Governor Gavin Newsom has signed AB 2227, which increases licensing costs and potential penalties for California farm labor contractors. 

Beginning January 1, 2027, the law doubles the surety bonds required to obtain or renew an FLC license: 

• $50,000 for annual payroll up to $500,000 

• $100,000 for annual payroll between $500,000 and $2 million 

• $150,000 for annual payroll exceeding $2 million 

The higher amount will apply when an FLC first registers or files its first annual renewal application after the law takes effect. 

AB 2227 also makes licensed FLCs subject to the existing civil penalty schedule for violations of California’s FLC laws. An initial citation may carry penalties of $100 per farmworker plus $100 for each day the violation continues, up to $10,000. Penalties increase for repeat citations. 

The Labor Commissioner must also add bond details to the public FLC license database, including the bond amount, number, effective dates and surety company contact information. 

Western Growers opposed the bill and joined a coalition of agricultural associations in urging the Governor to veto the bill. The coalition argued that penalty language added late in the legislative process eliminated reasonable enforcement discretion and could punish minor administrative or clerical mistakes as harshly as intentional and serious violations. For example, an FLC’s failure to carry legible proof of licensure or promptly update an address could trigger the same penalty formula as deliberately misleading workers, withholding wages or transporting employees in uninsured vehicles. The coalition urged an approach that would allow the Labor Commissioner to consider the severity of the violation, intent and prompt corrective action. Unfortunately, the Governor signed the bill despite these real world implications.  

What Employers Should Do Now 

FLCs should contact their surety providers before their next renewal and budget for higher premiums or collateral requirements. Growers using FLCs should continue verifying that each contractor’s license and bond remain active.