Bill Text: CA SB27 | 2023-2024 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: University of California: vendors.

Spectrum: Partisan Bill (Democrat 6-0)

Status: (Passed) 2023-10-08 - Chaptered by Secretary of State. Chapter 480, Statutes of 2023. [SB27 Detail]

Download: California-2023-SB27-Amended.html

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Amended  IN  Assembly  September 01, 2023

Amended  IN  Assembly  June 15, 2023

Amended  IN  Senate  May 18, 2023

Amended  IN  Senate  April 25, 2023

Amended  IN  Senate  April 18, 2023

Amended  IN  Senate  March 13, 2023

Amended  IN  Senate  February 22, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill

No. 27

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Introduced by Senators Durazo and Caballero
(Principal coauthor: Assembly Member Kalra)
(Coauthor: Senator Cortese)
(Coauthors: Assembly Members Jones-Sawyer and Luz Rivas)

December 05, 2022

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An act to add Part 4.3 (commencing with Section 1440) to Division 2 of the Labor Code, relating to employment. Section 10527 to, and to add Article 2.7 (commencing with Section 10510.50) to Chapter 2.1 of Part 2 of Division 2 of, the Public Contract Code, relating to contracts.

LEGISLATIVE COUNSEL'S DIGEST

SB 27, as amended, Durazo. University of California: vendors.

Existing provisions of the California Constitution provide that the University of California constitutes a public trust and require the university to be administered by the Regents of the University of California (regents), a corporation in the form of a board, with full powers of organization and government, subject to legislative control only for specified purposes, including any competitive bidding procedures as may be applicable to the university by statute for specified purposes, including the purchasing of materials, goods, and services. Existing law requires the regents, except as provided, to let all contracts involving an expenditure of $100,000 or more annually for goods and materials or services, excepting personal or professional services, to the lowest responsible bidder meeting certain specifications, or to reject all bids. Existing policy of the regents establishes a general prohibition on contracting out for services and functions that can be performed by university staff, with certain exceptions, establishes employment standards for contract employees, and provides for the conversion of contract employees to university employment under prescribed circumstances.

This bill would make it unlawful for any vendor, as defined, to accept payment from the university pursuant to a contract for prescribed services if the vendor is performing services or supplying the university with employees to perform services who are paid less than the higher of the total compensation rate specified in the vendor’s contract with the university or as required by university policy. The bill would require a vendor to provide those employees with prescribed written notice relating to compensation. The bill would require a vendor, twice yearly, to provide basic payroll information, as defined, to the university and members of any joint labor-management committee, as defined. The bill would also require a vendor to provide specified additional written notice, including specific text, relating to the release of basic payroll information, to all employees who agree to perform services for the university or continue doing so. The bill would also require basic payroll information for an individual employee who performs services for the university, on request, to be made available for inspection by that individual employee or that individual employee’s authorized representative or to be furnished to that individual employee or that individual employee’s authorized representative. The bill would require an auditor, vendor, the university, or any other person who conducts or receives an audit or other finding with regard to whether a vendor has compensated employees at the total compensation rate required by the vendor’s contract with the university or university policy to provide that audit or other finding to the university and members of any joint labor-management committee.

This bill would authorize an aggrieved employee, as defined, to bring a civil action against a vendor if an aggrieved employee first provides a vendor with written notice of an alleged violation of these provisions, as specified, and provides the vendor the opportunity to correct and cure the violation and the vendor fails to provide prescribed documentation. The bill would require a vendor who receives written notice from an aggrieved employee to provide a copy of that notice to the president of the university within 5 business days. The bill would establish remedies, including civil penalties and restitution, for prevailing claimants. The bill would require a prevailing claimant to notify the president of the university of the decision. The bill would make its provisions severable.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NO  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Article 2.7 (commencing with Section 10510.50) is added to Chapter 2.1 of Part 2 of Division 2 of the Public Contract Code, to read:

Article  2.7. University of California Vendors

10510.50.

 This article shall be known, and may be cited, as the Recovery of Earned but Unpaid Wages Act.

10510.51.

 As used in this article:

(a) “Aggrieved employee” means either of the following:

(1) An employee against whom one or more alleged violations of this article was committed.

(2) A university employee coworker of an employee against whom one or more alleged violations of this article was committed who performs services for the university at or for the same university location or department as the employee.

(b) “Basic payroll information” means, for each vendor-supplied employee who performed services at any time during the preceding six-month period, the following information:

(1) The employee’s full name, job title, mobile telephone number, email address, and home address.

(2) Work location while performing services for the university.

(3) The employee’s hourly rate of pay while performing services for the university for each applicable pay period during the preceding six-month period.

(4) The hourly value of employer-provided benefits, if any, received by the employee while performing services for the university for each applicable pay period during the preceding six-month period.

(5) The employee’s hours of work while performing services for the university for each applicable pay period during the six-month period.

(c) “Contract” includes any written instrument, purchase order, change order, order, requisition, service agreement, or other written or electronic document, however titled, reflecting an agreement that the vendor will perform services or supply the university with employees to perform services in exchange for payment.

(d) “Employee” includes any contract worker, or individual employed by any vendor, or otherwise supplied to the university by any vendor, to perform services for the university. “Employee” also includes an individual treated by either the vendor, a subcontractor, or the university as an independent contractor. “Employee” does not include any individual who is a parent, spouse, child, or legally adopted child of the employer, any sole proprietor, or any individual with an ownership interest of 5 percent or more in the vendor.

(e) “Employer” means any person, as defined in Section 18 of the Labor Code, who directly or indirectly, or through an agent or any other person, employs or exercises control over the wages, hours, or working conditions of any person.

(f) “Hourly value of employer-provided benefits” means the employer’s actual cost for the employee’s benefits, including retirement, health, dental, vision, and life and disability benefits, if any, calculated as an hourly dollar amount. It does not include any paid time off or any payroll expenses required by law. For any employee who does not receive employer-provided benefits, the hourly value is zero dollars ($0).

(g) “Joint labor-management committee” includes any joint labor-management committee or similar meeting body or committee established jointly by the university and the exclusive representative of university employees who perform the same or similar services as the employees performing services for the university.

(h) “Services” means work that is subject to university policy. “Services” includes services that have been customarily performed by bargaining unit employees of the university, including, but not limited to, the following services: cleaning, custodial, janitorial, or housekeeping services; food services; laundry services; grounds keeping; nonskilled crafts building maintenance; transportation and parking services; security services; billing and coding services; sterile processing; hospital and nursing assistant services; respiratory therapy; and medical imaging services. “Services” does not include financial investment or retirement planning advice, retirement plan recordkeeping, or asset management.

(i) “Subcontractor” means any person, employer, supplier of labor, staffing agency, temporary services employer, or other entity that performs services for the university or supplies employees to perform services, pursuant to a contract with a vendor.

(j) “Total compensation rate” means the employee’s hourly rate of pay plus the hourly value of employer-provided benefits, or the equivalent compensation.

(k) “University” means the University of California.

(l) “University policy” means a policy or collective bargaining agreement adopted or approved by the university that requires vendors to provide employees wages and benefits of equivalent value to the wages and benefits provided to university employees performing the same work.

(m) “Vendor” means contractor and includes any person, employer, supplier of labor, staffing agency, temporary services employer, labor broker, management services provider, or other entity that contracts with the university to provide services or to supply the university with its own employees or those of a subcontractor to perform services. “Vendor” also means any person acting either individually or as an officer, agent, or employee of a vendor. “Vendor” does not include a contractor in the construction industry. For purposes of this subdivision, “contractor in the construction industry” means an employer that provides work associated with construction, including work involving alteration, demolition, building, excavation, renovation, remodeling, maintenance, improvement, repair work, and any other work as described by Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code, and other similar or related occupations or trades.

10510.52.

 (a) A vendor that supplies the university with employees to perform services, shall provide those employees with written notice of the total compensation rate specified in the vendor’s contract with the university or required by university policy, whichever is higher, and the employee’s hourly rate of pay and hourly value of employer-provided benefits. The vendor shall provide employees with these notices at the time each employee is assigned to perform services for the university and thereafter, each January, and within seven days of a change to the employee’s hourly rate.

(b) (1) In January and July of each year, the vendor shall provide basic payroll information to the university and members of any joint labor-management committee. The vendor shall provide all employees who agree to perform services for the university or continue doing so with written notice of this requirement and the written notice shall also include the following text:

“Basic payroll information pertaining to all employees who accept an assignment or continue performing services for the University of California will be shared with the University of California and the organizations that represent University of California employees. The information that will be shared includes your full name, university work location, mobile telephone number, email address, and home address. The purpose of sharing this information is to ensure that the University of California and the organizations that represent University of California employees can contact you if they discover you have been paid less than required by the vendor’s contract with the university or university policy and so that the University of California can provide you with a timely offer of employment as soon as you become eligible.”

(2) Basic payroll information for an individual employee who performs services for the university shall also, upon request, be made available for inspection by that individual employee or that individual employee’s authorized representative or be furnished to that individual employee or that individual employee’s authorized representative.

(c) If an auditor, vendor, the university, or any other person conducts or receives an audit, verification, notice, report, or finding with regard to whether a vendor has compensated employees at the total compensation rate required by the vendor’s contract with the university or university policy, including the vendor’s failure to provide employees with any “wage and benefits parity” rate required by university policy, that audit, verification, notice, report, or finding shall be provided to the university and members of any joint labor-management committee.

10510.53.

 (a) It shall be unlawful for any vendor to accept payment from the university pursuant to a contract for services if the vendor is performing services or supplying the university with employees to perform services who are paid less than the total compensation rate specified in the vendor’s contract with the university or required by university policy, whichever is higher.

(b) An aggrieved employee may bring a civil action, including on behalf of an employee or employees against whom a violation of this article was committed, against a vendor to recover compensation that has been earned but was not paid at the total compensation rate required by the vendor’s contract with the university or university policy, whichever is higher, or to enforce any other provision of this article.

(c) (1) Prior to bringing an action against a vendor, an aggrieved employee shall first provide a vendor with written notice of an alleged violation of this article. The notice shall include the names or other information sufficient to identify the employees against whom the alleged violations were committed, dates of employment, the period of alleged noncompliance, and contact information. The notice shall also provide the vendor with the opportunity to correct and cure the violation.

(2) If a vendor receives written notice pursuant to paragraph (1), the vendor shall provide a copy of the written notice to the president of the university within five business days of receipt.

(3) Upon providing written notice pursuant to paragraph (1), an aggrieved employee may file suit only if the vendor fails to provide documentation, within 60 days, demonstrating that each employee identified in the notice has been made whole, has been provided with the notices required by this article, and is receiving a total compensation rate no less than the rate specified in the vendor’s contract with the university or in university policy, whichever is higher.

(d) If a claimant prevails in an action brought under this section, the vendor shall notify the president of the university of the decision and the court shall order the following:

(1) Any vendor that supplies the university with any employee who is paid a total compensation rate less than the amount fixed by the vendor’s contract with the university or university policy to pay a penalty and restitution, as follows:

(A) For any initial violation of subdivision (a), one hundred dollars ($100) for each underpaid employee for each pay period for which the employee is underpaid, not exceeding an aggregate penalty of five hundred dollars ($500) per employee. This amount shall be in addition to an amount sufficient to recover underpaid compensation.

(B) For each subsequent violation of subdivision (a), two hundred fifty dollars ($250) for each underpaid employee for each pay period for which the employee is underpaid, not exceeding an aggregate penalty of one thousand dollars ($1000) per employee. This amount shall be in addition to an amount sufficient to recover underpaid compensation.

(C) For each knowing and intentional failure by a vendor to comply with Section 10510.52, fifty dollars ($50) per employee for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, not exceeding an aggregate penalty of one thousand dollars ($1,000) per employee. This amount shall be in addition to an amount sufficient to recover underpaid compensation.

(2) To the extent a vendor bills the university for services provided via an hourly bill rate, and to the extent a vendor fails to pay its employees the amount fixed by the vendor’s contract with the university or university policy, a court may, in its discretion, require that the vendor return to the university any amounts paid by the university to the vendor for services that exceed the amounts the vendor paid to its employees providing services for any payroll periods after January 1, 2024.

(3) Reasonable attorney’s fees and costs.

(e) Compensation and penalties recovered pursuant to this section shall be paid to the employee against whom a violation of this article was committed.

(f) The remedies provided for in this section are in addition to any other remedies provided by law. The penalties provided for in this section are in addition to any other penalties provided by law except that an employee shall not also receive penalties provided for in subdivision (f) of Section 226 or Section 1197.1 of the Labor Code.

(g) This section shall not preclude or alter the university’s ability to contract for services as permitted under existing policies or collective bargaining agreements, nor shall it preclude the university from hiring in emergency circumstances or to meet other staffing needs.

10510.54.

 The provisions of this article are severable. If any provision of this article or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

SEC. 2.

 Section 10527 is added to the Public Contract Code, immediately following Section 10526, to read:

10527.

 This article does not apply to violations of Article 2.7 (commencing with Section 10510.50) of this chapter.

SECTION 1.Part 4.3 (commencing with Section 1440) is added to Division 2 of the Labor Code, to read:

4.3.UNIVERSITY OF CALIFORNIA VENDORS

1440.

This part shall be known, and may be cited, as the Recovery of Earned but Unpaid Wages Act.

1441.

As used in this part:

(a)“Aggrieved employee” means either of the following:

(1)An employee against whom one or more alleged violations of this part was committed.

(2)A university employee coworker of an employee against whom one or more alleged violations of this part was committed who performs services for the university at or for the same university location or department as the employee.

(b)“Basic payroll information” means, for each vendor-supplied employee who performed services at any time during the preceding six-month period, the following information:

(1)The employee’s full name, job title, mobile telephone number, email address, and home address.

(2)Work location while performing services for the university.

(3)The employee’s hourly rate of pay while performing services for the university for each applicable pay period during the preceding six-month period.

(4)The hourly value of employer-paid benefits provided to the employee, if any, while performing services for the university for each applicable pay period during the preceding six-month period.

(5)The employee’s hours of work while performing services for the university for each applicable pay period during the six-month period.

(c)“Contract” includes any written instrument, purchase order, change order, order, requisition, service agreement, or other written or electronic document, however titled, reflecting an agreement that the vendor will perform services or supply the university with employees to perform services in exchange for payment.

(d)“Employee” includes any contract worker, or individual employed by any vendor, or otherwise supplied to the university by any vendor, to perform services for the university. “Employee” also includes an individual treated by either the vendor, a subcontractor, or the university as an independent contractor. “Employee” does not include any individual who is a parent, spouse, child, or legally adopted child of the employer, any sole proprietor, or any individual with an ownership interest of 5 percent or more in the vendor.

(e)“Employer” means any person, as defined in Section 18, who directly or indirectly, or through an agent or any other person, employs or exercises control over the wages, hours, or working conditions of any person.

(f)“Hourly value of employer-provided benefits” means the employer’s actual cost for the employee’s retirement, health, dental, vision, and life and disability benefits, if any, calculated as an hourly dollar amount. It does not include any paid time off or any payroll expenses required by law. For any employee who does not receive employer-provided benefits, the hourly value is zero dollars ($0).

(g)“Joint labor-management committee” includes any joint labor-management committee or similar meeting body or committee established jointly by the university and the exclusive representative of university employees who perform the same or similar services as the employees performing services for the university.

(h)“Services” means work that is subject to university policy. “Services” includes services that have been customarily performed by bargaining unit employees of the university, including, but not limited to, the following services: cleaning, custodial, janitorial, or housekeeping services; food services; laundry services; grounds keeping; nonskilled crafts building maintenance; transportation and parking services; security services; billing and coding services; sterile processing; hospital and nursing assistant services; respiratory therapy; and medical imaging services. “Services” does not include financial investment or retirement planning advice, retirement plan recordkeeping, or asset management.

(i)“Subcontractor” means any person, employer, supplier of labor, staffing agency, temporary services employer, or other entity that performs services for the university or supplies employees to perform services, pursuant to a contract with a vendor.

(j)“Total compensation rate” means the employee’s hourly rate of pay plus the hourly value of employer-provided benefits, or the equivalent compensation.

(k)“University” means the University of California.

(l)“University policy” means a policy or collective bargaining agreement adopted or approved by the university that requires vendors to provide employees wages and benefits of equivalent value to the wages and benefits provided to university employees performing the same work.

(m)“Vendor” means contractor and includes any person, employer, supplier of labor, staffing agency, temporary services employer, labor broker, management services provider, or other entity that contracts with the university to provide services or to supply the university with its own employees or those of a subcontractor to perform services. “Vendor” also means any person acting either individually or as an officer, agent, or employee of a vendor. “Vendor” does not include a contractor in the construction industry. For purposes of this subdivision, “contractor in the construction industry” means an employer that provides work associated with construction, including work involving alteration, demolition, building, excavation, renovation, remodeling, maintenance, improvement, repair work, and any other work as described by Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code, and other similar or related occupations or trades.

1442.

(a)A vendor that supplies the university with employees to perform services, shall provide those employees with written notice of the total compensation rate specified in the vendor’s contract with the university or required by university policy, whichever is higher, and the employee’s hourly rate of pay and hourly value of employer-provided benefits. The vendor shall provide employees with these notices at the time each employee is assigned to perform services for the university and thereafter, each January, and within seven days of a change to the employee’s hourly rate.

(b)(1)In January and July of each year, the vendor shall provide basic payroll information to the university and members of any joint labor-management committee. The vendor shall provide all employees who agree to perform services for the university or continue doing so with written notice of this requirement and the written notice shall also include the following text:

“Basic payroll information pertaining to all employees who accept an assignment or continue performing services for the University of California will be shared with the University of California and the organizations that represent University of California employees. The information that will be shared includes your full name, university work location, mobile telephone number, email address, and home address. The purpose of sharing this information is to ensure that the University of California and the organizations that represent University of California employees can contact you if they discover you have been paid less than required by the vendor’s contract with the university or university policy and so that the University of California can provide you with a timely offer of employment as soon as you become eligible.”

(2)Basic payroll information for an individual employee who performs services for the university shall also, upon request, be made available for inspection by that individual employee or that individual employee’s authorized representative or be furnished to that individual employee or that individual employee’s authorized representative.

(c)If an auditor, vendor, the university, or any other person conducts or receives an audit, verification, notice, report, or finding with regard to whether a vendor has compensated employees at the total compensation rate required by the vendor’s contract with the university or university policy, including the vendor’s failure to provide employees with any “wage and benefits parity” rate required by university policy, that audit, verification, notice, report, or finding shall be provided to the university and members of any joint labor-management committee.

1443.

(a)It shall be unlawful for any vendor to accept payment from the university pursuant to a contract for services if the vendor is performing services or supplying the university with employees to perform services who are paid less than the total compensation rate specified in the vendor’s contract with the university or required by university policy, whichever is higher.

(b)An aggrieved employee may bring a civil action, including on behalf of an employee or employees against whom a violation of this part was committed, against a vendor to recover compensation that has been earned but was not paid at the total compensation rate required by the vendor’s contract with the university or university policy, whichever is higher, or to enforce any other provisions of this part.

(c)(1)Prior to bringing an action against a vendor, an aggrieved employee shall first provide a vendor with written notice of an alleged violation of this part. The notice shall include the names or other information sufficient to identify the employees against whom the alleged violations were committed, dates of employment, the period of alleged noncompliance, and contact information. The notice shall also provide the vendor with the opportunity to correct and cure the violation.

(2)If a vendor receives written notice pursuant to paragraph (1), the vendor shall provide a copy of the written notice to the president of the university within five business days of receipt.

(3)Upon providing written notice pursuant to paragraph (1), an aggrieved employee may file suit only if the vendor fails to provide documentation, within 60 days, demonstrating that each employee identified in the notice has been made whole, has been provided with the notices required by this part, and is receiving a total compensation rate no less than the rate specified in the vendor’s contract with the university or in university policy, whichever is higher.

(d)If a claimant prevails in an action brought under this section, the vendor shall notify the president of the university of the decision and the court shall order the following:

(1)Any vendor that supplies the university with any employee who is paid a total compensation rate less than the amount fixed by the vendor’s contract with the university or university policy to pay a civil penalty and restitution, as follows:

(A)For any initial violation of subdivision (a), one hundred dollars ($100) for each underpaid employee for each pay period for which the employee is underpaid, not exceeding an aggregate penalty of five hundred dollars ($500) per employee. This amount shall be in addition to an amount sufficient to recover underpaid compensation.

(B)For each subsequent violation of subdivision (a), two hundred fifty dollars ($250) for each underpaid employee for each pay period for which the employee is underpaid, not exceeding an aggregate penalty of one thousand dollars ($1000) per employee. This amount shall be in addition to an amount sufficient to recover underpaid compensation.

(C)For each knowing and intentional failure by a vendor to comply with Section 1442, fifty dollars ($50) per employee for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, not exceeding an aggregate penalty of one thousand dollars ($1,000) per employee. This amount shall be in addition to an amount sufficient to recover underpaid compensation.

(2)To the extent a vendor bills the university for services provided via an hourly bill rate, and to the extent a vendor fails to pay its employees the amount fixed by the vendor’s contract with the university or university policy, a court may, in its discretion, require that the vendor return to the university any amounts paid by the university to the vendor for services that exceed the amounts the vendor paid to its employees providing services for any payroll periods after January 1, 2024.

(3)Reasonable attorney’s fees and costs.

(e)Compensation and civil penalties recovered pursuant to this subdivision shall be paid to the employee against whom a violation of this part was committed.

(f)The remedies provided for in this section are in addition to any other remedies provided by law. The civil penalties provided for in this section are in addition to any other penalties provided by law except that an employee shall not also receive civil penalties provided for in Section 226 or 1197.1.

(g)This section shall not preclude or alter the university’s ability to contract for services as permitted under existing policies or collective bargaining agreements, nor shall it preclude the university from hiring in emergency circumstances or to meet other staffing needs.

1444.

The provisions of this part are severable. If any provision of this part or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.