BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair AB 263 (Hernandez) - Employment: Retaliation: Immigrant-Related Practices Amended: August 12, 2013 Policy Vote: L&IR 3-0; Judiciary 4-2 Urgency: No Mandate: Yes Hearing Date: August 30, 2013 Consultant: Robert Ingenito SUSPENSE FILE. AS PROPOSED TO BE AMENDED. 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 purposes: 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 enforcement.. 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 wages. 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 period. For a 3rd violation, suspend all licenses for a 90 day period. 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 AB 263 (Hernandez) 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.