BILL ANALYSIS �
Senate Committee on Labor and Industrial Relations
Senator Ben Hueso, Chair
Date of Hearing: June 11, 2014 2013-2014 Regular
Session
Consultant: Alma Perez-Schwab Fiscal:Yes
Urgency: No
Bill No: AB 1522
Author: Gonzalez
As Introduced/Amended: May 28, 2014
SUBJECT
Employment: paid sick days
KEY ISSUE
Should the Legislature require employers to provide at least 3
paid sick days to any employee that works for seven or more days
in a calendar year?
ANALYSIS
Existing law provides for various forms of unpaid and (in some
circumstances) paid leave for employees. Existing law
authorizes, but does not require, employers to provide their
employees with paid sick leave. Any employer that chooses to
provide sick leave must allow an employee to use accrued and
available sick leave, in an amount not less than the sick leave
that would be accrued during six months at the employee's then
current rate of entitlement. Sick leave can be used by the
employee for any of the following reasons:
� Being physically or mentally unable to work due to
illness, injury, or a medical condition of the employee.
� Obtaining professional diagnosis of treatment for a
medical condition of the employee.
� Other medical reasons of the employee, such as pregnancy
or obtaining a physical examination.
� To attend to an illness of a child, parent, spouse, or
domestic partner of the employee.
Existing law does not require this sick leave to accrue, from
one year to the next, nor does it vest. In addition, sick leave
does not extend the maximum period of leave to which an employee
is entitled under other leaves, such as the federal Family and
Medical Leave Act, regardless of whether sick leave is received
during that leave.
Existing law prohibits employers from denying an employee the
right to use sick leave or discharge, threaten to discharge,
demote, suspend, or in any manner discriminate against an
employee for using, or attempting to use, sick leave to attend
to an illness of a child, parent, spouse, or domestic partner of
the employee. Violation of this right entitles employees to
reinstatement and actual damages or one day's pay, whichever is
greater, and to appropriate equitable relief. The employee can
either file a complaint with the Labor Commissioner, or bring a
civil action for remedies. (Labor Code �233)
Currently , San Francisco County is the only county that has
passed an ordinance requiring employers to provide paid sick
leave for all employees, including temporary and part-time
employees, who work within the county. The San Francisco Paid
Sick Leave Ordinance became effective on February 5, 2007.
This Bill would enact the Healthy Workplaces, Healthy Families
Act of 2014, which would require employers to provide paid sick
days to employees who work seven or more days in a calendar
year. Specifically, this bill would:
1) Provide that on or after July 1, 2015, an employee who
works for seven or more days in a calendar year is entitled
to paid sick days.
2) Specify that paid sick days accrue at a rate of no less
than one hour for every 30 hours worked, and may be used
beginning on the 90th calendar day of employment.
3) Provide that paid sick days may accrue and be carried
over to the following year; however, employers may limit
their use to 24 hours or 3 days in each calendar year.
Hearing Date: June 11, 2014 AB 1522
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Senate Committee on Labor and Industrial Relations
4) Provide that "employer" includes any person employing
another and includes the state, political subdivisions of
the state, and municipalities.
5) Provides that an "employee" does not include:
a. An employee covered by a valid collective
bargaining agreement that expressly provides for
paid sick days or similar policy, as specified.
b. An employee in the construction industry
covered by a valid collective bargaining agreement
that was entered into before January 1, 2015 or
waives the requirements of this bill, as specified.
1) Provides that a public authority must comply with these
requirements for individuals who perform in-home supportive
services, except that these requirements may be satisfied
by entering into a collective bargaining agreement that
provides an incremental hourly wage adjustment in an amount
sufficient to satisfy the bill's requirements.
2) Require an employer, upon oral or written request of an
employee, to provide paid sick days for the following
purposes:
o Diagnosis, care or treatment of an existing
health condition of, or preventive care for, an
employee or the employee's family member; or
o For an employee who is a victim of domestic
violence, sexual assault, or stalking as specified.
1) Define "family member" to include a child (as
specified), a parent (as specified), a spouse, a registered
domestic partner, a grandparent, a grandchild, or a
sibling.
2) Not require an employer to provide compensation to an
employee for accrued, unused paid sick days upon
termination, resignation, retirement, or other separation
from employment, except if an employee is rehired by the
same employer within one year, any previously accrued,
unused paid sick days shall be reinstated.
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3) Allow an employer to lend paid sick days to an employee
in advance of accrual, at the employer's discretion and
with proper documentation.
4) Prohibit an employer from requiring employees to find a
replacement worker as a condition of using his/her paid
sick days.
5) Prohibit an employer from denying an employee the right
to use sick days, discharging, threatening to discharge,
demoting, suspending or in any manner discriminating
against an employee for using sick days, as specified.
6) Establish a rebuttable presumption of unlawful
retaliation if an employer denies an employee the right to
use sick days or takes other specified adverse action
within 90 days of specified protected activities by the
employee.
7) Require employers to provide written notice [in various
specified languages] and posting requirements, as
specified, or be subject to a civil fine for not
compliance.
8) Require employers to retain employee records related to
used and accrued paid sick days for at least five years.
9) Require employer to include in employee wage statements
any paid sick leave accrued and used pursuant to this Act.
10) Direct the Labor Commissioner to:
o Coordinate implementation and enforcement of
these requirements and to promulgate guidelines and
regulations;
o Investigate alleged violations and order
appropriate relief, including reinstatement, back pay,
the payment of sick days unlawfully withheld, and
additional administrative penalties, as specified.
o In addition to the Attorney General, bring a
civil action against an employer in a court of
competent jurisdiction to recover relief, as
specified, including back pay, penalties, liquidated
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damages and attorney's fees and costs.
1) Specify that this bill establishes minimum requirements
and does not preempt, limit, or otherwise affect the
applicability of any other law or similar requirement that
provides greater accrual or use of sick days, or that
extends other protections to employees.
2) Make several findings and declarations related to
employees and the need and benefits of providing for paid
sick days.
COMMENTS
1. Recent Research on Paid Sick Days:
According to a recent study by the Economic Policy Institute,
("The Need for Paid Sick Days: The Lack of a Federal Policy
Further Erodes Family Economic Security," June 29, 2011)
American workers are more productive than ever before, but
they are less secure in their ability to provide for their
families. Workers without paid sick days-nearly 40 percent of
the private-sector workforce-are among the least economically
secure, and an illness forces them to take time away from work
without pay and puts them at risk of losing their job.
In exploring economic security for working families, the study
found that a national paid sick leave policy would promote
workers' financial stability and the economic security of
their families. The study made the following findings:
Employees without paid sick time are likely to go to
work sick, where they will have reduced productivity, at
a significant cost both to their employer and to their
possibility for professional advancement.
Without paid sick leave, parents are forced to send
sick children to school, which could potentially impact
their long-term health and educational performance.
A two-child family with two workers earning the
average wage for workers without paid sick time would
lose the family's entire health care budget after just
three days of missed work.
A two-child family with a single working parent
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earning the average wage for workers without paid sick
time ($10/hour) cannot miss more than three days of work
in a month without falling below the federal poverty
line.
Taking unpaid sick time leaves workers vulnerable to
losing their jobs in an economy with a stubbornly high
long-term unemployment rate.
These findings are echoed by another recent report by the
Institute for Women's Policy Research, ("Paid Sick days and
Health: Cost Savings from Reduced Emergency Department
Visits," November 2011) which found, among other things, that
1.3 million hospital emergency department visits could be
prevented in the U.S. each year by providing paid sick days to
workers who currently lack access, reducing medical costs by
$1.1 billion annually, with over $500 million in savings for
public health insurance programs.
2. Background on San Francisco's Paid Sick Leave Ordinance:
In 2006, San Francisco voters approved Proposition F, the
first law in the nation that provided workers with the ability
to earn and use paid sick days. The Paid Sick Leave Ordinance
(PSLO), which became effective on February 5, 2007, allows
employees (including temporary and part-time) to earn one hour
of paid sick leave for every 30 hours worked. Workers earn
paid sick days after three months on the job, earn up to a
maximum of five days per year in small firms and nine days per
year in larger firms. An employee's accrued paid sick leave
carries over from year to year, subject to the applicable cap,
but does not get paid out at termination.
Employees are entitled to paid sick leave for their own
illness or to provide care for a sick child, parent, sibling,
grandparent, grandchild, spouse, registered domestic partner
or other designated person. Under the ordinance, employees
who assert their rights to receive paid sick leave are
protected from retaliation. The City can investigate possible
violations, have access to employer records, and can enforce
the paid sick leave requirements by ordering reinstatement of
employees, payment of paid sick leave unlawfully withheld, and
penalties.
Hearing Date: June 11, 2014 AB 1522
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Senate Committee on Labor and Industrial Relations
3. Update on the implementation of San Francisco's Paid Sick
Leave Ordinance:
A 2011 study by the Institute for Women's Policy Research,
("San Francisco's Paid Sick Leave Ordinance: Outcomes for
Employers and Employees," February 2011) examined the effects
of San Francisco's paid sick days ordinance on employees and
employers. The report provides results from surveys of 727
employers and 1,194 employees working in San Francisco.
According to the study, both city officials and employer
groups have characterized the Paid Sick Leave Ordinance as
having a low impact on employers and being relatively easy to
implement. The following are among the report's findings:
Despite the availability of either five or nine sick
days, the typical worker with access used only three paid
sick days during the previous year, and one-quarter of
employees with access used zero paid sick days.
Parents with paid sick days were more than 20
percent less likely to send a child with a contagious
disease to school than parents who did not have paid sick
days.
Employer profitability did not suffer. Six out of
seven employers did not report any negative effect on
profitability as a result of the ordinance.
Most employers reported no difficulty providing sick
days to their employees. Approximately one-third of
employers reported any difficulties implementing the
ordinance, and only one-sixth needed to introduce an
entirely new paid sick days policy because of the law.
However, some employers (also around one-sixth) are in
violation of the law and still did not offer paid sick
days at the time of the survey.
It should be noted, however, that although most of the
feedback from the surveys in the study appear to be positive,
there were some possible negative effects of increased paid
sick leave. The study found that of all the workers surveyed,
15.2% experienced layoffs or had their total hours reduced;
14.1% received fewer raises/bonuses or had their benefits
reduced; and 21.7% saw increased work demands.
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Senate Committee on Labor and Industrial Relations
4. Need for this bill?
Given the arguments in support of paid sick leave legislation,
including the public health hazard associated with the spread
of illness when individuals are forced to go to work sick, it
appears that a paid sick leave policy would provide great
benefits to workers in the state. The Centers for Disease
Control and Prevention recommends that workers who are ill
"stay home from work and school" to prevent the spread of
disease in the community and workplace. Unfortunately, with
nearly 40 percent of the private-sector workforce having no
access to paid sick days, staying home is not a luxury most
people have. In California, San Francisco County is the only
county that has passed an ordinance requiring employers to
provide paid sick leave for all employees who work within the
county. In looking at the impact of the ordinance, it appears
that rates of utilization have been well below the caps of
five and nine days, suggesting that employees view paid sick
days as a valuable benefit that is saved and used only as
needed. This bill is similar to the San Francisco ordinance
and would enact the Healthy Workplaces, Healthy Families Act
of 2014, which would require employers to provide paid sick
days to employees who work seven or more days in a calendar
year.
5. Double Referral and Staff Comments :
This bill has been double referred and, if approved by this
committee, it will be sent to the Senate Judiciary Committee
for a hearing. Staff would like to offer a couple of points
for consideration of the author as the bill progresses through
the legislative process.
First, the bill would require that employers provide written
notice to employees as well as display a poster at the
worksite, both containing the same information regarding the
paid sick leave policy. The poster is to be created by the
Labor Commissioner and made available to employers. Since the
information to be contained in the poster is the same as the
information to be included in the written notice, should the
bill also direct the Labor Commissioner to create the written
Hearing Date: June 11, 2014 AB 1522
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Senate Committee on Labor and Industrial Relations
notice and make it available to employers for employee
distribution?
Regarding an employee's right to use sick days, and for
clarifying purposes, the author may wish to add the word
"accrued" to specify that an employer shall in no manner
discriminate against an employee for using accrued sick days
or attempting to exercise the right to use accrued sick days
(Page 10, line 33-34 of the bill).
6. Similar Efforts at the National, State and Federal Levels:
Paid sick days legislation has been proposed at the federal,
state and local levels. A push for federal paid sick leave
legislation began in 2004, the Healthy Families Act which
proposes to ensure that all employees working 30 or hours more
per week have seven paid sick days a year, has been regularly
re-introduced since then but failed to advance. In total, four
jurisdictions in the United States have passed local paid sick
leave laws including San Francisco in 2006, Washington D.C. in
2008, Milwaukee in 2008, and the Connecticut in 2011 became
the first state to pass a statewide paid sick days law. Other
cities that have recently adopted paid sick days standards
include Portland, New York City, Jersey City and Newark. At
least twenty-two states have proposed legislation for paid
sick days over the last several years.
In recent years, opponents of paid sick days legislation or
ordinances have begun to respond to the adoption of such
policies by pushing for the enactment of "preemption"
legislation that would bar any city or county within the state
from establishing a right to paid sick leave. According to
the Economic Policy Institute, in all, ten states have enacted
such preemption measures in recent years, including Arizona,
Florida, Georgia, Indiana, Kansas, Louisiana, Mississippi,
North Carolina, Tennessee and Wisconsin. In 2011, the
Wisconsin Legislature not only prohibited localities from
establishing paid sick leave standards, but also retroactively
abolished a paid sick leave measure that had been established
in Milwaukee and was approved by 68 percent of voters in a
2008 referendum.
7. Proponent Arguments :
Hearing Date: June 11, 2014 AB 1522
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Senate Committee on Labor and Industrial Relations
According to the author and proponents, under current state
law, nothing requires employers to provide paid sick days, and
as a result, roughly 39 percent of the workforce earns no sick
leave benefits whatsoever. That leaves seven million
Californians with few options when personal or family needs
arise. Proponents argue that a worker without paid sick leave
is either expected to work while sick, risking the health and
safety of co-workers and customers, or stay home and forego
wages, jeopardizing that worker's own ability to survive. They
argue that given the rising cost of living expenses, workers
just cannot afford to lose a day's pay. According to the
author, this bill appropriately allows workers to earn paid
sick days, which they can use for personal illness, to care
for a sick family member and to recover from domestic violence
or assault.
The author and proponents also point to studies which have
found that providing sick days to workers saves money for
businesses by reducing turnover, reducing the spread of
illness in the workplace, and improving workers' morale and
productivity. Furthermore, proponents argue that an
overwhelming majority of the public believes employers should
be required to offer paid sick days and point to a 2010 poll
which found that 74% of adults surveyed would support a law
guaranteeing paid sick days, with this position enjoying
widespread support across party, gender, and ethnic lines.
Finally, they argue that several local jurisdictions - and the
state of Connecticut - have already passed this measure and
found no adverse impact to employers; therefore, they argue
that it is time to allow workers, the public, and employers
access to all of the benefits offered by earned sick leave
legislation.
8. Opponent Arguments :
Opponents representing many large and small business
associations argue that this bill would unreasonably expand
employers' burdens, costs and liability. They argue that many
employers already offer paid sick leave and believe that
California should incentivize this practice rather than
mandate it. With regards to the cost concern, opponents point
Hearing Date: June 11, 2014 AB 1522
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Senate Committee on Labor and Industrial Relations
out that many employers allow employees to accrue sick leave
per pay period or per month, not according to the number of
hours worked. Accordingly, such employers will have to
completely change their policies in order to mirror the
accrual rate proposed under this bill, resulting in increased
cost to employers. Additionally, AB 1522 mandates that
accrued sick leave carry over from year to year, a practice
currently not required therefore imposing a new burden on
employers.
Regarding the various penalties contained in the bill,
opponents argue that, while an employee should be made whole
for any violation of the law, the layering of additional
penalties, such as treble damages, is simply an unjustified
windfall. Opponents also object to the bill's creation of a
rebuttable presumption of retaliation, arguing that the burden
will fall on the employer to prove that employment decisions
were valid, instead of the burden falling on the employee to
prove retaliation. For example, an employee who took paid sick
leave returns to work the following day and is caught
stealing, he/she is then terminated, however, this individual
would be protected under the automatic rebuttable presumption
and the burden would then fall on the employer to prove its
actions were valid.
Another point of concern for opponents is the new posting and
notice requirements, with additional penalties for
noncompliance, required in the bill which they argue puts
employers at risk of litigation. Current law already requires
employers to post over 15 different notices and they argue
that at some point the posting of such information becomes
just another added expense without any corresponding benefit
to employees overwhelmed with postings. Also of concern to
opponents is the requirement in the bill that gives local
counties and cities authority to adopt more stringent paid
sick leave requirements than is included in the bill. They
argue that this provision will create inconsistency and
confusion for California employers who operate in different
jurisdictions.
Opponents also contend that recent employer surveys of
jurisdictions that have adopted paid sick leave policies
Hearing Date: June 11, 2014 AB 1522
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Senate Committee on Labor and Industrial Relations
indicated a negative impact on growth and jobs. They write:
The Employment Policies Institute recently published a
limited study on the effects of Connecticut's Paid Sick
Leave law that went into place in 2012 and only applies to
larger employers and non-exempt service workers. Although
the survey was admittedly limited in the number of
businesses evaluated, the results indicate the new law has
had a negative impact on growth and jobs. Of the 156
businesses that responded to the survey, 31 of the
businesses had reduced other employee benefits to balance
the cost of the paid sick leave; 12 had reduced employee
hours; 6 had reduced employee wages; 19 companies had
raised their prices; 6 companies had laid off employees;
and, 16 companies stated that they would limit their
expansion in the state. Thirty-eight of the businesses
surveyed also indicated that they would hire fewer
employees as a direct result of the new law, while others
stated they planned to offer fewer raises.
Opponents conclude that rather than mandate new requirements,
we should incentivize employers to offer these additional
benefits by reducing costs in other areas. Among other
things, they suggest offsetting the burden to provide paid
sick leave by providing small employers with a tax credit for
the amount expended each year on paid sick leave.
Concerns have also been raised by some contractors within the
construction industry regarding a one-size fits-all approach
arguing that it ignores the sanctity and value of collectively
bargained agreements (CBAs). They argue that the unionized
sector of the construction industry operates in a
"multi-employer" fashion whereby a worker often works for
multiple employers in a given year. They argue that
implementing this measure in the multiemployer setting is next
to impossible and unfair leaving many questions answered. For
example, would an employer be liable to provide paid sick
leave for hours a worker accumulated working for another
employer under the same CBA? For these reasons, they argue
that CBAs in the construction industry should be exempted.
9. Prior Legislation :
Hearing Date: June 11, 2014 AB 1522
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Senate Committee on Labor and Industrial Relations
AB 400(Ma) of 2012: Held in Assembly Committee on
Appropriations
Similar to this bill, but not identical, AB 400 differs in
that the minimum amount of paid sick days required by this
bill is (3) instead of (5) and this bill does not exempt small
businesses, not does it include a private right of action.
AB 1000(Ma) of 2009: Held in Assembly Committee on
Appropriations
Also similar to this bill, AB 1000 was identical to AB 2716
(below).
AB 2716(Ma) of 2008: Held in Senate Committee on
Appropriations
Similarly, AB 2716 would have required that employers provide
paid sick days to employees who work for seven or more days in
a calendar year.
SUPPORT
California Labor Federation, AFL-CIO (Co-Sponsor)
California State Council of the Service Employees International
Union (Co-Sponsor)
Alameda Labor Council, AFL-CIO
American Federation of State, County and Municipal Employees,
AFL-CIO
California Catholic Conference of Bishops
California Communities United Institute
California Employment Lawyers Association
California Medical Association
California Nurses Association
California Professional Firefighters
California School Employees Association, AFL-CIO
California State Association of Electrical Workers
California State Pipe Trades Council
California Teachers Association
California Work and Family Coalition
Communication Workers of America, AFL-CIO, District 9
Consumer Attorneys of California
Family Caregiver Alliance
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Senate Committee on Labor and Industrial Relations
Health Officers Association of California
Legal Aid Society - Employment Law Center
Next Generation
Parent Voices
United Domestic Workers of America, AFSCME, Local 3930
Western Center on Law and Poverty
Western State Council of Sheet Metal Workers
Young Invincibles
9to5 National Association of Working Women
OPPOSITION
Acclamation Insurance Management Services
Air Conditioning Trade Association
Alhambra Chamber of Commerce
Allied Managed Care
Associated Builders and Contractors - San Diego Chapter
Associated Builders and Contractors of California
Associated General Contractors
Association of California Helathcare Districts
Brawley Chamber of Commerce
Brea Chamber of Commerce
California Asian Chamber of Commerce
California Association of Health Facilities
California Association of Joint Powers Authorities
California Association of Licensed Security Agencies, Guards and
Associates
California Association of Sheet Metal Air Conditioning
Contractors, National Association
California Association of Winegrape Growers
California Attractions and Parks Association
California Automatic Vendors Council
California Bankers Association
California Beer & Beverage Distributors
California Business Properties Association
California Business Roundtable
California Chamber of Commerce
California Chapter of American Fence Association
California Chapters of the National Electric Contractors
Association
Hearing Date: June 11, 2014 AB 1522
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Senate Committee on Labor and Industrial Relations
California Employment Law Council
California Farm Bureau Federation
California Fence Contractors' Association
California Grocers Association
California Hotel & Lodging Association
California Independent Grocers Association
California League of Food Processors
California Legislative Conference of the Plumbing, Heating and
Piping Industry
California Manufacturers and Technology Association
California New Car Dealers Association
California Newspaper Publishers Association
California Pool and Spa Association
California Professional Association of Specialty Contractors
California Restaurant Association
California Retailers Association
California Special Districts Association
California State Association of Counties
California Travel Association
California Trucking Association
Carlsbad Chamber of Commerce
CAWA - Representing the Automotive Parts Industry
Cerritos Regional Chamber of Commerce
Chambers of Commerce Alliance of Ventura & Santa Barbara
Counties
City of La Mirada
Dana Point Chamber of Commerce
Desert Hot Springs Chamber of Commerce and Visitors Center
El Centro Chamber of Commerce
Flasher Barricade Association
Fountain Valley Chamber of Commerce
Fullerton Chamber of Commerce
Gateway Chambers Alliance
Greater Bakersfield Chamber of Commerce
Greater Conejo Valley Chamber of Commerce
Greater Fresno Area Chamber of Commerce
Greater Riverside Chambers of Commerce
Greater San Fernando Valley Chamber of Commerce
Huntington Beach Chamber of Commerce
League of California Cities
Lodi Chamber of Commerce
Long Beach Area Chamber of Commerce
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Senate Committee on Labor and Industrial Relations
Marin Builders Association
National Federation of Independent Business
Orange County Business Council
Oxnard Chamber of Commerce
Palm Desert Area Chamber of Commerce
Plumbing-Heating-Cooling Contractors Association of California
Porterville Chamber of Commerce
Redondo Beach Chamber of Commerce
Rural County Representatives of California
San Diego East County Chamber of Commerce
San Gabriel Valley Coalition
San Jose Silicon Valley Chamber of Commerce
Santa Clara Chamber of Commerce and Convention-Visitors Bureau
Simi Valley Chamber of Commerce
Society for Human Resource Management
Southwest California Legislative Council
Tahoe Chamber of Commerce
Torrance Area Chamber of Commerce
Turlock Chamber of Commerce
Urban Counties Caucus
Visalia Chamber of Commerce
Western Electrical Contractors Association
Western Growers Association
Wine Institute
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Senate Committee on Labor and Industrial Relations