Existing law, the Sherman Food, Drug, and Cosmetic Law, prohibits the manufacture, sale, delivery, holding, or offer for sale of adulterated foods. Existing law provides specified standards for the transportation of food, including, among others, the requirement for all food to be transported so as to be pure and free from adulteration and spoilage, and the requirement for potentially hazardous food to be maintained at the required holding temperatures. A person who violates the Sherman Food, Drug, and Cosmetic Law is guilty of a misdemeanor, except as otherwise provided, and may be subject to a civil penalty, as specified.

This bill would define a food delivery platform as a business engaged in the service of online food ordering and delivery from a grocery establishment, a retail store with a grocery department, or a grocery warehouse to a consumer, and would require a food delivery platform, at its own expense, to ensure, among other things, that its food delivery drivers have training relating to maintaining potentially hazardous foods at required temperatures. The bill would require a food delivery platform to ensure that a vehicle used by a food delivery driver to provide food delivery services is in full compliance with specified vehicle safety requirements. The bill would require a food delivery platform to maintain minimum liability insurance, as specified, that covers liabilities arising from a food delivery drivers use of a vehicle in connection with the food delivery platforms online-enabled application or platform. The bill would require the food delivery platform, at its sole expense, to ensure compliance with laws regulating the adulteration of food. The bill would require the State Department of Public Health to enforce these provisions, and would impose a civil penalty of no more than $25,000 against a food delivery platform that violates the requirements imposed by this bill.

Existing law requires a client employer, as defined, to share with a labor contractor all civil legal responsibility and civil liability for all workers supplied by that labor contractor for the payment of wages. Existing law also prohibits a client employer from shifting to the labor contractor legal duties or liabilities under workplace safety provisions with respect to workers provided by the labor contractor.

This bill would require a grocery establishment, a retail store with a grocery department, or a grocery warehouse that uses a food delivery platform to share all civil legal responsibility and civil liability for payment of wages to a food delivery driver supplied by the food delivery platform. The bill would provide that a contract or other arrangement between a food delivery platform and a food delivery driver that would require the food delivery driver to pay a penalty imposed on the food delivery platform is void as against public policy.

 THIRD READING  

Bill No: AB 1360

Author: Ting (D)

Amended: 9/6/19 in Senate

Vote: 21

SENATE HEALTH COMMITTEE: 7-0, 7/3/19

AYES: Pan, Lena Gonzalez, Hurtado, Leyva, Mitchell, Monning, Rubio

NO VOTE RECORDED: Stone, Grove

SENATE JUDICIARY COMMITTEE: 5-1, 7/9/19

AYES: Jackson, Durazo, Lena Gonzalez, Monning, Wieckowski

NOES: Jones

NO VOTE RECORDED: Borgeas, Stern, Umberg

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/30/19

AYES: Portantino, Bradford, Durazo, Hill, Wieckowski

NOES: Bates, Jones

ASSEMBLY FLOOR: 44-25, 5/23/19 - See last page for vote

SUBJECT: Third-party food delivery

SOURCE: United Food and Commercial Workers, Western States Council

DIGEST:

This bill establishes requirements on food delivery platforms that deliver food to consumers from a grocery establishment, a retail store with a grocery department, or a grocery warehouse, including requiring that a food delivery driver has specified training, and that the food delivery platform maintains liability insurance.

Senate Floor Amendments of 9/6/19 (1) delete the requirement that a grocery establishment share with the food delivery platform the legal responsibility for any compensation or wages owed to a food delivery driver; (2) reduce penalties for violation of this bill from $25,000 per violation to $5,000 per violation; and (3) permit the Department of Public Health to enter into interagency agreements with counties to implement this section.

ANALYSIS:

Existing law:

1. Establishes the California Retail Food Code (CalCode) to provide for the regulation of retail food facilities. Health and sanitation standards are established at the state level through the CalCode, while enforcement is charged to local agencies, carried out by the 58 county environmental health departments, and four city environmental health departments (Berkeley, Long Beach, Pasadena, and Vernon). Prohibits any food facility from being open for business without a valid permit from the local health agency having jurisdiction over the food facility. [HSC §113700, et seq.]
2. Defines a “food facility” as an operation that stores, prepares, packages, serves, vends, or otherwise provides food for human consumption at the retail level. Excludes various entities from the definition of a “food facility,” including a commercial food processing establishment, a cottage food operation, and a church, private club, or other nonprofit association that gives or sells food to its members and guests, and not to the general public, at an event that occurs no more than three days in any 90-day period. [HSC §113789]
3. Defines “food handler” as an individual who is involved in the preparation, storage, or service of food in a food facility. [HSC §113790]
4. Requires all food handlers to obtain a “food handler card” within 30 days from the date of hire, and to maintain a valid food handler card for the duration of employment. Requires the food handler course to provide basic, introductory instructions on specified elements of knowledge, including foodborne illness, the relationship between personal hygiene and food safety, methods of preventing food contamination, and procedures for cleaning and sanitizing equipment. [HSC §113948]
5. Defines “potentially hazardous food” as a food that requires time or temperature control to limit pathogenic micro-organism growth or toxin formation. [HSC §113871]
6. Establishes the Sherman Food, Drug, and Cosmetic Law (Sherman Law), and prohibits any person from engaging in the manufacture, packing, or holding of any processed food unless the person has a valid registration as a food processing facility from the Department of Public Health (DPH). [HSC §109875, §110460]
7. Enacts the California Food Sanitation Act to regulate commercial food processing establishments, which are defined as any room, building, or place, maintained, used, or operated for the purpose of commercially storing, packaging, making, cooking, mixing, processing, bottling, canning, packing, slaughtering, or otherwise preparing or handling food, except restaurants. [HSC §111950, et seq.]
8. Incorporates all federal good manufacturing practices regulations as the good manufacturing practices in California, to be enforced under the Sherman Law. [HSC §110105]
9. Establishes penalties for violations of the Sherman Law of up to one year in a county jail or a fine of up to $1,000, or both. For repeat violations, or for violations with intent to defraud or mislead, or was intentional or was intended to cause injury, the penalty is up to a $10,000 fine and/or imprisonment in a state prison. [HSC §111825, §111855]

This bill:

1. Defines the following terms for purposes of this bill:
   1. “Food delivery driver” means a person who transports and delivers food ordered from a food delivery platform to a consumer;
   2. “Food delivery platform” means a business engaged in the service of online food ordering and delivery from a grocery establishment, a retail store with a grocery department, or a grocery warehouse to a consumer;
   3. “Grocery establishment” means a retail store that is over 15,000 square feet in size and that primarily sells food for offsite consumption, including, but not limited to, fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods, and prepared foods;
   4. “Grocery warehouse” means a room, building, or place or portion thereof, excluding a restaurant, used to sell to a customer through a food delivery platform any of the following products: fresh produce, meat, poultry, fish, deli products, dairy products, canned foods, dry foods, perishable beverages, baked foods, and prepared foods; and,
   5. “Retail store with a grocery department” means any of the following:
      1. A retail store that has an area within it that is at least 10,000 square feet and where there is primarily food for sale for offsite consumption, including, but not limited to, fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods, and prepared foods.
      2. A retail pharmacy that sells $1 million of nontaxable merchandise per year.
      3. A general retail merchandise store that sells $1million of nontaxable merchandise per year.
2. Requires a food delivery platform to do all of the following:
   1. At its sole expense, ensure that a food delivery driver has training in the requirements relating to maintain potentially hazardous foods at the required temperatures, as specified in provisions of existing law, and in the requirements relating to food spoilage and adulteration, as specified in provisions of existing law. Permits a food delivery driver to satisfy this training requirement by obtaining a food handler card, as specified;
   2. Maintain liability insurance to cover liabilities arising from a food delivery driver’s use of a vehicle in connection with providing food delivery services on behalf of the food delivery platform, as specified, including $1 million for death, personal injury, and property damage, for time period when the driver is performing a food delivery, and $100,000 for death and personal injury per incident and $30,000 for property damage per incident for when the driver is logged onto the food delivery platform’s application but is between delivery requests; and,
   3. At its sole expense, ensure compliance with specified provisions of existing law prohibiting and regulating the adulteration of food.
3. Requires DPH to enforce this bill, and permits DPH to adopt regulations or best practices to implement this bill. Permits DPH to enter into interagency agreements with counties to implement this bill.
4. Requires DPH, notwithstanding lower existing fine authority in the Sherman Law, to assess a civil penalty of not more than $5,000 per violation of 2) above on a food delivery platform, and permits those penalties to be used to reimburse DPH for the cost of implementing or enforcing this bill. Specifies that a contract or other arrangement between a food delivery platform and a food delivery driver that, in whole or in part, requires the food delivery driver to pay this penalty, or a portion thereof, or a cost associated with enforcement action brought under this provision, including attorney fees incurred by the food delivery platform, is void as against public policy.

Comments

1. Author’s statement. According to the author, the rapid growth of online food and alcohol delivery services has the potential to expose customers to unsafe and unregulated delivery practices. This bill establishes basic safety standards for grocery delivery services, consistent with safety requirements imposed on brick and mortar grocery stores. A growing number of Californians order groceries online and have them delivered directly to their home. Food retail establishments are subject to strict regulations regarding the handling of food to protect consumer and employee health and safety. Delivery companies expose consumer goods to the same risks as may arise for the food retailer, yet they are not subject to regulatory oversight. This bill is to ensure that consumers who choose to use a delivery service receive uncontaminated, safe food and that platform workers receive the appropriate training and certification to perform their job duties.
2. New models of food delivery. This bill is targeting app-based grocery delivery services such as Instacart, Shipt, and others. These companies send personal shoppers to pick up your items from local grocery stores, for a fee. At least one company, Google Express, lets people order groceries from places like Target or Costco, but limits groceries to nonperishable items. Some large grocery chains are also offering home delivery, but unless they use a third-party food delivery platform, the provisions of this bill would not apply to their drivers. However, as the author and sponsor point out, if a grocery store is using their own employees to deliver groceries, they are still under the regulatory structure of their retail food facility license and the provisions of law governing temperature controls and other requirements apply during the transportation of food. Amazon also has a grocery delivery program, Amazon Fresh, and the extent to which this bill applies to Amazon is based on whether Amazon meets the definition of a grocery warehouse, and whether it is contracting with a third-party delivery company to deliver groceries from its warehouse.
   
   Other companies, such as Grubhub, DoorDash, or Uber Eats, are app-based companies focusing on delivering food from local restaurants. As this bill specifically does not apply to restaurant food delivery, these companies would not have to comply with this bill unless they began delivering food from grocery stores or grocery warehouses.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee:

• DPH. Potentially up to $302,000 (General Fund) in FY 2020-21, and ongoing, for 1.0 Senior Environmental Scientist Specialist ($159,000 GF) with heavy travel to conduct complaint follow-up investigations (assuming approximately 100 complaints annually with 10 hours per investigation) and 1.0 full-time, permanent Associate Governmental Program Analyst ($133,000) to oversee financial operations, verify food delivery platform eligibility, monitor regulatory compliance and to provide program support.
• Department of Industrial Relations (DIR). Staff notes indeterminate, potential costs pressures in an amount that would depend on the total number of claims submitted by food delivery drivers holding business entities liable for unpaid wages, damages and penalties. The department would continue its existing practice of receiving and adjudicating claims, and conducting field investigations at present. The DIR notes minor and absorbable costs at this time, and any necessary increase directly attributable to this bill can be evaluated during the annual budget process.

SUPPORT: (Verified 9/9/19)

United Food and Commercial Workers, Western States Council (source)

California Association of Environmental Health Administrators

California Labor Federation

State Building and Construction Trades Council

OPPOSITION: (Verified 9/9/19)

Albertsons Companies

Bay Area Council
California Chamber of Commerce

California Department of Public Health

Food Marketing Institute

Internet Association

San Francisco Chamber of Commerce
TechNet

ARGUMENTS IN SUPPORT: This bill is sponsored by the United Food and Commercial Workers, Western States Council (UFCW), which states that a growing number of Californians order groceries online and have them delivered directly to their home. To provide this labor-intensive service, retailers frequently rely on mobile phone app-based delivery platforms. Food retail establishments are subject to strict regulations regarding the handling of food to protect consumer and employee health and safety, and UFCW argues delivery companies expose consumer goods to the same risks as may arise for the food retailer, yet they are not subject to regulatory oversight. UFCW states that this lack of regulation is particularly grave as delivery platform drivers use personal vehicles to perform their duties, which lack temperature-controlled compartments and hygienic storage space, potentially exposing consumers to hazardous food held out of its proper holding temperature. UFCW states that when groceries travel from store to home they enter an unregulated grey zone, which threatens public health while shielding delivery platforms from accountability. The California Labor Federation makes similar arguments in support, and states that as app-based companies expand services, we must ensure that public safety and worker protections are not disrupted, and that businesses that work hard to comply with regulations do not face unfair competition from companies that escape these obligations.

ARGUMENTS IN OPPOSITION: TechNet, Internet Association, and the California Chamber of Commerce write in a joint letter of opposition (joint letter) that this bill is a solution in search of a problem, pointing out that there have been no reported issues or cases of mishandling of food that would prompt the need for the onerous requirements of this bill. The joint letter argues that this bill will stifle innovation and harm consumers and business in this state, and eliminate the earning potential for Californians who rely on these platforms. The Bay Area Council opposes this bill, stating that Bay Area companies engaged in the food delivery business provide flexible work opportunities for thousands of employees to earn supplemental income, and the burdensome requirements in this bill may stifle the earning potential of these employees, restrict business growth, and significantly impact the local economy. The California Department of Public Health is opposed unless amended to remove provisions that require it to enforce compliance outside of its jurisdiction, such as enforcing minimum liability insurance requirements.

ASSEMBLY FLOOR: 44-25, 5/23/19

AYES: Aguiar-Curry, Arambula, Bauer-Kahan, Bloom, Bonta, Calderon, Carrillo, Cervantes, Chau, Chiu, Chu, Eggman, Friedman, Cristina Garcia, Gipson, Gloria, Gonzalez, Gray, Holden, Jones-Sawyer, Kalra, Kamlager-Dove, Limón, McCarty, Medina, Mullin, Muratsuchi, Nazarian, O'Donnell, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Santiago, Smith, Mark Stone, Ting, Weber, Wicks, Wood, Rendon

NOES: Bigelow, Brough, Chen, Choi, Cunningham, Dahle, Diep, Flora, Fong, Frazier, Gallagher, Irwin, Kiley, Lackey, Levine, Low, Mathis, Mayes, Melendez, Obernolte, Patterson, Petrie-Norris, Salas, Voepel, Waldron

NO VOTE RECORDED: Berman, Boerner Horvath, Burke, Cooley, Cooper, Daly, Gabriel, Eduardo Garcia, Grayson, Maienschein, Robert Rivas

Prepared by: Vincent D. Marchand / HEALTH / (916) 651-4111

9/9/19 18:28:11

**** END ****

 THIRD READING  

Bill No: AB 1360

Author: Ting (D)

Amended: 8/30/19 in Senate

Vote: 21

SENATE HEALTH COMMITTEE: 7-0, 7/3/19

AYES: Pan, Lena Gonzalez, Hurtado, Leyva, Mitchell, Monning, Rubio

NO VOTE RECORDED: Stone, Grove

SENATE JUDICIARY COMMITTEE: 5-1, 7/9/19

AYES: Jackson, Durazo, Lena Gonzalez, Monning, Wieckowski

NOES: Jones

NO VOTE RECORDED: Borgeas, Stern, Umberg

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/30/19

AYES: Portantino, Bradford, Durazo, Hill, Wieckowski

NOES: Bates, Jones

ASSEMBLY FLOOR: 44-25, 5/23/19 - See last page for vote

SUBJECT: Third-party food delivery

SOURCE: United Food and Commercial Workers, Western States Council

DIGEST:

This bill establishes requirements on food delivery platforms that deliver food to consumers from a grocery establishment, a retail store with a grocery department, or a grocery warehouse, including requiring that a food delivery driver has specified training, and that the food delivery platform maintains liability insurance.

ANALYSIS:

Existing law:

1. Establishes the California Retail Food Code (CalCode) to provide for the regulation of retail food facilities. Health and sanitation standards are established at the state level through the CalCode, while enforcement is charged to local agencies, carried out by the 58 county environmental health departments, and four city environmental health departments (Berkeley, Long Beach, Pasadena, and Vernon). Prohibits any food facility from being open for business without a valid permit from the local health agency having jurisdiction over the food facility. [HSC §113700, et seq.]
2. Defines a “food facility” as an operation that stores, prepares, packages, serves, vends, or otherwise provides food for human consumption at the retail level. Excludes various entities from the definition of a “food facility,” including a commercial food processing establishment, a cottage food operation, and a church, private club, or other nonprofit association that gives or sells food to its members and guests, and not to the general public, at an event that occurs no more than three days in any 90-day period. [HSC §113789]
3. Defines “food handler” as an individual who is involved in the preparation, storage, or service of food in a food facility. [HSC §113790]
4. Requires all food handlers to obtain a “food handler card” within 30 days from the date of hire, and to maintain a valid food handler card for the duration of employment. Requires the food handler course to provide basic, introductory instructions on specified elements of knowledge, including foodborne illness, the relationship between personal hygiene and food safety, methods of preventing food contamination, and procedures for cleaning and sanitizing equipment. [HSC §113948]
5. Defines “potentially hazardous food” as a food that requires time or temperature control to limit pathogenic micro-organism growth or toxin formation. [HSC §113871]
6. Establishes the Sherman Food, Drug, and Cosmetic Law (Sherman Law), and prohibits any person from engaging in the manufacture, packing, or holding of any processed food unless the person has a valid registration as a food processing facility from the Department of Public Health (DPH). [HSC §109875, §110460]
7. Enacts the California Food Sanitation Act to regulate commercial food processing establishments, which are defined as any room, building, or place, maintained, used, or operated for the purpose of commercially storing, packaging, making, cooking, mixing, processing, bottling, canning, packing, slaughtering, or otherwise preparing or handling food, except restaurants. [HSC §111950, et seq.]
8. Incorporates all federal good manufacturing practices regulations as the good manufacturing practices in California, to be enforced under the Sherman Law. [HSC §110105]
9. Establishes penalties for violations of the Sherman Law of up to one year in a county jail or a fine of up to $1,000, or both. For repeat violations, or for violations with intent to defraud or mislead, or was intentional or was intended to cause injury, the penalty is up to a $10,000 fine and/or imprisonment in a state prison. [HSC §111825, §111855]

This bill:

1. Defines the following terms for purposes of this bill:
   1. “Food delivery driver” means a person who transports and delivers food ordered from a food delivery platform to a consumer;
   2. “Food delivery platform” means a business engaged in the service of online food ordering and delivery from a grocery establishment, a retail store with a grocery department, or a grocery warehouse to a consumer;
   3. “Grocery establishment” means a retail store that is over 15,000 square feet in size and that primarily sells food for offsite consumption, including, but not limited to, fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods, and prepared foods;
   4. “Grocery warehouse” means a room, building, or place or portion thereof, excluding a restaurant, used to sell to a customer through a food delivery platform any of the following products: fresh produce, meat, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods, and prepared foods; and,
   5. “Retail store with a grocery department” means any of the following:
      1. A retail store that has an area within it that is at least 10,000 square feet and where there is primarily food for sale for offsite consumption, including, but not limited to, fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods, and prepared foods.
      2. A retail pharmacy that sells $1 million of nontaxable merchandise per year.
      3. A general retail merchandise store that sells $1million of nontaxable merchandise per year.
2. Requires a food delivery platform to do all of the following:
   1. At its sole expense, ensure that a food delivery driver has training in the requirements relating to maintain potentially hazardous foods at the required temperatures, as specified in provisions of existing law, and in the requirements relating to food spoilage and adulteration, as specified in provisions of existing law. Permits a food delivery driver to satisfy this training requirement by obtaining a food handler card, as specified;
   2. Maintain liability insurance to cover liabilities arising from a food delivery driver’s use of a vehicle in connection with providing food delivery services on behalf of the food delivery platform, as specified, including $1 million for death, personal injury, and property damage, for time period when the driver is performing a food delivery, and $100,000 for death and personal injury per incident and $30,000 for property damage per incident for when the driver is logged onto the food delivery platform’s application but is between delivery requests; and,
   3. At its sole expense, ensure compliance with specified provisions of existing law prohibiting and regulating the adulteration of food.
3. Requires a grocery store, retail store with a grocery department, or grocery warehouse to share with a food delivery platform all civil legal responsibility for any compensation or wages owed to a food delivery driver supplied by the food delivery platform to whom the grocery establishment, retail food store with a grocery department, or grocery warehouse transfers food for delivery.
4. Requires DPH to enforce this bill, and permits DPH to adopt regulations or best practices to implement this bill.
5. Requires DPH, notwithstanding lower existing fine authority in the Sherman Law, to assess a civil penalty of not more than $25,000 per violation of 2) above on a food delivery platform, and permits those penalties to be used to reimburse DPH for the cost of implementing or enforcing this bill. Specifies that a contract or other arrangement between a food delivery platform and a food delivery driver that, in whole or in part, requires the food delivery driver to pay this penalty, or a portion thereof, or a cost associated with enforcement action brought under this provision, including attorney fees incurred by the food delivery platform, is void as against public policy.

Comments

1. Author’s statement. According to the author, the rapid growth of online food and alcohol delivery services has the potential to expose customers to unsafe and unregulated delivery practices. This bill establishes basic safety standards for grocery delivery services, consistent with safety requirements imposed on brick and mortar grocery stores. A growing number of Californians order groceries online and have them delivered directly to their home. Food retail establishments are subject to strict regulations regarding the handling of food to protect consumer and employee health and safety. Delivery companies expose consumer goods to the same risks as may arise for the food retailer, yet they are not subject to regulatory oversight. This bill is to ensure that consumers who choose to use a delivery service receive uncontaminated, safe food and that platform workers receive the appropriate training and certification to perform their job duties.
2. New models of food delivery. This bill is targeting app-based grocery delivery services such as Instacart, Shipt, and others. These companies send personal shoppers to pick up your items from local grocery stores, for a fee. At least one company, Google Express, lets people order groceries from places like Target or Costco, but limits groceries to nonperishable items. Some large grocery chains are also offering home delivery, but unless they use a third-party food delivery platform, the provisions of this bill would not apply to their drivers. However, as the author and sponsor point out, if a grocery store is using their own employees to deliver groceries, they are still under the regulatory structure of their retail food facility license and the provisions of law governing temperature controls and other requirements apply during the transportation of food. Amazon also has a grocery delivery program, Amazon Fresh, and the extent to which this bill applies to Amazon is based on whether Amazon meets the definition of a grocery warehouse, and whether it is contracting with a third-party delivery company to deliver groceries from its warehouse.
   
   Other companies, such as Grubhub, DoorDash, or Uber Eats, are app-based companies focusing on delivering food from local restaurants. As this bill specifically does not apply to restaurant food delivery, these companies would not have to comply with this bill unless they began delivering food from grocery stores or grocery warehouses.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee:

• DPH. Potentially up to $302,000 (General Fund) in FY 2020-21, and ongoing, for 1.0 Senior Environmental Scientist Specialist ($159,000 GF) with heavy travel to conduct complaint follow-up investigations (assuming approximately 100 complaints annually with 10 hours per investigation) and 1.0 full-time, permanent Associate Governmental Program Analyst ($133,000) to oversee financial operations, verify food delivery platform eligibility, monitor regulatory compliance and to provide program support.
• Department of Industrial Relations (DIR). Staff notes indeterminate, potential costs pressures in an amount that would depend on the total number of claims submitted by food delivery drivers holding business entities liable for unpaid wages, damages and penalties. The department would continue its existing practice of receiving and adjudicating claims, and conducting field investigations at present. The DIR notes minor and absorbable costs at this time, and any necessary increase directly attributable to this bill can be evaluated during the annual budget process.

SUPPORT: (Verified 8/27/19)

United Food and Commercial Workers, Western States Council (source)

California Association of Environmental Health Administrators

California Labor Federation

State Building and Construction Trades Council

OPPOSITION: (Verified 8/27/19)

Albertsons Companies

Bay Area Council
California Chamber of Commerce

California Department of Public Health

California Grocers Association

California Retailers Association

Food Marketing Institute

Internet Association

San Francisco Chamber of Commerce
TechNet

ARGUMENTS IN SUPPORT: This bill is sponsored by the United Food and Commercial Workers, Western States Council (UFCW), which states that a growing number of Californians order groceries online and have them delivered directly to their home. To provide this labor-intensive service, retailers frequently rely on mobile phone app-based delivery platforms. Food retail establishments are subject to strict regulations regarding the handling of food to protect consumer and employee health and safety, and UFCW argues delivery companies expose consumer goods to the same risks as may arise for the food retailer, yet they are not subject to regulatory oversight. UFCW states that this lack of regulation is particularly grave as delivery platform drivers use personal vehicles to perform their duties, which lack temperature-controlled compartments and hygienic storage space, potentially exposing consumers to hazardous food held out of its proper holding temperature. UFCW states that when groceries travel from store to home they enter an unregulated grey zone, which threatens public health while shielding delivery platforms from accountability. According to UFCW, groceries are particularly vulnerable during the delivery process as they are removed from a temperature-controlled environment and safe storage sites. As all third party drivers use a personal vehicle rather than one provided by the retailer to make deliveries, they expose consumers’ groceries to a host of contaminants, including pet dander, open food containers, and toxic substances, and the risk of cross contamination of allergens, which are controlled for in a retail establishment. UFCW also states that many third party delivery services transport alcoholic beverages alongside the milk and eggs, and this bill ensures the safe purchase of alcoholic beverages by requiring identification be provided upon purchase and upon delivery. UFCW states that food handlers require training concerning the relationship between time and temperature and food borne illness, personal hygiene and food borne illness, and methods to prevent contamination in all states of food handling. According to UFCW, an understanding of these issues is essential for the safe delivery of food from store to home, where time, temperature, and exposure to contaminants are variables with which a driver must contend. The California Labor Federation makes similar arguments in support, and states that as app-based companies expand services, we must ensure that public safety and worker protections are not disrupted, and that businesses that work hard to comply with regulations do not face unfair competition from companies that escape these obligations.

ARGUMENTS IN OPPOSITION: TechNet, Internet Association, and the California Chamber of Commerce write in a joint letter of opposition (joint letter) that this bill is a solution in search of a problem, pointing out that there have been no reported issues or cases of mishandling of food that would prompt the need for the onerous requirements of this bill. The joint letter argues that this bill will stifle innovation and harm consumers and business in this state, and eliminate the earning potential for Californians who rely on these platforms. The California Retailers Association (CRA) states that it is opposed to the provision that requires a grocery department or warehouse to share all civil responsibility for compensation or wages to drivers who delivery food provided by the grocery department or warehouse, arguing that it is unprecedented to hold a retailer responsible for the actions of a third-party delivery platform when they have no authority in the day to day operations. The California Grocers Association (CGA) points out in opposition that if this measure were about the safety of delivered food, it would stand to reason that it should apply to restaurant food delivery. In fact, CGA argues that restaurant delivery involves more risks to food safety as nearly everything delivered from a restaurant is perishable. CGA states that there have been no incidents reported that would suggest a need for this bill.

ASSEMBLY FLOOR: 44-25, 5/23/19

AYES: Aguiar-Curry, Arambula, Bauer-Kahan, Bloom, Bonta, Calderon, Carrillo, Cervantes, Chau, Chiu, Chu, Eggman, Friedman, Cristina Garcia, Gipson, Gloria, Gonzalez, Gray, Holden, Jones-Sawyer, Kalra, Kamlager-Dove, Limón, McCarty, Medina, Mullin, Muratsuchi, Nazarian, O'Donnell, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Santiago, Smith, Mark Stone, Ting, Weber, Wicks, Wood, Rendon

NOES: Bigelow, Brough, Chen, Choi, Cunningham, Dahle, Diep, Flora, Fong, Frazier, Gallagher, Irwin, Kiley, Lackey, Levine, Low, Mathis, Mayes, Melendez, Obernolte, Patterson, Petrie-Norris, Salas, Voepel, Waldron

NO VOTE RECORDED: Berman, Boerner Horvath, Burke, Cooley, Cooper, Daly, Gabriel, Eduardo Garcia, Grayson, Maienschein, Robert Rivas

Prepared by: Vincent D. Marchand / HEALTH / (916) 651-4111

9/3/19 11:08:04

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

AB 1360 (Ting) - Third-party food delivery

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 30, 2019

Bill Summary:

Assembly Bill 1360 would place specified requirements on a food delivery platform that engages in online food ordering and delivery from a grocery establishment, and would require the Department of Public Health (CDPH) to enforce penalties, as specified.

Fiscal Impact:

Staff estimates:

• Department of Public Health (CDPH). Potentially up to $302,000 (General Fund) in FY 2020-21, and ongoing, for 1.0 Senior Environmental Scientist Specialist ($159,000 GF) with heavy travel to conduct complaint follow-up investigations (assuming approximately 100 complaints annually with 10 hours per investigation) and 1.0 full-time, permanent Associate Governmental Program Analyst ($133,000) to oversee financial operations, verify food delivery platform eligibility, monitor regulatory compliance and to provide program support.
• Department of Industrial Relations (DIR). Staff notes indeterminate, potential costs pressures in an amount that would depend on the total number of claims submitted by food delivery drivers holding business entities liable for unpaid wages, damages and penalties. The department would continue its existing practice of receiving and adjudicating claims, and conducting field investigations at present. The DIR notes minor and absorbable costs at this time, and any necessary increase directly attributable to this bill can be evaluated during the annual budget process.

Author Amendments:

The author’s amendments would:

• Remove the requirement that a vehicle used by a food delivery driver, at the food delivery platform’s sole expense, undergoes a 19-point vehicle inspection, as specified time intervals;
• Revise the liability coverage limits; and,
• Require, at the food delivery platform’s sole expense, compliance with state laws that prohibit and regulate the adulteration of food.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

AB 1360 (Ting) - Third-party food delivery

Bill Summary:

Assembly Bill 1360 would place specified requirements on a food delivery platform that engages in online food ordering and delivery from a grocery establishment, and would require the Department of Public Health (CDPH) to enforce penalties, as specified.

Fiscal Impact:

Department of Public Health (CDPH). $302,000 (General Fund) in FY 2020-21, and ongoing, for 1.0 Senior Environmental Scientist Specialist ($159,000 GF) with heavy travel to conduct complaint follow-up investigations (assuming approximately 100 complaints annually with 10 hours per investigation) and 1.0 full-time, permanent Associate Governmental Program Analyst ($133,000) to oversee financial operations, verify food delivery platform eligibility, monitor regulatory compliance and to provide program support.

Department of Industrial Relations (DIR). Staff notes indeterminate, potential costs pressures in an amount that would depend on the total number of claims submitted by food delivery drivers holding business entities liable for unpaid wages, damages and penalties. Although the bill does not have an administrative enforcement mechanism for the Labor Commissioner, the department would continue its existing practice of receive and adjudicate claims and conduct field investigations at present. The DIR notes minor and absorbable costs at this time, and any necessary increase directly attributable to this bill can be evaluated during the annual budget process.

Background:

There are two regulatory structures for food safety: one for food processors or manufacturers, which sell products at a wholesale level; and another for retail food facilities, such as restaurants and some grocery stores that sell prepared food to customers. The CDPH, the Counties of Los Angeles, Orange, and San Bernardino, and City of Vernon, enforce the Sherman Food, Drug, and Cosmetic Law (Sherman Act), which prohibits any person from engaging in the manufacture, packing, or holding of any processed food unless the person has a valid registration as a food processing facility from the department (HSC §109875, §110460.) The California Food Sanitation Act (CFSA) also regulates commercial food processing establishments (HSC §111950, et seq.) Local environmental health departments in the 58 counties plus four cities with delegated authority – Berkeley, Long Beach, Pasadena, and Vernon – regulate retail food facilities (restaurants and grocery stores).

As more Californians access groceries and other food goods through online-applications and delivery, the bill seeks to apply food safety standards for grocery delivery services as those on brick and mortar grocery stores.

Proposed Law:

AB 1360 would require a food delivery platform, as defined, to do all of the following:

• Ensure, at the food delivery platform’s sole expense, a food delivery driver has food safety and handling training, as specified. A food delivery driver may satisfy these requirements by obtaining a food handler card.
• Ensure a food delivery driver’s vehicle that is used to provide food delivery services on behalf of the platform is legally registered in California and, at the food delivery platform’s sole expense, have the vehicle undergo a 19-point vehicle inspection, and every 12 months thereafter.
• Require a food delivery platform to maintain the minimum liability insurance requirements that specifically covers liabilities arising from a food delivery driver’s vehicle from the moment a food delivery driver accepts the request on the platform’s online application:
  • One million dollars ($1,000,000) for death, personal injury, and property damage. This insurance shall be primary.
  • At least fifty thousand dollars ($50,000) for death and personal injury per person, one hundred thousand dollars ($100,000) for death and personal injury per incident, and thirty thousand dollars ($30,000) for property damage.

In addition, the bill would include the following provisions, among others:

Requires a grocery establishment, a retail store with a grocery department, or a grocery warehouse to share with a food delivery platform all civil legal responsibility for any compensation or wages owed to a food delivery driver supplied by the food delivery platform to whom the grocery establishment, retail food store with a grocery department, or grocery warehouse transfers food for delivery.

• Requires the CDPH to enforce the bill, and authorizes CDPH to adopt regulations or best practices to implement the bill
• Establishes a civil penalty schedule per violation, specifically: $25,000 per violation on a food delivery platform, and specifies penalties can be used to reimburse CDPH enforcement and implementation costs.
• A contract or other arrangement between a food delivery platform and a food delivery driver that, in whole or in part, requires the food delivery driver to pay the penalty required by this section, or a portion thereof, or a cost associated with an enforcement action brought pursuant to this section, including attorney fees incurred by the food delivery platform, is void as against public policy.
• Defines several terms, including: “food delivery platform”, “grocery establishment”, “retail store with a grocery department”, and “grocery warehouse”.

Staff Comments: The Senate Health Committee analysis noted:

This bill is targeting app-based grocery delivery services such as Instacart, Shipt, and others. These companies send personal shoppers to pick up your items from local grocery stores, for a fee. At least one company, Google Express, lets people order groceries from places like Target or Costco, but limits groceries to nonperishable items. Amazon also has a grocery delivery program, Amazon Fresh, and the extent to which this bill applies to Amazon is based on whether Amazon meets the definition of a grocery warehouse, and whether it is contracting with a third-party delivery company to deliver groceries from its warehouse.

Other companies, such as Grubhub, DoorDash, or Uber Eats, are app-based companies focusing on delivering food from local restaurants. As this bill specifically does not apply to restaurant food delivery, these companies would not have to comply with this bill unless they began delivering food from grocery stores or grocery warehouses.

-- END --

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2019-2020 Regular Session

Bill No: AB 1360 (Author:Ting)

Version: June 27, 2019

Hearing Date:

Fiscal: Yes

Urgency: No

AMConsultant:

SUBJECT

Third-party food delivery

DIGEST

This places requirements on a food delivery platform engaging in the service of online food ordering and delivery from a grocery establishment, a retail store with a grocery department, or a grocery warehouse to a consumer to ensure that a food delivery driver has training in the requirements relating to maintain potentially hazardous foods, as provided. The bill requires a food delivery platform to ensure that vehicle used by a food delivery driver to provide food delivery services under goes a specified inspection, and requires the food delivery platform to maintain necessary liability insurance. The bill also requires a grocery establishment, a retail store with a grocery department, or a grocery warehouse to share with a food delivery platform all civil legal responsibility for any compensation or wages owed to a food delivery driver supplied by the food delivery platform to whom the grocery establishment, retail food store with a grocery department, or grocery warehouse transfers food for delivery. 

EXECUTIVE SUMMARY

A growing number of Californians order groceries online and have them delivered directly to their home. These delivery companies could potentially expose consumer goods to the same risks that arise for the food retailer, yet they are not subject to similar oversight. This bill places requirements on a food delivery platform engaging in the service of online food ordering and delivery from a grocery establishment, a retail store with a grocery department, or a grocery warehouse to a consumer. The bill provides that a violation of some of its provisions subject the violator to a civil penalty.

This bill is sponsored by the United Food and Commercial Workers. It is supported by the California Labor Federation and State Building and Constructions Trades Council.

It is opposed by various business organizations, and associations representing grocers, agricultural growers, and internet companies. The bill passed the Senate Health Committee on a vote of 7 to 0.

PROPOSED CHANGES TO THE LAW

Existing law:

1. Establishes the California Retail Food Code (CRFC) to provide for the regulation of retail food facilities.
   1. Health and sanitation standards are established at the state level through the CRFC, while enforcement is charged to local agencies, carried out by the 58 county environmental health departments, and four city environmental health departments.
   2. Prohibits any food facility from being open for business without a valid permit from the local health agency having jurisdiction over the food facility. (Health & Saf. Code § 113700, et seq.)
2. Defines a “food facility” as an operation that stores, prepares, packages, serves, vends, or otherwise provides food for human consumption at the retail level. Excludes various entities from the definition of a “food facility,” including a commercial food processing establishment, a cottage food operation, and a church, private club, or other nonprofit association that gives or sells food to its members and guests, and not to the general public, at an event that occurs no more than three days in any 90-day period. (Health & Saf. Code §113789.)
3. Defines “food handler” as an individual who is involved in the preparation, storage, or service of food in a food facility. (Health & Saf. Code §113790.)
4. Requires all food handlers to obtain a “food handler card” within 30 days from the date of hire, and to maintain a valid food handler card for the duration of employment. Requires the food handler course to provide basic, introductory instructions on specified elements of knowledge, including foodborne illness, the relationship between personal hygiene and food safety, methods of preventing food contamination, and procedures for cleaning and sanitizing equipment. (Health & Saf. Code §113948.)
5. Defines “potentially hazardous food” as a food that requires time or temperature control to limit pathogenic micro-organism growth or toxin formation. (Health & Saf. Code §113871.)
6. Establishes the Sherman Food, Drug, and Cosmetic Law (Sherman Law), and prohibits any person from engaging in the manufacture, packing, or holding of any processed food unless the person has a valid registration as a food processing facility from the Department of Public Health (DPH). (Health & Saf. Code §109875, §110460.)
7. Enacts the California Food Sanitation Act (CFSA) to regulate commercial food processing establishments, which are defined as any room, building, or place, maintained, used, or operated for the purpose of commercially storing, packaging, making, cooking, mixing, processing, bottling, canning, packing, slaughtering, or otherwise preparing or handling food, except restaurants. (Health & Saf. Code §111950, et seq.)
8. Incorporates all federal good manufacturing practices regulations as the good manufacturing practices in California, to be enforced under the Sherman Law. (Health & Saf. Code §110105.)

This bill:

1. Requires a food delivery platform to do all of the following:
   1. Ensure, at its sole expense, that a food delivery driver has training in the requirements relating to maintain potentially hazardous foods at the required temperatures, as specified in provisions of existing law, and in the requirements relating to food spoilage and adulteration, as specified in provisions of existing law. Permits a food delivery driver to satisfy this training requirement by obtaining a food handler card, as specified.
   2. Ensure that a vehicle used by a food delivery driver to provide food delivery services on behalf of the food delivery platform is legally registered in California.
   3. Ensure, at its sole expense, the vehicle used by a food delivery driver undergoes a 19-point vehicle inspection, covering the same items listed in a specified Public Utilities Commission order relating to vehicle inspections for rideshare companies, at a facility licensed by the Bureau of Automotive Repair prior to delivering food on behalf of a food delivery platform, and every 12 months thereafter.
   4. Maintain necessary liability insurance for all deliveries made by a food delivery driver.
      1. Requires the State Department of Public Health (DPH) to assess a civil penalty of not more than $25,000 per violation on a food delivery platform.
2. Requires the DPH to enforce these provisions.
3. Defines the following terms for purposes of this bill:
   1. “Food delivery driver” means a person who transports and delivers food ordered from a food delivery platform to a consumer.
   2. “Food delivery platform” means a business engaged in the service of online food ordering and delivery from a grocery establishment, a retail store with a grocery department, or a grocery warehouse to a consumer.
   3. “Grocery establishment” means a retail store that is over 15,000 square feet in size and that primarily sells food for offsite consumption, including, but not limited to, fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods, and prepared foods.
   4. “Grocery warehouse” means a room, building, or place or portion thereof, excluding a restaurant, used to sell to a customer through a food delivery platform any of the following products: fresh produce, meat, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods, and prepared foods.
   5. “Retail store with a grocery department” means any of the following:
      1. a retail store that has an area within it that is at least 10,000 square feet and where there is primarily food for sale for offsite consumption, including, but not limited to, fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods, and prepared foods;
      2. a retail pharmacy that sells $1 million of nontaxable merchandise per year; or
      3. a general retail merchandise store that sells $1 million of nontaxable merchandise per year.
4. Requires a grocery establishment, a retail store with a grocery department, or a grocery warehouse to share with a food delivery platform all civil legal responsibility for any compensation or wages owed to a food delivery driver supplied by the food delivery platform to whom the grocery establishment, retail food store with a grocery department, or grocery warehouse transfers food for delivery.

COMMENTS

1. Stated need for the bill

The author writes:

The rapid growth of online food and alcohol delivery services has the potential to expose customers to unsafe and unregulated delivery practices. This bill establishes basic safety standards for grocery delivery services, consistent with safety requirements imposed on brick and mortar grocery stores.

2. Food delivery platforms

This bill is addressing app-based grocery delivery services, such as Instacart and Shipt. These app-based companies generally allow customers to place orders for items from local grocery stores and has a personal shopper pick up the items for the customer, for a fee. Some stores allow perishable items to be picked up and others do not. Some grocery stores, mainly large chains, offer home delivery; however, unless they use a third-party food delivery platform, the provisions of this bill would not apply to their drivers. The author and sponsor state that a grocery store using their own employees to deliver groceries would still be operating under the regulatory structure of their retail food facility license.

3. Requirements on food delivery platforms

According to the Senate Committee on Health:

In general, there are two regulatory structures for food safety: one for food processors/manufacturers, which generally process and sell food products at a wholesale level, and another for retail food facilities, most commonly restaurants that sell prepared food to consumers but which also encompasses grocery stores. The former (food processors) is generally regulated at the state level, while the latter is regulated at the local level, and they follow two different bodies of law. Food processing establishments engaged in manufacturing, packing, and holding of processed food for wholesale purposes are regulated under the Sherman Law, and under the CFSA, which are enforced by DPH in most areas of the state, except where it has been delegated to the Counties of Los Angeles, Orange, and San Bernardino, and the City of Vernon. Retail food facilities (restaurants and grocery stores) are subject to the [CFRC], and are regulated by local environmental health departments in the 58 counties plus four cities that have been delegated enforcement authority: Berkeley, Long Beach, Pasadena, and Vernon.

This bill requires a food delivery platform to ensure, at its sole expense, that a food delivery driver has training in the requirements related to maintaining potentially hazardous foods at the required temperatures under the CFRC and training in the requirements related to food spoilage and adulteration as required under the CFRC. If a food delivery driver obtains a food handler card under the CFRC they satisfy this requirement.

The bill also requires a food delivery platform to ensure, at its sole expense, that the vehicle used by a food delivery driver undergoes a 19-point vehicle inspection, covering the same items listed in Section 4.05 of the General Order 157-E of Public Utilities Commission relating to vehicle inspections for rideshare companies, at a facility licensed by the Bureau of Automotive Repair prior to delivering food on behalf of a food delivery platform, and every 12 months thereafter.

The bill also requires a food delivery platform to maintain necessary liability. It is unclear what necessary liability means. Existing law requires transportation network companies, which are companies like Uber or Lyft, to carry prescribed minimum insurance (Pub. Util. Code §§ 5430 et. seq.) These provisions require a transportation network to maintain primary insurance in the amount of $1 million dollars for death, personal injury, and property damage. In addition, insurance is required to be maintained and be primary from the moment a driver enables the app until the driver completes the ride or transaction on the app, whichever is later, until the driver accepts another ride or logs off the app in in the amount of at least $50,000 for death and personal injury per person, $100,000 for death and personal injury per incident, and $30,000 for property damage.

In light of these existing insurance requirements, the Committee may wish to amend the bill to require similar coverage for a food delivery driver. For the specific amendment, see Comment 5.

The bill requires the DPH to enforce these provisions and also requires them to asses a civil penalty not to exceed $25,000 per violation. The bill provides that a contract or other arrangement between a food delivery platform and a food delivery driver that, in whole or in part, requires the food delivery driver to pay the penalty required by this section, or a portion thereof, or a cost associated with an enforcement action brought pursuant to this section, including attorney fees incurred by the food delivery platform, is void as against public policy.

4. Liability for wages owed

The bill also requires a grocery establishment, a retail store with a grocery department, or a grocery warehouse to share with a food delivery platform all civil legal responsibility for any compensation or wages owed to a food delivery driver supplied by the food delivery platform to whom the grocery establishment, retail food store with a grocery department, or grocery warehouse transfers food for delivery. These provisions are similar to and consistent with the protections provided for in Section 2810.3 of the Labor Code requiring employer shared civil and legal responsibility for works supplied by a labor contractor. (Lab. Code § 2810.3.) By requiring shared liability for wages, this provision will ensure that grocery establishments, retail stores with a grocery department, or grocery warehouses only do business with food delivery platforms that are paying wages owed to the food delivery drivers and ensures that a food delivery driver will be able to recoup wages earned.

5. Proposed amendment

The specific amendment relating to maintaining necessary liability insurance, as described in Comment 3, is as follows:

Amendment

On page 5, delete lines 30 to 31 and insert:

(c) A food delivery platform shall maintain the following minimum liability insurance requirements that specifically covers liabilities arising from a food delivery driver’s use of a vehicle in connection with a food delivery platform’s online-enabled application or platform. The following requirements shall apply from the moment a food delivery driver accepts request on the food delivery platform’s online-enabled application or platform until the food delivery driver completes the transaction on the online-enabled application or platform.

(1) One million dollars ($1,000,000) for death, personal injury, and property damage. This insurance shall be primary.

(2) At least fifty thousand dollars ($50,000) for death and personal injury per person, one hundred thousand dollars ($100,000) for death and personal injury per incident, and thirty thousand dollars ($30,000) for property damage.

6. Statements in support

The sponsor of the bill, the United Food and Commercial Workers, and a coalition of supporters consisting of the California Labor Federation and the State Building and Construction Trades Council write:

A growing number of Californians order groceries online and have them delivered directly to their home. Retailers frequently rely on app-based delivery platforms. Food retail establishments are subject to strict regulations regarding the handling of food to protect consumer and employee health and safety, and these regulations are incredibly important to preventing foodborne illness and keeping workers safe on the job.

Gig economy delivery companies are not subject to the same regulations. This lack of regulation is compounded by the fact that delivery drivers, almost always misclassified as independent contractors, use personal vehicles to perform their duties and receive virtually no training regarding food safety. For example, their vehicles lack temperature-controlled compartments and hygienic storage space, potentially exposing consumers to hazardous food transported out of its proper holding temperature. Platform delivery drivers face no required food handling certification to ensure that they are equipped to transport food safely, and when groceries travel from store to home, they enter an unregulated grey zone that threatens public health while shielding delivery platforms from accountability.

Workers also typically receive no training regarding injury and illness prevention, despite the vast majority of California’s workplace fatalities occurring as a result of transportation accidents. This already dangerous work is then made more so by workers required to drive to unfamiliar areas and focus on their phones as much as the road in front of them. The risk is not limited to the workers themselves, as pedestrians, cyclists, and other motorists must share the road with these drivers, creating a hazardous situation for all involved.

AB 1360 better protects consumers and workers by extending regulations which safeguard their health and safety in retail food establishments. As app-based companies expand services, we must ensure that public safety and worker protections are not disrupted. We should also ensure that businesses that work hard to comply with regulations do not face unfair competition from companies that escape these obligations.

7. Statements in opposition

Opponents of the bill include business organizations, Albertsons Companies, and associations representing grocers, agricultural growers, and internet companies.

Opponents raise several concerns with the bill. One major concern is that the bills’ provisions do not apply to restaurants. Opponents believe if the author was truly concerned with food safety, the bill’s provisions would apply equally to food being delivered from restaurants. The opponents point out there are inconsistencies in how the bill’s provisions apply, arguing that if a grocery store delivered its own groceries the driver would not need to get a food handling card but if that same grocery store allowed deliveries by a food delivery platform the driver would need a food handling card. Concerns were also raised regarding extending civil liability for wages owed to a food delivery driver to a grocery establishment, a retail store with a grocery department, or a grocery warehouse.

The California Retailers Association writes:

Labor contracts between grocers and employees expired earlier this year and both sides have started the process of negotiating new collective bargaining agreements. Among the issues on the bargaining table is the role that third party food delivery companies play in the continually evolving grocery industry. There is a chance that this bill could actually undo what is agreed to between grocers and union locals, since this bill is a one-size-fits-all solution to an issue that could be resolved differently depending on negotiations between companies and their unions.

Albertsons Companies writes in opposition:

This bill forces retailers to assume all civil legal responsibility and civil liability for workers on a food delivery platform, including with respect to wages and workers’ compensation, if a retailer sells or transfers any food to a consumer through the food delivery platform. It does this by defining the retailer using the platform for delivery as a “client employer” under the California Labor Code.

The bill would also require every delivery driver on the platform to obtain Food Handler Cards, which is unnecessary for—and largely irrelevant to—delivery drivers who retrieve food and deliver it to customers a short distance away […]

This bill also appears to specifically target grocery deliveries from a retail location and not prepared food deliveries from restaurants by redefining the term “Food Retail Establishment.”

This bill does not apply to websites or e-commerce platforms that offer delivery from their own warehouses, which further disadvantages brick and mortar retail stores seeking to sell and have items delivered through a delivery platform.

SUPPORT

United Food and Commercial Workers, Western States Council (sponsor)

California Labor Federation

State Building and Constructions Trades Council

OPPOSITION

Albertsons Companies

American Pistachio Growers

California Chamber of Commerce

California Fresh Fruit Association

California Grocers Association

California Retailers Association

Internet Association

TechNet

Western Agricultural Processors Association

RELATED LEGISLATION

Pending Legislation: None known

Prior Legislation:

SB 303 (Padilla, Ch. 233, Stats. 2011) clarified that existing law requiring a food handler to obtain a food handler card only applies to food handlers employed at a food facility that sells food for human consumption to the general public, required a food handler to obtain a food handler card exclusively from a nationally accredited training provider, and clarified that snack bars, prisons and county jails, and elderly nutrition programs are exempt from the food handler certification requirements.

SB 602 (Padilla, Ch. 609, Stats. 2010) required a food handler, as defined, to obtain a food handler card within 30 days after date of hire at a food facility, with specified exceptions, and mandated at least one of the accredited food safety certification examinations required under current law to be offered online.

PRIOR VOTES:

Senate Health Committee (Ayes 7, Noes 0)

Assembly Floor (Ayes 44, Noes 25)

Assembly Appropriations Committee (Ayes 13, Noes 5)

Assembly Judiciary Committee (Ayes 9, Noes 3)

Assembly Health Committee (Ayes 10, Noes 4)

**************

SENATE COMMITTEE ON HEALTH

Senator Dr. Richard Pan, Chair

BILL NO: AB 1360

SUBJECT: Third-party food delivery

SUMMARY:

Establishes requirements on food delivery drivers and food delivery platforms that deliver food to consumers from food processing establishments and grocery stores, but excluding restaurants, including requiring food delivery drivers to obtain a food handler card.

Existing law:

1. Establishes the California Retail Food Code (CalCode) to provide for the regulation of retail food facilities. Health and sanitation standards are established at the state level through the CalCode, while enforcement is charged to local agencies, carried out by the 58 county environmental health departments, and four city environmental health departments (Berkeley, Long Beach, Pasadena, and Vernon). Prohibits any food facility from being open for business without a valid permit from the local health agency having jurisdiction over the food facility. [HSC §113700, et seq.]
2. Defines a “food facility” as an operation that stores, prepares, packages, serves, vends, or otherwise provides food for human consumption at the retail level. Excludes various entities from the definition of a “food facility,” including a commercial food processing establishment, a cottage food operation, and a church, private club, or other nonprofit association that gives or sells food to its members and guests, and not to the general public, at an event that occurs no more than three days in any 90 day period. [HSC §113789]
3. Defines “food handler” as an individual who is involved in the preparation, storage, or service of food in a food facility. [HSC §113790]
4. Requires all food handlers to obtain a “food handler card” within 30 days from the date of hire, and to maintain a valid food handler card for the duration of employment. Requires the food handler course to provide basic, introductory instructions on specified elements of knowledge, including foodborne illness, the relationship between personal hygiene and food safety, methods of preventing food contamination, and procedures for cleaning and sanitizing equipment. [HSC §113948]
5. Defines “potentially hazardous food” as a food that requires time or temperature control to limit pathogenic micro-organism growth or toxin formation. [HSC §113871]
6. Establishes the Sherman Food, Drug, and Cosmetic Law (Sherman Law), and prohibits any person from engaging in the manufacture, packing, or holding of any processed food unless the person has a valid registration as a food processing facility from the Department of Public Health (DPH). [HSC §109875, §110460]
7. Enacts the California Food Sanitation Act (CFSA) to regulate commercial food processing establishments, which are defined as any room, building, or place, maintained, used, or operated for the purpose of commercially storing, packaging, making, cooking, mixing, processing, bottling, canning, packing, slaughtering, or otherwise preparing or handling food, except restaurants. [HSC §111950, et seq.]
8. Incorporates all federal good manufacturing practices regulations as the good manufacturing practices in California, to be enforced under the Sherman Law. [HSC §110105]
9. Establishes penalties for violations of the Sherman Law of up to one year in a county jail or a fine of up to $1,000, or both. For repeat violations, or for violations with intent to defraud or mislead, or was intentional or was intended to cause injury, the penalty is up to a $10,000 fine and/or imprisonment in a state prison. [HSC §111825, §111855]

This bill:

1. Defines the following terms for purposes of this bill:
   1. “Food delivery driver” means a person who transports and delivers food ordered from a food delivery platform to a consumer;
   2. “Food delivery platform” means a business engaged in the service of online food ordering and delivery from a grocery establishment, a retail store with a grocery department, or a grocery warehouse to a consumer;
   3. “Grocery establishment” means a retail store that is over 15,000 square feet in size and that primarily sells food for offsite consumption, including, but not limited to, fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods, and prepared foods;
   4. “Grocery warehouse” means a room, building, or place or portion thereof, excluding a restaurant, used to sell to a customer through a food delivery platform any of the following products: fresh produce, meat, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods, and prepared foods; and,
   5. “Retail store with a grocery department” means any of the following:
      1. A retail store that has an area within it that is at least 10,000 square feet and where there is primarily food for sale for offsite consumption, including, but not limited to, fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods, and prepared foods;
      2. A retail pharmacy that sells $1 million of nontaxable merchandise per year;
      3. A general retail merchandise store that sells $1million of nontaxable merchandise per year.
2. Requires a food delivery platform to do all of the following:
   1. At its sole expense, ensure that a food delivery driver has training in the requirements relating to maintain potentially hazardous foods at the required temperatures, as specified in provisions of existing law, and in the requirements relating to food spoilage and adulteration, as specified in provisions of existing law. Permits a food delivery driver to satisfy this training requirement by obtaining a food handler card, as specified;
   2. Ensure that a vehicle used by a food delivery driver to provide food delivery services on behalf of the food delivery platform is legally registered in California;
   3. At its sole expense, ensure the vehicle used by a food delivery driver undergoes a 19-point vehicle inspection, covering the same items listed in a specified Public Utilities Commission order relating to vehicle inspections for rideshare companies, at a facility licensed by the Bureau of Automotive Repair prior to delivering food on behalf of a food delivery platform, and every 12 months thereafter; and,
   4. Maintain necessary liability insurance for all deliveries made by a food delivery driver.
3. Requires a grocery store, retail store with a grocery department, or grocery warehouse to share with a food delivery platform all civil legal responsibility for any compensation or wages owed to a food delivery driver supplied by the food delivery platform to whom the grocery establishment, retail food store with a grocery department, or grocery warehouse transfers food for delivery.
4. Requires DPH to enforce this bill, and permits DPH to adopt regulations or best practices to implement this bill.
5. Requires DPH, notwithstanding lower existing fine authority in the Sherman Law, to assess a civil penalty of not more than $25,000 per violation of 2) above on a food delivery platform, and permits those penalties to be used to reimburse DPH for the cost of implementing or enforcing this bill. Specifies that a contract or other arrangement between a food delivery platform and a food delivery driver that, in whole or in part, requires the food delivery driver to pay this penalty, or a portion thereof, or a cost associated with enforcement action brought under this provision, including attorney fees incurred by the food delivery platform, is void as against public policy.

FISCAL EFFECT:

This bill has been substantially amended, and the analysis by the Assembly Appropriations Committee is no longer relevant.

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, the rapid growth of online food and alcohol delivery services has the potential to expose customers to unsafe and unregulated delivery practices. This bill establishes basic safety standards for grocery delivery services, consistent with safety requirements imposed on brick and mortar grocery stores. A growing number of Californians order groceries online and have them delivered directly to their home. Food retail establishments are subject to strict regulations regarding the handling of food to protect consumer and employee health and safety. Delivery companies expose consumer goods to the same risks as may arise for the food retailer, yet they are not subject to regulatory oversight. This bill is to ensure that consumers who choose to use a delivery service receive uncontaminated, safe food and that platform workers receive the appropriate training and certification to perform their job duties.
2. New models of food delivery. This bill is targeting app-based grocery delivery services such as Instacart, Shipt, and others. These companies send personal shoppers to pick up your items from local grocery stores, for a fee. At least one company, Google Express, lets people order groceries from places like Target or Costco, but limits groceries to nonperishable items. Some large grocery chains are also offering home delivery, but unless they use a third-party food delivery platform, the provisions of this bill would not apply to their drivers. However, as the author and sponsor point out, if a grocery store is using their own employees to deliver groceries, they are still under the regulatory structure of their retail food facility license and the provisions of law governing temperature controls and other requirements apply during the transportation of food. Amazon also has a grocery delivery program, Amazon Fresh, and the extent to which this bill applies to Amazon is based on whether Amazon meets the definition of a grocery warehouse, and whether it is contracting with a third-party delivery company to deliver groceries from its warehouse.
   
   Other companies, such as Grubhub, DoorDash, or Uber Eats, are app-based companies focusing on delivering food from local restaurants. As this bill specifically does not apply to restaurant food delivery, these companies would not have to comply with this bill unless they began delivering food from grocery stores or grocery warehouses.
3. The regulation of food in California. In general, there are two regulatory structures for food safety: one for food processors/manufacturers, which generally process and sell food products at a wholesale level, and another for retail food facilities, most commonly restaurants that sell prepared food to consumers but which also encompasses grocery stores. The former (food processors) is generally regulated at the state level, while the latter is regulated at the local level, and they follow two different bodies of law. Food processing establishments engaged in manufacturing, packing, and holding of processed food for wholesale purposes are regulated under the Sherman Law, and under the CFSA, which are enforced by DPH in most areas of the state, except where it has been delegated to the Counties of Los Angeles, Orange, and San Bernardino, and the City of Vernon. Retail food facilities (restaurants and grocery stores) are subject to the CalCode, and are regulated by local environmental health departments in the 58 counties plus four cities that have been delegated enforcement authority: Berkeley, Long Beach, Pasadena, and Vernon.
   
   Under the Sherman Act, “all good manufacturing practices regulations” for any food, drug, device, or cosmetic adopted under federal law are considered the good manufacturing practices of California. DPH is permitted to adopt interpretive regulations as necessary to define “current good manufacturing practice.” The Sherman Act requires DPH to inspect food processing facilities to determine compliance, and to target the inspections based on DPH’s statewide assessment of public health risk potential, including the food safety practices and compliance histories of persons who manufacture, pack, or hold processed foods. The CFSA generally governs the sanitary requirements of the physical building and equipment. The federal “good manufacturing practices,” adopted by the Food and Drug Administration (FDA), that food processing establishments are obligated to follow are detailed in a specific Hazard Analysis and Risk-Based Preventative Controls regulation. Among other requirements, food processors are required to establish hazard analysis to identify reasonable foreseeable hazards that may be present in the food handled at that establishment, implement preventive controls to minimize hazards, and establish monitoring and corrective action procedures. With regard to food safety training for employees, the federal regulations require “all individuals engaged in manufacturing, processing, packing, or holding food” to have the education, training, or experience necessary to manufacture, process, pack, or hold clean and safe food as appropriate, and to “receive training in the principles of food hygiene and food safety, including the importance of employee health and personal hygiene, as appropriate to the food, the facility, and the individual’s assigned duties.”
4. Training requirements tied to provisions in CalCode on temperature control and protection from contamination. This bill requires a food delivery platform to ensure food delivery drivers obtain training related to provisions of the CalCode that require potentially hazardous food to be kept at certain temperatures, generally at or below 41 degrees Fahrenheit, with certain exceptions. One of the exceptions is when being transported to or from a food facility for a period of 30 minutes or less. The training is also required to include provisions in the CalCode that require all food to be transported “so as to be pure and free from adulteration and spoilage…obtained from approved sources…protected from dirt, vermin, unnecessary handling, droplet contamination, overhead leakage, or other environmental sources of contamination” and otherwise be fully fit for human consumption and conforming to applicable provisions of the Sherman Law.
   
   Under current law, these requirements apply to retail food facilities, including grocery stores. Therefore, these requirements would apply to the transportation of food, and the delivery of food, using in-house drivers. For example, if Safeway delivers groceries directly to a consumer, as a company that is a registered retail food facility, it is subject to temperature control requirements of potentially hazardous foods under the CalCode, in the same way that a Domino’s pizza delivery driver is subject to the CalCode. Again, there is an exception to the temperature requirements for transportation times of 30 minutes or less.
5. Food handler certification. SB 602 (Padilla, Chapter 309, Statutes of 2010) was enacted to require food handlers to obtain food handler cards. The intent of food handler certification is to provide employees who handle non-prepackaged food with an overview of key elements of food safety in order to prevent the transmission of foodborne illnesses. Both the course and test for food handlers is required to be available online, and the test does not require a proctor. Topics covered include foodborne illness, time and temperature control, personal hygiene, cross-contamination prevention, and proper cleaning and sanitizing techniques. To obtain a food handler card, applicants are required to take the food handler training course and pass the assessment test with a score of at least 70%. The food handler test and card is required to be provided by a training provider that is accredited by the American National Standards Institute (ANSI), and at least one vendor is required to offer the course for $15 or less. Food handler cards are valid for three years. The law requiring food facilities to have all food handlers obtain a food handler card does contain some exemptions, including those working in temporary food facilities, grocery stores, unionized food facilities, and food facilities with in-house training approved in another state (many chain restaurants, such as Burger King, Denny’s, and McDonald’s are exempted under this provision). Additionally, food handlers that were subject to pre-existing local food handler programs in the counties of Riverside, San Bernardino, and San Diego are exempted.
6. Related legislation. AB 1532 (Bauer-Kahan) enacts the Natalie Giorgi Sunshine Act to require the food handler training course to include instructions on safe handling food practices for major food allergens. AB 1532 passed the Senate Health Committee by a vote of 9-0 on June 12, 2019.
7. Prior legislation. AB 1461 (Thurmond of 2017) would have required an employee of a food facility, and that is also a for-profit business that offers meal subscription plans, to obtain a food handler card if they work in whole or in part with unpackaged food. AB 1461 was vetoed by Governor,Brown who stated: “This bill attempts to regulate a burgeoning new business model of home food delivery. I’m not convinced, however, that the existing regulatory scheme for food facilities is suitable for this new industry. I encourage the Legislature to continue to work on this issue with the Department of Public Health and interested stakeholders to ensure food safety is protected and innovation is encouraged.”
   
   SB 303 (Padilla, Chapter 233, Statutes of 2011) clarified that existing law requiring a food handler to obtain a food handler card only applies to food handlers employed at a food facility that sells food for human consumption to the general public, required that after January 1, 2012, a food handler must obtain a food handler card exclusively from a nationally accredited training provider, and clarified that snack bars, prisons and county jails, and elderly nutrition programs are exempt from the food handler certification requirements.
   
   SB 602 (Padilla) requires a food handler, as defined, to obtain a food handler card within 30 days after his/her hire date at a food facility, with specified exceptions, beginning June 1, 2011, and mandates at least one of the accredited food safety certification examinations required under current law to be offered online.
   
8. Triple referral. This bill is triple referred. Should it pass out of this committee, it will be referred to the Senate Governmental Organization Committee, followed by the Senate Judiciary Committee.
9. Support. This bill is sponsored by the United Food and Commercial Workers Western States Council (UFCW), which states that a growing number of Californians order groceries online and have them delivered directly to their home. To provide this labor-intensive service, retailers frequently rely on mobile phone app-based delivery platforms. Food retail establishments are subject to strict regulations regarding the handling of food to protect consumer and employee health and safety, and UFCW argues delivery companies expose consumer goods to the same risks as may arise for the food retailer, yet they are not subject to regulatory oversight. UFCW states that this lack of regulation is particularly grave as delivery platform drivers use personal vehicles to perform their duties, which lack temperature-controlled compartments and hygienic storage space, potentially exposing consumers to hazardous food held out of its proper holding temperature. UFCW states that when groceries travel from store to home they enter an unregulated grey zone, which threatens public health while shielding delivery platforms from accountability. According to UFCW, groceries are particularly vulnerable during the delivery process as they are removed from a temperature-controlled environment and safe storage sites. As all third party drivers use a personal vehicle rather than one provided by the retailer to make deliveries, they expose consumers’ groceries to a host of contaminants, including pet dander, open food containers, and toxic substances, and the risk of cross contamination of allergens, which are controlled for in a retail establishment. UFCW also states that many third party delivery services transport alcoholic beverages alongside the milk and eggs, and this bill ensures the safe purchase of alcoholic beverages by requiring identification be provided upon purchase and upon delivery. UFCW states that food handlers require training concerning the relationship between time and temperature and food borne illness, personal hygiene and food borne illness, and methods to prevent contamination in all states of food handling. According to UFCW, an understanding of these issues is essential for the safe delivery of food from store to home, where time, temperature, and exposure to contaminants are variables with which a driver must contend. The California Labor Federation makes similar arguments in support, and states that as app-based companies expand services, we must ensure that public safety and worker protections are not disrupted, and that businesses that work hard to comply with regulations do not face unfair competition from companies that escape these obligations.
10. Opposition (prior version). TechNet, Internet Association, and the California Chamber of Commerce write in a joint letter of opposition (joint letter) to the prior version of this bill that this bill is a solution in search of a problem, pointing out that there have been no reported issues or cases of mishandling of food that would prompt the need for the onerous requirements of this bill. Regarding the food handler card, the joint letter argues that this program was intended to impact workers at restaurants where food is being prepared and served, which is not the case for drivers who are simply collecting and delivering packaged products to a consumer. Because grocery store employees are not even required to have a food handler card, this bill would mean a delivery driver utilizing the opportunity to work with a “platform” would be required to have a food handler card but an employee of a grocery store doing the same work and arguable handling more food would not. According to the joint letter, this bill would also require companies to ensure vehicles used by drivers are in full compliance with multiple sections of the Vehicle Code and that deliveries are done with the full requirements of certain Health and Safety Code sections, many of which do not relate to this type of food delivery. As an example, the joint letter states that this bill would require companies engaged in food delivery to verify the drivers’ personal vehicles include evidence of current registration, headlamp, turn signal, tail lamp, adequate muffler, vehicle pollution standards and windshield wiper requirements. The bill also requires delivery drivers to transport food in a manner that would eliminate the use of personal vehicles for grocery delivery in California.
    
    The California Retailers Association (CRA) opposes this bill, stating that it would require drivers who never handle food directly to pay for and pass an exam that has little-to-nothing to do with the job they actually perform. Drivers simply carry groceries from the store to the consumer’s home. CRA points out that labor contracts between grocers and employees expired earlier this year and both sides have started the process of negotiating new collective bargaining agreements. According to CRA, among the issues on the bargaining table is the role that third party food delivery companies play in the continually evolving grocery industry. CRA states there is a chance that this bill could actually undo what is agreed to between grocers and union locals, since this bill is a one-size-fits-all solution to an issue that could be resolved differently depending on negotiations.
    
    The California Grocers Association (CGA) points out in opposition that if this measure were about the safety of delivered food, it would stand to reason that it should apply to restaurant food delivery. In fact, CGA argues that restaurant delivery involves more risks to food safety as nearly everything delivered from a restaurant is perishable. According to CGA, under this bill, if a person put in a grocery order directly through Safeway and another person were to put in the exact same order through an online platform, the Safeway delivery driver would not need a card while the third-party driver would. CGA states that there have been no incidents reported that would suggest a need for this bill.
11. Policy comments.
    1. Should the bill be targeted more specifically to hazardous foods? As described above, California law has different regulatory structures for handling food at the retail level vs. the wholesale level. But within both of these regulatory structures, there are more specific requirements for handling potentially hazardous food, which is defined as food that must be kept at a controlled temperature to avoid the growth of bacteria or other toxins. This bill does not distinguish between the type of food being delivered, and instead applies its requirements to the type of facility where the food is coming from – grocery stores or food processing establishments, but not restaurants. While this ensures the protection of raw meat and dairy products being delivered from a grocery store, it will also result in the application of this bill to the delivery of completely shelf-stable products, while exempting the delivery of prepared food from restaurants, which is considered potentially hazardous food.
    2. Grocery stores are exempt from the food handler card requirement. As described above, the food handler card requirement was established to provide employees of retail food facilities who handle non-prepackaged food with an overview of key elements of food safety in order to prevent the transmission of foodborne illnesses. However, even though grocery stores are regulated as retail food facilities in the same manner as restaurants, grocery stores are specifically exempt from the food handler card requirement.
12. Amendment to correct drafting error. In the most recent amendments, an inadvertent drafting error left out language that the author intended to include. The author intends to amend the bill as follows (due to the double-referral to Senate Judiciary Committee, these amendments will be taken at a future date):
    
    On page 5, between lines 31 and 32, insert the following:
    (d) At the food delivery platform’s sole expense, ensure compliance with Sections 116020, 110625, and 110630, prohibiting and regulating the adulteration of food.

SUPPORT AND OPPOSITION:

Support: United Food and Commercial Workers, Western States Council (sponsor)

California Labor Federation

Oppose (prior version):

Albertsons Companies

American Pistachio Growers (unless amended)

Bay Area Council
California Chamber of Commerce

California Fresh Fruit Association (unless amended)

California Grocers Association

California Retailers Association

Food Marketing Institute

Internet Association

San Francisco Chamber of Commerce
TechNet

Western Agricultural Processors Association (unless amended)

-- END --

SENATE COMMITTEE ON HEALTH

Senator Dr. Richard Pan, Chair

BILL NO: AB 1360

SUBJECT: Food retail establishments: third-party food delivery

SUMMARY:

Establishes requirements on food delivery drivers and food delivery platforms that deliver food to consumers from food processing establishments and grocery stores, but excluding restaurants, including requiring food delivery drivers to obtain a food handler card.

Existing law:

1. Establishes the California Retail Food Code (CalCode) to provide for the regulation of retail food facilities. Health and sanitation standards are established at the state level through the CalCode, while enforcement is charged to local agencies, carried out by the 58 county environmental health departments, and four city environmental health departments (Berkeley, Long Beach, Pasadena, and Vernon). Prohibits any food facility from being open for business without a valid permit from the local health agency having jurisdiction over the food facility. [HSC §113700, et seq.]
2. Defines a “food facility” as an operation that stores, prepares, packages, serves, vends, or otherwise provides food for human consumption at the retail level. Excludes various entities from the definition of a “food facility,” including a commercial food processing establishment, a cottage food operation, and a church, private club, or other nonprofit association that gives or sells food to its members and guests, and not to the general public, at an event that occurs no more than three days in any 90 day period. [HSC §113789]
3. Defines “food handler” as an individual who is involved in the preparation, storage, or service of food in a food facility. [HSC §113790]
4. Requires all food handlers to obtain a “food handler card” within 30 days from the date of hire, and to maintain a valid food handler card for the duration of employment. Requires the food handler course to provide basic, introductory instructions on specified elements of knowledge, including foodborne illness, the relationship between personal hygiene and food safety, methods of preventing food contamination, and procedures for cleaning and sanitizing equipment. [HSC §113948]
5. Defines “potentially hazardous food” as a food that requires time or temperature control to limit pathogenic micro-organism growth or toxin formation. [HSC §113871]
6. Establishes the Sherman Food, Drug, and Cosmetic Law (Sherman Law), and prohibits any person from engaging in the manufacture, packing, or holding of any processed food unless the person has a valid registration as a food processing facility from the Department of Public Health (DPH). [HSC §109875, §110460]
7. Enacts the California Food Sanitation Act (CFSA) to regulate commercial food processing establishments, which are defined as any room, building, or place, maintained, used, or operated for the purpose of commercially storing, packaging, making, cooking, mixing, processing, bottling, canning, packing, slaughtering, or otherwise preparing or handling food, except restaurants. [HSC §111950, et seq.]
8. Incorporates all federal good manufacturing practices regulations as the good manufacturing practices in California, to be enforced under the Sherman Law. [HSC §110105]
9. Establishes the Department of Alcoholic Beverage Control (ABC), and charges ABC with enforcing the ABC Act. [BPC §23050]

This bill:

1. Defines the following terms for purposes of this bill:
   1. “Food delivery driver” means a person who transports and delivers food ordered from a food delivery platform to a consumer;
   2. “Food delivery platform” means a business engaged in the service of online food ordering and delivery from food retail establishments to a consumer;
   3. “Food retail establishment” means a grocery establishment, retail store with a grocery department, or food processing establishment, that is engaged in the sale of food directly to consumers through onsite sale with onsite pickup by the consumer, or delivery directly to the consumer or through online sale for onsite pickup by the consumer or delivery directly to the consumer;
   4. “Food processing establishment” means any room, building, or place, maintained, used, or operated for the purpose of commercially storing, packaging, making, cooking, mixing, processing, bottling, canning, packing, slaughtering, or otherwise preparing or handling food, except restaurants;
   5. “Grocery establishment” means a retail store that is over 15,000 square feet in size and that primarily sells food for offsite consumption, including, but not limited to, fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods, and prepared foods; and,
   6. “Retail stores with a grocery department” means any of the following:
      1. A retail store that has an area within it that is at least 10,000 square feet and where there is primarily food for sale for offsite consumption, including, but not limited to, fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods, and prepared foods;
      2. A retail pharmacy that sells $1 million of nontaxable merchandise per year;
      3. A general retail merchandise store that sells $1million of nontaxable merchandise per year.
2. Requires a food delivery driver to obtain a food handler card in accordance with existing law that requires retail food facility workers to obtain a food handler card.
3. Requires a food delivery platform to ensure that the vehicles used by a food delivery driver are in full compliance with specified requirements of the Vehicle Code related to registration of the vehicle, as well as with the full list of required equipment on vehicles, such as all of the various lights required on vehicles, brake requirements, exhaust requirements, windshield wiper and mirror requirements, and more.
4. Requires a food delivery platform and food delivery driver to ensure that food is transported during delivery in a manner that meets the requirements of specified provisions of the Cal Code, including the following:
   1. Requires food to be protected from contamination;
   2. Requires potentially hazardous food be transported according to specified requirements that require food holding areas to be constructed of smooth and washable material and that can maintain potentially hazardous foods at specified required holding temperatures unless it will be transported for a period of less than 30 minutes;
   3. Requires frozen foods to be stored in their frozen state; and,
   4. Prohibits prepackaged food from being stored in direct contact with ice or water if the food is subject to the entry of water due to the nature of its packaging, and prohibits nonprepackaged food from being stored in direct contact with undrained ice.
5. Prohibits a food delivery driver, during the process of delivery, from making any stops, except when necessary for rest, fuel, or vehicle repair.
6. Prohibits a food retail establishment, as defined under this bill, from selling or otherwise transferring any food for delivery to a consumer through the use of a food delivery platform unless it meets all of the following requirements:
   1. Maintains liability insurance for all deliveries made by a food delivery platform through a food delivery driver, or ensures that the food delivery platform assumes liability and has necessary liability insurance to protect against any liability to a consumer;
   2. Meets all of the requirements for a client employer, as defined in specified provisions of the Labor Code to mean a business entity that obtains or is provided workers to perform labor from a labor contractor, including any regulations adopted by the Labor Commissioner, the Division of Occupational Safety and Health, or the Employment Development Department; and,
   3. Ensures that all employees or contractors who deliver alcohol comply with the requirements of this bill pertaining to alcohol deliveries.
7. Prohibits any alcoholic beverage, notwithstanding any other law, from leaving the premises of a food retail establishment for delivery to a consumer, except pursuant to an order previously received by the food retail establishment.
8. Requires alcoholic beverages to be accompanied by a delivery order that is required to state the quantity, brand, proof, and price of the alcoholic beverages, the name and address of the consumer purchaser, and to have printed or stamped thereon the name and address of the off-sale licensee. Requires a copy of the order to be kept on file by the food retail establishment for a period of two years after the date of delivery.
9. Requires proof of identity and age for all alcohol transactions to be verified at the time of sale, and again by the driver upon delivery, to ensure no sales to minors.
10. Requires DPH to adopt regulations to implement this bill.

FISCAL EFFECT:

According to the Assembly Appropriations Committee:

1. Estimated costs of $180,000 to the Department of Industrial Relations to enforce requirements related to client employers (Labor Enforcement and Compliance Fund).
2. The retail food sections of this bill are locally enforced and enforcement costs can be recovered through local fees.

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, the rapid growth of online food and alcohol delivery services has the potential to expose customers to unsafe and unregulated delivery practices. This bill establishes basic safety standards for grocery delivery services, consistent with safety requirements imposed on brick and mortar grocery stores. A growing number of Californians order groceries online and have them delivered directly to their home. Food retail establishments are subject to strict regulations regarding the handling of food to protect consumer and employee health and safety. Delivery companies expose consumer goods to the same risks as may arise for the food retailer, yet they are not subject to regulatory oversight. This bill is to ensure that consumers who choose to use a delivery service receive uncontaminated, safe food and that platform workers receive the appropriate training and certification to perform their job duties.
2. New models of food delivery. This bill is targeting app-based grocery delivery services such as Instacart, Shipt, and others. These companies send personal shoppers to pick up your items from local grocery stores, for a fee. At least one company, Google Express, lets people order groceries from places like Target or Costco, but limits groceries to nonperishable items. Some large grocery chains are also offering home delivery, but unless they use a third-party food delivery platform, the provisions of this bill would not apply to their drivers. However, as the author and sponsor point out, if a grocery store is using their own employees to deliver groceries, they are still under the regulatory structure of their retail food facility license and the provisions of this bill requiring temperature controls during the transportation of food already apply. Amazon also has a grocery delivery program, Amazon Fresh, but again, the extent to which this bill applies to Amazon is based on whether Amazon meets the definition of using a food delivery platform: a “business engaged in the service of online food ordering and delivery from food retail establishments to a consumer.” If, for example, Amazon Fresh is delivering food from Whole Foods, it would probably have to comply with this bill. Similarly, if it is contracting with a third-party delivery company to deliver groceries from its warehouse, it would likely have to comply with this bill.
   
   Other companies, such as Grubhub, DoorDash, or Uber Eats, are app-based companies focusing on delivering food from local restaurants. As this bill specifically does not apply to restaurant food delivery, these companies would not have to comply with this bill unless they began delivering food from grocery stores or food processing establishments.
3. The regulation of food in California. In general, there are two regulatory structures for food safety: one for food processors/manufacturers, which generally process and sell food products at a wholesale level, and another for retail food facilities, most commonly restaurants that sell prepared food to consumers but which also encompasses grocery stores. The former (food processors) is generally regulated at the state level, while the latter is regulated at the local level, and they follow two different bodies of law. Food processing establishments engaged in manufacturing, packing, and holding of processed food for wholesale purposes are regulated under the Sherman Law, and under the CFSA, which are enforced by DPH in most areas of the state, except where it has been delegated to the Counties of Los Angeles, Orange, and San Bernardino, and the City of Vernon. Retail food facilities (restaurants and grocery stores) are subject to the CalCode, and are regulated by local environmental health departments in the 58 counties plus four cities that have been delegated enforcement authority: Berkeley, Long Beach, Pasadena, and Vernon.
   
   Under the Sherman Act, “all good manufacturing practices regulations” for any food, drug, device, or cosmetic adopted under federal law are considered the good manufacturing practices of California. DPH is permitted to adopt interpretive regulations as necessary to define “current good manufacturing practice.” The Sherman Act requires DPH to inspect food processing facilities to determine compliance, and to target the inspections based on DPH’s statewide assessment of public health risk potential, including the food safety practices and compliance histories of persons who manufacture, pack, or hold processed foods. The CFSA generally governs the sanitary requirements of the physical building and equipment. The federal “good manufacturing practices,” adopted by the Food and Drug Administration (FDA), that food processing establishments are obligated to follow are detailed in a specific Hazard Analysis and Risk-Based Preventative Controls regulation. Among other requirements, food processors are required to establish hazard analysis to identify reasonable foreseeable hazards that may be present in the food handled at that establishment, implement preventive controls to minimize hazards, and establish monitoring and corrective action procedures. With regard to food safety training for employees, the federal regulations require “all individuals engaged in manufacturing, processing, packing, or holding food” to have the education, training, or experience necessary to manufacture, process, pack, or hold clean and safe food as appropriate, and to “receive training in the principles of food hygiene and food safety, including the importance of employee health and personal hygiene, as appropriate to the food, the facility, and the individual’s assigned duties.”
4. Requirements in CalCode pertaining to transportation of food. This bill includes a provision requiring a food delivery platform and food delivery driver to ensure food is transported during delivery in a manner that meets certain specified requirements of the CalCode. One of these provisions require food to be transported in a manner such that the interior floor, sides, and top of the food holding area is constructed of a smooth, washable, impervious material, and that no liquid wastes can drain onto any street, sidewalk, or premises. Another provision requires that all potentially hazardous food held during transportation be kept at or below 45 degrees Fahrenheit, unless the transportation is for a period of less than 30 minutes. This bill also incorporates a requirement that a food that is labeled frozen and shipped frozen by a food processing plant to be received frozen and accepted only if there are not visible signs of thawing or refreezing.
   

Under current law, these requirements apply to retail food facilities. Therefore, these requirements would apply to the transportation of food, and the delivery of food, using in-house drivers. For example, if Safeway delivers groceries directly to a consumer, as a company that is a registered retail food facility, it is subject to the transportation requirements under the CalCode, in the same way that a Domino’s pizza delivery driver is subject to the CalCode. Again, there is an exception to the temperature requirements for transportation times of 30 minutes or less. This bill is seeking to extend these requirements to third party delivery companies, but only for grocery deliveries.

1. Food handler certification. SB 602 (Padilla, Chapter 309, Statutes of 2010) was enacted to require food handlers to obtain food handler cards. The intent of food handler certification is to provide employees who handle non-prepackaged food with an overview of key elements of food safety in order to prevent the transmission of foodborne illnesses. Both the course and test for food handlers is required to be available online, and the test does not require a proctor. Topics covered include foodborne illness, time and temperature control, personal hygiene, cross-contamination prevention, and proper cleaning and sanitizing techniques. To obtain a food handler card, applicants are required to take the food handler training course and pass the assessment test with a score of at least 70%. The food handler test and card is required to be provided by a training provider that is accredited by the American National Standards Institute (ANSI), and at least one vendor is required to offer the course for $15 or less. Food handler cards are valid for three years. The law requiring food facilities to have all food handlers obtain a food handler card does contain some exemptions, including those working in temporary food facilities, grocery stores, unionized food facilities, and food facilities with in-house training approved in another state (many chain restaurants, such as Burger King, Denny’s, and McDonald’s are exempted under this provision). Additionally, food handlers that were subject to pre-existing local food handler programs in the counties of Riverside, San Bernardino, and San Diego are exempted.
2. ABC advisory on alcohol delivery by third party providers. In an advisory by ABC that was updated in 2011, the ABC expressed concern about activities engaged in by unlicensed providers of certain services in connection with the sale of alcoholic beverages, particularly in the context of Internet sales. In this advisory, ABC stated that given that only licensees of ABC may engage in activities for which a license is required, all sales transactions must ultimately be conducted by and under the control of a licensee. A licensee working with a third party provider is ultimately responsible for any activities undertaken by the third party on the licensee’s behalf. Licensees must be responsible for, and must control, the fulfillment of orders and the shipment of alcoholic beverages from the licensee’s licensed premises or other authorized shipping point.
3. Related legislation. AB 1532 (Bauer-Kahan) enacts the Natalie Giorgi Sunshine Act to require the food handler training course to include instructions on safe handling food practices for major food allergens. AB 1532 passed the Senate Health Committee by a vote of 9-0 on June 12, 2019.
4. Prior legislation. AB 1461 (Thurmond of 2017) would have required an employee of a food facility, and that is also a for-profit business that offers meal subscription plans, to obtain a food handler card if they work in whole or in part with unpackaged food. AB 1461 was vetoed by Governor,Brown who stated: “This bill attempts to regulate a burgeoning new business model of home food delivery. I’m not convinced, however, that the existing regulatory scheme for food facilities is suitable for this new industry. I encourage the Legislature to continue to work on this issue with the Department of Public Health and interested stakeholders to ensure food safety is protected and innovation is encouraged.”
   
   SB 254 (Portantino of 2017) would have prohibited a delivery network company, as defined, from delivering alcoholic beverages unless it has a system, reviewed and approved by ABC, that meets specified requirements, including that the company can verify that the products are delivered to a person who is 21 years of age or older. SB 254 passed the Senate and was referred to the Assembly Governmental Organization Committee, but was never heard.
   
   SB 303 (Padilla, Chapter 233, Statutes of 2011) clarified that existing law requiring a food handler to obtain a food handler card only applies to food handlers employed at a food facility that sells food for human consumption to the general public, required that after January 1, 2012, a food handler must obtain a food handler card exclusively from a nationally accredited training provider, and clarified that snack bars, prisons and county jails, and elderly nutrition programs are exempt from the food handler certification requirements.
   
   SB 602 (Padilla) requires a food handler, as defined, to obtain a food handler card within 30 days after his/her hire date at a food facility, with specified exceptions, beginning June 1, 2011, and mandates at least one of the accredited food safety certification examinations required under current law to be offered online.
   
5. Triple referral. This bill is triple referred. Should it pass out of this committee, it will be referred to the Senate Governmental Organization Committee, followed by the Senate Judiciary Committee.
6. Support. This bill is sponsored by the United Food and Commercial Workers Western States Council (UFCW), which states that a growing number of Californians order groceries online and have them delivered directly to their home. To provide this labor-intensive service, retailers frequently rely on mobile phone app-based delivery platforms. Food retail establishments are subject to strict regulations regarding the handling of food to protect consumer and employee health and safety, and UFCW argues delivery companies expose consumer goods to the same risks as may arise for the food retailer, yet they are not subject to regulatory oversight. UFCW states that this lack of regulation is particularly grave as delivery platform drivers use personal vehicles to perform their duties, which lack temperature-controlled compartments and hygienic storage space, potentially exposing consumers to hazardous food held out of its proper holding temperature. UFCW states that when groceries travel from store to home they enter an unregulated grey zone, which threatens public health while shielding delivery platforms from accountability. According to UFCW, groceries are particularly vulnerable during the delivery process as they are removed from a temperature-controlled environment and safe storage sites. As all third party drivers use a personal vehicle rather than one provided by the retailer to make deliveries, they expose consumers’ groceries to a host of contaminants, including pet dander, open food containers, and toxic substances, and the risk of cross contamination of allergens, which are controlled for in a retail establishment. UFCW also states that many third party delivery services transport alcoholic beverages alongside the milk and eggs, and this bill ensures the safe purchase of alcoholic beverages by requiring identification be provided upon purchase and upon delivery. UFCW states that food handlers require training concerning the relationship between time and temperature and food borne illness, personal hygiene and food borne illness, and methods to prevent contamination in all states of food handling. According to UFCW, an understanding of these issues is essential for the safe delivery of food from store to home, where time, temperature, and exposure to contaminants are variables with which a driver must contend. Finally, UFCW states that this bill ensures that those who pick and/or deliver retail food to consumers enjoy the protections consistent with provisions of the Labor Code that include client employer shared legal responsibility and civil liability for all workers supplied by the labor contractor for payment of wages and/or failure to secure valid workers’ compensation coverage.
   
   The California Labor Federation makes similar arguments in support, and states that as app-based companies expand services, we must ensure that public safety and worker protections are not disrupted, and that businesses that work hard to comply with regulations do not face unfair competition from companies that escape these obligations.
7. Opposition. TechNet, Internet Association, and the California Chamber of Commerce write in a joint letter of opposition (joint letter) that this bill is a solution in search of a problem, pointing out that there have been no reported issues or cases of mishandling of food that would prompt the need for the onerous requirements of this bill. Regarding the food handler card, the joint letter argues that this program was intended to impact workers at restaurants where food is being prepared and served, which is not the case for drivers who are simply collecting and delivering packaged products to a consumer. Because grocery store employees are not even required to have a food handler card, this bill would mean a delivery driver utilizing the opportunity to work with a “platform” would be required to have a food handler card but an employee of a grocery store doing the same work and arguable handling more food would not. According to the joint letter, this bill would also require companies to ensure vehicles used by drivers are in full compliance with multiple sections of the Vehicle Code and that deliveries are done with the full requirements of certain Health and Safety Code sections, many of which do not relate to this type of food delivery. As an example, the joint letter states that this bill would require companies engaged in food delivery to verify the drivers’ personal vehicles include evidence of current registration, headlamp, turn signal, tail lamp, adequate muffler, vehicle pollution standards and windshield wiper requirements. The bill also requires delivery drivers to transport food in a manner that would eliminate the use of personal vehicles for grocery delivery in California.
   
   The California Retailers Association (CRA) opposes this bill, stating that it would require drivers who never handle food directly to pay for and pass an exam that has little-to-nothing to do with the job they actually perform. Drivers simply carry groceries from the store to the consumer’s home. CRA points out that labor contracts between grocers and employees expired earlier this year and both sides have started the process of negotiating new collective bargaining agreements. According to CRA, among the issues on the bargaining table is the role that third party food delivery companies play in the continually evolving grocery industry. CRA states there is a chance that this bill could actually undo what is agreed to between grocers and union locals, since this bill is a one-size-fits-all solution to an issue that could be resolved differently depending on negotiations.
   
   The California Grocers Association (CGA) points out in opposition that if this measure were about the safety of delivered food, it would stand to reason that it should apply to restaurant food delivery. In fact, CGA argues that restaurant delivery involves more risks to food safety as nearly everything delivered from a restaurant is perishable. According to CGA, under this bill, if a person put in a grocery order directly through Safeway and another person were to put in the exact same order through an online platform, the Safeway delivery driver would not need a card while the third-party driver would. CGA states that there have been no incidents reported that would suggest a need for this bill.
8. Oppose unless amended. The Western Agricultural Processors Association, the California Fresh Fruit Association, and American Pistachio Growers (food processors) oppose this bill unless amended, stating that this bill would directly conflict with a long-established and foundational concept enshrined in California law – that “food processing establishments” are fundamentally distinct from food retailers and must be treated differently. These food processors write that the growing number of delivery companies that are partnering with restaurants, grocery stores and fast food chains has opened a policy dialogue that they believe is appropriate, but unfortunately, this bill includes both traditional food retailers as well as food processing establishments. Food processing establishments, such as companies that process and store fruits, vegetables, and other agriculture commodities, are controlled environments that customers and members of the public do not typically enter and that generally ship foods to multiple counties and often throughout the country. The food processors point out that unlike food retailers, they are required to process food and ingredients under extremely high levels of regulatory oversight that go well beyond requirements applying to food retailers, including being registered by the FDA and DPH. Under these rigorous standards, food processing establishments are required to implement an overarching strategy for ensuring that their products reach the end consumer in a safe condition, regardless of whether they conduct deliveries through employees or partner with a food delivery platform or third-party couriers. The food processors request amendments that would exempt food processing establishments from the requirements of this bill.
9. Policy comments.
   1. Should the bill be targeted more specifically to hazardous foods? As described above, California law has different regulatory structures for handling food at the retail level vs. the wholesale level. But within both of these regulatory structures, there are more specific requirements for handling potentially hazardous food, which is defined as food that must be kept at a controlled temperature to avoid the growth of bacteria or other toxins. This bill does not distinguish between the type of food being delivered, and instead applies its requirements to the type of facility where the food is coming from – grocery stores or food processing establishments, but not restaurants. While this ensures the protection of raw meat and dairy products being delivered from a grocery store, it will also result in the application of this bill to the delivery of completely shelf-stable products, such as the third party delivery of canned nuts from a registered food processor, while exempting the delivery of prepared food from restaurants, which is considered potentially hazardous food.
   2. Grocery stores are exempt from the food handler card requirement. As described above, the food handler card requirement was established to provide employees of retail food facilities who handle non-prepackaged food with an overview of key elements of food safety in order to prevent the transmission of foodborne illnesses. However, even though grocery stores are regulated as retail food facilities in the same manner as restaurants, grocery stores are specifically exempt from the food handler card requirement. In addition, registered food processors are not regulated at the retail level under CalCode, and therefore are not subject to the food handler card requirement either. Therefore, this bill will have the odd construction of requiring drivers to have a food handler card if they make deliveries from grocery stores or food processing establishments, where food handler cards are currently not required, but exempts deliveries from restaurants, where food handler cards are required.
   3. Putting local health directors in position of enforcing vehicle and labor code law. The provisions of this bill are placed in the CalCode, which is enforced at the local level. This bill is placing local environmental health directors in the position of enforcing provisions of law that fall outside their traditional purview. For example, this bill requires a retail food establishment to meet certain requirements prior to selling or transferring any food to a consumer through the use of a food delivery platform, including: obtaining liability insurance or ensuring the food delivery platform assumes liability; meeting certain Labor Code requirements for a client employer; and, ensuring that all employees or contractors who deliver alcohol comply with the requirements of this bill relating to alcoholic beverages. Additionally, food delivery platforms are required to ensure that vehicles are in full compliance with a number of provisions of the Vehicle Code. It is unclear if local environmental health directors are the appropriate enforcement agency for these provisions. Further, because of this local enforcement, DPH has not adopted any regulations related to retail food facilities. Instead, all of the changes to the requirements of retail food facilities must be made by legislation, as they are all in statute. However, this bill requires DPH to adopt regulations to implement this bill.
   4. Labor code provisions. This bill require a food retail establishment to meet all the requirements, as specified in the Labor Code, for a client employer that obtains or is provided workers from a labor contractor, which include requiring a client employer to share the legal responsibility with a labor contractor to ensure that all workers supplied by the labor contractor get their wages paid and have workers’ compensation coverage. According to the Assembly Judiciary Committee analysis of this bill, creating a system of shared liability between client employers and labor contractors has precedent in existing law, but the particular section of Labor Code that this bill references may not achieve the author’s objective. According to the Assembly Judiciary Committee, it is not entirely clear that the relationship between the retail food establishment and a food delivery platform could ever meet the description of a “client employer” and “labor contractor” in the specified provision of the Labor Code. The grocery store does not contract with the food platform for workers to perform labor on its “premises or worksite.” The drivers do not really perform any service for the grocery store, but instead provide a delivery service to consumers.

SUPPORT AND OPPOSITION:

Support: United Food and Commercial Workers, Western States Council (sponsor)

California Labor Federation

State Building and Construction Trades Council

Oppose: Albertsons Companies

American Pistachio Growers (unless amended)
California Chamber of Commerce

California Fresh Fruit Association (unless amended)

California Grocers Association

California Retailers Association

Food Marketing Institute

Internet Association

San Francisco Chamber of Commerce
TechNet

Western Agricultural Processors Association (unless amended)

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 1360

Author:(Ting)

As Amended Ver:April 10, 2019

Majority vote

SUMMARY:

Prohibits a food retail establishment from selling or transferring any food for delivery to a consumer to a food delivery platform unless specified requirements are met; requires a food delivery driver to obtain a food handler card; and, requires a food delivery platform and food delivery driver to ensure that food is transported in a manner that meets the specified safety requirements of the California Retail Food Code (CRFC).

Major Provisions

Prohibits a food retail establishment from selling or transferring any food for delivery to a consumer using a food delivery platform unless it meets all of the following: Either maintain a liability insurance for all deliveries; or ensures that the food delivery platform assumes liability, as specified; meets all of the requirements for a client employer, as specified; and ensures that all employees or contractors who deliver alcohol comply with specific requirements.

COMMENTS:

The CRFC contains the structural, equipment, and operational requirements for all California retail food facilities. Provisions of CRCF are primarily enforced by 62 local enforcement agencies. The Department of Public Health's Food and Drug Branch plays a supporting role in the enforcement of CRFC by providing technical expertise to evaluate processes and procedures and to answer technical and legal inquires for local agencies, industry, and consumers. This bill places new requirements on food delivery platforms under the CRFC.

This bill defines a food delivery platform as a business engaged in the service of online food ordering and delivery from food retail establishments to consumers. Instacart, Shipt, Google Express, and Peapod, are some examples of these food delivery platforms although not all of them do business in California. Generally, these platforms charge a minimum or annual fee for the service, or waive the fee if minimum amount is spent on groceries.

This bill would also require a food delivery driver to obtain a food handler card. Under the CRFC, food handlers must obtain a food handler card from an American National Standards Institute accredited training program. In order to obtain the card, a food handler must complete a two and one half hour training course and pass an examination of 40 questions with a score of at least 70%. Additionally, this bill would require a food delivery platform to ensure that the vehicles used by a food delivery driver comply with specified requirements of the Vehicle Code, including evidence of current registration, headlamp, turn signal, tail lamp, adequate muffler, vehicle pollution standards, and windshield wiper requirements.

This bill also prohibits a food retail establishment from selling or transferring any food for delivery to a consumer through the use of a food delivery platform unless the food retail establishment also meets all the requirements for a client employer as described in the Labor Code.

According to the Author:

The rapid growth of online food and alcohol delivery services has the potential to expose customers to unsafe and unregulated delivery practices. This bill establishes basic safety standards for grocery delivery services, consistent with safety requirements imposed on brick and mortar grocery stores.

Arguments in Support:

The United Food and Commercial Workers Western States Council, the sponsor of this bill indicates that a growing number of Californians order groceries online and have them delivered directly to their home. Food retail establishments are subject to strict regulations regarding the handling of food to protect consumer and employee health and safety. Delivery companies expose consumer goods to the same risks as may arise for the food retailer, yet they are not subject to regulatory oversight. This bill is not intended to prevent innovation in delivery and food services nor cut off the source of income upon which many Californians rely, but to ensure that consumers who choose to use a delivery service receive uncontaminated, safe food and that platform workers receive the appropriate training and certification to perform their job duties. Additionally this bill ensures the safe purchase of alcoholic beverages, and ensures that those who pick-up/deliver retail food to consumers enjoy the protections of the Labor Code.

Arguments in Opposition:

In their opposition, Technet and the California Chamber of Commerce state that companies engaged in food delivery are a flexible work opportunity for thousands of Californians to earn money and supplement their earnings which stimulates local economies. Additionally, these companies serve consumers by providing the convenience and choice to have food delivered from their favorite restaurant or grocery store, which increases the market reach of these businesses. This bill may stifle the earning potential of thousands of Californians, restrict business growth and prevent millions of dollars from being added to local communities.

Technet also states that there have been no reported issues or cases of mishandling of food that would prompt the need for the onerous requirements of this bill. This bill would also require companies to re-engineer their platforms and exert more control over drivers which could put these companies in conflict with California labor laws. As conversations are continuing to develop regarding worker classification, bills such as these create conflict and confusion that will not help in coming to a solution in those conversations. It also states that the existing food handler requirements were intended for workers at restaurants and other establishments where food is being prepared and served, which is not the case for drivers who are simply collecting and delivering packaged products to a consumer. This bill is too broad.

FISCAL COMMENTS:

According to the Assembly Appropriations Committee:

1. Estimated costs of $180,000 to the Department of Industrial Relations to enforce requirements related to client employers (Labor Enforcement and Compliance Fund).
2. The retail food sections of this bill are locally enforced and enforcement costs can be recovered through local fees.

VOTES:

ASM HEALTH: 10-4-1

YES: Wood, Aguiar-Curry, Bonta, Wicks, Limón, McCarty, Nazarian, Ramos, Rodriguez, Santiago

NO: Mayes, Bigelow, Flora, Waldron

ABS, ABST OR NV: Burke

ASM JUDICIARY: 9-3-0

YES: Mark Stone, Chau, Chiu, Gonzalez, Holden, Kalra, Maienschein, Petrie-Norris, Reyes

NO: Gallagher, Kiley, Obernolte

ASM APPROPRIATIONS: 13-5-0

YES: Gonzalez, Bloom, Bonta, Calderon, Carrillo, Chau, Eggman, Gabriel, Eduardo Garcia, Maienschein, Petrie-Norris, Quirk, Robert Rivas

NO: Bigelow, Brough, Diep, Fong, Obernolte

UPDATED:

VERSION: April 10, 2019

CONSULTANT: Rosielyn Pulmano / HEALTH / (916) 319-2097 FN: 0000617

Date of Hearing: May 8, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1360

Author:(Ting) – As Amended Ver:April 10, 2019

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill places new rules on the operation of the delivery of food by drivers from retail food sellers through a food delivery platform. Specifically, this bill:

1. Requires food delivery drivers to obtain a food handler card.
2. Requires a food delivery platform to ensure the vehicles used by a food delivery driver to provide food delivery services are in full compliance with specified provisions of the Vehicle Code and restricts stops a delivery driver can make during delivery.
3. Requires retail food sellers to maintain liability insurance for deliveries or ensure the food delivery platform has liability insurance and to meet the requirements for a client employer, as defined.
4. Establishes rules related to alcohol delivery.
5. Requires a food retail establishment to meet all of the requirements for a “client employer,” as described in existing law.
6. Requires the California Department of Public Health (CDPH) to adopt implementing regulations.

FISCAL EFFECT:

1. Estimated costs of $180,000 to the Department of Industrial Relations to enforce requirements related to client employers (Labor Enforcement and Compliance Fund).
2. The retail food sections of this bill are locally enforced and enforcement costs can be recovered through local fees.

COMMENTS:

1. Purpose. According to the author, the rapid growth of online food and alcohol delivery services has the potential to expose customers to unsafe and unregulated delivery practices. This bill establishes basic safety standards for grocery delivery services, consistent with safety requirements imposed on brick and mortar grocery stores.
2. Background. The California Retail Food Code (CRFC), which is enforced by 62 local environmental health regulatory agencies, contains the structural, equipment and operational requirements for all California retail food facilities. The California Department of Public Health (CDPH) provides high-level oversight and technical expertise related to the CRFC. Current law requires food handlers—individuals involved in the preparation, storage or service of food in a retail food facility—to obtain a food handler card from an accredited training program. Retail food facilities also must submit to local permitting and inspections to ensure they are following relevant codes. In contrast, CDPH Food and Drug Branch regulates the manufacture, processing, storage and distribution of food products that are not sold directly to consumers. California law requires these food businesses to obtain a state license, certificate or registration, depending on the activity. In essence, the state regulates wholesale food handling, while local jurisdictions regulate retail facilities.

The sponsors of this bill argue innovation in the food sales and distribution system requires a new regulatory framework. For instance, if Safeway uses Instacart to deliver food to customers, this bill will require Safeway to share in the responsibility toward the shoppers/delivery persons, including the provision of applicable wages and workers’ compensation.

This bill requires food retail establishments to meet requirements of a “client employer,” as defined in the Labor Code. A client employer is a business entity that obtains or is provided workers to perform labor within its usual course of business from a labor contractor. This bill subjects the food retail establishments to all regulations that apply to client employers, which largely address liability.

1. Support. The United Food and Commercial Workers, Western States Council (UFCW), the sponsor of this bill, indicates a growing number of Californians order groceries online to be delivered directly to their home. They argue food retail establishments are subject to strict regulations and delivery companies expose consumer goods to the same risks as may arise for the food retailer, yet they are not subject to regulatory oversight. Additionally, UFCW points out this bill ensures the safe purchase of alcoholic beverages and that those who pick up and deliver retail food to consumers enjoy the protections of the Labor Code.
2. Opposition. In their opposition, Technet and the California Chamber of Commerce state that companies engaged in food delivery are a flexible work opportunity for thousands of Californians to earn money and supplement their earnings, which stimulates local economies. Technet also states that there have been no reported issues or cases of mishandling of food that would prompt the need for the onerous requirements of this bill. Technet argues this bill may stifle the earning potential of thousands of Californians, restrict business growth and prevent millions of dollars from being added to local communities.
3. Prior Legislation. AB 2212 (Ting), of the 2017-18 Legislative Session, would have included in the definition of a food facility a subscription-based meal delivery service that provides customers with recipes and preportioned ingredients needed to prepare those recipes at home. AB 2212 was never heard in Assembly Health Committee.

AB 1461 (Thurmond), of the 2017-18 Legislative Session, would have required an employee of a food facility that offers meal subscription plans, who is a food handler and who also works in whole or in part with unpackaged food to obtain a food handler card. AB 1461 was vetoed by Governor Brown who indicated:

This bill attempts to regulate a burgeoning new business model of home food delivery. I'm not convinced, however, that the existing regulatory scheme for food facilities is suitable for this new industry. I encourage the Legislature to continue to work on this issue with DPH and interested stakeholders to ensure food safety is protected and innovation is encouraged.

Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081

Date of Hearing: April 23, 2019

ASSEMBLY COMMITTEE ON JUDICIARY

Mark Stone, Chair

ABPCA Bill Id:AB 1360

Author:(Ting) – As Amended Ver:April 10, 2019

SUBJECT: Food retail establishments: third-party food delivery

KEY ISSUES:

1. should drivers who deliver food through an online food delivery platform be required to obtain a “food handler card” and comply with other food safety regulations?
2. Should a food delivery platform ensure that a driver’s vehicle complies with specified sections of the vehicle code?
3. Should a business that sells food for delivery through a food delivery platform either maintain liability insurance or ensure that the platform maintains liability insurance?
4. should a food retail establishment meet the requirements of a “client employer,” as defined, before it can sell food to a consumer through a food delivery platform?

SYNOPSIS

AB 1360 seeks to protect public health, consumers, and workers by ensuring the safety of food delivered to consumers through an online grocery delivery platform, such as “Instacart.” Some of the bill’s provisions purport to deal with food safety. First, the bill would require platform drivers to obtain a certified “food handler card” if they deliver food from a “food retail establishment” (primarily a grocery) to the consumer through an online delivery platform. Under existing law, a “food handler card” is required of employees whose job includes preparing and serving food directly to consumers, primarily in a restaurant. Second, the bill would require the driver and the food delivery platform to comply with specified sections of the California Retail Food Code (CRFC). Finally, the bill would require the food delivery platform to ensure that the vehicle used by a food delivery driver complies with specified sections of the Vehicle Code. These provisions dealing with food and vehicle safety regulations received attention in the Assembly Health Committee, which recently passed the bill on a 10-4 vote. The bill comes to this Committee, however, primarily because of two other provisions: one requires either the retail establishment or platform to maintain liability insurance; the other prohibits the food retail establishment from selling goods through a delivery platform unless it meets the requirements of a “client employer.” In brief, as a client employer, the food retail establishment would share liability with the delivery platform for labor law violations. While this bill admirably seeks to fill a regulatory gap created by the gig economy, the opponents nonetheless raise legitimate questions about certain aspects of the bill. If the bill moves forward, the author should continue to address what opponents reasonably call the bill’s “ill-fitting” parts.

SUMMARY: Imposes new regulations on food delivery platforms, food delivery drivers, and retail food establishments that sell groceries through food delivery platforms. Specifically, this bill:

1. Requires a food delivery driver, as defined, to obtain a food handler card in accordance with the California Retail Food Code (CRFC).
2. Requires a food delivery platform, as defined, to ensure that the vehicles used by a food delivery driver are in full compliance with specified divisions of the Vehicle Code.
3. Requires the food delivery platform and the food delivery driver to ensure that food is transported in a manner that meets the requirements of several sections of the CRFC.
4. Prohibits a food delivery driver from making any stops during the course of delivery, from the food retail establishment to the consumer, except when necessary for rest, fuel, or vehicle repair.
5. Prohibits a food retail establishment from selling or otherwise transferring any food for delivery to a consumer through the use of a food delivery platform unless it meets all of the following requirements:
   1. Either the food retail establishment maintains liability insurance for all deliveries made by a food delivery platform, or it ensures that the food delivery platform assumes liability, has necessary liability insurance to protect against any liability to a consumer, and complies with the requirements of this bill.
   2. Meets all of the requirements for a “client employer,” as specified, including regulations adopted by the Labor Commissioner, the Division of Occupational Health and Safety, or the Employment Development Department, as specified.
   3. Ensures that all employees or contractors who deliver alcohol comply with specified requirements, including proof of identity and age for all alcohol transactions at the time of sale, and again by the driver upon delivery, to ensure no sales to minors.
6. Provides that for purposes of the above, the following definitions apply:
   1. “Food delivery driver” means a person who transports and delivers food ordered from a food delivery platform to a consumer.
   2. “Food delivery platform” means a business engaged in the service of online food ordering and delivery from food retail establishments to a consumer.
   3. “Food retail establishment” means a grocery establishment, retail store with a grocery department, or a food-processing establishment, other than a restaurant, that sells food directly to consumers through onsite sale with onsite pick up by the consumer, or delivery directly to the consumer or through online sale for onsite pickup by the consumer or delivery directly to the consumer.

EXISTING LAW:

1. Establishes, under the CRFC, uniform health and sanitation standards for retail food facilities, provides for their regulation by the Department of Public Health (DPH), and requires local health agencies to enforce these provisions. (Health and Safety Code Sections 113700-114437.)
2. Defines a food facility to mean an operation that stores, prepares, packages, serves, vends, or otherwise provides food for human consumption at the retail level, and includes, among others, restaurants, and public and private school cafeterias, and excludes, among others, private homes. Defines retail to mean the storing, preparing, serving, manufacturing, packaging, transporting, salvaging, or otherwise handling food for dispensing or sale directly to the consumer or indirectly through a delivery service. (Health and Safety Code Section 113789.)
3. Requires a food handler to obtain a food handler card from a nationally accredited training provider within thirty days of obtaining employment and to maintain the card for the duration of their employment as a food handler. Defines food handler to mean an individual who is involved in the preparation, storage, or service of food in a food facility that sells food for human consumption to the public. (Health and Safety Code Sections 113790 and 113948.)
4. Requires a food facility to comply with specified general food safety requirements, including protecting food from contamination in the process of preparing, transporting, storing, displaying, or serving food. (Health and Safety Code Sections 113980-113996 and 114018-114053.)
5. Provides that a client employer shall share with a labor contractor all civil legal responsibility and civil liability for all workers supplied by the labor contractor for the payment of wages and failure to secure valid workers’ compensation coverage. (Labor Code Section 2810.3 (b).)
6. Defines, for purposes of 5), above, the following:
   1. “Client employer” means a business entity, regardless of its form, that obtains workers to perform labor within its usual course of business from a labor contractor. (Labor Code Section 2810.3 (a)(1).)
   2. “Labor contractor” means an individual or entity that supplies, either with or without a contract, a client employer with workers to perform labor within the client employer’s usual course of business. (Id., at (a)(3).)
   3. “Usual course of business” means the regular and customary work of a business, performed within or upon the premises or worksite of the client employer. (Id., at (a)(6).)

FISCAL EFFECT: As currently in print this bill is keyed fiscal.

COMMENTS: According to the author, “the rapid growth of online food and alcohol delivery services has the potential to expose customers to unsafe and unregulated delivery practices.” The author believes that this bill will establish “basic safety standards for grocery delivery services, consistent with safety requirements imposed on brick and mortar grocery stores.”

This bill is one of several that this Committee has heard in recent years attempting to grapple with the effect of the so-called “gig economy,” which increasingly relies on online platforms that act as intermediary between a business and consumers and relies upon a flexible workforce classified as “independent contractors.” Like any business innovation, the gig economy creates gaps and lags in an existing regulatory framework designed for earlier modes of business, labor, and consumption. This bill responds to the growing use of online platforms and applications, such as “Instacart,” that allow consumers to order groceries and connect with drivers who deliver those groceries directly to the consumer. Similar online companies, such as “Postmates” or “Doordash,” allow consumers to order prepared food for delivery from restaurants to home, work, or other locations. This bill, however, only applies to online delivery platforms that transports food to consumers from “food retail establishments,” which is defined to include grocery stores, but to exempt restaurants. Thus, the provisions of this bill would apply to “Instacart” drivers who deliver food to a consumer from a grocery store, but it would not apply to “Postmates” and “Doordash” drivers who deliver food to a consumer from a restaurant.

According to the author and sponsor, food delivery platforms and food delivery drivers that deliver groceries to consumers pose a threat to public health because the California Retail Food Code (CRFC) does not regulate them. CRFC provides a comprehensive statutory framework that establishes uniform health and sanitation standards for “retail food facilities,” and provides for their regulation by the Department of Public Health, and requires local health agencies to enforce these provisions. A “retail food facility” is defined under the CRFC as any operation that stores, packages, prepares, serves, sells, or otherwise provides food for human consumption directly to consumers and includes, among others, restaurants and public and private school cafeterias. This bill seeks to apply some of the regulations laid out in the CRFC to food platforms and food platforms drivers that deliver food from a “food retail establishment” (primarily a grocery store or a large retail store that sells groceries).

Do Drivers Need a Food Handler Card? Among other things, AB 1360 would require food platform drivers to obtain a “food handler card” in accordance with provisions of CRFC. Under existing law, employees who prepare or serve food directly to consumers in a restaurant or similar facility must possess a food handler card. These cards are generally available online for a small fee (about $10) from any number of companies accredited by the American National Standards Institute (ANSI) to administer the 40-question exam and issue the cards. A restaurant employee involved in preparing or serving of food must obtain the ANSI-accredited card within 30 days after hire and renew it every three years.

Opponents of this bill contend that drivers who deliver groceries from the store to the consumer do not need a food handler card because they are not involved in preparation or service of food in a restaurant. For the most part, drivers deliver packaged products or perhaps fresh produce, which do not pose the same danger of contamination or spoilage as food prepared and served in a restaurant. The author and sponsor of this bill contend, however, that some groceries have delis or food counters that sell prepared food and consumers sometimes order these foods through delivery platforms. The analysis of AB 1360 prepared by the Assembly Health Committee recommended amending the bill to require the food handler card only when the driver delivers prepared or immediately perishable foods. The author’s office and sponsor informed this Committee, however, that they rejected this amendment because most drivers deliver both kinds of foods. However, since the author and sponsor are concerned with prepared foods, it may be appropriate to apply the provisions of this bill to food delivery platforms that deliver food from a restaurant. The author and sponsor contend, however, that restaurants are exempt from the bill because CRFC already regulates them, but this is not entirely the case. The CRFC only requires employees who prepare, handle, or serve food in the restaurant to have a card. Neither existing law nor this bill would require drivers that deliver online orders from a restaurant to obtain a card. Yet, prepared food delivered to a consumer from a restaurant seems far more likely to spoil than groceries, and just as likely to spoil as prepared food delivered to the consumer from a grocery store.

In short, the requirement that grocery delivery drivers obtain a food handler’s card is both over-inclusive and under-inclusive. It is over-inclusive in that it captures drivers who deliver items that are not prone to contamination or spoilage. It is under-inclusive in that it does not require a card for drivers who deliver food from a restaurant through an online platform. For example, a “Postmates” driver could deliver prepared food from a restaurant to a consumer without a card, but that same driver could not deliver canned and packaged foods from a grocery store to a consumer without a card. If the bill is seeking to prevent any food from spoiling or becoming contaminated during the delivery, then, if the bill moves forward, the author may wish to expand the bill to include drivers that deliver food from a restaurant to a consumer through an online delivery platform. This, of course, will not assuage the opponents of this bill, but it will make the bill more logically consistent and more protective of consumers.

Compliance with the Vehicle Code: AB 1360 would require the food delivery platform to ensure that that vehicles used by a food delivery driver are in “full compliance” with Division 3 (commencing with Section 4000) and Division 12 (commencing with Section 24000) of the Vehicle Code. Division 3 of the Vehicle Code includes several sections relating to registration and certificates of title. Because this division contains several sections, it is not entirely clear what “full compliance” with all of these sections would mean. If the bill moves forward, the author may wish to consider clarifying this requirement. Does it simply mean that the platform must ensure that the vehicle is legally registered? If this is so, then it might be simpler to state that. Division 12 of the Vehicle Code contains dozens of sections pertaining to the operability of the various parts and equipment that constitute a vehicle, from headlamps, to wiper blades, to brakes. Because drivers generally use their own vehicles, it is not entirely clear how the delivery platform would ensure that all of these various parts are in “full compliance” with all of the provisions of Division 12. If the bill moves forward, the author may wish to consider specifying how the platform would verify this. Would it be sufficient, for example, to require the driver to present the food delivery platform with a recent inspection report?

Shared Liability between the Retail Food Establishment and the Food Delivery Platform: AB 1360 came to this Committee primarily because of provisions affecting the liability of various parties. One of the more difficult problems created by the gig economy is the reliance upon workers who are classified as “independent contractors,” even though they perform the same job duties as persons who were traditionally classified as “employees.” The California Supreme Court’s recent decision in Dynamex Operations West v. Superior Court (2018) 4 Cal. 5^th 903 modified a long-standing test used to determine when a worker is deemed by law to be an “independent contractor” versus an “employee.” This decision is the subject of pending legislation, including AB 5 (Gonzalez), which would effectively codify the Dynamex ruling and AB 71 (Melendez), which would effectively codify the Borello ruling (S.G. Borello & Sons v. Department of Industrial Relations (1989) 48 Cal.3d 342) that preceded Dynamex. That wider debate is relevant to this bill. This is because if the law classifies drivers of food delivery platforms as “independent contractors,” there is no “employer” who is responsible for complying with labor laws. If there is no employer, there is no one who is vicariously liable for harms inflicted on consumers by employees acting within the scope of their employment.

This bill seeks to fill the liability gap in two ways. First, AB 1360 would require the retail food establishment either to maintain liability insurance for deliveries made through a food delivery platform or to ensure that the food delivery platform assumes liability and has necessary liability insurance to protect against any liability to a consumer.

Second, this bill would prohibit a food retail establishment from selling food to a consumer through a food delivery platform unless the establishment meets all of the requirements of a “client employer,” as described in Section 2810.3 of the Labor Code. That section requires a client employer to share with a labor contractor all civil legal responsibility and civil liability for all workers supplied by the labor contractor, in particular for the payment of wages and failure to secure valid workers’ compensation coverage. The purpose of requiring a food retail establishment, therefore, to meet the requirements of a “client employer” is apparently to prevent the food retail establishment and the food delivery platform from shirking responsibilities by attempting to shift liability for noncompliance with applicable laws to the other party.

Is Labor Code Section 2810.3 the Appropriate Reference? Creating a system of shared liability between client employers and labor contractors has precedent in existing law, but referencing Labor Code Section 2810.3 may not achieve the author’s objective. Existing law defines a “client employer” as a business entity that obtains workers from a labor contractor, and it defines a “labor contractor” as a person or entity that supplies workers to perform labor in the client employer’s “ordinary course of business.” The law defines “ordinary course of business,” in turn, to mean “the regular and customary work of a business, performed within or upon the premises or worksite of the client employer.” [Emphasis added.] It is not entirely clear that the relationship between the retail food establishment and a food delivery platform could ever meet the description of “client employer” and “labor contractor” in Section 2810.3. The grocery establishment does not contract with the food platform for workers to perform labor on its “premises or worksite.” Indeed, the drivers do not really perform any service for the grocery; rather, they provide a delivery service to consumers who choose to make use of a food delivery platform. Therefore, if the bill moves forward, the author may wish to establish shared liability between the food retail establishment and the food delivery platform more directly – and specify precisely what they will be liable for – rather than rely upon a reference to a statute that envisions a more conventional type of labor contracting relationship.

ARGUMENTS IN SUPPORT: The United Food and Commercial Workers (UFCW), the sponsor, contend that a “growing number of Californians order groceries online and have them delivered directly to their home [and] . . . retailers frequently rely on mobile phone app-based delivery platforms.” UFCW contends that these online delivery platforms “expose consumer goods to the same risks as may arise for the food retailer yet they are not subject to regulatory oversight. This lack of regulation is particularly grave as delivery platform drivers use personal vehicles to perform their duties.” UFCW claims that personal vehicles may “lack temperature-controlled compartments and hygienic storage space, potentially exposing consumers to hazardous food held out of its proper holding temperature. Platform delivery drivers have no required food handling certification to ensure that they are equipped to transport food safely.” UFCW argues that AB 1360 will “ensure that consumers who choose to use a delivery service receive uncontaminated, safe food and that platform workers receive the appropriate training and certification to perform their job duties.”

ARGUMENTS IN OPPOSITION: TechNet, the Internet Association, and the California Chamber of Commerce oppose this bill because, they believe, it will stifle innovation while not doing anything to protect public health and safety. Opponents contend that food delivery platforms provide a “flexible work opportunity for thousands of Californians to earn money and supplement their earnings which stimulates local economies. Additionally, these companies serve consumers in California by providing the convenience and choice to have food delivered from their favorite grocery store or commissary kitchen, which increases the market reach of those businesses.” Opponents fear, however, the “burdensome requirements in AB 1360 may stifle the earning potential of thousands of Californians, restrict business growth, and prevent millions of dollars from being added to local communities.” TechNet further claims that this bill “would also require companies to re-engineer their platforms and exert more control over drivers, which could put these companies in conflict with California labor laws. As conversations are continuing to develop regarding worker classification, bills such as these create conflict and confusion that will not help in coming to a solution in those conversations.”

In general, opponents “believe this bill is a solution in search of a problem,” noting that to date “there have been no reported issues or cases of mishandling of food that would prompt the need for the onerous requirements of this bill.” Additionally, the opponents point to several specific problematic provisions. For example, opponents contend that the Food Handler Card program seeks to ensure that workers in restaurants who prepare and serve food directly to consumers know how to perform these duties without contaminating or undercooking food. This bill, however, would require drivers who never handle food directly to pay for and pass an exam that has little to do with the job that they actually perform. Opponents point out that AB 1360 inconsistently exempts restaurants (which entail the transport of cooked food) and instead imposes “ill-fitting regulatory requirements” on drivers who simply carry groceries (much of it canned, packaged or not immediately perishable) from the store to the consumer’s home.

REGISTERED SUPPORT / OPPOSITION:

Support

United Food and Commercial Workers, Western States Council (sponsor)

Oppose

California Chamber of Commerce

Internet Association

TechNet

Analysis Prepared by: Thomas Clark / JUD. / (916) 319-2334

Date of Hearing: April 9, 2019

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 1360

Author:Ting – As Amended Ver:April 1, 2019

SUBJECT: Food retail establishments: third-party food delivery.

SUMMARY: Prohibits a food retail establishment from selling or transferring any food for delivery to a consumer to a food delivery platform unless specified requirements are met; requires a food delivery driver to obtain a food handler card; and, requires a food delivery platform and food delivery driver to ensure that food is transported in a manner that meets the general safety requirements of the California Retail Food Code (CRFC). Specifically, this bill:

1. Prohibits a food retail establishment from selling or transferring any food for delivery to a consumer through the use of a food delivery platform unless it meets all of the following requirements:
   1. Either of the following regarding liability:
      1. Maintains liability insurance for all deliveries made by a food delivery platform through a food delivery driver; or,
      2. Ensures that the food delivery platform assumes liability, has necessary liability insurance to protect against any liability to a consumer, and is in compliance with the requirements of this bill.
   2. Meets all of the requirements for a client employer, as specified, including any regulations adopted by the Labor Commissioner, the Division of Occupational Safety and Health, or the Employment Development Department.
   3. Ensures that all employees or contractors who deliver alcohol comply with the requirements of 2) below.
      
2. Prohibits an alcoholic beverage from leaving the premises of a food retail establishment for delivery to a consumer, except pursuant to an order previously received by the food retail establishment. Requires the alcoholic beverages to be accompanied by a delivery order that state the quantity, brand, proof, and price of the alcoholic beverages, the name and address of the consumer purchaser, and to have printed or stamped the name and address of the off-sale licensee. Requires a copy of the order to be kept on file by the food retail establishment for a period of two years after the date of delivery. Requires proof of identity and age for all alcohol transactions to be verified at the time of sale, and again by the driver upon delivery, to ensure no sales to minors.
   
3. Requires a food delivery driver to obtain a food handler card, as specified,
   
4. Requires a food delivery platform to ensure that the vehicles used by a food delivery driver to provide food delivery services are in full compliance with the requirements of the Vehicle Code.
   
5. Requires a food delivery platform and food delivery driver to ensure that food is transported during delivery in a manner that meets the general safety requirements of the CRFC, as specified.
   
6. Prohibits a food delivery driver, during the process of delivery, from making any stops, except when necessary for rest, fuel, or vehicle repair.
   
7. Specifies that a process of delivery begins when the food leaves the premises of a food retail establishment with the food delivery driver and ends when the food is delivered to the consumer.
   
8. Requires the DPH to adopt regulations to implement this bill.
   
9. Defines the following terms:
   1. Food delivery driver as a person who transports and delivers food ordered from a food delivery platform to a consumer;
   2. Food delivery platform as a business engaged in the service of online food ordering and delivery from food retail establishments to a consumer;
   3. Food processing establishment as any room, building, or place or portion of those, maintained, used, or operated for the purpose of commercially storing, packaging, making, cooking, mixing, processing, bottling, canning, packing, slaughtering, or otherwise preparing or handling food, except restaurants. Excludes from this definition a cottage food operation, as defined, or a microenterprise home kitchen, as defined;
   4. Food retail establishment as a grocery establishment, retail store with a grocery department, or food processing establishment, that is engaged in the sale of food directly to consumers through onsite sale with onsite pickup by the consumer, or delivery directly to the consumer or through online sale for onsite pickup by the consumer or delivery directly to the consumer;
   5. Grocery establishment as a retail store that is over 15,000 square feet in size and that primarily sells food for offsite consumption, including, but not limited to, fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods, and prepared foods;
   6. Retail stores with a grocery department as all of the following:
      1. A retail store that has an area within it that is at least 10,000 square feet and where there is primarily food for sale offsite consumption, including but not limited to, fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods, and prepared foods;
      2. A retail pharmacy that sells $1 million of nontaxable merchandise per year; and,
      3. A general retail merchandise store that sells $1 million of nontaxable merchandise per year.
         

EXISTING LAW:

1. Establishes, under the CRFC, uniform health and sanitation standards for retail food facilities, provides for their regulation by the Department of Public Health (DPH), and requires local health agencies (LEAs) to enforce these provisions.
2. Defines a food facility to mean an operation that stores, prepares, packages, serves, vends, or otherwise provides food for human consumption at the retail level, and includes, among others, restaurants, public and private school cafeterias, and excludes, among others, private homes. Defines retail to mean the storing, preparing, serving, manufacturing, packaging, transporting, salvaging, or otherwise handling food for dispensing or sale directly to the consumer or indirectly through a delivery service.
3. Defines food handler to mean an individual who is involved in the preparation, storage, or service of food in a food facility that sells food for human consumption to the general public. Excludes from the definition of food handler an individual holding a valid food safety certificate or an individual involved in the preparation, storage, or service of food in a temporary food facility.
4. Requires a food handler to obtain a food handler card from a nationally accredited training provider within 30 days of their employment and to maintain the card for the duration of their employment as a food handler.
5. Requires a food facility to comply with specified general food safety requirements, including: protection from contamination; food transportation; time and temperature relationships; food storage; and, food display and service.
6. Defines potentially hazardous food to mean any food that requires time or temperature control to limit pathogenic micro-organism growth or toxic formation.
7. Defines a transporter as any vehicle used to transport food pursuant to a prior order from a manufacturers, distributor, retail food facility, or other approved source to a retail food facility or consumer.
8. Provides that a person who violates any provision of the CRFC is guilty of a misdemeanor, except as otherwise specified.
9. Establishes the Sherman, Food, Drug and Cosmetic Law (Sherman), administered by DPH to, among other provisions, regulate food processing facilities including requiring registration and inspection of these facilities. Defines food processing to mean any facility operated for the purposes of manufacturing, packing, or holding processed food.

FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, the rapid growth of online food and alcohol delivery services has the potential to expose customers to unsafe and unregulated delivery practices. This bill establishes basic safety standards for grocery delivery services, consistent with safety requirements imposed on brick and mortar grocery stores.
2. BACKGROUND. The CRFC contains the structural, equipment, and operational requirements for all California retail food facilities. Provisions of CRCF are primarily enforced by 62 LEAs. DPH’s Food and Drug Branch plays a supporting role in the enforcement of CRFC by providing technical expertise to evaluate processes and procedures and to answer technical and legal inquires for local agencies, industry, and consumers. This bill places new requirements on food delivery platforms under the CRFC.
   1. Food delivery platform. This bill defines a food delivery platform as a business engaged in the service of online food ordering and delivery from food retail establishments to consumers. Instacart, Shipt, Google Express, and Peapod, are some examples of these food delivery platforms although not all of them do business in California. Generally, these platforms charge a minimum or annual fee for the service, or waive the fee if minimum amount is spent on groceries.
      Instacart, a San Francisco-based technology company reached out to Committee staff to introduce its business model to Committee staff. Instacart states that it provides the technical infrastructure for grocery delivery services via its communications and logistics platform. Currently, it employs around 500 full-time associates and 800 part-time associates and contract with around 20,000 independent contractors.
      
      According to Instacart, full service shoppers (FSSs) (those who shop a customer’s order, and directly deliver the groceries to the customer’s designated delivery address) sign an independent contractor agreement. A third party company runs a complete driving record and criminal background check for the FSS before they are offered orders to accept and fulfill. Instacart also provides excess commercial automobile insurance liability for claims made by a third party against an independent contractor while providing services through the Instacart platform; and, this is in addition to the independent contractor’s primary insurance.
      
      Instacart also provided document that contains requirements for their FSSs called “Shopper Food Safety Requirements and Recommended Best Practices.” These requirements and best practices include food safety walk through, food safety tips while shopping (handwashing, use of clean, insulated bags, choosing high quality items, bagging at checkout, and food safety tips for delivery. Each shopper must also take an internet based food safety walk-through slides, that includes question and answer portion. These slides provide information on sanitation such as handwashing requirements, the prohibition on shopping while experiencing specified ailment symptoms and notifying Instacart if they or members of their household have specific medical diagnosis (e.g. norovirus); cross contamination prevention; time and temperature control for safety (e.g. importance on the use of insulated bags, shelf-stable foods); ambient food storage; and, best practices when delivering food. Instacart also has a protocol for alcohol delivery, which includes verification of a customer’s age through a proper photo identification that is scanned and signature is collected.
      
      Lastly, a Critical Response Team (CRT) exists to investigate complaints and concerns raised by consumers, including a process to refer the consumer back to the retailer where the product was purchased, and in some instances refunds.
      
   2. Food handler card. This bill would require a food delivery driver to obtain a food handler card. Under the CRFC, food handlers must obtain a food handler card from an American National Standards Institute accredited training program. In order to obtain the card, a food handler must complete a two and one half hour training course and pass an examination of 40 questions with a score of at least 70%. The course and examination may be offered through a trainer-led class and examination, through the use of a computer program or the internet, or through a combination of these. Committee staff found food handler card courses available on the internet for $7.00 to $9.00.
   3. Vehicle Code requirements. This bill would require a food delivery platform to ensure that the vehicles used by a food delivery driver comply with the requirements of the Vehicle Code. According to the United Food and Commercial Workers (UFCW), the sponsor of this bill, these requirements are in Division 12 and Division 3 of the Vehicle Code, and include evidence of current registration, headlamp, turn signal, tail lamp, adequate muffler, vehicle pollution standards, and windshield wiper requirements.
   4. Client employer. This bill prohibits a food retail establishment from selling or transferring any food for delivery to a consumer through the use of a food delivery platform unless the food retail establishment also meets all the requirements for a client employer as described in the Labor Code.
      
      According to UFCW, the Labor Code requires a client employer to share with a labor contractor all civil legal responsibility and liability for all workers supplied by that labor contractor, for the payment of wages, and any failure to secure valid workers compensation coverage. UFCW states that the purpose of this provision is to ensure that if the food retail establishment is going to allow individuals working for a food delivery platform to work within their stores, then the food retail establishment must share in the responsibility toward those workers, including any applicable wages and workers compensation. For example, if Safeway uses Instacart to deliver food to customers, Safeway will share in the responsibility toward the shoppers, including the provision of applicable wages and workers compensation. Thus, if Instacart does not pay an FSS, these provisions state that Safeway has a legal responsibility for the unpaid wages.
   5. Chapter 4 of the CRFC. Chapter 4 of the CRFC contains all the general safety requirements that retail food facilities must meet. These requirements include protection from contamination, time and temperature relationships, food from approved sources, receipt of food, food storage, specialized processing methods, food display and service and consumer information.
3. SUPPORT. The UFCW, the sponsor of this bill indicates that a growing number of Californians order groceries online and have them delivered directly to their home. Food retail establishments are subject to strict regulations regarding the handling of food to protect consumer and employee health and safety. Delivery companies expose consumer goods to the same risks as may arise for the food retailer, yet they are not subject to regulatory oversight. This bill is not intended to prevent innovation in delivery and food services nor cut off the source of income upon which many Californians rely, but to ensure that consumers who choose to use a delivery service receive uncontaminated, safe food and that platform workers receive the appropriate training and certification to perform their job duties. Additionally this bill ensures the safe purchase of alcoholic beverages, and ensures that those who pick-up/deliver retail food to consumers enjoy the protections of the Labor Code.
4. OPPOSITION. In their opposition, Technet and the California Chamber of Commerce state that companies engaged in food delivery are a flexible work opportunity for thousands of Californians to earn money and supplement their earnings which stimulates local economies. Additionally, these companies serve consumers by providing the convenience and choice to have food delivered from their favorite restaurant or grocery store, which increases the market reach of these businesses. This bill may stifle the earning potential of thousands of Californians, restrict business growth and prevent millions of dollars from being added to local communities.
   
   Technet also states that there have been no reported issues or cases of mishandling of food that would prompt the need for the onerous requirements of this bill. This bill would also require companies to re-engineer their platforms and exert more control over drivers which could put these companies in conflict with California labor laws. As conversations are continuing to develop regarding worker classification, bills such as these create conflict and confusion that will not help in coming to a solution in those conversations. It also states that the existing food handler requirements were intended for workers at restaurants and other establishments where food is being prepared and served, which is not the case for drivers who are simply collecting and delivering packaged products to a consumer. This bill is too broad.
5. PREVIOUS LEGISLATION. AB 2212 (Ting) of 2018 would have included in the definition of a food facility a subscription-based meal delivery service that provides customers with recipes and preportioned ingredients needed to prepare those recipes at home. AB 2212 was never heard in Assembly Health Committee. AB 1461 (Thurmond) of 2017, would have required an employee of a food facility that offers meal subscription plans, who is a food handler and who also works in whole or in part with unpackaged food to obtain a food handler card. AB 1461 was vetoed by then Governor Brown who indicated: “This bill attempts to regulate a burgeoning new business model of home food delivery. I'm not convinced, however, that the existing regulatory scheme for food facilities is suitable for this new industry. I encourage the Legislature to continue to work on this issue with DPH and interested stakeholders to ensure food safety is protected and innovation is encouraged.
6. DOUBLE REFERRAL. This bill is double referred; upon passage in this Committee, this bill will be referred to the Assembly Judiciary Committee.
7. POLICY CONCERNS & RECOMMENDED AMENDMENTS.
   1. Enforcement/CRFC. The requirements of this bill are included in the CRFC, which applies to retail food facilities, and enforced by LEAs. Below are some issues associated with the enforcement design in this bill:
      1. A food delivery platform is not contractually or legally associated with a permitted retail food establishment; and,
      2. This bill will require LEAs to check driver’s licenses, vehicle insurance, and other Vehicle Code requirements, which are not normally within the scope of the role of these agencies.
         
         The Committee may wish to consider whether this is an appropriate function for the LEAs, or if there is an alternative approach that could be less burdensome for the LEAs but still provide the necessary public health protection.
   2. CRFC Chapter 4 Requirements. This bill requires a food delivery platform and food delivery driver to ensure that food is transported during delivery in a manner that complies with Chapter 4 of the CRFC. Chapter four of the CRFC is quite broad, and there are some requirements that are not appropriately applied to food delivery.
      
      The author and the sponsor have agreed to only apply the following code requirements to this bill:
      1. Section 113980 – requirements for food;
      2. Section 113982 – food transportation;
      3. Section 113996 – hot and cold holding, potentially hazardous food;
      4. Section 114018 – frozen foods;
      5. Section 114037 – receiving temperatures; and,
      6. Section 114053 – storage or display of food in contact with water or ice.
   3. Food delivery driver. The CRFC currently requires that retail food facilities that transport or deliver food to consumers comply with the CRFC. As written, this bill does not make the distinction between the transportation of food by a retail food facility and a food delivery driver. The Committee may wish to clarify that the food delivery driver referred to in this bill is one that is not employed by, or contracted with, a retail food facility.
   4. Food handler card. The CRFC established the food handler program to require food employees who handle potentially hazardous food on the key elements of food safety to prevent the transmission of foodborne illnesses. As written, this bill requires all food delivery drivers to obtain a food handler card. The Committee may wish to amend this bill to require all food delivery drivers delivering potentially hazardous ready-to-eat food to obtain a food handler card.
   5. Vehicle Code requirements. To capture the intent of the author to require the food delivery platform to ensure that the vehicles fully comply with the requirements of the Vehicle Code, Committee staff recommends clarifying that these requirements are those contained in Division 12 and Division 3 of the Vehicle Code.
   6. Retail store definition. To clarify which retail stores with a grocery department this bill would apply to, Committee staff recommends a drafting fix, as follows:
      
      (6) “Retail stores with a grocery department” means all any of the following:

REGISTERED SUPPORT / OPPOSITION:

Support

United Food and Commercial Workers, Western States Council (sponsor)

Opposition

California Chamber of Commerce

Technet

Analysis Prepared by: Rosielyn Pulmano / HEALTH / (916) 319-2097