Bill Text: CA AB747 | 2023-2024 | Regular Session | Amended
Bill Title: Business: unlawful employee contracts and requirements.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Failed) 2024-02-01 - Died on third reading file. [AB747 Detail]
Download: California-2023-AB747-Amended.html
Amended
IN
Assembly
January 25, 2024 |
Amended
IN
Assembly
May 18, 2023 |
Amended
IN
Assembly
April 26, 2023 |
Amended
IN
Assembly
April 03, 2023 |
Amended
IN
Assembly
March 20, 2023 |
Introduced by Assembly Member McCarty (Coauthors: Assembly Members Jackson, Kalra, and Ting) |
February 13, 2023 |
LEGISLATIVE COUNSEL'S DIGEST
This bill would prohibit an employer from entering into a contract or contract term that requires a debtor to pay for a debt if the debtor’s employment or work relationship with the employer is terminated, except as specified.
This bill would prohibit an employer from imposing any penalty, fee, or cost on an employee or independent contractor for terminating the employment relationship, as specified.
(2)Existing
(3)
(4)
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 6090.5.5 is added to the Business and Professions Code, to read:6090.5.5.
(a) ItSEC. 2.
Section 16601 of the Business and Professions Code is amended to read:16601.
(a) Any person who sells the goodwill of a business, any owner of a business entity selling or otherwise disposing of all of their ownership interest in the business entity, or any owner of a business entity that sells (a) all or substantially all of its operating assets together with the goodwill of the business entity, (b) all or substantially all of the operating assets of a division or a subsidiary of the business entity together with the goodwill of that division or subsidiary, or (c) all of the ownership interest of any subsidiary, may agree with the buyer to refrain from carrying on a similar business within a specified geographic area in which the business so sold, or that of the business entity, division, or subsidiary has been carried on, if the buyer, or any person deriving title to the goodwill or ownership interest from the buyer, carries on a like business therein.(a)For purposes of this section, the following definitions apply:
(1)“Contract” includes a promise, undertaking, contract, or agreement, whether written or oral, express or implied.
(2)“Consumer financial product or service” has the same meaning as defined in subdivision (e) of Section 90005 of the Financial Code.
(3)“Debt” means money, property, or their equivalent that is due or owing or alleged to be due or owing from a natural person to another person, including, but not limited to, for employment-related costs, education-related costs, or a consumer financial product or service.
(4)“Debtor” means a natural person who is or may become liable to pay an employer, a prospective employer, a third-party entity, or other business entity for all or part of an employment-related cost, education-related cost, or other debt.
(5)“Education-related cost” means a cost associated with enrollment or attendance at an educational program and related expenses, including, but not limited to, tuition, fees, books, supplies, student loans, examinations, and equipment required for enrollment or attendance in an educational, training, or residency program.
(6)“Employer” means any person or entity that employs employees or independent contractors or any parent company, subsidiary, division, affiliate, contractor, or third-party agent of an employer.
(7)“Employment-related cost” means a necessary expenditure or loss incurred by a person in direct consequence of the discharge of their duties at work or of their obedience to a direction of their employer, including, but not limited to, equipment or a training, residency, orientation, or competency validation required either by an employer or to practice in a specific employee classification.
(8)“Person” means a natural person or an entity, including, but not limited to, a corporation, partnership, association, trust, limited liability company, cooperative, or other organization.
(b)Beginning
January 1, 2024, except as provided in subdivision (c), an employer shall not enter into a contract or contract term that requires a debtor to pay for a debt if the debtor’s employment or work relationship with the employer is terminated.
(c)(1)An employer may require an employee to pay for training-related costs if they are incurred pursuant to a union-affiliated apprenticeship program.
(2)An employer may require an employee to pay for the cost of maintaining professional licensure required by the state.
(d)(1)This section applies to a contract or contractual term regardless of whether the debt is certain, contingent, or incurred voluntarily.
(2)This section applies to a contract or contractual term in which a person promises to pay or forgive a debt, defers liability of a debt, or holds a debt in forbearance.
(3)This section does not prevent a person or governmental entity from paying or forgiving a debt or from providing other benefits to a debtor or other natural person after the debtor or natural person completes a specified time period of employment or work relationship with an employer or other business entity.
(4)Nothing in this section shall be construed to limit or prohibit any loan repayment assistance program or loan forgiveness program provided by a federal, state, or local governmental agency, other than an individual agreement between an agency and its employee.
(5)This section does not limit or alter the obligation of employers under Section 2802 of the Labor Code.
An employer shall not impose any penalty, fee, or cost on an employee or independent contractor for terminating the employment relationship, including, but not limited to, a replacement hire fee, a retraining fee, reimbursement for immigration or visa-related costs, bondage fees, liquidated damages, lost goodwill, or lost profit.
(a)
SEC. 3.
Section 16610 is added to the Business and Professions Code, immediately following Section 16607, to read:16610.
(a) An employer shall not enter into, present an employee or prospective employee as a term of employment, or attempt to enforce any contract in restraint of trade that is void under this chapter.
(b)The Attorney General and the Labor Commissioner shall coordinate responsibility with respect to enforcement of this section,
according to the following:
(1)The Attorney General and Labor Commissioner may enter into an agreement with respect to civil actions by each agency.
(2)Any regulation or order made under the authority of this subdivision or any agreement under this subdivision shall not do any of the following:
(A)Limit the powers or authorities of the Attorney General or Labor Commissioner, including, but not limited to, the Attorney General’s ability to prosecute violations of civil or criminal law and the Labor Commissioner’s ability to prosecute violations of the Labor Code.
(B)Limit the rights of any person, or the obligations of any covered person, under this chapter, the Unfair Competition Law, the False Advertising Law, or a consumer financial law.
(C)Limit the rights of any employee under the Labor Code.
(3)The Attorney General shall notify the Labor Commissioner of any complaint regarding a contract or contract term that may constitute a violation of this section.
(1)“Consumer financial law” means a federal or state law that directly and specifically regulates the manner, content, or terms and conditions of any financial transaction, or any account, product, or service related thereto, with respect to a consumer.
SEC. 6.SEC. 4.
Section 925 of the Labor Code is amended to read:925.
(a) An employer shall not require an employee who primarily resides and works in California, as a condition of employment, to agree to a provision that would do either of the following:(a)A contract or contract term that violates subdivision (a) of Section 16608 of the Business and Professions Code is void as contrary to public policy.
(b)The Labor Commissioner shall enforce this section and subdivision (a) of Section 16610 of the Business and Professions Code, including receiving and investigating
complaints of an alleged violation and ordering appropriate temporary relief to mitigate the violation or to maintain the status quo pending the completion of a full investigation or hearing through the procedures set forth in Section 98, 98.3, or 1197.1, including by issuance of a citation against an employer who violates this article and by filing a civil action. If a citation is issued, the procedures for issuing, contesting, and enforcing judgments for citations and civil penalties issued by the Labor Commissioner shall be the same as those set out in Section 1197.1, as appropriate. If the Labor Commissioner issues a citation or files a civil action under this subdivision, the Labor Commissioner may, in addition to any other penalties or remedies available, seek penalties pursuant to paragraph (1) of
subdivision (b) of Section 16610 of the Business and Professions Code.
(c)The Labor Commissioner and the Attorney General shall coordinate responsibility with respect to enforcement of this section, according to the following:
(1)The Labor Commissioner and the Attorney General may enter into an agreement with respect to civil actions by each agency.
(2)Any regulation or order made under the authority of this section or any agreement under this section shall not do any of the following:
(A)Limit the powers or authorities of the Attorney General or Labor Commissioner, including, but not limited to, the Attorney General’s ability to prosecute violations of civil or criminal law and the Labor Commissioner’s ability to prosecute violations of the Labor Code.
(B)Limit the rights of any person, or the obligations of any covered person, under the Unfair Competition Law, the False Advertising Law, or a federal or state law that directly and specifically regulates the manner, content, or terms and conditions of any financial transaction, or any account, product, or service related thereto, with respect to a consumer.
(C)Limit the rights of any employee under the Labor Code.
(3)The Labor Commissioner shall notify the Attorney General of any complaint regarding a contract or contract term that may constitute a violation of this section.
(d)A person, including a local government or an employee representative, seeking to establish liability against an employer may bring a civil action on behalf of the
person, other persons similarly situated, or both, in any court of competent jurisdiction. The court may award reasonable costs, including reasonable attorney’s fees, as part of the costs, to any plaintiff who prevails in a civil action brought under this section.
(e)This section does not limit the remedies available to a debtor or other natural person specified in Section 16608 of the Business and Professions Code.