BILL ANALYSIS Ó SB 1015 Page A Date of Hearing: June 22, 2016 ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT Roger Hernández, Chair SB 1015 (Leyva) - As Introduced February 11, 2016 SENATE VOTE: 25-10 SUBJECT: Domestic work employees: labor standards SUMMARY: Deletes the sunset date on the Domestic Worker Bill of Rights, which granted overtime compensation to specified domestic workers. EXISTING LAW: 1)Establishes the Domestic Worker Bill of Rights to regulate the hours of work of specified domestic work employees who are personal attendants and provides an overtime compensation rate for those employees after nine hours in one day and 45 hours in one workweek. 2)Requires the Governor to convene a committee to study and report on the effects of this law on personal attendants and SB 1015 Page B their employers. 3)Sunsets the Domestic Worker Bill of Rights on January 1, 2017. FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. COMMENTS: AB 241 (Ammiano) of 2013 enacted the Domestic Worker Bills of Rights to grant overtime compensation to specified domestic workers after 9 hours in one day and 45 hours in one workweek. AB 241 contained a January 1, 2017 sunset date. This bill proposes to eliminate that sunset date, thereby making those overtime provisions permanent. AB 241 also required the Governor to convene a committee to study and report on the effects of this law on personal attendants and their employers. The Labor and Workforce Development Agency (LWDA) has convened meetings and solicited input from stakeholders, but a report has not yet been released. LWDA indicates that the report will be released this summer. Background on Domestic Workers at the Federal Level In 1938, the U.S. Congress enacted the Fair Labor Standards Act (FLSA) introducing the forty-hour work week and establishing minimum wage and overtime protections for workers, with some exceptions including domestic workers and farmworkers. In 1974, Congress extended FLSA coverage to workers who perform domestic service. "Domestic workers" or "household workers" are generally comprised of housekeepers, nannies and caregivers of children and others, including the disabled and elderly, who work in private households to care for the health, safety and well-being of those under their care. Casual babysitters and domestic service workers employed to provide "companionship services" for an elderly person or a person with an illness, SB 1015 Page C injury, or disability are not required to be paid the minimum wage or overtime pay if they meet certain regulatory requirements. Effective January 1, 2015, the U.S. Department of Labor amended its regulations to revise the definition of "companionship services" to clarify and narrow the duties that fall within the term and prohibit third party employers, such as home care agencies, from claiming the companionship or live-in exemptions. The major effect of this Final Rule is that more domestic service workers will be protected by the FLSA's minimum wage and overtime provisions. The FLSA requires employers to compensate employees at one-and-one-half times the regular rate of pay for all hours worked over 40. Unlike California law, the FLSA does not contain a daily overtime requirement. The Growing Need for Domestic Workers According to a report<1> from the UCLA Labor Center, 16% of households or 2 million households in California employ domestic workers to provide care for children, housecleaning, and support for seniors and people with disabilities. The report found that due to health and medical advancements and the aging of the baby boomer generation, the U.S. is experiencing an unprecedented "elder boom," and domestic workers help empower the independence of seniors. There has been a shift in recent years around --------------------------- <1> Profile, Practices, and Needs of California's Domestic Work Employers, University of California Los Angeles Labor Center: http://www.labor.ucla.edu/publication/domestic-employers-report/ SB 1015 Page D societal expectations that people with illnesses and disabilities will be able to live at home with appropriate assistance, rather than in nursing facilities. Long-term support for seniors and people with disabilities is, about half the time, informally provided by friends and family members, usually a spouse or an adult daughter. Professional domestic work, however, provides an alternative to assisted living and nursing facilities, and can allow informal, familial caregivers to take up needed employment. By 2022, the number of personal care aides in California will have increased by 52% to over half a million workers. It is estimated that about half of those turning 65 today will need some form of long term support. Prevalence of Inadequate or Illegal Pay and Substandard Conditions among Domestic Workers The National Domestic Worker Alliance performed a survey to analyze data on domestic work and workers in 14 United States cities. The sample analyzed in the report<2> includes 631 domestic workers in four metropolitan areas in California: Los Angeles, San Diego, San Francisco, and San Jose. The report examines conditions in the industry and presents the results of nannies, housecleaners, and caregivers who are employed directly by private households. This provides context on the large, --------------------------- <2> Home Truths: Domestic Workers in California. National Domestic Workers Alliance Data Center at the Center for Urban Economic Development, University of Illinois at Chicago: http://www.domesticworkers.org/sites/default/files/HomeTruths.pdf SB 1015 Page E informal labor market of domestic work. The report reveals that domestic workers, who labor without many of the protections afforded most other workers in the U.S., face a range of hardships associated with their work in an industry that is largely invisible and unregulated. Specifically the report finds that low pay is a systemic problem across the industry, and workers rarely receive employment benefits. Their findings declare that 25 percent of domestic workers are paid below the California minimum wage, the result of a combination of poorly delineated tasks, long workdays, and low pay. Using a conservative measure of income adequacy, 61% of workers are paid an hourly wage at their primary job that is below the level needed to adequately support a family (analysis using the Lower Living Standard Income Level guideline). Less than 1 percent receives retirement or pension benefits. Only 6 percent work for employers who pay into Social Security. Just 1 percent work for employers who pay into workers' compensation, and only 2 percent receive employer-provided health insurance coverage. Survey data was analyzed to determine the hourly wages paid by workers' "primary" employer, the employer for whom the most hours were worked in the previous week. The median hourly wage for the domestic workers surveyed is $10.00 an hour. Fully one-quarter (25%) of survey respondents are paid less than the California minimum wage ($8 per hour at the time of the survey), the result of a combination of poorly delineated tasks, long workdays, and low pay. Sixteen percent put in more than 40 hours of work per week for their primary employer, but rarely are domestic workers paid time-and-a-half for overtime hours. Many SB 1015 Page F are paid a flat rate that does not change according to the actual number of hours worked. The tendency within private households is for work tasks to expand and for the workday to lengthen, often driving pay below the state minimum wage. The report also highlights the low pay and substandard conditions faced by domestic workers, and how most workers and their families face financial hardships. 58 percent of domestic workers spend more than half their income on rent. 35 percent paid rent late in the prior 12 months. 39 percent of workers had to pay essential bills late in the last month. 23 percent had no food to eat in the last month because they lacked resources to obtain it-an extreme form of food insecurity. The report argues that while not all domestic work employers treat their nannies, caregivers, and housecleaners poorly, the lack of enforceable standards increases the likelihood of mistreatment. They call for sensible policies that protect domestic workers on the job are needed to redress the substandard conditions that exist in the industry. Argument in Support The California Domestic Workers Coalition, the sponsor of this measure, writes in support: SB 1015 Page G "This bill would make permanent California's current overtime law for domestic workers. The law was first enacted in January of 2014 to finally provide overtime pay to domestic workers who have been excluded from many labor protections for decades. Domestic workers are primarily immigrant women that, as a result of the uneven application of labor laws, have been denied basic protections afforded to other workers. Domestic workers often work around the clock to fulfill the requests of their employers and meet the needs of their own families. The unique nature of their work and constant isolation permits unscrupulous employers to exploit this hard-working labor force. The path towards dignifying domestic work started many years ago. The legislative effort began in 2012, through AB 899. That initial version, which sought more comprehensive protections for workers, was ultimately vetoed by Governor Brown. Undeterred and with a renewed focus, the coalition, in 2013, fought to pass Assembly Bill 241 (known as the Domestic Workers Bill of Rights). Under AB 241, overtime protections were established for personal attendants who care for and provide support for thousands of individuals and families in California. However, the legislation carried a sunset provision, thus making these protections provisional, ending at the end of 2016 unless made permanent. The California Domestic Workers Coalition, its members and allies, have reached out to many workers to educate them about their rights. We have witnessed a growing recognition of the law, and compliance. We have witnessed growth in the confidence of workers, with their work affirmed as legitimate work, and an improvement in their ability to advocate for dignified working conditions. Only through making this law permanent can these efforts be fully effective. By making the law permanent, the legislature will dignify this profession, the work of supporting our families, seniors, and people with disabilities. The population that will need personal attendants continues to grow in our state; SB 1015 will help ensure fair and just standards that will result in better care for both the workers and the people they attend to." SB 1015 Page H The California Alliance for Retired Americans writes in support, "As a retiree organization which champions the rights of seniors, the California Alliance for Retired Americans (CARA) cares about how domestic workers are treated. We want to ensure that they are treated fairly and compensated equitably, including pay for overtime hours worked. It is due to their dedicated and compassionate work that seniors are able to stay in the home during their most vulnerable period in their lives. Thanks to the work of domestic workers, seniors are able to live in their own homes with dignity and respect. Keeping seniors out of nursing homes, and in their own homes, saves the state millions of dollar every year." The American Civil Liberties Union (ACLU) writes in support that, "since the passage of AB 241, domestic workers have reported improved confidence and the ability to advocate for dignified standards in their jobs. If SB 1015 is not passed, these workers will no longer have access to these much needed state job protections. The ACLU is proud to support SB 1015, which recognizes the importance of domestic work and reaffirms the dignity of the California families whose household economy relies on this critical work." The United Domestic Workers (UDW) - AFSCME Local 390 supports this measure and states, "On average, domestic workers earn poverty wages and are excluded from our most fundamental labor protections. In 2013, the California Domestic Workers Coalition sponsored AB 241 (Ammiano) to grant domestic workers the right SB 1015 Page I to daily and weekly overtime pay? Domestic workers make so little that they have come to depend on overtime pay. It is crucial that we end this injustice and make this law permanent so that employers cannot pocket the money that our State's most vulnerable workers deserve." Arguments in Opposition The California Association for Health Services at Home (CAHSAH) opposes this measure and states: "As early as 1986, the Industrial Welfare Commission recognized a complete exemption from the overtime provisions and other requirements of the Wage Orders for individuals employed as personal attendants who provide in-home care. In 2012, Governor Jerry Brown vetoed AB 889 which would have extended overtime pay to personal attendants because he was concerned about the impact the bill would have on seniors and other frail Californians who depend on private home care services to avoid institutionalization and to keep them safe and healthy in their home. In 2013, AB 241 was signed into law requiring that caregivers receive overtime compensation after nine hours in a day and/or 45 hours in a workweek but this time the bill included a sunset clause of 2017 and specifically required that a complete impact study be conducted. The Governor included a specific message in his AB 241 signing statement that asked: What will be the economic and human impact on the disabled or elderly person and their family of requiring overtime, SB 1015 Page J rest and meal periods for an attendant who provides 24-hour care? What would be the additional costs and what is the financial capacity of those taking care of loved ones in the last years of life? Will it increase costs to the point of forcing people out of their homes and into licensed institutions? Will there be fewer jobs for domestic workers? Will the available jobs be for fewer hours and will they be less flexible?" According to CAHSAH, they have heard from home care providers, their caregivers, clients and family members about the serious negative consequences that have resulted from AB 241, including the following: Families are faced with difficult decisions about how to afford care and keep the continuity of care consistent. Many seniors with dementia are experiencing the confusion of having multiple caregivers in their home. Caregivers have lost schedule flexibility. Caregivers who were accustomed to living in the client's homes lost their ability to live rent-free and have had their income significantly reduced. Home care providers are having difficulty finding enough caregivers to provide care. Many seniors and frail individuals are being forced out of their homes into residential care facilities. CAHSAH goes on to state that, "Now, [this bill] is being introduced to remove the sunset clause that was established under AB 241. However, the impact study that was mandated by AB 241 has not been released and the work continues to collect and analyze all the data. The Department of Industrial Relations just notified CAHSAH that they will be conducting a final home care providers study beginning in April. The full results of SB 1015 Page K the impact study need to be understood before making any changes to AB 241. " In addition, Disability Rights California (DRC) opposes this measure. They state that, "DRC opposed AB 241, whose sunset [this bill] would lift, because of the negative consequences to people with disabilities, most of whom are low-income who pay privately for attendant care. The AB 241 debate was long and painful and did not resolve the issues which should unite rather than divide two groups: low-income personal care workers and low-income people with disabilities who employ them. We support the rights of workers to be treated fairly, and we also support the rights of people with disabilities to live in their own homes, work and function in their communities. Unfortunately, AB 241 lumped low-income people with disabilities, who rely on their attendants for their survival and functioning, with wealthy people who could do their own chores but have money enough to hire somebody else to do them. The burdens are not equal; the effects of the bill are not equal. There are people with disabilities who spend half their incomes paying privately for their attendants, because their gross income does not qualify them for government programs. The claim that AB 241 has been a great success does not seem to be supported by any data on its effect on people with disabilities." Prior Related Legislation SB 1344 (Stone) from 2016 proposed to add a sleep time exemption from hours worked for purposes of overtime compensation for SB 1015 Page L live-in employees or 24-hour shift workers. Specifically, SB 1344 would have allowed live-in domestic work employees or those on duty for 24 or more consecutive hours to enter into a written agreement with their employers to exclude a regularly-scheduled sleeping period from hours worked, and thus from employee pay. SB 1344 failed passage in the Senate Labor and Industrial Relations Committee. AB 241(Ammiano) Chapter 374, Statutes of 2013, enacted the Domestic Worker Bill of Rights granting overtime compensation, until January 1, 2017, to specified domestic workers after 9 hours in one day and 45 hours a week. AB 889 (Ammiano) from 2012 would have required the permanent adoption of regulations governing specified working conditions of domestic workers, including but not limited to, overtime compensation and meal and rest periods. AB 889 was vetoed by Governor Brown. The Governor's veto message stated: "Domestic workers work in the homes of ill, elderly or disabled people. They often share duties and responsibilities with the family and friends of the patient-employer. Those employed in this noble endeavor, like anyone who works for a living; deserve fair pay and safe working conditions. Seeking to improve the circumstances of these workers however, raises a number of unanswered questions. What will be the economic and human impact on the disabled or elderly person and their family of requiring overtime, rest and meal periods for attendants who provide 24 hour care? What would be the additional costs and what is the financial capacity of those taking care of loved ones in the last years of life? Will it increase costs to the point of forcing people out of their homes and into licensed institutions? Will there be fewer jobs for domestic workers? Will the available jobs be for fewer hours? Will they be less flexible? SB 1015 Page M What will be the impact of the looming federal policies in this area? How would the state actually enforce the new work rules in the privacy of people's homes? The bill calls for these questions to be studied by the state Department of Industrial Relations and for the department to simultaneously issue new regulations to provide overtime, meal, rest break and sleep periods for domestic workers. In the face of consequences both unknown and unintended, I find it more prudent to do the studies before considering an untested legal regime for those that work in our homes. Finally, a drafting error leaves most In Home Supportive Service (IHSS) workers subject to this measure - - resulting in costs to the state of over $200 million per year. This could require cuts in wages, reduced hours of care and other reductions to those served by IHSS workers." REGISTERED SUPPORT / OPPOSITION: Support 9 to 5 Los Angeles Ability NOWBay Area Alameda Labor Council SB 1015 Page N Alliance of Californians for Community Empowerment American Association of University Women American Civil Liberties Union of California American Federation of Teachers, Local 2121 American Friends Service Committee's US/Mexico Border Program Anakbayan East Bay Asian Americans Advancing Justice-California Asian Health Services Asian Immigrant Women Advocates Asian Pacific American Labor Alliance Asian Pacific Islander Legal Outreach Association of Filipino Workers Bend the Arc SB 1015 Page O Binational Center for the Development of Oaxacan Indigenous Communities Black Alliance for Just Immigration California Alliance for Retired Americans California Applicants' Attorneys Association California Asset Building Coalition California Child Care Resource & Referral Network California Commission on Asian Pacific Islander American Affairs California Domestic Workers Coalition (sponsor) California Employment Lawyers Association California Environmental Justice Alliance California Faculty Association, San Francisco State Chapter California Healthy Nail Salon Collaborative California Hunger Action Coalition SB 1015 Page P California Immigrant Policy Center California Immigrant Youth Justice Alliance California In-Home Supportive Services Consumer Alliance California Labor Federation, AFL-CIO California Latinas for Reproductive Justice California Nurses Association California Partnership California Rural Legal Assistance Foundation California School Employees Association California Women's Law Center California Work and Family Coalition Californians for a Healthy and Green Economy Care.com SB 1015 Page Q Career Ladders Project Caring Across Generation Center for Popular Democracy Central American Resource Center/Centro de Recursos Centroamericanos Central Coast Alliance United for a Sustainable Economy Central Florida Jobs with Justice Centro Cultural de Mexico Centro Laboral de Graton Centro Legal de la Raza Child Care Law Center Chinese for Affirmative Action City and County of San Francisco Coalition for Humane Immigrant Rights of Los Angeles SB 1015 Page R Community Coalition Community Health for Asian Americans Community Housing Partnerships Council of Mexican Federations Council on American-Islamic Relations California Courage Campaign Day Labor Center Hayward, Oakland, Tri-City, Tri-Valley Day Worker Center in Santa Cruz County Day Worker Center of Mountain View Diawang Kabataan of Tri-city Dolores Street Community Services East Bay Alliance for a Sustainable Economy East Bay Organizing Committee SB 1015 Page S El/La Para TransLatinas Ella Baker Center for Human Rights Episcopal Church of St. John the Evangelist Equal Rights Advocates Filipino Advocates for Justice Filipino Community Center Filipino Migrant Center Forward Together Friends Committee on Legislation of California GABRIELA San Francisco Gray Panthers of San Francisco Hand in Hand: The Domestic Employers Network Home Green Home SB 1015 Page T Immigrant Youth Coalition Institute of Popular Education of Southern California Interfaith Movement for Human Integrity International Longshore & Warehouse Union Local 6 Jobs with Justice San Francisco KmB, Pro-People Youth Koreatown Immigrant Workers Alliance La Raza Centro Legal Language Access Network Lawyers' Committee for Civil Rights of the San Francisco Bay Area Mexican American Legal Defense and Education Fund MomsRising.org SB 1015 Page U Movement Generation Justice & Ecology Project Movement Strategy Center Mujeres Unidas Y Activas National Council of Jewish Women National Domestic Workers Alliance National Employment Law Project National Network for Immigrant and Refugee Rights North Bay Immigrant Youth Union North Bay Jobs with Justice North County Immigration Task Force Numerous Individuals Oakland Rising Oceanic Coalition of Northern California SB 1015 Page V Office & Professional Employees International Union, Local 3 Orange County Immigrant Youth United Parent Voices Pegasus Pilipino Association of Workers and IM/Immigrants - Silicon Valley Pilipino Workers Center of Southern California PolicyLink Pomona Economic Opportunity Center Progressive Workers Alliance of San Francisco PROSPERA Co-Ops: The Business of Empowerment Public Counsel Raising California Together Restaurant Opportunities Centers of Los Angeles SB 1015 Page W Restaurant Opportunities Centers United Sacramento Immigration Alliance Sailors Union of the Pacific San Francisco Community College Federation of Teachers San Francisco Labor Council San Francisco Women Against Rape Santa Clara County Wage Theft Coalition Save Midtown Tenants Association SEIU - United Service Workers West SEIU California Senior and Disability Action Services Immigrant Rights & Education Network Somos Familia SB 1015 Page X Strategic Action for Just Economy Supervisor Efren Carrillo, Sonoma County Swiss Cheese Childcare Cooperative Temple Beth Hillel, North Hollywood Temple Judea The Full Rights, Equality, and Empowerment San Francisco Coalition The Greenlining Institute The Kitchen San Francisco The Opportunity Institute The Women's Collective/La Colectiva de Mujeres Tradeswomen, Inc. UFCW Western State Council UNITE HERE! SB 1015 Page Y United Domestic Workers of America - AFSCME LOCAL 3930 United Educators of San Francisco United Farm Workers Vital Immigrant Defense Advocacy and Services Voices for Progress Wage Justice Center Western Center on Law and Poverty Women's Employment Rights Clinic of Golden Gate University School of Law Women's Policy Institute, Women's Foundation of California WorkSafe Young Workers United PODER! SB 1015 Page Z Opposition Numerous Individuals 1-Heart Caregiver Services AAA T.L.C. Health Care, Inc. California Association for Health Services at Home Care to Stay Home Comfort Keepers Disability Rights California Home Instead Senior Care Innovative Healthcare Consultants Matched Caregivers Visiting Angels SB 1015 Page A Analysis Prepared by:Taylor Jackson / L. & E. / (916) 319-2091