Senate Labor PERS — 2026-04-08

Thank you. Good morning. Senate Committee on Labor, Public Employment, and Retirement will commence. I see one of our illustrious committee members here. So we will start as a committee, subcommittee this morning. But I also see one of our authors who are presenting today.

So we will start with file item number one, SB 947.

I will yield to Yvonne You both have two minutes Hello Madam Chair and members of the committee Yvonne Fernandez with the California Federation of Labor Unions proud co of SB 947 the No Robot Bosses Act This year, the Labor Federation is sponsoring a package of bills to create worker technology rights as the new labor standards for the 21st century. So, it was only fitting that we bring back the No Robot Bosses Act this year. Since last year, a 2025 resume builder report indicated that about 60% of managers use AI systems to make crucial employment-related decisions, such as wage determinations, layoffs, and even firings. The report also indicated that of those employers that use AI to impact the livelihood of a worker, 20% allowed the AI system to make the final determination without any human involvement. So today, employers are still capable and, as reflected by the opposition, are eager to automate managerial decisions. Yet, automated management poses serious harms to workers. Algorithmic management often results in endless speed and efficiency increases, and workers are less likely to become fatigued, leading to injuries and immense stress. This is seen in Amazon warehouses, where their unpaid time system is used to flag workers who happen to pass their allotted time off even by a few minutes. As a system flags workers, reports have indicated that firing paperwork is automatically generated to quickly terminate a worker. No worker should have their livelihood stripped away because an algorithm is incapable of understanding the nuances of everyday human life, and no employer should be rubber stamping an ADS output for the sake of efficiency. These issues unfortunately exist beyond Amazon warehouses. In healthcare, an app-based platform known as ShiftKey has been reportedly providing disparate wages to nurses who sign up for shifts due to the platform's algorithm. It is unclear what data the platform is drawing on to offer these wages, so nurses are forced to deal with potential algorithmic bias. This is the landscape workers across the state are facing. As the senator described, SB 947 does not ban the use of ADS technology, but creates necessary guardrails on how employers use these tools when firing or disciplining a worker. The time to regulate these tools is now because AI isn't going anywhere, and neither are we. I respectfully urge your aye vote at the appropriate time. Thank you.

You're two minutes over.

Please wrap up.

Thank you. Do we have other witnesses here speaking in support of the bill? If so, please step to the mic. state your name, affiliation, and position.

Judy E. State Building Trades Council. In support.

Megan Varvey on behalf of Electronic Frontier Foundation in support

Mariko Yoshihara on behalf of the California Employment Lawyers Association and the California Initiative for Technology and Democracy in support

Ariana Montez on behalf of the Communication Workers of America District 9 in support.

Okay, thank you. I think that is it for support. We will move to opposition. Are there any witnesses here in opposition? If so, thank you. Support witnesses have a seat. Those in opposition, please step forward. You each have two minutes.

Morning, Madam Chair. Chris McKaley here on behalf of the Civil Justice Association of California in respectful opposition as we were just a year ago with the senators SB 7. Three main points from our perspective. The first is, again, at least from our perspective, in order for SB 7 to clear the Senate floor last spring. What's that? Assembly floor. Assembly floor. Sorry. My apologies. Off the assembly floor last year, SB 7 removed the private right of action. And unfortunately, if you turn to Section 1526.1B, it is reinserted in this bill. So it's been added back in, which what's the practical effect of that? It means that any failure to issue some sort of post-use notice, for example, or perform an investigation where ADS was relied upon, no matter the level of use, can subject an employer to potentially significant litigation. Also in subdivision D of that same section, the provision says where the person resides or transacts business. There's a bill related to ADS in the assembly in which that provision about transacts business was removed. We'd like to see that taken out as well. The other main issue that we raised, as we did last year, is inclusion in the definition of worker in 1520-I. that includes an independent contractor. We think it's entirely inappropriate. Workers should not include independent contractors because they're often limited-term work for a designated purpose or a very specific job, and so we don't think that is appropriate to include there. The last minor item is that there's also a provision in 1526.2 that does not preempt local jurisdictions from enacting similar provisions. If you're going to do a statewide bill like this, it should, in fact, preempt local ordinances. Thank you, Madam Chair.

Good morning, Sarah Petrowski on behalf of the California Association of School Business Officials in opposition. Good morning. Mike Robeson here on behalf of the California Staffing Professionals and the American Staffing Association in opposition. Good morning, Eileen Ricker with California's Credit Unions in Opposition. Thank you. Good morning, Cesar Diaz on behalf of the California Hospital Association in Opposition. Good morning, Eric Lerr on behalf of the California State Association of Counties and the League of California Cities in Respectful Opposition. Thank you.

Good morning, Sarah Bridges on behalf of the California Manufacturers and Technology Association in opposition. Brina Sheehy on behalf of the California Landscape Contractors Association in opposition. Good morning, Chair and members. Melissa Koslachuk with Western Growers in respectful opposition. Ben Ebbing on behalf of the California League of Food Producers in opposition. Good morning, Brian Little, California Farm Bureau, in opposition. Good morning, Jacob Brint with the California Retailers Association, in respectful opposition. Good morning, John Finley on behalf of Uber, in respectful opposition.

Thank you, Madam Chair. Just a question, and it's meant to be a constructive question for opposition. They're still here. It doesn't matter to me who responds, but I can understand the concerns about private right of action, any expansion of it, given some of the reforms that we've done recently. to try to corral some of that, which, as I recall, had labor and business support at the time. So I get all that. But if you don't have human oversight for AI, generative AI, I mean pretty much any kind of machine operation I can think of out there, then how do you hold bad actors in the AI universe accountable? What would the amendment be that you would offer or suggest to the committee or the author in terms of some of the things that were brought up by the support witnesses, which I think we're all somewhat familiar with in terms of just trying to work with AI on an individual basis. you get just absolutely incorrect facts that people are relying upon. How do you hold that machine accountable if you don't have a human overseeing that work that presumably would be accountable for that error? Madam Chair?

Let me tackle the first half and then defer to my colleague on the second half because the first part of your question dealt with enforcement Our concern is the private right of action again which was ultimately stripped in subdivision A of that same section of course allows a complaint and investigation and enforcement by the Labor Commissioner, and we think that that is the appropriate venue rather than a private right of action. In terms of the human interaction, I'll defer to my colleague at the chamber for that one. Sorry, do you mind repeating the human interaction piece just to make sure I understand correctly? Well, the bill is fundamentally one of the, I think, key pieces of the bill. Hopefully someone will correct me if I'm wrong, but it's just the notion that there needs to be a human in oversight of AI algorithms that are impacting people in the workplace. And where I start to lean in on that is because I don't know how to hold a non-human being accountable for an error. I know the old way, you know, which we've had conversations about, you know, to hold the employer accountable is PAGA or, you know, some private right of action. But if we really wanted to just make this bill without human oversight to make the person who, I'm sorry, the entity who's made the error accountable for their actions, how do we do that without a human on the other end of the discipline? Yeah. And I'm actually, I said I'm asking a construction question because I think we'd all be, we'd all love to hear, you know, with emerging technologies across every workspace. We just had discussions in other committees even about AI out on the road, not having response systems in terms of human errors that are occurring out in the public right of way. So I'm just simply saying what's compelling about the bill to me is that if you have a human in an oversight position, And that human is lax, you know, allows an error to occur or to compound, to hurt somebody, to cause the wrong person to be, you know, in a disciplinary situation. That human could be called in to the disciplinary action to testify what was happening. How did it happen? What does the data say? Did the driver really fall asleep at the wheel or what? What do you say? What is your testimony under oath as a human being in terms of right and wrong here and who's culpable? How does a machine do, how do we do that with a machine? I'm just, as an attorney, how do I do that? How do I bring that machine into a Scully hearing? Sure. And just give me a way to go. Yeah. happy to work with the author and say, hey, let's install that. They came up with a way to hold the machine accountable in a disciplinary hearing Yeah good question And I think you know from SB7 to now we always said we understand what the bill is trying to do about having a human in the loop And I don think we dispute that For us a lot of it is in the details of exactly when and how and how does that impact our ability to issue potentially disciplinary termination action at all You know, we submitted red lines last year. We intend to do the same. And I think we got pretty close, you know, at the end, because I agree that there are tools where we want to make sure, you know, it's not in the best interest of the employer or the employee to be firing everyone every time a machine says so, right? I agree with that. And I think there should be a human in the loop. But, for example, one of the points in the governor's veto message was, are you actually regulating the tools that are presenting these concerns and these dangers, or are you regulating kind of every innocuous tool, no matter how minimally it's relied on? or like how basic a function or how everyday a function. And so I think from our perspective, trying to find and strike that right balance is the key. And so, you know, and some of these things, you know, are pure bands versus what steps do you have to take, right? And so, again, finding that balance is important for us. I don't know if that answers your question. It's not that we're completely opposed to having a human in the loop. It's when and it's how much. And then like the example I brought up is if a human must corroborate every single thing, some of these tools are being used to make sure that there's workplace safety, you know, issues are being addressed or prevented in situations where you can't have a manager next to someone every single time. And so I think as these tools are improved and we're doing testing and whatever, you want to leave some room because, again, every time the manager watches the employees acting correctly and then the second they turn away, they're not, at some point we're going to have to discipline because we don't want that to cause a safety issue. And so it's a bill that's hard to strike the right balance and really hope that we can find that with the author and the sponsors. Well, I mean, just to push back a little bit and ask a follow-up question, we just have come out of decades, actually probably an entire Western civilization environment where human beings and managers were always in place to observe these things. That's not new in this bill. That's something that's actually worked. And our whole system of legal due process has been set up with the notion that somebody who is accused or disciplined has the right to a fair and balanced hearing. and what I'm asking is if the accuser is a machine how do we get to due process without having a human you know that manager that was observing or showing up at the hearing to provide the due process that's embedded in not only our judicial system but our constitutional system how do we get there with just the machine or are you saying that you're supportive of situations where due process is at issue of having the elements of a bill like this in place. So I think to the first question, you know, something we've seen, I've attended, I handle a lot of workers' comp issues as well as risk management, and some of these tools, yes, traditionally, right, they haven't existed in the past. But some of these tools, actually, when they're implemented, we've seen reductions in incidents. So I think that they are catching incidents that when you only had humans, right, they could not catch. And I do think that a positive thing We want to make sure there workplace safety in all of our workplaces I think to the second piece I mean and I know your original question was the PRA right It doesn mean there's not enforcement. Even if you strike the PRA in this bill, there's still PAGA. You know, that's still a case that would proceed, for example. And you still would have the right, I think, to discovery and what have you and everything. And I don't think in a, Sorry, I'm trying to find the words here. I see what you're saying about you can't bring in a machine to testify or what have you, right? But I think, as a lot of times happens in our legal system, especially with employment cases, when you have a lot of circumstantial evidence as well saying, okay, this ADS is flagging that this unsafe action was happening. when the employee knew a manager was watching, it stopped. When they knew the manager wasn't watching anymore, it continued. I mean, you know, we kind of have to make a choice. I mean, are you going to say we can never put an employee in that situation? Are you going to say, hey, that's enough circumstantial evidence to where I do think a disciplinary action there was appropriate? And that's a tough call as these emerging technologies are coming. We obviously feel like that would be enough, right? And I understand some people may disagree with that, but I think that's where we're coming from. Yeah. And I'm not asking these questions again to repeat what I said earlier. I'm not asking them to badger you. I just think in this bill process we have to either have, you know, proposed amendments that come in and say, you know, if we don't believe in due process and accountability, and I don't think that's your position, then it would be fair to come into the committee and just say, we don't. We think we're headed toward a brave new world where we don't need the kind of due process that we've had for the last couple hundred years in this country. We're going to rely so heavily on a machine judgment that we just don't need it anymore. That's a position, a philosophical position. It doesn't sound like it's your position. Right. So what I'm trying to get to then is if we're not going to dispatch with due process, then we're not going to have human oversight in cases where due process is from a labor standpoint, a labor and employment standpoint is going to be at issue, then what is the solution? And I think there's an obligation in this legislative process to propose an alternative. And also in this emerging technology world, we just saw a crash not too long ago, LaGuardia, between an automated aircraft, which is using AI and the technology that's been around for decades already. We fly our planes without humans actually controlling them. But we have a pilot and we have a co-pilot. We have an air traffic controller. All right. And then we have people on the ground that crash into the plane, and at some point we have to go back, you know, despite the tragedy itself, and say, was there a human being at fault? Did somebody do work outside of the scope of their work here or take action? And if so, is there going to be a disciplinary action? did firefighters you know do something in error and they now need to be disciplined for that or did pilots do something in error or did air traffic control if all we had was the black box what do we do with that I think that's the question by analogy you know in real life circumstance so appreciate your engaging me on that I think it's just important in these hearings as fast as things are moving out there, you know, to have these discussions and you know perhaps at some point somebody comes up with you know some some ideas as new as AI are in terms of how we deal with the workforce for now I see the author you know trying to install the protections that have worked for us in the past you know until somebody comes up with a better idea and that's where I'm at so I'll be supporting the bill, but that's where I'm at. Happy to engage further. Yeah, I appreciate, always appreciate the discussion and the questions, Senator. Thank you.

Well, I thank the chair. I'm going to thank my two witnesses and also thank the opposition for their thoughtful comments and ideas. Basically, we want to make sure that human beings are protected. And I do hear what the opposition comments are and certainly willing to work with the committees in the future But at this point I going to ask for an aye vote and we move forward to the next committee Thank you

I'm here to present SB 978, the Data Center Community Accountability Act. SB 978 ensures that new data centers are built and operated responsibly by protecting energy ratepayers from higher cost, requiring data centers to pay their fair shares, supporting good-paying jobs for workers, and establishing a process for data centers to fund zero-carbon energy projects. Over the past few years we have seen increased reporting on the rapid growth of data centers along with growing concerns from our constituents Data centers are facilities that house and operate large computer systems for data storage, as well as both AI development and deployment. When large data centers are added to a utility service territory, they often require additional infrastructure to support their operations. Their projected electricity demand will require the construction of new transmission facilities, and without clear statutory guidance, those costs may be passed on to ratepayers and other commercial energy consumers. SB 978 ensures that ratepayers are not responsible for these costs by requiring data centers to pay up front for any new transmission or distribution infrastructure needed to serve their facilities. This bill also directs the CPUC to establish a separate rate structure to prevent cost associated with data centers from being shifted to other electricity customers, an issue that has already emerged in other states. In addition to cost protections, reporting by IBW shows that between 45% to 70% of a data center's budget is allocated for the electrical contractor to ensure these projects are built correctly and safely. To support safe, high-quality construction, SB 978 includes skilled and trained labor standard requirements to ensure these major infrastructure projects are built by qualified professionals. Because data centers require relatively few ongoing jobs once operational, ensuring strong construction standards helps support workforce stability and quality job opportunities. SB 978 ultimately strikes the right balance. It gives the CPUC the authority to manage this rapidly growing sector responsibly while protecting ratepayers and the broader workforce from cost shifts. At the appropriate time, I ask for your aye vote. Thank you.

Thank you, Madam Chair. and members, Will Brieger, State Strategies, and I'm here today for Climate Action California. I'm pleased to support SB 978 at a time when some gigantic new loads could be coming onto our grid. And that raises good news and bad news. There's a promise of good jobs, revenue to the state. There's the possibility of lower electrical rates. Or without the kind of guardrails in Senator Perez's bill, we could leave regular folks behind as essentially the tech folks get richer. And we could possibly raise electric rates. As always, Senator Perez is here looking out for her constituents and for all of us. So I want to call attention to one aspect of the bill that's not about construction of data centers, which is the heart of this, of course. And that is a provision in proposed section 740.22 B3, and that asks the PUC to design a rate structure that would pre-fund new zero-carbon electrical generation sources. Thank you. in the utility service territory. So that's huge for two reasons. That's jobs in California. I mean, the sun shines in Arizona, but it shines in California too. We can build solar here. We can do wind. We can do all kinds of zero carbon energy, and those are great jobs. Secondly, that precludes a situation that we're seeing in other parts of the country which is dirty generation, fossil fuel, carbon-intensive electrical generation, is being hastily thrown together to power new data center loads. And that wouldn't happen under this bill. So like millions of Californians...

Thank you.

Good morning, Madam Chair and members. Martin Vindial on behalf of the California State Association of Electrical Workers, the Western States Council of Sheet Metal Workers, and the California State Pipe Trades Council in support. Thank you.

Okay, seeing the end of support. Me too's. Let's move to opposition. Opposition witnesses, please have a seat at the table if you're here. Support witnesses may sit on the... Support witnesses may...

in an era of unprecedented demand for digital services. From telehealth and online classrooms to the rapid scaling of generative AI, which would add over $4 trillion to the global economy, data centers are the essential infrastructure making it all possible. The data center industry is committed to paying its full cost of service for electricity and the underlying infrastructure it uses. That is not the reason why we are opposed to this bill. Sound rate-making principles depends on non-discrimination, and no single industry should be singled out for disparate treatment unless there is verifiable cost-based reasoning, any rate designed to reflect the actual cost of service rather than targeting a specific type of end user. Singling out one industry while not applying the same treatment to other large commercial campuses with similar demands will inevitably drive high-paying jobs and the significant tax revenue associated with data centers to neighboring states like Arizona and Nevada. To give you an idea of what is at risk, from 2022 to 2023 California data center industry directly and indirectly generated over billion in state and local tax revenues And the latest government spending data suggests that the data center industry total state and local tax contribution of billion in California in 2022 was sufficient to fund almost half of the construction, maintenance, and operation of highways, streets, and related structures in the state, including toll highways, bridges, tunnels, ferries, street lighting, and snow and ice removal. California's position as a global tech leader depends on this infrastructure. The PUC already has expertise and transparent processes in place to ensure fair cost allocation. We should allow the assessment that's required by SB 57, which was signed into law last year, which specifically requires the PUC to assess data center cost impacts to be delivered in early 2027 before layering on new potentially duplicative mandates. We urge the committee to resist advancing SB 978. Thank you for your consideration.

Chair Smallwood, Cuevas, and members, thank you very much. I'm Ahmad Thomas, CEO of the Silicon Valley Leadership Group, and we respectfully oppose SB 978. California's economy depends on reliable, affordable power for facilities that keep our state online, supporting telehealth, education, finance, manufacturing, government services, and the cloud tools households and businesses use every day. SB 978 directs the CPUC to create a special rate structure for large load data centers and hard codes how costs are assigned. But the CPUC already has the expertise and transparent processes to do this, and under SB 57 is actively assessing whether new data center loads cause cost shifts. Those findings are due January 1, 2027. PG&E's Rule 30 proceeding is in its second phase right now. This bill legislates ahead of that work and risks forcing the CPUC to re-scope a proceeding that is producing results. SVLG and our members are committed to paying the full, fair cost of service and supporting a grid that is clean, reliable, and affordable. But stacking prescriptive rate mandates and long-term procurement obligations in statute, while the CPUC is actively building the regulatory framework to address these exact issues, creates a chilling effect for investment and development. We urge the committee to vote no and to allow the CPUC's ongoing proceedings to deliver the durable, evidence-based framework that ratepayers and industry both need. Thank you.

Good morning, General Members. Jose Torres with TechNet in opposition. Sarah Bridges with the Manufacturers and Technology Association in opposition. Thank you. Matt Easley representing the California chapters of the Associated General Contractors here in opposition to the skilled and trained workforce requirements and public works designations for privately funded projects.

Good morning. Andrea Lynch on behalf of the California Chamber of Commerce and respectful opposition. Thank you. Good morning. Andrea DeVoe on behalf of the Cal Asian Chamber in opposition.

Thank you Madam Chair So I just want to say I going to be supporting the bill today especially because I think the elements that are the jurisdiction of this committee are very very important not just for this type of construction and the type of construction that has so much public interaction You know, my city has made a big deal in my Senate District 15 of embracing data centers. Appreciate Silicon Valley Leadership Group being represented by their CEO here today. And we have a big problem in terms of the balance between the lack of data center capacity and, you know, the growing, obviously the growing economic boom, including IPOs that come out of those data centers, and we anticipate more of those coming out of these data centers, which are actually helping us to balance the state budget in a big way. So I'm for this notion of trying to make sure that we're advancing data centers. I don't know the other, to the author, the other provisions in the bill in terms of balancing sort of the rest of the equities once you get outside of the labor standards issue, again, which I think is pretty critical. But I do think that will be the path of discussion going forward. How do we do this without sort of shooting ourselves in the foot in terms of like it or not, killing the goose that lays the golden egg right now. I mean, this is where most of the revenue for the state is coming from, big corporations like NVIDIA and so forth. They're not creating all their jobs here, so it's no longer about job growth. It's really just about the capital gains that we end up using to essentially pay for health and human services and equity-type issues. on the other side of the ledger here at the state. So I'm supporting the bill today. I intend to keep supporting it, but I have faith in the author to navigate those issues. I had my own data center bill a couple years ago, which I thought was embraced by the legislature overall, but I thought that it would feel a lot more compelling to people just to try to alleviate some of the lack of vacancy out there in these commercial data centers. And it's a tough slog, getting everyone to understand and also to strike the balance. So I do trust you to find that balance and do appreciate the opposition coming in and advocating to make sure that equilibrium is there.

Thank you. And I appreciate the comments from the members. and recognize we have this bill in committee because of the strong labor standards that we did include in the bill. You know, this is a bill that was inspired directly from my community. You know, the residents of Monterey Park, a city that I have the pleasure of representing, have put forth and driven a citizen-led ballot initiative that's going to be the first of its kind in the state of California to put a temporary ban on the building of new data centers. And that is specifically because my constituents feel as though there is a lack of guardrails for this type of infrastructure. They have real concerns and questions about everything from environmental impacts to electricity rates and costs to the good-paying jobs that it will bring to their community. And so our bill is hoping to address just some of those issues. I think it's a really important time for us to answer those questions as our communities look to us and they see the rise of this type of infrastructure, not just across the state, but really all across the country, and really see it as our duty to try to fill in those gaps. And I think if we don't, that we'll continue to see ballot initiatives like the one that's being proposed in my community. Because residents and communities will respond to protect their neighborhoods when they feel as though we're not doing our due diligence. And I think that this is one way that we can do our due diligence. So I respectfully request an aye vote. Thank you.

Thank you, Madam Chair and committee, for this opportunity to present SB 951, the California Worker Technological Displacement Act. I'd like to thank the committee staff for your work on the bill and accept the committee amendments. 3,000, 10,000, 14,000, 4,000. These are just a few of the thousands of workers who have been laid off in recent months as companies rapidly shift investments toward artificial intelligence. As more workplaces embrace AI, researchers and economists are raising serious concerns about potential economic disruption and widespread worker displacement. Yet despite these headlines and warning signs, California lacks clear, consistent data and transparency on how AI is impacting jobs, layoffs, and hiring decisions. Unlike past technological shifts, AI is evolving faster and affecting a wider range of industries simultaneously. This is not just automation in a single factory. AI can replace tasks across entire sectors, and as the technology improves, it increasingly replaces workers themselves. Without proactive policy, we risk widespread economic disruption and harm to workers, to their families, and to local economies. SB 951 builds on the existing WARN Act by requiring employers to provide a 90-day advance written notice before any technological displacement and prohibits employers from discharging an affected worker during that 90-day period. This notice must be provided to workers, local governments, and EDD, the Employment Development Department. The bill also requires employers to submit a report detailing the roles being displaced, the technology being deployed, and the reasons for adopting that technology. Importantly, for employers with 100 or more employees, displaced workers must be given the right of first consideration for other available positions. SB 951 does not stop innovation. Instead, it ensures transparency and accountability as innovation moves forward. This bill actually is a modest but critical first step to understanding and addressing the real-world impacts of AI on California workers, because we cannot manage what we cannot measure. Joining me today in support are Sarah Phlox with the California Labor Federation and Samantha Samantha Gordon with TechEquity. Thank you.

Madam Chair, members, Sarah Phlox, the California Federation of Labor Unions, and we are proud to sponsor SB 951. It's part of a package of bills that we're doing to establish worker technology rights as labor standards for the 21st century. The Federal and State Warren Act were enacted by policymakers as a response to the deindustrialization that was happening in the 1980s and 1990s Today we face the massive dehumanization of the economy Right now, we are seeing AI replace human workers and human judgment at a scale we have not seen before. The technology is moving much faster and at a velocity that the economy is going to have a hard time catching up and affording any kind of transition. And we are seeing that already. According to the Challenger Jobs Report, 2023 was the first year that AI was cited as a reason for layoffs. layoffs. In just two years, there have been 72,000 jobs that have been eliminated by AI, according to public reports. That's just two years. There's many more that happened in 2026. And we are also seeing that companies are ceasing to hire in certain positions. Salesforce announced last year that they are no longer going to be hiring lawyers or software engineers because AI is now doing 50% of the work of the company. This is hitting young college graduates, 22 to 25, the hardest. We've seen a 25% drop in hiring, and now young college grads that are in AI-adjacent fields have a 16% increase in their unemployment rate. And when we say AI-adjacent, That means any job that involves thinking, the knowledge industry, what was once considered a skilled, well-paid industry. And so as we see these changes happening, we need to adjust the Warren Act to capture the information so that policymakers can prepare and need to prepare quickly as these changes are happening.

The only thing I want to say is that the intent of this bill is to protect workers and give policymakers the information they need. We are happy to continue to work with the opposition to make sure that that intent comes through. Thank you.

Are there Me Too's in support of this bill? Please step to the mic and state your name, affiliation, and position.

Judy Yee, State Billings Rates, in support.

Jason Hanel on behalf of ASPE California in support.

JP Hanna on behalf of the California Nurses Association in support. I've also been asked to provide support for K-POR. Thank you.

Ariana Montez on behalf of the Communication Workers of America District 9 in support.

My name is Andrea Lynch, and I'm here on behalf of the California Chamber of Commerce and respectful opposition to SB 951. SB 951 creates a conflicting regulatory framework governing technological workforce decisions that significantly expands California's existing WARN Act. I want to draw your attention to three overarching issues. First, the overly broad scope. Second, extensive notice requirement. And three, conflicts with existing California WARN law. First, SB951's definition of technological displacement and technological cessation in hiring are broad and unquantifiable, such as the term primarily caused by an AI system and automation of job functions. These broad and vague definitions could capture the use of routine and widely used tools such as payroll software and scheduling programs. Second, SB951 requires an extensive eight-item notice, including but not limited to an employer's justification for using an AI tool and disclosure of the model of AI tools used. This could lead to disclosure of proprietary information, confidential operational strategies, or vendor relationships wholly unrelated to job loss. Third, SB951 creates overlapping compliance obligations and a new private right of action tied to technology adoption decisions. For example CalWARN requires a 60 notice for layoff versus SB951 proposed 90 notice requirement CalWARN is triggered when 50 employees are impacted versus SB 951 proposed threshold of 25 workers or 25 of the workforce Cal WARN does not require a right-to-first bid versus SB 951's proposal requiring a right-to-first bid, even if employees are not covered under a CBA, which creates competing priorities for employers that have unionized and non-unionized workforces. workforces. These conflicting frameworks could create compliance issues, increase litigation exposure, and leave uncertainty on which war notice takes priority when both are triggered. I also want to highlight that the 90-day employers cannot discharge an employee within 90 days. It's noted in the analysis as well. We believe employers should be able to discharge employees that have performance issues or violating company policy within that 90 days. I wanted to flag that for you. So for these and other reasons, we respectfully oppose SB 951 or respectfully ask for your no vote.

Good morning again, Madam Chair. Chris McKaylee here on behalf of the Civil Justice Association of California. Three main issues. The first two are a replication of earlier concerns with Senator McNerney's bill. That is the overbroad definition of worker. We think it should not include independent contractors. They have a specified term. Those contracts generally specify a scope of work, termination provisions, et cetera. So we don't think that the definition of worker should include independent contractor. The second is, as Ms. Lynch indicated, of course, CJAC's concern with the private right of action as opposed to Labor Commissioner enforcement of this. And then the other thing that I wanted to make mention of is in the language on the private right of action, It's not just the individual, but also their worker representative. And unfortunately, I think history with other laws such as the UCL, the unfair competition law, we've seen abuses occur in a litigation industry startup when we have worker representatives also able to make those claims as well. The last item I wanted to point out is some experience in other states. For example, Bloomberg Law reported on AI-related layoffs testing New York's ability to track their job losses. They had 160 mass termination notices under New York's AI-WARN Act in 2025, but none of them were attributable solely to AI-related displacement. Thank you, Madam Chair.

Good morning. Eric Lur on behalf of the California State Association of Counties. We appreciate all the conversations with the author and sponsor, but are opposed unless amended at this time. But look forward to continued conversations. Thank you. Hi, Eileen Ricker with the California's Credit Unions in opposition to the bill. Thank you. Secretary Kidd on behalf of the Rural County Representatives of California, the Urban Counties of California, the California Special District Association and the Association of California School Administrators. In respectful, opposed, unless amended. Thank you.

Jose Torres with Tech in opposition.

Cesar Diaz on behalf of the California Hospital Association in opposition.

Good morning, Chair and Members.

in respectful opposition.

of the California chapters of the Associated General Contractors in opposition. Brina Sheehy on behalf of the California Landscape Contract Association in opposition.

Thank you.

Senator Jirasi. Thank you, Madam Chair. Just generally speaking, I'm a little bit, I'm disappointed that there be the kind of opposition today when the things that are being asked for in this bill are so basic. To have information in advance of major decisions being made about people in our communities, you know, to not have the information so that we don't blindly approve or reject policies that are presented to us, all these potential ideas. I mean, why should employers alone have all the information at their disposal and not share that information with the people who are going to be impacted to know in advance as much as possible if you're going to lose your job because of technology? I mean, why aren't we talking about this in such a way that it's going to join both the benefits of technology with the well-being of people who work for them? I mean, wouldn't you want that in your own situation, in your own lives, to have that information, to know that it's going to impact you, that something's going to impact you and your livelihood? Why wouldn't you want that? I mean, why wouldn't you want to share that? Why would you want to keep that and hold it back instead of sharing it so that we could come up with the best possible ways of addressing what may be some job losses? I don't think anybody's saying, don't do this. It's how you do it. It's how you do it. And this basic dignity that people should have, I don't know why there's so much opposition to that. Any individual would want that. Any business would want that. You wouldn't want to be from one day to the next, you know, your contracts thrown out the door. You know, you just, you would want to know and you'd want to prepare for that. So I don't know what the problem is with knowing in advance, preparing in advance, doing it for a greater good. I don't think I'm being naive about this, you know. It's like that's the way. Isn't technology supposed to help everyone? Isn't technology supposed to benefit everyone? Or is it just supposed to benefit a few people? If there are some small, some issues that could be addressed, then by all means. But this overall is just the opposite. And that's why there's reaction from our communities. That's why there's reaction saying we've got to do much stronger guardrails. Why? Because no guardrails are being proposed. So it's all in reaction. I don't know. Profits should not depend on denying people such basic information or denying our community basic information. So I just got to say, overall, I'm disappointed in this, and I wholeheartedly support the author and the bill today. And I just hope that you know someone could take the lead in the tech industry and say these are specific things we could live with We want to do this for the greater good Thank you Madam Chair

Well, the wonderful comments from the two of you, I use that as my close. Respectfully ask for your aye vote.

Thank you. Thank you, Madam Chair and members, for the opportunity to present 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 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 licensing and regulatory framework for temporary staffing agencies, allowing gaps in oversight that can put workers, honest businesses, and taxpayers at risk. This fragmented labor enforcement system leaves workers and families exposed. This bill addresses this issue by establishing a clear oversight, real accountability, and required registration so staffing agencies are complying with the law before harm can occur. The SAFE Act would align temporary staffing agencies with the existing regulatory approach in other industries to protect workers and promote compliance. I would like to thank the chair and committee staff for their suggestions. As requested, I am committed to specifically work on defining staffing agency and to make it clear that the intent is to prohibit a business from using the services of a staffing agency that is without a registration instead of requiring them to verify that they are registered. Here to testify in support are Alberto Torrico on behalf of UFCW Western States Council. and Jennifer Snyder of Council for Power, the Partnership Organization for Workplace Ethics and Reform.

Good morning, Madam Chair, members of the committee. I want to also echo our gratitude to you and the committee staff on working out some provisions of the bill. I want to thank the author, Senator Reyes, who's always been a tremendous partner for United Food and Commercial Workers, who I represent. UFCW, as many of you know, and the Western States Council represents about 175,000 workers across a broad range of industries. Grocery stores, of course, cannabis operators, pharmacies, food processors, and even a number of farm workers. We support the bill and we sponsor the bill proudly because there is a growing, maybe not a growing, but there are, as mentioned in the opening statement, a number of staffing agencies. And unfortunately, there are staffing agencies that operate illicitly. They don't provide workers' compensation. They don't pay even minimum wage. And this creates – this undercuts the marketplace. So some of our employers, although they're unionized, do use staffing agencies for ancillary services. That results in undercutting the marketplace for our unionized members.

Good morning, Madam Chair and members of the committee. I come to you from a point of view of enforcement and compliance. I am a retired prosecutor who proudly served more than 33 years for the Los Angeles County District Attorney's Office, during which I spent more than 20 years reviewing, investigating, and prosecuting, as a manager and as a trial attorney, fraud and integrity crimes. The kinds of conduct that we see in staffing are not new. In 2014 and 15, my office received complaints about fraud occurring in the staffing world that related to workers' comp, EDD, and other frauds. So in my view, it's the same scheme with a slightly different name. What was the underground economy is now the shadow. As somebody who has led investigations thousands of times, I can tell you that the biggest block in any investigation is not identifying a business, but identifying the individuals that are that business. the individuals who operate behind the anonymity of their companies and who change entity names in order to shield them from being detected. We all know that enforcement is costly, time-consuming, and sometimes ineffective, especially when what we're looking at is something that can morph through masking and cloning and other means of avoiding detection. This bill accomplishes something that is absolutely essential to being preventive and being proactive in preventing fraud, and that is identifying. Knowing who the people are behind the businesses is essential. Knowing whether the business is built on solid financial footing is important. Establishing baseline requirements before somebody can enter into staffing, which is by itself a layered model of employment, is absolutely critical to ensuring that workers are protected, that competing businesses can play on an even playing field, and that the public is protected. This is greater than just workers' compensation fraud. This fraud is absolutely corrosive to the business environment.

Yes. Because state agencies are already overburdened, it's critical that we find a way to stop this on the front end. And this is the reason why the legislation that is being presented accomplishes preventive measures that do not exist. Thank you.

Is that on me?

Thank you. Good morning, Madam Chair and Chairmembers. I'm Lisa Lake-D. I am the CEO of Star Staffing. We have been in business for 28 years. We are a woman-owned business in Northern California. We serve all of Northern California and employ about 2,000 human workers in Northern California, ranging from entry-level production roles through executive roles. We predominantly service the food and beverage manufacturing industry, but also many more. I'm also here serving as the chair of the Government Affairs Committee for the California Staffing Professionals. The California Staffing Professionals is a chapter of the American Staffing Association. We pride ourselves on operating under the highest standards of ethics, integrity, competence, and professionalism. With me are just a few members, also owner-operators of women-owned staffing agencies. Staffing firms are required to follow all business laws from filing statements of information, articles of incorporation, paying taxes, following unemployment laws, and very strong and detailed labor laws. We also have some specific responsibility under rules and laws specific to the staffing industry, such as the OSHA Temporary Worker Initiative and initiatives such as the Joint Employment Standard. Today, with my fellow staffing agency owners and the California staffing professionals, we are here in opposition of SB 1032. Our biggest concerns about the bill, as currently written, is that it creates vague, new, and unnecessary requirements rather than enforcing current laws to address the problem. An example of this is Section 2203, which states any open litigation, liens, fines, taxes, past due, and any disclosure of current or past violations of this code. We are a litigious state. Unfortunately, a large portion of employers are dealing with litigation. One specific example is workers' comp litigation. Many claims are litigated. It does not mean that the employee is being taken care of or not taken care of. It simply is common practice for workers' comp. So the vagueness of certain amendments are far too broad. Overall, this bill is too vague and too ambiguous. the Labor Commissioner would be given too much discretion and could give rise to discrimination. It is expressed in the author's initial write-up that workers' comp fraud is a main issue to address. However, most of this bill is addressing other topics, such as owner background checks.

Good morning, Chair Smallwood-Cuevas and members of the committee and Senator Reyes. My name is Joanne Sanders. I'm the founder and president of Bolt Staffing Service. We are a California certified small and minority owned business. We been working as a family owned business here in the state of California for 31 years I am here to ask you to hold this bill and work with us to rewrite the bill to get it right We, too, share your concerns about fraud and abuse. I am here with several other small female minority-owned staffing company owners, none of whom would have been able to start our own businesses if this law were in place. We're not talking about the big guys. We're talking about the ones who are starting staffing companies like mine. Many of us are human resources professionals who went out and took a risk. We were recruiters. We took a risk to start our own businesses. And had this legislation, had this law been in place, we wouldn't have been able to do it. Just alone, the language around line item 26, the commissioner after review of application is satisfied to the character, competency, and responsibility of the staffing agency. That language alone is like, what is that? It's antiquated language that if I were starting my business 31 years ago would have been daunting. I would have wondered, do I have the character? Do I have the responsibility? I probably wouldn't have even taken the chance to start my business knowing that there was language like that that was going to be judging me. It's really hard to start a business. We want it to be fair. We want all the employees to not have bad actors, but we're not the ones that are doing that. We want you to work with us to make sure that we don't stop the startup business, especially by small minority females like us who have started businesses in the staffing industry. And then the progression is that the big guys come in and squeeze us out with legislation like this. Thank you very much.

Madam Chair, Gary Cooper today representing the National Association of Locum Tenens Organizations. For those of you who don't know, Locum Tenens are the temporary staffing companies that deal with health care, specifically doctors. We have been working with Senator Reyes to try to get the health care dynamics into this bill, and she's committed to do that. So today we're going to suggest, oppose unless amended, which she has suggested that she would do. Thank you very much.

Of course. Sylvia Jones, I am the president and CEO of Synapse Technology, and I oppose this bill. Andrea Brunholtz, president and CEO of ATR International. We are a Latina family-owned staffing firm specializing in IT and engineering serving Silicon Valley. Good morning, everyone. Liliana Bernal, the CEO and founder of Balanced Diversity, supporting the Sacramento-Placer County area, also in opposition of this bill. Thank you.

We represent the American Staffing Association and the California Staffing Professionals, and we're opposed.

Good morning. Andrea Lynch on behalf of the California Chamber of Commerce and Respectful Opposition. Thank you.

Just a question, I can of the author. If you have met with any of the opposition with regards to some of the concerns that have been raised today?

And I just want to let the witnesses know that I've known the young lady author of the bill for many years. She's truly very sincere, just as you are today. So I urge you all to sit as many times as you can with her and her staff to figure out some of these issues.

I'll move it.

If I have witnesses in the room, they're welcome to come forward.

So sorry to keep you waiting. I was presenting in another committee. I know you know how that is.

Okay. Thank you, Chair and members, for the opportunity to present SB 1046, which is sponsored by SEIU. Thank you, committee staff, for your work. I gladly accept the committee's technical amendments. This bill creates necessary worker protections for lifeguards and park rangers exposed to transboundary pollution in the Tijuana River Valley. The Tijuana River transports millions of gallons of untreated wastewater into California every year. Last December, I visited the Tijuana River Valley and saw firsthand how the pollution is poisoning California residents. That was in conjunction with holding a joint legislative hearing in San Diego County with the Senate Environmental Quality Committee and the Assembly Environmental Safety and Toxic Materials Committee. We were examining the pollution problem and what can be done about it. The contaminated water exposes Tijuana River Valley households to industrial chemicals, pesticides, fecal matter, pathogens, and toxic gases such as hydrogen sulfide. contaminated water enters the air as aerosolized water droplets impacting everyone who lives near it not just those who actually enter the water exposure can result in gastrointestinal illness skin infections and respiratory and neurological disorders in a community survey 67% of respondents reported that the Tijuana River Valley is not a safe place to live visit or work an outdoor work are especially vulnerable. Lifeguards are exposed to contaminated ocean water, either working near it or entering the water in an emergency, and park rangers are exposed while working near river water, especially at hot spot locations where turbulent water injects hydrogen sulfide into the air at 70 times the nuisance standard. Workers report headaches, fatigue, nausea, and bloody noses after exposure. Lifeguards and park rangers lack appropriate guidance, equipment, and training to minimize their exposure to this type of pollution. SB 1046 directs Cal OSHA to develop workplace standards for minimizing exposure to transboundary pollution, including requiring personal protective equipment such as respirators, hazard communication, incident reporting when workers are exposed to transboundary pollution or reported symptoms, trainings, and an exposure threshold for hydrogen sulfide. These guidelines will be developed in conjunction with the community and those impacted. With me today, I have in support Michael Verderber, a San Diego park ranger with SEIU Local 221, and Ben McHugh, the Executive Director of Outdoor Outreach, a San Diego-based nonprofit.

Thank you. Good morning, Madam Chair and members. Supervising park ranger Mike Verderber, County of San Diego, and proud SEIU 221 union member. I've served as a park ranger for 18 years. 12 of those years I've served and worked in the Tijuana River Valley. The Tijuana River transboundary pollution flows continue to affect the park and the surrounding community health and safety A park ranger job is to serve our communities by reporting the truth about safety hazards We can help our communities though if we don prioritize our own health first. Our work group experiences noxious odors, physical contact with polluted water and soil, flash flooding transporting fecal matter, chemicals and trash, and elevated hydrogen sulfide gas levels, as well as the unknowns, unknown chemicals and toxic gases, causing physical symptoms such as headaches, nausea, dizziness, respiratory issues, spiritual and mental stresses as well are included. What are the future health risks for long-term exposure? These are some of the uncomfortable health conversations we share with concerned family members and friends. We can't answer questions from the public about their safety if we don't have the answers for ourselves. And therefore, it's stressful and we lose sleep. Imagine if you feared your future health because of where you work. That's why I'm here asking for your support. Please support Senate Bill 1046 by Senator Catherine Blakespear. Thank you.

Good morning, Chair and members of the committee. I'm Ben McHugh, Executive Director of Outdoor Outreach, and we're a San Diego-based youth development nonprofit, helping to further the state's commitment to an outdoors for all. So every day we're running programs around San Diego to support youth and families in connecting to our amazing outdoor spaces, including many that are along our border communities Borderfield State Beach Borderfield State Park Tijuana River Valley Tijuana Slough National Wildlife Refuge And unfortunately a lot of these areas are deeply deeply impacted by pollution so much that we had to cancel or pivot hundreds of the programs that we run with state support due to those concerns about potential health impacts to our staff and also the youth that we serve. We're funded through Cal EPA's Environmental Justice Grants Program to update our risk management practices and provide additional staff training related to exposure to contaminated water. And yet that's still not enough. Now we know through emerging science that border pollution is increasingly airborne at levels that could be hazardous as well. And in the absence of clear information to ensure the safety of our staff and participants, we've practically completely stopped running programs in a lot of our border communities, which are those parks and beaches specifically for environmental justice folks who rely on those areas to get outside safely. We simply need better guidance and tools to protect our staff and in return protect our youth participants. and to ensure that we can continue to provide meaningful outdoor engagement programs for youth and families. And for those reasons, we respectfully request your support for SB 1045-46.

Good morning. My name is Ivana Chacon-Suarez. I am here with Outdoor Outreach, and I am a youth program coordinator assistant, and you have my support.

Hello my name is Noelle Kendrick I am one of their youth programs coordinators for Outdoor Outreach and I am in support Hello my name is Jaden Saunders I am a participant of the group myself and I am in support

Thank you. Okay, now we will move to opposition. Is there opposition witness or witnesses here today? Seeing none. Any Me Too's in opposition to this bill? Seeing none. We will move to the dais. Any comments? Okay, we have a motion from Senator DeRosso. Would you like to close, Senator Blaisbier, before we take the vote?

Thank you very much. We have a motion by Senator DeRosso. Please call the roll. The motion is due pass as amended to the Senate Committee on Appropriations. Senator Smallwood Cuevas? Aye. Smallwood Cuevas, aye. Senator Strickland? Aye. Strickland, aye. Senator Cortese? Aye. Cortese, aye. Senator Durazo? Aye. Durazo, aye. Senator Laird? Okay. With a vote of 4-0, this bill is out. Thank you. Thank you. Looks like we are all clear. So that concludes our agenda for today. If you were not able to testify, please submit your comments in writing to the committee. Thank you, everyone. This hearing is adjourned. Thank you.