Senate Standing Committee on Labor, Public Employment and Retirement

Senate Committee on Labor, Public Employment and Retirement will come to order. Good morning everyone. Good to see you. I want to start with a disclaimer.

We have many committees going today, many bills being presented and so we are going to have a little bit of musical chairs probably with many of our presenters and with our Committee Members as well. So please bear with us.

I want to say we will have 13 items on our agenda today and we do not have a quorum. So we will start. Today's hearing is a Subcommitee. Thank you Senator Strickland for being with us. I think given where we are, we will start with file item 11, SB648, my Bill. So I will hand the gavel over to you as I present.

Madam Chair. You may open.

Thank you so much, Senator. Good morning Members, Member and friends. I am proud to present SB 648 which enhances worker protections by providing the Labor Commissioner authority to recover workers stolen gratuities. Currently, the Labor Commissioner can issue citations for most workplace wide violations of labor law, including unpaid wages over time, missed meal or rest breaks.

But this is a critical gap in our enforcement. Despite our legal efforts, wage theft remains a crisis across California, but particularly for tip workers, costing workers billions in stolen income each year with minimal accountability for those very bad actors.

And we know that creates an uneven playing field for those employers who are doing the right thing, and many of them are. Gratuity theft is one of the most common forms of this exploitation, particularly among minimum wage and low wage service workers. In Los Angeles alone, nearly 1 in 55 low wage workers has experienced stolen tips.

And we know those jars that might sit right in front of the cash register or when we write our gratuity, some of us are, you know, on the 15%, some of us go to 22. Our expectation is good service deserves a reward.

And we want to reward and support those workers when they provide good service for those workers. We know that every dollar counts and many are earning minimum wage, tip wage. And while trying to survive in cities when the living wage can reach up to 30 to 40 an hour.

And there have been studies, MIT in particular, the most recent, that shows that a living wage is upwards of 35 to $42 an hour, stolen tips can mean the difference between affording rent, paying gas and putting food on the table in a state where affordability is already out of reach.

And we have certainly heard that from our constituents across the state. We have to ensure that workers receive income that they have earned and is essential to helping them make the ends meet. The labor Commissioner's office receives tens of thousands of wage theft claims annually, many involving lost gratuities.

But without a clear authority to act, those workers are left without any recourse. This Bill, SB648, empowers the Labor Commissioner to issue administrative citations for stolen tips, including efficiency, accountability and access to justice for workers who can't afford private legal representation. And one might think it's, you know, lawyers don't want to take a case on tips. Right.

And so it's hard to find a lawyer who's going to represent you on tips. Right. And that's why the state has to step in. Affordability continues to be a great challenge. And this also ensures that our most vulnerable workers are not shortchanged and that the consumers will and intention is actually actualized in the pockets of those workers.

With me today is Sarah Flocks with the California Labor Federation, who will speak and I enthusiastically ask for the aye vote of this Committee.

Witnesses in support.

Mariko Yoshihara on behalf of the California Employment Lawyers Association and support.

And pardon me, Elmer Lizardi here on behalf of the California Federation of Labor Unions. Sarah, no worries. Sarah Flocks is in the middle of another Committee, so she could make it. But obviously we very much enthusiastically support this Bill. We asked for an aye vote. Thank you.

Kristin Heidelbach here on behalf of UFCW Western States Council and support.

Good morning. Shane Gusman on behalf of the Teamsters and Unite here in support.

Thank you. I don't see any opposition on file. Is there anybody that's here in opposition? Seeing none. Madam Chair, would you like to close?

Thank you, Mr. Acting Chair. I want to thank this Committee and particularly the staff for their thoughtful analysis. And we will continue right on our mission to inform all forms of wage theft in the state and to ensure our Labor Commissioner has the adequate tools to enforce these robust protections, particularly for our most vulnerable workers.

And I ask for your aye vote.

We don't have a quorum yet, but as soon as it does, you have my aye vote. Thank you. Appreciate that. And she'll hold me to it. So, audience, the chair is coming back and.

Okay, I see one amazing Member here. I just want to make an announcement as the Senator comes to the podium here. If you have a Bill and Labor Committee Members, please come on down. We need you in the room. 2200. We have 13 items up today.

So we hope that you come so that we can begin to move this file forward. Thank you. Thank you so much for being here Senator. We are going to look at five file item number five, SB 6332. Senator, you may proceed.

Thank you. Well, good morning, Madam Chair, members, thank you for the opportunity to present Senate Bill 632 which establishes a workers comp rebuttable presumption for hospital employees to provide direct patient care in acute hospital setting for specified injuries and illnesses.

This legislation is crucial to ensuring that frontline healthcare workers receive timely medical treatment and workers compensation benefits that they deserve when suffering from job related illnesses and injuries. Workers compensation is a form of insurance that provides medical benefits and wage replacement between employees injured in the course of employment, regardless of who's at fault.

Hospital workers, particularly nurses, face high risks of occupational injuries and illnesses, yet must navigate complex barriers to prove workplace causation. This results in delayed or denied claims, worsening health outcomes and financial strain, and exacerbated staffing shortages. For several decades, California has established expanded workers compensation presumptions for first or sonic professions.

Now it's time to do that for nurses. And I have some witness here here present Sandy Reding, Board President for the California Nurses Association and Carmen Comsti with the California Nurses Association as well. And if my witnesses can please come forward.

Absolutely. And before as they come forward, I just want to make sure you're open to accepting the amendment.

Yes, I accept the committee amendments. Thank you.

Thank you so much. Please come to the podium. Please come to the podium and you have two minutes.

Thank you. Good morning and thank you chair and members. I'm Sandy Reding, President of the California Nurses Association and a working operating room nurse serving my community for over 30 years. As nurses, we dedicate our ourselves to serving our community and protecting our patients. The hours are long and the work is both physical and psychological.

We place ourselves at risk for injury and illness every day and we're very happy to do it. We love our jobs and our patients. We lift, reposition and move patients. Then over time, nurses develop chronic back injuries or tear muscles while caring for others.

I've known too many nurses who have broken bones, concussions or trauma after facing workplace violence, yet providing these injuries were work related in order to receive workers comp. It's often an uphill battle and I'm just going to go off script, but I'll stay to my time or you can ping me.

When I was working through the pandemic when nurses got sick and myself personally if I got sick, when I got sick, we had to go through workers compared and we felt like through the interrogation process that it was our fault even though we didn't receive the proper protective equipment and had to reuse things.

So having said that, you know, we work very hard and we're willing to do that and we're willing to come to work every day even though it was a novel virus and we didn't know. We lost friends, we lost community members. We had the refrigerator trucks out there because our morgues were full.

So I guess what, what we're here to do today is ask for you to have our backs.

We're going to be there for you every time you need us, but we need you to support this bill so that we can know that you have our backs and will continue to go to work so that we can be more protected.

People trust nurses with their lives, but when we get hurt or sick while doing our job, we're met with delays or denials of workers comp before we even file a claim. Employers discourage us from doing so. After filing a claim, we're harassed and interrogated. We're told to prove the exact moment the injury occurred.

And you are over on your time. So wrap up as soon as you can.

Okay. So injured nurses are forced to keep working in pain. We don't want that to happen. And when hospitals claim that the current workers comp process works fine and it's because it works for them and not workers. So thank you for listening and reminding me, and I hope you have a good day.

Thank you.

Thank you. Chair and members. I'm Carmen Comsti, Assistant Director of government relations with the California Nurses Association, the proud sponsor of SB 632. Compared to workers overall, hospital nurses experience far higher rates of infectious disease, musculoskeletal injuries, workplace violence, and exposure to harmful substances. But too many nurses face challenges when seeking workers comp benefits.

When we surveyed over 2,000 hospital RNs, over a third said their workers comp claims were denied or otherwise not approved. Of these nurses, 59% said they had trouble proving their injury or illness was work related. These hurdles result in delayed treatment and recovery for nurses or nurses having to pay out of pocket for care.

Some nurses scramble to find an attorney to fight for their benefits. But even then, it can take over a year to appeal a denial. Without prompt care, their injuries can get worse and they may have to leave the profession altogether. As Sandy described, hospital employers engage in delay and denial tactics, discouraging workers from filing claims.

Over one third of hospital nurses reported that they did not file a worker's comp claim after their most recent injury or illness on the job, with nearly half saying they were worried that they wouldn't be covered or that they'd have trouble proving their claim.

By creating presumptive eligibility protections for direct care hospital workers, this bill simply shifts the burden of proving work relatedness from workers to employers. These protections help ensure that nurses who get sick or injured on the job can get the timely benefits and care they need to continue serving their communities.

Importantly, these protections already exist for male dominated first responder professions, including firefighters and peace officers. In a profession of over 90% women nurses face similar risks of exposure to infectious disease, injury and trauma as their first responder brothers, sisters and siblings. Nurses simply deserve these same protections. Thank you. And I ask you to support this bill.

Thank you. Now, anyone else here in support of this bill, please step forward. State your name, affiliation, and me too, so only a few seconds.

Members. Thank you, Madam Chair. Members. Meagan Subers, on behalf of the California Professional Firefighters. In support.

Shane Gusman, on behalf of the Teamsters and the Engineers and Scientists of California. In support.

Jason Marcus, on behalf of the California Applicants Attorneys Association. In support.

Kristen Heidelbach, UFCW Western States Council, in support.

Elmer Lazari, on behalf of the California Federation of Labor Unions, in support. Thank you.

Nicole Vance, pediatric critical care nurse, in support.

Jane Churchon, neonatal ICU nurse, in support of the bill. California Nurses Association.

Hi, I'm Juliet Uyen from Kaiser Roseville NICU Department. I support this bill. Thank you.

Michelle Sanchez, registered nurse, UC Davis Pediatrics. And I support the bill.

Hi. Andrea Santag, UC Davis registered nurse. I'm here to support the bill.

Melissa Beebe, chief nurse rep at California Nurses Association, UC Davis Medical center, oncology nurse. Strongly support this bill.

Andreani Ribo at UC Davis Medical Center. I'm a registered nurse. I support the bill.

Melissa Silva, registered nurse at UC Davis. I support this bill.

Frederick Tristeza, registered nurse from UC Davis Medical Center, and I support the bill.

John Bergmann, emergency room nurse at Kaiser South Sacramento, and I support this Bill.

Meredith Salazar-Baker registered nurse at Adventist Health in Rideout in Marysville, and I too support this bill. Thank you.

Deborah Aguilar Kimbrell from Woodland Memorial Hospital, registered nurse, and I support this bill.

Theresa Klaus, registered nurse at Woodland Outpatient Surgery Center, and I support this bill.

Gloria Morrison, nurse of 20 years, employee of Dignity Health for over 27 years, and I support this bill.

Janelle Owens, I work at Woodland Memorial Hospital, and I support this bill.

Shahira Zarinkhil, I'm a nurse at Woodland Memorial Hospital, been a nurse for 15 years, and I absolutely support this bill.

Karen Boxley, RN, 34 year, retired, Dignity Health. I support this bill.

Heather Stark, Roseville Kaiser. I support this bill.

Tina Rufo, Roseville Kaiser. I've been a nurse for over 40 years. I support this bill.

Holly Souza. I've been a nurse for 34 years. Roseville Kaiser. I support this bill.

Okay, that looks like that's it for support. I want to say this is the probably the safest room to have a hearing today. We have all of this medical profession in the house. I feel very taken care of already.

Before we move on, senator, if you don't mind, we need to just make sure we have a quorum while we have our members here. Assistant, will you call the roll?

[roll call]

And do we have a motion for consent items? Assistant, call the roll.

Today we have two file items on consent. File items 12 and 13 on the consent calendar.

[roll call]

Madam Chair, I'd like to move file item 11 by the chair. SB 648.

We'll hold that right there, senator. Right now, I just want to just let folks know we have a consent call. The calendar's on call. I'm sorry. And with a vote of 3 to 0. And thank you for your motion, Senator. Assistant, can you call the roll the.

This file item 11, SB 648. We've already heard the bill.

On file, item 11. The motion is do pass to the committee on the judiciary.

[roll call]

Okay, we have a vote of 3 to 0, and that bill is on call. Thank you so much, senator. And. And witnesses. We just want to make sure that we are doing the committee's work while we have folks here. Next, I want to call up opposition to this bill. Is there any opposition? You speaking on this bill?

Witness. Wonderful. You have two minutes.

All right, thank you. Good morning, Madam Chair and members. I'm Erika Frank. I'm vice policy Vice President of Policy and Legal Counsel with the California Hospital Association. And I'm speaking today on behalf of our more than 400 hospitals and health systems in opposition to SB 632.

I first want to applaud all of the speakers and the nurses that have stepped forward today and recognize that we applaud all of the hard work that you perform, and we recognize what you do on a daily basis and assure you that worker safety and wellbeing is prioritized in all that our members do.

And although hospitals must follow strict and comprehensive safety procedures and protocols, which makes hospitals one of the most controllable environments, work related injuries and illnesses do occur. And when they do, we do encourage and we want our employees to seek the care.

And I'm sorry to hear that some of the nurses felt that they couldn't or that they felt harassed. There's protections in the law that prevent any form of retaliation from any employee who is seeking workers comp coverage. And such activity is not something that CHA or our members support.

So to be clear, our disagreement today is not about ensuring that our healthcare workers receive prompt care and wage replacement benefits when necessary when there's a workplace injury.

Our disagreement really rests upon the fact that what we're trying to do here, what SB 632 would do is upend a longstanding, an effective system that provides timely medical care and compensation with no demonstrable reason. In fact, the effectiveness of the current system is reflected by hospitals maintaining approximately a 90% approval rate on all claims.

And this is also reflected by the number of letters that were submitted to the committee where our members explained and identified what their approval rating is. The system works. And frankly, imposing a rebuttable presumption also discounts all the preventive measures that our hospitals are already following to ensure that our hospital employees and our patients are safe.

In addition, SB 632 will also allow these presumptions to follow an employee even after they are no longer working for us for a predetermined time.

You're over about 16 seconds. If you could wrap it.

Thank you. Thank you. So this presumption is going to be a significant cost driver and will make hospitals who are already bracing for likely Medicare and Medicaid cuts even more vulnerable. And we respectively request your no vote. Thank you.

Thank you. Anyone here as a witness? Second witness in opposition. You have two minutes.

Thank you, Madam Chair. Members, my name is Jason Schmelzer and I'm here today on behalf of the California Coalition on Workers Compensation and PRISM. I want to associate my comments or myself with the comments made by the California Hospital Association.

But I do want to do a brief examination of history because this is the 10th iteration of this bill that's been introduced in the legislature over the last 16 years. I want to do a quick bit of history. The last two versions in 21 and 22 failed to pass out of the Assembly Insurance Committee.

The two prior versions before that in 2019 and 2020 earned only one I vote out of four, a possible 10 in two hearings in this committee. The version before that, which only covered one portion of this bill, was vetoed by Governor Jerry Brown. The four prior to that all were defeated in the legislature.

Now, these outcomes aren't the product of an insensitive legislative or executive branch that somehow intent on depriving hospital workers of equitable treatment in the workers compensation system. The failures with the proposal have been pretty consistent over time and I'm going to go ahead and run through them really quickly.

One the authors and sponsors have failed to establish that hospital workers are experiencing bad outcomes generally, let alone specifically with the types of injuries that are covered by this presumption.

Employers have repeatedly recommended over the years that this issue be studied by the Commission on Health and Safety and Workers Compensation, which is a joint labor management committee that studies complex issues and has helped the Legislature grapple with some of these complex workers compensation policy issues. That has not been done.

Instead, what we've seen is the sponsors bring forward anecdote which is not data. It's a collection of individual stories. This is a system that is overflowing with specific data and analysis on the performance of the system. But I just want to highlight they keep bringing forth anecdote.

Our workers comp system isn't perfect, but there is actually no evidence that this bill is needed. Despite 16 years, five bill authors and a lot of time and effort spent by committees reviewing these proposals, the burden of proof needed to establish a presumption has not been met and you should reject this bill again. Thank you.

Thank you. Right on time. Thank you for that. Anyone else speaking in opposition? Me too, state your name. Affiliation.

Good morning. Ashley Hoffman on behalf of the California Chamber of Commerce, respectfully in opposition is a cost driver bill. Thank you.

Good morning. Chair and members, Laura Curtis on behalf of the American Property Casualty Insurance Association as well as the California Association of Joint Powers Authority and respectful opposition thank you.

Nicette Short on behalf of Loma Linda University Health, the Alliance of Catholic Healthcare and St. Agnes Medical center, in opposition.

Good morning. Meghan Loper on behalf of the United Hospital Association in opposition.

Thank you. Madam Chair. Members. Sarah Bridge on behalf of the Association of California Healthcare Districts and the California Special Districts Association, respectfully in opposition. Thank you.

Mckay Carney on behalf of Cedar Sinai, respectfully in opposition.

Thank you. I will well yeah, I wanted to just ask members, are there any comments that you have on this bill, please.

Through the chair, if I could have the Hospital Association come up.

Sure.

Testimony today says that there's no data or study about nurses who are injured on the job and be denied benefits. I want to know, what if we all love the nurses and I just. My mom and dad just passed away and I couldn't thank the nurses enough. What is the process now?

You mentioned a stat, and I want to get back to it because I didn't catch it. Said something about 90%. What's that stat that you're talking about? 90% approval.

That's correct. So of all claims that are filed, we have a 90% percentage of approvals. So of all of the claims that are filed, we're approving 90% of them.

90% of them. Okay, and then what is the process right now if a nurse has an issue, say the nurse just retired a year ago or two years ago, what's that process?

So again, so that's a little bit. A little bit more outside of my head expertise. However, I can tell you that the process is all of our nurses are encouraged to file their claims. If there's a workplace injury, they file their claim.

There's a time period where they're automatically provided medical care and a time period for the hospital to do an investigation to check the claim and also to address any workplace hazards that may exist.

Okay. And again, through the chair, my understanding. I know it wasn't you that testified this, but has. If it's been brought up so many different times here in the legislature and we don't have data. Has anybody thought about doing a study bill?

Has there ever been a study bill, or is the data going to come back on this issue to the legislature at any point?

That's a great question. I don't know the answer to that. To my knowledge, there has not been a study bill.

And who. Who. I forgot the person who testified. Would they know that? I believe you. You mentioned it has been through this legislature many times.

Yeah, 10 times, by my count.

And has there ever been a study that's been done that come back on data for this bill?

There has not. It can happen a few different ways at times. Sometimes a chair will request a study through the commission on health and safety and workers compensation. Just write a letter. In prior bills, authors themselves have done it.

It's also a joint labor management committee, so the labor members of that joint labor management committee could raise it as an agenda item. But no, it hasn't been studied for some reason. Okay, thank you. Thanks, madam.

Thank you for that comment. And I want to just say to the senator, thank you for bringing this important piece of legislation forward. And it has come and it has not been able to get through.

But certainly as an advocate for underrepresented populations, it is curious to me why women can't seem to have the same protections. Women dominated industry that's on a front line like our healthcare profession don't have the same protections and opportunities that other industries that are typically, you know, dominated by men have very similar protections.

So it is a question that I have about this and why I support this bill so much. And no doubt we know how much risk healthcare workers endure every single day in terms of their exposure to disease through Covid and the traumas of caring for our family members. I also appreciate that you worked with committee.

I think you were initially asking for a 10 year statute of limitation for respiratory presumption. Lowering the maximum length from 10 to five years for me, more closely aligns with what some of the other, yes, frontline sectors have and, and, and they have the, the opportunity of, of these protections.

So I just appreciate the dedication on this issue and I will be supporting this issue today. I will make. Do we have a motion on the bill? Thank you. Senator Laird. Uh, Assistant, please call the roll. Oh, would you like to close?

Thank you to all the nurses who came today and what you do every single day to save lives. And it's now our turn to stand up for you to make sure that you're safe. And I really appreciate the firefighters being here and the other labor partners in support of this bill.

The state has created a rebuttable presumption for these other essential workers. But yet, for far too long, our nurses and healthcare workers have not had the same protections.

And we know, especially over the last several years with the pandemic, that they are on the front lines and are exposed to a variety of pathogens, respiratory diseases, infectious diseases, all of which are covered under this bill.

I'll just note with respect to the issue of data, the division of workers compensation does not disaggregate the data by this particular classification. So that's been one of the long standing issues about being able to extrapolate data.

But I'll just note that the nurses themselves two years ago conducted a survey of 2,000 nurses in California to get information about their experience of workers compensation claims. And as the speakers, the witnesses had said, 59% of nurses reported having trouble proving their injury and illness was work related.

Only 35% reported that they did not even file a claim because they didn't think it was actually going to be covered. And so there is an issue. There is an issue with the workers compensation system in California covering these types of illnesses. That's why this bill is important. I respectfully asked for your I vote.

We have a motion from Senator Laird. Assistant, please call the roll.

On file, item 5, SB 632. The motion is do pass as amended, to the Committee on Appropriations.

[roll call]

We have a vote of 2 to 1, and this bill is on call. Thank you.

We are going to go back to our file order. Here we have file item number one. Senator McNerney, please step forward on SB7. SB7. Senator McNerney, please step forward. Proceed whenever ready.

Good morning, Chair and Members of the Committee. I'm here to present SB7, the No Robo Bosses Act. So we see new technologies coming out, like artificial intelligence, very powerful, can make life better for a lot of people.

But the there's also risk that these technologies can become intrusive and take over our lives to a degree that would be unacceptable. Currently, employees are using increasingly powerful automated decision making software and hardware to make decisions about people in the workplace. Are you going to hire someone? Are you going to fire someone?

Are you going to give them a promotion? Are you going to do things that humans should be in control of? And so what this Bill does is it mandates that there's a human in the loop in these automated decision making programs. So it doesn't bar employers from using these.

But what it does is it requires them to have a human in the loop. So if an automated decision is going to make a decision about your career, there has to be human oversight and there has to be a human in the loop if there's an appeal.

Now, again, this doesn't bar using automated decision making, but it requires humans to be in the loop. But what it does bar is using ADS to predict behavior or predict productivity. So that's going to be barred. But we want to make sure that humans are in the loop.

And we don't want these, these programs to be predicting how you're going to behave and how you're going to be performing for the company. And it's just common sense. I mean, who wants to have automated decision making programs decide about your life? I mean, nobody wants that.

We want to make sure that humans, as flawed as they are, are in the loop because humans have feelings. Humans can kind of empathize with what you are going through and what your challenges are, whereas an automatic decision making program does not have that ability. So with this, I brought in some great witnesses to testify.

First, I have Ivan Fernandez from the California Federation of Labor and Shane Gusman from the Teamsters.

Thank you. You may proceed. You have two minutes.

Perfect. Thank you. Good, good morning, Madam Chair and Members of the Committee. Ivan Fernandez, with the California Federation of Labor Unions, proud co-sponsor of SB7, the No Robot Bosses Act, which, as the name suggests, would prevent workers from being subjected to automated management. Automated decision making systems, or commonly referred to as ADS.

They may be a new tool employers have at their disposal to squeeze out every bit of productivity from a worker. However, this practice is nothing new. Employers have used scientific management to speed up, monitor and control workers for decades.

Today, employers are outsourcing management to artificial intelligence powered systems capable of firing, disciplining and disciplining a worker, predicting their behavior and determining how much a worker is paid. For example, Amazon Warehouses use an unpaid time system that provides workers with a limited amount of minutes of non working time throughout the day.

However, rather than providing any sort of flexibility, workers have reported that this system is used to automatically fire them if they use up a certain amount of allotted time.

Workers can be fired even if they're 10 minutes because of a traffic jam, because of a health issue or a sick child, just because an ADS is incapable of making a nuanced decision. Another risk of unsupervised ADS usage is the potential for bias and discrimination built into the system.

Technology is not free of the biases and flaws of humans and the developers that create them. Human biases are typically visible and can be tracked and corrected given that they're made at the human scale. However, human bias can also be built into the core of the technology through training, data and the algorithm itself.

These systems operate in a black box at a greater scale than any than an army of humans, making it harder to detect and in many instances even harder to correct. This risk is worsened when these tools are used to predict future behavior rather than just analyzing past performances.

An example Terramind, a software development company, offers employers with advisory service algorithms to detect potential employee fraud by analyzing information such as worker debt history or their spending habits in order to flag a worker as being high risk of committing fraud or stealing from the company.

Just being flagged as a risk can impact worker ability to get good shifts raises or put them at risk of termination simply because of an algorithm. SP7 requires human oversight of of machine management with a few simple requirements and I'm respectfully urge your aye vote at the appropriate time. Thank you.

Madam Chair, Members of the Committee, Shane Gusman on behalf of the California Teamsters Public Affairs Council, proud co-sponsor of this Bill along with UNITE here, the Amalgamated Transit Union, the Machinists, the Utility Workers Union of America and the Engineers and Scientists of California all in strong support of this Bill.

You know, technology has gone in the workplace has gone way beyond what folks would have predicted 10 years ago. It's in every facet of the workplace.

It's constantly monitoring and surveilling employees across many different industries, across industries that the unions that I mentioned represent whether it's distribution centers, Amazon as the previous witness mentioned, or for house cleaners cleaning hotel rooms.

And the pervasive technology has really not made the workplace better. Privacy, autonomy of workers has suffered and it's really arguably made productivity go down. Workers are stressed. They don't know what the reasons are for being disciplined or being terminated many times.

So what we need as we're taking the human element out, we need to make sure that we have at least some human element in the most important decision making in the workplace, which is the future of your career. Big decisions like termination or discipline and these appropriate guardrails is what SB7 is about.

And that's why we support the Bill and urge your aye vote. Thank you.

Thank you. Are there any others here in speaking in support of the Bill? Please step forward. State your name, affiliation.

Mariko Yoshihara on behalf of the California Employment Lawyers Association and TechEquity Action and support.

Kristin Heidelbach here on behalf of UFCW Western States Council in support and because they had to step out, UNITE here, Local 11.

Good morning, Madam Chair, Members. Janice O'Malley with AFSCME California in strong support.

Good morning. Sandra Barreiro on behalf of SEIU California in strong support.

Good morning. Navnit Puryear on behalf of the California School Employees Association in support.

Meagan Subers on behalf of the California Professional Firefighters in support.

Good morning, Madam Chair and Members Louie Costa with the Sheet Metal, Air, Rail and Transportation Workers Transportation Division, SMART TD, in support.

Good morning. Mitch Steiger with CFT, a union of educators and classified professionals. Also in support.

Good morning Chair, Members. J.P. Hanna with the California Nurses Association in support.

It looks like that is the end of support. Witnesses let's move to opposition. Is there any witnesses speaking in opposition to the Bill? You have two minutes.

Yes, Madam Chair. Good morning. Chris McKayley on behalf of the Society for Human Resource Management. SHRM is a international organization with over 340,000 HR professionals throughout the world. Your detailed analysis, your Committee staff's detailed analysis on 12 and pages 12 and 13 has about a dozen or so specific items.

My colleague and I don't have an opportunity to go through all of them in detail, of course. But I would note, as your analysis does, that this is the start of a perhaps lengthy conversation about the provisions of the Bill. So I wanted to focus on two things, if I could this morning.

The first is we think that hiring should be looked at differently and to distinguish between employees and job applicants and that impact. We think that there's a lot of beneficial use in ADS in recruiting and hiring that we've seen amongst HR professionals.

SHRM has done a lot of survey data on this with their again hundreds of thousands of members and HR professionals and they believe that it improves efficiency in hiring and also ends up reducing bias.

In fact, the second thing, because for example, they can review a resume thoroughly rather than an HR professional who might be unfortunately stuck with hundreds, perhaps thousands of resumes to work their way through. And under this Bill, we believe that that would be prohibited because it would be primarily making a decision through that ADS system.

The second item that I wanted to highlight for you is this pre and post use notice where every applicant would be required to receive such a notice, which we think is frankly impractical and unnecessary. So my colleague will tackle a handful of other issues. But we look forward to the conversation with the Senator and your Committee staff.

Thank you, Madam Chair.

Thank you.

Good morning. Ashley Hoffman, on behalf of the California Chamber of Commerce, respectfully in opposition as a cost driver Bill, I do want to echo what my colleague stated about the beginning of a conversation and do appreciate the conversations we have had with the author staff and the sponsors.

I think fundamentally we completely understand the goal of the right that employees do not want to be of course terminated, right, without some sort of human involvement human oversight. And we completely understand that, as well as disclosures.

We have, for example, supported similar bills a Bill last session about disclosures to workers regarding certain surveillance data that could be used for disciplinary purposes. Also did not oppose a Bill a number of years ago that also disclosed to warehouse workers, you know, certain productivity standards that they may be required to meet.

Our concern here really is the breadth of the Bill and some of the specific processes.

As my colleague noted, when you consider hiring, of course, right, under this Bill, if you have thousands of people applying for a job under this Bill, you would have to send each of those folks not only a pre use but post notice, post use notice. It would basically obviate the entire use of ADS in the hiring system.

Further, we have concerns about the breadth of some of the definitions. The definitions of ADS is really anything that even just a assists with a decision which is pretty much almost any technology and it's not for just truly consequential decisions, but it is even when something indirectly affects an employee.

So under the Bill you have the possibility of even something as simple as a scheduling software, right. Generating all of the notices required by this Bill specific to the Bill and the notices, some of the provisions may not be known only by the deployer.

So the employer who is utilizing the system, some of it is quite technical, only to be known by the developer. As my colleague also noticed some of the concerns about, you know, the language of "you cannot use ADS primarily." I think in some circumstances, especially if we're talking about construction or people who are on customer sites.

Right. We have ADS tools to determine when workers are using the correct PPE or in an unsafe place or maybe someone's entering a space they should not be and making sure that we are then able to rely on that data if there is a safety issue or potential discipline needs to result from that.

Also when we're talking about things like wage and hour as well. And then finally on the

12 seconds over.

Sorry all to say some additional concerns on the access correction and appeal provision, but we are continuing conversations, appreciate the analysis and some of these issues highlighted. Thank you.

Thank you. Are there any witnesses? No, we've just done witnesses. Anyone else here to speak in opposition to the Bill? Please state your name and affiliation.

Good morning. Ryan Allain on behalf of the California Retailers Association, in opposition. Thank you.

Good morning. Mike Robson on behalf of the American Staffing Association, the California Staffing Professionals, in opposition.

Good morning. Jason Schmelzer on behalf of TechNet and Prism and respectful opposition.

Chair, Senators. Dean Grafilo with Capital Advocacy, on behalf of the California Life Sciences and the Security Industry Association and opposition. Thank you.

Good morning. Eileen Ricker with the California Credit Union League in respectful opposition. Thank you.

Kalyn Dean, on behalf of the California Hospital Association, in respectful opposition.

Good morning. Matt Easley on behalf of the Associated General Contractors of California and our San Diego chapter as well, in opposition. Thank you.

Okay, looks like that is the end of opposition. We'll bring it back to Members now. Are there any questions or comments on this Bill? Senator Laird?

Well, it was said by one witness as this is the start of a long conversation and so I'm willing to give you a chance to have that conversation.

But I thought since the testimony was given, I know you might do it in your close, if you would like to talk about how you see that conversation going from here, given some of the concerns that were raised.

Well, I thank, Senator Laird, for your question. We are aware that there are some concerns about the hiring aspect of this act and we are in conversation on how that might be amended.

As far as I know, that's as far as the conversation goes at this point, but I'm certainly willing to work with opponents or with critics who have constructive criticism that we might be able to use to improve the Bill.

And I wanted to say thank you for the question, Senator Laird. And you know, AI is integrating into our workplace, and this is the future of our workplaces. And so this is an important conversation to have and looking forward to this Bill getting out today. Would you like to close, Senator McNerney?

Yes. Thank you again for hearing the Bill. I think it's important to look to the future as how we're going to be able to let AI integrate into our society. It's going to have an impact. We want to make sure that the impact takes into consideration what human beings offer to the, to the situation.

I certainly don't want or wouldn't have wanted an algorithm to decide my future when I was 20 years old or 25 years old. So. And I think most people feel that way. There's, there's room possibly to improve the legislation as it sits, and we're willing to work with constructive opinions with that. I ask for an aye vote.

Thank you. Do we have a motion?

Thank you Senator Laird, call the roll.

On final item 1. The motion is do pass to the Committee on the Judiciary.

Yes, sir.

[ROLL CALL]

Okay. This Bill has a vote of 2 to 1. It is on call for when we come back. Senator. Thank you.

Members, we're going to file item 3, SB355, by Senator Perez. I would note that you have support on both ends, so just letting you know. All right, you may open.

Thanks. Great. Good morning, Chair and Members. SB3 55 addresses the unpaid wage thefts by authorizing the Labor Commissioner's office to submit a notice of an unpaged wage theft judgment to the EDD Tax Support Division for potential tax fraud Members.

Wage theft is a significant issue that has devastated workers to the tune of more than 39,000 claims of unpaid wages. Workers that are disproportionately impacted by wage theft include disadvantaged immigrant and workers of color working in sectors where wage theft is rampant, including hospitality, construction, car wash, garment, agriculture and warehouse sectors.

Despite its best efforts, the LCO faces barriers that bear it that bar from effective enforcement of all the wage theft claims that its office receives. The inability for many wage theft judgments to be satisfied increases the devastating impact that workers face, as many face more than 850 days to have their claims processed.

Context of the scope of this issue can be pulled from 2017, when workers filed 320 million collectively in wage theft claims, but only 40 million was recovered with less than half of the workers receiving any payment at all.

Without stronger enforcement mechanisms, many employers treat wage theft as a calculated risk because they face very few tangible or immediate consequences for non compliance, enabling them to deny claims, delay payments or refuse payments altogether. Overall, this weakens consumer demand, harms local businesses and slows economic growth for the entire state.

SB 355 provides the LCO with a new enforcement tool to address unpaid wage judgments by authorizing the LCO to provide a written notice to the judgment debtor employer of an unpaid wage theft to that tax support division of the EDD as a notice of potential tax fraud.

The intent of this Bill is to incentivize employers to comply in a timely fashion by wage theft claims, help the LCO address its wage theft claim backlog, and most importantly, ensuring workers receive the pay and justice that they deserve.

With me to testify in support and help provide and help to answer questions are Elmer Lizardi, Legislative Advocate for the California Labor Federation as well as Fernando Ochoa, Political Director for Sheet Metal Workers Local Union 105. At the appropriate time I ask for your aye vote.

Thank you. Good morning Chair Members. Elmer is already here with the California Federation of Labor Unions. We are proud to co-sponsor SB 355 which as stated, provides the Labor Commissioner's Office with new enforcement tools to address wage theft.

This is one of a package of bills that the Federation is co sponsoring this year tackling wage theft because of how pervasive it is in California.

Workers lose billions of dollars every year due to wage theft violations, and a study conducted by Rutgers University last year found that on average, workers affected by wage theft had about 20% of their entire paycheck stolen from them.

Most most families cannot afford this type of loss of their paychecks, but wage theft disproportionately impacts minority workers doing some of the toughest low wage jobs in construction, agriculture, garment and hospitality industries, obviously worsening the economic inequality in the state.

And as mentioned, WAISTF also ends up putting law abiding employers at a disadvantage and costing taxpayers in lost revenue.

This Bill will provide the Labor Commissioner's Office with new enforcement tools to address these violations, requiring those who have an outstanding judgment to notify the LCO if they have already paid the judgment, have posted bond, or have entered into an agreement to actually pay it to make sure that they can clear up as many cases that are already closed and clear up the backlogs at the lco, saving our understaffed agencies valuable resources.

And of course, the notice of the Tax Support Division of the EDD Department will ensure that workers will no longer have to pay or wait for the payment that they have earned and adjusted they are owed, as the Member stated. And we are happy to co sponsor and ask for an aye vote. Thank you.

Thank you. Second witness, you have two minutes.

Good morning, Chair and Committee Members. My name is Fernando Ochoa. I serve as political Director for Smart Local 105 here on behalf of over 25,000 Members across California serving in the construction and manufacturing industries. This Bill, SB 355, tackles a persistent and damaging issue for working Californians, wage theft and the tax fraud that often comes with it.

So when a bad actor steals from workers by refusing to pay the wages they're owed, they're also often defrauding the state, dodging duties like paying payroll taxes, for example. This isn't just wage theft, it's tax fraud. And it robs honest employers and taxpayers alike.

As a prime example, just recently, Attorney General Rob Bonta just recently filed 31 criminal charges against a contractor for wage theft as well as tax evasion, costing the state and workers approximately $2.6 million. SB 355 ensures that when an employer is found liable, they can't just walk away.

If they ignore judgment, they'll face real consequences, including being flagged for potential tax fraud by the edd. And this is just a flag, a trigger. That's the kind of enforcement we believe we need to level the playing field and protect working families here in California. Thank you.

Thank you. Are there folks here speaking in support of the Bill? Please step forward and state your name and affiliation.

Vince Sugrue on behalf of Sheet Metal Workers Local 104, in support.

Shane Gusman on behalf of the Teamsters and Unite, here in support.

Janice O'malley with AFSCME California in support.

Kimberly Rosenberger with SEIU in support.

Mitch Steiger with CFT, also in support.

Louis Costa with the Sheet Metal Air, Rail and Transportation Workers Transportation Division, SMART TD in support.

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. Thank you.

Good morning. Kristin Heidelbach here on behalf of UFCW Western States Council in support.

Thank you. Now we'll turn to opposition. Are there opposition witnesses here today? Seeing none. Anyone speaking in opposition to this Bill?

Madam Chair, I'd like to move. Bill.

Well, well, thank you very much. Would you like to close? Senator Perez?

Thank you. I respectfully ask you all for your aye vote.

Thank you. We have a motion from Senator Strickland. Assistant. Please call the roll on file item 3.

[Roll Call]

Okay, we have a vote of 3 to 0. The Bill is on call. Thank you. Thank you. Okay, we are going to move to file item number four. Senator Caballero, who's been patiently waiting, please step forward and you may proceed when you're ready.

Thank you, Madam Chair and Members for the opportunity to present SB555, the Worker Disability Adjustment Act, which would ensure that injured workers who are permanently partially disabled, or PPD, and secure permanent partial disability benefits are protected from the rising cost of living.

This Bill introduces an annual cost of living adjustment beginning January 1st, 2026 to PPD benefits, which aligns with the Social Security Administration's COLA. PPD benefits have been capped at $1,256 per month since 2014, over a decade without adjustment.

inflation has significantly, significantly reduced the purchasing power of these benefits, leaving injured workers struggling to afford necessities like rent, groceries and health care. These individuals have sustained injuries on the job and face limitations on their ability to work or complete tasks while working.

Without COLA, their fixed benefits shrink in real value over time, creating financial hardship programs like Social Security and permanent disability compensation claims already adjust annually for inflation. SB555 ensures workers who have been injured in our state are not left behind.

The Bill ties the COLA increase to the Social Security Administration's annual COLA, ensuring a predictable and fair adjustment. SB 555 is about fairness and dignity. Workers who have suffered life changing injuries on the job should not be left behind as costs rise.

With me to testify in support of the Bill is Jason Marcus with California Applicant Attorneys Association.

Thank you, Senator. Witness, you may approach the podium. You have two minutes.

Thank you. Good morning, Madam Chair and Members of the Committee. Jason Marcus, Legislative Chair for the California Applicants Attorneys Association, or CAAA, as we call ourselves. We are a group of roughly a thousand attorneys, most of whom exclusively represent injured workers.

Collectively co-represents more women, more union members and more immigrants than any other group of lawyers in the State of California. I'd also like to point out that injured workers in California are entitled to workers compensation benefits regardless of immigration status. I would also like to thank Senator Caballero for her steadfast commitment to California's workers. SB 555 is the latest example of that.

We believe that SB 555 is a straightforward Bill that, as the Senator explained, establishes an annual cost of living adjustment for permanent partial disability benefits in the workers compensation system, equivalent to the same COLA that is used by the Social Security Administration that would apply to all injured workers claims whose claims have been approved beginning on January 1st, 2026.

Temporary disability benefits, one of the other main money benefits in the workers compensation system, already have a COLA, as do most other state programs, benefits and wages. Permanent partial disability benefits have had a maximum cap of $1,256 per month since 2014.

In 2014, the average Social Security check was $1,294 per month, almost the same as the $1,256 maximum permanent partial disability monthly check for work injuries. The Social Security Administration's modest COLA adjustments over the last 10 years has have added roughly $531 to the average Social Security monthly check, a modest increase averaging $53 per month.

There are an estimated 21,000 permanent partial disability claims. We believe that tying these benefits to the Social Security COLA will result in a prospective change averaging $45 per month per injured worker, which we believe will be more than offset by the average reduction that employers have seen in California in their workers compensation premiums of $13,356 over the last 10 years.

You've gone over time, so if you could wrap up, that would be appreciated.

Happy to answer any questions the Committee may have. Thank you.

Thank you. Is there another witness, Senator?

Okay. Can folks speaking in support of the Bill please step to the podium? State your name and affiliation.

No, that's it.

Good morning. Navnit Puryear with the California School Employees Association. In support.

Coby Pizzotti with the California Association of Psychiatric Technicians. In support.

Megan Subers on behalf of the California Professional Firefighters. In support.

Elmer Lizardi on behalf of the California Federation of Labor Unions. In support. Thank you.

Thank you. We will move to opposition. Is there an opposition? Witness, please step to the podium. Two minutes.

Good morning, Madam Chair. Members. Ashley Hoffman, on behalf of the California Chamber of Commerce, respectfully in opposition. I do want to thank the author and her staff. As we have had a lot of conversations about this Bill, we acknowledge that these benefits have not been increased in 12 years.

However, as was done 12 years ago, we strongly believe this discussion belongs as part of a larger reform discussion of the workers compensation system. The last major reform in 2012, SB863, increased PD benefits and paid for that cost by reducing frictional costs elsewhere elsewhere.

Historically, those broader discussions have occurred between labor and management, and there's also been involvement, for example, by the Administration and the Department running numbers and costs and estimates on some of those proposals.

And to be frank, we are concerned that if we have an ongoing COLA increase every single year, that increases the risk of unbalancing the system and makes it more difficult to bring all parties to the table to have broader reform discussions again.

Specific to cost, we estimate that the cost could be between 570 million to 907 million over an eight year period. A significant portion of that would also be a cost to the state to public employers.

So it is very necessary from our perspective that some of those costs are also addressed by reducing friction elsewhere in the system. I also want to point out that the costs we believe go above and beyond simply a COLA.

During the last reform there was a frequency modifier applied to cost costs to show that when benefits are higher, there tend to be more claims for those benefits. That bore true in the data resulting from ISB863. So the cost analysis on this is also a little bit complex as well. Thank you so much for your time.

Thank you. Next witness.

Thank you, Madam Chair and Members. My name is Jason Schmelzer. I'm here today on behalf of the California Coalition on Workers Compensation and PRISM. Also want to thank the author and her staff for the conversations that we've had since the Bill has been introduced.

I'd like to associate myself with the comments made by my colleague from the California Chamber of Commerce. We too would be quite happy to sit down and negotiate reasonable package benefit increases financed by needed system reforms. For context, though, I do want to say a few things about the current state of permanent disability benefits.

I just want to flag that the weekly benefit amount isn't the only factor determining the adequacy or growth in permanent disability benefits. We should also look at the Subsequent Injuries Benefit Trust Fund. SIBTF is funded by assessments on employers, but the benefits paid to workers are statutorily recognized as permanent disability benefits.

The SIBTF essentially compensates injured workers for the effects of their combined industrial and non industrial injuries. Quick example. Let's say that I had a non industrial back injury in my 20s, 30% disability. It's followed up with an industrial shoulder injury in my 40s, another 30%.

Based on some case law that's occurred over the past decade, the combination of those two disabilities may be higher than their simple sum, and so that difference in benefits is covered by the SIBTF.

But those are permanent disability benefits paid outside in a different context. It's not covered in the analysis, but the SIBTF has seen a massive increase in both administrative and benefit costs over the last decade. So much so that the governor's January budget includes 15 new full time positions because the state needs bodies to administer these claims.

The Commission on Health and Safety and Workers Compensation contracted with Rand in 2024 to study these benefits. And there's a few key findings.

Between 2013 and 2023, the number of pending cases increased from just over 4,000 to just over 15,000. That growth is expected to continue for the next five years. And between 2010 and 2022, the amount of benefits, PD benefits paid out of this Fund increased from 13.6 million to 232 million.

So there has been more permanent disability paid over the last 10 years. It's just not quite in the context as described by this Bill. So from our perspective, the question of benefit adequacy and financing is a little more complicated than the weekly benefit amount. But we would be willing to have those conversations moving forward and thank you.

Thank you. We will now bring it to the dias. Any, oh, that's right. Let's do me-toos. Me-toos in opposition to the Bill.

Good morning Chair and Members of the Committee. Laura Curtis, on behalf of the American Property Casualty Insurance Association as well as the California Association of Joint Powers Authorities in respectful opposition. Thank you.

Thank you. We'll bring it to the dias. Any comments, questions, Members? Okay. Seeing none. Senator, would you like to close?

Respectfully ask for your aye vote. Thank you, Madam Chair.

Thank you. Do we have a motion? Thank you. Senator Laird. Assistant please call the roll.

On file item 4. The motion is do pass to the Committee on appropriations.

[ROLL CALL]

Okay. We have a vote of three to one. Senator, this Bill is on call.

Thank you.

Thank you.

Okay, we are going to take a moment to lift call here, seeing no presenters in the audience. If you have a Bill in Labor Committee, please come on down so we can hear your Bill and close the file for the day. Thank you. We're going to. We're going to lift call now.

Okay, we are going to go to file item number one. SB7. Senator McNerney.

On file item one the motion is do passed to the Judiciary Committee. The Chair is voting aye. The Vice Chair is voting no. Senators Cortese. Durazo.

Aye.

Durazo. Aye.

Okay, that Bill is now three to one and it's on call. We will move now to File item number three, SB355. Senator Perez

On file item three the motion is do pass for referral to the Committee on Rules. The Chair and Vice Chair are voting aye. Senators Cortese. Durazo.

Aye.

Durazo. Aye.

Okay, we now have that Bill at four to zero. It's on call. We are moving now to file item number four. Oh, you did. She did vote on that. Okay. File item number five. SB632, Senator Arreguin.

The motion on file item five is do pass as amended to the Committee on Appropriations. The chair is voting aye. Vice Chair voting no. Senators Cortese. Durazo.

Aye.

Durazo, aye.

So we have a vote now 3 to 1 on that Bill, and it's still on call. Okay, we are going to move down to file item number 11. SB648, Smallwood-Cuevas.

The motion on file item 11 is do passed to the Committee on the Judiciary. Both the chair and Vice Chair are voting aye. Senators Cortese. Durazo.

Durazo, aye

Aye.

Okay, we have a vote now 4 to 0. And that Bill remains on call. And we'll move to the consent calendars.

All right, on the consent calendar, Senators Cortese. Durazo.

Aye.

Durazo. Aye.

We have a vote now 4 to 0 on the consent calendar. It remains on call. Okay.

We will move to two bills being presented by our Committee Member, Senator Durazo. That is file item number seven. File item number eight.

Okay. Yep. You may proceed.

Thank you, Madam Chair and members. No one should have to choose between putting food on the table and caring for a seriously ill loved one. And especially not those workers who have been contributing each month into the Paid Family Leave insurance program. That's what's happening in California.

When someone's loved one is not on the list of a family member, a worker can care for under the California Paid Family Leave program. Unlike Colorado, Connecticut, Washington, California law does not permit a worker to use their Paid Family Leave insurance to care for extended or chosen family.

Our current family leave program fails to meet the needs of California's diverse families. More and more people 55 and older are childless and or unmarried immigrants, many of whom have no immediate family nearby frequently, frequently rely upon extended family and friends for caregiving.

Also, many LGBTQ adults, especially older adults, do not have accessible relationships with biological relatives and depend upon their family of choice for care. Paid Family Leave claims make up roughly 30% of all claims paid for by our disability insurance trust fund.

Our Paid Family Leave insurance program covers chosen family, will represent less than a tenth of a percent increase in claims paid for by this insurance trust fund. With such a low cost, it makes no sense for California's Paid Family Leave insurance program to exclude caregiving claims for chosen and extended family.

With me here today, Madam Chair, in support are Eduardo Rubalcava from AARP and Yvette Cervantes from Orange County.

Thank you, Senator. Please step forward and you have two minutes.

Thank you. Good morning, Madam Chair and members of the committee. My name is Eduardo Rubalcava. I am a member of the AARP Capital Response Team here in Sacramento speaking on behalf of the 3.2 million AARP members in California. AARP is a proud co-sponsor of SB 590.

SB 590 is essential and important to older Californians and their family because it will update the California's Paid Family Leave program to include - will update the Paid Family Leave program which has been.

It will update the California's Paid Family Leave program to keep pace with and reflect the changing American family structure which no longer follows the traditional nuclear family structure. So, SB 590 will improve the - sorry about this.

You're doing good.

Yep. You have time on the clock.

So, it will - it will update the California family to keep pace with and reflect the changing nature of our traditional family where the nuclear family is no longer the norm. In fact, analysis of 2020 Census Bureau data shows that just 18.4% of American households follow the traditional nuclear family.

In addition, in 2023 married single people living alone, which include the large number of older Californians that live alone together with married couples that do not have children, outnumbered married parent households. So, these statistics show the urgent need to expand family paid leave to include family of affinity.

So that older Californians can have their loved ones care for them in their time of need when they're like in serious illness. SB 590 will do this by expanding paid family leave to include persons designated persons and family of choice as persons who can use job protected family paid leave to care for their loved ones.

Thank you.

AARP and its members respectfully ask for your support on SB590. Thank you.

Thank you. Any other witnesses? Is there another witness? Great.

So, my name is Yvette Cervantes and I'm a resident of Orange County, but I'm also a mom. I'm proud to testify in support of SB 590. I met my son Danny in 2015, and he's been my kid ever since.

I give him the same tough love and banter as I give my five kids, I gave birth to. Even though Danny and our family, we don't have a legal relationship. So, when he went through gender affirming surgery in spring of 21, I was unable to take paid family leave to care for him.

And as the primary income for our house, unpaid time wasn't an option. If I had been able to take paid family leave, I could have been there when Danny got home from the hospital to make sure he was taking his medication on time and didn't run out.

He needed assistance with things like that we take for granted, like getting up to walk around, having meals prepared, grocery shopping. I needed to check in on him, check his dressings, make sure he was changing his clothes, doing his laundry, cleaning the house, making sure he was sitting up and getting to his apartments.

A few days after his surgery, I was at work, and I got a text from him telling me the surgery site felt wet and was bleeding. I told him to get to the ER and thankfully a neighbor was able to rush him there. He was immediately admitted and was in the hospital for a week.

It was tough knowing that he was alone, and I couldn't be there with him when he needed me the most. Being sick, recovering from surgery, or any other medical condition is scary. Now try doing it alone. Relationships that are not currently recognized by the law are no less committed or meaningful.

Care from chosen family is just as important and sometimes life savings when it comes to those are part of the LGBT community. Love, patience, and care are part of what helps us begin to define family, not legal or blood relationships.

I urge the California Senate Labor Committee to support SB 590 so that California workers like me can use this entirely worker funded paid leave program to care for chosen or extended family members. Thank you for your time.

Thank you. Okay, do we have folks me-too-ing. Please step to the mic. State your name. Affiliation There are a lot of folks, so let's really keep it short.

Craig Pulsipher, on behalf of Equality California, proud co-sponsor, and strong support.

Katherine Squire, on behalf of the California Commission on the Status of Women and Girls, in support.

Andrew Mendoza, on behalf of the Alzheimer's Association, in support.

Sarah Diaz with the California WIC Association. Also, on behalf of Black Women for Wellness Action Project, Caring Across Generations, California Business and Professional women, Citizens for Choice, and Ensure the Uninsured Project, in strong support.

Lang Lei from Asian Americans Advancing Justice, Southern California, in strong support.

Kristin Heidelbach, on behalf of UFCW Western States Council, and proud support.

Sara Flocks, California Labor Federation, in support.

Mariko Yoshihara on behalf of the California Employment Lawyers Association, proud co-sponsor in support.

Whitney Francis with the Western Center on Law and Poverty, in support.

Katie Duberg, California Work and Family Coalition is a proud co-sponsor of SB 590.

Also testifying on behalf of the following organizations in strong support. Alliance of Californians for Community Empowerment, AAUW California, California Immigrant Policy Center, California Partnership to End Domestic Violence, Center for Community Action and Environmental Justice, Consumer Attorneys of California, Courage California, Justice and Aging, Orange County Equality Coalition, and National Council of Jewish Women California. Thank you.

Antonio Guilar with Small Business Majority representing small business owners across California and we happily support for SB590. Thank you.

[Foreign Language]

Good morning. Jenna Shankman with the California Coalition on Family Caregiving and Family Caregiver alliance in strong support. Thanks.

Good morning. Julia Parish on behalf of proud co-sponsors, Legal Aid at Work, Equal Rights Advocates, Unite LA. And also Supporters Friends Committee on Legislation of California, Human Impact Partners, Parent Voices California, and the Women's Foundation of California. Thank you.

[Foreign Language]

Good morning. My name is Yael Falakov. I'm with Mujeres Unidas y Activas in Oakland, California and we are in strong support of SB590.

Good morning everybody. My name is Delia Torres from MUA organization we support. Thank you.

[Foreign Language]

Good morning. Sam Davis, Ally to Las Mujeres Unidas y Activas in full support. Thank you.

Kimberly Rosenberger with SEIU in support.

Hi, good morning. My name is Martina Gomez. [Foreign Language]

Thank you. Gracias. Let's see. We will move to opposition other opposition witnesses for this bill today. Seeing none. We will move to any me too's in opposition to this bill today. Okay. Seeing none. We will bring it to the dais. Any comments? Thank you, Senator. Senator Durazo, would you like to close? Oh, did you?

Oh, I'm sorry. Over there.

I know you don't usually look to your right. I just wanted to say that this is a great bill.

And I reflect on my long time ago experience of running an AIDS agency at the height of the epidemic, when the chosen family would be with the person all the way through the illness and to the end and then would be excluded by an estranged biological family in the last days of the life.

And I always hoped I would be in a place where we could take action to recognize sort of who was there in times like that. And that's what I heard in one of the witnesses, and it just called that up.

And so, I know that there will be issues about how to make sure we designate the right people and do it in a way that's appropriate, but this is the right thing. And so, I really want to thank you for doing this bill and I look forward to supporting it.

Thank you for those beautiful comments. Senator, would you please close?

I think the esteemed Senator summed it all up and together with the remarks made by our two witnesses, just puts it all together. You want to be able to choose who your family is, and they ought to, because they contributed to this fund, be able to get out of it and take care of that loved one.

So, thank you all and thank you for your remarks, Senator. And I urge an aye vote.

Thank you. Senator Strickland has moved the bill. Let's call the roll.

On SB 7 the motion is do pass to the Committee on Appropriations. Oh, I'm sorry. On file, item 7, SB 590. Hang in there, folks. We have the motion. [Roll Call].

That Bill has a vote of 4 to 0. It is on call. Thank you. And you have another, Senator Durazo. So. Yes. Please proceed when you're ready.

Thank you. Madam Chair, I'm proud to present SP809, a Bill to stop the misclassification of truck owner drivers in the construction industry. SP809 will provide legal amnesty to employers who have misclassified these drivers as independent contractors, provided they one, reclassify them as employees, two, to comp compensate them properly.

Thanks to Assembly Member Gonzalez's AB5, in 2019, California established clearer laws on worker classification. The law exempted construction trucking companies from classifying their drivers as employees for five years to give them time to come into compliance.

Unfortunately, despite that exemption expiring last year, many employers continued to misclassify drivers, depriving them of basic protections like overtime, workers compensation and the right to unionize.

SB809 provides a clear solution by incentivizing employers to comply with the law, providing them legal amnesty for past violations of the law, provided they reclassify their truck owner drivers as employees and pay them through the two check system.

This system ensures that drivers are paid two checks, one for their labor and one for the use of their equipment. This guarantees they are compensated fairly for both their time and the expenses related to their trucks, such as fuel and maintenance.

SB809 will provide clarity and fairness in the industry, benefiting both employers and workers and creating a level playing field. I'm proud to have two representatives from our sponsors with me, Matt Brod from the California Teamsters Public Affairs Council and Judy Yee with the State Building and Construction Trades Council. Thank you. Senator, please step forward.

Thank you, Madam Chair. Members Matt Broad here, proud to co sponsor SB809 on behalf of the Teamsters, I want to be clear this Bill does not mandate AB5 or the two check system. AB5 applies to all forms of intrastate trucking, including construction trucking, with that exemption for the construction industry totaling in 2024.

This Bill to us is the proverbial carrot in the carrot in the stick in that we're implementing a high road employment model in exchange for relief from liability. I'd also comment that two check is both tried and tested. For example, we use it in the motion picture industry here in California.

It's also used in the construction industry in New York City where it's uplifted workers and rewarded them for their investment in their vehicles. That's because you will get compensation for the use of your vehicle wear and tear mileage, but also you have the eligibility to get employer sponsored health care and participate in a pension.

So we think it's the perfect model to bring misclassified owner operators into compliance with AB5 and urge employers to do the right thing. So for these reasons we urge your aye vote, thank you.

Thank you.

Madam Chair. Senators Judy Yee on behalf of the State Building Trades representing 450,000 working families, we are proud to co sponsor SB809 along with the Teamsters. I'll keep my comments brief.

SB809 provides construction employers with the pathway to AB5 compliance while simultaneously alleviating their outstanding liability for misclassifications in other words, it's a win for both the workers who will reap the benefits of the two check system and a win for employers who can do right by workers while avoiding unnecessary litigation.

We know the misclassification in construction trucking is a decades old problem that has grown due to trucking brokers dispatching misclassified drivers on the job sites. It's a long overdue for the construction industry to come into compliance with AB5. We believe that SB 809 will be a useful tool for accomplishing this purpose.

For these reasons, we are proud to co sponsor this important Bill and respectfully ask for. I vote.

Thank you. So witnesses concluded. Who's here in Me too. Please step forward. Name and affiliation.

Madam Chair, Sarah Flocks. California Federation of Labor Unions in support. Thank you.

Okay, I think we. That is conclude support witnesses. We will move to opposition. Are there opposition witnesses against this Bill today? Any opposition me toos on this Bill today? Okay. We will move to the D. I move the Bill. Thank you. Senator Laird. We have a motion for Senator Laird. Senator Daso, would you like to close?

Thank you, Madam Chair. Urgent. I vote.

We have a motion from Senator Laird. Please call the roll.

On file item 8. SB 809. The motion is do pass to the Committee on the Judiciary. Senator Smallwood-Cuevas. Smallwood-Cuevas, Aye. Strickland. Cortese. Durazo. Durazo aye. Laird. Laird aye.

Okay. This Bill has a vote of three to zero. It is on call. Thank you, Senator.

Okay. We are then going to lift the call on the item we just took up. That is SB number 809. Please call the roll.

On file item 8. The motion is do pass to the Committee on the Judiciary. Senator Strickland. No. Strickland. No. Cortese.

Okay. That Bill now has a vote of 3 to 1 and it's on call. Yeah. We are going to take a brief recess as we wait for Members to return and hopefully get all of our Members of the Committee here to vote as we lift calls. So maybe a five minute. No, let's make it a 10 minute recess and we'll come back.

Committee on Labor, Public Employment and Retirement is back in session. We see our great author, Senator Wiener, is here. We are--that is File Item Number Two: SB 310. You may proceed.

Thank you very much, Madam Chair, colleagues. SB 310 will allow workers to recover the full amount of statutory penalties they're entitled to when they are not paid in a timely manner. I want to be clear: this bill does not change what the remedies are, what the penalties are.

There's existing law that if you are not paid on the timetable you're supposed to be paid--and we know this is a big problem in California where we have workers who are not paid at all or paid days or weeks late or months late.

And of course, for so many workers, even a matter of days can be a difference between being able to buy food, pay rent, and so forth. So this really, really matters, and wage theft and wage delays are a big problem in California, and right now, you're entitled, of course, to seek your back pay but there are statutory penalties, which we're not changing. However, workers currently only have two options to get those penalties.

They can either go to the Labor Commissioner, where it takes on average several years to get any kind of hearing or they can use the Private Attorney General Act, PAGA, which means that they only actually recover 35% of the penalties. The rest goes to the state.

Neither one is a good option, and so SB 310 will allow a third option for the worker to be able to file a civil action and to receive all of the penalties instead of just a third or years of delay. Again, this does not change what the remedy is.

It just provides an additional option so that workers can have a more effective way of getting the compensation to which they are already entitled. Respectfully ask for an aye vote. With me today to testify is Veronica Melendez, the Litigation Director with the California Rural Legal Assistance Foundation, and Alexx Campbell, a staff attorney with Legal Aid at Work.

Thank you, Senator. Witnesses, you may approach the podium. You have two minutes.

Good morning. My name is Veronica Melendez, and I work at California Rural Legal Assistance Foundation. California Rural Legal Assistance Foundation represents farm workers and other low-wage workers in civil actions recovering for them wages and other compensation owed to them.

We are here today co-sponsoring this bill with Legal Aid at Work because California working families are the ones that shoulder the financial burden when the workers are not paid on time, each pay period, and this failure deprives workers from being able to meet basic life necessities and to meet their own financial obligation.

SB 310 compensates this workers for shouldering this burden while they're working, and it also--it simply allows workers to use a path that's already in existence that was created by the Legislature. In 2019, the Legislature allowed workers two options.

They could either go to the Labor Commissioner and recover 100% of the penalty or they can go to court and get 35% of the penalty through PAGA. And so SB 310 simply allows that workers to use that existing path and it also doesn't allow workers to recover both.

They can recover one or the other. Given that this existing right is already there and workers can recover 100% of the penalty, it's also important to note that any attempts to try to label this violation and this failure to pay on time as just a simple, harmless derivative violation purposefully ignores the financial burden the workers have to take on when they cannot pay their debts and they cannot pay for basic necessities.

SB 310 and PAGA serve two different purposes. SB 310 is meant to compensate the workers for shouldering this financial burden when they were not able to pay for necessities and debts, while PAGA is a prophylactic tool that was created by the Legislature to incentivize compliance with California laws and allows workers to step into the shoes of the state and recover penalties on behalf of the state. As such, SB 310 does not reinvent the wheel.

All it does is allows a worker to go into court, get 100% of the penalties--which they have the right to do to go into court--and to put money back into their pockets. So we ask for your support in this bill.

Thank you.

Thank you.

Next witness?

Thank you and good morning. My name is Alexx Campbell, and I'm a senior staff attorney at Legal Aid at Work. We're a nonprofit based in San Francisco that advocates on behalf of low-income workers and families across California.

Those of us who have relatively good, stable jobs might not understand how serious it can be when an employer fails to pay a low-wage worker's wages on time. It's not just the unpaid wages. There are very real knock-on effects: rent goes unpaid, bills pile up, bank accounts overdraft, food gets skipped.

For my clients who are already living paycheck to paycheck, a delay of even a few days can mean a crisis. One client of mine, an older gentleman, after his employer underpaid him several times, had to borrow money from family and friends to make ends meet.

And it got so bad that he was never able to repay these loans, destroying his reputation and relationships in his community. Right now, I'm representing a young woman who was trying to pay for college by working at a Subway restaurant in San Francisco. When she was repeatedly paid several weeks late, she was forced to drop out of school for an entire semester.

These are things that they can't get back. SB 310 gives workers an effective avenue to address these cascading harms, to seek the penalties that the Legislature already created to make them whole.

We have a Labor Commissioner process right now that just is not functioning the way it's supposed to. SB 310 opens up a faster avenue for workers to obtain all 100% of the relief that they deserve. Paying workers on time is not optional. It's a basic obligation, and this bill ensures that when employers fall short, workers have access to a remedy and a process that reflects the real harm caused. I urge your support. Thank you.

Thank you. Okay, anyone in the room supporting the bill, please step forward and state your name and affiliation.

Mariko Yoshihara, on behalf of the California Employment Lawyers Association, in support.

Madam Chair, Matt Broad for the Teamsters. We don't have a letter on file, but we support. Thank you.

Sara Flocks, California Federation of Labor Unions, in support.

Kristin Heidelbach, here on behalf of United Food and Commercial Workers, Western States Council, in support.

Vince Sugrue, on behalf of Sheet Metal Workers Local 104, in support.

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

Kimberly Rosenberger with SEIU, in support.

Ken Wang, on behalf of the Chinese Progressive Association, in support.

Okay, I think that was all of the supports. Let's move to opposition. Is there anyone here speaking as a witness in opposition? Please step forward. You have two minutes.

Thank you. Good morning, Madam Chair and members. Ashley Hoffman, on behalf of the California Chamber of Commerce, in strong opposition to SB 310 is a cost-driver bill. Last summer, this Legislature passed PAGA reform. That reform was so celebrated that was even split in two between the two Houses, so each Houses had a piece of that bill.

And the goal there was to curb litigation abuse that the Legislature labor employers had all known was going on for so long by the trial bar when it came to wage and hour class actions and PAGA lawsuits. And I will say when SB 310 went into print, the reaction on my side was immediate: that we feel that this is a step that completely undermines the goal of that reform, and I will explain why.

Labor Code Section 210 is a penalty. It attaches when there is a violation of Labor Code Section 204, which is, as described, the timely payment of wages. That is perhaps the most common derivative claim that we see that applies in all cases. The Labor Commissioner has FAQs on this; for example, missed meal break, missed rest break, overtime, the kinds of claims that we see in pretty much every single kitchen sink type, wage and hour class action, and PAGA case.

So our concern here is that you are taking a penalty, and by allowing the trial bar to utilize it, to attach it in all of these cases, that it is going to be used just as PAGA was to drive up settlement value and it creates a new avenue for litigation abuse when we just stopped one.

And we completely understand the backlog at the agency at the Labor Commissioner's Office, and we are here to do whatever we can to stop that backlog. But the time PAGA was passed 20 years ago, that issue also existed, and that is exactly why PAGA was created because the Labor Commissioner's Office was understaffed.

And so PAGA was meant as a mechanism to recover certain penalties that had only been recoverable by the Labor Commissioner's Office. And so now, as you can imagine, it is frustrating on our side to hear that PAGA is not a good option.

And if you start this trend of now pulling out every penalty that is only recoverable at the Labor Commissioner's Office, which is what PAGA was created for, in creating their own new private right of action that does not contain the same protections that we just put into the PAGA statute, that is a very disturbing trend from our perspective, it completely undermines the reform--

You are over time.

Yes. And so I just want to really emphasize from our perspective that we have a lot of, lot of concerns about this bill and what it represents in relation to that reform. Thank you.

Thank you. Is there another witness? Two minutes. And we have so many folks. Let's try to keep it to two.

Yes. Good morning, Madam Chair and members of the committee, and we know it's been a long hearing today. I'm Matthew Allen with Western Growers Association. We represent small, medium, and large growers across the states of California, Arizona, New Mexico, and Colorado.

Our members, in fact, provide over half of the nation's fresh produce, so fresh fruits, tree nuts, and vegetables. Our opposition today to the bill is quite simple and straightforward.

We were one of the organizations that worked very closely with the Legislature, the Governor's Office, the Chamber of Commerce, the New Car Dealers Association, the Restaurant Association, the Retailers, and many others to make historic reforms and improvements to the previous PAGA statute, really due to ongoing abuses of an ongoing litigation that we were seeing that was taking that PAGA statute, we believe, taking the value out of that for actual workers and employees and creating additional litigation abuse.

We actually view this bill in a similar light that it's actually counter to what the Legislature approved last year and looking towards that PAGA reform. So it's for those reasons that we remain opposed to the bill and we ask for a no vote. Thank you.

Position--#MeToo's in opposition to the bill, please step forward.

Madam Chair, Chris Micheli, on behalf of the Civil Justice Association of California, in respectful opposition. Thank you.

Good morning. Sabrina Lockhart, on behalf of the California Attractions and Parks Association, in opposition. Thank you.

Good morning. Marlon Lara with the California Restaurant Association, in opposition. Thank you.

Good morning. Bret Gladfelty, on behalf of the California Alliance of Family Owned Businesses, in opposition.

Margie Lie, Samson Advisors, on behalf of the California New Car Dealers Association, in opposition.

Matt Easley, on behalf of the Associated General Contractors of California, in opposition. Thank you.

Madam Chair, members, Chris Walker, on behalf of the California Sheet Metal Air Conditioning Contractors, in opposition to the bill.

Good morning. Sue Fries, Termite Lady, owner of ECOLA Termite Pest Control, director of used to be PCOC, now CAPMA, strongly opposed.

Stephen Tanksley, owner of Pinpoint Pest Control, a resident of North San Diego County. I strongly oppose this bill.

Ryan Allain, on behalf of the California Retailers Association, in opposition. Thank you.

Madam Chair and members, Annalee Augustine, on behalf of the Family Business Association of California, opposed as well.

Madam Chair and members, Laura Curtis, on behalf of the California Hospital Association, in opposition as well.

Good morning. Bryan Little, California Farm Bureau, in opposition.

Hello, my name is Jennifer Fox. I work for Rentokil-Terminix and also represent California Pest Management Association, and I oppose this bill.

Allen Kanady, Omega Termite & Pest Control. I oppose this bill.

Good morning. Gregg Gransie with Target-Specialty Products and CAPMA, and I oppose this bill.

Good morning. Dave Watkins with Rentokil-Terminix, and I oppose the bill.

Good morning. Carlos Blandino, owner of North Point Pest Solutions, Napa, CA, and I oppose this bill.

Morning, committee. Dave Silva, small business owner in Northern California, oppose.

Good morning. Dylan Scoville, Pest Control Center. I oppose.

Good morning. My name is Dave Hendricks with Lloyd Pest Control in San Diego, in opposition.

Erik Turner, on behalf of the California Construction and Industrial Materials Association, in opposition. Thank you.

Lauren Thrasher, small business owner, in opposition.

Robert Morales, owner, operator, Morales Exterminating in Rosemead, California, and I oppose this.

Good morning. Gordon Nasser, Orkin Pest Control, San Diego County, and I oppose this bill.

Richard Vail, Verikill Pest Control. I oppose this. Thank you.

Okay, I think that is the end of the opposition. Members, any comments on the bill? Questions? Okay. We have a motion from Senator Durazo. Senator Wiener, would you like to close?

Yeah. I mean, you know, fundamentally, this isn't about the PAGA deal from last year. This is about whether workers who are not being paid or paid in a timely manner are able to actually recover the penalties that this Legislature has enacted. Right now, they can't. They either have an option to go to the Labor Commissioner, which is, you know, years of delay or they get 35% of it.

These are--as was pointed out by one of the witnesses--these are not folks like the people who are largely in this building where we're used to getting just a stable paycheck in a very institutional way and there's never a question of whether you're going to get on time.

There is an entire large number of people in the State of California who have to wonder every two weeks, am I going to get paid or is it going to be late or is the check going to bounce and am I going to be able to meet my basic needs? No one should have to wonder that, and the system that we have set up right now creates very few incentives for employers to actually pay their workers on time. SB 310 will help, and I respectfully ask for an aye vote.

Thank you, and we have a motion from Senator Durazo. Assistant, please call the roll.

On File Item Two, SB 310, the motion is do pass to the Committee on the Judiciary. [Roll Call].

Okay, this Bill has a vote of three to zero. It's on call. Thank you, Senator. Okay, we're going to lift call so that we can get all as many votes as we can on file here. We're going to start with File item number one, SB7.

[Roll Call]

Okay, that Bill has a vote of four to one SB and 7. McNerney is out. File item number two. And that's. Oh, he just voted on that. Let's go to file item. zero, that's right. Okay, we will do File item number two. SB310. Wiener. That current vote is three to zero. All right.

[Roll Call]

Okay, we have a vote of 3 to 1, so that Bill remains on call. Let's move to File item number three. SB355. Senator Perez.

[Roll Call]

Okay. On a vote of 5 to 0, that Bill is out. Moving on to File item number 4. SB555. Caballero.

[Roll Call]

We have a vote of 4 to 1 on that Bill and it is out. Moving on to File item number five. SB532. I'm sorry, where are my glasses? SB632, .

[Roll Call]

Okay, that Bill has now voted 4 to 1 and it is out. Moving on to File item number six. SB847. zero, no. File item number seven. SB590. Senator Durazo.

[Roll Call]

Okay, that Bill now has a vote of five to zero. It is out. Moving on to file item number eight. That is SB809.

[Roll Call]

Okay, with the vote of four to one, that Bill is out. Moving on to File item number 11. SB648, Smallwood-Cuevas.

[Roll Call]

Okay, that Bill has a vote of 5 to 0. It is out. And we'll do our consent calendar.

[Roll Call]

Okay, with a vote of 5 to 0, the consent calendar is out. We are now ready for you, Senator Cortese. We are going to start with a Bill you're presenting for Senator Reyes, and that is SB 4847.

Well, thank you, Madam Chair and Committee Members. I appreciate the opportunity to present SB 847 on behalf of Senator Reyes. This bill is directed at stopping uninsured employers from evading their responsibility to reimburse the Uninsured Employers Benefit Trust Fund, sometimes known as UEBTF. I'll just refer to it as trust fund with the rest of this presentation.

To recoup the funds that are used from the trust fund to pay on an employer's behalf, the most effective method of collection employed against insured employers is through recording a certificate of lien. That's now. That's the status quo. While this has proven to be successful to some extent, it's a way by which the trust fund recoups these amounts. Some of the worst offending employers have exploited a current loophole of transferring property to a relative or a friend after a worker injury to avoid the lien and to avoid repaying the fund.

SB 847 resolves this issue by allowing a prima facie determination to be made when this loophole is exploited that the property is held in a resulting trust, which is a term of art, of course, a type of trust that can be imposed in favor of the illegally insured uninsured employer.

So the certificate of lien would continue to attach to the property. This will allow reimbursement from the employer for all sums paid by the trust on the injured worker's claim by collecting the amounts the trust fund is expended when the employer closes sale or refinance escrow.

The bill protects the financial stability of the UEBTF while also providing long term timely relief for injured workers. Here to testify today we have Alberto Torrico on behalf of the California Applicants Attorneys Association and Jason Marcus, Legislative Chair with the California Applicant Attorneys Association. Thank you, and I respectfully ask for your aye vote.

Thank you, Senator. And you have two minutes.

Thank you, Madam Chair. I'll do my best not to go over this time. Mr. Torrico sends his apologies. He's at another Committee hearing. I want to thank Senator Cortese for presenting on behalf of Senator Reyes and for her commitments of the injured workers of the State of California. Again, Jason Marcus with the Applicant Attorneys.

In 2017, the State Auditor, at the direction of the Legislature, investigated the various forms of fraud in the workers compensation system and found that fraud committed by employers resulted in 700% more cost in terms of actual dollars of fraud than all employee fraud combined.

They also found that the state's failure to effectively enforce the law resulted in 8,500 fraud cases being dismissed without any investigation. However, one bright spot in the report was the trust fund who found was actually doing a good job of collecting from dishonest employers.

As a practicing attorney, I from time to time represent injured workers who work for illegally uninsured employers and firsthand see the benefit that the fund provides in paying benefits to those workers who have been hurt when their employers failed to pay and when their employers have illegally failed to secure workers compensation for their employees. As the Senator explained, existing law allows the fund to seek reimbursement from employers, but some employers are exploiting the law to transfer their real property before the fund can attach a lien.