Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

F I S C A L I M P A C T R E P O R T

SPONSOR HJC

DATE TYPED 3/7/2005 HB 672/HJCS

SHORT TITLE Day Laborer

SB

ANALYST Dunbar

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$240.0

See Narrative Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

See Narrative

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Labor (DOL)

NM Corrections Department (NMCD)

SUMMARY

Synopsis of Bill

The House Judiciary Committee Substitute for House Bill 672 creates new legislation that de-

fines “day labor,” “day labor service agency”, “day laborer”, and “third party employer.” The bill

also proposes exemptions to Day Laborer Act.

House Bill 672/HJCS Page 2

The bill further requires that day labor service agency pay laborers “on demand”, and provide

laborer with itemized statement showing deductions from wages.

The committee substitute adds additional criteria for check cashing services that are operating as

day labor service agencies. The additional criteria include: (1) the day labor service agency

may not charge in excess of $2.00 for cashing a check or payment instrument that is issued by

the agency. ( 2) States that no fees may be charged for cashing a check or payment instrument

unless the day laborer is given the option of being paid with an instrument that is payable with-

out a fee at a local financial institution or if the day laborer voluntarily elects to cash the check at

the day labor service agency. (3) Requires day labor service agencies to place public notices that

state in English, Spanish, Navajo and any other written language where there is a high percent-

age of workers who speak that language the fee for cashing a check.

The committee substitute modifies the criminal penalties section of the bill so that the penalties

are consistent with other misdemeanor penalties defined in NMSA 1978, §31-19-1. The com-

mittee substitute adds increased penalties for second and subsequent violations and adds a sec-

tion stating that each

Significant Issues

Labor and Industrial Division of New Mexico Department of Labor has no current

authority to prosecute criminal actions, but can prosecute civil actions.

HB 672 provides that an employer may not reduce through deductions, other than mandatory

federal or state deductions, a day laborer’s wages below the federal minimum wage.

FISCAL IMPLICATIONS

There is no appropriation in this bill. Currently, there are about 186,000 citizens per labor law

administrator (LLA) statewide, with the current staff of eight LLA’s. DOL estimates that three

additional FTE would be required to implement the responsibilities as proposed by this bill. The

additional FTE will require a recurring annual appropriation from the general fund to the De-

partment of $240 thousand annually.

The bill does impose mandatory fines for subsequent violations of these misdemeanors. This

may result in additional revenue for the state. It is highly likely that fines, not probation or jail

time, will be imposed for violation of these new misdemeanors.

ADMINISTRATIVE IMPLICATIONS

The bill provides for the department of labor to investigate complaints of violations and enforce

the Act. It also requires that the department of labor adopts rules necessary to implement the Act.

Labor and Industrial Division of the New Mexico Department of Labor currently performs these

functions for unpaid wage claims for other employees, and can prosecute civil actions against

employers, but has no authority to prosecute criminal actions. DOL acknowledges that the Act

will require additional staff and resources.

House Bill 672/HJCS Page 3

TECHNICAL ISSUES

Section 6 B provides for record retention of a day labor service agency for a least one year. How-

ever, any investigation or audit done by the department involves the previous calendar year. Day

laborer records need to be maintained for a minimum of two years.

OTHER SUBSTANTIVE ISSUES

The bill exempts the following from the Act: Farm labor contractors, temporary services em-

ployment agencies, labor union hiring hall, and labor bureau or entity “whose sole purpose is to

employ a person for its own use.”

Labor and Industrial Division of NM Department of Labor has no authority to enforce Federal

minimum wage laws; the division can only enforce State minimum wage laws. Current State

minimum wage is the same as Federal, but that could change in the future.

BD/njw:lg