JKM C.S.H.B. 3116 75(R)BILL ANALYSIS ECONOMIC DEVELOPMENT C.S.H.B. 3116 By: Greenberg 4-2-97 Committee Report (Substituted) BACKGROUND Welfare Reform legislation passed on both the state and federal level has created intense financial and political pressure to move welfare recipients into the workforce. One approach that is available to facilitate this process is subsidized employment. In a subsidized employment situation, the government, in an attempt to attract private sector participation, confers a benefit on an employer for the hiring and/or training of an individual currently receiving cash assistance benefits. This can take the form of a direct wage subsidy, a tax credit, or a requirement that the participant work for the employer in exchange for the benefits that they receive. This bill aims to ensure that any public money expended in a subsidized employment situation truly benefits the community and doesn't merely become a way for employers to attain cheaper labor costs. Individuals who are currently working in very low-wage, unskilled occupations are placed in some risk by subsidized employment programs. These individuals would then simply take the place on welfare previously occupied by the participants who would now be working. PURPOSE The purpose of this bill is to protect low-wage workers from displacement by subsidized employment programs, protect participants in these programs from violations of state and federal labor laws . RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1.Amends Subchapter G, Chapter 2308, Government Code, by adding Section 2308.314 to prohibit the displacement of employees by workers participating in a wage supplementation program. Subsection (a) prohibits an employer from hiring a welfare recipient under a wage supplementation program if the hiring will: result in the displacement or partial displacement of an employee from an existing position, the elimination of a vacant position caused by a lay off within the last 90 days, or impair a collective bargaining agreement. Subsection (b) requires a public employer who intends to fill a position with a participant to notify an organization that represents employees who are engaged in similar work or training as the work or training involved in the position to be filled of the employer's intent. The employer must notify the organization before the date on which the position is filled. Subsection (c) states that the work supplement program participant is an employee of the participating employer for purposes under state and federal law, is entitled to sick leave, vacation, and paid holidays or other pay as other employees who perform the same type of work, is entitled to pay at a rate that is not less than the rate the employer pays other employees with similar background, training, or experience who perform the same type of work, and is entitled to the same rights as the employer's other employees under any applicable grievance procedures. Subsection (d) defines "participant," "welfare recipient," and "work supplementation program." SECTION 2. If a state agency determines that a waiver or authorization from a federal agency is necessary for implementation of any provision of this Act, the state agency shall request the waiver or authorization and may delay implementing that provision until the waiver or authorization is granted. SECTION 3. States that this Act does not apply to a work supplementation program (as defined by Section 2308.314 (d) (3) (A) or (C), Government Code) created by HB 1639, S.B. 781, or other similar legislation created by the 75th Legislature that becomes law and contains provisions prohibiting the displacement from existing positions of employees of an employer who is or will be participating in the program. SECTION 4.Effective date. SECTION 5. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE SECTION 1. CSHB 3116 added Subsection (b) which requires employers to notify, before the date on which an employer intends to fill a position, an organization that represents employees who are engaged in similar work or training as the work or training involved in the position to be filled of the employer's intent. Renumbers subsequent subsections in the bill. Subsection (b) of H.B. 3116 becomes Subsection (c) in CSHB 3116, and adds the right of a participant in a work supplementation program to be entitled to the same rights as the employer's other employees under any applicable grievance procedures. Subsection (c) of 3116 becomes Subsection (d) in CSHB 3116, and additions are made to the definition of "work supplementation program." SECTION 2 in HB 3116 contained the effective date; in CSHB 3116 SECTION 2 is added and requires any state agency that determines a waiver or authorization from a federal agency is necessary for implementation of any provision of the Act to request the waiver or authorization and may delay implementation of the program until the waiver or authorization is granted. Renumbers subsequent sections. SECTION 3. In HB 3116, SECTION 3 was the emergency clause; in CSHB 3116 SECTION 3 is added and designates to which bills this Act does not apply. SECTION 4. In CSHB 3116, SECTION 4 is the effective date. SECTION 5. In CSHB 3116, SECTION 5 is the emergency clause.