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AB-1902 Eligible employers: personal services contracts.(2017-2018)

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Date Published: 03/23/2018 04:00 AM
AB1902:v98#DOCUMENT

Amended  IN  Assembly  March 22, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1902


Introduced by Assembly Member Levine

January 22, 2018


An act to add Section 1182.14 to the Labor Code, relating to private employment.


LEGISLATIVE COUNSEL'S DIGEST


AB 1902, as amended, Levine. Eligible employers: personal services contracts.
Existing law permits state agencies to enter into personal services contracts with firms when certain conditions are met. These conditions include requiring a state agency that enters into a personal services contract for janitorial and housekeeping services, custodians, food service workers, laundry workers, window cleaners, and security guards to include provisions for employee wages that are valued at least 85% of the state’s cost of wages provided to state employees performing similar duties.
Existing law provides for criminal and civil penalties for violations of specified statutes regarding payment of wages.
This bill would require the Department of Industrial Relations to, by January 1, 2020, and annually thereafter, develop a list of eligible employers that the department determines are valued at least $1,000,000,000. The bill would require an eligible employer that enters into a personal services contract, as defined, on or after January 1, 2020, to include a provision in that contract that requires the employees that will perform the services in that contract to be paid a wage that is equal to an unspecified amount. By expanding the scope of an existing crime, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 The Legislature finds and declares all of the following:
(a) According to the United States Bureau of Economic Analysis (BEA), after-tax corporate profits grew by 177 percent from the end of 2008 through the third quarter of 2017.
(b) According to the BEA, California’s real gross domestic product grew by 3.3 percent in 2016 while the national real gross domestic product grew by 1.5 percent that year.
(c) According to the United States Bureau of Labor Statistics (BLS), wage growth since the end of the Great Recession, adjusted for inflation, has been relatively flat except for workers on the higher end of the pay scale.
(d) According to the BLS, the wage gap in California between workers earning at or above the 90th percentile and those in the lowest 10th percentile is one of the largest in the nation.
(e) Therefore, the state needs to take action to further address the wage gap for low-wage workers.

SECTION 1.SEC. 2.

 Section 1182.14 is added to the Labor Code, to read:

1182.14.
 (a) For purposes of this section:
(1) “Department” means the Department of Industrial Relations.
(2) “Eligible employer” means an employer that is included on the list prepared by the department pursuant to subdivision (b) for that year.
(3) “Personal service contract” means a contract to provide janitorial and housekeeping services, custodial services, food service workers, laundry services, window cleaning services, bus driving services, or security guard services to an eligible employer. The department may, by regulation, designate additional types of services that qualify as personal services within the meaning of this section if the department determines that the services are similar to the services described in the previous sentence.
(4) “Wage equal to the area ____ income” means a wage that if paid for an eight hour 8-hour workday over a 40-hour workweek would be sufficient to equal an annual wage that is equal to the area ____ income.
(5) “Workday” has the same meaning as defined in subdivision (a) of Section 500.
(6) “Workweek” has the same meaning as defined in subdivision (b) of Section 500.
(b) The department shall, by January 1, 2020, and annually thereafter, develop a list of eligible employers that the department determines are valued at least one billion dollars ($1,000,000,000). The department shall develop a method to determine whether an employer is eligible under this subdivision, subject to the following requirements:
(1) The employer is located in California. An employer shall be deemed to be located in California if it owns, operates, maintains, or rents any building in California.
(2) If the employer is listed on an established stock exchange, such as the New York Stock Exchange, the American Stock Exchange Exchange, or regional stock exchanges exchanges, or the National Market System of the Nasdaq Stock Market or successors, the department shall use the valuation of the employer on that exchange to calculate whether the employer is eligible under this section.
(3) The department shall use all publicly available information to determine the valuation of an employer.
(c) An eligible employer that enters into a personal services contract on or after January 1, 2020, shall include a provision in that contract that requires the employees that will perform the services in that contract to be paid a wage that is equal to the area ____ income.
(d) The department shall adopt regulations, pursuant to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), in order to implement this section.

SEC. 2.SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.