Bill Text: CA AB1563 | 2009-2010 | Regular Session | Amended

California Assembly Bill 1563 (Prior Session Legislation)

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Employment: contracts or agreements for labor or

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Vetoed) 2010-01-14 - Consideration of Governor's veto stricken from file. [AB1563 Detail]

Download: California-2009-AB1563-Amended.html
BILL NUMBER: AB 1563	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 14, 2009

INTRODUCED BY   Committee on Labor and Employment (Monning (Chair),
Eng, Furutani, Ma, and Portantino)

                        MARCH 11, 2009

   An act to  amend Section 2810 of   add
Section 2811 to  the Labor Code, relating to employment.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1563, as amended, Committee on Labor and Employment.
Employment: contracts or agreements for labor or services.
   Existing law prohibits a person or entity from entering into a
contract or agreement for labor or services with a construction, farm
labor, garment, janitorial, or security guard contractor where the
person or entity knows or should know that the contract or agreement
does not include funds sufficient to allow the contractor to comply
with all applicable local, state, and federal laws or regulations
governing the labor or services to be provided.  Existing law
permits an aggrieved employee to bring an action to recover the
greater of his or her actual damages or $250 per employee per
violation for an initial violation and $1,000 per employee for each
subsequent violation, in addition to injunctive relief. 
The Division of Labor Standards Enforcement, within the Department
of Industrial Relations, is   charged with the
responsibility of enforcing minimum labor standards under state law.
The division's Bureau of Field Enforcement is responsible for
investigating and enforcing statutes relating to the above targeted
areas. The Economic and Employment Enforcement Coalition, composed of
the division and other state and federal agencies, combines and
coordinates investigative and enforcement efforts of the various
agencies targeting the underground economy. 
   This bill would  require the Labor Commissioner, by July
1, 2010, to develop and implement an enforcement protocol to be used
in an investigation involving a labor contractor whose contract or
agreement for construction, farm labor, garment, janitorial, or
security guard services does not include funds sufficient to allow
the contractor to comply with applicable local, state, and federal
laws or regulations governing the labor or services to be provided
  provide that in an investigation by the Economic and
Employment Enforcement Coalition or the Bureau of Field Enforcement
involving a labor contractor employing 15 or more workers in any of
these 5 targeted areas, if the Division of Labor Standards
Enforcement has a reasonable suspicion that a violation of potential
financial significance, as defined, has been committed or cited by
the division, the division must obtain the relevant terms of the
contract from the contractor and make a written record thereof, as
well as a record of whether there is a likelihood that the applicable
contract violates those provisions requiring adequate funding 
.  The bill   also would   require  
the division to make a record of its reasons supporting its decision
to either file or not   file a legal action. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 2811 is added to the  
Labor Code   , to read:  
   2811.  (a) In any investigation by the Economic and Employment
Enforcement Coalition or the Bureau of Field Enforcement involving a
labor contractor employing 15 or more workers in in the fields of
construction, farm labor, garment, janitorial, or security guard
service, if the Division of Labor Standards Enforcement has a
reasonable suspicion that violations of potential financial
significance have been committed or if such violations have been
cited by the division and have not been set aside by the division
within 15 days of their issuance, the division shall do the
following:
   (1) Issue an administrative subpoena for the relevant portions for
any written contract covering the work performed by the contractor.
   (2) If there is no written contract, obtain from the contractor
the relevant terms of any oral contract and make a written record of
the information provided by the contractor.
   (3) Record whether the terms of an applicable contract appear to
violate the provisions of Section 2810 and, if so, whether the
division filed a legal action pursuant to that section. If no legal
action was filed, this record shall explain the reasons why the
division chose not to do so.
   (b) For purposes of this section, a violation of "financial
significance" includes the following violations, which are within the
jurisdiction of the Division of Labor Standards Enforcement:
   (1) Failure to have a worker's compensation insurance policy
covering all employees.
   (2) Multiple minimum wage violations over a period of one or more
months.
   (3) Multiple serious overtime violations over a period of one or
more months.
   (c) The Division of Labor Standards Enforcement shall make a
record, including a brief analysis and explanation of reasons, in
each instance that provisions of Section 2810 were likely violated
but the division determined that implementation of this section was
not feasible or practicable.  
  SECTION 1.    Section 2810 of the Labor Code is
amended to read:
   2810.  (a) A person or entity shall not enter into a contract or
agreement for labor or services with a construction, farm labor,
garment, janitorial, or security guard contractor, where the person
or entity knows or should know that the contract or agreement does
not include funds sufficient to allow the contractor to comply with
all applicable local, state, and federal laws or regulations
governing the labor or services to be provided.
   (b) There is a rebuttable presumption affecting the burden of
proof that there has been no violation of subdivision (a) where the
contract or agreement with a construction, farm labor, garment,
janitorial, or security guard contractor meets all of the
requirements in subdivision (d).
   (c) Subdivision (a) does not apply to a person or entity who
executes a collective bargaining agreement covering the workers
employed under the contract or agreement, or to a person who enters
into a contract or agreement for labor or services to be performed on
his or her home residence, provided that a family member resides in
the residence for which the labor or services are to be performed for
at least a portion of the year.
   (d) To meet the requirements of subdivision (b), a contract or
agreement with a construction, farm labor, garment, janitorial, or
security guard contractor for labor or services must be in writing,
in a single document, and contain all of the following provisions, in
addition to any other provisions that may be required by regulations
adopted by the Labor Commissioner:
   (1) The name, address, and telephone number of the person or
entity and the construction, farm labor, garment, janitorial, or
security guard contractor through whom the labor or services are to
be provided.
   (2) A description of the labor or services to be provided and a
statement of when those services are to be commenced and completed.
   (3) The employer identification number for state tax purposes of
the construction, farm labor, garment, janitorial, or security guard
contractor.
   (4) The workers' compensation insurance policy number and the
name, address, and telephone number of the insurance carrier of the
construction, farm labor, garment, janitorial, or security guard
contractor.
   (5) The vehicle identification number of any vehicle that is owned
by the construction, farm labor, garment, janitorial, or security
guard contractor and used for transportation in connection with a
service provided pursuant to the contract or agreement, the number of
the vehicle liability insurance policy that covers the vehicle, and
the name, address, and telephone number of the insurance carrier.
   (6) The address of real property to be used to house workers in
connection with the contract or agreement.
   (7) The total number of workers to be employed under the contract
or agreement, the total amount of all wages to be paid, and the date
or dates when those wages are to be paid.
   (8) The amount of the commission or other payment made to the
construction, farm labor, garment, janitorial, or security guard
contractor for services under the contract or agreement.
   (9) The total number of persons who will be utilized under the
contract or agreement as independent contractors, along with a list
of the current local, state, and federal contractor license
identification numbers that the independent contractors are required
to have under local, state, or federal laws or regulations.
   (10) The signatures of all parties, and the date the contract or
agreement was signed.
   (e) (1) To qualify for the rebuttable presumption set forth in
subdivision (b), a material change to the terms and conditions of a
contract or agreement between a person or entity and a construction,
farm labor, garment, janitorial, or security guard contractor must be
in writing, in a single document, and contain all of the provisions
listed in subdivision (d) that are affected by the change.
   (2) If a provision required to be contained in a contract or
agreement pursuant to paragraph (7) or (9) of subdivision (d) is
unknown at the time the contract or agreement is executed, the best
estimate available at that time is sufficient to satisfy the
requirements of subdivision (d). If an estimate is used in place of
actual figures in accordance with this paragraph, the parties to the
contract or agreement have a continuing duty to ascertain the
information required pursuant to paragraph (7) or (9) of subdivision
(d) and to reduce that information to writing in accordance with the
requirements of paragraph (1) once that information becomes known.
   (f) A person or entity who enters into a contract or agreement
referred to in subdivision (d) or (e) shall keep a copy of the
written contract or agreement for a period of not less than four
years following the termination of the contract or agreement.
   (g) (1) An employee aggrieved by a violation of subdivision (a)
may file an action for damages to recover the greater of his or her
actual damages or two hundred fifty dollars ($250) per employee per
violation for an initial violation and one thousand dollars ($1,000)
per employee for each subsequent violation, and, upon prevailing in
an action brought pursuant to this section, may recover costs and
reasonable attorney's fees. To maintain an action under this section,
an employee shall plead and prove that he or she was injured as a
result of a violation of a labor law or regulation in connection with
the performance of the contract or agreement.
   (2) An employee aggrieved by a violation of subdivision (a) may
also bring an action for injunctive relief and, upon prevailing, may
recover costs and reasonable attorneys' fees.
   (h) The phrase "construction, farm labor, garment, janitorial, or
security guard contractor" includes a person, as defined in this
code, whether or not licensed, who is acting in the capacity of a
construction, farm labor, garment, janitorial, or security guard
contractor.
   (i) (1) The term "knows" includes the knowledge, arising from
familiarity with the normal facts and circumstances of the business
activity engaged in, that the contract or agreement does not include
funds sufficient to allow the contractor to comply with applicable
laws.
   (2) The phrase "should know" includes the knowledge of any
additional facts or information that would make a reasonably prudent
person undertake to inquire whether, taken together, the contract or
agreement contains sufficient funds to allow the contractor to comply
with applicable laws.
   (3) A failure by a person or entity to request or obtain
information from the contractor that is required by an applicable
statute or by the contract or agreement between them constitutes
knowledge of that information for purposes of this section.
   (j) The Labor Commissioner shall, not later than July 1, 2010,
develop and implement an enforcement protocol for investigations
involving a construction, farm labor, garment, janitorial, or
security guard contractor whose contract or agreement for labor or
services does not include funds sufficient to allow the contractor to
comply with applicable local, state, and federal laws or regulations
governing the labor or services to be provided.