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<ns0:ActionText>INTRODUCED</ns0:ActionText>
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<ns0:ActionDate>2026-03-19</ns0:ActionDate>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Lee</ns0:AuthorText>
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<ns0:Title>An act to amend Section 6108 of the Public Contract Code, relating to public contracts.</ns0:Title>
<ns0:RelatingClause>public contracts</ns0:RelatingClause>
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<ns0:Subject>State contracts: certification process: Sweatfree AI Code of Conduct.</ns0:Subject>
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<html:p>Existing law requires a contract entered into by any state agency for the procurement or laundering of apparel, garments, or corresponding accessories, or the procurement of equipment, materials, or supplies, other than procurement related to a public works contract, to require that a contractor certify that nothing furnished to the state pursuant to the contract has been laundered or produced by certain types of labor, including sweatshop labor and forced labor, as defined. Existing law makes any person who falsely certifies pursuant to these provisions guilty of a misdemeanor.</html:p>
<html:p>This bill would additionally require a contract entered into by any state
agency for the procurement of artificial intelligence (AI) products that require data enrichment services in their production, other than procurement related to a public works contract, to require that a contractor certify that nothing furnished to the state pursuant to the contract has been laundered or produced by certain types of labor, including sweatshop labor and forced labor, and would make conforming changes. The bill would define “data enrichment services” to mean services, including, but not limited to, content moderation, data labeling, model training and evaluation, AI Fauxtomation, and data annotation services, obtained as part of the deployment, creation, and testing of AI models in order to secure reliable and safe data. </html:p>
<html:p>Existing law requires the Department of Industrial Relations to establish a contractor responsibility program, including a
Sweatfree Code of Conduct, to be signed by all bidders on state contracts and subcontracts, as provided. Existing law requires contractors to ensure that their subcontractors comply in writing with the Sweatfree Code of Conduct, under penalty of perjury.</html:p>
<html:p>This bill would require the Department of Industrial Relations to, on or before July 1, 2027, update its contractor responsibility program to include a Sweatfree AI Code of Conduct to be signed by all bidders on state contracts and subcontracts, similar to the Sweatfree Code of Conduct, and solicit input from an advisory panel, as provided, for that purpose. The bill would require the updated contractor responsibility program and Sweatfree AI Code of Conduct to include specified information related to AI products that require data enrichment services in their production and to establish a process for independent monitoring or inspections for complaints, as defined, against contractors and subcontractors. The bill
would require the updated contractor responsibility program and Sweatfree AI Code of Conduct to require contractors and subcontractors to, among other things, compensate workers, at a minimum, wages and benefits consistent with a living wage for contracts for AI products that require data enrichment in their production and ensure the workplace is free from psychological harms. The bill would redefine “sweatshop labor” to include all work or service extracted from or performed by any person contrary to the conditions outlined in the Sweatfree AI Code of Conduct.</html:p>
<html:p>By expanding the scope of perjury and a misdemeanor, the bill would impose a state-mandated local program.</html:p>
<html:p>The California Constitution
requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.</html:p>
<html:p>This bill would provide that no reimbursement is required by this act for a specified reason.</html:p>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
<ns0:BillSection id="id_6D373700-1A31-47BB-BF70-68ED13871BAF">
<ns0:Num>SECTION 1.</ns0:Num>
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Section 6108 of the
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is amended to read:
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<ns0:Num>6108.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Every contract entered into by any state agency for the procurement or laundering of apparel, garments, or corresponding accessories, or the procurement of equipment, materials, supplies, or artificial intelligence (AI) products that require data enrichment services in their production, other than procurement related to a public works contract, shall require that a contractor certify that no apparel, garments, corresponding accessories, equipment, materials,
supplies, or AI products that require data enrichment services in their production furnished to the state pursuant to the contract have been laundered or produced in whole or in part by sweatshop labor, forced labor, convict labor, indentured labor under penal sanction, abusive forms of child labor, or exploitation of children in sweatshop labor, or with the benefit of sweatshop labor, forced labor, convict labor, indentured labor under penal sanction, abusive forms of child labor, or exploitation of children in sweatshop labor. The contractor shall agree to comply with this provision of the contract.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The contract shall specify that the contractor is required to cooperate fully in providing reasonable access to the contractor’s records, documents, agents, employees, or premises if reasonably
required by authorized officials of the contracting agency, the Department of Industrial Relations, or the Department of Justice determine the contractor’s compliance with the requirements under paragraph (1).
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Any contractor contracting with the state who knew or should have known that the apparel, garments, corresponding accessories, equipment, materials, supplies, or AI products that require data enrichment services in their production
furnished to the state were laundered or produced in violation of the conditions specified in subdivision (a) when entering into a contract pursuant to subdivision (a), may, subject to subdivision (c), have any or all of the following sanctions imposed:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The contract under which the prohibited apparel, garments, or corresponding accessories, equipment, materials, supplies, or AI products that require data enrichment services in their production were laundered or provided may be voided at the option of the state agency to which the equipment, materials,
supplies, or AI products that require data enrichment services in their production were provided.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The contractor may be assessed a penalty that shall be the greater of one thousand dollars ($1,000) or an amount equaling 20 percent of the value of the apparel, garments, corresponding accessories, equipment, materials, supplies, or AI products that require data enrichment services in their production that the state agency demonstrates were produced in violation of the conditions specified in paragraph (1) of subdivision (a) and that were supplied to the state agency under the contract.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The contractor may be removed from the bidder’s list for a period not to exceed 360 days.
</html:p>
<html:p>
(2)
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Any moneys collected pursuant to this subdivision shall be deposited into the General Fund.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
When imposing the sanctions described in subdivision (b), the contracting agency shall notify the contractor of the right to a hearing, if requested, within 15 days of the date of the notice. The hearing shall be before an administrative law judge of the Office of Administrative Hearings in accordance with the procedures specified in Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. The administrative law judge shall take into consideration any measures the contractor has taken to ensure compliance with this section, and may waive any or all of the
sanctions if it is determined that the contractor has acted in good faith.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The agency shall be assessed the cost of the administrative hearing, unless the agency has prevailed in the hearing, in which case the contractor shall be assessed the cost of the hearing.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Any state agency that investigates a complaint against a contractor for violation of this section may limit its investigation to evaluating the information provided by the person or entity submitting the complaint and the information provided by the contractor.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Whenever a contracting officer of the contracting agency has reason to believe that the contractor failed to comply with paragraph (1) of subdivision (a), the agency shall refer the matter for investigation to the head of the agency and, as the head of the agency
determines appropriate, to either the Director of Industrial Relations or the Department of Justice.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
For purposes of this section, the following terms have the following meanings:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Forced labor” shall have the same meaning as in Section 1307 of Title 19 of the United States Code.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Abusive forms of child labor” means any of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
All forms of slavery or practices similar to slavery, such as the sale and trafficking of children, debt bondage, and serfdom and forced or compulsory labor, including forced or compulsory recruitment of children for use in armed conflict.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The use, procuring, or offering of a child for prostitution, for the production of pornography, or for pornographic performances.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The use, procuring, or offering of a child for illicit activities, in particular for the production and trafficking of illicit drugs.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
All work or service exacted from or performed by any person under the age of 18 years either under the menace of any
penalty for its nonperformance and for which the worker does not offer oneself voluntarily, or under a contract, the enforcement of which can be accomplished by process or penalties.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
All work or service exacted from or performed by a child in violation of all applicable laws of the country of manufacture or data enrichment governing the minimum age of employment, compulsory education, and occupational health and safety.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
“Exploitation of children in sweatshop labor” means all work or service exacted from or performed by any person under the age of 18 years in violation of more than one law of the country of manufacture or data enrichment governing wage and
benefits, occupational health and safety, nondiscrimination, and freedom of association.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
“Sweatshop labor” means all work or service exacted from or performed by any person in violation of more than one law of the country of manufacture governing wages, employee benefits, occupational health, occupational safety, nondiscrimination, or freedom of association. For AI products that require data enrichment in their production, “sweatshop labor” means all work or service extracted from or performed by any person contrary to the conditions outlined in the “Sweatfree AI Code of Conduct” as set forth in subparagraph (B) of paragraph (1) of subdivision (f).
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
“Apparel, garments, or corresponding accessories” includes, but is not limited to, uniforms.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
Notwithstanding any other provision of this section, “forced labor” and “convict labor” do not include work or services performed by an inmate or a person employed by the California Correctional Training and Rehabilitation Authority.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
“State agency” means any state agency in this state.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
“Data enrichment services” means services, including, but not limited to, content moderation, data labeling, model training and evaluation, AI Fauxtomation, and data annotation services, obtained as part of the deployment, creation, and testing of AI models in order to secure reliable and safe data.
</html:p>
<html:p>
(9)
<html:span class="EnSpace"/>
“Independent monitoring or inspections for complaints” means monitoring of a contractor or subcontractor’s compliance with, or investigation of a complaint of a contractor or subcontractor’s violation of, the “Sweatfree AI Code of Conduct,” as set forth in subparagraph (B) of paragraph (1) of subdivision (f), by any of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The Department of Industrial Relations.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A bona fide labor organization.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
A bona fide nonprofit
organization, no less than half of whose governing board, not including its chair, is comprised of members appointed by labor organizations.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
A bona fide nonprofit organization that does not accept funding or fees from, or perform services for, any state vendor, contractor, or subcontractor.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
On or before February 1, 2004, the Department of Industrial Relations shall establish a contractor responsibility program, including a Sweatfree Code of Conduct, to be signed by all bidders on
state contracts and subcontracts. Any state agency responsible for procurement shall ensure that the Sweatfree Code of Conduct is available for public review at least 30 calendar days between the dates of receipt and the final award of the contract. The Sweatfree Code of Conduct shall list the requirements that contractors are required to meet, as set forth in subdivision (g).
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
(i)
<html:span class="EnSpace"/>
On or before July 1, 2027, the Department of Industrial Relations shall update its contractor responsibility program to include a Sweatfree AI Code of Conduct to be signed by all bidders on state contracts and subcontracts. Any state agency responsible for procurement shall ensure that the Sweatfree AI Code of Conduct is available for public review at least 30 calendar days between the dates of receipt and the final award of the contract. The Sweatfree AI Code
of Conduct shall, at a minimum, list the requirements that contractors are required to meet, as set forth in subdivision (g).
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
While the Department of Industrial Relations maintains final decisionmaking authority, the process to update and modernize the contractor responsibility program and Sweatfree AI Code of Conduct shall solicit input from an advisory panel, which shall have as a majority of its members experts from trade unions and civil society organizations who shall volunteer their time. The updated contractor responsibility program and Sweatfree AI Code of Conduct shall, at a minimum, list the requirements set forth in this section and establish a process for independent monitoring or inspections for complaints against contractors and subcontractors.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Upon implementation in the manner described in paragraph (4), every contract entered into by any state agency for the procurement or laundering of apparel, garments, or corresponding accessories, or for the procurement of
equipment, supplies, or AI products that require data enrichment services in their production, shall require that the contractor certify in accordance with the Sweatfree Code of Conduct or the Sweatfree AI Code of Conduct that no apparel, garments, or corresponding accessories, or equipment, materials,
supplies, or AI products that require data enrichment services in their production,
furnished to the state pursuant to the contract have been laundered or produced, in whole or in part, by sweatshop labor.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The appropriate procurement agency, in consultation with the Director of Industrial Relations, shall employ a phased and targeted approach to implementing the Sweatfree Code of Conduct or the Sweatfree AI Code of Conduct. Sweatfree Code of Conduct or the Sweatfree AI Code of Conduct procurement policies involving apparel, garments, and corresponding accessories and
AI products that require data enrichment services in their production may be permitted a phasein period of up to one year for purposes of feasibility and providing sufficient notice to contractors and the general public. The appropriate procurement agency, in consultation with the Director of Industrial Relations, shall target other procurement categories based on the magnitude of verified sweatshop conditions and the feasibility of implementation, and may set phasein goals and timetables of up to three years to achieve compliance with the principles of the Sweatfree Code of Conduct or the Sweatfree AI Code of Conduct.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
In order to facilitate compliance with the Sweatfree Code of
Conduct or the Sweatfree AI Code of Conduct, the Department of Industrial Relations shall explore mechanisms employed by other governmental entities, including, but not limited to, New Jersey Executive Order No. 20, of 2002, to ensure that businesses that contract with this state are in compliance with this section and any regulations or requirements promulgated in conformance with this section, as amended by Section 2 of Chapter 711 of the Statutes of 2003. The mechanisms explored may include, but not be limited to, authorization to contract with a competent nonprofit organization that is neither funded nor controlled, in whole or in part, by a corporation that is engaged in the procurement or laundering of apparel, garments, or corresponding accessories, or the procurement of equipment, materials,
supplies, or AI products that require data enrichment services in their production. The Department of Industrial Relations, in complying with this paragraph, shall also consider any feasible and cost-effective monitoring measures that will encourage compliance with the Sweatfree Code of Conduct or the Sweatfree AI Code of Conduct.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
To ensure public access and confidence, the Department of Industrial Relations shall ensure public awareness and access to proposed contracts by postings on the Internet and through communication to advocates for garment workers, unions, data enrichment workers,
and other interested parties. The appropriate agencies shall establish a mechanism for soliciting and reviewing any information indicating violations of the Sweatfree Code of Conduct or the Sweatfree AI Code of Conduct by prospective or current bidders, contractors, or subcontractors. The agencies shall make their findings public when they reject allegations against bidding or contracting parties.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
Contractors shall ensure that their subcontractors comply in writing with the Sweatfree Code of Conduct or the Sweatfree AI Code of Conduct, under penalty of perjury. Contractors shall attach a copy of the
Sweatfree Code of Conduct
or the Sweatfree AI Code of Conduct to the certification required by subdivision (a).
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
No state agency may enter into a contract with any contractor unless the contractor meets the following requirements:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Contractors and subcontractors in California shall comply with all appropriate state laws concerning wages, workplace safety, rights to association and assembly, and nondiscrimination standards as well as appropriate federal laws. Contractors based in other states in the United States shall comply with all appropriate laws of their states and appropriate federal laws. For contractors whose locations for manufacture or assembly are outside the United States, those contractors shall ensure that their subcontractors comply with the appropriate laws of countries where the facilities are located.
For AI products that require data enrichment services in their production, where national, federal, state, or local law either does not regulate the conduct at issue or where the national, federal, state, or local law requirements fall below the Sweatfree AI Code of Conduct, contractors shall ensure their subcontractors adhere to the requirements of the Sweatfree AI Code of Conduct.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Contractors and subcontractors shall maintain a policy of not terminating any worker except for just cause, and
workers shall have access to a mediator or to a mediation process to resolve certain workplace disputes that are not regulated by the National Labor Relations Board, other state or local agencies, or other governmental agencies. Contractors and subcontractors shall classify workers’ employment status consistent with state and local laws.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Contractors and subcontractors shall ensure that workers are paid, at a minimum, wages and benefits in compliance with applicable local, state, and national laws of the jurisdiction in which the labor, on behalf of the contractor or subcontractor, is performed.
Whenever a state agency expends funds for the procurement or laundering of apparel, garments, or corresponding accessories, or the procurement of equipment, materials, supplies, or AI products that require data enrichment services in their production, other than procurement related to a public works contract, the applicable labor standards established by the local jurisdiction through the exercise of either local police powers or local spending powers in which the labor, in compliance with the contract or purchase order for which the expenditure is made, is performed shall apply with regard to the contract or purchase order for which the expenditure is made, unless the applicable local standards are in conflict with, or are explicitly preempted by, state law. A state agency may not require, as a condition for the
receipt of state funds or assistance, that a local jurisdiction refrain from applying the labor standards that are otherwise applicable to that local jurisdiction. The Department of Industrial Relations may, without incurring additional expenses, access information from any nonprofit organization, including, but not limited to, the International Labour Organization (ILO), that gathers and disseminates data with respect to wages paid throughout the world, to allow the Department of Industrial Relations to determine whether contractors and subcontractors are compensating their employees at a level that enables those employees to live above the applicable poverty level. For AI products that require data enrichment services in
their production, contractors and subcontractors shall be compensating workers, at a minimum, wages and benefits consistent with a living wage.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
All contractors and subcontractors shall comply with the overtime laws and regulations of the country in which their employees are working.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
All overtime hours shall be worked voluntarily. Workers shall be compensated for overtime at either (A) the rate of compensation for regular hours of work, or (B) as legally required in the country of manufacture or country of development or provision of data enrichment services, whichever is greater.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
No person may be employed who is younger than the legal age for children to work in the country in which the facility is located. In no case may children under the age of 15 years be employed in the manufacturing process. Where the age for completing compulsory education is higher than the standard for the minimum age of employment, the age for completing education shall apply to this section.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
There may be no form of forced labor of any kind, including slave labor, prison labor, indentured labor, or bonded labor, including forced overtime hours.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
The work environment shall be safe and healthy,
including, but not limited to, being free from psychological harms, and, at a minimum, be in compliance with relevant local, state, and national laws. If residential facilities are provided to workers, those facilities shall be safe and healthy as well.
</html:p>
<html:p>
(9)
<html:span class="EnSpace"/>
There may be no discrimination in hiring, salary, benefits, performance evaluation, discipline, promotion, retirement, or dismissal on the basis of age, sex, pregnancy, maternity leave status, marital status, race, nationality, country of origin, ethnic origin, disability, sexual orientation, gender identity, religion, or political opinion.
</html:p>
<html:p>
(10)
<html:span class="EnSpace"/>
No worker may be subjected to any physical, sexual, psychological, or verbal harassment or abuse, including corporal punishment, under any circumstances, including, but not limited to, retaliation for exercising their right to free
speech, association, and assembly, and to organizing and collective bargaining. All contractors and subcontractors shall affirmatively and routinely share a statement with their workers affirming these rights and freedoms.
</html:p>
<html:p>
(11)
<html:span class="EnSpace"/>
No worker may be forced to use contraceptives or take pregnancy tests. No worker may be exposed to chemicals, including glues and solvents, that endanger reproductive health.
</html:p>
<html:p>
(12)
<html:span class="EnSpace"/>
Contractors and bidders shall list the names and addresses of each subcontractor to be utilized in the performance of the contract, and list each manufacturing,
data enrichment service, or other facility or operation of the contractor or subcontractor for performance of the contract. The list, which shall be publicly available and maintained and updated to show any changes in subcontractors during the term of the contract, shall provide company names, owners or officers, addresses, telephone numbers, e-mail addresses, the nature of the business association, a description of the types of production or services provided by the workforce location and the numbers of
workers providing these services, and an indication of whether the entity, or its contractors and its subcontractors, have signed on to any international agreements related to labor standards or any other agreements, including with local government or educational institutions located in California.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
Any person who certifies as true any material matter pursuant to this section that they know to be false is guilty of a misdemeanor.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
The provisions of this section, as amended by Section 2 of Chapter 711 of the Statutes of 2003, shall be in addition to any other provisions that authorize the prosecution and enforcement of local labor laws and may not be interpreted to prohibit a local prosecutor from bringing a criminal or civil action against an individual or business that violates the provisions of this section.
</html:p>
<html:p>
(j)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The certification requirements set forth in subdivisions (a) and (f) do not apply to a credit card purchase of goods of two thousand five hundred dollars ($2,500) or less.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The total amount of exemption authorized herein shall not exceed seven thousand five hundred dollars ($7,500) per year for each company from which a state agency is purchasing goods by credit card. It shall be the responsibility of each state agency to monitor the use of this exemption and adhere to these restrictions on these purchases.
</html:p>
<html:p>
(k)
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This section does not limit compliance with any other law or contractual agreement related to labor standards, wages, or benefits consistent with a living wage or other health and safety standards
of the entity, or its contractors or subcontractors.
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<ns0:Num>SEC. 2.</ns0:Num>
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No reimbursement is required by this act pursuant to Section 6 of Article XIII
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B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII
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B of the California Constitution.
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