Bill Text: CA SB1399 | 2019-2020 | Regular Session | Amended
Bill Title: Employment: garment manufacturing.
Spectrum: Partisan Bill (Democrat 5-0)
Status: (Engrossed - Dead) 2020-08-25 - Read second time. Ordered to third reading. [SB1399 Detail]
Download: California-2019-SB1399-Amended.html
Amended
IN
Senate
May 19, 2020 |
Amended
IN
Senate
April 08, 2020 |
Introduced by Senator Durazo (Principal coauthor: Assembly Member Gonzalez) |
February 21, 2020 |
LEGISLATIVE COUNSEL'S DIGEST
Existing law makes any person engaged in the business of garment manufacturing who is not registered with the Labor Commissioner guilty of a misdemeanor.
This bill would prohibit the commissioner from permitting a person engaged in garment manufacturing or contracting from registering until the person has obtained a surety bond in an amount based upon the number of employees engaged in garment manufacturing, as specified, for the benefit of an employee damaged by their employer’s failure to pay minimum wages, overtime pay, break premiums, liquidated damages, or other penalties. Because the bill would expand the definition of garment manufacturing, the bill would change the definition of a crime, thereby imposing a
state-mandated local program. The bill would also require a brand guarantor to file a bond with the commissioner in order to do business in the state, as specified. The bill would make failure to maintain a bond as required by these provisions punishable by a civil fine of $100 for each calendar day that the person engaged in garment manufacturing or contracting without a valid bond.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
The Legislature finds and declares all of the following:SECTION 1. SEC. 2.
Section 2670 of the Labor Code is amended to read:2670.
(a) It is the intent of the Legislature to restore the purpose of AB 633 (Chapter 554 of the Statutes of 1999) to prevent wage theft against garment workers by clarifying ambiguities in the original language. AB 633 sought to ensure that persons who contracted to have garments manufactured were liable as guarantors for the unpaid wages and overtime of the workers making their garments.Accordingly, this act amends this part to include a requirement that garment manufacturers and contractors obtain surety bonds to ensure that garment workers are able to recover
their stolen wages.
SEC. 2.SEC. 3.
Section 2671 of the Labor Code is amended to read:2671.
As used in this part:SEC. 3.SEC. 4.
Section 2673 of the Labor Code is amended to read:2673.
Every employer engaged in the business of garment manufacturing shall keep accurate records for three years which show all of the following:SEC. 4.SEC. 5.
Section 2673.1 of the Labor Code is amended to read:2673.1.
(a) To ensure that employees are paid for all hours worked, an employee engaged in the performance of garment manufacturing, as defined in subdivision (b) of Section 2671, shall not be paid by the piece or unit, or by piece rate. Nothing in this section shall be deemed to prohibit incentive-based bonuses. This section shall not apply to workplaces where employees are covered by a bona fide collective bargaining agreement, or other enforceable agreement, if the agreement expressly provides for wages, hours of work, working conditions, stewards or monitors, and a process to resolve disputes concerning nonpayment of wages.SEC. 5.SEC. 6.
Section 2675.5 of the Labor Code is amended to read:2675.5.
(a) The commissioner shall deposit seventy-five dollars ($75) of each registrant’s annual registration fee, required pursuant to paragraph (5) of subdivision (a) of Section 2675, into a separate account known as the Garment Manufacturers Special Account. Funds from the Garment Manufacturers Special Account shall be disbursed by the commissioner only to persons determined by the commissioner to have been damaged by the failure to pay wages and benefits by any garment manufacturer, jobber, brand guarantor, contractor, or subcontractor.(3)
(a)The commissioner shall not permit a contractor or person engaged in garment manufacturing, as defined in subdivision (b) of Section 2671, to register, or to renew registration, until both of the following conditions are satisfied:
(1)The person engaged in garment manufacturing or contracting has obtained a surety bond issued by a surety company admitted to do business in this state. The principal sum of the bond shall be as follows:
(A)Not less than one hundred fifty thousand dollars ($150,000) for garment manufacturers or contractors that employ ten or fewer workers engaged in garment
manufacturing.
(B)Not less than three hundred thousand dollars ($300,000) for garment manufacturers or contractors that employ between 11 and 20 workers engaged in garment manufacturing.
(C)Not less than four hundred fifty thousand dollars ($450,000) for garment manufacturers or contractors that employ between 21 and 30 workers engaged in garment manufacturing.
(D)Not less than six hundred thousand dollars ($600,000) for garment manufacturers or contractors that employ 31 or more workers engaged in garment manufacturing.
(2)The person engaged in garment manufacturing or contracting shall file a copy of the bond with the commissioner.
(b)The bond required by this section shall be in favor of, and payable to, the people of the State of California, and shall be for the benefit of any employee damaged by their employer’s failure to pay minimum wages, overtime pay, break premiums, liquidated damages, or other penalties.
(c)(1)Thirty days before the cancellation or termination of a surety bond required by this section, the surety shall send written notice to both the person engaged in garment manufacturing or contracting and the commissioner that identifies the bond and the date of the cancellation or termination.
(2)A person engaged in garment manufacturing or contracting that had a bond canceled or terminated shall not conduct any business
until the person obtains a new surety bond and files a copy of the bond with the commissioner.
(d)Failure to maintain the bond required by this section shall result in a civil fine of one hundred dollars ($100) for each calendar day, not to exceed ten thousand dollars ($10,000), that the person engaged in garment manufacturing or contracting engages in the business of garment manufacturing or contracting without a valid bond.
(e)This section shall not require a bond in favor of employees covered by a bona fide collective bargaining agreement, or other enforceable agreement, if the agreement expressly provides for wages, hours of work, working conditions, stewards or monitors, a process to resolve disputes concerning nonpayment of wages, and a waiver of the bond required by this
section.
(a)The commissioner shall not permit a brand guarantor, as defined in subdivision (c) of Section 2671, to conduct business in this state until both of the following conditions are satisfied:
(1)The brand guarantor has obtained a surety bond issued by a surety company admitted to do business in this state. The principal sum of the bond shall be as follows:
(A)Not less than one hundred fifty thousand dollars ($150,000) for brand guarantors that employ ten or fewer workers engaged in garment manufacturing.
(B)Not less than three hundred
thousand dollars ($300,000) for brand guarantors that employ between 11 and 20 workers engaged in garment manufacturing.
(C)Not less than four hundred fifty thousand dollars ($450,000) for brand guarantors that employ between 21 and 30 workers engaged in garment manufacturing.
(D)Not less than six hundred thousand dollars ($600,000) for brand guarantors that employ 31 or more workers engaged in garment manufacturing.
(2)The brand guarantor shall file a copy of the bond with the commissioner.
(b)The bond required by this section shall be in favor of, and payable to, the people of the State of California, and shall be for the benefit of any employee
damaged by their employer’s failure to pay minimum wages, overtime pay, break premiums, liquidated damages, or other penalties.
(c)(1)Thirty days before the cancellation or termination of a surety bond required by this section, the surety shall send written notice to both the brand guarantor and the commissioner that identifies the bond and the date of the cancellation or termination.
(2)A brand guarantor that had a bond canceled or terminated shall not conduct any business until the person obtains a new surety bond and files a copy of the bond with the commissioner.
(d)Failure to maintain the bond required by this section shall result in a civil fine of one hundred dollars ($100) for each calendar
day, not to exceed ten thousand dollars ($10,000), that the brand guarantor engages in the business of garment manufacturing or contracting without a valid bond.
(e)This section shall not require a bond in favor of employees covered by a bona fide collective bargaining agreement, or other enforceable agreement, if the agreement expressly provides for wages, hours of work, working conditions, stewards or monitors, a process to resolve disputes concerning nonpayment of wages, and a waiver of the bond required by this section.