Bill Text: CA SB516 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Foreign labor contractors: registration.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Vetoed) 2014-02-27 - Consideration of Governor's veto stricken from file. [SB516 Detail]

Download: California-2013-SB516-Amended.html

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BILL NUMBER: SB 516	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  AUGUST 20, 2013
	AMENDED IN ASSEMBLY  AUGUST 5, 2013
	AMENDED IN SENATE  MAY 7, 2013
	AMENDED IN SENATE  APRIL 1, 2013

INTRODUCED BY   Senator Steinberg
   (Coauthors: Senators Leno and Lieu)

                        FEBRUARY 21, 2013

   An act to amend Sections 9998.1, 9998.6, and 9998.8 of, to add
Sections 9998.1.5, 9998.2.5, 9998.10, and 9998.11 to, and to repeal
and add Section 9998.2 of, the Business and Professions Code,
relating to foreign labor contractors.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 516, as amended, Steinberg. Foreign labor contractors:
registration.
   Existing federal law permits certain aliens to engage in
employment in the United States under specified conditions. Existing
state law regulates the services of foreign labor contractors, as
defined, with regard to contracts, recruitment procedures and
representations, and information as to terms and conditions of
employment. Existing law provides that any person who violates the
latter provisions is guilty of a misdemeanor. Existing law also
permits any person aggrieved by a violation of these provisions to
bring an action for injunctive relief or damages, or both, and
authorizes recovery of damages, costs, and reasonable attorney's
fees, in an amount not less than $500, if the aggrieved person
prevails on the action.
   Under existing state law, the Division of Labor Standards
Enforcement in the Department of Industrial Relations, under the
direction of the Labor Commissioner, enforces and administers the
licensing and supervision of farm labor contractors, as defined.
   This bill would  change the definition of a foreign labor
contractor to mean a person who performs foreign labor contracting
activity, as defined, and would  require a foreign labor
contractor to register with the Labor Commissioner and pay a
specified fee, upon satisfying specified conditions. The bill would
require the commissioner to enforce and administer the registration
and supervision of foreign labor contractors. The bill would prohibit
a person from  knowingly  entering into an agreement for
the services of a foreign labor contractor that is not registered
with the commissioner. The bill would also require foreign labor
contractors to disclose specified information and deposit with the
commissioner a surety bond in a specified amount, for payment of any
amount adjudicated against the foreign labor contractor, as a
condition of registration, as specified. The bill would further
require persons using the services of foreign labor contractors to
obtain foreign workers to disclose specified information  and
deposit with the commissioner a surety bond in a specified amount,
for payment of any amount adjudicated against that person, as
specified   to the commissioner  .
   The bill would require a foreign labor contractor to disclose in
writing to each foreign worker who is recruited for employment
certain information, as specified. The bill would prohibit a foreign
labor contractor and its agent from assessing a fee or cost to a
foreign worker for  employment services, as defined 
 foreign labor contracting activities  . The bill would
also prohibit charging a foreign worker with any costs or expenses
not customarily assessed against similarly situated workers, and
would limit the amount of housing costs charged to the foreign worker
to the market rate for similar housing. The bill would prohibit
requiring a foreign worker to pay any costs or expenses prior to
commencement of work. The bill would prohibit additional requirements
or changes to the terms of the contract originally signed by the
foreign worker, unless the foreign worker is provided at least 48
hours to review and consider the additional requirements or changes,
and would require the specific consent of the foreign worker, as
provided, to each additional requirement or change.
   The bill would authorize a civil penalty for violations of these
provisions,  and  would authorize the commissioner
or a person aggrieved by a violation of these provisions to bring an
action for injunctive relief or damages, or both, and would authorize
recovery of damages, costs, and reasonable attorney's fees, as
specified, including enforcement of liability against the 
bonds   bond  deposited with the commissioner. The
bill would provide for the joint and several liability of foreign
labor contractors and persons using the foreign labor contractors'
services  if specified conditions are met  . The bill would
further authorize a person who, upon information and belief, claims a
violation of these provisions has been committed to bring a civil
action for injunctive relief on behalf of the general public and,
upon prevailing, recover reasonable attorney's fees and costs.
Because this bill would expand the scope of the provisions regulating
foreign labor contractors, a violation of which is a misdemeanor,
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.
State-mandated 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) Foreign labor contractors are increasingly relied upon to
facilitate the movement of labor from one country to another.
California is the leading destination state in the United States for
temporary foreign workers. As of January 2011, there were 130,000
temporary foreign workers in California.
   (b) While many foreign labor contractors behave ethically and are
engaged in lawful conduct, some foreign labor contractors are often
complicit with, or are directly involved in, the illegal trafficking
of foreign workers.
   (c) Unscrupulous foreign labor contractors often charge exorbitant
fees for their services, force foreign workers into debt bondage,
falsify documents, and deceive foreign workers about the terms and
conditions of work, thereby increasing their vulnerability to human
trafficking.
   (d) The incidence of known human trafficking cases involving
foreign labor recruiters is increasing dramatically in the United
States. Stricter regulation of foreign labor contractors will ensure
the integrity of the Californian economy, which is undermined when
unregulated persons conspire to fraudulently deceive foreign workers
about the terms and conditions of work.
   (e) California already regulates farm labor contractors through a
comprehensive licensing system and provides some oversight of the
activities of foreign labor contractors. This bill expands regulation
of the activities of foreign labor contractors by the following:
   (1) Requiring foreign labor contractors to register with the
appropriate state agency.
   (2) Requiring disclosure of the use of foreign labor contractors,
and their agents, by persons seeking to employ foreign workers.
   (3) Imposing penalties on a person using an unregistered foreign
labor contractor to obtain foreign workers or employees.
   (4) Expanding the remedies available to foreign workers aggrieved
by the actions of foreign labor contractors and those acting in
concert with them.
  SEC. 2.  Section 9998.1 of the Business and Professions Code is
amended to read:
   9998.1.  The following definitions are applicable to this chapter:

   (a) "Person" includes any natural person, company, firm,
partnership or joint venture, association, corporation, limited
liability company, or sole proprietorship. 
   (b) "Compensation" means all forms of remuneration or
consideration for the provision of employment services to foreign
workers by a foreign labor contractor.  
   (c) "Employment services" includes, but is not limited to,
procuring employment, marketing labor, processing visa applications,
or otherwise arranging the employment or transportation, housing, and
other living accommodations for foreign workers either on behalf of
those foreign workers or on behalf of another person, including
services performed outside the United States. "Employment services"
does 
    (b)     "Foreign labor contracting activity"
means recruiting, soliciting, or related activities with respect to
a foreign worker who resides outside of the United States in
furtherance of that worker's employment in California, including when
that activity occurs wholly outside the United States. "Foreign
labor contracting activity" does  not include the services of an
employer, or employee of an employer, if those services are provided
directly to foreign workers solely to find workers for the employer'
s own use, and are provided without the participation of any foreign
labor contractor. 
   (d) 
   (c)  "Foreign worker" means any person seeking employment
who is not a United States citizen  or permanent resident 
but who is authorized by the federal government to work in the United
States, including a person who engages in temporary nonagricultural
labor pursuant to Section 101(a)(15)(H)(ii)(b) of the federal
Immigration and Nationality Act (8 U.S.C.  Sec.  1101(a)(15)
(H)(ii)(b)). 
   (e) 
    (d)  "Foreign labor contractor" means any person
 who for compensation agrees to assist in securing or who
actually secures for or provides employment services to foreign
workers   who performs foreign labor contracting 
 activity, including any person who performs foreign labor
contracting activity wholly outside the United States, except that
the term does not include any entity of federal, state, or local
government  . "Foreign labor contractor" does not include a
person licensed by the Labor Commissioner as a talent agency under
Chapter 4 (commencing with Section 1700) of Part 6 of Division 2 of
the Labor Code.
  SEC. 3.  Section 9998.1.5 is added to the Business and Professions
Code, to read:
   9998.1.5.  (a) On and after July 1, 2015, a person acting as a
foreign labor contractor shall register with the Labor Commissioner
in accordance with the terms and procedures for registration
established by the commissioner by January 1, 2015. On and after
August 1, 2015, the commissioner shall post on its Internet Web site
the names and contact information for all registered foreign labor
contractors and a list of the names and contact information for any
foreign labor contractors denied renewal or registration.
   (b) The Labor Commissioner may not register a person to act as a
foreign labor contractor, and may not renew a registration, until all
of the following conditions are satisfied:
   (1) The person has executed a written application in a form
prescribed by the commissioner, subscribed and sworn to by the
person, and containing all of the following:
   (A) A statement by the person of all facts required by the
commissioner concerning the applicant's character, competency,
responsibility, and the manner and means by which the person proposes
to conduct operations as a foreign labor contractor if registered.
   (B) The names and addresses of all persons, except bona fide
employees on stated salaries, financially interested, either as
partners, associates, or profit sharers, in the proposed operation as
a foreign labor contractor, together with the amount of their
respective interests.
   (C) A declaration consenting to the designation by a court or the
commissioner as an agent available to accept service of summons in
any action against the registrant, if the registrant has left the
jurisdiction in which the action is commenced or otherwise has become
unavailable to accept service.
   (2) The commissioner, after investigation, is satisfied as to the
character, competency, and responsibility of the person.
   (3) (A) The person has deposited with the commissioner a surety
bond in an amount based on the size of the person's annual gross
receipts from operations as a foreign labor contractor, as follows:
   (i) For gross receipts up to five hundred thousand dollars
($500,000), a  twenty-five-thousand-dollar ($25,000)
    fifty-thousand-dollar ($50,000)  bond.

   (ii) For gross receipts of five hundred thousand dollars
($500,000) to two million dollars ($2,000,000), a 
fifty-thousand-dollar ($50,000)  
one-hundred-thousand-dollar ($100,000)  bond.
   (iii) For gross receipts greater than two million dollars
($2,000,000), a  seventy-five-thousand-dollar ($75,000)
  one-hundred-fifty-thousand-dollar ($150,000) 
bond.
   (B) If the foreign labor contractor has been the subject of a
final judgment in a year in an amount equal to that of the bond
required, that contractor shall be required to deposit an additional
bond within 60 days. The bond shall be payable to the people of the
State of California and shall be conditioned on the foreign labor
contractor complying with all the terms and provisions of this
chapter and paying all damages occasioned to any person by failure to
do so, or by any violation of this chapter, or false statements or
misrepresentations made in the registration process. The bond shall
also be payable for interest on wages and for any damages arising
from violation of applicable orders of the Industrial Welfare
Commission, and for any other monetary relief awarded to a foreign
worker as a result of a violation of law by the foreign labor
contractor.
   (4) The person has paid to the commissioner a registration fee of
five hundred dollars ($500) plus a filing fee of ten dollars ($10).
   (c) The commissioner may not register a person as a foreign labor
contractor, if the person was found by a court, the Secretary of
Labor, or the commissioner to have violated any of the following
provisions:
   (1) The federal Trafficking Victims Protection Act of 2000
(Division A, Public Law 106-386), as amended.
   (2) Sections 1682 to 1699, inclusive, of the Labor Code.
   (3) Section 236.1 of the Penal Code.
   (4) An applicable guest worker program.
  SEC. 4.  Section 9998.2 of the Business and Professions Code is
repealed.
  SEC. 5.  Section 9998.2 is added to the Business and Professions
Code, to read:
   9998.2.  (a) On and after July 1, 2015, a person using the
services of a foreign labor contractor to procure foreign workers or
employees  pursuant to subdivision (b) of Section 9998.1 
shall disclose this information to the Labor Commissioner in
accordance with the terms and procedures established by the
commissioner by January 1, 2015.
   (b) The disclosure shall include, but is not limited to, the
following: 
   (1) The names and addresses of all persons, except bona fide
employees on stated salaries, financially interested, either as
partners, associates, or profit sharers, in the person's business
enterprise, together with the amount of their respective interests.
 
   (1) The name, address, and contact information of the person
designated by the employer to work with a foreign labor contractor.

   (2) A declaration consenting to the designation by a court of the
commissioner as an agent available to accept service of summons in
any action against the person, if the person has left the
jurisdiction in which the action is commenced or otherwise has become
unavailable to accept service. 
   (3) A copy of the foreign labor contractor's disclosure as
required under Section 9998.2.5 to all foreign workers or employees
obtained by the person through the services of the foreign labor
contractor or its agents.  
   (4) Information about the steps the person has taken to verify the
accuracy of the information provided in the foreign labor contractor'
s disclosure under Section 9998.2.5 and submitted under paragraph
(3). 
    (c) A person may not knowingly enter into an agreement for the
services of a foreign labor contractor that is not registered under
this chapter. 
   (d) (1) A person using or anticipating using the services of a
foreign labor contractor to obtain workers or employees shall deposit
with the commissioner a surety bond in an amount based on the size
of the person's annual payroll for all employees, as follows:
 
   (A) For payrolls up to five hundred thousand dollars ($500,000), a
twenty-five-thousand-dollar ($25,000) bond.  
   (B) For payrolls of five hundred thousand dollars ($500,000) to
two million dollars ($2,000,000), a fifty-thousand-dollar ($50,000)
bond.  
   (C) For payrolls greater than two million dollars ($2,000,000), a
seventy-five-thousand-dollar ($75,000) bond.  
   (2) If the person has been the subject of a final judgment in a
year in an amount equal to that of the bond required, that person
shall be required to deposit an additional bond within 60 days. The
bond shall be payable to the people of the State of California and
shall be conditioned on the person complying with all the terms and
provisions of this chapter and paying all damages occasioned to any
person by failure to do so, or by any violation of this chapter, or
false statements or misrepresentations made in complying with this
section. The bond shall also be payable for interest on wages and for
any damages arising from violation of applicable orders of the
Industrial Welfare Commission, and for any other monetary relief
awarded to a foreign worker as a result of a violation of law by the
person. 
  SEC. 6.  Section 9998.2.5 is added to the Business and Professions
Code, to read:
   9998.2.5.  (a) A foreign labor contractor shall ascertain and
disclose in writing to each foreign worker who is recruited for
employment in English and in the primary language of the foreign
worker being recruited, at the time of the foreign worker's
recruitment, the following information:
   (1) The identity of the employer and the identity of the person
conducting the recruiting on behalf of the employer, including any
subcontractor or agent involved in the recruiting.
   (2) A signed copy of the work contract, including all assurances
and terms and conditions of employment, from the prospective employer
for whom the foreign worker is being recruited, including the
compensation to be paid, the place and period of employment, a
description of the type and nature of employment activities, any
withholdings or deductions from compensation, and any penalties for
terminating employment.
   (3) The type of visa under which the foreign worker is to be
employed, the length of time the visa is valid, and the terms and
conditions under which the visa will be renewed with a clear
statement of whether the employer will secure renewal of the visa or
if renewal must be obtained by the foreign worker, and any expenses
associated with securing or renewing the visa.
   (4) An itemized list of any costs or expenses to be charged to the
foreign worker, including, but not limited to, the costs of housing
or accommodation, transportation to and from the worksite, meals,
medical examinations, health care or safety equipment costs, and any
other costs, expenses, or deductions to be charged the foreign
worker.
   (5) A statement, in a form specified by the Labor Commissioner,
that does each of the following:
   (A) States that no foreign labor contractor, or agent or employee
of a foreign labor contractor, can lawfully assess any fee, including
visa fees, processing fees, transportation fees, legal expenses,
placement fees, and other costs to a foreign worker for 
employment services   foreign labor contracting
activities  , and that the employer may bear the costs or fees
for the foreign labor contractor, but that these fees cannot be
assessed to the foreign worker.
   (B) Explains that no additional requirements or changes may be
made to the terms of the contract originally signed by the foreign
worker, unless the foreign worker is provided at least 48 hours to
review and consider the additional requirements or changes and the
foreign worker gives specific consent, voluntarily and without threat
of penalty, to each additional requirement or change.
   (C) Describes the protections afforded the foreign worker by this
chapter and by the federal Trafficking Victims Protection Act of 2000
(Division A, Public Law 106-386), as amended, and any applicable
guest worker program, including relevant information about the
procedure for filing a complaint under this chapter, and the
telephone number for the national human trafficking resource center
hotline.
   (6) Any education or training to be provided or required,
including the nature, timing, and cost of training and the person who
will pay training costs, whether the training is a condition of
employment, continued employment, or future employment, and whether
the foreign worker will be paid or remunerated during the training
period, including the rate of pay or remuneration.
   (7) Any other information that the commissioner may require by
regulation. 
   (b) The foreign labor contractor shall file the disclosure
required under subdivision (a) with the Labor Commissioner within 72
hours of providing it to the foreign worker.  
   (b) 
    (c)  A foreign labor contractor, or the agent,
subcontractor, or employee of a foreign labor contractor, or a person
using the services of a foreign labor contractor to obtain foreign
workers or employees, may not assess any fee, including, but not
limited to, visa fees, processing fees, transportation fees, legal
expenses, placement fees, and other costs, to a foreign worker for
 employment services   foreign labor contracting
activities  . 
   (c) 
    (d)  A foreign worker may not be required to pay any
costs or expenses that are not customarily assessed against all
workers similarly employed  in the United States  . No costs
or expenses shall be required to be paid by the foreign worker prior
to the commencement of work. The amount charged for providing
housing to the foreign worker shall be limited to market rate for
similar housing. 
   (d) 
    (e)  Additional requirements or changes shall not be
made to the terms of the contract originally signed by the foreign
worker, unless the foreign worker is provided at least 48 hours to
review and consider the additional requirements or changes and the
foreign worker gives specific consent, voluntarily and without threat
of penalty, to each additional requirement or change.
  SEC. 7.  Section 9998.6 of the Business and Professions Code is
amended to read:
   9998.6.  A person may not intimidate, threaten, restrain, coerce,
discharge, or in any manner discriminate against a foreign worker or
a member of his or her family in retaliation for the foreign worker's
exercise of any right under this chapter.
  SEC. 8.  Section 9998.8 of the Business and Professions Code is
amended to read:
   9998.8.  (a) A person who violates this chapter or who causes or
induces another to violate this chapter is guilty of a misdemeanor
punishable by a fine of not more than one thousand dollars ($1,000),
or imprisonment in the county jail for not more than six months, or
both.    An employer shall be not liable under this
subdivision if the employer only used services provided by a foreign
labor contractor registered with the Labor Commissioner pursuant to
Section 9998.1.5. 
   (b) A person who violates any provision of this chapter shall be
subject to a civil penalty of no less than one thousand dollars
($1,000) and no more than twenty-five thousand dollars ($25,000) per
violation, in addition to any other civil remedies available to the
Labor Commissioner or an aggrieved person.
   (c) The commissioner or a person aggrieved by a violation of this
chapter may do all of the following:
    (1) Bring an action for injunctive relief against a person who
violates this chapter and, upon prevailing, recover costs and
reasonable attorney's fees.
   (2) Bring an action for damages, against a person who violates
this chapter to recover the greater of all of his or her actual
damages or five hundred dollars ($500) per employee per violation for
an initial violation, and one thousand dollars ($1,000) per employee
for each subsequent violation, and, upon prevailing in an action
brought pursuant to this section, recover costs and reasonable
attorney's fees.
   (3) Enforce the liability on the bonds required under Section
9998.1.5  or 9998.2  . 
   (d) Foreign labor contractors and those persons using their
services to obtain foreign workers or employees are jointly and
severally liable for violations of this chapter.  
   (d) (1) A person using the services of a foreign labor contractor
is jointly and severally liable for any violation of this chapter by
a foreign labor contractor unless both of the following are true:
 
   (A) The person only used services provided by a foreign labor
contractor registered with the Labor Commissioner pursuant to Section
9998.1.5.  
   (B) The person has made a good faith effort to ensure compliance
of this chapter by the foreign labor contractor.  
   (2) For purposes of this subdivision, "good faith effort" means
all reasonable and feasible efforts by the person using the services
of the foreign labor contractor to ensure the foreign labor
contractor has not committed any violations of this chapter. An
evaluation of a person's good faith effort may include, but is not
limited to, the following factors:  
   (A) The extent to which the person has informed the foreign labor
contractor of its obligations and liabilities under this chapter.
 
   (B) The extent to which the person has periodically reviewed the
foreign labor contractor's recruiting and contracting practices,
including reports by foreign workers of practices that may violate
this chapter.  
   (C) Whether the person has obtained and reviewed copies of
disclosure statements or other documentation required to be provided
by the foreign labor contractor to the foreign worker by this
chapter. 
   (e) Nothing in this section shall be construed to preempt or alter
any other rights or remedies, including any causes of action,
available under any other federal or state law.
  SEC. 9.  Section 9998.10 is added to the Business and Professions
Code, to read:
   9998.10.  The Labor Commissioner and the deputies and
representatives authorized by the commissioner in writing may take
assignments of actions on the bonds required under Section 9998.1.5
 or 9998.2  by aggrieved persons and may prosecute
the actions on behalf of persons who, in the judgment of the
commissioner, are financially unable to employ counsel, in the same
manner that claims are prosecuted under Section 98 of the Labor Code.

  SEC. 10.  Section 9998.11 is added to the Business and Professions
Code, to read:
   9998.11.  A person who, upon information and belief, claims a
violation of this chapter has been committed may bring a civil action
for injunctive relief on behalf of the general public and, upon
prevailing, shall recover reasonable attorney's fees and costs.
  SEC. 11.  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.