BILL ANALYSIS                                                                                                                                                                                                    Ó

                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair

          AB 263 (Hernandez) - Employment: Retaliation: Immigrant-Related  
          Amended: August 12, 2013        Policy Vote: L&IR 3-0; Judiciary  
          Urgency: No                     Mandate: Yes
          Hearing Date: August 30, 2013                           
          Consultant: Robert Ingenito     

          Bill Summary: AB 263 would make it unlawful for an employer to  
          engage in unfair immigration-related practices, as defined,  
          against any person as retaliation for exercising Labor  
          Code-related rights. It also would establish penalties for  
          violation of this prohibition.

          Fiscal Impact: 
                 The Department of Industrial Relations (DIR) estimates  
               that it would incur costs of $415,000 (special funds) and  
               require up to five positions to implement the provisions of  
               the bill.

                 The Department of Justice indicates its impacts from the  
               bill would be insignificant.

                 Costs to the state court system are unknown.

          Background: Employees are entitled to protections under current  
          law regardless of their immigration status. Nevertheless, cases  
          exist where such workers seek to exercise their employment  
          rights (e.g. receiving minimum wage, or being paid for the hours  
          they work, a sexual harassment-free work environment, etc.),  
          with the employer responding by threatening to report them  
          and/or their family to immigration or law enforcement officials  
          (or actually doing so). 

          Proposed Law: This bill defines an unfair immigration-related  
          practice as any of the following when undertaken for retaliatory  


          AB 263 (Hernandez)
          Page 1

                 Requesting additional or differing documents than are  
               required under federal law, or the refusal to honor  
               documents that reasonably appear to be genuine.

                 Using the federal E-Verify system to check the  
               employment authorization status of a person at a time or in  
               a manner not currently authorized.

                 Threatening to file or filing a false report to law  

                 Threatening to contact immigration authorities.

          This bill prohibits an employer from retaliating or taking  
          adverse action against any employee or applicant for employment  
          because the employee or applicant has engaged in protected  
          activity. The bill also provides that an employee who was  
          retaliated against or otherwise was subjected to an adverse  
          action is entitled to reinstatement and reimbursement for lost  

          The bill would subject a person who violates these provisions to  
          a civil penalty of up to $10,000 per violation. It also  
          authorizes the court to suspend all licenses held by the  
          business at the location of the violation as follows:

                 For a 1st violation, the court shall order the  
               appropriate government agencies to suspend all licenses, as  
               specified, held by the violating party for a 14 day period.
                 For a 2nd violation, suspend all licenses for a 30 day  

                 For a 3rd violation, suspend all licenses for a 90 day  

                 For a 4th violation, or if the court establishes a  
               pattern or practice of willful violations, permanently  
               revoke all licenses held by the violating party.

          While this bill provides the court discretion to consider  
          various factors such as the impact to its employees before  
          issuing a license suspension, no other violations specific to  
          unfair practices for discrimination and retaliation result in  


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          Page 2

          sanctions such as those provided for in this bill.

          Prior Legislation: This bill is very similar to SB 666  
          (Steinberg) which is pending in the Assembly Appropriations  
          Committee. This bill, however, subjects violating employers to  
          possible suspension and/or revocation of their business  
          license(s), while SB 666 specifies that a business license is  
          subject to suspension or revocation if a current, former, or  
          prospective employee of the licensee attempts to exercise a  
          protected right and, in reaction, the licensee threatens to  
          retaliate or retaliates based on the employee's citizenship or  
          immigration status.  This bill also extends existing protections  
          against retaliation to all persons, not just employers.
          Staff Comments: DIR indicates that it would need between  
          $480,000 and $540,000 (Labor Enforcement and Compliance Fund)  
          and up to 5 additional positions to accommodate the expected  
          increase in workload. Specifically, DIR expects that it would  
          have to investigate 45 additional cases per year. Additionally,  
          since the bill broadens potential liability to persons or  
          entities that act on behalf of employers, DIR estimates  
          approximately 1,100 hours of additional investigative work.  
          These estimates reflect several assumptions, including DIR's  
          current workload for similar cases and the number of immigrant  
          workers. For purposes of this bill, DIR used the Employment  
          Development Department's workforce data that reports 18.6  
          million workers in the state and assumed that 1 in 10 workers  
          are undocumented.
          Although flagged as a mandate by the Legislative Counsel because  
          it alters the definition of a crime or infraction, under Section  
          6(b) of Article XIII B of the California Constitution, any costs  
          to a unit of local government which result from legislation  
          defining a new crime or changing the definition of a crime are  
          not reimbursable by the state.

          Author's Amendments would clarify the procedures under which the  
          Labor Commissioner would investigate potential violations.