Outsourcing Legislation in the Works

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, Feb. 13, 2004 Share this on FacebookTweet thisEmail this to a friend

In what state legislators describe as a response to rising tension over the shift of American jobs to more competitive foreign lands, legislative efforts are beginning to surface regarding the ability to outsource.

AB 1829 (Carol Liu D-La Canada Flintridge), introduced in January, prohibits a state agency from contracting for services unless the contractor or subcontractor certifies that the service will be performed solely with workers within the United States.

Additionally, Assemblymember Manny Diaz (D-San Jose) and Senator Joseph Dunn (D-Santa Ana) are both expected to introduce legislation this month to restrict the ability to outsource. Senator Dunn is expected to focus on private and public sector outsourcing.

Critics of outsourcing argue that the practice can lead to potential security risks. They site an October 2003 case where a disgruntled contract employee in Pakistan was handling confidential medical records from the UC San Francisco Medical Center and threatened to disclose the information in an employment dispute.

CMTA expects that outsourcing will be a major issue before the legislature in 2004. Banning outsourcing and erecting such trade barriers in a state that already faces some of the highest costs to do business may only increase costs in California and continue to damage the state's business climate.
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