California’s Governor Gavin Newsom deserves credit and praise for signing into law a number of bills that will improve the lives of workers over the past few weeks. He signed legislation that will expand paid family leave, improve wages and working conditions in the fast food industry, and protect the right to organize for California’s farmworkers. Unfortunately, however, Gov. Newsom vetoed AB 364, a bill that would protect 300,000 temporary migrant workers.
Last month, I published an analysis of the components of AB 364 and its positive impact if it became law, including creating a system of transparency and accountability to prevent fraud and exploitation committed against migrant workers who are vulnerable to abuses by international labor recruiters. The abuses often include wage theft, debt bondage, and human trafficking of the migrant workers recruited to work in California through temporary work visa programs. AB 364 was introduced to combat those abuses in California, the biggest host state for migrants working with temporary visas—with a rapidly increasing population.
Below, I’ll discuss Gov. Newsom’s veto of AB 364 and critique the reasoning behind it.
While the veto is tragic in its own right—the legislation has been supported for years by immigrant, worker, and anti-trafficking advocates—Gov. Newsom issued a veto signing statement that included factual and technical inaccuracies about AB 364.
First, Gov. Newsom notes that foreign labor contractors (aka international labor recruiters) are “already regulated” and thus AB 364 would create “a redundant process” for them. This is not true.
Gov. Newsom cites farm labor contractors as an example for this assertion. He is referencing the fact that farm labor contractors—which are essentially staffing firms that employ and send farmworkers to various farms—are already regulated for their activities as employers in California. Gov. Newsom seems to be concerned because some farm labor contractors may also recruit and hire migrant workers through the H-2A visa program—which allows U.S. employers to hire migrant farmworkers for temporary agricultural jobs—and wants to prevent the farm labor contractors that also recruit and hire H-2A workers from being subject to two different regulatory schemes.
This is misguided: foreign labor recruiters and farm labor contractors are not the same and their activities should not be conflated, even if they are in some cases the same entity.
AB 364 regulates activity that mostly takes place abroad, i.e. when international or foreign labor recruiters—which can be individuals or firms—recruit migrants in origin countries for temporary jobs in the United States. Existing rules applying to farm labor contractors regulate the activity of those contractors in their capacity as agricultural employers operating in the United States, not what they do outside the country.
In some cases, a person or entity can be both a foreign labor contractor recruiting abroad and a farm labor contractor employing farmworkers in California, as Gov. Newsom seems to suggest. But we have no reliable data that reveal how many entities like these exist that would be subject to both regulatory schemes.
Importantly, it doesn’t matter if such entities are regulated under both schemes because they are engaging in two entirely separate activities which require their own sets of rules—even if the subjected entity is the same. In other words, there would be no “redundant process” for the foreign labor recruiters that are also farm labor contractors.
It is well known that regulation of foreign labor recruiters is desperately needed because the recruitment phase is where many abuses of migrant workers occur and the activities of recruiters are virtually unregulated.
The regulation of farm labor contractors is also desperately needed and justified, which is why the current rules exist. Farm labor contractors, which now employ a majority of crop farmworkers in California, are the worst violators of wage and hour laws on farms: they accounted for half of all violations detected by the U.S. Department of Labor between 2005 and 2019.
Even if what Gov. Newsom cited were true about a redundancy in regulation, it would only account for a small subset of the migrant workers who need AB 364’s protections. Assuming that every single H-2A farmworker is employed by a farm labor contractor who recruited them abroad would only account for about 30,000 workers, or about 10% of all temporary migrant workers in California.
However, that would be an assumption unsupported by evidence, and the true number is likely much lower, leaving the vast majority of temporary migrant workers unprotected from the abuses of unregulated labor recruiters.
Gov. Newsom also notes that AB 364 “creates uncertainty by bringing within the scope of foreign labor contractor regulation visa programs that would not normally be considered worker visa programs, such as intracompany transfers.” The visa Newsom references here is the L-1 visa, which allows employers to transfer their managers and executives and employees with “specialized knowledge” from their foreign offices to U.S. offices. To suggest that the L-1 visa is not a work visa and that migrants with L-1 visas are not “workers” is preposterous and harmful. The L-1 visa operates very much like the H-1B visa program for college-educated temporary migrant workers—but without any of the H-1B visa’s wage rules or worker protections.
There are likely over 300,000 L-1 workers nationwide and the largest employers of L-1 workers are mostly the same as the largest employers of H-1B workers—namely, information technology staffing firms. In 2006 the Department of Homeland Security’s (DHS) Office of the Inspector General (OIG) published an in-depth look at the L-1 visa and found it to be “vulnerable in several respects” and cited evidence of how it was used to displace and replace U.S. workers because of a lack of worker protections. The OIG also noted at the time that “California has received the most L visa workers.”
It is important that in this sentence, contrary to Gov. Newsom’s view about the L-1, the DHS OIG acknowledges and refers to migrants with L-1 visas as “workers.”
For evidence that migrant workers with L-1 visas are in fact workers, Gov. Newsom need look no further than a glaring example from the Silicon Valley. The U.S. Department of Labor found a tech company in Fremont, Calif. was paying its L-1 workers from India just $1.21 an hour to install their computer and network systems. Many were working over 100 hours per week. If migrants employed with L-1 visas who are working full-time plus 60 hours of unpaid overtime doing skilled tasks aren’t workers, then who is a worker, exactly?
These errors show that, with all due respect, Gov. Newsom’s office and staff misunderstood the nature of temporary work visa programs and the needs and vulnerabilities of the population of 315,000 temporary migrant workers in California who make up 1.6% of the state’s total labor force.
California was very close to making a huge stride toward protecting temporary migrant workers from the abuses of international labor recruiters. While Gov. Newsom is rightly being celebrated and applauded for improving worker power in California during this past legislative session, he nevertheless missed an opportunity to protect some of the most vulnerable workers in California while also implementing an essential component of immigration reform—and creating a model for other states to follow.
For now, migrant workers with temporary visas—many of whom were hailed as “essential” and “heroes” during the pandemic—will have to wait for meaningful state or federal protections from the labor recruiters who exploit, rob, and traffic them.
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