Senate Standing Committee on Labor, Public Employment and Retirement

[Roll call].

Okay. With our quorum. Let's move to our consent calendar so we can go ahead and put on that. Assistant, will you call the roll? Before we get a motion from one of the Members, I just want to note that we are going to consent today. File items number two and numbers five through 12.

Do we have a motion? Thank you, Senator Durazo.

[Roll call].

With a vote of three to zero, the calendar is on call and we will go a bit out of order today. Hearing bills. We'll start with item number. File item number 13. Since I see the good Assembly Member Lowenthal with us, we'll start with AB 3143. Mister Lowenthal, please proceed when you're ready.

Okay, thank you. Madam Chair Members, I am pleased to present AB 3143, which prevents an employer from prohibiting or implementing a policy to prohibit an employee of a restaurant from receiving a gratuity. A gratuity that is paid, given to, or left for an employee by a patron. Tipping is embedded in our culture.

At the majority of restaurants we frequent, we expect to be prompted to leave a tip at the service kiosk for our morning coffee or on our check for dinner. While tipping has become commonplace throughout much of the food service industry, there are still some restaurants that maintain policies to prevent their employees from accepting gratuities.

Many food service workers rely on tips to make ends meet, especially for employees earning minimum wage. And policies to prevent tipping are hurting these employees. Policies to prevent employees from receiving or accepting tips are most common amongst chains.

Despite the legislators success to raise the minimum wage for fast food workers, for example, the combination of Low wages and benefits, often coupled with part time employment, means that many of the families of fast food workers must rely on taxpayer funded safety net programs to make ends meet.

So not only are the polities that prohibit tipping hurting food service employers, it's also hurting taxpayers by allowing for tipping in all restaurants, AB 3143 allows food service employees to earn a critical source of income and takes an important step towards closing the wage gap experienced by underserved and marginalized communities who are disproportionately represented in these Low wage jobs in the food service industry.

This is a common sense measure. It's long overdue. In order to create parity for all food service workers in the restaurant industry.

Mister Lowenthal, do you have witnesses to testify today? Okay. Seeing no witness. Is anyone here speaking in support of the Bill today? Please come to the mic. State your name, organization, and position on the Bill. Seeing none. Is there any opposition here in the room? Seeing none. We'll bring it back to the dais Members.

Well, I'll move the. It's appropriate to move. I can move the Bill, but I love the story you told me on the way over here as to what prompted you and to do this. And I appreciate that you're looking out for our tipped classifications. Thank you.

Thank you, Senator Durazo, who has moved the Bill. I think we can move forward. Assistant, will you call the roll? Sorry, would you like to close, Mister Lowenthal?

Respectfully ask for your aye vote.

[Roll call].

All right. Unfortunately, I couldn't have been here to hear testimony, so I'm going to lay off as of right now because I'm not sure of it. So I apologize. I had to go present.

[Roll call].

Okay, that Bill is on call with a vote of three to zero, and the other Members will vote when they return. Thank you, Mister Lowenthal. Okay, we have Senator Durazo, who will be presenting on behalf of assemblymember Ortega for AB 1870. I'm sorry, not that one. AB 3234.

Thank you, Madam Chair. As you said, I'm presenting on behalf of Assemblymember Liz Ortega, a Bill that simply requires companies who voluntarily undergo a social compliance audit to post those findings of the audit relating to child labor to their website.

A social compliance audit is a non governmental audit by a private firm that reviews a facility to ensure that an employer is compliant with all applicable child labor laws. This Bill provides transparency, allowing consumers to support companies that follow child labor laws and company shareholders to know how they are performing and where they may need to improve.

With that, I respectfully ask for your aye vote.

Thank you. Senator Durazo, do you have a witness with you today? Okay, let's see. We'll go to the room. Is there anyone here speaking in support of the Bill today? Please step forward. Okay, seeing none. Anyone speaking in opposition of the Bill today. Okay, we will come to the dais. I will move the Bill.

Do we have a motion?

I can't. We have a motion from Senator Cortese. Assistant, will you call the roll?

[Roll call].

Okay. With a vote of four to zero, this Bill is on call. Thank you, Senator. Okay, we are going to take the consent calendar off call so that Senator Wilk can vote. Assistant, please call the roll.

[Roll call].

So we have a vote of four to zero on the consent calendar. We'll put it back on call. It looks like we're still waiting for presenters, so we will recess Committee until the presenters show and come back, hopefully in the next five or 10 minutes. Labor Committee is back in session. Seeing assemblymember Kara in the room.

We are ready to proceed. AB 1516. Ready when you are, assemblymember.

Thank you so much, Madam Chair and Senators, I'm proud to present AB 1516, which would require the labor and Workforce Development Agency to convene a working group to study and report to the Legislature on raising the minimum wage and ending the subminimum wage for incarcerated workers.

The working group would be comprised of state representatives, organizations representing Low wage or immigrant workers, organizations advocating for the rights of incarcerated persons, and an organization representing employers. The group's final report to the Legislature will guide lawmakers in enacting a state minimum wage that truly reflects what working families need to make ends meet.

We know that workers of color are disproportionately paid the minimum wage. And these workers deserve a living wage that can lift them out of working poverty. Even worse, incarcerated workers who do the same work as other workers, including fighting some of our worst wildfires, are paid considerably less than the minimum wage.

This archaic practice, with its legacy from slavery, must stop. AB 15 and 16 will lay the foundation for critical discussions around any future minimum wage reform. The Bill currently has no opposition, and testifying in support today are Saru Jayaraman, President of one fair Wage, and John Cannon, outreach coordinator with legal services for prisoners with children.

Assembly Member witnesses, please have a seat at the table.

All right. Well, thank you so much, Assembly member Kalra, and all of you, for hearing us out. I'm with one fair wage. We're a national organization of 300,000 restaurant and service workers.

1000 restaurant owners also teach at UC Berkeley and have written five books on the issue and have some if anybody, would like to read about the background.

But I'm here also on behalf of the California Living Wage for All Coalition, which is 35 organizations of economic, criminal justice and gender justice organizations, all working to to raise the minimum wage in California closer to the cost of living and end that very last subminimum wage for incarcerated workers.

It does include now the UAW, the United auto workers, and working very closely with SEIU. So we are experiencing a post pandemic moment in which workers are demanding a lot more from restaurants. 1.2 million workers walked off the job in the restaurant industry. Thousands of small businesses have had to raise wages to recruit staff. Staff.

We need a level playing field that would bring all workers up closer to the cost of living, which has skyrocketed post pandemic and allow workers to come back to work in the restaurant industry and other Low wage sectors. We have been seeing this affordability crisis across the country.

We are leading initiatives in Washington, Minnesota, we have an dollar 18 initiative on the ballot in Arizona. In Washington state, Tukwila and Renton already passed 20 for all. Kings county, which includes Seattle, already passed 20 for all. We're actually behind on this issue here in California. Minnesota and Massachusetts are both moving $20 bills right now.

And we as California, if you look at the MIT living wage calculator, statewide, we're at $44 an hour for one person in a two parent, two child household to cover just the basics. And it's higher. In San Francisco, it's dollar 48 an hour to cover the basics.

Even in Modoc County, the cheapest county in California, it's dollar 35 an hour. So we are, of course, very happy that fast food workers got $20 an hour. Thank you so much for that. Kudos to SEIU and the fast food workers.

And they have been in agreement with us that now we need this for everybody because workers across the Low wage sector are saying if fast food workers can get 20, we absolutely need that, too.

We cannot have $16.50 in a state next door to Arizona with three times the cost of living in Arizona being at 20 and Washington state being at 20. We need a living wage for everybody, including incarcerated workers, who, as you're going to hear, have been left out all along. And you don't need to take it from us.

Your own Legislative Analyst's office released a report two months ago saying the minimum wage is too Low. And very heartbreakingly, minimum wage workers in California are no longer able to afford to have children, given the very high cost of living. So we want California to be a leader, not a follower. In this moment, we're a follower.

We're so grateful that we can at least study the issue to get closer to where we are. And I want to thank John and our Members for coming today. Thank you. You may proceed.

Good morning. My name is John Cannon. I'm the outreach coordinator with legal services for prisoners with children. But before holding this position, I was in prison for 10 years from a young adult. From the moment I entered the prison, I was assigned job duties.

Initially, I was excited to get these jobs because I would be able to pay for my hygiene products or my food, or so I thought. But when reality set in, I was given different positions. My first position was yard labor. Where you doing work outside? My second position was working in the kitchen.

I did maintenance work, and eventually I did three years fighting fires and wildfires in California. From making $0.08 an hour from the yard labor jobs to my highest paying job was the firefighting job, where I made a dollar an hour. It just wasn't enough to even buy food or hygiene products.

It became clear I was getting exploited for my labor. When I committed my crime, I understood the consequences. I accepted I'd be confined to prison cell and separated from my family, who I love dearly. But being exploited for my labor is not a just consequence.

My children, they still needed me out here on the outside world, although I couldn't be there physically. Me being a full time worker, I should have been able to take care of my family and take care of my kids still, even from in there. So even taxpayers didn't have to.

Upon my release, I had nothing to show for these years of hard work. Had I been paid a living wage, I would have re entered society as a more stable, productive Member. But instead, I faced reentry with no money, nowhere to stay.

And those skills I learned didn't even transfer to jobs out here because I wasn't able to get those jobs, it significantly hindered my ability to rebuild my life. But being forced to work for little to no pay gave me a distorted view of the workforce.

The lack of fair compensation left me feeling undervalued, disillusioned about my place in society. Everyone deserves a fair wage for their work, regardless of the situation. I could have been a taxpayer, and I could have been able to pay my restitution as well.

Supporting this Bill is not just about fairness, but it's about upholding human rights and creating safer communities. So I urge you to help pass this Bill.

Thank you. Thank you so much. Looking in the room now, is there anyone else here who wants to speak in support of the Bill? Please step to the mic. State your name, organization and position.

Alissa Moore. All of us or none, in support.

Louis Tedini, one fair wage, in support.

Are there any opposition witnesses who wish to speak on this Bill? Okay, anyone in the room in opposition who wants to comment on this Bill? Okay, seeing none, we'll move to Members. Senator.

Thank you, Madam Chair. Well, I want to appreciate the author for bringing this forward and all of your work across the country. I just want to add one more element of the impact of having such Low wages. When you're unemployed, your Unemployment Insurance depends on what your wages were. So that that has a big impact.

And we could see that in the pandemic. Paid family leave, you know, impacted by what your wages are even later in life, Social Security, what your wages are, have an impact on so much in people's lives and almost condemns people to live in that poverty forever.

So I appreciate this, and I would gladly move the Bill when you're ready.

A motion from Senator Durazo. Senator Cortese, would you like to speak?

Thank you, Madam Chair. I, too, want to thank the author for putting this together, and I wanted to, of course, the whole Bill is something I support, but to pay attention to the situation with the incarcerated, which we've tried to deal with over the last couple sessions here in the Legislature, we've come close and really haven't been able to deal with it.

I think it's a travesty. I think it's, obviously, it's a form of modern day slavery, and I just appreciate you. You could have easily, you know, come forward with a Bill without that, maybe have a little easier path somewhere along the line. I hope that's not the case. I hope everybody embraces it.

But again, appreciate that aspect of the Bill especially. It's up to the chair. zero, that's all I have. Madam Chair, it looks like the witness wants to speak.

We have one more Member who wants to speak. Yes.

So I'm somebody who believes in the free market, so I'm not going to be able to support your Bill today, but we do have to address the compensation for those who are incarcerated. Thank you for sharing your story. I so sorry you went through that and that, I mean, it's just so unjust. It's just so unjust. So thank you.

Senator. Thank you, Senator Wilk.

To both. I just wanted to say thank you so much for mentioning that, both of you and the fact that it's been hard to get across the finish line.

One of the things we've been missing is a fiscal analysis, cost benefit analysis, that doesn't just show the cost to the State of paying incarcerated workers a wage, but the tremendous savings that you heard that come from not having to be in debt when you come out in terms of restitution, paying child support.

So we are both working with UC Berkeley's law and policy center to conduct some of that initial analysis that will help feed into the study that the study Bill helps to conduct. That's what we've been missing all along that we hope to bring to you next session.

Thank you so much. And thank you, Members, for your comments. Would you like to close?

Thank you, Madam Chair. And looking at the dais here, I see folks that I know that have worked on this issue and cared about this issue a very long time, and I appreciate the comments regarding incarcerated workers. It's certainly not a free market system when we talk about how our incarcerated workers are treated.

And so I respect that thought from Senator Wilk. And, you know, it's also complex for business owners. If you drive San Jose, you drive for 45 minutes, you can literally drive through 678 different jurisdictions that have completely different minimum wages. It's convoluted, it's confusing.

I think that not only is the right thing to do in terms of economic justice, but I think in terms of efficiency in creating an economic system that actually makes sense. With that respect, we ask for an aye vote.

Thank you so much, Mister Kalra. Thank you for your advocacy and response. And with that assistant, we have a motion by Senator Durazo. Will you call the roll?

[Roll call].

Okay. With a vote of three to one, this Bill is on call. When the Members come, we'll follow it up. Thank you. Okay, we're waiting on Members. So the labor Committee will go to a short recess, about 10 minutes, and we'll be back when the Members arrive.

I think that's 30. I think that's 30 seconds. So we're going to now move to item number four, AB 1890 by Assemblyman Joe Patterson and with the recommendation of do pass to appropriations and with that the floor is yours, sir.

Great. Well thank you very much Mister chair. I don't know the decorum here, call you Mister chair while you're chairing the Committee, but thank you very much. And Senators. Great. I am Assemblyman Joe Patterson, not to be confused with Jim Patterson, but I'm here to present Assembly Bill 1890 sponsored by friends here at the operating engineers.

And essentially what it does is it requires a notification to dir when there's a change order of $10,000 or more. And as a former City Council Member myself, I actually recognize the value of that in bringing the transparency to change orders that occur, especially on large dollar projects.

We would often give spending authority to the city manager of whatever the bid was plus 15%. But if the amount came in below 15%, we honestly wouldn't know about. Didn't mean we didn't have access to it. But you know, you got a lot of other things going on.

So when I heard about this opportunity to do this Bill, I was very interested in it because of the transparency that it provides for the people who are paying these bills at the end of the day. So I'll leave it with that and I'll turn it over here with Matt Kremens.

He's with the California Nevada conference of the operating engineers. Testify in support of the Bill.

Thank you very much Mister Chairman and Members, Matt Cremins here on behalf of the California Nevada Conference of Operating Engineers. We are the proud sponsors of AB 1890, which will provide needed transparency around situations in which details of public works project change after the project has begun.

By way of brief background, existing law requires all awarding agencies of public works projects to notify the Department of Industrial Relations of any contract that they intend to enter into within 30 days of awarding the contract, but no later than the first day in which the contractor has workers employed on the project.

And these notices are required to contain a variety of information that's intended to aid in the enforcement of public works laws, including information related to contractors and subcontractors, information related to the anticipated project cost, information related to the estimated start and completion date, and any other information that the labor Commissioner Deems appropriate to assist with compliance efforts.

And I would note at the front end here that submission of these notices is done online under existing law. And the labor Commissioner's website already has the ability today for awarding agencies to update their public works project registration and while these tax.

While these public works reporting requirements are critical to ensuring that taxpayer dollars are being properly utilized and that the laws that accompany these projects are being followed.

Existing law is silent on situations in which details of these projects change after the project has already begun, and in our minds, this lack of clarity leaves the door open for unlicensed contractors to be added onto projects after the fact, with the public and the labor Commissioner having no knowledge of a change having occurred.

So with that being said, AB 1890 simply seeks to ensure that the Department of Industrial Relations has full and accurate information related to the projects that they are expected to monitor.

Specifically, the Bill would require awarding agencies to update their projects and situations in which a contractor or subcontractor is approved to be changed by the awarding agency, and it would require them to update DIR in situations in which their project changes by $10,000 or more.

Ensuring that DIR has up to date information related to these projects will help ensure that workers are protected and that those projects and that taxpayer dollars are not going to contractors with egregious labor violations. Happy to answer any questions or concerns and would respectfully request your I vote great.

Thank you very much. Anyone else here in the room that like to add their me too testimony and support of the Bill, just go to the mic right over there.

Good afternoon, Mister chair. Mike West on behalf of the state building trades in support. Thank you.

Elmer Lizardi on behalf of the California Labor Federation in support.

Good afternoon, chair and Members Martin Vindiola on behalf of the California State Association of Electrical Workers, the Western States Council of Sheet Metal Workers, and the California State Pipe Trades Council in support.

Now we have our cleanup hitter coming up. Oh, you're tweener. Okay. I kind of jumped the gun on that.

Josh Horowitz, Los Angeles Unified School District. I want to thank the Committee and author.

We've worked out some amendments to address the fact that Los Angeles, as a legacy labor compliance program with a PLA, is already responsible for overseeing its own labor compliance questions as they come up, meaning this would be duplicative for a public agency like ours.

So those amendments are not in print, but we have a commitment that they will be, and we thank the author.

Great. Thank you so much. Anyone here in opposition? You can be primary. Okay, we're gonna give you two. I'm in a good mood, actually. They told me I have to give you two.

So can you be in a bad mood then in this one? I'm just kidding.

Damon Conklin with the League of California Cities first and foremost want to. Thank the Committee for their work, the author and his staff for working with us and describing kind of the challenges that they have perceived with the industry.

The intent, as we understand it, is describing this kind of lack of transparency for unlicensed activity and ensuring that law abiding contractors are engaged in public work projects. What 1890 does not do, which we see as a deficiency in the Bill, is required Department of Industrial Relations to do anything with it.

CSLB is the licensing body in the state, decides whether a contractor has a suspended license or VoC license. If there's communication between DIR and CSLB with some sort of collaboration with this information, I can see a gap being bridged, but also protections for subcontractors from being arbitrarily replaced on a project.

Those are already well protected in the public contract code 4107 to ensure that subcontractors are just not willy nilly thrown off a site, but are only done so because they're unlicensed or they have shoddy work or whatever it may be. And so again, adding a notification requirement to dir with this change doesn't with that information does what?

So again, we see some gaps here. Also, 1890 establishes a $10,000 change order threshold. We don't know where that threshold came from. There are some industry standards. Caltrans has a a division of construction approval that must review projects and change orders in excess of $200,000. It's a common practice.

I don't know about the City of Rockland, but other cities at least have a floor with a percentage that are tied together. So we would say if there's a floor with a 2025 percentage, I think that would be somewhat in line or consistent, consistent with what we see by other jurisdictions. And with that we respectfully oppose unless amended.

Only 13 seconds over. That's good. Are you going to do it from there? I can wherever you're comfortable.

Thank you. Chair Anthony Tannehill with California Special Districts Association in the same post, unless amended with my colleague, also with portfolio for California State Association counties who couldn't be here today. I echo the sentiments and comments of my colleague who just spoke.

A lot of feedback from my Members is that we're all trying to get these projects done. We're all kind of on the same team there. We need each other to do the people's work in business.

But the threshold of $10,000 is, could be many hundreds of opportunities to run afoul of this and the penalties depending on the size of the project.

As my colleague noted, there's a lot of other analogs and procedures that set those sort of times that you need to agendize or come back to your board your elected board, things like that. So a floor and a percentage might make the Bill much more manageable for our public servants.

And so we look forward to continuing the conversation with the time that's left to achieve that. Thank you, chair.

Anybody else in the room that wants to add a me too opposition seeing none, pull it back to the Committee for questions, comments, concerns. Senator Durazo.

Yes. Thank you. Thank you, assemblymember, for bringing this up. My question is related to the, this $10,000 threshold that's being done. What is your experience? I mean, why pick 10,000? It seems very, very Low. Like extremely Low.

So I'm not familiar with industry to be able to say that's the level that would allow us to carry out what the goals are. So if you can either of you or both of you talk about that, because it does seem, I don't know how often, depending on the project, how often change orders do come up.

Many years ago, when I was at the airport, Commission change orders came up a lot, but usually it was a higher amount. So if you can speak to that, I appreciate it.

Yes. Thank you very much. I just want to say, you know, obviously, through the course of this Bill, I've met with many individual cities on it that, in my view, doesn't have the same level of concerns. But that's it. I always meet with opposition on the bills, and we're trying to figure it out.

I will tell you right now that we have offered a 10% instead of $10,000. And, you know, the response we got from our office from one of the opponents was that it's headed the right direction, but to other staff was that it actually made the Bill worse. So I can't, you know, negotiate with what?

I don't know what I'm looking at. That said, I met with one of my cities on Friday, and they gave me something that I think is, you know, actually actionable. And so because of that, we're going to work together. But by the way, we offered the 10% on our own. On our own.

Right, when we found out the opposition, because this went through the Assembly on consent. And the day I learned of the opposition was the same day that my City Council Members received calls from the associations.

And so I'm willing to work on this measure and consider that floor as well as to make sure it's not too, you know, small, $5,000 or something like that. I mean, I'm totally okay with that. So my thing is I'm willing to keep working on that totally open to it. And.

But the subject matter expert, in terms of the $10,000 number, he'd have to answer that, no.

Thank you for the question, Senator. We started with the $10,000 threshold because we wanted to be sure we were capturing smaller projects that could be below the apprenticeship threshold. So under existing law, apprentices are not required on projects that are under $30,000.

So we wanted to make sure that the threshold was Low enough where if there was a $22,000 project that received a $10,000 increase, the labor Commissioner. The labor Commissioner could be made aware that then they are expected to enforce apprenticeship laws. But as the Assembly Member said, this is a starting point from our end.

We have always been happy to work on this threshold. We just have not been given a number from the opposition that will work on their end yet. Thank you.

Comments?

Thank you, Madam Chair. I'm going to support the Bill today. It seems like there's probably a slightly more elegant solution, and it sounds like people are working on it in terms of what's not arbitrary, but, you know, a number that's obviously not going to work on or maybe be unnecessary and some contract size is too Low or, you know, but it sounds like the real goal here is just to trigger a review when you hit $30,000.

So maybe there's a way to essentially just write that language into the Bill. That said, I'll support it and keep it moving along if we can today. Thank you.

Thank you. Senator Cortese, did we get a motion on this move by Senator Wilkes assistant? When you'll call the roll, please close Assembly, Mayor Patterson.

Zero, great. Well, hey, thank you. Obviously, the proponents and the Committee staff as well, you know, obviously, we can't get things through this place without working together and very interested in continuing to do that.

And we will consider, we will work with the opposition even when it passes this Committee, to see if we can come up with something that is a little bit more tenable for them. So with that, I respectfully ask for your. I vote.

Thank you. We have a motion by Senator Wilk, assistant will you call the roll?

[Roll call].

First Bill to get out on the first try, five to zero. This Bill is out.

Great. Thank you and also thank you for all your patience getting across the street over here. I really appreciate it. Thank you.

Okay, Members, we're going to open the roll to start with our consent calendar. Assistant, will you. Assistant, will you call the roll?

On the consent calendar, which includes file items two and also file items five through twelve? The current vote is 4-0. Senator Laird? Aye. Laird, aye.

A vote of five to zero. Our consent calendar is out. Now we're going to move to AB 3134. I'm sorry, AB 3234. Assistant, will you call the roll?

On file item three, the motion is do passed to the Committee on Appropriations, Senator Laird? Aye. Laird, aye.

Okay. With a vote of five to zero, that Bill is out. Next we will move to AB 1516. Assistant, will you call the roll?

On file item one, AB 1516, the current vote is three to one, with the Chair voting aye. The motion is do passed to the Committee on Appropriations, Senator Laird? Aye. Laird, aye.

Okay. With a, Bill of four, vote of four to one, that Bill is out. And last, we're going to move to AB 3134. Assistant, please call the roll?

On AB 3134, the current vote is three to zero, with the Chair voting aye. The motion is do passed to the Committee on Appropriations, Senator Wilk? Senator Laird? Laird, aye.

With a vote of four to zero, that Bill is out. And that is the final one of the day.

Okay, that concludes our agenda for today. Thanks, everyone, for their testimony. If you were not able to testify, please know that you can submit any testimony in writing and with that, our meeting is adjourned.