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AB-790 Eligible employers: personal services contracts.(2019-2020)

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Date Published: 01/23/2020 09:00 PM
AB790:v96#DOCUMENT

Amended  IN  Assembly  January 23, 2020
Amended  IN  Assembly  April 11, 2019
Amended  IN  Assembly  March 20, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 790


Introduced by Assembly Member Levine

February 20, 2019


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


LEGISLATIVE COUNSEL'S DIGEST


AB 790, 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, 2021, and annually thereafter, identify employers with a market capitalization of 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, 2021, 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 85% of the area median income for a single person household. provide the employees who will perform that contract with specified information regarding the employees’ right to form or assist labor organizations as provided for by federal law. This bill would define terms for purposes of these provisions. 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 at or below 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.

SEC. 2.

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

1182.14.
 (a) For purposes of this section:

(1)“Area median income” means an income that is equal to the income limit for median income for a single-person household for that geographic area published by the Department of Housing and Community Development, pursuant to Section 50093 of the Health and Safety Code.

(2)

(1) “Department” means the Department of Industrial Relations.

(3)

(2) “Eligible employer” means a publicly held company with a market capitalization of at least one billion dollars ($1,000,000,000) according to the company’s most recent annual report that the company filed using form 10-K, or other applicable substitute form, with the Securities and Exchange Commission.

(4)

(3) “Market capitalization” means the value of a corporation determined by multiplying the market price of one share of the corporation by the total number of outstanding shares.

(5)

(4) “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.

(6)“Wage equal to 85 percent of the area median income” means a wage that if paid for an 8-hour workday over a 40-hour workweek would be sufficient to equal an annual wage that is equal to 85 percent of the area median income.

(7)“Workday” has the same meaning as defined in subdivision (a) of Section 500.

(8)“Workweek” has the same meaning as defined in subdivision (b) of Section 500.

(b) The department shall, by January 1, 2021, and annually thereafter, identify employers with a market capitalization of at least one billion dollars ($1,000,000,000). The department shall 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) The publicly held company is registered with the Securities and Exchange Commission.
(c) An eligible employer that enters into a personal services contract on or after January 1, 2021, 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 85 percent of the area median income. provide the employees who will perform the services in that contract a notice that they have a right “to form, join, or assist labor organizations” as stipulated in Section 7 of the National Labor Relations Act (NLRA) if that employer is subject to the NLRA. This notice shall be provided annually in writing.
(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. 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.