A careful and historic compromise forged by the Legislature and the California Chamber of Commerce is under attack by legislation seeking to expand workplace litigation.
AB 1209 by Assemblymember Lorena Gonzalez Fletcher (D-San Diego) is being considered this week by the Senate Appropriations Committee. CalChamber has tagged AB 1209 a job killer.
CalChamber and numerous employer organizations oppose AB 1209 because it will expose employers to significant litigation costs and create a false impression of wage discrimination or unequal pay where none exists.
The bill also threatens employee privacy by inappropriately forcing the disclosure of their wages.
“This takes direct aim at the 2015 compromise,” said Jennifer Barrera, CalChamber senior policy advocate. “AB 1209 thumbs the scale for plaintiffs’ litigators to ease their ability to make a pay equity case.”
The current law makes plain that the standard for equal wages is “substantially similar work,” not merely the job title or description. It also carefully allocates the litigation burdens between the employee and employer.
The new measure disregards this careful balance, and instead requires employers to collect statistical data on salaries of all well-paid white collar employees in selected private and nonprofit corporations.
By using the smokescreen of transparency, the measure would unravel a carefully structured compromise that advanced both employee and employer interests.
A California Chamber of Commerce-opposed bill that imposes a cost to contractors with county contracts and subjects contractor and subcontractor employees’ private information to Public Records Act requests has been held in a Senate fiscal committee pending review of the bill’s financial impact on the state budget.
The CalChamber-led coalition is opposed to AB 1250 (Jones-Sawyer; D-South Los Angeles) because the bill seeks to severely limit options for county agencies to determine the most appropriate solution to providing efficient and effective public service by establishing significant and costly obstacles for agencies and for vendors contracting for personal services.
Must Justify Contracts
AB 1250 imposes not only onerous requirements on counties in order to justify the need for contracting out personal services, but also imposes costs on contractors. The bill requires the agency to conduct an audit of the contract to determine if anticipated cost savings of the contract have been realized. The contractors would be required to reimburse the agency for the cost of the analysis, and would be prohibited from factoring the cost of the audit into the contract costs, thereby imposing a fee on the contractor. If the onerous process for these agencies to follow when seeking to contract for personal services does not discourage the agency from attempting the process, the cost to the contractors will discourage many from engaging.
AB 1250 requires the contractor, on a monthly basis, to furnish the names and hourly rates of all contractor and subcontractor employees, as well as any independent contractor’s names and compensation. This private information would be provided to anyone who makes a request, per the Public Records Act. The public release of private information could be damaging to the individuals whose contact information is exposed. It is unclear why providing this personal information benefits the public.
Counties have a long history of addressing service delivery challenges with creativity, self-reliance and innovation in partnership with the private sector. Limited budgets create further challenges to local governments that can sometimes be addressed through using outside vendors to provide services. By establishing near-insurmountable barriers to contracting, AB 1250 seeks to eliminate even the consideration of contracting as a tool to meet the needs of these agencies. By limiting their choices, AB 1250 limits the options that counties rely upon to provide public services, and stay within their means.
If in fact a county makes it to this point and determines that contracting out these services has merit, there may not be any contractors to bid on these contracts because of the costs associated with reimbursing the contracting agencies for the required audit. AB 1250 will in effect leave agencies with limited choice, or lacking the ability to maintain and provide needed services altogether.
Department of Finance Opposed
During the Senate Appropriations Committee hearing on August 21, the state Department of Finance (DOF) announced that it opposes the bill because AB 1250 “would create unknown, but likely significant General Fund costs to the state.”
The DOF opposition rationale also aligns with the CalChamber-led coalition’s concerns about increased costs from AB 1250.
September 1 is the deadline for all bills to be sent to the Senate and Assembly floors. CalChamber urges members to contact their senator and member of the Senate Appropriations Committee and recommend they oppose AB 1250 and hold the bill in the appropriations committee.
The California State Assembly and Senate return today from their month-long summer recess and will consider the remaining job killer bills over the next several weeks.
The next significant deadline for the job killer bills is September 1, the date by which fiscal committees must send the bills along for consideration by the entire Senate or Assembly.
In addition, nine tax-related job killer bills remain alive because they were not subject to the July 21 deadline for bills to pass policy committees and move to fiscal committees. Although they still are eligible for consideration, they are not set for hearings at this time.
Job Killer Bills
Three Senate job killer bills and one Assembly job killer bill remain active.
The California Chamber of Commerce has identified 25 job killer bills to date.
The following job killers are still moving:
SB 33 (Dodd; D-Napa) Discrimination Against Arbitration Agreements — Unfairly discriminates against arbitration agreements contained in consumer contracts for goods or services with a financial institution, as broadly defined, which is likely preempted by the Federal Arbitration Act and will lead to confusion and unnecessary litigation.
Increased Labor Costs
AB 1209 (Gonzalez Fletcher; D-San Diego) Public Shaming of Employers -- Imposes new data collection mandate on California employers to collect and report data to the Secretary of State regarding the mean and median salaries of men and women in the same job title and job description, determine which employees perform “substantially similar” work, and then have that report posted on a publicly accessible website, where such employers will receive undue scrutiny and criticism for wage disparity that is not unlawful and justified by a bona fide factor.
SB 63 (Jackson; D-Santa Barbara) Imposes New Maternity and Paternity Leave Mandate — Unduly burdens and increases costs of small employers with as few as 20 employees by requiring 12 weeks of protected employee leave for child bonding and exposes them to the threat of costly litigation.
Increased Unnecessary Litigation Costs
SB 49 (de León; D-Los Angeles) Creates Uncertainty and Increases Potential Litigation Regarding Environmental Standards — Creates Uncertainty and Increases Potential Litigation Regarding Environmental Standards. Creates uncertainty by giving broad and sweeping discretion to State agencies to adopt rules and regulations more stringent than the federal rules and regulations in effect on January 19, 2017 through an expedited administrative procedure without public participation or input, when the State agencies determine that federal action leads to less stringent laws and regulations than those in effect on January 19, 2017; and increases the potential for costly litigation by creating private rights of action under California law, which may be triggered when a State agency takes the foregoing discretionary action.
Tax Increases; Not Subject to Deadline
The following nine tax-related job killer bills were not subject to the July 21 deadline. Although these bills aren’t moving in the Legislature, they could be taken up at any time before the end of the session.
CalChamber is asking businesses to contact their legislators and urge them to oppose these job killers.
California’s housing crisis is a big focus of attention at the State Capitol as studies highlight two elements of the crisis that are inextricably linked—supply and affordability.
The Department of Housing and Community Development estimates that California must build at least 180,000 units a year to keep pace with demand, not accounting for the backlog of approximately 2 million units that has accrued over the last several decades.
The supply shortage has sent home prices and rents soaring, resulting in many individuals and families being priced out of the market and leading to overcrowding, homelessness, substandard housing conditions, and an exodus of Californians to other states.
For every $1,000 increase in a California home, 15,000 buyers are priced out of the market, according to a recent study by the National Association of Home Builders.
Based on pending legislation, lawmakers are concentrating on things like local land use, funding affordable housing, or expedited permit processing.
Local Land Use Decisions
The Legislature will grapple to define the scope of the state’s role in local land use decisions. One of the driving issues in the crisis is the reluctance of local governments to approve new housing projects due to “not in my backyard” (NIMBY) resistance.
Several bills have been introduced to hold local governments accountable for meeting their affordable housing elements. Such bills include SB 167 (Skinner; D-Berkeley) and AB 678 (Bocanegra; D-Pacoima), both supported by the California Chamber of Commerce.
These bills require a local agency to make relevant findings if it denies a housing development, clarify provisions of the Housing Accountability Act (HAA), and impose added penalties on agencies that violate the HAA by failing to make appropriate findings.
Another CalChamber-supported bill, AB 943 (Santiago; D-Los Angeles), seeks to increase the vote required to pass an ordinance that would reduce density or stop development or construction of parcels located less than one mile from a major transit stop, in an effort to limit the NIMBY effect.
AB 1397 (Low; D-Campbell) further attempts to ensure that sites contained in a local government’s housing element can realistically be developed to meet the locality’s housing needs by requiring that such sites have sufficient infrastructure available to support housing development.
Funding Affordable Housing
Another focus is funding for state subsidies to develop affordable housing. The two bills getting the most attention are:
Other proposed funding methods include taxes:
Both these tax bills have been identified as job killers and have not moved through the legislative process at this juncture.
While the state places significant focus on funding, according to the Legislative Analyst’s Office report, it would have to raise upwards of $250 billion to subsidize itself out of the housing crisis—a feat that cannot be accomplished.
Several bills aim to streamline permit processing, which is much needed to stimulate development; however, the bills’ limitations or prevailing wage requirements make them unlikely to have much impact on the ground. Other bills attempt to relax rules for granny flats (accessory dwelling units) and home additions.
Fortunately, three “wrong way” bills have been taken out of the equation.
Three potential key factors in addressing the housing crisis that do not appear to be getting much attention are the potential for Proposition 13 property tax and CEQA reform, and revival of some version of California’s redevelopment agencies.
Although there is no silver bullet to tackle the housing crisis, the Legislature will need to consider all available and possible avenues to increase supply to address the state’s housing crisis—the stimulation of actual construction being of the utmost importance.
Louinda V. Lacey presents a recap of housing bills at the CalChamber Capitol Summit.
The California Chamber of Commerce is reminding employers with 10 or more employees that they are required to electronically submit employment tax returns, wage reports, and payroll tax deposits to the Employment Development Department (EDD).
The requirement began January 1 for employers with 10 or more employees. All remaining employers are required to begin reporting and paying electronically with their 2018 payroll or as soon as they report having 10 or more employees, whichever happens first.
Unemployment Insurance and Electronic Reporting
AB 1245 (Cooley; D-Rancho Cordova, Statutes of 2015) requires electronic reporting for unemployment insurance reports submitted to the EDD. It also requires employers to remit contributions for unemployment insurance taxes by electronic funds transfer.
Any employer required under existing law to electronically submit wage reports and/or electronic funds transfer to the EDD remains subject to those requirements. For more information, visit FAQs – E-file and E-pay Mandate for Employers.
The EDD encourages employers to enroll in e-Services for Business to meet the requirement.
For more information about the e-file and e-pay mandate, please visit: www.edd.ca.gov/EfileMandate
Benefits of Electronic Filing and Payments
File and Pay Electronically with e-Services for Business
Employers can use e-Services for Business to comply with the e-file and e-pay mandate. e-Services for Business is a fast, easy, and secure way to manage employer payroll tax accounts online. With e-Services for Business, employers can:
This mandate contains a waiver provision for employers who are unable to electronically submit employment tax returns, wage reports, and payroll tax deposits.
The EDD began accepting waiver requests from employers in July 2016. To request a waiver, employers must complete and submit the E-file and E-pay Mandate Waiver Request (DE 1245W).
Here are the ways to obtain a DE 1245W:
Waiver requests can be submitted by mail or fax:
Employment Development Department
Document and Information Management Center
P.O. Box 989779
West Sacramento, CA 95798-9779
Fax: (916) 255-1181
Employers will be notified by mail if their waiver is approved or denied. An approved waiver will be valid for one year. Upon the expiration of the approval period, an employer must start to electronically file and pay, or submit a new waiver request to avoid a noncompliance penalty.
Penalties for Not Complying with the E-file and E-pay Mandate
Penalties will be incurred for noncompliance with this mandate. To avoid the penalties, enroll in e-Services for Business.