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

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

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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

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BILL NUMBER: AB 2770	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 13, 2010

INTRODUCED BY    Committee on Labor and Employment 
 (   Monning (Chair), Bill Berryhill (Vice
Chair), Eng, Furutani, Ma, and Portantino   )
  Assembly Member  Monning 
    (   Principal coauthor:   Assembly Member
  Bill Berryhill   ) 

                        MARCH 1, 2010

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



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2770, as amended,  Committee on Labor and Employment
  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 require 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), to develop and implement a
set of standards that, if met by an employer, would trigger a
recommendation for an audit or investigation by appropriate state tax
authorities of employers 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 to take
specified actions to facilitate audits and investigations of
employers who meet the standards required by this bill. This bill
also would state findings and declarations relating to the
underground economy.
   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, 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
coordinated approach to enforcement in the underground economy, which
would include a nexus between the state's enforcement of labor and
tax laws.
   (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), shall, by July 1, 2011, develop and implement an
appropriate set of standards that, if met by an employer, will
trigger a recommendation for an audit or investigation by appropriate
state tax authorities of employers 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 shall
take into account, among other things, the severity and number of
violations committed by an employer.
   (b) 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:
   (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.