Existing law, the State Civil Service Act, regulates employment with the state and vests in the Department of Human Resources all powers, duties, and authority necessary to operate the state civil service system. Existing law establishes standards for the use of personal services contracts by state agencies. Existing law permits personal services contracting to achieve cost savings when specified conditions are met, including that the contract does not cause the displacement of civil service employees.

This bill would require specified state departments to provide certain information, by facility, on a quarterly basis to the relevant employee representatives regarding positions, vacancies, and registry contract data of their state-run health facilities. The bill would require the departments to make the information available to the public on a publicly accessible website.

Existing law states that it is the policy of the state that the workweek of the state employee shall be 40 hours, and the workday of state employees 8 hours, except that workweeks and workdays of a different number of hours may be established in order to meet the varying needs of the different state agencies.

This bill would make nonsubstantive changes to those provisions.

GOVERNOR'S VETO

GV Bill Id:AB 2367

Author:(Kalra)

As Enrolled Ver:August 26, 2026

2/3 vote

SUMMARY

Requires the Department of Corrections and Rehabilitation (CDCR), Department of Developmental Services (DDS), Department of Veterans Affairs (CalVet), and Department State Hospitals (DSH) to provide certain information to relevant employee representatives and the public, among other provisions.

Major Provisions

1. Require the aforementioned departments to provide the following information to the relevant employee representatives and make it available to the public on a quarterly basis:
2. Vacancy data that includes classification title, classification code, full-time equivalent, total positions filled, and total vacant positions.
3. Overtime data that includes a monthly breakdown by classification, including voluntary and mandatory overtime.
4. All registry contact data that includes (i) bill rate and pay rate by classification; (ii) monthly total hours worked, and (iii) annual amount paid.
5. The number of shits and the number of staff during which the facility fell short of its required shift staffing minimums, and an explanation for why those minimums were missed.
6. Require the above-described information to be provided to the relevant employee organization and made publicly available and accessible on the department's website.

Governor’s Veto Message

This bill would require the Department of Corrections and Rehabilitation, the State Department of Development Services, the Department of Veterans Affairs, and the State Department of Hospitals to provide specified staffing information for state-run health facilities. Required information would include data on vacancies, overtime, contracts, and the number of times each facility fell short of a required staffing minimum.

I appreciate the author's goal to give the public and state employees more information about the hiring and retention challenges facing state-run health facilities. However, this measure would create substantial operational and technological burdens for affected departments by requiring the creation of more complex reporting structures than currently exist, resulting in millions of dollars in new General Fund costs.

COMMENTS

Government Contracting Public Services: Ongoing Questions and Concerns Regarding the Use of Public Funds, Transparency, Accountability, and Quality of Service Delivery

Government contracting of public services, generally, is to provide a particular service for a common public need. For example, in California, to address significant wildfires, the state regularly contracts with private companies to operate specialized aircraft to cover terrain that is difficult to access by traditional ground equipment or personnel.

"Government transparency strengthens democracy, promotes fiscal responsibility, checks corruption, and bolsters public confidence. Sunshine laws enshrine transparency into the fabric of government by guaranteeing citizens access to information regarding government expenditures and policies. When government contractors assume control of public services, in many cases they are able to circumvent sunshine laws and shield important information from disclosure. Corporations may refuse to release records that would otherwise be available by claiming that transparency would hurt their bottom lines. Many times, contractors claim that the information is a "trade secret" or "proprietary" and legally protected from public review. To protect the public's right-to-information, decision makers should adopt strong sunshine laws that require government contractors to follow the same disclosure rules as government entities. As an additional protection, state and local governments should also include disclosure requirements in contracts." ("Closing the Books: How Government Contractors Hid Public Records," at p 2. In the Public Interest (ITPI), March 2015.)

Report by the California State Auditor

A report by the State Auditor focused on CDCR-Salinas Valley, DDS-Porterville, DSH-Atascadero and their use of health care staffing contracts at these facilities. Although it found that “contract workers make up a small portion of medical health staffing, the facilities have increasingly used them to address their growing number of staff vacancies."^[1]

The summary of this report further states, "[s]ince July 2019, vacancy rates have increased to 30 percent at Atascadero, 36 percent at Porterville, and more than 50 percent at Salinas Valley. Although the facilities have engaged in multiple recruitment strategies, they have not evaluated the success of their efforts to determine which are most effective. To help address vacancies, each facility has significantly increased its use of contract workers: Atascadero by 79 percent, Porterville by 172 percent, and Salinas Valley by 46 percent. Contract workers generally cost the State more than state employees in the same job classifications, and the shorter tenure of contract workers presents challenges for facilities because of the training necessary to ensure that the contract workers are prepared to provide appropriate care to the facilities' patient populations.

"The many staff vacancies have resulted in each facility realizing significant savings from fiscal year 2019–20 through 2024–25: about $247 million for Atascadero, $188 million for Salinas Valley, and $157 million for Porterville. Nonetheless, neither [the] DSH nor DDS has required staff to evaluate staffing needs annually. Further, none of the three agencies require their facilities to report whether they are meeting shift-staffing minimums, which are critical to ensuring the provision of legally required levels of care. Because of the decades-long difficulties the facilities have had in filling vacant health care positions and a current and projected health care professional shortage, the State should consider facilitating a statewide campaign to draw medical and mental health care workers to California's civil service."

Key findings in this report include:

1. The three facilities reviewed have increasingly struggled to fill vacant positions.
2. To address vacancies, the three facilities have increased their use of contract workers.
3. The CDCR, DDS, and DSH have not taken necessary steps to ensure that their facilities have appropriate staffing levels.

The State Auditor also reviewed staffing logs from the three facilities and found that they used state employees to provide the majority of patient care, but filled in shifts with contract workers as necessary.

In response, among the various recommendations offered by the State Auditor, the CDCR agreed with the State Auditor's recommendations, and the DDS and DSH generally agreed with the recommendations. However, the DDS disagreed with the State Auditor's recommendation that it require its facilities to track and report whether they are meeting required shift-staffing minimums, and the DSH disagreed with the State Auditor’s recommendation that it evaluate whether offering affordable housing options would improve Atascadero's ability to recruit new state employees.

The State Auditor also recommended that, "to maximize the effectiveness of the State's recruiting efforts, the Legislature should require [the] CalHR to assembly and coordinate a cross-agency collaborative campaign to recruit medical and mental health care staff for state facilities statewide. [The CalHR] should continue, modify, and improve such efforts until the State can achieve and maintain appropriate vacancy rates, as the Legislature determines. This campaign should include, but not be limited to, the following:

1. A total compensation analysis, and adjust as appropriate, to ensure that all medical and mental health care classifications’ compensation is commensurate and competitive with similarly situated recruiting entities.
2. The provision of online and in‑person assistance for candidates during the application and testing process.
3. The implementation of targeted efforts, including development of marketing materials, as appropriate, highlighting the benefits of state employment in California, to recruit candidates for specific job classifications and facility locations that are historically difficult to fill.
4. The establishment of measurement metrics to track the results of each type of recruiting activity and test modifications to each strategy. These measurements should include, but not be limited to, the number of candidates who express interest, apply, interview, receive, and accept employment offers."

Nexus to State Public Employment Relations

Existing law, the State Employer-Employee Relations Act (commonly referred to as the "Ralph C. Dills Act," or the "Dills Act"), regulates public employment relations between the state, as an employer, and its employees represented by a recognized employee organization by providing a reasonable of resolving disputes regarding wages, hours, and other terms and conditions of employment. In addition, the scope of representation is limited to wages, hours, and other terms and conditions of employment, while excluding other specified items. (Sections. 3512 et seq. of the Gov. Code). Where a state agency contracts for services and its represented employees perform the same or similar services, indeed, such contracting that may or does impact those employees, more likely than not, may be within the scope of representation under the Dills Act; thereby, being subject to bargaining under that act.

This Bill

In several respects, this bill is aligned with the findings and information discussed in the State Auditor's report. As such, this bill seeks to avail the exclusive representative and the public of information relating to the quality of service provision in the CDCR, DDS, CalVets, and DSH in furtherance of public transparency, disclosure, and accountability.

According to the Author

"Chronic understaffing and contracting out hurts our workers, our patients, and our state's health outcomes. [This bill] builds on recommendations by the State Auditor and requires our state run health facilities to track and publicly report staffing levels in order to promote transparency, accountability, and oversight."

Arguments in Support

Referencing the report by the State Auditor, the Service Employees International Union states, among other things, "[t]his bill takes an important step toward improving transparency and accountability in state-run healthcare facilities," [and] "responds directly to these concerns [in the report] by establishing standardized reporting requirements. By ensuring the Legislature, the public, and stakeholders have access to consistent and detailed staffing data, this bill will support better decision-making and help the state prioritize investments in its civil service workforce."

Among other things, the Service Employees Internation Union, Local 1000 expresses that, “[this bill] establishes reporting requirements and guidelines to ensure that the contracts state healthcare facilities have or newly establish will be reported to the Legislature, [and] "… will also support our workers by providing information on vacancies and overtime data to help our members, the public, and the Legislature understand the staffing shortages present within the system. We believe this bill will help build toward more transparency and accountability within state-run healthcare facilities."

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Senate Committee on Appropriations:

1. The CDCR estimates that the bill would result in annual costs in the low millions of dollars for additional staffing and workload to collect, compile, coordinate, and report quarterly facility-level data on vacancies, overtime, registry staffing, and staffing shortfalls. It is unclear whether the reporting requirements apply only to health care staff or also include custody staff assigned to health care settings. To the extent custody staff are included, workload and costs could increase. The CDCR also notes that requests for this information can be addressed through the collective bargaining process.
2. The DDS would incur first-year costs of $542,000 ($434,000 General Fund) in 2025-26, and $1.1 million annually thereafter ($867,000 General Fund), to implement the provisions of the bill. The DDS indicates that the required data are currently maintained across multiple systems, including manual and paper-based processes with limited system integration. Although the department periodically reviews this information for operational purposes, the bill's detailed quarterly reporting requirements would create significant new workload that cannot be absorbed within existing resources. The DDS estimates it would require 5.5 additional positions to collect, aggregate, and prepare the required facility-level reports.
3. The CalVet indicates one-time implementation costs of approximately $6.8 million to develop, implement, and deploy a new information technology system capable of collecting, integrating, validating, and reporting workforce data from multiple systems, generating the required quarterly reports, and publishing the information on the department's website. Ongoing annual costs are estimated at approximately $3.6 million for system maintenance, software licensing, hosting, technical support, and information technology staff, plus an additional $120,000 to $250,000 annually for analyst positions at the Veterans Homes to support ongoing data collection, validation, compliance, analysis, and quarterly reporting.
4. The bill would result in ongoing General Fund costs of $3.7 million (General Fund) annually for the DSH to hire 25 additional positions to collect, manage, analyze, and report the data required by the bill. Although the DSH currently collects much of the required information for certain clinical and nursing classifications, it does not track comparable data for many other employee classifications. The DSH indicates the bill could require tracking data for approximately 400 classifications and nearly 13,000 employees across its state hospitals, including food service, police, general services, and plant operations staff. Because much of the existing data collection is manual and occurs independently at each hospital, the DSH states it would need to establish dedicated reporting units at each facility, along with centralized analytical and information technology support, to comply with the bill's quarterly reporting requirements.

VOTES

ASM PUBLIC EMPLOYMENT AND RETIREMENT: 6-0-1

YES: McKinnor, Lackey, Boerner, Garcia, Nguyen, Michelle Rodriguez

ABS, ABST OR NV: Alanis

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Hoover, Aguiar-Curry, Calderon, Caloza, Dixon, Fong, Mark González, Krell, Pacheco, Pellerin, Sharp-Collins, Solache, Ta, Tangipa

ASSEMBLY FLOOR: 78-0-2

YES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Johnson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

ABS, ABST OR NV: Muratsuchi, Celeste Rodriguez

SENATE FLOOR: 40-0-0

YES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Grove, Hurtado, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Reyes, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener

UPDATED

VERSION: August 26, 2026

CONSULTANT: Michael Bolden / P. E. & R. / (916) 319-3957 FN: 0004616

1. “Report 2024-114 State Health Care Staffing Contracts: Contract Workers Are a Small but Growing Proportion of Three State Facilities’ Workforces.” California State Auditor, December 4, 2025. Visit: http:// www.auditor.ca.gov/reports/2024-114/#summary ↑

 THIRD READING  

Bill No: AB 2367

Author: Kalra (D)

Amended: 3/19/26 in Assembly

Vote: 21

SENATE LABOR, PUB. EMP. & RET. COMMITTEE: 5-0, 7/1/26

AYES: Smallwood-Cuevas, Strickland, Cortese, Durazo, Laird

SENATE APPROPRIATIONS COMMITTEE: 6-0, 8/13/26

AYES: Cervantes, Seyarto, Cabaldon, Dahle, Grayson, Richardson

NO VOTE RECORDED: Wahab

ASSEMBLY FLOOR: 78-0, 5/26/26 - See last page for vote

SUBJECT: State employment: reporting: health facilities

SOURCE: Service Employees International Union California

Service Employees International Union California Local 1000

DIGEST:

This bill requires the Department of Corrections and Rehabilitation (CDCR), the State Department of Developmental Services (DDS), the Department of Veterans Affairs (CalVet), and the State Department of State Hospitals (DSH) to provide, on a quarterly basis, specified staffing information for all their state-run health facilities.

ANALYSIS:

Existing law:

1. Creates the state civil service that includes every officer and employee of the state except a limited number of specified, exempted officers and employees. Existing law also requires that the state make “permanent appointment and promotion in the civil service under a general system based on merit ascertained by competitive examination.” Case law and custom refer to this provision as the merit principle and it governs the administration of the state’s civil service system. (CA CONST. art. VII, §1 and §4)
2. Establishes the State Personnel Board (SPB) to enforce the civil service statutes and prescribe probationary periods and classifications, adopt other rules authorized by statute, and review disciplinary actions. (CA CONST. art. VII, §2 and §3)
3. Establishes the State Civil Service Act to provide a comprehensive personnel system for the state in which appointments are based upon merit and fitness ascertained through practical and competitive examination (Government Code §18500)
4. Establishes CalHR and vests it with the powers, duties, and authorities necessary to operate the state civil service system pursuant to Article VII of the California Constitution, the Government Code, the merit principle, and applicable rules duly adopted by the SPB. (Government Code §18500 et seq.)
5. Creates, under the Dills Act, a system of collective bargaining between the state and its employees’ exclusive representatives to negotiate for terms and conditions of employment (Government Code §3512 et seq.)
6. Provides for state acquisition of goods and services in contracts for services. (Public Contract Code §10335 et seq.)
7. Establishes strict standards for the use of personal services contracts to achieve cost savings. Among others, all of the following conditions must be met:
8. The contracting agency must clearly demonstrate that the proposed contract will result in overall cost savings to the state.
9. The contract does not cause the displacement of civil service employees.
10. The savings are large enough to ensure that they will not be eliminated by private sector and state cost fluctuations that could normally be expected during the contracting period.
11. The amount of savings clearly justify the size and duration of the contracting agreement.
12. The contract is awarded through a publicized, competitive bidding process.

(Government Code §19130(a))

1. Provides that personal services contracting, for non-cost savings reasons, shall also be permissible when specified conditions are met, including when the services contracted are not available within civil service, cannot be performed satisfactorily by civil service employees, or are of such a highly specialized or technical nature that the necessary expert knowledge, experience, and ability are not available through the civil service system. (Government Code §19130(b))
2. Requires any state agency proposing to execute a personal services contract to achieve cost savings to notify the SPB of its intention. All organizations that represent employees who perform the type of work to be contracted and any person or organization which has filed with the SPB a request for notice shall be contacted, as specified, and given a reasonable opportunity to comment on the proposed contract. (Government Code §19131)
3. Authorizes any employee organization to request, within 10 days of being notified, the SPB to review any contract proposed to achieve cost savings. Upon such a request, the SPB shall review the contract, as specified. (Government Code §19131)
4. Provides that unless a non-cost savings personal services contract is necessary due to a sudden and unexpected occurrence that poses a clear and imminent danger, requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services, the contract shall not be executed until the state agency proposing to execute the contract has notified all organizations that represent state employees who perform the type of work to be contracted. (Government Code §19132)
5. Authorizes the SPB to establish necessary standards and controls over DGS’ approval of contracts to assure that the approval is consistent with the merit employment principles and requirements contained in Article VII of the California Constitution. The SPB shall have discretion to establish the substantive provisions of the standards. However, the SPB and DGS shall establish the specific procedures for contract review pursuant to such standards jointly. (Public Contracting Code §10337)

This bill:

1. Requires CDCR, DDS, CalVet, and DSH to provide, on a quarterly basis, the following information, by facility, of their state-run health facilities:
2. Vacancy data that includes the following information: classification title, classification code, full-time equivalent, total positions filled, and total vacant positions.
3. Overtime data that includes the following information: a monthly breakdown by classification to include voluntary and mandatory overtime, including a.m., p.m., and nocturnal shift hours, and total hours worked.
4. All registry contract data that includes the following information: bill rate and pay rate by classification, monthly total hours worked, and annual amount paid.
5. The number of shifts during which, and the number of staff by which, the facility fell short of its required shift staffing minimums, and an explanation for why it missed those minimums.
6. Requires the information in 1) to be provided to the relevant employee representatives and to be made available to the public on a publicly accessible

Background

State Personnel Board (SPB) and Personal Services Contracts. When agencies use contracted personnel rather than civil service positions they enter into personal services contracts. Existing law establishes strict standards for the use of these contracts. Agencies can enter into a personal services contract to achieve cost savings or for specified, non-cost-related reasons. Contracts intended to achieve cost savings are only permissible if 11 different conditions are satisfied. For example, contracts cannot cause the displacement of civil service employees. Non-cost savings personal services contracts are only permissible in a limited number of situations, such as when the services in question are not available within the civil service or cannot be performed satisfactorily by civil service employees. These standards exist to limit the state’s reliance on contractors and to ensure civil service employees perform state work.

Any state agency proposing to execute a personal services contract must notify all organizations that represent state employees who perform the type of work covered by the contract. The SPB has the authority to review proposed contracts to ensure compliance with existing law. Upon request by an employee organization, the SPB must direct a state agency to transmit the proposed or executed contract for review. The SPB delegates the review of personal services contracts to its Executive Officer. However, if an employee organization requests it, the Executive Officer must grant the organization the opportunity to present its case against the contract and the reasons why the contract should be referred to the SPB for a hearing. Upon a showing of good cause by the organization, the Executive Officer must schedule the disputed contract for a hearing before the SPB. Contracts subject to review shall not become effective unless the SPB grants its approval.

2025 State Health Care Staffing Contracts Audit. In December 2025, the State Auditor released an audit examining staffing levels at three facilities: the Department of State Hospitals‑Atascadero, which the Department of State Hospitals (DSH) oversees; the Porterville Developmental Center, which the Department of Developmental Services (DDS) oversees; and Salinas Valley State Prison, which CDCR oversees.^[1] State and federal laws require each of the three facilities to provide medical and mental health care to the individuals they house. DSH, DDS, and CDCR have all been involved in litigation for failing to provide adequate mental health care staffing. The Auditor found that the facilities faced challenges when recruiting staff, including difficult working conditions, a local shortage of health care professionals, and competition with other public facilities, private hospitals, and contract staffing agencies. As a result of these challenges, vacancy rates for medical and mental health positions at each of the three facilities increased from fiscal years 2019–20 through 2023–24. These vacancy rates are not due to a lack of effort on the facilities’ part; each have made significant efforts to recruit medical and mental health care professionals through online job advertisements and in‑person or virtual recruiting events.

Although the three facilities overwhelmingly rely on state employees, rather than contract workers to provide care, they have increasingly relied on contract workers to ensure adequate staffing. For example, in fiscal year 2023-24 contract workers accounted for 62 of Salinas Valley’s authorized 637 positions, or about 10 percent. However, in that same fiscal year the number of hours worked by contract workers increased. This increase in hours was particularly notable for contract workers covering nursing classifications. The auditor found that the facilities incur higher hourly costs for contract workers than for their state counterparts, even after accounting for the State’s overhead and benefit costs. Contract workers generally have a shorter tenure than state employees. This is in part because facilities often use them to meet temporary rather than long-term needs.

The facilities require contract workers to have the same licenses and certificates and to meet the same or higher qualifications as those that the State requires for state employees in the same classifications.

The Auditor found that all three facilities and their respective departments realized significant vacancy savings from unfilled medical and mental health care positions. Over the six fiscal years of the audit period Atascadero accumulated $247 million in savings, Salinas Valley accumulated $188 million, and Porterville accumulated $157 million. All three departments were unable to explain to the Auditor how they used the above specified savings.

None of the departments responsible for overseeing the three facilities has formally or specifically requested that facilities track, tabulate, and report their compliance with staffing minimums or developed a formal process for the facilities to do so. Without such oversight, the departments cannot be certain that their facilities are staffed appropriately for each shift to provide adequate medical and mental health care.

Among other recommendations, the Audit suggests requiring DSH, DDS, and CDCR to immediately require its facilities to establish a system to track, tabulate, periodically report, and make publicly available the following:

• Staffing levels by shift, including the individuals’ classifications and whether they are state employees or contract workers.
• The number of shifts during which and the number of staff by which the facility fell short of its required shift‑staffing minimums, as well as an explanation for why it missed the minimums.

Establishing such a system would ensure transparency, increase accountability, and allow adequate oversight.

This bill. AB 2367 would require CDCR, DDS, CalVet, and DSH to provide, on a quarterly basis, specified staffing information to relevant employee representatives and the public. The author and sponsors cite the 2025 State Auditor Staffing Audit, described above, as the impetus for this bill. The committee notes that facilities overseen by CalVet were not included in the audit report.

Related/Prior Legislation

AB 2223 (Lowenthal, 2026) would require CDCR to disclose specified information for each new contract or contract renewal entered into on or after January 1, 2027, for medical and mental health staffing. This bill was held in the Senate Appropriations Committee.

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

According to the Senate Appropriations Committee:

• CDCR estimates that the bill would result in annual costs in the low millions of dollars for additional staffing and workload to collect, compile, coordinate, and report quarterly facility-level data on vacancies, overtime, registry staffing, and staffing shortfalls. It is unclear whether the reporting requirements apply only to health care staff or also include custody staff assigned to health care settings. To the extent custody staff are included, workload and costs could increase. CDCR also notes that requests for this information can be addressed through the collective bargaining process.
• DDS would incur first-year costs of $542,000 ($434,000 General Fund) in 2025-26, and $1.1 million annually thereafter ($867,000 General Fund), to implement the provisions of the bill. DDS indicates that the required data are currently maintained across multiple systems, including manual and paper-based processes with limited system integration. Although the department periodically reviews this information for operational purposes, the bill's detailed quarterly reporting requirements would create significant new workload that cannot be absorbed within existing resources. DDS estimates it would require 5.5 additional positions to collect, aggregate, and prepare the required facility-level reports.
• CalVet indicates one-time implementation costs of approximately $6.8 million to develop, implement, and deploy a new information technology system capable of collecting, integrating, validating, and reporting workforce data from multiple systems, generating the required quarterly reports, and publishing the information on the department's website. Ongoing annual costs are estimated at approximately $3.6 million for system maintenance, software licensing, hosting, technical support, and information technology staff, plus an additional $120,000 to $250,000 annually for analyst positions at the Veterans Homes to support ongoing data collection, validation, compliance, analysis, and quarterly reporting.
• The bill would result in ongoing General Fund costs of $3.7 million (General Fund) annually for DSH to hire 25 additional positions to collect, manage, analyze, and report the data required by the bill. Although DSH currently collects much of the required information for certain clinical and nursing classifications, it does not track comparable data for many other employee classifications. DSH indicates the bill could require tracking data for approximately 400 classifications and nearly 13,000 employees across its state hospitals, including food service, police, general services, and plant operations staff. Because much of the existing data collection is manual and occurs independently at each hospital, DSH states it would need to establish dedicated reporting units at each facility, along with centralized analytical and information technology support, to comply with the bill's quarterly reporting requirements.

SUPPORT: (Verified 8/13/26)

Service Employees International Union California (co-source)

Service Employees International Union California Local 1000 (co-source)

American Federation of State, County and Municipal Employees

OPPOSITION: (Verified 8/13/26)

None received

ARGUMENTS IN SUPPORT: SEIU Local 1000, a co-source, argues:

“Our SEIU Local 1000 members have continued to provide care within these healthcare facilities through years of excessive mandatory overtime, low staffing levels, and the COVID-19 pandemic. These departments listed have increasingly relied on contractors to complete work where civil service employees like our Bargaining Unit(s) 17 and 20 workers could be completing the work instead.

These contracts do not have a standardized reporting requirement, and that is why we at SEIU Local 1000 choose to support this bill. AB 2367 establishes reporting requirements and guidelines to ensure that the contracts state healthcare facilities have or will newly establish will be reported to the Legislature.”

ASSEMBLY FLOOR: 78-0, 5/26/26

AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Johnson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

NO VOTE RECORDED: Muratsuchi, Celeste Rodriguez

Prepared by: Emma Bruce / L., P.E. & R. / (916) 651-1556

8/14/26 11:51:05

**** END ****

1. State Health Care Staffing Contracts. California State Auditor. December 4, 2025.

   *The entirety of this section of the analysis is based on information provided in the 2025 State Health Care Staffing Contracts Audit. ↑

SENATE COMMITTEE ON

Senator Sabrina Cervantes, Chair

2025 - 2026 Regular Session

AB 2367 (Kalra) - State employment: reporting: health facilities

Bill Summary:

AB 2367 would require the Department of Corrections and Rehabilitation (CDCR), the State Department of Developmental Services (DDS), the Department of Veterans Affairs (CalVet), and the State Department of State Hospitals (DSH) to provide, on a quarterly basis, specified staffing information for all their state-run health facilities.

Fiscal Impact:

• CDCR estimates that the bill would result in annual costs in the low millions of dollars for additional staffing and workload to collect, compile, coordinate, and report quarterly facility-level data on vacancies, overtime, registry staffing, and staffing shortfalls. It is unclear whether the reporting requirements apply only to health care staff or also include custody staff assigned to health care settings. To the extent custody staff are included, workload and costs could increase. CDCR also notes that requests for this information can be addressed through the collective bargaining process.
• DDS would incur first-year costs of $542,000 ($434,000 General Fund) in 2025-26, and $1.1 million annually thereafter ($867,000 General Fund), to implement the provisions of the bill. DDS indicates that the required data are currently maintained across multiple systems, including manual and paper-based processes with limited system integration. Although the department periodically reviews this information for operational purposes, the bill's detailed quarterly reporting requirements would create significant new workload that cannot be absorbed within existing resources. DDS estimates it would require 5.5 additional positions to collect, aggregate, and prepare the required facility-level reports.
• CalVet indicates one-time implementation costs of approximately $6.8 million to develop, implement, and deploy a new information technology system capable of collecting, integrating, validating, and reporting workforce data from multiple systems, generating the required quarterly reports, and publishing the information on the department's website. Ongoing annual costs are estimated at approximately $3.6 million for system maintenance, software licensing, hosting, technical support, and information technology staff, plus an additional $120,000 to $250,000 annually for analyst positions at the Veterans Homes to support ongoing data collection, validation, compliance, analysis, and quarterly reporting.
• The bill would result in ongoing General Fund costs of $3.7 million (General Fund) annually for DSH to hire 25 additional positions to collect, manage, analyze, and report the data required by the bill. Although DSH currently collects much of the required information for certain clinical and nursing classifications, it does not track comparable data for many other employee classifications. DSH indicates the bill could require tracking data for approximately 400 classifications and nearly 13,000 employees across its state hospitals, including food service, police, general services, and plant operations staff. Because much of the existing data collection is manual and occurs independently at each hospital, DSH states it would need to establish dedicated reporting units at each facility, along with centralized analytical and information technology support, to comply with the bill's quarterly reporting requirements.

Background:

Existing law limits the use of personal services contracts to specified circumstances, including when they achieve cost savings under strict statutory criteria or when services cannot reasonably be performed by state employees. Agencies must notify affected employee organizations before executing a contract, and the SPB may review disputed contracts for compliance with these requirements. Contracts subject to SPB review may not take effect until approved. These provisions are intended to limit the state's reliance on contractors and ensure that work is performed by civil service employees whenever appropriate.

In December 2025, the State Auditor examined staffing practices at the Department of State Hospitals–Atascadero, Porterville Developmental Center, and Salinas Valley State Prison. The audit found that all three facilities faced persistent recruitment challenges (including difficult working conditions, shortages of qualified health care professionals, and competition from other employers) which contributed to increasing vacancy rates in medical and mental health classifications. Although the facilities primarily relied on state employees, they increasingly used contract workers to maintain required staffing levels. The Auditor found that contract workers generally cost more per hour than comparable state employees, even after accounting for salary, benefits, and overhead, while also tending to have shorter tenures.

The audit also found that the departments accumulated significant vacancy savings from unfilled positions—$247 million at Atascadero, $188 million at Salinas Valley, and $157 million at Porterville over the six-year audit period—but were unable to explain how those savings were used. In addition, the departments lacked formal systems to monitor and publicly report compliance with required staffing levels, limiting oversight and transparency. Among other recommendations, the Auditor recommended requiring DSH, DDS, and CDCR to establish systems to track and publicly report staffing by shift, distinguish between state employees and contract workers, identify staffing shortages, and explain instances in which minimum staffing requirements were not met.

Proposed Law:

This bill would do the following:

• Require CDCR, DDS, CalVet, and DSH to provide, on a quarterly basis, the following information, by facility, of their state-run health facilities:
  • Vacancy data that includes the following information: classification title, classification code, full-time equivalent, total positions filled, and total vacant positions.
  • Overtime data that includes the following information: a monthly breakdown by classification to include voluntary and mandatory overtime, including a.m., p.m., and nocturnal shift hours, and total hours worked.
  • All registry contract data that includes the following information: bill rate and pay rate by classification, monthly total hours worked, and annual amount paid.
  • The number of shifts during which, and the number of staff by which, the facility fell short of its required shift staffing minimums, and an explanation for why it missed those minimums.
• Require the specified information to be provided to the relevant employee representatives and to be made available to the public on a publicly accessible website.

Related Legislation:

• AB 2223 (Lowenthal) would require CDCR to disclose specified information for each new contract or contract renewal entered into on or after January 1, 2027, for medical and mental health staffing. This bill is currently pending in this Committee.
• AB 393 (Connolly) would have required CDCR and DSH to take specified actions, including preparing an analysis comparing the hourly cost of a contractor to a civil service Bargaining Unit 16 (BU-16) physician, before entering into a personal services contract to fill a BU-16 physician position. This bill was vetoed by Governor Newsom.
• AB 339 (Ortega, Chapter 687, Statutes of 2025) required public agencies regulated by the Meyers-Milias-Brown Act to give a recognized employee organization no less than 45 days’ written notice regarding contracts to perform services that are within the scope of work of job classifications represented by the recognized employee organization.
• AB 2557 (Ortega, 2024) would have required the governing bodies of local agencies that contract for certain services to, among other things, post contracts and related documents on the agency’s website and provide advance notice to the public agency’s affected workforce union representative. This bill was held under submission on the Suspense File of this Committee.
• AB 2860 (Arambula, 2023) would have required DSH and CDCR to only fill a vacant supervisor position overseeing healthcare employees in State Bargaining Units 16, 17, 18, 19, or 20, with a permanent full-time civil service employee. This bill was held under submission on the Suspense File of the Assembly Appropriations Committee.
• SB 422 (Pan, 2022) would have required DSH to establish, by January 1, 2024, a physician registry as a three-year pilot program for the Patton State Hospital to be maintained by DSH and composed of members of State Bargaining Unit 16, who may elect to join the registry. This bill was vetoed by Governor Newsom.
• AB 657 (Cooper, 2021) would have prohibited specified professionals (generally medical personnel) employed under personal service contracts with state agencies from being under contract for a period that exceeds 365 consecutive days or 365 nonconsecutive days in a 24-month period. This bill was amended into another issue area.

-- END --

SENATE COMMITTEE ON LABOR, PUBLIC EMPLOYMENT AND RETIREMENT

Senator Lola Smallwood-Cuevas, Chair

2025 - 2026 Regular

Bill No: AB 2367 Hearing Date: July 1, 2026

SUBJECT: State employment: reporting: health facilities

KEY ISSUE

This bill requires the Department of Corrections and Rehabilitation (CDCR), the State Department of Developmental Services (DDS), the Department of Veterans Affairs (CalVet), and the State Department of State Hospitals (DSH) to provide, on a quarterly basis, specified staffing information for all their state-run health facilities.

ANALYSIS

Existing law:

1. Creates the state civil service that includes every officer and employee of the state except a limited number of specified, exempted officers and employees. Existing law also requires that the state make “permanent appointment and promotion in the civil service under a general system based on merit ascertained by competitive examination.” Case law and custom refer to this provision as the merit principle and it governs the administration of the state’s civil service system. (CA CONST. art. VII, §1 and §4)
2. Establishes the State Personnel Board (SPB) to enforce the civil service statutes and prescribe probationary periods and classifications, adopt other rules authorized by statute, and review disciplinary actions. (CA CONST. art. VII, §2 and §3)
3. Establishes the State Civil Service Act to provide a comprehensive personnel system for the state in which appointments are based upon merit and fitness ascertained through practical and competitive examination (Government Code §18500)
4. Establishes CalHR and vests it with the powers, duties, and authorities necessary to operate the state civil service system pursuant to Article VII of the California Constitution, the Government Code, the merit principle, and applicable rules duly adopted by the SPB. (Government Code §18500 et seq.)
5. Creates, under the Dills Act, a system of collective bargaining between the state and its employees’ exclusive representatives to negotiate for terms and conditions of employment (Government Code §3512 et seq.)
6. Provides for state acquisition of goods and services in contracts for services. (Public Contract Code §10335 et seq.)
7. Establishes strict standards for the use of personal services contracts to achieve cost savings. Among others, all of the following conditions must be met:
8. The contracting agency must clearly demonstrate that the proposed contract will result in overall cost savings to the state.
9. The contract does not cause the displacement of civil service employees.
10. The savings are large enough to ensure that they will not be eliminated by private sector and state cost fluctuations that could normally be expected during the contracting period.
11. The amount of savings clearly justify the size and duration of the contracting agreement.
12. The contract is awarded through a publicized, competitive bidding process.

(Government Code §19130(a))

1. Provides that personal services contracting, for non-cost savings reasons, shall also be permissible when specified conditions are met, including when the services contracted are not available within civil service, cannot be performed satisfactorily by civil service employees, or are of such a highly specialized or technical nature that the necessary expert knowledge, experience, and ability are not available through the civil service system. (Government Code §19130(b))
2. Requires any state agency proposing to execute a personal services contract to achieve cost savings to notify the SPB of its intention. All organizations that represent employees who perform the type of work to be contracted and any person or organization which has filed with the SPB a request for notice shall be contacted, as specified, and given a reasonable opportunity to comment on the proposed contract. (Government Code §19131)
3. Authorizes any employee organization to request, within 10 days of being notified, the SPB to review any contract proposed to achieve cost savings. Upon such a request, the SPB shall review the contract, as specified. (Government Code §19131)
4. Requires the SPB, at the request of an employee organization that represents state employees, to review the adequacy of any non-cost savings proposed or executed contract. (Government Code §19132)
5. Provides that unless a non-cost savings personal services contract is necessary due to a sudden and unexpected occurrence that poses a clear and imminent danger, requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services, the contract shall not be executed until the state agency proposing to execute the contract has notified all organizations that represent state employees who perform the type of work to be contracted. (Government Code §19132)
6. Authorizes the SPB to establish necessary standards and controls over DGS’ approval of contracts to assure that the approval is consistent with the merit employment principles and requirements contained in Article VII of the California Constitution. The SPB shall have discretion to establish the substantive provisions of the standards. However, the SPB and DGS shall establish the specific procedures for contract review pursuant to such standards jointly. (Public Contracting Code §10337)

This bill:

1. Requires CDCR, DDS, CalVet, and DSH to provide, on a quarterly basis, the following information, by facility, of their state-run health facilities:
2. Vacancy data that includes the following information: classification title, classification code, full-time equivalent, total positions filled, and total vacant positions.
3. Overtime data that includes the following information: a monthly breakdown by classification to include voluntary and mandatory overtime, including a.m., p.m., and nocturnal shift hours, and total hours worked.
4. All registry contract data that includes the following information: bill rate and pay rate by classification, monthly total hours worked, and annual amount paid.
5. The number of shifts during which, and the number of staff by which, the facility fell short of its required shift staffing minimums, and an explanation for why it missed those minimums.
6. Requires the information in 1) to be provided to the relevant employee representatives and to be made available to the public on a publicly accessible website.

COMMENTS

1. Background:

State Personnel Board (SPB) and Personal Services Contracts

When agencies use contracted personnel rather than civil service positions they enter into personal services contracts. Existing law establishes strict standards for the use of these contracts. Agencies can enter into a personal services contract to achieve cost savings or for specified, non-cost-related reasons. Contracts intended to achieve cost savings are only permissible if 11 different conditions are satisfied. For example, contracts cannot cause the displacement of civil service employees. Non-cost savings personal services contracts are only permissible in a limited number of situations, such as when the services in question are not available within the civil service or cannot be performed satisfactorily by civil service employees. These standards exist to limit the state’s reliance on contractors and to ensure civil service employees perform state work.

Any state agency proposing to execute a personal services contract must notify all organizations that represent state employees who perform the type of work covered by the contract. The SPB has the authority to review proposed contracts to ensure compliance with existing law. Upon request by an employee organization, the SPB must direct a state agency to transmit the proposed or executed contract for review. The SPB delegates the review of personal services contracts to its Executive Officer. However, if an employee organization requests it, the Executive Officer must grant the organization the opportunity to present its case against the contract and the reasons why the contract should be referred to the SPB for a hearing. Upon a showing of good cause by the organization, the Executive Officer must schedule the disputed contract for a hearing before the SPB. Contracts subject to review shall not become effective unless the SPB grants its approval.

2025 State Health Care Staffing Contracts Audit

In December 2025, the State Auditor released an audit examining staffing levels at three facilities: the Department of State Hospitals‑Atascadero, which the Department of State Hospitals (DSH) oversees; the Porterville Developmental Center, which the Department of Developmental Services (DDS) oversees; and Salinas Valley State Prison, which CDCR oversees.^[1] State and federal laws require each of the three facilities to provide medical and mental health care to the individuals they house. DSH, DDS, and CDCR have all been involved in litigation for failing to provide adequate mental health care staffing. The Auditor found that the facilities faced challenges when recruiting staff, including difficult working conditions, a local shortage of health care professionals, and competition with other public facilities, private hospitals, and contract staffing agencies. As a result of these challenges, vacancy rates for medical and mental health positions at each of the three facilities increased from fiscal years 2019–20 through 2023–24. These vacancy rates are not due to a lack of effort on the facilities’ part; each have made significant efforts to recruit medical and mental health care professionals through online job advertisements and in‑person or virtual recruiting events.

Although the three facilities overwhelmingly rely on state employees, rather than contract workers to provide care, they have increasingly relied on contract workers to ensure adequate staffing. For example, in fiscal year 2023-24 contract workers accounted for 62 of Salinas Valley’s authorized 637 positions, or about 10 percent. However, in that same fiscal year the number of hours worked by contract workers increased. This increase in hours was particularly notable for contract workers covering nursing classifications. The auditor found that the facilities incur higher hourly costs for contract workers than for their state counterparts, even after accounting for the State’s overhead and benefit costs. Contract workers generally have a shorter tenure than state employees. This is in part because facilities often use them to meet temporary rather than long-term needs.

The facilities require contract workers to have the same licenses and certificates and to meet the same or higher qualifications as those that the State requires for state employees in the same classifications.

The Auditor found that all three facilities and their respective departments realized significant vacancy savings from unfilled medical and mental health care positions. Over the six fiscal years of the audit period Atascadero accumulated $247 million in savings, Salinas Valley accumulated $188 million, and Porterville accumulated $157 million. All three departments were unable to explain to the Auditor how they used the above specified savings.

None of the departments responsible for overseeing the three facilities has formally or specifically requested that facilities track, tabulate, and report their compliance with staffing minimums or developed a formal process for the facilities to do so. Without such oversight, the departments cannot be certain that their facilities are staffed appropriately for each shift to provide adequate medical and mental health care.

Among other recommendations, the Audit suggests requiring DSH, DDS, and CDCR to immediately require its facilities to establish a system to track, tabulate, periodically report, and make publicly available the following:

• Staffing levels by shift, including the individuals’ classifications and whether they are state employees or contract workers.
• The number of shifts during which and the number of staff by which the facility fell short of its required shift‑staffing minimums, as well as an explanation for why it missed the minimums.

Establishing such a system would ensure transparency, increase accountability, and allow adequate oversight.

This bill

AB 2367 would require CDCR, DDS, CalVet, and DSH to provide, on a quarterly basis, specified staffing information to relevant employee representatives and the public. The author and sponsors cite the 2025 State Auditor Staffing Audit, described above, as the impetus for this bill. The committee notes that facilities overseen by CalVet were not included in the audit report.

2. Need for this bill?

According to the author:

“A 2025 report by the State Auditor reviewed staffing levels at the California Department of Corrections and Rehabilitation (CDCR), the Department of Developmental Services (DDS), and the Department of State Hospitals (DSH). Per the direction of the Joint Legislative Audit Committee, this report focused on three facilities: the Department of State Hospitals‑Atascadero (Atascadero), which DSH oversees; the Porterville Developmental Center (Porterville), which DDS oversees; and Salinas Valley State Prison (Salinas Valley), which CDCR oversees.

The audit found that over five years, the vacancy rates at these three facilities had increased. To address the vacancies, the facilities had to increase their use of contract workers, which costs “more per hour than their state civil service counterparts, even after taking into account the non-wage costs associated with state civil service employment, such as benefits.” The contract workers also had two to three years less tenure than state employees in the same classification which resulted in a need for additional training and time. The Auditor also found that CDCR, DDS, and DSH do not have a formal process for reporting their shift-staffing minimums, ‘which are critical to ensuring the provision of legally required levels of care.’…

To promote transparency, accountability, and oversight, the Auditor recommended all three Departments immediately require their facilities to track and report publicly their staffing levels with explanations for any missed minimums. AB 2367 builds on the Auditor’s recommendation and will require state-run healthcare facilities to report on a quarterly basis their staff vacancy, overtime, and contract data, with additional breakdowns by classification, facility, and others as specified.”

3. Proponent Arguments:

SEIU California, a co-sponsor of the measure, argues:

“Across California, our members see firsthand the impact of chronic understaffing in public healthcare settings. Workers are routinely asked to take on excessive overtime, often on a mandatory basis, while departments increasingly turn to costly contract staff to fill gaps. This approach is not sustainable and undermines continuity of care, institutional knowledge, and patient outcomes.

The need for better oversight is well documented. A recent audit by the California State Auditor found that state facilities have experienced rising vacancy rates and have relied more heavily on contract workers, often at significantly higher cost than civil service employees. The audit also highlighted gaps in workforce planning and the lack of consistent data needed to evaluate staffing decisions.

AB 2367 responds directly to these concerns by establishing standardized reporting requirements. By ensuring the Legislature, the public, and stakeholders have access to consistent and detailed staffing data, this bill will support better decision-making and help the state prioritize investments in its civil service workforce.

For SEIU California, this is about accountability and making sure public dollars are used wisely. It is also about supporting the workers who keep these facilities running and ensuring Californians receive the quality care they deserve.”

SEIU Local 1000, also a co-sponsor, argues:

“Our SEIU Local 1000 members have continued to provide care within these healthcare facilities through years of excessive mandatory overtime, low staffing levels, and the COVID-19 pandemic. These departments listed have increasingly relied on contractors to complete work where civil service employees like our Bargaining Unit(s) 17 and 20 workers could be completing the work instead.

These contracts do not have a standardized reporting requirement, and that is why we at SEIU Local 1000 choose to support this bill. AB 2367 establishes reporting requirements and guidelines to ensure that the contracts state healthcare facilities have or will newly establish will be reported to the Legislature. This bill will also support our workers by providing information on vacancies and overtime data to help our members, the public, and the Legislature understand the staffing shortages present within the system. All this data will support the work of committees such as the Committee on Accountability Oversight.”

4. Opponent Arguments:

None received.

5. Prior Legislation:

AB 2223 (Lowenthal, 2026) would require CDCR to disclose specified information for each new contract or contract renewal entered into on or after January 1, 2027, for medical and mental health staffing. This bill is pending in the Senate Labor, Public Employment and Retirement Committee.

AB 393 (Connolly, 2025) would have required CDCR and DSH to take specified actions, including preparing an analysis comparing the hourly cost of a contractor to a civil service Bargaining Unit 16 (BU-16) physician, before entering into a personal services contract to fill a BU-16 physician position. This bill was vetoed by Governor Newsom, who stated the following:

“While I am supportive of ideas to reduce state reliance on contractors, this measure circumvents the collective bargaining process and limits the ability of these departments to deliver critical services. The matters contemplated by this bill are more appropriately handled through the budget and labor negotiations processes.”

AB 339 (Ortega, Chapter 687, Statutes of 2025) required public agencies regulated by the Meyers-Milias-Brown Act to give a recognized employee organization no less than 45 days’ written notice regarding contracts to perform services that are within the scope of work of job classifications represented by the recognized employee organization.

AB 2557 (Ortega, 2024) would have required the governing bodies of local agencies that contract for certain services to, among other things, post contracts and related documents on the agency’s website and provide advance notice to the public agency’s affected workforce union representative. This bill was held in the Senate Committee on Appropriations.

AB 2860 (Arambula, 2023) would have required DSH and CDCR to only fill a vacant supervisor position overseeing healthcare employees in State Bargaining Units 16, 17, 18, 19, or 20, with a permanent full-time civil service employee. This bill was held in Assembly Appropriations Committee.

SB 422 (Pan, 2022) would have required DSH to establish, by January 1, 2024, a physician registry as a three-year pilot program for the Patton State Hospital to be maintained by DSH and composed of members of State Bargaining Unit 16, who may elect to join the registry. This bill was vetoed by Governor Newsom.

AB 657 (Cooper, 2021) would have prohibited specified professionals (generally medical personnel) employed under personal service contracts with state agencies from being under contract for a period that exceeds 365 consecutive days or 365 nonconsecutive days in a 24-month period. This bill was amended into another issue area.

AB 906 (Pan, Chapter 744, Statutes of 2013) prohibited a state agency from executing a personal services contract, except in specified sudden and unexpected situations, until it has certified that all employee organizations that perform the type of work being contracted out have been notified.

AB 149 (Lara, 2011) would have authorized a state department or agency, when the SPB either disapproves a personal services contract from being executed, or nullifies an executed personal services contract, to create and fill a limited-term civil service position for the equivalent number of hours for each contractor position requested in the submitted contract. This bill was held in the Senate Committee on Appropriations.

SUPPORT

Service Employees International Union California (Co-sponsor)

Service Employees International Union California Local 1000 (Co-sponsor)

OPPOSITION

None received

-- END --

1. State Health Care Staffing Contracts. California State Auditor. December 4, 2025.

   *The entirety of this section of the analysis is based on information provided in the 2025 State Health Care Staffing Contracts Audit. ↑

ASSEMBLY THIRD READING

ATR Bill Id:AB 2367

Author:(Kalra)

As Amended Ver:March 19, 2026

Majority vote

SUMMARY

Requires the Department of Corrections and Rehabilitation (CDCR), Department of Developmental Services (DDS), Department of Veterans Affairs (CalVet), and Department State Hospitals (DSH) to provide certain information to relevant employee representatives and the public, among other provisions.

Major Provisions

1. Require the aforementioned departments to provide the following information to the relevant employee representatives and make it available to the public on a quarterly basis:
2. Vacancy data that includes classification title, classification code, full-time equivalent, total positions filled, and total vacant positions.
3. Overtime data that includes a monthly breakdown by classification, including voluntary and mandatory overtime.
4. All registry contact data that includes (i) bill rate and pay rate by classification; (ii) monthly total hours worked, and (iii) annual amount paid.
5. The number of shits and the number of staff during which the facility fell short of its required shift staffing minimums, and an explanation for why those minimums were missed.
6. Require the above-described information to be provided to the relevant employee organization and made publicly available and accessible on the department's website.

COMMENTS

Government Contracting Public Services: Ongoing Questions and Concerns Regarding the Use of Public Funds, Transparency, Accountability, and Quality of Service Delivery

Government contracting of public services, generally, is to provide a particular service for a common public need. For example, in California, to address significant wildfires, the state regularly contracts with private companies to operate specialized aircraft to cover terrain that is difficult to access by traditional ground equipment or personnel.

"Government transparency strengthens democracy, promotes fiscal responsibility, checks corruption, and bolsters public confidence. Sunshine laws enshrine transparency into the fabric of government by guaranteeing citizens access to information regarding government expenditures and policies. When government contractors assume control of public services, in many cases they are able to circumvent sunshine laws and shield important information from disclosure. Corporations may refuse to release records that would otherwise be available by claiming that transparency would hurt their bottom lines. Many times, contractors claim that the information is a "trade secret" or "proprietary" and legally protected from public review. To protect the public's right-to-information, decision makers should adopt strong sunshine laws that require government contractors to follow the same disclosure rules as government entities. As an additional protection, state and local governments should also include disclosure requirements in contracts." ("Closing the Books: How Government Contractors Hid Public Records," at p 2. In the Public Interest (ITPI), March 2015.)

Report by the California State Auditor

A report by the State Auditor focused on CDCR-Salinas Valley, DDS-Porterville, DSH-Atascadero and their use of health care staffing contracts at these facilities. Although it found that “contract workers make up a small portion of medical health staffing, the facilities have increasingly used them to address their growing number of staff vacancies."^[1]

The summary of this report further states, "[s]ince July 2019, vacancy rates have increased to 30 percent at Atascadero, 36 percent at Porterville, and more than 50 percent at Salinas Valley. Although the facilities have engaged in multiple recruitment strategies, they have not evaluated the success of their efforts to determine which are most effective. To help address vacancies, each facility has significantly increased its use of contract workers: Atascadero by 79 percent, Porterville by 172 percent, and Salinas Valley by 46 percent. Contract workers generally cost the State more than state employees in the same job classifications, and the shorter tenure of contract workers presents challenges for facilities because of the training necessary to ensure that the contract workers are prepared to provide appropriate care to the facilities' patient populations.

"The many staff vacancies have resulted in each facility realizing significant savings from fiscal year 2019–20 through 2024–25: about $247 million for Atascadero, $188 million for Salinas Valley, and $157 million for Porterville. Nonetheless, neither [the] DSH nor DDS has required staff to evaluate staffing needs annually. Further, none of the three agencies require their facilities to report whether they are meeting shift-staffing minimums, which are critical to ensuring the provision of legally required levels of care. Because of the decades-long difficulties the facilities have had in filling vacant health care positions and a current and projected health care professional shortage, the State should consider facilitating a statewide campaign to draw medical and mental health care workers to California's civil service."

Key findings in this report include:

1. The three facilities reviewed have increasingly struggled to fill vacant positions.
2. To address vacancies, the three facilities have increased their use of contract workers.
3. The CDCR, DDS, and DSH have not taken necessary steps to ensure that their facilities have appropriate staffing levels.

The State Auditor also reviewed staffing logs from the three facilities and found that they used state employees to provide the majority of patient care, but filled in shifts with contract workers as necessary.

In response, among the various recommendations offered by the State Auditor, the CDCR agreed with the State Auditor's recommendations, and the DDS and DSH generally agreed with the recommendations. However, the DDS disagreed with the State Auditor's recommendation that it require its facilities to track and report whether they are meeting required shift-staffing minimums, and the DSH disagreed with the State Auditor’s recommendation that it evaluate whether offering affordable housing options would improve Atascadero's ability to recruit new state employees.

The State Auditor also recommended that, "to maximize the effectiveness of the State's recruiting efforts, the Legislature should require [the] CalHR to assembly and coordinate a cross-agency collaborative campaign to recruit medical and mental health care staff for state facilities statewide. [The CalHR] should continue, modify, and improve such efforts until the State can achieve and maintain appropriate vacancy rates, as the Legislature determines. This campaign should include, but not be limited to, the following:

1. A total compensation analysis, and adjust as appropriate, to ensure that all medical and mental health care classifications’ compensation is commensurate and competitive with similarly situated recruiting entities.
2. The provision of online and in‑person assistance for candidates during the application and testing process.
3. The implementation of targeted efforts, including development of marketing materials, as appropriate, highlighting the benefits of state employment in California, to recruit candidates for specific job classifications and facility locations that are historically difficult to fill.
4. The establishment of measurement metrics to track the results of each type of recruiting activity and test modifications to each strategy. These measurements should include, but not be limited to, the number of candidates who express interest, apply, interview, receive, and accept employment offers."

Nexus to State Public Employment Relations

Existing law, the State Employer-Employee Relations Act (commonly referred to as the "Ralph C. Dills Act," or the "Dills Act"), regulates public employment relations between the state, as an employer, and its employees represented by a recognized employee organization by providing a reasonable of resolving disputes regarding wages, hours, and other terms and conditions of employment. In addition, the scope of representation is limited to wages, hours, and other terms and conditions of employment, while excluding other specified items. (Sections. 3512 et seq. of the Gov. Code). Where a state agency contracts for services and its represented employees perform the same or similar services, indeed, such contracting that may or does impact those employees, more likely than not, may be within the scope of representation under the Dills Act; thereby, being subject to bargaining under that act.

This Bill

In several respects, this bill is aligned with the findings and information discussed in the State Auditor's report. As such, this bill seeks to avail the exclusive representative and the public of information relating to the quality of service provision in the CDCR, DDS, CalVets, and DSH in furtherance of public transparency, disclosure, and accountability.

According to the Author

"Chronic understaffing and contracting out hurts our workers, our patients, and our state's health outcomes. [This bill] builds on recommendations by the State Auditor and requires our state run health facilities to track and publicly report staffing levels in order to promote transparency, accountability, and oversight."

Arguments in Support

Referencing the report by the State Auditor, the Service Employees International Union states, among other things, "[t]his bill takes an important step toward improving transparency and accountability in state-run healthcare facilities," [and] "responds directly to these concerns [in the report] by establishing standardized reporting requirements. By ensuring the Legislature, the public, and stakeholders have access to consistent and detailed staffing data, this bill will support better decision-making and help the state prioritize investments in its civil service workforce."

Among other things, the Service Employees Internation Union, Local 1000 expresses that, “[this bill] establishes reporting requirements and guidelines to ensure that the contracts state healthcare facilities have or newly establish will be reported to the Legislature, [and] "… will also support our workers by providing information on vacancies and overtime data to help our members, the public, and the Legislature understand the staffing shortages present within the system. We believe this bill will help build toward more transparency and accountability within state-run healthcare facilities."

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Committee on Appropriations, this bill would result in the following:

1. Ongoing General Fund costs in the low millions of dollars annually for the CDCR to hire additional staff needed for tracking, compiling, coordinating, and reporting quarterly facility-level vacancy, overtime, registry, and staffing-shortfall data. According to the CDCR, to the extent custody staff assigned to health care settings are also included under the bill's requirements, workload and associated costs could increase. Additionally, the CDCR notes such requests for reports may be addressed through the collective bargaining process.
2. Ongoing costs of $1,084,000 ($867,000 General Fund, remainder from reimbursement) annually for the DDS to hire five-and-one-half additional full-time staff to accurately aggregate and report the information required by this bill. DDS notes that much of the information required by this bill is corrected currently across multiple systems, including by manual and paper-based processes with limited interfacing across systems.
3. One-time costs of $6.79 million General Fund, approximately $3.7 million of which is ongoing annually, for CalVet to develop, implement, and maintain a new information technology system to facilitate the collection and reporting of required data and hire additional staff.
4. Ongoing General Fund costs of approximately $3.7 million annually for the DSH to hire a total of 25 additional staff across all DSH-operated facilities. The DSH reports it currently collects much of the data required for healthcare staff, however, it does not track information for other employee classifications. There are roughly 400 classifications and nearly 13,000 employees total across the facilities that would potentially need tracking under the bill.

While implementation cost exposure is somewhat consistent across departments, it does appear to the committee that a significant portion of the estimated costs assume a more expansive requirement for staff information tracking than the author may intend, i.e. all staff at a facility compared to only healthcare staff.

The Legislative Analyst's Office recently warned of General Fund structural deficits of around $35 billion per year in the 2027-28 fiscal year and ongoing.

VOTES

ASM PUBLIC EMPLOYMENT AND RETIREMENT: 6-0-1

YES: McKinnor, Lackey, Boerner, Garcia, Nguyen, Michelle Rodriguez

ABS, ABST OR NV: Alanis

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Hoover, Aguiar-Curry, Calderon, Caloza, Dixon, Fong, Mark González, Krell, Pacheco, Pellerin, Sharp-Collins, Solache, Ta, Tangipa

UPDATED

VERSION: March 19, 2026

CONSULTANT: Michael Bolden / P. E. & R. / (916) 319-3957 FN: 0002831

1. “Report 2024-114 State Health Care Staffing Contracts: Contract Workers Are a Small but Growing Proportion of Three State Facilities’ Workforces.” California State Auditor, December 4, 2025. Visit: http:// www.auditor.ca.gov/reports/2024-114/#summary ↑

Date of Hearing: May 6, 2026

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2367

Author:(Kalra) – As Amended Ver:March 19, 2026

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

SUMMARY:

This bill requires the Department of Corrections and Rehabilitation (CDCR), the State Department of Developmental Services (DDS), the Department of Veterans Affairs (CalVet), and the State Department of State Hospitals (DSH) to provide, on a quarterly basis, specified staffing information for all their state-run health facilities.

The bill’s required information includes vacancy data, overtime data, registry contract data, and the number of shifts short of required shift staffing minimums. The bill requires reported information be provided to the relevant employee representatives and made available to the public on a publicly accessible website.

FISCAL EFFECT:

1. Ongoing General Fund costs in the low millions of dollars annually for the CDCR to hire additional staff needed for tracking, compiling, coordinating, and reporting quarterly facility-level vacancy, overtime, registry, and staffing-shortfall data. According to the CDCR, to the extent custody staff assigned to health care settings are also included under the bill’s requirements, workload and associated costs could increase. Additionally, CDCR notes such requests for reports may be addressed through the collective bargaining process.
2. Ongoing costs of $1,084,000 ($867,000 General Fund, remainder from reimbursement) annually for the DDS to hire five-and-one-half additional full-time staff to accurately aggregate and report the information required by this bill. DDS notes that much of the information required by AB 2367 is corrected currently across multiple systems, including by manual and paper-based processes with limited interfacing across systems.
3. One-time costs of $6.79 million General Fund, approximately $3.7 million of which is ongoing annually, for CalVet to develop, implement, and maintain a new IT system to facilitate the collection and reporting of required data and hire additional staff.
4. Ongoing General Fund costs of approximately $3.7 million annually for DSH to hire a total of 25 additional staff across all DSH-operated facilities. DSH reports it currently collects much of the data required for healthcare staff, however, it does not track information for other employee classifications. There are roughly 400 classifications and nearly 13,000 employees total across the facilities that would potentially need tracking under the bill.

While implementation cost exposure is somewhat consistent across departments, it does appear to the committee that a significant portion of the estimated costs assume a more expansive requirement for staff information tracking than the author may intend, i.e. all staff at a facility compared to only healthcare staff.

The Legislative Analyst’s Office recently warned of General Fund structural deficits of around $35 billion per year in the 2027-28 fiscal year and ongoing.

COMMENTS:

1. Purpose. According to the author:

Chronic understaffing and contracting out hurts our workers, our patients, and our state’s health outcomes. AB 2367 builds on recommendations by the State Auditor and requires our state run health facilities to track and publicly report staffing levels in order to promote transparency, accountability, and oversight.

1. Background. State Civil Service. The State Civil Service Act provides a comprehensive personnel system where state employment is based on the merit principle and fitness ascertained through practical and competitive examination. However, existing law also authorizes state agencies to contract for personal services under certain conditions, such as when the services contracted are not available within civil service, cannot be performed satisfactorily by civil service employees, or are of such a highly specialized or technical nature not available through the civil service system.

State Auditor Report. In 2024, the California State Auditor (CSA) conducted an audit of state healthcare staffing contracts at three separate facilities operated by CDCR, DDS, and DSH, each of which with staff vacancy rates over 30%. The CSA found that between fiscal years 2019-20 and 2024-25 the three facilities had collectively saved $592 million from these staff vacancies. However, in spite of said savings and high vacancy rates, the CSA found that each facility has become increasingly reliant on contract workers, with one facility operated by DDS increasing their use of contract work by 172% across that same five-year period. In the closing of their report, the CSA makes the following recommendation to the Legislature:

The Legislature should require CalHR to assemble and coordinate a cross‑agency collaborative campaign to recruit medical and mental health care staff for state facilities statewide. CalHR should continue, modify, and improve such efforts until the State can achieve and maintain appropriate vacancy rates, as the Legislature determines. 

Additionally, the CSA recommended that CDCR, DSH, DDS develop procedures requiring each facility to track, tabulate, report, and make publicly available information regarding staffing levels, positions filled by either state employees or contract workers, and instances when they do not meet shift-staff minimums. This bill requires CDCR, DDS, DSH, and CalVet to provide specified facility-level staffing and contract information quarterly to the relevant employee representatives and to make said information available publicly. Notably, while CalVet was not included in the CSA report, CalVet does operate multiple state-run facilities serving aging and disabled veterans.

1. Related Legislation. AB 2223 (Lowenthal), of the current legislative session, would require CDCR to disclose specified information regarding new and renewed contracts for services typically performed by civil services employees to the affected bargaining unit and annually report this information to the Legislature.

Analysis Prepared by: Aaron Heredia / APPR. / (916) 319-2081

Date of Hearing: April 8, 2026

ASSEMBLY COMMITTEE ON PUBLIC EMPLOYMENT AND RETIREMENT

Tina S. McKinnor, Chair

ABPCA Bill Id:AB 2367 (

Author:Kalra) – As Amended Ver:March 19, 2026

SUBJECT: State employment: reporting: health facilities

SUMMARY: Requires the Department of Corrections and Rehabilitation (CDCR), Department of Developmental Services (DDS), Department of Veterans Affairs (CalVet), and Department State Hospitals (DSH) to provide specified information to relevant employee representatives and the public, among other provisions. Specifically, this bill:

1. Requires the aforementioned departments to provide the following information to the relevant employee representatives and make it available to the public on a quarterly basis:
2. Vacancy data that includes classification title, classification code, full-time equivalent, total positions filled, and total vacant positions.
3. Overtime data that includes a monthly breakdown by classification, including voluntary and mandatory overtime.
4. All registry contact data that includes (i) bill rate and pay rate by classification; (ii) monthly total hours worked, and (iii) annual amount paid.
5. The number of shits and the number of staff during which the facility fell short of its required shift staffing minimums, and an explanation for why those minimums were missed.
6. Requires the above-described information to be provided to the relevant employee organization and made publicly available and accessible on the department’s website.

EXISTING LAW:

1. Creates the state civil service that includes every officer and employee of the State except a limited number of specified, exempted officers and employees, and requires that the state make “permanent appointment and promotion in the civil service under a general system based on merit ascertained by competitive examination.” Case law and custom refer to this provision as the merit principle and it governs the administration of the state’s civil service system. (Sections 1 and 4, art. VII, Cal. Const.)
2. Establishes the State Civil Service Act to facilitate the operation of the Constitution’s merit principle for the state civil service; requires the SPB to prescribe rules consistent with a merit based civil service system to govern appointments classifications, examinations, probationary periods, disciplinary actions, and other matters related to the SPB’s authority under Article VII of the California Constitution; authorizes the SPB to conduct audits and investigations of the personnel practices of CalHR and appointing authorities to ensure compliance with civil service policies, procedures, and statutes, and permits the CalHR and the SPB to delegate, share, or transfer between them responsibilities for programs within their respective jurisdictions pursuant to an agreement. (Sections 18500 et seq., Gov. Code.)
3. Establishes, pursuant to Sections 2 and 3 of Article VII of the California Constitution, the SPB which must enforce civil service statutes, and by majority vote of all its members, prescribe probationary periods and classifications, adopt other rules authorized by statute, and review disciplinary actions. In addition, the Executive Officer of the SPB is required to administer civil service statutes under the rules of the SPB.
4. Creates the CalHR and vests it with the powers, duties, and authorities necessary to operate the state civil service system pursuant to Article VII of the California Constitution, the Government Code, the merit principle, and applicable rules duly adopted by the SPB. (Sections 18500 et seq., Gov. Code.)
5. Requires the CalHR and the SPB to enter into a MOU to determine areas of compliance for nonmerit-related audits and to train SPB staff on the areas of compliance. (Section 18502(b)(2), Gov. Code.)
6. Requires the SPB to establish minimum qualifications for determining the fitness and qualifications of employees for each class of position, among other things, and authorizes the CalHR to require applicants for examination or appointment to provide documentation as it deems necessary to establish the applicants’ qualifications. (Section 18931(a), Gov. Code.)
7. Authorizes the CalHR to designate an appointing power to design, announce, or administer examinations for the establishment of employment lists as specified. Existing law also permits a designated appointing power to contract with the CalHR or another designated appointing power for the purpose of designing, publicizing, or administering an examination. (Section 18930.5, Gov. Code.)
8. Provides for state acquisition of goods and services in contracts for services. (Sections 10335 et seq., Pub. Contract Code.)
9. Authorizes the state to enter into personal services contracts and establishes the conditions that must be met when procuring such contracts. (Sections 19130 et seq., Gov. Code.) Further, requires the SPB to review the adequacy of any proposed or executed contract, as provided, at the request of an employee organization that represents state employees, but need not review the contract again after its execution. Further, unless certain prescribed circumstances exist (e.g., an emergency), a state agency that proposes to execute a contract must first notify all organizations that represent state employees who perform the type of work to be contracted before executing the contract, among other provisions. (Section 19132, Gov. Code.)
10. Requires the State Personnel Board (SPB) to review a proposed or executed contract if it receives a request to conduct a review from an employee organization representing state employees. However, the review is restricted to the question as to whether the contract complies with existing law, as provided. Further, if the employee organizations requests, the SPB Executive Officer must grant the employee organization the opportunity to present its case against the contract and the reasons why it should be referred to the board for a hearing, and upon a showing of good cause by an employee organization, SPB Executive Officer must schedule the disputed contract for a hearing before the board for the purposes of receiving evidence and hearing arguments concerning the propriety of the disputed contract. Further, authorizes the SPB to direct a state agency to transmit a contract to an employee organization for review when it has reason to believe that a proposed contract is not compliant with existing law. However, if requested to do so by an employee organization, the SPB must direct a state agency to transmit the contract for it to review. (Section 10337, Pub. Contract Code.)
11. Governs collective bargaining in the private sector under the federal National Labor Relations Act (NLRA), but leaves it to the states to regulate collective bargaining in their respective public sectors. (Sections 151 et seq., Title 29, United States Code.) While the NLRA and the decisions of its National Labor Relations Board (NLRB) often provide persuasive precedent in interpreting state collective bargaining law, public employees have no collective bargaining rights absent specific statutory authority establishing those rights.
12. Provides several statutory frameworks under California law to provide public employees collective bargaining rights, govern public employer-employee relations, and limit labor strife and economic disruption in the public sector through a reasonable method of resolving disputes regarding wages, hours and other terms and conditions of employment between public employers and recognized public employee organizations or their exclusive representatives. These include the Ralph C. Dills Act (“Dills Act”) governing employment relations for certain executive branch (state) employees. (Sections 3512 et seq., Gov. Code.)
13. Establishes the PERB, a quasi-judicial administrative agency charged with administering certain statutory frameworks governing employer-employee relations, resolving disputes, and enforcing the statutory duties and rights of public agency employers, employees, and employee organizations, but provides the City and County of Los Angeles a local alternative to PERB oversight. (Sections 3541 et seq., Gov. Code.)

FISCAL EFFECT: Unknown. This bill is flagged as fiscal by Legislative Counsel.

COMMENTS

Among other things, information provided by the author states, “[a] 2025 report by the State Auditor reviewed staffing levels at the [CDCR, DDS, and DSH]. Per the direction of the Joint Legislative Audit Committee, this report focused on three facilities: the [DSH]‑Atascadero (Atascadero)…, the Porterville Developmental Center (Porterville), which [the] DDS oversees; and Salinas Valley State Prison (Salinas Valley), which [the] CDCR oversees. The audit found that over five years, the vacancy rates at these three facilities had increased. To address the vacancies, the facilities had to increase their use of contract workers, which costs ‘more per hour than their state civil service counterparts, even after taking into account the non-wage costs associated with state civil service employment, such as benefits.’ The contract workers also had two to three years less tenure than state employees in the same classification which resulted in a need for additional training and time. The [State] Auditor also found that [the] CDCR, DDS, and DSH do not have a formal process for reporting their shift-staffing minimums, ‘which are critical to ensuring the provision of legally required levels of care.’ Additionally, the audit highlights a federal court order mandating [the] CDCR to fill certain mental health positions. In 2023, the state began paying monthly fines for noncompliance and as of the timing of the audit, [the] CDCR had over $95 million in accumulated fines. To promote transparency, accountability, and oversight, the [State] Auditor recommended all three Departments immediately require their facilities to track and report publicly their staffing levels with explanations for any missed minimums.”

Government Contracting Public Services: Ongoing Questions and Concerns Regarding the Use of Public Funds, Transparency, Accountability, and Quality of Service Delivery

Government contracting of public services, generally, is to provide a particular service for a common public need. For example, in California, to address significant wildfires, the state regularly contracts with private companies to operate specialized aircraft to cover terrain that is difficult to access by traditional ground equipment or personnel.

“Government transparency strengthens democracy, promotes fiscal responsibility, checks corruption, and bolsters public confidence. Sunshine laws enshrine transparency into the fabric of government by guaranteeing citizens access to information regarding government expenditures and policies. When government contractors assume control of public services, in many cases they are able to circumvent sunshine laws and shield important information from disclosure. Corporations may refuse to release records that would otherwise be available by claiming that transparency would hurt their bottom lines. Many times, contractors claim that the information is a “trade secret” or “proprietary” and legally protected from public review. To protect the public’s right-to-information, decision makers should adopt strong sunshine laws that require government contractors to follow the same disclosure rules as government entities. As an additional protection, state and local governments should also include disclosure requirements in contracts.” (“Closing the Books: How Government Contractors Hid Public Records,” at p 2. In the Public Interest (ITPI), March 2015.)

Increasing Reliance by Public Employers on Contracting Out for Services

The committee is reminded of its informational hearing on May 10, 2023, titled “Strengthening California through the Public Sector and Its Workforce,” which focused on various subjects, including contracting out of public employee work.

During that hearing, the committee heard from a number of panelists, including experts from the University of California at Berkeley Labor Center, where data was provided and substantial concerns were expressed by other panelists about the ongoing and increasing reliance by public employers, including the state – as an employer, on a contingent, part-time, temporary, contracted out, or retired annuitant workforce to fill public sector vacancies, or to perform the duties of willing and capable existing and prospective public employees. These concerns also detailed how public employers are increasingly relying on these forms of employment and in a manner that has deleterious effects on wage growth, employee morale, employer-employee relations, and the need to ensure operational consistency and quality in the provision of services to the public that could be performed by permanent employees.

These concerns also detailed how public employers are increasingly relying on these forms of employment and in a manner that has deleterious effects on wage growth, employee morale, employer-employee relations, and the need to ensure operational consistency and quality in the provision of services to the public that could be performed by permanent employees.

On April 17, 2024, the committee held another information relating to that subject titled: “Public Service Delivery and Workforce Wellbeing – Addressing the Vacancy Crisis in Local Government,” where civil service vacancies, impacts of vacancies on the civil service workforce and services, and collaborative solutions to address civil service vacancies, were discussed.

Report by the California State Auditor

A report by the State Auditor focused on CDCR-Salinas Valley, DDS-Porterville, DSH-Atascadero and their use of health care staffing contracts at these facilities. Although it found that “contract workers make up a small portion of medical health staffing, the facilities have increasingly used them to address their growing number of staff vacancies.”^[1]

The summary of this report further states, “[s]ince July 2019, vacancy rates have increased to 30 percent at Atascadero, 36 percent at Porterville, and more than 50 percent at Salinas Valley. Although the facilities have engaged in multiple recruitment strategies, they have not evaluated the success of their efforts to determine which are most effective. To help address vacancies, each facility has significantly increased its use of contract workers: Atascadero by 79 percent, Porterville by 172 percent, and Salinas Valley by 46 percent. Contract workers generally cost the State more than state employees in the same job classifications, and the shorter tenure of contract workers presents challenges for facilities because of the training necessary to ensure that the contract workers are prepared to provide appropriate care to the facilities’ patient populations.

“The many staff vacancies have resulted in each facility realizing significant savings from fiscal year 2019–20 through 2024–25: about $247 million for Atascadero, $188 million for Salinas Valley, and $157 million for Porterville. Nonetheless, neither [the] DSH nor DDS has required staff to evaluate staffing needs annually. Further, none of the three agencies require their facilities to report whether they are meeting shift-staffing minimums, which are critical to ensuring the provision of legally required levels of care. Because of the decades-long difficulties the facilities have had in filling vacant health care positions and a current and projected health care professional shortage, the State should consider facilitating a statewide campaign to draw medical and mental health care workers to California’s civil service.”

Key findings in this report include:

• The three facilities reviewed have increasingly struggled to fill vacant positions.
• To address vacancies, the three facilities have increased their use of contract workers.
• The CDCR, DDS, and DSH have not take necessary steps to ensure that their facilities have appropriate staffing levels.

The State Auditor also reviewed staffing logs from the three facilities and found that they used state employees to provide the majority of patient care, but filled in shifts with contract workers as necessary.

In response, among the various recommendations offered by the State Auditor, the CDCR agreed with the State Auditor’s recommendations, and the DDS and DSH generally agreed with the recommendations. However, the DDS disagreed with the State Auditor’s recommendation that it require its facilities to track and report whether they are meeting required shift-staffing minimums, and the DSH disagreed with the State Auditor’s recommendation that it evaluate whether offering affordable housing options would improve Atascadero’s ability to recruit new state employees.

The State Auditor also recommended that, “to maximize the effectiveness of the State’s recruiting efforts, the Legislature should require [the] CalHR to assembly and coordinate a cross-agency collaborative campaign to recruit medical and mental health care staff for state facilities statewide. [The CalHR] should continue, modify, and improve such efforts until the State can achieve and maintain appropriate vacancy rates, as the Legislature determines. This campaign should include, but not be limited to, the following:

• A total compensation analysis, and adjust as appropriate, to ensure that all medical and mental health care classifications’ compensation is commensurate and competitive with similarly situated recruiting entities.
• The provision of online and in‑person assistance for candidates during the application and testing process.
• The implementation of targeted efforts, including development of marketing materials, as appropriate, highlighting the benefits of state employment in California, to recruit candidates for specific job classifications and facility locations that are historically difficult to fill.
• The establishment of measurement metrics to track the results of each type of recruiting activity and test modifications to each strategy. These measurements should include, but not be limited to, the number of candidates who express interest, apply, interview, receive, and accept employment offers.”

Nexus to State Public Employment Relations

Existing law, the State Employer-Employee Relations Act (commonly referred to as the “Ralph C. Dills Act,” or the “Dills Act”), regulates public employment relations between the state, as an employer, and its employees represented by a recognized employee organization by providing a reasonable of resolving disputes regarding wages, hours, and other terms and conditions of employment. In addition, the scope of representation is limited to wages, hours, and other terms and conditions of employment, while excluding other specified items. (Sections. 3512 et seq. of the Gov. Code). Where a state agency contracts for services and its represented employees perform the same or similar services, indeed, such contracting that may or does impact those employees, more likely than not, may be within the scope of representation under the Dills Act; thereby, being subject to bargaining under that act.

This Bill

In several respects, this bill is aligned with the findings and information discussed in the State Auditor’s report. As such, this bill seeks to avail the exclusive representative and the public of information relating to the quality of service provision in the CDCR, DDS, CalVets, and DSH in furtherance of public transparency, disclosure, and accountability.

Author’s Statement

“Chronic understaffing and contracting out hurts our workers, our patients, and our state’s health outcomes. [This bill] builds on recommendations by the State Auditor and requires our state run health facilities to track and publicly report staffing levels in order to promote transparency, accountability, and oversight.”

Comments by Supporters

Referencing the report by the State Auditor, the Service Employees International Union states, among other things, “[t]his bill takes an important step toward improving transparency and accountability in state-run healthcare facilities,” [and] “responds directly to these concerns [in the report] by establishing standardized reporting requirements. By ensuring the Legislature, the public, and stakeholders have access to consistent and detailed staffing data, this bill will support better decision-making and help the state prioritize investments in its civil service workforce.”

Among other things, the Service Employees Internation Union, Local 1000 expresses that, “[this bill] establishes reporting requirements and guidelines to ensure that the contracts state healthcare facilities have or newly establish will be reported to the Legislature, [and] “… will also support our workers by providing information on vacancies and overtime data to help our members, the public, and the Legislature understand the staffing shortages present within the system. We believe this bill will help build toward more transparency and accountability within state-run healthcare facilities.”

Comments by Opponents

None on file.

Prior or Related Legislation

Assembly Bill 2223 (Lowenthal, 2026) proposes to requires the CDCR to disclose specified information regarding each new or renewed contract to the exclusive representative of the affected bargaining unit (BU), among other provisions. This bill is currently pending in the Assembly Committee on Public Employment and Retirement.

Assembly Bill 393 (Connolly, 2025) proposed to require the CDCR and the Department of State Hospitals (DSH) to take specified actions before entering into a personal services contract to have a contractor fill a budgeted State BU 16 physician or civil service psychiatrist position. This bill was vetoed by the Governor stating:

“While I am supportive of ideas to reduce state reliance on contractors, this measure circumvents the collective bargaining process and limits the ability of these departments to deliver critical services. The matters contemplated by this bill are more appropriately handled through the budget and labor negotiations processes.”

Chapter 687, Statutes of 2025 (Assembly Bill 339, Ortega) requires public agencies regulated by the Meyers-Milias-Brown Act (MMBA) to give a recognized employee organization (REO) no less than 45 days’ written notice regarding contracts to perform services that are within the scope of work of job classifications represented by the REO, among other provisions.

Assembly Bill 24 (DeMaio, 2025) originally introduced to establish legislative intent to enact a constitutional amendment to achieve cost savings for the state and balance the budget by, among other things, requiring state government agencies to competitively source or contract out services, this bill was subsequently amended to address an unrelated matter and was held in the Assembly Committee on Local Government.

Assembly Bill 775 (Arambula, 2023) proposed to require the DSH to establish a physician registry for the Patton State Hospital under a three-year pilot program by January 1, 2025, among other provisions. This bill was held in the Senate Appropriations Committee.

Senate Bill 422 (Pan, 2022) proposed to amend existing law relating to the use of personal services contracts by the state by establishing a health professional registry consisting of existing state employees for supplemental, temporary work that would otherwise be performed by health contractors from private company medical registries, among other provisions. This bill was vetoed by the Governor who stated that:

“This bill is unclear on implementation and does not demonstrate how it would significantly reduce DSH’s reliance on contractors. While I am supportive of ideas to reduce state reliance on contractors, the creation of the registry and the determination of associated compensation are matters that are more appropriately handled through the budget and labor negotiations processes.”

Assembly Bill 657 (Cooper, 2021) originally proposed to establish certain prohibitions and reporting requirements relating to a state agency contracting with a professional, as defined, among other provisions. This bill was substantially amended to address an unrelated subject.

Chapter 611, Statutes of 2011 (Assembly Bill 438, Williams) imposed specified requirements, until January 1, 2019, on a city or library district that intends to withdraw from a county free library system and operate libraries with a private contractor that will employ library staff to achieve cost savings.

REGISTERED SUPPORT / OPPOSITION:

Support

California State Council of Service Employees International Union (Sponsor)

Service Employees International Union, Local 1000

Opposition

None on file.

Analysis Prepared by: Michael Bolden / P. E. & R. / (916) 319-3957

1. “Report 2024-114 State Health Care Staffing Contracts: Contract Workers Are a Small but Growing Proportion of Three State Facilities’ Workforces.” California State Auditor, December 4, 2025. ↑

Date of Hearing: April 8, 2026

ASSEMBLY COMMITTEE ON PUBLIC EMPLOYMENT AND RETIREMENT

Tina S. McKinnor, Chair

ABPCA Bill Id:AB 2367 (

Author:Kalra) – As Amended Ver:March 19, 2026

SUBJECT: State employment: reporting: health facilities

SUMMARY: Requires the Department of Corrections and Rehabilitation (CDCR), Department of Developmental Services (DDS), Department of Veterans Affairs (CalVet), and Department State Hospitals (DSH) to provide specified information to relevant employee representatives and the public, among other provisions. Specifically, this bill:

1. Requires the aforementioned departments to provide the following information to the relevant employee representatives and make it available to the public on a quarterly basis:
2. Vacancy data that includes classification title, classification code, full-time equivalent, total positions filled, and total vacant positions.
3. Overtime data that includes a monthly breakdown by classification, including voluntary and mandatory overtime.
4. All registry contact data that includes (i) bill rate and pay rate by classification; (ii) monthly total hours worked, and (iii) annual amount paid.
5. The number of shits and the number of staff during which the facility fell short of its required shift staffing minimums, and an explanation for why those minimums were missed.
6. Requires the above-described information to be provided to the relevant employee organization and made publicly available and accessible on the department’s website.

FISCAL EFFECT: Unknown. This bill is flagged as fiscal by Legislative Counsel.

EXISTING LAW:

1. Creates the state civil service that includes every officer and employee of the State except a limited number of specified, exempted officers and employees, and requires that the state make “permanent appointment and promotion in the civil service under a general system based on merit ascertained by competitive examination.” Case law and custom refer to this provision as the merit principle and it governs the administration of the state’s civil service system. (Sections 1 and 4, art. VII, Cal. Const.)
2. Establishes the State Civil Service Act to facilitate the operation of the Constitution’s merit principle for the state civil service; requires the SPB to prescribe rules consistent with a merit based civil service system to govern appointments classifications, examinations, probationary periods, disciplinary actions, and other matters related to the SPB’s authority under Article VII of the California Constitution; authorizes the SPB to conduct audits and investigations of the personnel practices of CalHR and appointing authorities to ensure compliance with civil service policies, procedures, and statutes, and permits the CalHR and the SPB to delegate, share, or transfer between them responsibilities for programs within their respective jurisdictions pursuant to an agreement. (Sections 18500 et seq., Gov. Code.)
3. Establishes, pursuant to Sections 2 and 3 of Article VII of the California Constitution, the SPB which must enforce civil service statutes, and by majority vote of all its members, prescribe probationary periods and classifications, adopt other rules authorized by statute, and review disciplinary actions. In addition, the Executive Officer of the SPB is required to administer civil service statutes under the rules of the SPB.
4. Creates the CalHR and vests it with the powers, duties, and authorities necessary to operate the state civil service system pursuant to Article VII of the California Constitution, the Government Code, the merit principle, and applicable rules duly adopted by the SPB. (Sections 18500 et seq., Gov. Code.)
5. Requires the CalHR and the SPB to enter into a MOU to determine areas of compliance for nonmerit-related audits and to train SPB staff on the areas of compliance. (Section 18502(b)(2), Gov. Code.)
6. Requires the SPB to establish minimum qualifications for determining the fitness and qualifications of employees for each class of position, among other things, and authorizes the CalHR to require applicants for examination or appointment to provide documentation as it deems necessary to establish the applicants’ qualifications. (Section 18931(a), Gov. Code.)
7. Authorizes the CalHR to designate an appointing power to design, announce, or administer examinations for the establishment of employment lists as specified. Existing law also permits a designated appointing power to contract with the CalHR or another designated appointing power for the purpose of designing, publicizing, or administering an examination. (Section 18930.5, Gov. Code.)
8. Provides for state acquisition of goods and services in contracts for services. (Sections 10335 et seq., Pub. Contract Code.)
9. Authorizes the state to enter into personal services contracts and establishes the conditions that must be met when procuring such contracts. (Sections 19130 et seq., Gov. Code.) Further, requires the SPB to review the adequacy of any proposed or executed contract, as provided, at the request of an employee organization that represents state employees, but need not review the contract again after its execution. Further, unless certain prescribed circumstances exist (e.g., an emergency), a state agency that proposes to execute a contract must first notify all organizations that represent state employees who perform the type of work to be contracted before executing the contract, among other provisions. (Section 19132, Gov. Code.)
10. Requires the State Personnel Board (SPB) to review a proposed or executed contract if it receives a request to conduct a review from an employee organization representing state employees. However, the review is restricted to the question as to whether the contract complies with existing law, as provided. Further, if the employee organizations requests, the SPB Executive Officer must grant the employee organization the opportunity to present its case against the contract and the reasons why it should be referred to the board for a hearing, and upon a showing of good cause by an employee organization, SPB Executive Officer must schedule the disputed contract for a hearing before the board for the purposes of receiving evidence and hearing arguments concerning the propriety of the disputed contract. Further, authorizes the SPB to direct a state agency to transmit a contract to an employee organization for review when it has reason to believe that a proposed contract is not compliant with existing law. However, if requested to do so by an employee organization, the SPB must direct a state agency to transmit the contract for it to review. (Section 10337, Pub. Contract Code.)
11. Governs collective bargaining in the private sector under the federal National Labor Relations Act (NLRA), but leaves it to the states to regulate collective bargaining in their respective public sectors. (Sections 151 et seq., Title 29, United States Code.) While the NLRA and the decisions of its National Labor Relations Board (NLRB) often provide persuasive precedent in interpreting state collective bargaining law, public employees have no collective bargaining rights absent specific statutory authority establishing those rights.
12. Provides several statutory frameworks under California law to provide public employees collective bargaining rights, govern public employer-employee relations, and limit labor strife and economic disruption in the public sector through a reasonable method of resolving disputes regarding wages, hours and other terms and conditions of employment between public employers and recognized public employee organizations or their exclusive representatives. These include the Ralph C. Dills Act (“Dills Act”) governing employment relations for certain executive branch (state) employees. (Sections 3512 et seq., Gov. Code.)
13. Establishes the PERB, a quasi-judicial administrative agency charged with administering certain statutory frameworks governing employer-employee relations, resolving disputes, and enforcing the statutory duties and rights of public agency employers, employees, and employee organizations, but provides the City and County of Los Angeles a local alternative to PERB oversight. (Sections 3541 et seq., Gov. Code.)

COMMENTS

Among other things, information provided by the author states, “[a] 2025 report by the State Auditor reviewed staffing levels at the [CDCR, DDS, and DSH]. Per the direction of the Joint Legislative Audit Committee, this report focused on three facilities: the [DSH]‑Atascadero (Atascadero)…, the Porterville Developmental Center (Porterville), which [the] DDS oversees; and Salinas Valley State Prison (Salinas Valley), which [the] CDCR oversees. The audit found that over five years, the vacancy rates at these three facilities had increased. To address the vacancies, the facilities had to increase their use of contract workers, which costs ‘more per hour than their state civil service counterparts, even after taking into account the non-wage costs associated with state civil service employment, such as benefits.’ The contract workers also had two to three years less tenure than state employees in the same classification which resulted in a need for additional training and time. The [State] Auditor also found that [the] CDCR, DDS, and DSH do not have a formal process for reporting their shift-staffing minimums, ‘which are critical to ensuring the provision of legally required levels of care.’ Additionally, the audit highlights a federal court order mandating [the] CDCR to fill certain mental health positions. In 2023, the state began paying monthly fines for noncompliance and as of the timing of the audit, [the] CDCR had over $95 million in accumulated fines. To promote transparency, accountability, and oversight, the [State] Auditor recommended all three Departments immediately require their facilities to track and report publicly their staffing levels with explanations for any missed minimums.”

Government Contracting Public Services: Ongoing Questions and Concerns Regarding the Use of Public Funds, Transparency, Accountability, and Quality of Service Delivery

Government contracting of public services, generally, is to provide a particular service for a common public need. For example, in California, to address significant wildfires, the state regularly contracts with private companies to operate specialized aircraft to cover terrain that is difficult to access by traditional ground equipment or personnel.

“Government transparency strengthens democracy, promotes fiscal responsibility, checks corruption, and bolsters public confidence. Sunshine laws enshrine transparency into the fabric of government by guaranteeing citizens access to information regarding government expenditures and policies. When government contractors assume control of public services, in many cases they are able to circumvent sunshine laws and shield important information from disclosure. Corporations may refuse to release records that would otherwise be available by claiming that transparency would hurt their bottom lines. Many times, contractors claim that the information is a “trade secret” or “proprietary” and legally protected from public review. To protect the public’s right-to-information, decision makers should adopt strong sunshine laws that require government contractors to follow the same disclosure rules as government entities. As an additional protection, state and local governments should also include disclosure requirements in contracts.” (“Closing the Books: How Government Contractors Hid Public Records,” at p 2. In the Public Interest (ITPI), March 2015.)

Increasing Reliance by Public Employers on Contracting Out for Services

The committee is reminded of its informational hearing on May 10, 2023, titled “Strengthening California through the Public Sector and Its Workforce,” which focused on various subjects, including contracting out of public employee work.

During that hearing, the committee heard from a number of panelists, including experts from the University of California at Berkeley Labor Center, where data was provided and substantial concerns were expressed by other panelists about the ongoing and increasing reliance by public employers, including the state – as an employer, on a contingent, part-time, temporary, contracted out, or retired annuitant workforce to fill public sector vacancies, or to perform the duties of willing and capable existing and prospective public employees. These concerns also detailed how public employers are increasingly relying on these forms of employment and in a manner that has deleterious effects on wage growth, employee morale, employer-employee relations, and the need to ensure operational consistency and quality in the provision of services to the public that could be performed by permanent employees.

These concerns also detailed how public employers are increasingly relying on these forms of employment and in a manner that has deleterious effects on wage growth, employee morale, employer-employee relations, and the need to ensure operational consistency and quality in the provision of services to the public that could be performed by permanent employees.

On April 17, 2024, the committee held another information relating to that subject titled: “Public Service Delivery and Workforce Wellbeing – Addressing the Vacancy Crisis in Local Government,” where civil service vacancies, impacts of vacancies on the civil service workforce and services, and collaborative solutions to address civil service vacancies, were discussed.

Report by the California State Auditor

A report by the State Auditor focused on CDCR-Salinas Valley, DDS-Porterville, DSH-Atascadero and their use of health care staffing contracts at these facilities. Although it found that “contract workers make up a small portion of medical health staffing, the facilities have increasingly used them to address their growing number of staff vacancies.”^[1]

The summary of this report further states, “[s]ince July 2019, vacancy rates have increased to 30 percent at Atascadero, 36 percent at Porterville, and more than 50 percent at Salinas Valley. Although the facilities have engaged in multiple recruitment strategies, they have not evaluated the success of their efforts to determine which are most effective. To help address vacancies, each facility has significantly increased its use of contract workers: Atascadero by 79 percent, Porterville by 172 percent, and Salinas Valley by 46 percent. Contract workers generally cost the State more than state employees in the same job classifications, and the shorter tenure of contract workers presents challenges for facilities because of the training necessary to ensure that the contract workers are prepared to provide appropriate care to the facilities’ patient populations.

“The many staff vacancies have resulted in each facility realizing significant savings from fiscal year 2019–20 through 2024–25: about $247 million for Atascadero, $188 million for Salinas Valley, and $157 million for Porterville. Nonetheless, neither [the] DSH nor DDS has required staff to evaluate staffing needs annually. Further, none of the three agencies require their facilities to report whether they are meeting shift-staffing minimums, which are critical to ensuring the provision of legally required levels of care. Because of the decades-long difficulties the facilities have had in filling vacant health care positions and a current and projected health care professional shortage, the State should consider facilitating a statewide campaign to draw medical and mental health care workers to California’s civil service.”

Key findings in this report include:

• The three facilities reviewed have increasingly struggled to fill vacant positions.
• To address vacancies, the three facilities have increased their use of contract workers.
• The CDCR, DDS, and DSH have not take necessary steps to ensure that their facilities have appropriate staffing levels.

The State Auditor also reviewed staffing logs from the three facilities and found that they used state employees to provide the majority of patient care, but filled in shifts with contract workers as necessary.

In response, among the various recommendations offered by the State Auditor, the CDCR agreed with the State Auditor’s recommendations, and the DDS and DSH generally agreed with the recommendations. However, the DDS disagreed with the State Auditor’s recommendation that it require its facilities to track and report whether they are meeting required shift-staffing minimums, and the DSH disagreed with the State Auditor’s recommendation that it evaluate whether offering affordable housing options would improve Atascadero’s ability to recruit new state employees.

The State Auditor also recommended that, “to maximize the effectiveness of the State’s recruiting efforts, the Legislature should require [the] CalHR to assembly and coordinate a cross-agency collaborative campaign to recruit medical and mental health care staff for state facilities statewide. [The CalHR] should continue, modify, and improve such efforts until the State can achieve and maintain appropriate vacancy rates, as the Legislature determines. This campaign should include, but not be limited to, the following:

• A total compensation analysis, and adjust as appropriate, to ensure that all medical and mental health care classifications’ compensation is commensurate and competitive with similarly situated recruiting entities.
• The provision of online and in‑person assistance for candidates during the application and testing process.
• The implementation of targeted efforts, including development of marketing materials, as appropriate, highlighting the benefits of state employment in California, to recruit candidates for specific job classifications and facility locations that are historically difficult to fill.
• The establishment of measurement metrics to track the results of each type of recruiting activity and test modifications to each strategy. These measurements should include, but not be limited to, the number of candidates who express interest, apply, interview, receive, and accept employment offers.”

Nexus to State Public Employment Relations

Existing law, the State Employer-Employee Relations Act (commonly referred to as the “Ralph C. Dills Act,” or the “Dills Act”), regulates public employment relations between the state, as an employer, and its employees represented by a recognized employee organization by providing a reasonable of resolving disputes regarding wages, hours, and other terms and conditions of employment. In addition, the scope of representation is limited to wages, hours, and other terms and conditions of employment, while excluding other specified items. (Sections. 3512 et seq. of the Gov. Code). Where a state agency contracts for services and its represented employees perform the same or similar services, indeed, such contracting that may or does impact those employees, more likely than not, may be within the scope of representation under the Dills Act; thereby, being subject to bargaining under that act.

This Bill

In several respects, this bill is aligned with the findings and information discussed in the State Auditor’s report. As such, this bill seeks to avail the exclusive representative and the public of information relating to the quality of service provision in the CDCR, DDS, CalVets, and DSH in furtherance of public transparency, disclosure, and accountability.

Author’s Statement

“Chronic understaffing and contracting out hurts our workers, our patients, and our state’s health outcomes. [This bill] builds on recommendations by the State Auditor and requires our state run health facilities to track and publicly report staffing levels in order to promote transparency, accountability, and oversight.”

Comments by Supporters

Referencing the report by the State Auditor, the Service Employees International Union states, among other things, “[t]his bill takes an important step toward improving transparency and accountability in state-run healthcare facilities,” [and] “responds directly to these concerns [in the report] by establishing standardized reporting requirements. By ensuring the Legislature, the public, and stakeholders have access to consistent and detailed staffing data, this bill will support better decision-making and help the state prioritize investments in its civil service workforce.”

Among other things, the Service Employees Internation Union, Local 1000 expresses that, “[this bill] establishes reporting requirements and guidelines to ensure that the contracts state healthcare facilities have or newly establish will be reported to the Legislature, [and] “… will also support our workers by providing information on vacancies and overtime data to help our members, the public, and the Legislature understand the staffing shortages present within the system. We believe this bill will help build toward more transparency and accountability within state-run healthcare facilities.”

Comments by Opponents

None on file.

Prior or Related Legislation

Assembly Bill 2223 (Lowenthal, 2026) proposes to requires the CDCR to disclose specified information regarding each new or renewed contract to the exclusive representative of the affected bargaining unit (BU), among other provisions. This bill is currently pending in the Assembly Committee on Public Employment and Retirement.

Assembly Bill 393 (Connolly, 2025) proposed to require the CDCR and the Department of State Hospitals (DSH) to take specified actions before entering into a personal services contract to have a contractor fill a budgeted State BU 16 physician or civil service psychiatrist position. This bill was vetoed by the Governor stating:

“While I am supportive of ideas to reduce state reliance on contractors, this measure circumvents the collective bargaining process and limits the ability of these departments to deliver critical services. The matters contemplated by this bill are more appropriately handled through the budget and labor negotiations processes.”

Chapter 687, Statutes of 2025 (Assembly Bill 339, Ortega) requires public agencies regulated by the Meyers-Milias-Brown Act (MMBA) to give a recognized employee organization (REO) no less than 45 days’ written notice regarding contracts to perform services that are within the scope of work of job classifications represented by the REO, among other provisions.

Assembly Bill 24 (DeMaio, 2025) originally introduced to establish legislative intent to enact a constitutional amendment to achieve cost savings for the state and balance the budget by, among other things, requiring state government agencies to competitively source or contract out services, this bill was subsequently amended to address an unrelated matter and was held in the Assembly Committee on Local Government.

Assembly Bill 775 (Arambula, 2023) proposed to require the DSH to establish a physician registry for the Patton State Hospital under a three-year pilot program by January 1, 2025, among other provisions. This bill was held in the Senate Appropriations Committee.

Senate Bill 422 (Pan, 2022) proposed to amend existing law relating to the use of personal services contracts by the state by establishing a health professional registry consisting of existing state employees for supplemental, temporary work that would otherwise be performed by health contractors from private company medical registries, among other provisions. This bill was vetoed by the Governor who stated that:

“This bill is unclear on implementation and does not demonstrate how it would significantly reduce DSH’s reliance on contractors. While I am supportive of ideas to reduce state reliance on contractors, the creation of the registry and the determination of associated compensation are matters that are more appropriately handled through the budget and labor negotiations processes.”

Assembly Bill 657 (Cooper, 2021) originally proposed to establish certain prohibitions and reporting requirements relating to a state agency contracting with a professional, as defined, among other provisions. This bill was substantially amended to address an unrelated subject.

Chapter 611, Statutes of 2011 (Assembly Bill 438, Williams) imposed specified requirements, until January 1, 2019, on a city or library district that intends to withdraw from a county free library system and operate libraries with a private contractor that will employ library staff to achieve cost savings.

REGISTERED SUPPORT / OPPOSITION:

Support

California State Council of Service Employees International Union (Sponsor)
Service Employees International Union, Local 1000

Opposition

None on file.

Analysis Prepared by: Michael Bolden / P. E. & R. / (916) 319-3957

1. “Report 2024-114 State Health Care Staffing Contracts: Contract Workers Are a Small but Growing Proportion of Three State Facilities’ Workforces.” California State Auditor, December 4, 2025. ↑