Assembly Standing Committee on Labor and Employment

Oh, he's calling. He's calling people.

Good afternoon, everyone. We will get started as soon as I get a couple members from our committee so that we can go ahead and get started as a subcommittee. Staff, if you're listening, please send your members over to labor committee. Thank you. Welcome to Assembly Labor and Employment Committee hearing.

In order to be able to hear as much from the public within the limits of our time, we will not permit conduct that disrupts, disturbs, or otherwise impedes the orderly conduct of legislator proceedings. Commenters who impede the orderly conduct of this meeting may be ruled out of order and may be removed. We will now start as a subcommittee, and I wanna thank Senator Blakespear for her patience. We will like to call up item number two, SB954, whenever you are ready. Try.

We're working to get it on. Okay. It's on. Thank you, Chair and colleague. I am here today to present SB 954, which provides thoughtful improvements to the CEQA exemptions passed through the budget act last year in SB 131.

Last year, the legislature passed Senate Bill 131 through the budget process, which created over a dozen new CEQA exemptions. Many of these CEQA exemptions are sensible and promote needed development that doesn't harm the environment or jeopardize human health. However, the bill also created an unprecedented CEQA exemption for advanced manufacturing, which was broadly defined, as well as neglecting to include protections for workers, habitat, and tribal resources.

As you may as you will recall, many elected members, including many on your committee here today, raised serious concerns about this policy when it was jammed through the legislature at the end of session. The bill passed on the condition that further changes would be taken to revisit the definition for advanced manufacturing and add stronger protections for habitat for sensitive species and for tribal resources.

SB 954 follows through on those commitments. Speaking specifically to the labor piece, SB 954 adds critical protections for workers on advanced manufacturing sites seeking a CEQA exemption. Specifically, the bill requires skilled and trained workforce and prevailing wage for workers at advanced manufacturing facilities, including both construction and operation at these facilities.

SB 954 also goes further with labor protections by requiring that project applicants meet high road employment standards, which includes good wages above the local or regional living standard, commitments to invest in employee training, incorporating worker voice, and requiring safe and healthy working conditions. As the committee analysis notes, high road employment standards are becoming the standard.

These labor protections are rigorous, but they are rigorous for a reason. Advanced manufacturing, as defined in SB 954, includes very polluting and high risk industries like semiconductors that have a history of harming the health of workers. A CEQA exemption for manufacturing of any kind is unprecedented. And so requiring that these manufacturing projects are labor leaders ensures that we are not sacrificing workers' rights to a safe environment in their workplace and in the communities where they live.

SB 954 also adds environmental guardrails to the advanced manufacturing CEQA exemption, including requiring that CEQA be triggered for facilities near sensitive receptive receptors or if facilities emit significant amounts of air pollution.

Taken together, SB 954 meets the promise of cleanup on SB 131 and provides a path forward to streamline sequa while retaining important protections for workers, the environment, and communities. With me as lead witnesses today, I have Elmer Lizardi from the Labor Federation and Gabriel Tolson from the Planning and Conservation League.

Good afternoon, Chair, Members. Elmer Lizardi with the California Federation of Labor Unions. We point 3,000,000 union workers in the state, including thousands of skilled workers who build, maintain, operate, and labor in manufacturing facilities in California. Our unions, again, fully support expanding California's manufacturing base, but we must ensure that industry growth is accompanied with protections for workers, communities, and the environment. SB 131, with its broadly defined advanced manufacturing projects, eroded labor standards for workers, environmental safeguards, and public accountability in the process.

And without any significant cleanup legislation, companies will continue to take advantage of the overly broad definition to skip over the public environmental and community review process to access building permits. This status quo allows companies to deprive workers, unions, and their communities of the opportunity to provide necessary input for large industrial projects that are input for large industrial projects that are cited in their own backyards.

And as previously in the natural resources committee, when their analysis outlined all the facilities that we're talking about, we have things like semiconductor facilities, fertilize production, and rare earth mining. And as we've seen recently, we've seen instances like what happened at Garden Grove, where 50,000 residents near the GKN aerospace facility had to be evacuated because of the threat of an imminent catastrophic explosion. And we're just incredibly lucky that we were able to avert a disaster, but these are the types of facilities that we're talking about.

Workers are the first line of exposure to the dangers in these facilities that can cause injury or death, and building any large scale industrial facilities without the safeguards that are traditionally required under CEQA increases exposure to unsafe conditions, compromises safety, and removes oversight mechanisms that ensure that projects are built correctly the first time. With this in mind, we support SB 954. We wanna thank Senator Blakesphere for her leadership here.

This is a great step towards establishing state oversight over these projects, while also prioritizing labor standards that allow for growth in the state's economy, while investing in safe middle class jobs for the workers that are actually propelling that growth. Thank you, and we respectfully ask for an aye vote.

Good afternoon, Chair. Good afternoon, Chair and Members of the committee. My name is Gabriel Tolson, and I'm here in support of SB 954 on behalf of the planning and conservation

Can you move the mic a little closer?

Oh, jeez. Thanks. Thank you.

This bill represents a full year of advocacy by more than 200 environmental justice, public health, conservation, and labor organizations, along with commitments from with from more than 30 legislators to fix the quote advanced manufacturing sequel exemption enact enacted under SB 1 through one last year.

That exemption applied to more than 80 categories of industrial projects, many of which use and might release chemicals that can cause cancer, birth defects, and other health problems even when the facilities are located in your homes, schools, day care centers, or hospitals. Never before had the legislature allowed such hazardous land uses to bypass requirements for stand for transparency, community safety, and habitat protection. The importance of these protections continues to be demonstrated by recent emergencies in Southern California.

In late May of this year, as Omar mentioned, explosion risks at the Garden Grove GKN aerospace facility, which was built before CEQA, forced the evacuation of more than 50,000 residents.

Around the same time, a fire at a tighter recycling facility in Southgate sent thick black smoke into surrounding communities and prompted a shelter in place order. That incident occurred only a few miles south of the former Exide battery recycling facility, which emitted toxic lead pollution into nearby neighborhoods for decades and has already cost the public more than $770,000,000 in cleanup expenses. For more than fifty years, CEQA has allowed community members and workers to participate in planning decisions when facilities like these are proposed.

Mitigation measures secured through CEQA have often included the installation of air filters in surrounding homes and schools, the replacement of hazardous chemicals with safer alternatives, training and resources for local emergency response departments, and conservation of habitat for sensitive species. These protections must be restored for projects like GK and aerospace, Exide, and the other hazardous project types exempted under SB 131.

I thank you for your time and respectfully urge your Aye vote today on SB 954.

Thank you. Do we have additional witnesses in support?

Chair, Members, Jacob Evans with Sierra California in support if amended to strengthen the guardrails in the bill. And also, we're just doing the same position for the Western Center on Law and Poverty, Green Foothills, and Californians Against Waste. Thank you.

Good afternoon. Christina Scrunch with the Center for Biological Diversity in strong support. Thank you.

Linda Wei with Western Center on Law and Poverty. Support if amended.

Katie Valenzuela on behalf of Communities for a Better Environment, Clean Water Action, California Nurses for Environmental Health and Justice, Center for Environmental Health, and PSRLA in the support if amended. Thank you.

Mariela Rancho, Leadership Council for Justice and Accountability in support. Thank you.

Vanessa Flores on behalf of Clean and Healthy California in support.

Marquise King Mason, Natural Resource Defense Counsel, support if amended. Thank you for your leadership.

Hi. Marie Lou on behalf of SAHA, Mothers against, Mothers Out Front Silicon Valley, endangered habitat leads, and the Environmental Action Committee of West Marin if support if amended. Thank you.

Judy Yee, State Building and Construction Trades Council in support. Thank you.

Chloe Shea on behalf of California Environmental Voters in support, also expressing support for Environmental Action Committee of West Marin, Indivisible of Santa Cruz County, California Coastal Protection Network, and supportive amended positions for Center for Biological Diversity, Center on Race, Poverty, and the Environment. Thank you.

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

Hello. Ada Welder with Earthjustice here in support.

Frankie Gracie on behalf of the Blue Green Alliance in support.

Sam Appel on behalf of UAW region six in support.

Hi. Natalie Brown on behalf of Defenders of Wildlife, the Sonoma Land Trust Environmental Defense Fund, Pacific Forest Trust, and the Nature Conservancy in support. Also voicing a support if amended position on behalf of Restore the Delta, Resource Renewal Institute, the Environmental Protection Information Center, and the San Francisco Gatekeeper. Thank you so much.

Hi. I'm Junie Badain, UAW 4811 member in support. Thank you.

I'm Ernest Walker, an organizer with UAW 4811. I'm in support.

I'm Theresa Nguyen, a member of UAW 4811 in support.

Good afternoon, Chair, Members. JP Hanna on behalf of the California Nurses Association in support.

Thank you. Do we have any main witnesses in opposition?

Sorry, Madam Chair and Members. Connor Guzman, I'll have the Teamsters California and Unite here in support. Sorry for being late.

Good afternoon. I'm Andrea Lynch on behalf of the California Chamber of Commerce and respectful opposition to SB 954. We appreciate Senator Blakespear's continued efforts to clean up this bill, and we have no objection to the public works portion. However, there are still critical concerns. Our concerns are with the private entity piece, specifically the skilled and trained workforce mandate and the labor peace agreement requirement.

The skilled and trained workforce provisions for private manufacturers applies to every contractor and subcontractor at every tier and carries steep penalties, including $10,000 per month for a missed report and $2,000 per day per worker for noncompliance. These are costly compliance burdens layered onto a private manufacturer simply trying to use a sequence exemption to build a facility. To our knowledge, the labor peace agreement provision that conditions an environmental exemption on an agreement would be unprecedented in CEQA law.

A labor peace agreement requires an employer to remain neutral in any union organizing effort, often before a single worker has been hired or a project has broken ground. Consider a manufacturer and by evaluating where to locate a new facility.

If California requires a labor peace agreement just to access this exemption and a competing state does not, that's a real factor in site selection decision. Their agreement would be required before the facility is ever built or a single job is created. And California risk losing the very investment this exemption is designed to attract. California has already lost 600,000 manufacturing jobs since 2000, nearly 36% of the entire sector. CEQA is an environmental review statute.

It was never intended to be a vehicle for extracting labor peace agreements that have nothing to do with environmental impact. For these and other reasons, we respectfully oppose SB 954.

Excuse me. Good afternoon, Chair, members of the committee. My name is Luis Morante on behalf of the Bay Area Council. Bay Area Council represents about 400 of the largest employers in the region. We're the first business group in California to back AB 32 because we believe California should lead the world in building a clean economy.

But we worry California is becoming a cautionary tale of what not to do. California has some of the cleanest electricity, the toughest efficiency standards, and the cleanest fuels in the country. If thiS Bill wants to maximize global environmental impacts and local job benefits of advanced manufacturing, we should be keeping that manufacturing here under our standards. But thiS Bill functionally repeals the CEQA exemption encouraging that to happen. As written, SB 954 goes beyond cleanup.

Its new land use requirements, certification process, labor requirements, make the bill more difficult in many cases than actually just going through the CEQA process. Some of these requirements in the bill such as the LEED certification are impossible to perform during permitting because LEED certification happens after construction. We're not opposed to environmental guardrails. We are opposed to requirements that are impossible to meet and that drive away the projects, jobs, and climate benefits that we should be competing for. Consider Anthro Energy, a Bay Area battery company.

California awarded Anthro more than $5,000,000 through the Energy Commission. But last December, Anthro announced their first large scale factory not here, but in Louisville, Kentucky, where roughly two thirds of the electricity still comes from burning coal. That's largely because the they figured that building in California was too hard. Again, largely because of CEQA. That company's carbon footprint didn't shrink because it moved out of the state.

It grew. But it was out of sight and off our books. And that's just not a strategy for fighting climate change. For these reasons, we must respectfully oppose SB 954. Thank you.

Thank you. Do we have additional winners in opposition?

Paul Schafer with the California Council for Affordable Housing in respectful opposition. Thank you.

Afternoon, Madam Chair. Chris McCailey here on behalf of the Los Angeles Area Chamber of Commerce in respectful opposition. Thank you.

Elizabeth Escobello, the California Manufacturers and Technology Association, also in opposition.

Catherine Charles on behalf of the Housing Action Coalition opposition. Thank you.

Good afternoon, Madam Chair, Members. Raymond Contreras with Lighthouse Public Affairs. On behalf of Abundant Housing Los Angeles, SPUR, Circulate Planning and Policy, Student Homes Coalition, and California DMV in opposition. Thank you.

Hi. Jenny Aguilar on behalf of California Business Properties Association, NAO California, and California Business Roundtable in opposition. Thank you.

Good afternoon. Jacob Brim with the California Retailers Association in respectful opposition.

Seeing no other witnesses in opposition, I'll turn it over to the dais for any questions from Members. Assemblymember Ward, I'll send it over to you.

I wanna thank you, Senator, for bringing this forward. I know that there was I'm I'm in the club of a lot of members that were concerned about some of the quick quick pressure judgment on SB 131 and the need for trying to be able to get this right. And that conversations that you're having, I think, through the labor committee perspective to be able to make sure that we're working on standards here.

So while we're correcting some of the issues on one thirty one that we're also using this moment to be able to address that is exactly what you're bringing forward in September. So really proud for the work that's gone into this.

I think that there's an opportunity to continue while I know that there's not maybe incorrect arguments that some of those that, you know, really understand our housing economics are are raising. I think some of those can continue to be worked on as this bill moves forward to every extent possible. And I wanna be able to support it today and happy to move the item. Resource subcommittee?

Now we're still in our subcommittee.

Okay. We'll move it when we have a quorum. Thank you.

Thank you, Madam Chair, and thank you, Senator, for your leadership on this and for everyone that's been involved in ensuring that the promises that were made at the end of session last year that we're actually staying true to them. I also wanna thank Senator Connolly. I know that he worked a lot on our side and has been in partnership with Senator Blake's spirit to ensure that that we have guardrails and environmental protections that, you know, supplement what was done last year, I guess you can say.

And look, you know, ultimately, California is still the the nation's economic engine. It still leaves the nation and the number of manufacturing companies and jobs, but we're not gonna enter a downward spiral on environmental quality or job quality in order to win a race that ends up with our residents and our workers losing.

So I think that this allows for us to take advantage of you know, truly of innovative, advanced manufacturing opportunities through grants that are being presented to the from the Federal Government, as well as our own incentives that we provide as a state, but do it in a way that that we don't have such expansive CEQA exemptions that render it moot when it comes to the manufacturing, especially of of whether it's mining or other types of manufacturing that certainly I don't think anyone would consider, you know, the as part of advanced manufacturing.

So, I can certainly. We a quorum right now? So, yeah, I'll join with the Senate award when we have quorum here to also move or second this and would like to be added as a coauthor.

Thank you.

Thank you. I apologize for that. But, yes, we do have quorum so we can establish that. Please, secretary, please call the roll.

[Roll Call]

We have quorum. Thank you. We have a motion and a second. Any additional comments? Before I ask you to close, Senator, I would like to echo those comments of my colleagues.

Wanna thank you for bringing this bill forward today. I was one of those members who was very vocal during the budget process. So I'm glad to see that we're actually doing something about it, and we're delivering on what we said we were going to do when this kind of all took us by surprise. And I voted on the budget with the understanding that we could come back and fix some of these issues.

So I am grateful that you are moving in that direction, which is why you have my eye recommendation today.

And with that, would you like to close?

Yes. Thank you. Thank you for that support, Chair. I wanna thank my colleagues, many of whom have been working on this policy, Recognizing the difficulties of doing cleanup is the challenge. You know, when it's easy to say at the end of session when you're doing things quickly, you'll do cleanup, but then actually negotiating it through, to a successful finish line is is challenging, but we are continuing to work on it.

I want to also recognize Assembly Member Connolly. His AB 1083 engaged many members of the Assembly on the same topic, and good progress was made. I also want to acknowledge the opposition because they they raise valid concerns, and we will continue to work with them and be in dialogue to make sure that we are able to do the best we can to thread the needle around promoting manufacturing in California that also provides good jobs and also protects communities from environmental degradation.

So staying true to the those two north stars is something that's really important, but we'll continue to be in close dialogue with them to see if we can, work out something that works for all. So with that, I respectfully ask for your Aye vote.

Thank you. Secretary, please call the roll.

File item number two, SB954 Blakespear. Motion is due passed and we refer to committee on appropriations. [Roll Call]

[Roll Call]

5-0. We will leave the roll open for absent Members. Next up, we have, I saw Senator Gonzalez here. Item number 3, SB 966.

We're gonna grab the witnesses. Excuse me, Madam Chair. They're here somewhere.

No worries. Whenever you're ready.

I'll go ahead and get started if... Oh, go ahead, please. Unless...

if we can move the consent calendar.

File item number 1, SB 845, Pérez. File item number 4, SB 1012, Smallwood-Cuevas. File item number seven, SB 1024, Menjivar. File item number ten, SB 1227, Durazo. Motion is do pass and re-refer to Committee on Appropriations. [Roll Call]

Consent calendar is 5-0. We will leave the roll open for absent Members.

Alright. Thank you and good afternoon madam Chair and members. I'm here to present Senate bill 966, which will codify critical safety standards and protect refinery workers from rollback, regulations. In 2020 in 2012, a fire at the Chevron refinery in Richmond endangered 19 workers and resulted in fifteen thousand residents seeking medical care. An investigation actually found the disaster could have been prevented if the refinery had acted on worker safety concerns.

In response to disasters like this, OSHA or the Occupational Safety and Health Standards Board adopted updated process safety management regulations in 2017, which strengthen worker protections, including the right to select their own representatives to participate in safety proceedings at refineries, report hazards anonymously, access safety information, and initiate stop work procedures. Now under pressure from refineries, new regulations have been proposed that will weaken these hard won protections. Refinery workers are on the front lines of hazardous conditions and have direct experience in process safety management.

They deserve a seat at the table. And nine sixty six makes that right permanent by codifying the existing worker representation and participation standards from the 2017 regulation safeguarding these essential protections from regulatory rollback and industry pressures.

Testifying in support today, I have Norman Rogers from the United Steelworkers Local six seventy five, as well as Lori Wallace, former employee at the Phillips sixty six refinery in Los Angeles. I respectfully ask for an aye vote, madam Chair.

Good afternoon, and thank you for the opportunity to speak. It can't be stressed enough that the regulations that we won in 2017 were a group effort between ourselves as United Steelworkers, the building trades, the Blue Green Alliance, communities for a better environment environment. All of us came together after what happened in 2012. And what happened in 2012, big accident, 15,000 people seeking help. But in particular, there was knowledge that the company held that they had thinning pipe.

There were recommendations that had made been made within the company to replace that existing pipe. Some of it did get replaced. The crucial piece that caused the incident did not get replaced, but there had been years and years of notice. But all that information was held by the company. They knew it, but nobody else did it.

And when it became apparent, it was the day of the release, and it was the day that those all those folks were impacted. All that came out in the investigation that was done by CSP. So that started a five year push for us to get this language. We have lived with it since 2017. In 2019, there was a lawsuit filed.

COVID hit, and so cases were put on hold. And that delayed the final, outcome where the state settled with, whisper. But we have lived with that, and we still currently live with those regulations. And we would ask that we're allowed to keep them because they've been very important and very helpful.

Hi. I'm Laurie Wallace again. Thank you. And thank you for giving me the time to share with you. As a worker that was recently laid off with Phillips sixty six, I can tell you that with twenty years of expertise, when I'm looking at a piece of equipment and knowing that we are going to have to do maintenance piece of equipment that they don't know and only I know because I've been working on it for twenty years.

When you remove my ability to speak and say things that I think might be a safety hazard as an employer, I and say things that I think might be a safety hazard as an employee in situations like this is when you cause the bigger hazards. Everything that we do is not only to protect ourselves, but it's to protect the communities. And taking away our voice is actually going to hurt not only the communities, but us.

I know from experience in working with equipment that because I was in the room in certain situations, I was able to raise concerns that the upper management didn't know or wasn't aware of because they aren't the ones working on the equipment every day. So I am asking that you understand how important it is for everybody to have a voice for the safety of the community and the employees.

And I also ask that you give us an eye on this. Thank you.

Do we have additional witnesses in support?

Hello, Katie Valenzuela on behalf of Communities for a Better Environment in support. Thank you.

Frankie Gracie with the Blue Green Alliance in support.

Julia Sebastian with California Labor for Climate Jobs in support.

Mitch Steiger with CFT in support.

Christina Scranger, the Center for Biological Diversity in support.

Shady Hannah on behalf of the California Nurses Association in support.

Thank you. Seeing no other witnesses in support, do we have a main witness in opposition?

Good afternoon, madam Chair and members. Zach Leary on behalf of the Western States Petroleum Association. I wanna urge extreme caution as you examine this bill. As you know, we've worked extremely close with the Newsom administration, with the California Energy Commission, with a number of stakeholders that regulate our industry, including the legislature on stabilizing oil refineries and the the the fuel market that you have in California and think that remains a priority.

Unfortunately, it's this type of regulatory and legislative whiplash that creates a business environment that is very difficult to operate in.

As it pertains to the lawsuit and the DIR regulations, we did ultimately sue over the DIR final regulations in 2019 after and we've sued in federal court because we believe parts of the, provisions were preempted by the National Labor Relations Act. Ultimately, in 2024, after careful negotiations with the Department of Justice, EPA, Cal OSHA, DIR Standards Board, we ultimately came to a settlement agreement to address this very issue because we believed at that time that that regulation was preempted by the National Labor Relations Act.

Fast forward now to thiS Bill, it would reinstate that very, provision that we believe was preempted. So whether it's a regulation or statute, we believe it could potentially be preempted by the federal law, and therefore, we could end up in this very same situation. So, for those reasons, we are in strong opposition to SB 966.

We think it's these types of regulatory and legislative whiplash that create that difficult business environment to operate in. Thank you.

Do we have additional witnesses in opposition? Seeing none, I'll turn it over to the dias for any member comments, questions? Second. We have a motion and a second. Senator, would you like to close?

I wanna thank my witnesses for being here. They're actually on the ground, have been working in refineries, and I just really appreciate their testimony because they're the ones that actually know the health and safety concerns at our refineries. And while I respect the opposition, the federal preemption issue is just opinion at this point. No court has actually ruled that there's been a federal preemption.

Yeah.

And so with that, I will continue to say that, you know, at our refineries, we need to make sure that there is employee participation and that there is worker, participation.

So we can prevent disasters from happening. With that, I respectfully ask for an aye vote.

Thank you. And you have an I recommendation from myself. Secretary, please call the roll.

Item number three SB 966 Gonzales motion is do passed and we refer to committee on appropriations Ortega. I take a I Alanis. Chen Elham Wari. Calra. Color.

I Lee Lee, I Ward.

That measure has 30. We will leave the roll open for absent members. Thank you. Thank you.

That measure has 30. We will leave the roll open for absent members. Thank you. Thank you.

I will see no other Senators here.

I will make a call to the following senators. Senator Smallwood-Cuevas, Cabaldon, Reyes, Arreguín. If you can please make your way to the labor and employment committee. Welcome, Senator. Yes.

We've been waiting for you. Oh. Item number 5 and 6 , SB 1203, 1284, whenever you are ready.

Thank you so much, Madam Chair and Members. Good afternoon. I am proud to present SB 1023. This is the stand for security act. And this bill this bill seeks to modernize training standards, strengthen accountability, and establish a clear professional pathway for private security guards across California.

I want to reaffirm my commitment to take the future amendments, that would require BSIS to conduct a regional training capacity analysis to identify and ensure that qualified third party organizations are ready to provide deescalation training to delay the employer's prohibit prohibition from providing the deescalation training requirements for two years and remove the exemption of the church mosque or other place of worship private security officers, training requirement under SB 123.

At the outset, it is important to understand the scale and the evolution of this workforce. There are approximately 1,200,000 security guards in the country making the private security industry, and I want you all to be clear and understand this, the third largest industry in The United States. There are 330,000 licensed security officers, and they protect apartment buildings, hospitals, transit systems, retail centers, schools, offices, entertainment venues, and neighborhoods across the state. They outnumber our sworn force of police officers three to one.

So when there is an emergency, the first person who is going to respond more than likely is going to be a security officer. They are expected to deescalate and assess risk and to protect the public often before our first responders. And increasingly, these workers are not simply protecting property. And we know the mental health crisis that we have in California and how we're trying to get ahead of it, but these workers face it every single day. They also face a substance abuse emergencies.

They are also dealing with our homeless population and some of that instability, trauma, and violence, unpredictable confrontations. And across the nation, security officers are increasingly being assaulted, injured, and even killed on the job. According to federal workforce, fatality data and industry reporting, security guards face workplace violence rates significantly higher than many occupations because they routinely interact with unstable and hostile individuals, often alone, often unarmed, and often as we are here today without the training infrastructure that we must provide to ensure public safety.

And yet under current law, they receive just eight hours of initial training with thirty two hours thereafter. Oftentimes, this training is performed on the job.

And what that means is just as you're here hearing this, this hearing today, if you were a security officer, you might have a laptop in front of you where you're doing your training module and also conducting this hearing. And so that is an unacceptable reality. This is a $34,000,000,000 industry. The average worker earns roughly 38,000 per year, and we know that places them right at and below our poverty level here in California.

We are simply asking workers who are earning poverty level wages to manage some of the most volatile public situations in the state.

And our question is, is that fair? Is that fair to the workers? Earlier this year, millions of American watched a viral video, and and this was something that disturbed me profoundly of a distressed black homeless woman being punched in the face by a security officer during a front confrontation. At the same time, we know of security officers who were told by management to go deal with a theft, which resulted in one of the workers being injured and stabbed, and then was later terminated. And we'll hear more about that situation.

So these are moments that are happening as we are not ensuring that these workers are adequately trained to be able to do the job that we demand and expect them to do. From a policy perspective, when we under invest in training and advancement in a workforce like this, we risk reinforcing patterns of occupational segregation and limited mobility. And why do I say that? Because these workers are largely black and brown young men. And why shouldn't we be investing in their upskilling?

Why can't this be a feeder into other career opportunities and first response? Much of it is because the industry is standing in the way of that opportunity. We want to use black and brown bodies to protect these buildings, but we don't wanna make sure that black and brown men and women are trained. So SB 123 takes practical steps forward. This bill strengthens security skills training by requiring eight hours of specific deescalation instruction.

It reviews wages and working conditions. It holds employers accountable through stronger reporting and enforcement, and it confronts implicit bias and racial profiling in the field. This bill is not about adding burden. It's about aligning standards with reality. And with me today, proud to have is doctor Enrique Lopez Lira, director of the low wage work program at UC Berkeley Center for Labor Studies, and Earl Hayes, a security officer in a major health care facility here in Sacramento and a former law enforcement officer.

We also have Tiffany Crane for technical assistance with SEIU if we need her.

I'm here. Good afternoon, Chair Ortega and Members of the committee. My name is Earl Hayes. I live in Folsom, and I work as a armed security officer in a hospital here in Sacramento. I've been a security officer for nearly three years, and before that, I spent fifteen years with the San Francisco sheriff's department.

I wanna address the misconception about private security work. Many people think it's simply observing report, but that's not the reality. Security office officers are often the first people to respond when someone is trespassing, acting disruptively, or showing signs that they may harm themselves or others. Our job is frequently to interview early and deescalate situations before they become crisis and before law enforcement needs to be called.

One thing I noticed when I started security work is that the basic training required to obtain a guard card does not include meaningful deescalation training.

There is no requirement to demonstrate deescalation skills through role playing or exercise. Even though communication is one of the most important tools a security officer has, I was fortunate to come into this work with years of experience in law enforcement. Working in the jails taught me how to approach people calmly, listen, assess situations, and help diffuse tensions before they escalate. In many cases, when people become angry or upset, they will tell you what they need if you take the time and approach a situation professionally.

Those skills can make all the difference.

A security officer can either worsen the situation or help make it better. But not every officer has the benefit of years of law enforcement experience, and many newer inexperienced officers are expected to handle volatile situations without the training they need. At the hospital where I work, especially around the emergency department, emotions run high, intentions can escalate quickly. That's why deescalation skills are essential. Security officers need training that prepares them to manage these situations safely, professionally, and effectively.

That's why I'm urging to support SB 1203 and recognizes the realities of security work and provides the training that officers need to handle difficult encounters safely

by making sure that security officers receive meaningful de escalation training, SB 123 will help prevent conflicts from getting worse, improve safety for the public and workers, and better prepare officers for the responsibilities they face every day. I respectfully ask you to vote yes on SB 1203. Thank you for your time.

Good afternoon, Chair Ortega, Members of the committee. I'm Enrique Lopez Lai, director of the low wage work program at the UC Berkeley Labor Center. I'm here to share what our research and the broader literature finds on the conditions the bill addresses. Two of the findings mentioned in the bill are testable empirical claims that higher wages help retain an experienced workforce and that scripted deescalation training that doesn't require practice is less effective. Our data and the research literature speak to both.

California security guards earn a median of about $20 an hour against 25 $28 for the typical California worker and roughly 80% earn below a living wage. This isn't offset by benefits. Four in five work full time, yet only about half have an employer or union health coverage. These are the conditions associated with turnover above a 100% in this industry. Because this is a public safety workforce, that turnover means the guard at a hospital or transit station is disproportionately likely to be new to the post.

Guards are increasingly first responders to mental health and behavioral crises. A common complaint that we hear is that much of their training is passive recall in nature, and the research helps explain why that format has limits. The escalation is a behavioral scale performed under acute stress, which the evidence suggests is built through in person practice and role play rather than passive recall. The stronger evidence comes from adjacent fields.

In health care systematic reviews of workplace violence prevention find that the effective programs are hands on and scenario based rather than the lecture or video based.

In policing, rigorous studies including randomized controlled trials in Louisville and Tempe, find that well designed de escalation training measurably changes office officer behavior involved for encounters with some studies showing reductions in injuries. The consistent finding across both fields is that the delivery mode matters. How training is secured affects whether skills transfer. The bill's provisions specifying live in person evidence based deescalation training track that body of evidence. California offers a relevant natural experiment on the wage question.

After the San Francisco Airport adopted a living wage for screeners, turnover for Sharply and service quality improved.

Thank you. Thanks. Thank you. Do we have additional witnesses in support?

Gustavo Garcia Martinez, California, security guard, sixteen years. And I support this bill.

Roberto Rubio, five years in the security industry, and I approve SB 1203.

Latasha Reed, seventeen years security officer, and I support SB 1203.

My name is Miguel. This is Amiga security officer. I support 1203. Thank you.

Ariel Park, a security officer in San Francisco, and I strongly support SB 1203.

My name is Jerry Longoria. I've been a security officer for twenty five years. I support this bill, SB 1023. Thank you.

My name is security officer Kevin Adams. I've been a security officer for thirty six years, and I'm definitely in total support of this bill.

How you doing? My name is James Lyons, security officer for twenty six years, Los Angeles, California, and I support SB 1203.

Hi. My name is Daniel Workasolio at Disneyland. I'm in support of SB 1203.

But, sir, you're a security officer for six years, and I support SB 1203.

Malik Harris, security officer in support of SB 1203.

My name is Akiva Carter, and I'm in support of SB 1203. I've been in the security office for forty years.

My name is Miguel Lopez with USWW, and I also support SB 1203.

Hi. Good afternoon. Thank you for having us. I support SB 1203. Thank you.

Good afternoon. My name is Beatrice Sandoval. I'm support my sisters and brothers for the new. Thank you.

Good afternoon. My name is Esther Sandoval. I'm a baby matron with Disney. I also am in support of SB 1203.

Good afternoon. I'm Wayman Fedri, twenty one years in Los Angeles and I wholeheartedly support SB 1203.

Good afternoon. My name is Tina Kramer. I'm Disneyland dispatch custodial and I support SB 1203.

Good afternoon. My name is Hector Ojeda. I work with for Disney in in the entertainment department, and I support SB 1203.

Good afternoon. My name is Allison Huber. I've been in security for fifteen years. I'm definitely in support of SB 1203.

Good afternoon. My name is Alexander Nunez based out of Los Angeles, California. I've been a security officer about for about three years now, and I am in support of SB 1203.

My name is Larry Taylor. I've been security officer for more than fifteen years, and I definitely support Senator Cuevas' bill SB 123.

Hello, sir. My name is Julio Ramirez. I support, SB 1203.

Hi. My name is Eugene Marvel the third. I'm from San Diego, California. I've been in security for a year and a half. I fully support SB 1203. Thank you.

Hello. This is Salma Chavez. I've been in security for over fifteen years, and I'm in support of the SB 1203.

My name is Anthony Guzman, and I support SB 1203.

Good afternoon. My name is Howard Frider. I'm a security guard representing my site in San Francisco, California. I support SB 1203.

Good afternoon. My name is Alfredo LaHood. I am working as a janitor in Oakland, California. I'm here in supporting the SB 1203. Thank you very much.

Hi. My name is Erica. I am support to SB 1203. Thank you.

My name is Warren Reed. I'm a security officer in Los Angeles, and I support SB 1203.

Thank you, gentlemen and women. I'm David Moran, United States Marine, veteran. I support SB 1203. Thank you.

Good afternoon. My name is Leon Jenkins, train security guard for twenty one years. I support this bill.

Hello. My name is Sarah Bakari, union organizer at SEIU USWW, and I'm in support of 1203.

Hi. My name can you hear me? Awesome. My name is Jennifer Dyer. I am a lead rep. We're the security division, and I support SB 1203. Thank you.

Hi, everyone. My name is Deandre Victoria. I'm with SCIU as USWDO as organizer, and I support SB 1203.

Hi. Good afternoon. My name is Destiny Ojeda, armed guard for eight years. I'm in San Diego, and I support SB 1203.

Good evening. My name is Gregory Armijo, security guard, Sacramento for seven and a half years. I support SB 1203.

Hello. My name is Pedro Los Santos. I come from Los Angeles. I'm a janitorial, and I'm here to support SB 1203.

Christian Ramirez, proud Vice President of SEIU USWW in support of SB 1203.

Madam Chair and Members, Tiffany Whiten with SEIU California, sponsors of the bill in strong support. Thank you so much.

Thank you, Chair, Members. Elmer Lizardi with the California Federation of Labor Unions in support.

Hi. My name is Alejandro Yoas, a grafter union member and licensed security officer representing myself. In spite of my current physical condition, I filled from Los Angeles this morning to simply express my support for SB 1203. Senator, staff, thank you for your sacrifice.

Thank you. Thank you. Do we have any main witnesses in opposition?

Chair and Members, Kelly Jensen representing Cal saga. We appreciate the author indicating that she is taking some amendments to the bill. We have not seen those yet, so we have to speak to the bill in chief today.

And to that point, while we support the sentiment and continued need to ensure security officers are well trained, SB 1203 will immediately make it more expensive and more difficult to employ security guards resulting in an even greater shortage and delayed employment of the exact individuals necessary to provide protection to California citizens and visitors, especially in the light of the upcoming worldwide events coming to California.

SB 1203 will eliminate jobs, making companies that seek to automate security functions more competitive, thereby displacing the very people this bill intends to help.

SB 1203's wage pressure on current lawful operators and those on the fringe will no doubt amplify the incentive to bring in less ethical providers to skip licensing requirements altogether. Most notably and squarely in this committee's jurisdiction is the reconstitution of the Industrial Welfare Commission. The IWC, as you know, has been idled since 2006. The bill directs the commission to promulgate a new wage by 06/30/2028. And I call your attention to that day because it's seventeen days before the Olympics starts.

While the city of Los Angeles has pulled back on their so called Olympic wage, this bill continues down that path even though the host city has realized that a minimum wage increase prior to the Olympics would be harmful to the success of that event. I urge the committee to at least delay that provision until after the Olympics, so the companies are not in a situation of having to anticipate what that wage is going to be to build into their contracts or be left underfunded.

The industry estimates that it will have to hire some 15,000 to 20,000 security guards to meet that demand. Thank you.

We ask for your, we ask that you hold the bill in committee. Thank you.

Thank you.

Good afternoon, Chair and Members. Jennifer Rowe with capital advocacy. I'm here today on behalf of Allied Universal, a security company in strong opposition to SB 1203. While we applaud California's nation leading training requirements, this legislation goes much further than is reasonable and introduces several critical problems. First, the bill will impose a staggering 1 to $2,000,000,000 annual financial burden on our industry and California's economy.

Significantly increasing training mandates and reconstituting the industrial welfare permission to issue a new wage order will drastically escalate expenses. Consequently, struggling retail businesses and local governments will be forced to eliminate human security jobs. Replacing them with cameras, fences and AI. The bill creates a massive recruitment bottleneck and unfair liability for employers like us. It prohibits licensed security companies from conducting their own required de escalation training, mandating specific third party organizations instead.

With over 350,000 secondurity guards in the state, it's unclear if enough approved third party organizations exist to handle this volume. Despite lacking control over third party availability, employers like us also face a disproportionate $10,000 fine if they fail to ensure the training occurs. So for this reason, we are strongly opposed. Thank you.

Thank you. Do we have additional witnesses in opposition?

Madam Chair, Members, Paul Yeager on behalf of the current County Board of Supervisors, I wanna make sure the author knows. I will make sure they review the amendments. Thank you.

Good afternoon. Andrea Lynch on behalf of the California Chamber of Commerce in opposition.

Seeing no other comments and oh, yeah. Okay.

Hi. Jenny Aguilar on behalf of the California Business Properties Association and Boma, California in opposition. Thank you.

Thank you. Seeing no other comments in opposition, I will now turn it over to members on the dais, Assembly Member of Kalra and Lee.

Thank you, Madam Chair. I'd like to make a motion to ask someone. Thank you, Senator, for bringing this forward. I really wanna thank everyone that came here from every corner of the state, including friends from San Jose that are here. I've had a great pleasure of being able to work with some of our security officers in Silicon Valley, obviously, the most expensive housing market in the nation.

And I think ensuring that that, you know, our especially in this in this moment of time, with a lot of the angst that's been happening in our society, having appropriate training, de escalation training is critically important in ensuring that our security officers are best trained as possible. As mentioned, there's far more security officers and police officers. Security officers are the ones that keep us safe.

And it just comes it brings to mind several years ago when, with with our friend David Huerta and with Jesse Jackson, we we took thousands of petitions to the, to the management of Apple, and and they brought them in house partly because we wanted to make sure our security officers had some some semblance of security themselves when it comes to taking care of themselves and their families as they were protecting one of the most important companies in our region, if not the world, certainly at that time.

And so I mentioned all that because the organ the manner in which you you come together and organize and show up matters.

Being here does matter. But more importantly, I think this legislation, you know, is really important during these times to ensure that you're you have the best training possible, because I know you all take your jobs very, very seriously.

Many of you have been doing it for many, many, many years, and obviously wouldn't still be employed if you weren't doing that job well and taking it seriously or contracted with so many important so many companies that that drive our economy, you know, from Silicon Valley to LA to San Diego and and here in this region and everywhere else in this state. So thank you for showing up. I'll certainly proudly vote Aye on this and would like to be added as a coauthor.

I wanna thank the author for bringing the bills forward. You know, I have a lot of friends who actually do also work as private security guards and only recently some of them are joining unions efforts and finally getting health care for the first time. I think it is pretty wild to the general public to think that so many security guards that they see at places of tourism, health care settings, or just properties at night when there's fences there.

Those people don't really get adequate training, much less adequate compensation. And at best, some of those jobs are very isolating, especially to those folks who work the night shifts. Those can be quite isolating, lonely times. And at worst, you know, you can have some confrontations that happen. Right? And, luckily my friends are smooth talkers. They're good talkers of people and safe encounter situations.

They talk people down. But, you know, it's not their job to get in between someone really and doing a lot of things. But it's also, you know, a lot of them don't have a lot of training, don't have those same innate skills all the time. And I think it is quite, I think the general public will be quite alarmed to know how pervasive this industry is and yet how little training people get and how also little compensation they get.

So I think it's a very reasonable bill. I think you took a lot of amendments today that make it a very implementable bill in the long run as well. It gives a couple years for different things. And I think it's just very, very reasonable bill and I think it's very common sense. I'd love to be added as a co-author and join your effort on this. And I'm proudly supporting the bill today as well. Thank you.

Seeing no other comments from Members, I would like to make my own. Just wanna thank the author. And I wanna thank all the workers for keeping us safe across the state from San Diego to Redding and everywhere in between, including the happiest place on Earth. It's making sure that you have the training and the compensation to go with the work that you do every day. It's the least we can do. And so you have my full support. With that, you know, this bill has an aye recommendation. Senator, would you like to close?

I wanna say thank you so much, Madam Chair and colleagues, for your comments. I'm happy to add you as co-authors on this bill. This is a common sense bill, as we are facing the Olympics, and we know the one thing this administration has done is invest in security. There will be billions in contracts let go to make sure that our region, our state is protected.

This is part of our legacy is that after the Olympics, we will have a more trained workforce, that we will have black and brown workers who are on a pathway to a career, and we know training is a major part of it. We wanna make sure workers are safe. We wanna make sure our communities are safe, and this bill helps to do that. And with that, I respectfully ask for your aye vote.

Secretary, please call the roll.

Item number five, SB 1203, Smallwood-Cuevas. Motion is do pass and re-refer to a Committee on Public Safety. [Roll Call]

That bill has four ayes, one no. We'll leave the roll open for absent Members.

Senator, would you be ready for SB 1284?

Yes. I will. Oh, I thought we were taking a break.

Oh, it's all yours. We're ready.

Thank you so much, Mr. Vice Chair, colleagues. And we will have a translator with us as to support my witness. I'm proud to present SB 1284. At its core, 1284 is about affordability and transparency for Californians. Right now, more than 3 million working Californians rely Medi-Cal because wages are too low and employer coverage is unaffordable. Nearly one in five California jobs is held by a Medi-Cal enrollee, representing more than 20 billion in public spending tied to the workforce.

That means taxpayers, Californians, are subsidizing gaps in the employer provided coverage even as large corporations remain highly profitable. Under existing law, large employers are already required to offer affordable coverage. When full time workers still rely on Medi-Cal, it signals a gap between what is required on paper and what is affordable in reality. And without transparency, taxpayers cannot see where their dollars are going or why costs keep rising. SB 1284 does not assign blame.

It provides transparency so policy makers and the public can understand what is driving cost. In my district, I hear from workers who are all doing the right thing, but they still are falling behind. And their stories reflect a broader affordability crisis, which we all know so well in all of our districts across the state. Our essential workers cannot afford health care. And even while contributing to our economy every day, taxpayers are footing the bill.

Meanwhile, some of our largest, most profitable corporations continue to report strong profits while relying on public programs to support their workers. That almost, that also puts responsible employers who do the right thing by their workers at a competitive disadvantage. This raises a fundamental question about fairness at a time of a budget strain and rising costs as we are trying to figure out how to balance this budget, and we already see so many families hurt by HR 1 who will lose their health care.

Is it fair for taxpayers to subsidize corporate labor costs? SB 1284 responds with a simple solution, transparency and accountability. This will, this bill will require that the Department of Health Care Services publish the names of large employers with workers enrolled in Medi-Cal along with the estimated cost to taxpayers. This is about giving Californians clear information and delivering long overdue accountability.

Over 70% of voters, and I wanna say that's Democrats, Independents, and Republicans, see this initiative as fair. Fairness in action. This has bipartisan support with voters across every aisle recognizing that they do not want to share the cost while profitable corporations are off the hook. SB 1284 is a measure step forward because without transparency, nothing changes. And with me to testify today is Eduard Jhon Hoyos, who is a janitorial services worker and member of SEIU, USWW, and Devon Gray with End Poverty in California. Translate. Okay. Perfect.

You'll have two minutes. Interpreter will have two minutes, and you'll have two minutes. Thank you.

[Translated]

Good afternoon, Committee Members. My name is Araceli Rueda, and I'll be translating for Mr. Hoyos. Good afternoon. My name is Eduard Jhon Hoyos. I am the father of three children, and together with my wife, we have worked our entire lives to provide for our family. Thanks to that hard work, two of our children are currently attending university, and our oldest daughter is pursuing a master's degree in environmental sciences.

For the past four years, I have worked in Cupertino for a contractor that provides cleaning services to a large global tech company. I am also a member of SEIU-USWW and serve on the executive board. Over the years, we have seen working conditions change. We have also seen some contractors cut wages and replace workers with employees who do not have union protections.

These practices weaken working conditions and limit access to essential benefits, especially health care. I have firsthand seen, I have, I have seen firsthand how the situation affects my coworkers and their families. Many essential workers do not have access to affordable health coverage provided by their employers and end up relying on public programs such as Medi-Cal to receive basic medical care.

The reality is that when employers do not fully take responsibility, the cost of caring for their worker, their workers' health falls on the state and on California taxpayers. This is why I am here today. I firmly believe that those of us who contribute every day to the success and prosperity of the biggest tech companies deserve access to quality health care and dignified work conditions. For these reasons, SB 1284 represents an important and necessary step forward. This legislation will help strengthen our health care system and promote greater employer accountability. Please vote in support for SB 1284. Thank you.

Great job. Go ahead, buddy.

Thank you. Good afternoon, Chair and Members. I'm Devon Gray. I'm president of End Poverty in California, and we're proud co-sponsors of SB 1284. As many of you know, California, despite our immense wealth, has the joint highest poverty rate in the nation. And unfortunately, some of our largest employers have decided that that's someone else's problem by paying poverty wages and often failing to offer employees affordable health coverage.

This, of course, leads to millions of Californians, who indeed have jobs, relying on Medi-Cal. In fact, as the Senator mentioned, nearly one in five of all California workers are enrolled on Medi-Cal. My organization has spent the last four years traveling to 26 counties across the state to convene and listen to people living in poverty.

And everywhere, urban, rural, suburban, from the Oregon border down to San Diego and our coastal inland communities, what we hear every time is people who say, I'm working hard, I'm doing everything right, and I'm still not making enough money to get by, let alone get ahead. I don't believe this is the consequence of personal failings.

Rather, it's a consequence of a system that allows for large employers to too often be able to pay poverty wages without accountability. And what this bill helps create is that accountability. That accountability doesn't just help the underpaid childcare worker in Fresno or the garment worker in LA. It also helps all of us as taxpayers who will otherwise be tasked with filling the gaps in Medi-Cal that will be created as HR 1 comes into effect and we see a trillion dollar cut from Medicaid over the next decade.

SB 1284 works by posing important questions where we've lacked answers. It asks which employers have the most workers in dependence on Medi-Cal, and what does that cost the state and taxpayers each year? With annual public reporting, this legislature gains the evidence that it needs to act on wages, on coverage requirements, on employer responsibility. And so with that, I respectfully ask for your aye vote. Thank you.

Thank you. Anyone else in support, please come up. Name, organization, and your position, please.

Good afternoon, Chair and Members. Beth Malinowski, SEIU California. We are proud co-sponsors. Thank you in advance for your aye votes today.

Mariko Yoshihara on behalf of UFCW Western States Council, proud co-sponsor. Thank you.

Good afternoon. Alia Griffing with the American Federation of State County Municipal Employees in support.

My name is Jerry Longoria. I support this bill.

My name is Miguel Lopez, organizer with USWW, also in support.

Christian Ramirez on behalf of USWW in support.

My name is Sebastian Navarro. I'm a member from USWW, and I support 1284.

Ariel Park, I'm a member of SEIU USWW. I'm also on the executive board, and I strongly support this bill.

My name is Daniel, custodial at Disneyland, and I support.

Again, my name is Allison Huber, and I support SB 1284. Thank you.

Hello there. Wayman Fedri again. Los Angeles, California, and I wholeheartedly support this bill.

Latasha Reed, USWW, and I support this bill.

My name is Hector Ojeda. I'm from Disney. I work in the entertainment department, and I support this bill.

Maria Ortiz, janitorial service, supporter.

Good afternoon. Again, my name is Akiva Carter, and I'm with SEIU USWW, and I am in support of SB 1204.

Afternoon again. My name is James Lyons, Los Angeles, California. And USWW, I'm in support of this bill.

Gilberto Rubio, security officer and SEIU member. I support bill 1284.

My name is Miguel. I support SB 1284. Thank you.

[Translated] Good afternoon. My name is Teresa Barrios. I'm here in support of 1284.

[Translated] Good afternoon. My name is Cruz Yanez, and I'm here in support of 1284. Thank you.

My name is Larry Taylor. Thank you for supporting this bill in advance.

[Translated] Good afternoon. My name is Pilar Torrez. I'm here to support bill 1284. Thank you.

[Translated] Good afternoon, young ladies. I am here to support bill 1284.

Good afternoon. Tina Kramer, and I support SB 1284.

Good afternoon. Esther Sandoval, baby matron of Disney, and I also support SB 1284.

My name is Eugene Marvel III. I support SB 1284.

Good afternoon. I'm Alexander Nunez, and I support SB 1284.

Hi. My name is Warren Reed from Los Angeles, security officer, and I support SB 1284.

Once again, Keven Adams. I support SB 1284 as a California worker.

Betsy Ramirez, and I support SB 1284.

[Translated] Good afternoon. My name is Ana Meza. I'm here to support bill 1284.

[Translated] Hello. Good afternoon. My name is Angelina Diego, and I am here to support 1284.

[Translated] Good afternoon. My name is Viviana Restrepo, and I'm here to support bill 1284.

My name is Halyard Freighter, and I support SB 1284.

Good afternoon. My name is Alfredo Lahoud. I'm here supporting the SB 1284.

Good afternoon. My name is Julio Ramirez. I support the 1284.

[Translated] Good afternoon. My name is Ramon Mondragon. I support 1284.

[Translated] Good afternoon. My name is Tatiana Nunez, and I'm here to support SB 1284. Thank you.

Josiah Martinez to support SB 1284. Thank you.

Gustavo Garcia in support of this bill. That's it. Thank you.

Malik Erin in support of SB 1284.

[Translated] Hi. Good afternoon. I'm Carolina Mendoza, and we are here to support 1284.

[Translated] My name is Veronica Bravo, and I'm here to support 1284.

[Translated] Hello. My name is Salma Chavez, and I am in support of SB 1284.

[Translated] Yes, good afternoon. My name is ... I am here to support 1284. I look forward to your collaboration as well. Thank you.

Good afternoon. Leon Jenkins again. Support bill 1284.

My name's Anthony Guzman, and I support 1284.

[Translated] My name is Tatiana Chaparro, and I am here to support SB 1284.

[Translated] Sergio Castellanos, support 1284.

[Translated] My name is Luis Rodriguez, and I support 1284.

Thank you, gentlemen and women. David Matos Moran, United States Marine veteran. I support SB 123. Thank you.

Hi again. Sarah Bukhari, and I support SB 1284. Thank you for your time.

[Translated] Good afternoon. My name is Cecilia, and I support 1284.

[Translated] Good afternoon. My name is Vicenta Casarrubias, and I support 1284.

Jennifer Dyer. And, yes, I support SB 1284.

Well, thank you very much. Anyone in opposition, please come forward. Both will have two minutes each.

Linda Nguy with Western Center on Law and Poverty in support.

Is this more supports coming in?

Yes.

Alright. Hold on, opposition. We're gonna go back to supports. Go ahead.

Linda Nguy with Western Center on Law and Poverty in support.

Jennifer Robles with Health Access California in support.

Loyal Terry with Economic Security California Action in support. Thank you.

Connor Gusman on behalf of Teamsters California in support.

Elmer Lizardi, California Federation of Labor Unions, in support.

Julie Nielsen, National Union of Healthcare Workers, in support.

Hi. Gabriela Chavez with United Domestic Workers and in strong support.

Thank you. One last call. Anybody else in support? Not gonna have a line coming in here? Okay. Alright. Opposition, you have two minutes a piece. You may start.

Good afternoon. Andrea Lynch on behalf of the California Chamber of Commerce in respectful opposition to SB 1284. We appreciate the bill's transparency goals, but a genuinely complete picture would account for the many factors driving Medi-Cal enrollment beyond employer decision. This bill does not do that. The bill's premise that employers with workers on Medi-Cal are shifting obligations onto taxpayers does not reflect how the program actually works.

Enrollment is shaped by numerous factors, including workers who choose Medi-Cal over offered coverage, part time or seasonal schedules, new hire waiting periods, and household income dynamics. A full time worker earning California's minimum wage may qualify simply by having a child or working part time.

This is not an employer failure. That is a program functioning as designed. Listing an employer's name next to a Medi-Cal enrollment count without any of this context implies sole responsibility for an outcome shaped by state policy, federal rules, and individual worker circumstances no employer has legal authority to override.

We would also note that public employers, including state agencies, are absent from this reporting requirement, despite the fact that thousands of public sector workers qualify for Medi-Cal by income threshold alone. Transparency that applies to only one sector of the economy is an incomplete and unequal standard. For these reasons, we respectfully oppose SB 1284.

Mr. Chair. Chris Micheli here on behalf of the Society for Human Resource Management. We think that the evidence sought by the author and proponents could be gleaned more from aggregate data. Individualized is not required, which is proposed in the legislation. We view it as a public shaming measure instead.

The only other time that California has engaged in public shaming of individual employers or businesses, and in fact, some individuals is with tax scofflaws. And those folks, of course, have had their due process rights adjudicated because they have been determined to, in fact, owe those dollars to the state of California before their names are actually publicized.

I hearken back to October 2017 when then Governor Jerry Brown vetoed a public shaming bill dealing with pay transparency and indicated that that would probably lead to litigation against those businesses that were named. And so for those reasons, SHRM continues to express respectful opposition to this measure. Thank you, Mr. Chair.

Thank you. Anyone else in opposition? Please step up. Name, organization. No one's gonna come from out the door. Alright. We'll turn over to dais. Assembly Member Kalra

Thank you, Mr. Chair. Just on the last point that was made by Mr. Micheli on the pay disparity. Did you wanna...

But we're gonna have one sneaking in.

Yeah. Of course.

Good afternoon. Jacob Brint with California Retailers Association in respectful opposition.

I'm familiar with that. I had one bill one year that had to do with disclosing pay, what have you, and the pay disparity issue could, the an argument could be made on litigation because you're talking about maybe two people in the same classification. This is very different. This has to do with Medi-Cal enrollment, so I don't think it opens itself up to that type of litigation. That being said, I don't think there's anything shameful about being on Medi-Cal, first of all.

I think that there is something, I think, shameful about employers that have large swaths of their employees on Medi-Cal by choice in order to increase their profit margins. There are, there are certainly gonna be some companies and because of their business model, maybe they're seasonal, what have you. And the reality is there's nothing that stops an employer from sharing more information if they so choose to give context to the data. This is not about anecdotes.

We can all find an anecdote about a reason why someone can't work full time. They have to take care of their elderly parent or a child. This is about cumulative data from each corporation or each company and getting that full picture. And I think, unfortunately, the business plan by design of some of these companies is to have the taxpayers subsidize some of the costs that that otherwise they would have to pay for.

So keeping people, you know, as part time workers rather than giving full time employment. There are some very wealthy, some of the biggest corporations in the nation do that by practice. And so what this data will help us do is make that determination. Hey. There are some companies that are doing it. This is their the manner in which they operate their business. They have seasonal because of the kind of business they do. Okay.

But there are some other companies that are intentionally not hiring full time. They're keeping people within the the parameters of being eligible for Medi-Cal. What are some policies we can do? Or how can we work with those companies to get more of their folks, you know, in house under their health care or help with ACA subsidies?

This is not all about, you know, sticks. There are definitely cares that can come from this data as well and working with our business community. And so I think it's very hard for us to develop policy or long term planning for jobs for the future and high road employment when we don't have the data.

And in fact, I was on the Future of Work Commission that one of the outcomes of that commission that also had business representatives on that commission, folks in the Chamber on that commission, was that we need data in order to determine how we create high road employment into the future. And so this is an important piece of that, and it will help us help better inform us of how we should approach these issues in the future.

And, yes, if there are business practices that push folks onto Medi-Cal roles at taxpayer expense, we should know that. And it's really important for us to have that kind of data. And so I would certainly make a motion on this, would like to be added as a co-author, and appreciate the Senator for bringing this forward.

Thank you. And I think I heard a second from Assembly Member Lee. Anyone else? Yes. Either one. Who want to go first. I think he's saying ladies first. Go ahead, Lee. Go ahead, Lee.

Alright. I'm just gonna ditto everything Assembly Member Kalra said, and I wanna thank your witness. You've been being modest working for a tech company, Cupertino. I wonder what that one could be. But I really do appreciate you coming here and sharing your story.

I do think it is really important that this data is out there so we can better, like my colleague said, better understand the role that our employers have and the role the public sector has in making sure that everyone has health care. Because at the end of the day, someone's paying for it, and we have to make sure what is the most equitable and just way of paying for it. And I would love to be added as a co-author as well. Thank you.

Please add me as a co-author as well. Thank you so much for the work that you're doing to make sure employers are paying their fair share. And really working on the disclosure part of this means that we're one step closer, given that we are in a time in our state where we have faced a deficit and we know we need to keep preparing for future, for the future. This is an opportunity to really look at how we can actually address that.

[Translated] And thanks for telling us the story of how you came to be here. And he's also asking, we know which company you work with. But we're here to support you, and thanks for sharing what's going on in your life as well.

Thank you. Chen, good? I have a couple. So first off, Senator, you, in your opening, you talked about 70% of Californians. I wasn't quite sure what where you got the 70% from.

So there have been surveys of across the state looking at all different rural, urban, more Republican leaning, more independent leaning, Democratic districts asking this question about, you know, the fairness of shifting the cost of health care onto the taxpayers versus, you know, employers stepping up and doing the right thing to support their workers having health care. And the data was very clear that there was across the board, across the aisle support for a fair share strategy.

I think we know a lot of our every no matter where folks live or what party they're in, it's hard to make ends meet. And more and more of our communities are losing their health care. And so this is a human problem. It's not a political problem. It's a human problem that we have to solve, and this is, you know, the data is about providing some information to help us. And, you know, the shaming, and I talk about the tone of the conversation because this is not about shaming. People are going to lose their health care.

People are going to die as a result of what is happening with HR 1 and California's inability to provide health care for all. Those folks who are, you know, not able to work, who are dealing with cancer, for example, because of the eligibility requirements, they likely will lose their health care and not have access to treatment. Young mothers with their young babies might lose their health care. And so as we are looking at I think we're spending almost $290 billion on health care in California, two thirds of our budget.

I mean, imagine what we could be doing if we all just rolled up our sleeves and said, we're gonna take on our share of what this cost is. So this is what this bill is. It is it is fairness. And I think when we talk to communities about this, no matter where they are on a on the political spectrum, they see this as fair.

Thank you. So to my knowledge, businesses with potential employees or current employees can't ask if they're on Medi-Cal. I know Walmart is, like, one of their largest or one of our biggest ones that have give second chances to people who've been incarcerated. And so just I I fear that maybe one of the one of the unintended consequences with this is maybe they won't have it with the gap going on between that. So, for you, how would this affect, like, those who've been incarcerated or those who are maybe who have been maybe been disabled, or maybe even seniors?

Well, one of the, one of the real problems that we have with the changes in Medi-Cal and HR 1 right now is that the requirement to work is going to require employers to get that information. The work eligibility is gonna require employers to collect that information. And so, you know, whether you're a senior and you're not working, if you're formally incarcerated and you're in between jobs, you are gonna be impacted in terms of your access to basic health care.

And so it really is a challenge that we are, in California, as you know, we're all trying to address that. We're trying to do everything that we can to put in some protections so that these eligibility requirements don't lead to more than the estimated 3 million people that we expect will lose their health care in the coming months and years due to HR 1. And so, you know, it's gonna be tough for seniors. It's gonna be tough for a formerly incarcerated individuals.

And so this again, and again, we hope business will come to the table on this. Because if we can solve this health care crisis, if California can lead on ways to solve this, there will be a lot more revenue in our in our state budget to do the things that we want to invest in business to do, like create more good jobs for California residents.

But we have a real problem, and HR 1 has helped to shine a light on just how real the problem is. I think we, you know, with ACA, with so many folks enrolled, you know, and we saw that some of the costs sort of coming down. And now we are seeing this cost in human life that's gonna be expected as more people lose their health care. So how do we, how, this this is a simple disclosure bill. This is information. This is data.

And if we don't, we can't fix something if we don't really know, you know, the severity of the challenge. And so my hope is that we can, we can continue to move this bill forward. We can continue to enlist the support of the Chamber, HR leaders, and others to help roll up their sleeves, work with us to solve this crisis.

Thank you. And, to your witness, you brought up gaps. Won't employers only look for maybe employees that don't have any gaps? Do you guys see that being an unintended consequence?

Sorry. Could you repeat that? I didn't quite hear you.

So employers only looking for people who don't have the gaps that you were talking about, like, in their work history and stuff like that. Is that something you guys have thought about with this that not being an unintended consequence?

I think there's always gonna be some edge cases for what we're trying to solve for here. Right? I think the principle aim of what we're trying to achieve with this is really just understanding the nature of the problem. And there are gonna be many people who are, as we've discussed, enrolled in Medi-Cal despite being employed for a good reason. Right?

And that's fine. I think we can deal with that. I think what we should strive to achieve, however, is just mere transparency to know what the nature of the issue is. And if we can have those, have that transparency, we're able to then address the gaps in a more precise way. So that's sort of how I think most of us are thinking about this. I don't think we actually lose much by getting more information.

Okay. Thank you. And for opposition, did you have anything on the gaps or anything like that you wanted to speak of?

No. I think just generally speaking, I think having a full transparency measure again, just kinda wanna reemphasize from testimony that this is sector specific to private industry. And again, just based on, you know, salaries of public sector workers alone, they could qualify for Medi-Cal based on that. And so I think just considering the multiple factors why an employee could be on Medi-Cal is something we're looking for in the bill, and this is just pinpointing a single factor as private employers.

Thank you. Anyone else? Mr. Ward, you good? He's good. Senator, you may close.

Well, thank you for this discussion. And we, as I mentioned, we don't wanna be an outlier. This issue is being taken up in places like New Jersey, which has the governor has introduced our fair share strategy, which is an actual bill that is bringing business to the table to pay a premium for those employees who are on Medi-Cal. The same is happening in Colorado and Maryland and other places. And so we're a nation state, and I think California should lead on this.

And we have diverse businesses that would benefit from our state deficit being reduced and us being able to invest in a many other places by ensuring that we do all that we can to fund our Medi-Cal program and to pay for those workers who may be on it. So, with that, I respectfully ask for your ask for your aye vote on disclosure and transparency.

Thank you, Senator. Unfortunately, right now, I'm not here with you. Hopefully, on the floor, I will be. But I know Chair Ortega has a recommendation of an aye. And please take the roll.

Item number six, SB 1284, Smallwood-Cuevas. Motion is do pass and re-refer to Committee on Appropriations. [Roll Call]

We'll keep that on call, and I'm sure it'll get out.

Thank you.

Senator Cabaldon, you ready?

all yours. This is gonna be item number 7 SB 1054. Senator, when you're ready, you have the floor. One second. I have a motion and a second.

Ready. It's

Alright. I can't third it, though.

You can't. Okay. Thank you, Mister Chair. This bill has has two purposes, but the mechanism is actually very simple.

The first purpose, and it's been a long standing issue, is we wanna improve, substantially improve the quality of our workforce data collection and sharing between the the new Internet agency council, the the the the workforce development board and others so that we can actually do a much better job of assuring that the programs that we're offering both in the public sector and those that we regulate, are creating the kinds of pathways to high roads jobs that Californians are looking for.

And so this bill is intended to do. That's the easy part. The second is that as you've heard and as you all know, that under HR 1, there are new requirements that require that for data collection as part of the recertification for applicants for medical and for in California for CalFresh. And though that those new data elements don't fit with our existing data collection system, and therefore, the state's ability to automatically verify eligibility for 80 plus percent of the of the applicants has been compromised.

The administration's done a lot of work to meet the need in the moment, so the state has a contract with Equifax in order to accomplish that in the in the near term.

That's $12 per ping for every single employee. So it's not a long term sustainable solution. And so this this bill simply adds that that that required data element, which is hours worked to the unemployment insurance wage dating sys wage reporting system and makes additional changes to that system in order to improve our workforce data, in order to accomplish both goals, better data in order to improve workforce development programs and outcomes.

And then secondly, secondarily, to assure that we can avoid hundreds of thousands of Californians losing their Medi Cal and CalFresh eligibility, not because they don't qualify, but because they fall through the the cracks of these new data requirements and semiannual requirements. So that's the point the purpose of the bill.

I'd like to introduce our witnesses, Justin Garrett with the California State Association of Counties and then Maxwell Johnson with California competes. And with that, I would ask for an aye vote.

Thank you. Justin Maxwell, you both have two minutes, please. Thank you.

Thank you. Justin Garrett with California State Association of Counties representing all 58 counties. CSAC is in strong support of SB 1054 and thankful to the author for his leadership on this issue. This bill is needed because HR 1 creates significant risk for people losing their health coverage and food benefits, and counties are on the front lines of helping people maintain that coverage for both medical and CalFresh and need all the resources and data sources available for this work.

So SB 1054 puts an important tool in the toolbox for counties in the state that will help prevent vulnerable Californians from unnecessarily losing health care and nutrition assistance.

HR 1 creates new and expanded work requirements for CalFresh, which went into effect this month. And then for Medi Cal, which go into effect on January 1. These requirements require recipients to demonstrate eighty hours, per month of work, education, or volunteer volunteering or job training. And counties are responsible for working with recipients and ensuring they have the proper documentation of hours worked, which is time consuming and challenging.

And the significant procedural and paperwork burden will it in and itself cause people to lose coverage even when they're eligible and have met the work requirements.

And so SB 1054 will ease that burden by requiring EDD to collect hours work data from employers and facilitate this information sharing with DHCS and CDSS. This data collection and sharing will allow for streamline verification that someone has met the work requirements and will allow them to maintain the coverage and benefits that they're eligible for. So we ask for your aye vote. Thank you.

Thank you.

Good afternoon, Chair and members. Thank you for the opportunity to speak today. My name is Maxwell Johnson, and I'm here on behalf of California Competes Higher Education for a Stronger Economy, who is proud to co sponsor Senate Bill 1054. This legislation, as you've heard, would modify our existing wage data reporting by adding a small number of targeted known elements, including on employees' hours worked and occupation and by increasing the reporting frequency from a monthly from a quarterly to a monthly cadence.

These are straightforward changes that could have meaningful impacts across public benefit systems, our workforce systems, and our education system.

As as you've heard, the more timely wage and work hours information would help streamline certain benefit applications and renewals. And starting this month, many adults must meet these worker community engagement requirements to continue receiving CalFresh for more than three months. And beginning in January, many adults will face similar requirements to qualify for and then remain enrolled in medical. Enhanced wage data, however, would also, would help automate the medical eligibility terminations and similarly streamline those for CalFresh, reducing administrative burden and helping prevent improper benefit loss.

The added wage data would also help California better understand the impact of our current education and job training investments, however, while improving how the state plans for and coordinates future spending.

Current wage data can tell us how somewhat how much someone has earned, but not in what job or for how many hours of work. That greatly limits our ability to understand whether education and job training programs are helping people reach their career goals and connect to quality employment. It also makes it harder for colleges and training providers to assess and improve their programs based on student outcomes.

Adding this information to our state's cradle to career data system would provide a clearer picture of how people move through education and workforce training and into the labor market. This could support the creation, for instance, of dashboards and other tools that help students make informed choices about where to enroll, what to study, and what pathways best align with their career goals.

Respectfully urge your support for SB 1054, which is a practical and timely approach that also draws on the experiences of numerous states that have already undertaken similar data enhancements. Thank you.

Thank you. Do we have additional witnesses in support?

Loyal to her on behalf of economic security, California action. Proud support. Thank you.

Sarah Brennan with Weideman Group on behalf of Institute for Responsive Gov. We thank the author for meeting with us and are in proud support.

Good afternoon. Linda Wei with Western Center on Law and Poverty in support.

Hi. Jenny Aguilar on behalf of Edge Coalition California in support of the bill. Thank you.

Hi. Anaia Matias Santiago with Latina Advocates here on behalf of Hispanics Organized for Political Equality and Support. Thank you.

Seeing no other witnesses in support, do we have any main witnesses in opposition? Okay.

Andrea Lynch on behalf of California Chamber of Commerce, just wanna say thank you to the author, and we're gonna continue the discussions to ensure small businesses can provide that reporting. So thank you.

Thank you. Seeing no other witnesses. Turn it over to the dais for any questions or comments. Seeing none, Senator, would you like to close?

Just Just to say to thank the the, the the chamber as well for their for their comments because that, obviously, we wanna make sure that people can can comply and can report. They and the US Chamber of Commerce and others have been working closely with us as well as with the administration on how to make sure that this works. Obviously, under HR 1, every small business will also have to provide some mechanism for their employees to verify that data too.

And so our our our hope is this simplified regular data that's timed more more with payroll reporting than anything else will meet the will help small businesses as well. And, of course, they want their employees to not lose eligibility for Medi Cal as well.

So this is it's a useful and important step to work forward. I do also wanna highlight the committee analysis raises several technical questions, including things like how to how will it intersect with workforce Pell and others. We are absolutely committed to working through, those quest those issues, and and as well as additional ones a week, but will come from EDD on implementation as we go forward.

But, appreciate all of the support for the bill and the work to try to assure that California can use the data that we collect and the systems that we that we have to in order to to mitigate, the impacts of HR 1 on folks who are fully qualified, but otherwise might fall through the cracks. And with that, we'd ask for an aye vote.

Thank you. Secretary, please call the roll.

Item number I'll file item number eight, SB 1054, Cabaldon. Motion is do passed and we refer to committee on appropriations. Ortega Ortega. I Alanis Alanis I Chen Chen. I l Horary.

I call her call her I Lee. Lee, I work. Ward I No.

That bill is out.

Thank you. Thank you.

We have two bills remaining, Senator Reyes and Senator Aragim. If you can make your way to labor and employment committee, please.

Alright. File item number 1, SB 845 Perez. File item number 4, SB1012, Smallwood-Cuevas. And file item number 10, SB 1227, Durazo. Motion is do passed and we refer to committee on Appropriations with the recommendation to consent calendar. [Roll Call].

That consent calendar is up.

Okay. I'll just make sure. Okay. File item number two, SB 954 Blakespear. Motion is do passed and we refer to committee on Appropriations. [Roll Call].

Senator Reyes, welcome. Item number nine, SB 1032. Whenever you are ready.

Thank you, Madam Chair and members. It is my pleasure to present to you SB 1032: the Staffing Agency Fair Employment or SAFE Act. SB 1032 will create a clear common sense regulatory framework for temporary staffing agencies similar to to what already exists for contractors and other high risk industries. California has the largest temporary staffing market in the nation with staffing firms generating over $41 billion in annual revenue and employing millions of workers over the course of a year.

Despite this scale, California lacks a dedicated regulatory framework for temporary staffing agencies, allowing gaps in oversight that puts workers, honest businesses, and taxpayers at risk.

This fragmented labor enforcement system leaves workers and families exposed. This bill addresses this issue by establishing clear oversight, real accountability, and required registration, so staffing agencies are complying with the law before harm can occur. SB 1032 would align temporary staffing agencies with the existing regulatory approach in other industries to protect workers and promote compliance. Here to testify in support are Alberto Torrico, on behalf of UFCW Western States Council, and James Phillips, Partner with Invero Staffing Group.

Good afternoon, madam Chair, members of the committee. Alberto Torrico on behalf of the United Food and Commercial Workers Western States Council and our 175,000 members throughout the state. We're sponsoring the measure because, unfortunately, staffing agencies, illicit staffing agencies that don't have licenses, they don't provide workers' comp. They don't pay they don't pay him a minimum wage. It's an arena that, as Senator Reyes mentioned, that that does not require licenses.

Other industries that, not coincidentally, other industries that do require licenses include farm workers, government workers, and individuals that work in car washes, other industries, janitorial, other industries that are largely exploited, many of those workers are immigrants. So, it's a it's a field where there could be a lot of exploitation. So, UFCW, along with many other unions, are trying to try to lift the standard of living.

And when you have illicit operators, don't have licenses, cheat on workers' comp, cheat on wages, it depresses the wages, and it makes makes people have to not work one job or two or three. So, for the reason set forth by the Senator and in the bill, we respectfully ask for an aye vote.

Thank you.

Good afternoon, Madam Chair and members of the committee. My name is James Phillips, and I'm a partner with Inviro Staffing, which operates within Senator Reyes' district. Thank you for the opportunity today to speak in support of California Senate Board, Bill 1032. More than two decades ago, I took my first job as a recruiter at a small family run business. In that small one room office, I discovered my career purpose.

I listened daily to the stories of struggle our employees brought with them. And by finding them work, I found myself humbled and fulfilled by their renewed hope and gratitude. Twelve years later, I partnered with my brother to start in Invero Staffing. Our mission continues to be defined by ethical business practices that prioritize putting people first. We support SB 1032 because it aims to improve transparency, strengthen compliance, create more consistent labor practices, and provide workers with the protection they deserve.

From a personal standpoint, I can say with confidence we encounter illegitimate staffing agencies operating unfairly every single day. This month alone, the month of June, my team had personal meetings with five prospective clients in the Inland Empire region, at which point we discovered the client company is utilizing a staffing agency, in some cases, multiple staffing agencies with operating rates in the low 20 percentile.

In my twenty plus years of experience in the industry, I can report with authority that a legitimate staffing agency would find these rates impossible to offer carrying adequate workers' comp coverage. As the current market stands, there's only one winner, and that's the illegitimate staffing agency. This legislation is especially important because it will support business that invest in compliance and provide workers with the true respect and coverage they deserve.

For those reasons, we respectfully ask for your continued effort to pass SB 1032. Thank you all for your time and consideration today and a special thank you to Senator Reyes for being a voice for California workers and legitimate staffing agencies. Thank you.

Do we have additional witnesses in support?

Elmer Lizardi with the California Federation of Labor Unions in support.

Seeing no other witnesses. Do we have a main witness in opposition?

Hey. Good afternoon. Molly Maula with Edelstein, Gilbert, Robson and Smith. We represent the California Staffing Professionals. They are the long standing established and recognized trade association for the temporary staffing and recruiting industry in California. We're made up of about a 150 member companies.

Our membership is made up of all type of staffing firms, but includes many small to medium sized women owned staffing agencies, all of whom share similar concerns with this bill. We have three core concerns that have yet to be addressed despite our effort to offer amendments since before the first policy committee three months ago. One, the definition of staffing: agencies explicitly carves out professional professional employer organizations, also known as PEOs.

PEOs, when used by a staffing agency, are the responsible entity for workers' compensation, payroll, and insurance. Excluding them from this bill creates a loophole that would further exacerbate the problem the author seeks to solve for around proper workers' comp and proof of coverage.

Two, the scope of what is required to register and lack of statutorily set registration fee: we've provided language that would align registration more closely with the registration requirements of the other similar bodies of law that are noted in the analysis. Most importantly, we need a set statutory fee for, registration. And then three, the private right of action: the PRA in this bill is set up to allow a registered staffing agency to sue an unregistered staffing agency.

It's anti-competitive and creates an opportunity for a larger resource staffing agency to go after their little the little competitors. Let me be clear. We're not opposed to registration or the goal the core goals of this bill to require the industry to register with the Department of Industrial Relations, but we are opposed to creating a scheme that will end up benefiting and incentivizing the use of PEOs, which is not to the benefit of the workers. There's a lot happening in this bill.

I'm happy to answer questions.

But because our concerns and amendments have yet to be addressed, I would respectfully ask your no vote.

Good afternoon, Madam Chair and committee members. My name is Lisa Lichty. I am a Board Member for the California Staffing Professionals. I am also a board member for a workers' comp, insurance company, specifically insuring staffing firms. And I am the CEO and Owner of Star Staffing, which has been serving Northern California for twenty eight years, employing thousands of workers.

Because the amendments have not been considered in this bill, I am here today in SB 1032 as written, as the bill does not solve the power of it is trying to address. This bill does not do enough to address workers' compensation fraud. In my experience, especially as a board member of a workers' compensation insurance company, fraud mostly happens through under reporting, misreporting, or purchasing coverage that is not truly protecting the workers. SB 1032 does not affect this.

Registering with the labor commissioner does not prove that employees have legitimate, fully funded workers' compensation coverage.

Bad actors who are willing to cheat the system today will continue to find ways to cheat the system as written. Another major flaw, as Molly mentioned, is that PEOs is are excluded from the definition of staffing agencies even though they serve as the employer of record, provide workers' compensation, and compete with or serve the same market as staffing firms. If PEOs are not included, this bill creates a major loophole for bad actors hiding behind PEOs.

I also wanna speak as a small business owner to the impact of this bill. I am a women owned staffing business owner, and if this bill had been in place when I started my staffing firm at the age of 22, I very likely may not have been able to start my firm.

The firm or staffing industry is not a high profit industry. So, high or unknown registration fees, burdensome financial disclosures, subjective reviews of character and competency create unnecessary barriers for small women owned business businesses to enter the industry. The private right of action is especially concerning. It could allow for larger competitors to sue or harass smaller firms. So be because no amendments have been taken, I respectfully request no vote.

Thank you. Do we have other witnesses in opposition?

Andrea Lynch, on behalf of the California Chamber of Commerce, and respectful opposition.

Mike Robson here on behalf of the American Staffing Association in opposition.

Austin Robelstead, sharing opposition for the following staffing firms: Balance Diversity, Bolt Staffing, ATR International, Synapse, Talent Group, and the Generation Group. Thank you.

Thank you. Seeing no other witnesses; I'll turn it over to the dais for questions or comments. We have a motion and a second. Senator, would you - oh, sorry. I did not see you.

Sorry. I was trying to open the book. Took lots of notes. Just concerns. But then, obviously, this is not my area of expertise. You talked about definition of staffing, scope of registration, setting fees.

So, registering a staffing company with the state that will or will not ensure that workman's comp will happen or not? Either one. Whoever wants to answer that.

I'm sorry.

So, with all the all the things that came up, registering a staffing company with the state, how does that ensure against workman's comp fraud?

Thanks for the question, Mister Vice Chairman. The licensing requirements include a requirement to file workers' compensation coverage. So, the idea of the bill is twofold. At the front end, if you have to - if you're required to as part of your license, required to show proof of workers' compensation. You have one mechanism at the front end.

You have a second mechanism at the back end which has been referenced, which is the private right of action, which means if your licensed operator, you discover an unlicensed operator, you can go to court and get an injunction to shut them down. So, they do there's two mechanisms for enforcement, but the front end enforcement is really important for workers' comp. I do agree that there is a workers' comp problem. It's significant. And these some of them are under reporting.

In this industry, many of them are no workers' compensation whatsoever, and there's no way to verify that because there's no licensing scheme.

And so as far as the licensing, is this after - would that be after this bill or that we're talking about before this bill as far as licensing goes?

There is there is no licensing. There's no registration as of now.

Okay. And so -

Our staffing agencies, staffing companies just get a business license and start operating. They have no registration requirement.

Okay. And so, is this what you're referring to where a business could sue another business?

The private right of action is something that - there's a similar bill, AB 1171 by Rubio in 2023, and that was with the cannabis industry, which authorizes a person licensed under the Medicinal and Adult Use Cannabis Regulation and Safety Act to bring an action in superior court against a person engaging in commercial cannabis activity without a license as specified.

So, this is a continuation, not a continuation, but that is one of the examples of a private right of action where someone is unlicensed. The person who is licensed, who has gone through the process, has workers' compensation, and finds an unlicensed staffing agency has a private right of action against them.

After this bill? Yes. Okay. And then you're with California Staffing Association, I think is what I wrote down. What can you add on that as well?

I would just add, existing law requires that they have workers' compensation. You - it's the law to have workers' comp for your employees. So to say that without registration, you don't, I think is kind of a false statement. I also would just add on the kind of use of the cannabis industry as an example. The cannabis law requires that, in order for an action to prevail in the private right of action, there has to be actual harm resulting from the unlicensed commercial cannabis activity.

This private right of action has no harm necessary. It's just a registered staffing company can go after an unregistered staffing company just on the basis of being registered or not.

Okay. And then, Lisa, I wrote down your name. Right?

Yes.

You were talking about, underreporting bad actors as far as workman's comp fraud. Is that also, like, maybe what the senator's addressing?

As I understand it, this bill does not do anything to address underreporting. I could have a workers' comp policy and report $1. So, it doesn't have to do anything with addressing the payroll reporting or that they are coded correctly for the work that they are doing.

Okay.

If I may respond? If somebody registers and says they have $1 that they're in workers' comp insurance, I am certain whoever registers them is going to flag that. I'll tell you the good thing is that we are surrounded here at this table by good actors. And so it's very difficult. It's it's not the those who are at this table that are causing the problem.

It's those who are not, who don't have workers' comp insurance who have are staffing agencies. They they they contract with employers who now have these employees working for them. Neither one of them has workers' comp for them. The person is injured and they have no recourse. The uninsured employer's fund, that's all we have available for them.

So, this is the only way because there is nothing else. There's the only way that by having the staffing agencies register with the state of California, we now have a way to show that they do have workers' comp insurance.

Okay.

And if they want to to work the system and say, hey. We have $1 in workers' comp insurance, I - not anybody at this table. But if somebody should do that when they register, I'm sure that would be flagged.

And then my other concern is the PEO, the professional employers organization that has come up that you guys have brought up. Why are PEOs excluded from this?

Thank you for that question. AB 1515 by this Assembly Labor Committee, which is another bill that that either you have heard or you will hear, aims to regulate the PEO industry by defining key terms and prohibiting a person from providing advertising or otherwise holding oneself out as providing professional employer services in the state unless the person registers with the department.

Thank you. And then just the last thing. You were mentioning how you wouldn't have been able to start the business if this was was there anything else that you had on that? And I know we might have ran out of time.

I might be able to speak to a little bit more. But, basically, the way that it is written right now, the - a perfect example is a lot of staffing industry executives work for a staffing firm and then go out and start their own firm. The bigger firm has a lot more money available to be able to potentially prevent me under a private right of action, should I be struggling with getting my own registration to prevent me from moving forward.

Not only that, but also because the fee is not capped right now, just the cost alone might might prevent me.

Okay. And just one last thing now that I'm thinking about it. You mentioned you've been trying to work with the author. She's a wonderful Senator. I'm I'm sure she she will.

I don't know what the gaps are on that or not, but hopefully that will happen soon. Thank you, Senator. I'm good.

Assemblymember Chen.

Thank you, Madam Chair. Senator, I do appreciate the intent of the building you bring this bill forward. When it comes to wage theft and labor law violations, I and myself, I believe I can speak on behalf of committee also. The Vice Chair is a lay Republican, if you will. That those are all things that we're in direct opposition of.

I do have a question, though, because when we spoke to the DIR, I myself and my staff, one of their main concerns was the things that they are unable to regulate as much as they would like is the black market. And as you said before, so eloquently, you're 100% right. The people surrounding you in this committee are folks who are the good actors. But DIR has constantly said they don't have enough individuals to go into the industry to regulate the bad actors.

Do you think that is ultimately the main crux of the issue, the inability to have enough funds to regulate the market to look for bad actors?

If that is the main crux, do you think your bill, this piece of legislation, answers that?

I think what we're trying to do is we're trying to find a way to make sure that the workers are protected. And I think in in a way, this is also for the staffing agencies to be protected. You register, the fee is $600. Actually, it isn't set.

The director will be the one to set it. But the fees so far that we have seen are 500, 600. Initially, when we introduced this bill, we had put it at 2,000 and or 5,000. And as a result of conversations with the representatives, we then said the director will set it. And we already know what the director has set for other industries, $5 to $600 is what we have seen.

So, we imagine that it's going to be the same thing. And if it isn't, that's something that we can address. But I think this is a protection for both the staffing agencies that are legitimately doing business just as my witnesses also. And they all encounter those who are not legitimately doing business. And who is the one who's going to suffer?

It's going to be the taxpayers. It's going to be those workers who are injured on the job and have no workers' comp insurance. And this is the closest we're coming to finally getting this industry registered. We're not talking about a small industry. As I said in my in my talking points, they generate over $41 billion in annual revenue and employ millions of employees here in California.

So, it's it's not a small industry, and I think that this is something we owe the workers and and the legitimate staffing agencies to find a way to be registered, to show you do have workers' comp insurance to cover your employees as you send them out to employers.

Thank you, Senator. I really appreciate that. And I one last question. You have an incredible amount of supporters that you have for this piece of legislation, which I am very appreciative of. And one of the folks that I'm trying to understand the reasoning for being a cosponsor, UFCW, and why they're involved in an issue that is dealing with temporary staffing.

I just want to get a better understanding what's the correlation there.

The United Food and Commercial Workers represents employers across a broad section of industries, farms, farm workers, packing industries, meatpacking, grocery stores, cannabis shops. Many of these shops are organized what we refer to as "wall-to-wall", which means all the employees are unions, but many of these companies are not wall-to-wall and they avail themselves of staffing agencies to fill those positions, janitorial, and others. That results in an undercutting of the pay of the wages for those workers in staffing agencies.

And if the staffing agencies are unlicensed, don't have workers' comp, the wages are even further undercut. So, we're very much interested in raising the standard living for employees and staffing agencies as well.

Thank you, Mister Torrico.

Any other questions? Okay. Seeing none, I would just like to thank the author for bringing this bill forward. This is a industry that you mentioned makes over $41 billion annually. So, we're not talking about a small mom and pop, you know, employer industry.

We're talking about billions of dollars. And, you know, to the opposition, you know, I would in future hearings, I would really appreciate if you will choose your your words a little bit more carefully. The Senator is an attorney herself, and I know for a fact that some of the comments that were made were not false. Because we looked a lot at this bill and went thoroughly and looked at other bills related to this industry.

She is an attorney herself, so is very aware of the legal ramifications that are part of this piece of legislation.

With that, Senator, would you like to close?

Thank you very much, and thank you for for the the questions of the robust discussion. I sincerely appreciate that. And I do appreciate the opposition because it's their comments. Although we didn't take all of their the proposed amendments, it's many of the these discussions that we had that helped us make, to write a better bill. And with that, I respectfully ask for your aye vote.

Secretary, please call the roll.

File item number 9, SB 1032: Reyes. Motion is do passed and we refer to committee on Judiciary. [Roll Call].

5 ayes; 2 noes: that bill is out.

Thank you.

Assemblymember Ward is going to go ahead and present for Senator Arreguin, item number 11, SB 1299 when whenever you are ready.

Thank you, madam Chair. See senators, we can do these things. Good afternoon. It's my pleasure to present on behalf of Senator Arreguin, SB 1299, the State Fire Marshall Suppression Education Training Safety Act. I'd like to begin on his behalf by accepting the committee amendments and making technical changes and clarifying the definition of fire suppression systems in this bill.

SB 1299 ensures that California has a clear enforcible framework for certifying and training fire sprinkler fitters. The bill would ensure that only properly trained and certified professionals perform this critical life safety work. With me to testify in on on behalf of this bill is Scott Wetch representing the California State Pipe Trades Council.

Madam Chair and member, Scott Wetch, on behalf of the California State Pipe Trades Council, representing plumbers, pipe fitters, and sprinkler fitters. This is a program we created, many years ago. Back in 2013, former Assembly member Gordon carried a bill authorizing the state fire marshal to adopt, regulations and standards to ensure, you know, fire safe, occupancies regarding, these types of systems. We went through a three and a half year regulatory process where they created a certification program for sprinkler fitters.

The program's been in effect for over a decade.

It's been extremely successful. There was a lawsuit, two years ago that culminated in 2025 where, the court didn't throw out the program based on the merits of the program, but merely that back when the, the state fire marshal promulgated the regulations that they did not follow all the appropriate processes of the, proceed of the Administrative Procedures Act. So because of that loophole, the whole program got topped out.

This now takes the program, updates it, because there's some new technologies that should be included and codifies the original program that worked very effectively for over a decade. We urge an aye vote.

Do we have additional witnesses in support?

Judy Yee with the State Building and Construction Trades Council in support.

Any witnesses in opposition? Seeing none, turning it over to the dais. We had a motion and a second. Would you like to close?

Thank you, madam Chair. Fire sprinkler systems are one of the most critical tools for saving lives in a fire. We wanna make sure that individuals working on these systems are trained and well qualified to do this work. With that, we respectfully request your aye vote.

Secretary. Please call the roll.

File item number 11, SB 1299, Arreguin. Motion is do passed to be referred to committee on appropriations. [Roll Call]. Six ayes.