Bill Text: CA AB2770 | 2009-2010 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Employee wages and working hours: violators.

Spectrum: Moderate Partisan Bill (Democrat 5-1)

Status: (Vetoed) 2010-09-30 - Vetoed by Governor. [AB2770 Detail]

Download: California-2009-AB2770-Amended.html
BILL NUMBER: AB 2770	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 18, 2010
	AMENDED IN ASSEMBLY  APRIL 13, 2010

INTRODUCED BY   Assembly Member Monning
   (Principal coauthor: Assembly Member Bill Berryhill)

                        MARCH 1, 2010

   An act to add  Section 559 to   and repeal
Section 559 of  the Labor Code, relating to employment.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2770, as amended, Monning. Employee wages and working hours:
violators.
   Existing law requires private employers to perform certain
activities with regard to employee wages, hours, and working
conditions.
   This bill would  , until January 1, 2017, establish a pilot
program to investigate employment and payment practices within the
swimming pool and spa construction industry. The bill would 
require the  Labor Commissioner or his or her designee from
the Labor and Workforce Development Agency   Employment
Development Department  , in consultation with the Franchise Tax
Board  and the Economic and Employment Enforcement Coalition
(EEEC)   ,   the Department of Justice, the
Department of Insurance, the Labor and Workforce Development Agency,
and industry representatives  , to develop and implement a set
of  standards   criteria  that, if met by
an employer, would trigger a recommendation for an audit or
investigation by appropriate state tax authorities  of
employers   to determine if the employer is  in
violation of statutes relating to employee wages, hours, and working
conditions. After July 1, 2011, this bill would require the 
Labor Commissioner or the EEEC   Employment Development
Department  to take specified actions  to facilitate
audits and investigations of employers who meet the standards
required by this bill   with respect to an employer when
application of the set of criteria indicates that a violation of the
statutes described above may have occurred  . This bill also
would state findings and declarations relating to the underground
economy  and the swimming pool and spa construction industry
 .
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  (a) The Legislature finds and declares all of the
following:
   (1) Despite many targeted enforcement efforts in recent years,
including the creation of the Economic and Employment Enforcement
Coalition,  and the addition of 62 personnel years by the
Governor in 2005 to specifically address the problem,  evidence
indicates that the underground economy in California is flourishing.
   (2) According to the Employment Development Department's analysis
of findings of the Internal Revenue Service, the underground economy
in California is estimated to be between $60 billion and $140 billion
each year.
   (3) Employers operating in the underground economy hurt everyone;
the state loses billions of dollars each year in tax revenues,
workers are forced to go without basic employment protections, and
law-abiding businesses are confronted with unfair competition from
scofflaw competitors.
   (4) According to the Franchise Tax Board and the State Board of
Equalization, an average of $8.5 billion in owed corporate, personal,
and sales and use taxes goes uncollected in California each year,
with unreported and underreported economic activity responsible for
the vast majority of that total.
   (5) As the state faces unprecedented budget shortfalls, rigorous
enforcement of existing state tax laws should be a top priority.
   (6) It is therefore in the public interest to establish a 
more  coordinated approach to enforcement in the underground
economy, which would include a nexus between the state's enforcement
of labor and tax laws. 
   (7) The construction industry has been particularly hard hit by
the underground economy, especially the swimming pool and spa
construction business, thus making it an appropriate industry to
serve as the subject of a pilot program to develop a more coordinated
approach to enforcement in the underground economy. 
   (b) It is the intent of the Legislature in enacting this act to
target those employers that operate in the underground economy in
flagrant violation of law, and not employers that commit minor or
inadvertent violations of existing law.
  SEC. 2.  Section 559 is added to the Labor Code, to read: 
   559.  (a) The Labor Commissioner or his or her designee from the
Labor and Workforce Development Agency, in consultation with the
Franchise Tax Board and the Economic and Employment Enforcement
Coalition (EEEC) 
    559.    (a)     A pilot program is
hereby established to investigate employment and payment practices
within the swimming pool and spa construction industry. 
    (b)     The Employment Development
Department, in consultation with the Franchise Tax Board, the
Department of Justice, the Department of Insurance, the Labor and
Workforce Development Agency, and industry representatives  ,
shall, by July 1, 2011, develop and implement an appropriate set of
 standards   criteria  that, if met by an
employer, will trigger a recommendation for an audit or investigation
by appropriate state tax authorities  of employers 
 to determine if the employer is  in violation of this
chapter, Chapter 1 (commencing with Section 200) of Part 1, or
Chapter 1 (commencing with Section 1171) of Part 4. The set of
 standards   criteria  shall take into
account  , among other things, the severity and number of
violations committed by an employer.   all relevant
factors, including reported workers' compensation exemptions and the
ratio of building material purchases to reported labor costs. 

   (b) 
    (c)  After July 1, 2011, the  Labor Commissioner
or the EEEC, whichever of the two has authority over the
investigation through which it was discovered that the standards
developed in subdivision (a) have been met, shall take all of the
following actions with respect to an employer who has met those
standards:   Employment Development Department shall
take the following actions with respect to an   employer
when application of the set of criteria indicates that a violation of
the laws specified in subdivision (b) may have occurred: 
   (1) Notify the appropriate state tax authorities  each
time the set of standards is met by an employer  .
   (2) Provide the appropriate state tax authorities with the name of
the employer and all relevant and necessary information regarding
the violations.
   (3) Make a recommendation to the appropriate state tax authorities
that the employer be audited or investigated. 
   (d) This section shall remain in effect only until January 1,
2017, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2017, deletes or extends
that date.            
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