BILL ANALYSIS                                                                                                                                                                                                    Ó

                                                                     AB 202

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          Date of Hearing:  April 8, 2015


                               Roger Hernández, Chair

          AB 202  
          (Gonzalez) - As Amended April 6, 2015

          SUBJECT:  Professional sports teams:  cheerleaders:  employee  

          SUMMARY:  Provides that specified professional sports  
          "cheerleaders" shall be deemed to be employees for state  
          employment law purposes.  Specifically, this bill:  

          1)Provides that, notwithstanding any other law, for purposes of  
            the provisions of state law that govern employment, a  
            cheerleader that is utilized by a California-based  
            professional sports team during its exhibitions or games shall  
            be deemed to be an employee.

          2)Defines "cheerleader" to mean an individual who performs  
            acrobatics, dance or gymnastics exercises on a recurring  
            basis.  However, the term does not include an individual who  
            is not otherwise affiliated with the sports team and is  
            utilized no more than one time in a calendar year.

          3)Defines "professional sports team" to mean a team at either a  
            minor or major league level in the sport of baseball,  
            basketball, football, ice hockey, or soccer.


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          4)Defines "California-based team" to mean a team that plays a  
            majority of its home games in California.

          5)Provides that the professional sports team shall ensure that  
            the cheerleader is classified and treated as an employee.

          FISCAL EFFECT:  Unknown

          COMMENTS:  This bill addresses an issue that has garnered  
          significant media attention over the last year - the treatment  
          of professional sports cheerleaders.  A number of lawsuits  
          (including one against the Oakland Raiders) have been filed  
          recently alleging violations of employment laws - including  
          minimum wage, overtime, meal and rest periods, and illegal  
          deductions - regarding professional sports cheerleaders.  Other  
          claims have been made that such cheerleaders have been  
          misclassified as independent contractors rather than employees,  
          thereby depriving them of important employment law protections. 

          As mentioned above, a lawsuit was filed in January of last year  
          alleging a number of employment law violations against the  
          Oakland Raiders.  Similar lawsuits have reportedly been filed  
          against the Tampa Bay Buccaneers, the New York Jets, the Buffalo  
          Bills, the Cincinnati Bengals, and the National Football League  

          Brief Background on Employment Misclassification

          Employee misclassification has become a serious problem in the  
          United States, and particularly in California.  When companies  
          misclassify workers as independent contractors instead of as  


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          employees, these workers do not receive worker protections,  
          including minimum wages, overtime pay, and health and vacation  
          benefits, to which they would otherwise be entitled.  Standard  
          employee protections such as anti-discrimination laws and safety  
          regulations also do not apply to independent contractors.   
          Additionally, businesses do not deduct taxes, 401(k), Social  
          Security, or Medicare payments from the paychecks of independent  
          contractors, which results in a loss of state tax income from  
          the businesses as well as a potential loss of income from the  
          individual worker who may not properly report income.  Because  
          employers do not pay unemployment taxes for independent  
          contractors, workers who are misclassified cannot obtain  
          unemployment benefits if they lose their jobs.

          A number of reports in the last several years have chronicled  
          the societal consequences of and impacts upon American workers  
          of misclassification of workers as independent contractors  
          versus employees.  The United States Government Accountability  
          Office conducted a study of misclassification of workers as  
          independent contractors and found that employee  
          misclassification cost the United States government $2.72  
          billion in revenue from Social Security, unemployment and income  
          taxes in 2006 alone.  (GAO, Employee Misclassifications:   
          Improved Outreach Could Help Ensure Proper Worker  
          Classification, GAO-07-859T (May 8, 2007), pg. 1.)

          Similarly, in California EDD reported that the number of  
          misclassified employees increased 54 percent from 2005 to 2007,  
          reaching 15,751 workers in 2007. During this 3-year period, the  
          EDD recovered a total of $111,956,556 in payroll tax  
          assessments, $18,537,894 in labor code citations, and  
          $40,348,667 in assessments on employment tax fraud cases.  (See  
          California Employment Development Department, Annual Report:  
          Fraud Deterrence and Detection Activities, report to the  
          California Legislature (June 2008))  A Daily Journal article  
          reported on the recent increase in worker misclassification and  
          one person interviewed for the article noted that worker  


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          misclassification is attractive to employers because they can  
          cut their labor costs by up to 30 percent by moving to an  
          independent contractor model.  (Ho, Independent Contractor  
          Status Raises IRS Eyebrows:  Contractor Status is Cheaper for  
          Employers; Some Workers are Crying Foul, Daily Journal (May 17,  

          These concerns led to the passage of SB 459 (Corbett) from 2011,  
          which established significant civil penalties for the  
          intentional misclassification

          "Statutory Employees" and Previous Legislation

          As discussed above, in general, most individuals are determined  
          to be employees under common law, which involves evaluating a  
          number of specific factors.  However, a "statutory employee" is  
          defined as an employee by law under a specific statute.

          For example, Unemployment Insurance Code Section 621 deems  
          certain groups of workers to be employees for purposes of  
          certain employment tax purposes.  These "statutory employees"  
          include corporate officers, specified agent/commission drivers,  
          traveling salespersons, certain home workers, and certain  
          artists and authors.


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          AB 950 (John A. Pérez) of 2011 would have deemed port drayage  
          drivers to be employees for employment law purposes, similar to  
          the approach taken by this bill.  AB 950 was moved to the  
          Inactive File on the Assembly floor. 


          Stated Need For The Bill

          According to the author, the widespread practice of worker  
          misclassification has resulted in a failure to justly compensate  
          cheerleaders. This bill will ensure that professional  
          cheerleaders will no longer be misrepresented as independent  
          contractors by statutorily defining them as "employees" entitled  
          to the same legal rights and benefits as employees.

          The author states:

            "It takes a lot of time and hard work to be a cheerleader,  
            including an initial financial investment along with a  
            commitment to practice just in order to have an opportunity to  
            professionally dance and cheer for a sports team. 

            Cheerleaders are required to attend and participate in  


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            practices, mandatory rehearsals, fittings, preparations,  
            drills, photo sessions, meetings, and workouts. Cheerleaders  
            are required to finance their business expenditures, including  
            travel and investment in their physical appearance by  
            purchasing required cosmetics, in the normal course of their  
            cheerleading duties. 

            During a sporting event, professional cheerleaders are  
            performing and cheering. It is a product of hours upon hours  
            of rehearsing dance routines, gymnastics and stunts. Cheer  
            athletes practice their routines at least 2 to 5 times a week.  
            They must get physically fit in order to carry out intense  
            dance routines and stunts in cheerleading. On game days, a  
            cheerleader's performance can consist of motivating players  
            along with a combination of dance and music, gymnastics and  
            acrobatics. As frontline team ambassadors, they're valuable  
            contributors that add significant value to the entertainment  
            product and fan experience.  

            Cheerleaders are featured prominently in advertising and  
            game-day coverage, especially leading in and out of every  
            commercial break on the nationally broadcasted television  
            programs. Prior to each sports season, selected cheerleaders  
            have training camps and practice, photo shoots and swimsuit  
            calendars obligations. Throughout the year, they have non-game  
            day annual responsibilities, such as guest appearances at  
            schools, charity events, or conferences. These are all  
            employee obligations imposed by an employer?


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            ?After examining numerous factors, it's clear that a  
            cheerleader's position constitutes an employee status. For  
            instance, once cheerleaders are selected to work for a sports  
            franchise, the control over their work time ends.  The  
            organization's management directs the set work hours, payment  
            schedules, dress codes and standards for behavior, among other  
            work conditions."

          This bill would establish statutory employment status for  
          covered cheerleaders. This would not impact the application of  
          protections that apply to cheerleaders prior to the passage of  
          the bill nor impact prior claims or settlements under existing  
          law or existing theories of liability.


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          Supporters argue that this bill will would clarify that a  
          professional cheerleader is provided the same rights and  
          benefits of an employee under state law and is not improperly  
          misclassified as an independent contractor.  As a result,  
          professional sport cheerleaders would be guaranteed a legal wage  
          for attending and participating in team practices, rehearsals,  
          preparations, meetings and required workouts.  In addition, they  
          would also be covered for all required appearances at corporate,  
          community and charity events.



          CA Conference Board of the Amalgamated Transit Union

          CA Conference of Machinists

          California Employment Lawyers Association

          California Labor Federation, AFL-CIO


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          California School Employees Association

          California Teamsters Public Affairs Council

          Consumer Attorneys of California

          Engineers & Scientists of California

          International Longshore & Warehouse Union

          Jockeys' Guild

          Professional & Technical Engineers



          None on file.

          Analysis Prepared by:Ben Ebbink / L. & E. / (916) 319-2091


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