Update on California’s AB2849

Prepared by Mo Manklang, last updated 4/20/2022

 

AB2849 is a newly introduced law in the state of California. While the USFWC was not involved in the origination of the bill, we are working to understand the implications of the bill, gather feedback on it, and potentially propose additions/amendments to the bill.

 

What is AB2849? 

AB2849 is a bill which will create a cooperative association which will provide administrative and HR resources for Cooperative Labor Contractors (CLCs). The cooperative association will act as an intermediary for co-op staffing agencies, creating incentives for businesses to utilize high-road businesses and enabling scale of labor relations and insurance for small CLCs. 

 

Where did this bill originate?

This bill originated with SEIU-UHW. Four years ago when the Dynamex decision came down and AB5 was not yet law, the big unions (Teamsters, UFCW, SEIU) were in conversation with big platform companies, the CA governor, and state leaders to ensure that workers rights were ensured through these companies, and to determine who the intermediaries would be if AB5 became law. These negotiations went nowhere, big platform companies were not interested in solutions that protected or centered workers. 

SEIU continued to respond to their healthcare workers, particularly because of the growing obliteration of good middle-class jobs within the industry. Using the examples of small-scale existing staffing cooperatives like Turning Basin Labs and Core Staffing Co-op, SEIU aimed to introduce legislation taking the idea of “intermediaries” (large staffing pools within different industries), and create a high-road association of CLCs that is worker-owned which will serve as a vehicle for scaling worker pools and engaging in labor negotiations. Within this legislation, workers can form Cooperative Labor Contractor companies which will become a staffing pool. Representative(s) from the CLC who are designated as managers will become employees of the Association. 

 

What would this bill do, specifically?

The legislation will allow the staffing pools to scale very big to take up a big piece of the labor market, so companies are more likely to contract with them. Additionally, the legislation also creates an incentive structure for CLCs to receive a credit-union-like tax benefit if they adhere to the democratic practice guidelines as well as meet the minimum labor standards, and for companies that are contracting with the CLCs to receive relief from joint employment liability (excluding intentional acts). Note: SEIU’s AlliedUp initiative, for example, aims to join the Association. 

This bill would:

  • Require the Secretary of Labor and Workforce Development to create a corporation that serves as an intermediary co-op association for cooperative labor contractors which provides management and business services as well as improving business conditions for its members. This includes the State allocating $9.8 million toward the creation of the association.
  • Require that member businesses of the corporation are democratically controlled with a majority worker vote on a basis of one-person, one-vote, as well as minimum labor standards
  • Establish a board, initially appointed by the Governor, Speaker of the Assembly, and President pro Tempore of the Senate; this board will create the bylaws. Afterwards, the government will cede control of the corporation to the board of directors.

 

What’s going on with the bill right now?

AB2849 is currently referred to the committees on Labor and Employment and Banking and Finance

 

Does the USFWC support this bill?

The USFWC is currently evaluating whether to support this bill. If you have feedback, please email policy@usworker.coop to get in contact with our Policy Director, Mo Manklang.

 

 

Posted in Policy.