BILL ANALYSIS AB 423 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 423 (Hertzberg) As Amended July 18, 2001 Majority vote ----------------------------------------------------------------- |ASSEMBLY: |49-24|(June 6, 2001) |SENATE: |25-7 |(July 19, | | | | | | |2001) | ----------------------------------------------------------------- Original Committee Reference: L. & E. SUMMARY : Establishes a system for the verification of farm labor contractor (FLC) licenses including a Verification Unit at the Department of Industrial Relations (DIR). Specifies the duties of growers and FLCs to obtain copies of licenses, and to use the verification system to determine if they are valid. Revises criminal penalties (fines) for specified wage violations, and establishes a program of state and local enforcement units to prosecute such cases. The Senate amendments : 1)Delay until January 1, 2003, the effective date of the provision that a grower, FLC, or other person, who knowingly and willfully fails to pay wages, as specified, is guilty of a misdemeanor. Delete from the elements of the crime the requirement that such party acted with "intent to defraud." 2)Delete the provisions of this bill requiring mandatory imprisonment in jail upon a third conviction and other provisions modifying existing law with respect to imprisonment in jail. 3)Increase, effective January 1, 2003, the fines upon conviction. The minimum fine upon a second conviction is increased from $5,000 to $10,000. The minimum fine upon a third conviction is increased from $10,000 to $25,000. 4)Limit the support of a local FLC enforcement unit (Local Unit) by the state FLC Enforcement Unit (State Unit) to technical rather than financial aid and delete the allocation of fine revenues to the State Unit. Require the Local Unit to coordinate, whenever possible, with the Rural Crime Prevention Program in its jurisdiction. AB 423 Page 2 5)Provide that a portion of the annual FLC license fee shall be allocated to the FLC verification unit as well as the State Unit. 6)Provide that this bill will become operative only if SB 1125 (Burton), pending the Governor's signature, is enacted and becomes effective on or before January 1, 2002. AS PASSED BY THE ASSEMBLY , this bill: 1)Established an affirmative obligation of a grower, as defined, to inspect, copy, and verify the license of a person contracted as a FLC. Established the duty and a procedure for a grower to verify a FLC license by contacting within specified timelines a license verification unit to be established by the Labor Commissioner (LC). Established a similar duty for a FLC to inspect the license of persons, as specified, contracted by a FLC. 2)Required the LC to establish and maintain a Farm Labor Contractor License Verification Unit (Verification Unit), no later than July 1, 2002, to certify, upon the request of a grower or FLC, the status of a state license issued to a FLC, and to provide a unique verification number to the requestor. The obligation to verify licenses and related penalties do not apply until three months after the verification unit becomes operational as certified by the State Auditor, and may be suspended if the system becomes inoperable. 1)Required a FLC whose license is not renewed to notify a grower within three days and provided that it is a misdemeanor for a person whose license was suspended or revoked to act as a FLC. 1)Specified the duties of a FLC to ensure that every person who is performing farm labor contracting activities on behalf of a FLC has obtained a license. Provided that a FLC is responsible for specified labor law violations committed by his or her employee. 1)Provided that any grower, FLC, or other person as specified who knowingly, willfully, and with intent to defraud fails to pay, or causes the failure to pay, wages, as specified, is guilty of a misdemeanor. Provided for imprisonment in a county jail and fines, or both, upon conviction. Provided for mandatory AB 423 Page 3 imprisonment in a county jail for not less than 30 days and a fine of not less than $10,000, or both, upon a third conviction, as specified. Provided also for other sanctions under specified statutes, and required the LC to revoke the defendant's license for specified period upon conviction. Provided that a person may not be prosecuted under any other law if the prosecution would be based upon the same set of acts if a person is prosecuted under these provisions. 1)Provided that upon final determination of the LC that a grower, FLC, or person acting in the capacity of a FLC has failed to pay wages to its employees, the grower, FLC or such person shall immediately pay those wages. If payment is not made within 30 days of the final determination, the LC shall notify the local district attorney. 1)Required the Director of DIR to establish a State Unit to develop a program of financial land technical assistance to a district attorney's office that establishes a local FLC enforcement unit (local unit). Provided that a local unit shall concentrate enhanced prosecution efforts on the prosecution of FLCs who violate a state law regulating wages. Allocated the fines collected pursuant to these provisions to DIR for support of the state unit. FISCAL EFFECT : According to the Senate Appropriations Committee analysis, as amended in the Senate, additional costs resulting from this bill will be offset by fee revenue. COMMENTS : This bill, sponsored by the United Farm Workers of America, AFL-CIO, focuses on the problem of wage payment violations by FLCs. The text of this bill, as introduced, was contained in AB 2862 (Romero) of 2000, which was vetoed. The Governor's veto message indicated that he would sign legislation that incorporates all of the provisions in the bill, but with stiff civil penalties in place of criminal sanctions for employers who knowingly violate the law. The amended bill deletes the provision for mandatory jail time sentence upon a third conviction and other provisions increasing jail time upon conviction. Instead, it increases the fines upon conviction under this bill. Analysis Prepared by : Ralph Lightstone / L. & E. / (916) 319-2091 FN: 0002142