This article is republished from CalChamberAlert.com By David Leporiere HR Adviser, CalChamber I just read that the Governor signed a new law that changes the timing for the new sexual harassment training. What are the new deadlines for getting my employees trained? For many years, employers with 50 or more employees were required to provide supervisors with two hours of sexual harassment prevention training every two years. Last year, SB 1343 was signed into law that required all employers with 5 or more employees to provide the same training to supervisors and one hour of training to employees. This training had to be completed by January 1, 2020, giving employers little time to meet the new mandate. However, on August 30 of this year, Governor Gavin Newsom signed into law SB 778, which extends this training deadline from January 1, 2020 to January 1, 2021. Those businesses that were providing training long before SB 1343 was made law must continue to follow their two-year training cycles. So, if you trained your supervisors in 2017, then those supervisors must be retrained before January 1, 2020. As for employees newly hired or employees newly promoted to a supervisory position, they must be trained within six months of hire or promotion, regardless of whether you fell under the old or newly enacted law. Employer Training Deadlines
Here is a quick breakdown of training deadlines for employers who have trained employees this year or in previous years. Year you last trained: 2019 Next required training year: 2021 Explanation: SB 778 clarifies that employers who train their employees in 2019 aren’t required to provide refresher training until two years from the time the employee was trained. Year you last trained: 2018 Next required training year: 2020 Explanation: SB 778 allows those employers who trained employees in 2018 to maintain their two-year cycle and still comply with the new January 1, 2021, deadline. Year you last trained: 2017 Next required training year: 2019 Explanation: Employers who trained supervisors in 2017 under prior law, known as AB 1825, should still train those employees this year in order to maintain their two-year cycle. The Oxnard Chamber of Commerce has partnered with the California Chamber to provide easy, affordable training for workers and supervisors. Order your online training today! You will receive a 20% discount when you purchase through this link. You will have to create a CalChamber store account, but you are not required to become a preferred member. The Oxnard Chamber 20% discount will be applied during checkout. The Office of the Attorney General (OAG) recently released updated human trafficking notices for employers.
California law requires some businesses to post a human trafficking notice near the public entrance or another conspicuous location where the public and employees may view the notice. The notice provides hotline and text numbers for the public and victims of human trafficking to seek help or report unlawful activity. The notice must be at least 8.5 x 11 inches in size, written in a 16-point font and must be in English, Spanish and one other language that is the most widely spoken language in the county where the business is located and for which translation is mandated by the federal Voting Rights Act. The OAG has developed notices in 22 other languages, which are available on their website. For more information on human trafficking, visit OAG Human Trafficking. CalChamber members and nonmembers can access the Human Trafficking Model Notice and Human Trafficking Model Notice – English and Spanish. By Loren Kaye
January 18, 2019 “The number one driver of cost of living is housing—housing is the issue. Unless we get serious about it, the state will continue to lose its middle class and the dream will be limited to fewer and fewer people.” —Governor Gavin Newsom During his campaign, candidate Newsom laid out ambitious goals for housing production—3.5 million new housing units by 2025, implying a production rate nearly four times faster than in recent years. In his just-released budget, Governor Newsom made his first official housing policy statement and related substantive proposals. The goals are still ambitious, although the results will not be apparent for many years. The Governor recognized that most new housing must be produced by the private marketplace, and that one of the key stumbling blocks is local government approval. His budget reminds us that “Local governments have a key role in ensuring the building of adequate numbers of housing units to meet local needs. They have primary control over land use and housing-related decisions and enact policies that either encourage or discourage housing construction.” Regional Housing Goals The centerpiece of the Governor’s housing policy is to revamp regional housing needs and to begin to enforce local governments’ obligations to meet those needs. The administration will no longer simply advise local agencies on how to meet those needs, but now will “oversee and enforce regional housing goals and production.” The administration will provide incentives to accomplish these goals by allocating $250 million in short-term grants to help local agencies improve their planning and permitting systems. If cities and counties deliver on their commitments, the administration will make another $500 million available for general municipal purposes. Along with these carrots, the Governor unveiled a stick: linking housing production to certain (not-yet-specified) transportation funds, and possibly other local economic development resources. This is potentially a serious attention getter and has already drawn opposition from local government and some legislators. More Tools In addition to his ambition to directly influence local planning, zoning and permitting of market-rate development, the Governor proposes more tools to encourage subsidized and “affordable” housing: • $500 million for subsidized loans for mixed-income developments. • Expanding by five-fold the state low-income housing tax credit, a key lever to motivate investment in subsidized housing. • Providing access to state-owned property for private affordable housing projects. • Easing approvals for long-term debt for local financing districts that want to provide infrastructure for housing and other economic development projects. • Allowing local infrastructure districts to join with federally designated Opportunity Zones by providing similar capital gains tax benefits for investments in these zones in affordable housing and “green technology” projects. By Terry MacRae
Vacations to California’s natural wonders, cultural riches and exciting city attractions fuel stable employment and the world’s fifth largest economy. Regardless of where travelers go and what they do in California, vacations are more than memories—they also spur one of California’s strongest economic pillars. In fact, tourism drove $132 billion in travel-related spending in 2017, generating $11 billion in state and local tax revenues. Running a cruises and events company wasn’t exactly the course I expected to take when I studied mechanical engineering at Cal Poly San Luis Obispo. After graduating and starting my career as an environmental engineer, I quickly rose through the ranks of Industrial Clean Air and later became vice president of sales for Ecolaire Systems Inc. I found myself regularly scouting venues for client and employee events, which is how I discovered and later purchased a small yacht charter company based in Berkeley, California. Over the last four decades, Hornblower expanded to a 100-vessel, half-billion-dollar company, spanning over 30 ports from coast-to-coast. Today, Hornblower companies employ more than 2,500 people and we take great pride in knowing our business supports so many families. Pillars of Economy As you enjoy your next vacation, know you too are fueling many pillars of the state’s economy, which in turn supports jobs for 1.1 million California workers. California’s tourism industry brings vibrancy to our economic health, vibrancy we see in the faces of the people who make this happy industry hum. It is these employees who help create amazing experiences and maintain California as a desirable travel destination. It is their energy and enthusiasm that melds with the natural beauty of California to create the vibrant experiences California is known to offer. Whether it’s new Californians looking for employment, retirees seeking seasonal work, summer jobs for students or a second job that bolsters a family’s income, tourism jobs remain stable even in the midst of economic downturns. The service-oriented industry relies on employees—yes, real people—who have a stake in customer satisfaction, and their work cannot be shipped abroad or cut back by automation. In the midst of the Great Recession, tourism’s employment held strong against other sectors, dipping just 5.6% compared to an overall employment loss of 8.6%. Coming out of the recession, tourism created more new jobs than any other industry—a trend that has reliably continued, with 30,000 new jobs created last year, a faster growth rate than state government, trade or manufacturing. (Source: California Employment Development Department) Worker Shortage Now, with the lowest unemployment rates since 1976 and a growing economy, California is seeing jobs growth slow, due in part to a shortage of workers. The California Foundation for Commerce & Education is projecting a shortfall over the next generation of more than a million graduates of four-year colleges and hundreds of thousands of those with two-year degrees. Graduates who enter the workforce need qualities that employers urgently seek: Solid communications skills, personal responsibility, and a strong work ethic. Tourism jobs help prepare California’s workforce with exactly these important skills. Travel and tourism is California’s largest export. International visitors spend more than $25 billion in California a year. That is more than the value of California’s agriculture exports. To help keep California a desirable location, we must work to provide clean and safe cites and infrastructure necessary for visitors. Not only is it necessary to provide education and training, but we must all commit to provide affordable housing and transportation alternatives for the amazing folks who work in this industry. We must take immediate action and create permanent solutions. The world has many beautiful places, so we must ensure we are working to maintain the competitiveness of this important pillar of California’s economy. Secret to Success On your next vacation, share how much we all appreciate the dedicated employees who help create those fond vacation memories. Take a moment to share your gratitude. These welcoming, hard-working folks may well be the secret to your best vacation ever and the secret to the success of California’s largest export industry: tourism and the jobs we all need. Terry MacRae, 2018 chair of the California Chamber of Commerce Board of Directors, serves as commissioner on the Visit California Board of Directors and is chief executive officer, president and founder of Hornblower Cruises & Events. As you reflect on your list of New Year’s resolutions, resolve to take a few moments to familiarize yourself with the new employment laws that you’ll need to know in 2019.
Employers need to make sure to be aware of new labor laws that could affect them in the new year. CalChamber’s employment law counsel analyzed the significant bills that Governor Jerry Brown signed into law and prepared a white paper summarizing their effects on California employers. Read the latest information on:
CalChamber members can access a full discussion of the new laws on HRCalifornia. Not a member? See what CalChamber can do for you. The outlook for the U.S. economy hasn’t changed much over the course of 2018, despite the fact that the nation is on the edge of the longest economic expansion in the nation’s history. Growth has progressed at a steady, sustainable pace since the 2015 commodity bust and mild economic slowdown that occurred that year, according to a recent report by the California Chamber of Commerce Economic Advisory Council. Growth in the last quarter of this year is expected to come in at slightly less than 3%, with growth for the entire year reaching 3.2%. This modest jump is being driven by the fiscal stimulus plan passed by Congress at the end of 2017. Outside of the rapidly growing federal budget deficit, the U.S. economy looks to be well-balanced in terms of the structure of growth with solid fundamentals including private sector debt levels, consumer savings rates, rising wages, the overall pace of homebuilding, and business investment. Unemployment is low—but job growth remains steady. In short, Beacon Economics’ forecast remains boringly positive, and yes, that outlook is expected to stay in place though 2020. This isn’t optimism. Rather, we don’t have any real reason to think otherwise. Read the full report or download PDF. Below are some of the highlights from the economic report. U.S. Trade Policy The only major short-term worry has been wrapped around the direction of U.S. trade policy, but the worst scenarios have not materialized. Rather than unilaterally pull out of the North American Free Trade Agreement (NAFTA) as threatened, the United States instead negotiated a new trade agreement with our two neighbors and largest trading partners that, thankfully, looks almost exactly like the old trade agreement. A brewing trade fight with the European Union that began with steel tariffs also has settled down, and there are now discussions about renewing talks and working toward a new trade agreement. It sounds a lot like T-TIP (Transatlantic Trade and Investment Partnership)—the EU-U.S. trade negotiations canceled by President Trump in one of his first acts in office—although this one will likely be better. Yes, the China trade dispute is still brewing. But even a major trade war with China would not be sufficient to end the current economic expansion. The United States exports fairly little to China—only 8% of all the nation’s exports. And what does get shipped out typically doesn’t have a long supply chain. The greater threat comes from the fact that the United States sources 20% of its manufactured imports from China. But the tariff-increased costs to U.S. importers have been largely offset by a 13% depreciation in the yuan relative to the U.S. dollar. And even as this article is being penned, there are reports, albeit few specifics, of a possible breakthrough in negotiations. Data vs. Discourse All said, from a technical or data standpoint there is not much change in Beacon Economics’ forecast for the U.S. economy. The framing of the outlook is another story. While little has changed in the actual economy, much of the public discourse surrounding the economy has taken a sharp turn for the worse. This new wave of pessimism has likely been driven by the sell-off in the stock market, slowing home sales, and rising interest rates. Yet, as we see it, these short-run trends do not amount to anything that could truly threaten the current expansion. Inflation Worries One wrongly assumed reason for rising rates is inflation. After years of inflation tracking below the Fed-targeted pace, price growth finally increased above the 2% mark. This should have made investors more confident as deflation is less of a risk. Instead, it created a panic about the potential for further increases. Investors need not have worried: the most recent numbers now show inflation back below the 2% range. Beacon Economics expects inflation to remain weak over the next few years. Oil prices are once again down based on high levels of U.S. output. Money supply growth also is very constrained at the moment. And yes, unemployment sits at an extremely low 3.7%—but if this were going to have an effect, we would already feel inflationary pressures on the economy. Housing The U.S. housing market has slowed as a result of the bump in mortgage rates, which has created considerable consternation. However, there is a big difference between a housing pause and a housing bust. The U.S. housing market is not overpriced, nor has there been much risky lending—or lending in general—occurring. So, for now, Beacon Economics is forecasting the expansion to continue and, barring some unexpected external impact, does not anticipate any major change in economic growth leading up to the 2020 election… for better or worse. California Outlook: Growth Prospects for 2019 As 2018 progressed, it became evident that the California economy would continue to prosper despite the challenge of a tight labor market and concerns about the state’s housing situation. Indeed, California’s economic performance was remarkably steady in 2018, fueled by expansion in the state’s industries, increases in incomes and wages, and in response to federal tax cuts enacted early in the year. Beacon Economics expects a continuation of these trends in 2019 and possibly into 2020. Job Gains For the month of October, California’s 308,700 year-to-year job gain was the second largest among the 50 states. One-fifth of the increase occurred in Health Care (63,100), followed by Professional, Scientific and Technical Services, Leisure and Hospitality, Administrative Services, Government and Construction, and Transportation. Most headline economic numbers for the state show that California maintained an edge over the nation throughout the year. Its 1.8% yearly growth rate in jobs surpassed the 1.6% gain for the United States in October. California’s gross state product growth outpaced U.S. gross domestic product (GDP) in the second quarter, with a 3.3% year-to-year gain compared to 2.9% nationally. The scant increase in the state’s workforce is cause for concern in 2019, although there is evidence that metro area labor force dynamics are such that rapidly growing regions continue to attract workers, most notably in the San Francisco Bay Area and the Inland Empire. Growth Industries Looking ahead to 2019, the question is, where will growth occur in California? The answer depends on the type of growth. Over the last three years, half of the job gains among the state’s industries have occurred in its population-serving sectors. This trend was led by Health Care, which accounted for 22% of California’s job gains over the three-year period from 2015 through 2018, followed by Leisure and Hospitality, and Government, and will continue through 2019. Smaller but noteworthy contributions also came from the state’s leading external-facing industries, such as Professional Scientific and Technical Services (9%) and Transportation Services (9%). Combine this with the 11% contribution from Professional, Scientific and Technical Services, and about half of all output generated in California came from tech-related activities over the last three years. Other external industries that weighed in with sizable contributions included Manufacturing at 7% and Transportation at 5%. Among those industries that contributed the largest job gains, only Health Care made a sizable contribution to output at 9% of the total. Increasing Economic Pie
These findings provide insight into the future direction of the state economy. California can count on increases in employment among its population-serving industries in the coming quarters, but if the state wants to increase the size of the economic pie, it must look to its external industries to fuel that growth. That is the challenge that lies ahead for California’s newly elected governor and the rest of the state. The Internal Revenue Service (IRS) recently announced that it is extending the due date for certain 2018 Affordable Care Act (ACA) reporting forms to be provided to employees.
In addition, the IRS notice extends “good faith transition relief” for one more year. The IRS will not penalize employers for incorrect or incomplete forms if they can show that they have made “good-faith efforts” to comply with the information-reporting requirements. According to the IRS, the relief applies to missing and inaccurate taxpayer identification numbers and dates of birth, as well as other information required on the return or statement. No relief is provided if the employer did not timely file or furnish the reports by the applicable deadlines or did not make a good-faith effort to comply. For more information, visit the IRS website. California employers that don’t already offer a workplace retirement savings vehicle will be required to either begin offering one via the private market or provide their employees access to CalSavers, a state-run retirement savings plan, as early as June 2020. The CalSavers pilot program is open for employers to enroll; however, mandatory enrollment and contributions do not go into effect until 2020. Employers need not register until then, or later for smaller employers. Emergency regulations governing the CalSavers program were recently approved by the Office of Administrative Law. CalSavers is the result of 2016 legislation enacting the Secure Choice Retirement Savings Program (SCRSP) for private sector workers whose employers do not offer a retirement plan. The legislation requires employers with five or more employees that do not offer specified retirement plans to put a payroll arrangement into place that requires employees to contribute a portion of their salary or wages to a retirement savings plan in the SCRSP, unless they opt out. Employers that already offer a qualified retirement savings program will not be mandated to have their employees enrolled in the SCRSP. Employers retain the right at all times to set up and offer their own qualified retirement plan. Registration Opens July 2019 According to the CalSavers website, employers will be able to start registering on July 1, 2019. Compliance will be phased in over a three-year period based on the size of the employer. It is intended that employers’ responsibility is simply as a pass-through, to deduct and submit contributions from employee wages. The program will be funded by an automatic 5% payroll deduction, the default contribution determined by the Secure Choice Investment Board. Employers will be required to automatically deduct contributions from employee paychecks and to transmit payroll contributions to the program. The employer makes no contribution into the retirement account. Employer Registration Deadlines Deadlines for registering for the CalSavers program are as follows:
CalChamber is featuring three new 2019 laws in its latest version of Capitol News Report. The video provides details about expansion of sexual harassment prevention training requirements and the need to provide lactation accommodations in the workplace as well as providing information about a mandate requiring that women be placed on corporate boards. Sexual Harassment Training
In the video, CalChamber Executive Vice President and General Counsel Erika Frank discusses new sexual harassment prevention training requirements that will impact virtually every business in the state and all their employees and supervisors. Current law requires employers with 50 or more employees to provide supervisors with two hours of sexual harassment prevention training. Under SB 1343, by January 1, 2020, all employers with five or more employees will be required to provide two hours of sexual harassment prevention training to supervisors and one hour to non-supervisorial employees and within six months of hire or promotion, and every two years after that. “Employers can satisfy this training in a number of ways,” Frank says. “They can offer live training or they can do computer-based training, which CalChamber offers.” Beginning January 1, 2020, temporary and seasonal employees will be required to be trained within 30 days of hire or 100 hours worked, whichever is earlier. Gender Representation on Boards of Directors The video also features information on a highly controversial law mandating female representation on corporate boards. Jennifer Barrera, CalChamber Senior Vice President of Policy, explains that publicly held corporations with principal executive offices in California will now be required to place at least one female director on its board by December 31, 2019. Depending on the board’s size, up to three female members may be required by the end of 2021. Significant financial penalties apply if a company fails to achieve the required number of female directors. When signing SB 826 (Chapter 954, Statutes of 2018) into law, Governor Edmund G. Brown Jr. acknowledged it could face significant legal challenges. “Some company who’s impacted by the law could file a legal claim suggesting that it’s unconstitutional for a company to retain a member on their board of directors solely based upon on their gender,” Barrera explains. “However, until that legal action happens, it is the law in California.” Lactation Accommodation Another new law requires all employers to provide lactation accommodations for employees. Before the new law, a bathroom was a permissible lactation accommodation space per California law. As of January 1, 2019, an employer must provide a reasonable lactation space other than a bathroom. The employer may be able to utilize a temporary space, so long as it meets the specifications of the new mandate. CalChamber Policy Advocate Laura Curtis explains that the requirement “is really going to impact employers with 50 or less employees because they haven’t previously had to provide a lactation accommodation space other than a toilet stall.” CalChamber worked diligently with the office of the author, Assemblymember Monique Limón (D-Goleta), to try to develop the most workable approach. Full List of New Employment Laws An Overview of New 2019 Laws Affecting California Employers is now available for nonmembers to download (member download here). CalChamber members also have access to a full discussion of the new laws on HRCalifornia. The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) recently issued a Notice of Administrative Determination of Preemption finding, stating that the Federal Hazardous Material Transportation Law and the Hazardous Materials Regulations preempt California meal and rest break laws for all hazardous materials motor vehicle drivers. As California employers know, employees in California are entitled to a 30-minute off-duty meal break for shifts greater than five hours, and a second 30-minute meal break for shifts over 10 hours. In addition, employees are entitled to a 10-minute off-duty rest break for every four hours worked or major fraction thereof. The PHMSA concluded that California’s meal and rest break requirements conflict with the federal laws governing drivers transporting hazardous materials. The PHMSA made the following rulings:
Employers subject to the Federal Hazardous Material Transportation Law and the Hazardous Materials Regulations should monitor the status of this determination and any potential requests for judicial review, as well as consult legal counsel with questions about compliance. CalChamber members can view more information on California’s Meal and Rest Break Requirements in the HR Library. Not a member? See how CalChamber can help you. Wildfire Reminders: Employers Have Obligations and Must Take Precautions to Protect Employees11/13/2018
With a new series of wildfires flaring up this month, the California Chamber of Commerce presents below responses to questions often received from the employer community about how to help employees and a recent Cal/OSHA advisory on worker safety. Employers must remember some key obligations. Paying Employees Even in an emergency, employers must be mindful of obligations under state employment laws and consider pay issues for exempt and nonexempt employees related to office closures. Employers must pay exempt employees a full weekly salary for any week in which any work is performed. If the business is closed for the entire week, however, employers don’t need to pay exempt employees. In emergencies, special pay rules apply for nonexempt employees. If your business shuts down for any of the following reasons, you must pay nonexempt employees only for the hours they worked before being sent home:
However, if you shut down your business at your discretion (and not for one of the above reasons), reporting time pay may be owed. When a nonexempt employee shows up for work as scheduled and is not put to work or is given less than half of his/her scheduled hours, the employee would be eligible for reporting time pay: pay for one-half of the scheduled shift, but no less than two hours and no more than four hours. Of course, employers are always free to pay employees or let them use vacation or other personal time. Many employers may choose to provide some paid time during emergencies. Just remember to be consistent! Leave for Health Issues Employees may be entitled to time off to deal with health issues that occur as a result of the disaster. For instance, employees may use their California mandatory paid sick leave for the care or treatment of a health condition for themselves or a family member, as defined by the law. They also may be eligible for time off for family or medical leave for themselves or to care for family members with any serious health conditions under the federal Family Medical Leave Act (FMLA) or the California Family Rights Act (CFRA). The FMLA and the CFRA cover employers with 50 or more employees and provide a maximum of 12 weeks of unpaid leave in a 12-month period. Employers may have obligations to reasonably accommodate an employee under the federal Americans with Disabilities Act (ADA) and the state Fair Employment and Housing Act (FEHA). Should an employee suffer a physical or mental injury because of a natural disaster, he/she may be entitled to protections under these laws. In some situations, State Disability Insurance (SDI) partial wage replacement benefits may be available for individuals injured by the disaster (nonwork-related injury). Similarly, Paid Family Leave (PFL) partial wage replacement benefits may be available for workers who take time off to care for a covered family member injured in the disaster. The Employment Development Department can provide support services for employers and employees with these determinations. School or Child Care Leave Employers with 25 or more employees working at the same location may need to provide unpaid time off to employees whose children’s school or child care closed due to a natural disaster, such as a fire, earthquake or flood. For emergencies, the time must not exceed 40 hours per year. Cal/OSHA AdvisoryCal/OSHA issued an advisory on Friday reminding employers that special precautions must be taken to protect workers from hazards from wildfire smoke. When employees are working outdoors where the air is affected by wildfire smoke, employers are required by Cal/OSHA’s standards on Control of Harmful Exposure to Employees and Respiratory Protection to determine if the outdoor air is a “harmful exposure” to employees. Exposure is harmful when the pollution or contaminants in the air cause (or are likely to cause) injury, illness, disease, impairment or loss of function. Local air quality districts provide information on outdoor air that can assist employers in determining if the outside air is harmful to employees. Employers should pay special attention when the outdoor air quality for airborne particles is “unhealthy,” “very unhealthy,” or “hazardous.” The outdoor air quality is posted at the U.S. Environmental Protection Agency website, airnow.gov. When exposure to wildfire smoke is considered harmful, employers are required to take the following measures to protect workers:
More Information CalChamber members can find more information on Emergency Action Plans and Fire Prevention Plans on HRCalifornia. Cal/OSHA offers resources as well. Not a member? See how CalChamber can help you. The Internal Revenue Service (IRS) has announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2019. The IRS issued technical guidance detailing these items in Notice 2018-83. Highlights of Changes for 2019 The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,500 to $19,000. The limit on annual contributions to an Individual Retirement Arrangement (IRA), which last increased in 2013, is increased from $5,500 to $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000. The income ranges for determining eligibility to make deductible contributions to traditional IRAs, to contribute to Roth IRAs and to claim the saver’s credit all increased for 2019. Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or his/her spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor his/her spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) Here are the phase-out ranges for 2019:
The income phase-out range for taxpayers making contributions to a Roth IRA is $122,000 to $137,000 for singles and heads of household, up from $120,000 to $135,000. For married couples filing jointly, the income phase-out range is $193,000 to $203,000, up from $189,000 to $199,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000. The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $64,000 for married couples filing jointly, up from $63,000; $48,000 for heads of household, up from $47,250; and $32,000 for singles and married individuals filing separately, up from $31,500. Highlights of Limitations that Remain Unchanged from 2018 The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $6,000. For more information, visit the IRS website. The California Fair Employment and Housing Council (FEHC) has been working on amendments to the state Fair Employment and Housing Act (FEHA) to address two laws that went into effect on January 1, 2018 — the New Parent Leave Act (NPLA) and the statewide ban-the-box law. The FEHC held a meeting on October 19, 2018, during which it discussed further amendments to the regulations. Answering Questions About NPLA Small businesses in California had to begin providing baby-bonding leave this year, as the NPLA requires employers with 20 or more employees to provide eligible employees with up to 12 weeks of unpaid, job-protected leave to bond with a new child. Yet employers were left with some questions about how to comply with the NPLA, such as whether employees could use NPLA leave intermittently and if a workplace notice would be required. Those questions and others will be answered in the regulations proposed by the FEHC. The proposed regulations will amend the existing regulations for the California Family Rights Act (CFRA) to integrate the NPLA (the CFRA also provides for baby-bonding leave, but applies to employers with 50 or more employees). Under these proposed regulations, the two laws will largely track each other, although there are still differences between the two, such as how employers can require employees to use vacation or paid time off during leave. Once adopted, the proposed NPLA regulations will provide more clarity to California employers on how to comply with the NPLA as well as require an update to the current required CFRA poster. Clarity on Use of Criminal Convictions in Hiring, Employment Decisions Another significant law that went into effect this year was California’s ban-the-box law, which prohibits employers with five or more employees from asking job candidates about any criminal background before making a conditional job offer. This law came on the heels of criminal history regulations promulgated in 2017, which apply to all employment decisions, and not just hiring. The proposed regulations merge the new law with the pre-existing regulations. The proposed regulations state when an employer can receive criminal history information about a job applicant and how that information can be used in hiring decisions. These regulations also address the use of conviction history in employment decisions. What’s Next? The FEHC made additional revisions to the proposed NPLA and criminal history regulations at the October 19 meeting, and will publish the revised regulations on the FEHC website for a 15-day public comment period. Once the time for public comments and hearings on the proposed amendments is over, the amended regulations will go to the state Office of Administrative Law for approval. But Wait, There’s More! The FEHC is also working on amendments to the regulations that govern required sexual harassment training in California, as well as introducing religious accommodation and age discrimination regulations. More information about those proposed regulations can be found on the FEHC website. CalChamber members can view more information on the New Parent Leave Act and Criminal Background Checks in the HR Library. Not a member? See how CalChamber can help you. The California Chamber of Commerce has released a report of California legislators’ floor votes for the second year of the 2017-18 legislative session, focusing on priority bills for the state’s business community. View the 2018 vote record This is the 44th vote record the CalChamber has compiled in response to numerous requests by member firms and local chambers of commerce that would like a gauge by which to measure the performance of their legislators. To help readers assess legislators’ vote records, the charts group bills into 12 areas: agriculture, food and natural resources; corporate governance; education; energy; health care costs, housing and land use; immigration; industrial safety and health; labor and employment; legal reform and protection; product regulation; and telecommunications. Partial Picture No vote record can tell the entire story of a legislator’s attitude and actions on issues of importance to business. To fully evaluate your legislative representative, consult the legislative journals and examine your legislator’s votes in committee and on floor issues. You can view these via links at www.calchambervotes.com. Many anti-business bills were rejected by legislators in policy or fiscal committees, thus stopping proposals before they reached the floor for a vote. The vote record does not capture these votes. Most bills in this report cover major business issues that are of concern to both small and large companies. The CalChamber recognizes that there are many bills supported or opposed by business that are not included in this vote record and analysis. Factors Considered The CalChamber considers the following factors in selecting vote record bills: • The bills and votes reflect legislators’ attitudes toward private enterprise, fiscal responsibility and the business climate. • Each bill was a CalChamber priority in a particular field. Priority bills have appeared in the “Status Report” sections of Alert. • The bills were voted upon by either the full Senate or Assembly. This year, the vote record covers 14 votes in the Senate and 15 votes in the Assembly. • Unless otherwise noted, final floor votes are shown. Concurrence votes are considered final votes. When ‘Not Voting’ Helps Sometimes a legislator is unwilling to vote against a colleague, but is willing to support the CalChamber’s opposition to a bill. In such cases, a legislator may abstain from voting, which will hinder passage of a bill, just as a “no” vote does. To recognize that not voting can aid the CalChamber’s opposition to a bill, the vote record includes the number of times legislators did not vote “aye” on a CalChamber-opposed bill in the total for the column listing actions “in accord with” the CalChamber’s position, if the legislator was not absent for the day. Priority Bills Agriculture, Food and Natural Resources • AB 2528 (Bloom; D-Santa Monica) Land Use Restrictions. Potentially limits private land use by expanding areas protected for non-endangered species. Punishes landowners who managed their lands in a way to enhance the habitat of nearby species. Passed Assembly, May 29, 42-32. Passed Senate, August 22, 23-12. Assembly concurred in Senate amendments August 27, 44-32 (vote shown). Vetoed. CalChamber Opposed Unless Amended. Corporate Governance • SB 826 (Jackson; D-Santa Barbara) Unconstitutional Board Mandate for Publicly Traded Corporations. Requires a publicly traded corporation to satisfy quotas regarding the number of women on its board or face significant penalties, which is likely unconstitutional, a violation of California’s Civil Rights statute, and a violation of the internal affairs doctrine for publicly held corporations. Passed Assembly, August 29, 41-26. Senate concurred in Assembly amendments, August 30, 23-9. Signed—Chapter 954. CalChamber Opposed. Education • AB 2361 (Weber; D-San Diego) Onerous Disclosure Requirements. Imposes onerous disclosure requirements on contractors of the University of California that will force public reporting of proprietary information as well as personal employee data, with the threat of barring the contractor from bidding on any contract for five years if the contractor makes a mistake or omission. Passed Assembly, May 31, 54-22. Passed Senate, August 24, 23-13. Vetoed. CalChamber Opposed. Energy • SB 64 (Wieckowski; D-Fremont) Increased Rates. Arbitrarily requires the Public Utilities Commission to consider elimination of electric-generating facilities that produce any air emissions. Threatens the reliability of the electric grid by eliminating generation needed to meet peak demand. Failed passage in Assembly, August 29, 33-37. CalChamber Opposed. • SB 100 (de León; D-Los Angeles) Increased Energy Costs. Increases the cost of energy and threatens the reliability of the grid by mandating an ambiguous zero-carbon energy by 2045 planning goal and requirements for regulatory agencies in the state. Passed Assembly, August 28, 44-33. Senate concurred in Assembly amendments, August 29, 25-13. Signed—Chapter 312. CalChamber Opposed. Health Care Costs • AB 2384 (Arambula; D-Kingsburg) Increases Health Care Premiums. Before amendments, increased health care premiums by mandating medication-assisted treatment for opioid use disorders and by eliminating all quality control and cost containment mechanisms. Job killer tag removed due to June 14, 2018 amendments, but CalChamber remains opposed. Passed Assembly, May 31, 58-17. Passed Senate August 28, 26-9. Assembly concurred in Senate amendments, August 29, 68-6 (vote shown). Vetoed. CalChamber Opposed/Former Job Killer 2018. Housing and Land Use • AB 2343 (Chiu; D-San Francisco) Amends Unlawful Detainer and Eviction Notice Process. Before amendments, would have driven up the cost of providing rental housing in the state by tripling the amount of notice a landlord is required to provide a tenant in order to begin a lawful eviction process, extending the due date for rent to the middle of the month, and allowing a tenant who has joined a “tenant association” to stop paying rent merely by claiming landlord retaliation. Opposition removed due to June 25, 2018 amendments. Passed Assembly, May 31, 42-27 (vote shown). Passed Senate, August 20, 25-12. Assembly concurred in Senate amendments, August 23, 46-27. Signed—Chapter 260. No Position. Immigration • AB 2732 (Gonzalez Fletcher; D-San Diego) New Labor Code Requirement Subject to Private Attorneys General Act (PAGA). Creates new onerous requirements for employers to provide a worker bill of rights document to all employees, have them sign it, give them a copy of the signed document, keep the original for three years, and post the document. Passed Senate, August 31, 24-8. Assembly concurred in Senate amendments, August 31, 59-13. Vetoed. CalChamber Opposed Unless Amended. Industrial Safety and Health • AB 2963 (Kalra; D-San Jose) Usurps Cal/OSHA Priorities. Requires Cal/OSHA to treat as a serious violation a rule that does not constitute any violation of Cal/OSHA rules, and redirects Cal/OSHA resources, which will undermine existing Cal/OSHA priorities. As a result of a blood lead level of employees reported to the Department of Public Health, the bill requires a workplace inspection by Cal/OSHA within three days, as if a serious violation has been reported where none exists. Passed Assembly, May 30, 41-30. Passed Senate, August 28, 23-13. Assembly concurred in Senate amendments, August 30, 43-31 (vote shown). Vetoed. CalChamber Opposed Unless Amended. Labor and Employment • AB 1870 (Reyes; D-Grand Terrace) Extension of Statute of Limitations. Unnecessarily extends the statute of limitations from one year to three years for all discrimination, harassment and retaliation claims filed with the Department of Fair Employment and Housing. Passed Assembly, May 29, 57-4. Passed Senate, August 27, 25-10. Assembly concurred in Senate amendments, August 29, 61-9 (vote shown). Vetoed. CalChamber Opposed Unless Amended. • AB 2770 (Irwin; D-Thousand Oaks) Sexual Harassment Employer/Employee Protection. Codifies case law to ensure victims of sexual harassment and employers are not sued for defamation by the alleged harasser when a complaint of sexual harassment is made and the employer conducts its internal investigation. This bill also provides additional protections to employers by expressly allowing employers to inform potential employers about the sexual harassment investigation and findings. Reducing the cost of frivolous litigation allows an employer to utilize these financial resources to grow its workforce. Passed Assembly, May 7, 72-0. Passed Senate, June 25, 36-0. Signed—Chapter 82. CalChamber Sponsored/Job Creator 2018. • AB 2946 (Kalra; D-San Jose) Imposes New One-Sided Attorney’s Fee Recovery. Undermines the essence of the Division of Labor Standards Enforcement complaint process by requiring a one-sided attorney’s fee provision that will incentivize further litigation. Failed passage in Assembly, May 31, 19-30. CalChamber Opposed. • SB 1284 (Jackson; D-Santa Barbara) Disclosure of Company Pay Data. Requires California employers to submit pay data to state agencies that could give the false impression of pay disparity where none may exist. Agencies are prohibited from releasing company-specific information. Job killer tag removed due to August 8 amendments helping rectify public shaming aspect of the bill, but CalChamber remains opposed due to administrative burden placed on employers. Passed Senate, May 31, 24-13. Held in Assembly Appropriations Suspense File, August 16. CalChamber Opposed/Former Job Killer 2018. • SB 1300 (Jackson; D-Santa Barbara) Significant Expansion of Harassment Discrimination and Retaliation Liability. Limits the use of nondisparagement agreements and general releases and, through the codified intent language, attempts to restrict the ability to summarily adjudicate harassment claims and attempts to lower the legal standard for actionable harassment claims by providing a directive to the courts on how they should interpret the law. These provisions will significantly increase litigation against California employers and limit their ability to invest in their workforce. Job killer status removed due to August 20, 2018 amendments, but CalChamber remains opposed. Passed Senate, May 31, 22-11. Passed Assembly, August 30, 41-33. Senate concurred in Assembly amendments, August 31, 25-10 (vote shown). Signed—Chapter 955. CalChamber Opposed/Former Job Killer 2018. Legal Reform and Protection • AB 3080 (Gonzalez Fletcher; D-San Diego) Ban on Settlement Agreements and Arbitration Agreements. Significantly expands employment litigation and increases costs for employers and employees by banning settlement agreements for labor and employment claims as well as arbitration agreements made as a condition of employment, which is likely preempted under the Federal Arbitration Act and will only delay the resolution of claims. Banning such agreements benefits the trial attorneys, not the employer or employee. Passed Assembly, May 30, 47-25. Passed Senate August 22, 26-12. Vetoed. CalChamber Opposed/Job Killer 2018. Product Regulation • SB 1249 (Galgiani; D-Stockton) Risks California Jobs and Limits Consumer Options. Before amendments, jeopardized hundreds of thousands of California manufacturing, distribution and retail jobs by effectively banning for sale any cosmetic product whose ingredient was tested on animals for any purpose, by anyone, anywhere in the world. Opposition removed due to August 28, 2018 amendments. Passed Senate, May 30, 21-9 (vote shown). Passed Assembly, August 31, 80-0. Senate concurred in Assembly amendments, August 31, 39-0. Signed—Chapter 899. No Position. Telecommunications • SB 822 (Wiener; D-San Francisco) Net Neutrality. Preempted by federal law and opens the door to a patchwork of unworkable state regulations that will stymie innovation and potentially undermine the backbone of California’s internet economy. Passed Assembly, August 30, 61-18. Senate concurred in Assembly amendments, August 31, 27-12. Signed—Chapter 976. CalChamber Opposed. Print-Friendly PDF of full Vote Record CalChamber Best Business Votes 2018 Legislators are listed in descending order according to how often they voted in accord with the California Chamber of Commerce position (first number) versus how often their votes were not in accord with the CalChamber position (second number) in 2018. Total votes may not match the vote record because the tally for not voting or absent is not included in this list. Votes when a legislator was absent are not included in calculating percentages. Best Business Votes: Print-Friendly PDF The California Chamber of Commerce is urging its members to register to vote for the November 6 General Election before the October 22 deadline. An online link to register is available at www.calchambervotes.com. Voter registration information is available at the website of the Secretary of State. The last day to register to vote for the November 6 election is October 22. To register to vote, you must be a U.S. citizen, at least 18 years of age, a resident of California, not in prison or on parole for the conviction of a felony, and have not been judged by a court to be mentally incompetent to register and vote. See CalChamber Positions on November Ballot measures Sample Ballots Persons who register between 29 and 15 days before an election may be sent a sample ballot if there is time to process these last-minute registrations. If not, such registrants will receive a postcard confirming voter registration, which will also include a notice of their polling place location. For all elections, extra sample ballots will be available at polling locations. When to Re-Register to Vote Voters need to re-register to vote when they:
Polling Places The location of a voter’s designated polling place is listed on the back of the Sample Ballot. Voters can also find their polling place on the Secretary of State website, or from their local elections official. Vote by Mail Any California voter may vote by mail. The last day to request a vote-by-mail ballot is October 30. A registered voter may request a ballot by using the application printed on the back of the sample ballot booklet. County elections officials began mailing vote-by-mail ballots on October 9 (post offices were closed for a federal holiday). Ballots have already been mailed to military and overseas voters. Vote-by-mail voters can cast their November 6 ballots through the mail, drop them off at any polling place within the voter’s county, or vote in person at county elections offices. Once county elections officials determine the signature on the vote-by-mail ballot return envelope matches the voter’s signature on his or her voter registration application, and the voter did not vote elsewhere in the same election, the ballot is counted. All valid vote-by-mail ballots are counted in every election, regardless of the outcome or closeness of any race. In the June 5, 2018 Statewide Primary Election, 67.7% of votes were cast on vote-by-mail ballots. Ballot Drop Boxes Drop boxes opened on October 9 in Madera, Napa, Nevada, Sacramento, and San Mateo counties—the five counties that have adopted the Voter’s Choice Act for the November 6, 2018 General Election. In these five counties, every voter will automatically receive a vote-by-mail ballot. Voters will have the option of returning their ballots at a dropbox, by mail, or at any vote center in their county. Dropboxes are secure locations where California voters can deliver their completed ballots from the time they receive them by mail up to 8:00 p.m. on Election Day. Counties implementing the Voter’s Choice Act must open a minimum of one dropbox location for every 15,000 registered voters. Voters can look-up ballot dropbox and vote center locations using the map lookup tool at VotersChoice.sos.ca.gov. Tips for Voters Who Plan to Use Dropboxes:
If individuals are not sure of their registration status, visit the Secretary of State My Voter Status tool at: VoterStatus.sos.ca.gov. Individuals can also use this tool to check the status of their ballot once it has been received by county elections officials. If voters do not receive their vote-by-mail ballot, they need to contact their county elections office. The Voter’s Choice Act (SB 450), a landmark election reform measure, was sponsored by Secretary of State Alex Padilla, signed into law by Governor Edmund G. Brown Jr. in 2016, and was first implemented in the June 5, 2018 Primary Election. Sharing Information with Employees The CalChamber encourages employers to share information on the November ballot measures with their employees. Businesses are within their rights to do so — just remember, NO PAYCHECK STUFFERS, no coercion, no rewarding or punishing employees (or threatening to do so) for their political activities or beliefs. For more guidelines on political communications to employees, see the brochure at www.calchamber.com/guidelines. Note the distinction between internal communications (to employees, stockholders and their families) and communications to external audiences (such as non-stockholder retirees, outside vendors, customers, passersby). For voter registration information, see the website of the Secretary of State. Stops All 29 Job Killer Bills The 2018 legislative session was especially busy for the California Chamber of Commerce policy advocates. CalChamber policy advocates, together with members, allied associations and local chambers of commerce, stopped many harmful proposals, won amendments to remove damaging provisions in other proposals, and helped pass bills to make future investments in our state’s economy In 2018, the Legislature introduced more than 2,600 bills; CalChamber tracked 213 California bills, stopping 115 opposed bills (including 29 job killers), and backing 27 bills that were signed into law. Job KillersStrong advocacy by the CalChamber, members, local chambers of commerce and allied employers prevented all but one job killer bill from passing the Legislature. On his final day to act on legislation, Governor Edmund G. Brown Jr. vetoed the last surviving CalChamber-opposed job killer bill. AB 3080(Gonzalez Fletcher; D-San Diego) would have banned arbitration agreements beneficial to employees, employers and the courts. Besides interfering with and essentially eliminating settlement agreements for labor and employment claims, AB 3080 exposed employers to criminal liability regarding arbitration agreements and essentially prohibited arbitration of labor and employment claims as a condition of employment. CalChamber’s analysis of the bill also found that it was likely preempted under the Federal Arbitration Act (FAA) and would only have delayed the resolution of claims. Finally, given where AB 3080 provisions were placed in the Labor Code, any violation would have been a misdemeanor. Accordingly, an employer would have faced not only civil liability for any violation of the various provisions of AB 3080, but could have faced criminal charges as well. In his September 30 veto message, the Governor stated: “Since this bill plainly violates federal law, I cannot sign this measure.” Session Highlights Following are highlights from the entire legislative session. For a list of all CalChamber priority bills send to the Governor this year, see the Final Status Report on Major Business Bills, embedded below. Labor and Employment As usual, labor matters were among the hardest fought issues on the CalChamber agenda. The 2019 new laws will include: Lactation Accommodation (AB 1976; Limón; D-Goleta): Under current state law an employer must provide a location other than a toilet stall for an employee to express breast milk. The location must also be private and in close proximity to the employee’s work area. This CalChamber supported law requires that the employer provide a location other than a “bathroom,” rather than a “toilet stall.” AB 1976 contains a hardship exemption and clarifying language about what temporary spaces are appropriate as lactation accommodations. Defamation Protection (AB 2770; Irwin; D-Thousand Oaks): Under this CalChamber-sponsored job creator bill, employers and victims of sexual harassment will be protected from liability for defamation lawsuits for injury to an alleged harasser’s reputation after a complaint of sexual harassment has been made. An employee who makes credible reports of harassment will be shielded from liability, as will an employer who communicates with interested parties such as victims and witnesses. When contacted for a job reference about a current or former employee, an employer will now be permitted to reveal whether the individual is not eligible for rehire because the employer determined that he/she engaged in sexual harassment. Confidentiality Clauses in Settlement Agreements (SB 820; Leyva; D-Chino): This CalChamber opposed new law expands the types of cases in which so-called “secret settlements” are restricted. It prohibits any settlement agreement in a case where sexual harassment, assault or discrimination has been alleged from including a confidentiality provision that prohibits disclosure of factual information regarding the claim, except with regard to the claimant’s identity. Sexual Harassment (SB 1300; Jackson; D-Santa Barbara): In this sweeping new law, the Legislature declared its intent to create a much lower bar for employees to bring harassment lawsuits, and limited the ability of employers to obtain summary judgment in such cases and also prohibits the use of non disclosure agreements. CalChamber secured amendments to remove the more onerous job killer provisions, but remained opposed to the bill. For expanded information on employment-related laws, an HRCalifornia Extra newsletter and White Paper will be published soon. CEQA Reform/Land UseThe Governor signed two CalChamber-supported bills that will help expedite home building: California Environmental Quality Act (CEQA) reform (AB 1804; Berman; D-Palo Alto): Expedites infill development of affordable housing by expanding the existing CEQA exemption for infill projects to unincorporated areas already surrounded by urbanized land uses and populations. Land Use Improvements (AB 2913; Wood; D-Healdsburg) The bill promotes fairness in housing construction by providing that a permit would remain valid if the work on the site authorized by that permit is begun within 3 years after its issuance, or if the work authorized on the site by the permit is suspended or abandoned for a period of up to 3 years after the time the work has begun. Health Care Costs The Governor vetoed two CalChamber-opposed bills that would have increased health care premiums if signed into law:
Governor Brown signed a CalChamber-supported bill related to food and consumer product packaging: CalChamber supports AB 2632 (Santiago; D-Los Angeles) because it protects consumer product and food manufacturers from lawsuits by clarifying package labeling requirements regarding the amount of product and packaging. Final Status Report on Major Bills The following list summarizes the final status of priority bills for the CalChamber that were sent to the Governor this year. Within each subject area, the CalChamber list presents bills in order of priority, with the highest priorities at the top. The CalChamber will publish a record of legislators’ votes on key bills affecting the California business climate on October 19. Generally, the bills selected for the vote record have appeared in one of the status reports. Bills signed by the Governor will become law on January 1, 2019 unless otherwise stated. Urgency, budget-related and tax levy measures go into effect immediately upon being signed, so the date the bill was signed is noted. Download PDF Version of Report Governor Vetoes Last CalChamber Identified Job Killer Bill of 2017-2018 Legislative Session10/2/2018
AB 3080 Would Have Banned Arbitration Agreements Beneficial to Employees, Employers, Courts The last CalChamber identified Job Killer bill of the 2017-2018 Legislative Session, AB 3080 (Gonzalez Fletcher), has been vetoed by Governor Edmund G. Brown, Jr. “We are grateful to the Governor for vetoing this bill and recognizing that, had it become law, AB 3080 would have been preempted by federal law. The Governor’s veto saved California employers from significant amount of unnecessary litigation,” said Allan Zaremberg, CalChamber President and CEO. In his veto message, the Governor indicated, “since this bill plainly violates federal law, I cannot sign this measure.” “We are pleased the Governor recognized the significant flaws of AB 3080” said Jennifer Barrera, CalChamber’s Senior Vice President of Policy. “Employment arbitration agreements have proven to provide a beneficial forum to resolve disputes for both employers and employees for decades, and are even routinely utilized by unions in their collective bargaining agreements. Arbitration agreements expedite the resolution of claims in a less costly environment than sending all claims through an overburdened court system. At the end of the day, had this bill become law, the winners would have been trial lawyers, not workers.” “With the Governor’s veto of AB 3080 (Gonzalez Fletcher), CalChamber has now successfully stopped every piece of job killing legislation proposed this session from becoming law,” said Zaremberg. “We know many of these job killing proposals will return next session but Legislators need to understand that California employers have reached their limit with respect to new laws and regulations that increase costs through threat of litigation and additional burdens that stop them from making future investments in our state’s economy,” he added. Job Killer Stats 2018: 29 job killers identified, 1 sent to Governor Brown, 1 vetoed. 2017: 27 job killers identified, 3 sent to Governor Brown, 2 signed, 1 vetoed. 2016: 24 job killers identified, 5 sent to Governor Brown, 4 signed, and 1 vetoed; 2015: 19 job killer bills identified, 3 sent to Governor Brown, 1 signed, and 2 vetoed; 2014: 27 job killer bills identified, 2 sent to Governor, signs 2; 2013: 38 job killer bills identified, 1 sent to Governor, signs 1; 2012: 32 job killer bills identified, 6 sent to Governor, signs 4, 2 vetoed; 2011: 30 job killer bills identified, 5 sent to Governor, 1 signed, 4 vetoed; 2010: 43 job killer bills identified, 12 sent to Governor, 2 signed, 10 vetoed; 2009: 33 job killer bills identified, 6 sent to Governor, 6 vetoed; 2008: 39 job killer bills identified, 10 sent to Governor, 1 signed, 9 vetoed; 2007: 30 job killer bills identified, 12 sent to Governor, 12 vetoed; 2006: 40 job killer bills identified, 11 sent to Governor, 2 signed, 9 vetoed; 2005: 45 job killer bills identified, 8 sent to Governor, 1 signed, 7 vetoed; 2004: 23 job killer bills identified, 10 sent to Governor, 10 vetoed; 2003: 53 job killer bills identified, 13 sent to Governor, 11 signed, 2 vetoed; 2002: 35 job killer bills identified, 17 sent to Governor, 12 signed, 5 vetoed 2001: 12 job killer bills identified, 5 sent to Governor, 3 signed, 2 vetoed; 2000: No job killers identified. Of 4 bad bills identified at end of session, Governor Davis signs 2 and vetoes 2. 1999: 30 job killer bills identified, 9 sent to Governor, 6 signed, 3 vetoed; 1998: 64 job killer bills identified, 11 sent to Governor, 11 vetoed. 1997: 57 job killer bills identified, 9 sent to Governor, 9 vetoed. Study: One Size Fits All Approach to Independent Contractors Ignores Value to California’s Economy9/25/2018
A wholesale reclassification of workers would have significant consequences for many different sectors in the state’s economy, according to a recent study by Beacon Economics. “Since the nature of, and reliance on independent contracting varies by industry, a one-size fits all policy ignores the complexity and nuance of such work arrangements, and the value they bring to California’s economy,” the study states. As many employers know, the California Supreme Court outlined a new test in Dynamex Operations West, Inc. v. Superior Court, No. S222732 (April 30, 2018) to determine whether a worker must be classified as an employee, rather than as an independent contractor, and subject to all the laws governing wages, hours and rest breaks, as well as the withholding of taxes. The Supreme Court replaced a totality of circumstances test that it had created with a decision in 1989 and replaced it with an “ABC” test of three factors, the most significant being that the worker performs work which is not the hiring entity’s usual business. Beacon Economics Executive Summary In the executive summary of its report, Beacon notes that the California Supreme Court decision in Dynamex has the potential to be a “watershed moment” for the state’s economy. The court’s guidelines for determining whether certain categories of workers should be considered as employees or independent contractors have far-reaching consequences in relation to worker regulations and their protection under California Law, Beacon points out. While specifically related to the delivery service industry, the Dynamex decision “will potentially make it more difficult for companies to classify workers as independent contractors in other sectors of the economy. The decision is part of a broader legislative and judicial effort to define and understand the changing nature of employer-employee relations.” Beacon goes on to comment: “While worker classification and ‘alternative’ work arrangements have received widespread media attention with the advent of the gig economy, alternative work arrangements have long been a part of modern economies.” The Beacon analysis aims to shed light on independent contractors and similar alternative work arrangements by:
Key Findings The Beacon study finds that:
The full report, “Understanding California’s Dynamex Decision 2018,” is available on the Beacon Economics website. Following are brief summaries of the measures that will appear on the November 6 General Election ballot. When the California Chamber of Commerce has taken a position, the reasons for that position are summarized. The CalChamber encourages employers to share this information with their employees. Businesses are within their rights to do so—just remember: NO PAYCHECK STUFFERS, no coercion, no rewarding or punishing employees (or threatening to do so) for their political activities or beliefs. For more guidelines on political communications to employees, see the brochure at www.calchamber.com/guidelines. Note the distinction between internal communications (to employees, stockholders and their families) and communications to external audiences (such as nonstockholder retirees, outside vendors, customers and passersby). For more information on the ballot measures, see the links listed below or visit the website of the Secretary of State at www.sos.ca.gov. Proposition 1 Authorizes Bonds to Fund Specified Housing Assistance Programs. Legislative Statute. Authorizes $4 billion in general obligation bonds for existing affordable housing programs for low-income residents, veterans, farmworkers, manufactured and mobile homes, infill and transit-oriented housing. Placed on Ballot by: SB 3 (Beall; D-San Jose), Chapter 365, Statutes of 2017. CalChamber Position: Support Reasons for Position Proposition 1 will provide much-needed housing, allowing California to leverage federal tax credits and bonds. There will be no cost to the state’s General Fund because the CalVet loan program is self-supporting; the bonds are repaid by CalVet loan holders through paying principal and interest on their loans. More Information www.vetsandaffordablehousingact.org Proposition 2 Authorizes Bonds to Fund Existing Housing Program for Individuals with Mental Illness. Legislative Statute. Amends the Mental Health Services Act to fund No Place Like Home Program, which finances housing for individuals with mental illness. Ratifies existing law establishing the No Place Like Home Program. Placed on Ballot by: AB 1827 (Committee on Budget), Chapter 41, Statutes of 2018. CalChamber Position: Support Reasons for Position Proposition 2 will enable the state to use funding long earmarked for specialized types of mental health and housing services to build housing and keep mental health services in reach for people. Under the No Place Like Home Program, 20,000 permanent supportive housing units will be built, allowing coordinated care of mental health and substance use services, medical care, case managers, education and job training to help people get the treatment and housing stability they need. More Information www.CAyesonprop2.org Proposition 3 Authorizes Bonds to Fund Projects for Water Supply and Quality, Watershed, Fish, Wildlife, Water Conveyance, and Groundwater Sustainability and Storage. Initiative Statute. Authorizes $8.877 billion in state general obligation bonds for various infrastructure projects and funds improvements to water safety and quality, watershed and fisheries, habitat protection programs, water conveyance, groundwater sustainability and storage, and surface water storage and dam repairs. Placed on Ballot by: Petition signatures. CalChamber Position: Support. CalChamber President and CEO Allan Zaremberg is quoted in the ballot arguments supporting Proposition 3. Reasons for Position California’s environment and economy rely on a clean and reliable water supply. Proposition 3 will provide critical funding that will help create sustainable water management in the state. Bond proceeds will go toward: providing major funding for watershed improvements and better management practices that will improve water quality and supply; safe drinking and wastewater treatment for disadvantaged communities; stabilizing groundwater levels in overdrafted groundwater basins; funding for recycling wastewater; funding for leak detection, toilet replacement and landscape conversion; and repairing the Oroville Dam spillway. More Information waterbond.org Proposition 4 Authorizes Bonds Funding Construction at Hospitals Providing Children’s Health Care. Initiative Statute. Authorizes $1.5 billion in general obligation bonds, to be repaid from state’s General Fund, to fund grants for construction, expansion, renovation, and equipping of qualifying children’s hospitals. Placed on Ballot by: Petition signatures. CalChamber Position: Support Reasons for Position California children’s hospitals provide critical care to children with significant medical needs and it is not possible to set aside money for infrastructure with the current payer mix. Previous bonds enabled the hospitals to build new patient towers that meet 2030 seismic standards and buy new equipment, including medical records systems and new medical technology. Proposition 4 will help the 13 regional children’s hospitals meet growing demand for services and update technology. More Information www.YesOnProposition4.org Proposition 5 Changes Requirements for Certain Property Owners to Transfer Their Property Tax Base to Replacement Property. Initiative Constitutional Amendment and Statute. Allows people over 55 years old, severely disabled homeowners and owners of contaminated or disaster-destroyed property to sell their homes, move and transfer their property tax basis to the replacement residence. Placed on Ballot by: Petition signatures. CalChamber Position: Support Reasons for Position California is facing a massive housing shortage and needs at least 100,000 additional new units a year to meet demand. Proposition 5 could help ease the shortage by freeing up modest-priced and move-up housing for young families. Seniors, who often are on a fixed income, fear they will not be able to afford a big property tax increase if they sell their existing home and buy another one, discouraging them from ever moving. As a result of this “moving penalty,” almost three-quarters of homeowners 55 and older haven’t moved since 2000. The Legislative Analyst’s Office estimates the initiative would increase home sales in the tens of thousands per year. More Information www.voteyesonprop5.com Proposition 6 Eliminates Certain Road Repair and Transportation Funding. Requires Certain Fuel Taxes and Vehicle Fees Be Approved by the Electorate. Initiative Constitutional Amendment. Repeals a 2017 transportation law’s taxes and fees designated for road repairs and public transportation. Placed on Ballot by: Petition signatures. CalChamber Position: Oppose Reasons for Position The Legislative Analyst estimates the measure would reduce spending on state and local transportation projects by nearly $5 billion annually. Repealing the gas tax would stop transportation improvement projects already underway in every community in California, eliminating funds already flowing to every city and county to fix potholes, make safety improvements, ease traffic congestion, upgrade bridges, and improve public transportation. Passage of Proposition 6 also will make traffic congestion worse, cost drivers and taxpayers more money in the long run, and hurt job creation and the state’s economy. The average driver spends $739 per year on front end alignments, body damage, shocks, tires and other repairs because of bad roads and bridges. Fixing a road costs eight times more than maintaining it. Proposition 6 would eliminate more than 680,000 good-paying jobs and nearly $183 billion in economic growth that will be created fixing California roads over the next decade. More Information www.NoProp6.com Proposition 7 Conforms California Daylight Saving Time to Federal Law. Allows Legislature to Change Daylight Saving Time Period. Legislative Statute. Gives Legislature ability to change Daylight Saving Time period by two-thirds vote, if changes are consistent with federal law. Placed on Ballot by: AB 807 (Chu; D-San Jose), Chapter 60, Statutes of 2018. CalChamber Position: No Position Ballot Arguments For Proposition 7 will end the biannual time changes that medical researchers and economists agree are hazardous to the health and productivity of school children, the workforce and seniors. Ballot Arguments Against Proposition 7 allows for permanent Daylight Saving Time, subject to federal approval. It would be light in the evening in the summer, as it is now, but winter mornings would be dark for an extra hour so children would be going to school in the dark. Proposition 8 Regulates Amounts Outpatient Kidney Dialysis Clinics Charge for Dialysis Treatment. Initiative Statute. Limits amounts outpatient kidney dialysis clinics may charge for patient care and imposes penalties for excessive charges. Placed on Ballot by: Petition signatures. CalChamber Position: Oppose Reasons for Position The CalChamber opposes arbitrary government price controls that do not account for the actual cost of care. Proposition 8 sets a dangerous precedent to apply arbitrary government price controls to other health care providers and businesses. Moreover, the measure could increase costs by shifting treatment from a dialysis clinic to more expensive venues, such as emergency rooms or hospitals. It also could jeopardize the financial viability of clinics, which could lead to closures, thereby reducing patient access to critical care. More Information www.NoProp8.com Proposition 9 Three States Initiative. CalChamber Position: Oppose Removed from ballot on 7/18/18 by order of California Supreme Court. Proposition 10 Expands Local Governments’ Authority to Enact Rent Control on Residential Property. Initiative Statute. Repeals state law that currently restricts the scope of rent control policies that cities and other local jurisdictions may impose on residential property. Placed on Ballot by: Petition signatures. CalChamber Position: Oppose Reasons for Position Removing the limitations on locally enacted rent control laws could discourage new construction, decrease the supply of rental housing and reduce the quality of housing available in communities statewide. In a 2016 report, the Legislative Analyst’s Office (LAO) concluded that “Rent control will do nothing to increase our supply of affordable housing and, in fact, likely would discourage new construction.” Cities with stringent forms of rent control, such as San Francisco and Santa Monica, have lost large numbers of rental units as a result of rent control. Owners of rental housing subject to rent control are more likely to convert their properties to condos or other forms of ownership housing. This results in fewer homes being available for rent and more being available for purchase. Rental property owners would not be able to afford to adequately maintain their buildings. According to the LAO, “By depressing rents, rent control policies reduce the income received by owners of rental housing. In response, property owners may attempt to cut back their operating costs by forgoing maintenance and repairs. Over time, this can result in a decline in the overall quality of a community’s housing stock.” More Information www.noprop10.org Proposition 11 Requires Private-Sector Emergency Ambulance Employees to Remain On-Call During Work Breaks. Eliminates Certain Employer Liability. Initiative Statute. Makes labor laws entitling hourly employees to take meal and rest breaks without being on-call not apply to private-sector ambulance employees. Exempts employers from potential liability for violations of existing law regarding work breaks. Requires all meal periods be paid, regardless of if they are or are not interrupted. Placed on Ballot by: Petition signatures. CalChamber Position: No Position. Ballot Arguments For California faces disasters too often. Proposition 11 ensures emergency medical technicians are paid to be reachable during breaks to save lives, gives them better disaster training that meets Federal Emergency Management Agency standards and mandatory mental health coverage. In an emergency, seconds make the difference between life and death. Yes on Proposition 11 is common sense. More Information www.Yeson11.org Ballot Arguments Against No argument against Proposition 11 was submitted. Proposition 12 Establishes New Standards for Confinement of Specified Farm Animals. Bans Sale of Noncomplying Products. Initiative Statute. Establishes minimum space requirements for confining certain farm animals. Bans the sale of meat and eggs from calves raised for veal, breeding pigs, and egg-laying hens confined in spaces below a specific number of square feet. Placed on Ballot by: Petition signatures. CalChamber Position: No Position Ballot Arguments For Confining a baby veal calf, other pig or egg-laying hen inside a tiny cage is cruel. Products from these suffering animals threaten food safety. Proposition 12 endorsers include nearly 500 California veterinarians, American Society for the Prevention of Cruelty to Animals, Humane Society for the United States, California family farmers and animal shelters, Center for Food Safety. More Information www.preventcrueltyca.com Ballot Arguments Against Proposition 12 is a reckless exploitation of California’s initiative process that not only harms farm animals, but also puts in grave danger a wide array of existing consumer, animal, and environmental protection laws. The measure is an outrageous sell-out to the egg industry and betrays animals and voters. Californians already voted to ban cages by 2015. This measure legalizes cages until at least 2022. More Information www.NoOnProposition12.org CalChamber Positions on November 2018 Ballot Measures Proposition 1 Veterans Housing Bond Support Proposition 2 Housing and Services for Individuals with Mental Illness Support Proposition 3 Bond Funding for Water Supply/Quality, Watershed, Fish, Wildlife, Water Conveyance, and Groundwater Sustainability and Storage Projects Support Proposition 4 Children’s Hospitals Construction Bonds Support Proposition 5 Property Tax Base Transfer for Replacement Property Support Proposition 6 Eliminates Road Repair and Transportation Funding Oppose Proposition 7 Conforms California Daylight Saving Time to Federal Law No Position Proposition 8 Regulates Amounts Outpatient Kidney Dialysis Clinics Charge for Dialysis Treatment Oppose Proposition 9 Three States Initiative – Removed from ballot on 7/18/18 by order of California Supreme Court Oppose Proposition 10 Expands Local Governments’ Authority to Enact Rent Control on Residential Property Oppose Proposition 11 Requires Private-Sector Emergency Ambulance Employees to Remain On-Call During Work Breaks No Position Proposition 12 New Standards for Confinement of Specified Farm Animals No Position Strong opposition from the California Chamber of Commerce and its allies in the closing days of the legislative session prevented one energy-related job killer bill from advancing and helped secure removal of one of the more onerous elements of an employment-related job killer proposal as well. AB 893: Higher Energy CostsOn August 31, the last day of the session, the Senate Rules Committee failed to garner enough votes to move the newest CalChamber job killer, AB 893 (E. Garcia; D-Coachella). AB 893 was tagged as a job killer because it would have discouraged energy-dependent businesses from growing in California and added new overhead costs for all California employers. AB 893 also created incentives for utilities to purchase out-of-state power to satisfy the mandate, threatening even more California jobs. AB 893 required the procurement of a large amount—4,250 megawatts—of additional and unneeded geothermal, solar, and wind power. CalChamber’s analysis found that this would have substantially increase rates for California ratepayers. In addition, AB 893 would have created a procurement process outside of the current “least-cost, best-fit” competitive bidding process. SB 1300: Harassment/Discrimination Claims Former job killer SB 1300 (Jackson; D-Santa Barbara), dealing with harassment and discrimination claims, was amended on August 20 to remove the provisions from the bill that created a new, stand-alone private right of action for failure to prevent harassment or discrimination. CalChamber remains opposed to SB 1300 because the bill limits the use of nondisparagement agreements and general releases, restricts the ability to summarily adjudicate harassment claims and lowers the legal standard for actionable harassment claims. These provisions will significantly increase litigation against California employers and limit their ability to invest in their workforce. SB 1300 passed the Assembly on August 30, 41-33. The Senate concurred in Assembly amendments on August 31, 25-10. The bill awaits action by the Governor. AB 3080: Last Job Killer Only one job killer remains active: AB 3080 (Gonzalez Fletcher; D-San Diego), which passed the Senate on August 22, 26-12, and is awaiting action by the Governor. The CalChamber has labeled AB 3080 as a job killer because it will create more litigation, significant delays in the resolution of disputes and higher costs for employers and employees. Jennifer Barrera, CalChamber senior vice president, policy, recaps the problems with AB 3080 in the latest CalChamber Capitol News Report video and the Capitol Insider blog wrap-up of the session.
In the video, Barrera points out that if AB 3080 becomes law, “it will prevent employers and employees from utilizing arbitration as a way in which to resolve their disputes and will force all of these disputes into the court system.” Her blog post notes: “AB 3080 has been portrayed as a part of the #metoo movement, but upon review, is much broader than just sexual harassment. It seeks to prohibit and limit settlement agreements, arbitration agreements, and class action waivers for any labor and employment claim. “This includes claims that have nothing to do with sexual harassment, such as meal periods, rest periods, paystub errors, sick leave, etc. It also subjects an employer to criminal liability for any violation of the various provisions.” August 31 was the last day for the Legislature to send bills to the Governor’s desk. For a full overview of the status of major business bills when legislators began their final recess, see the Status Report pages inside this Alert. The California Chamber of Commerce has added to the job killer list a bill that recently was amended to impose on both public and investor-owned utilities an extreme, costly mandate to procure 5,000 megawatts (MW) of energy from renewable sources. Adding AB 893 (E. Garcia; D-Coachella) brings the total number of job killer bills identified this year to 29. Currently, in addition to AB 893, only one other job killer remains active, AB 3080 (Gonzalez Fletcher; D-San Diego), which passed the Senate last week and is awaiting action by the Governor. CalChamber has identified AB 893 as a job killer because it would discourage energy-dependent businesses from growing in California and would add new overhead costs for all California employers. AB 893 also creates incentives for utilities to purchase out-of-state power to satisfy the mandate, threatening even more California jobs. Unrealistic Procurement Numbers California’s investor-owned utilities (IOU) and publicly owned utilities (POU) already use a diverse mix of renewable resources and are on track to meet and exceed California’s aggressive Renewable Portfolio Standard (RPS) goals. According to CalChamber’s analysis, AB 893’s procurement mandate significantly increases costs by removing the utilities’ ability to meet RPS goals in a cost-effective manner. AB 893 will inevitably increase energy costs for California ratepayers and requires all of this procurement on an expedited timeline—some utilities must submit a plan a mere nine or 10 months from now, giving the Public Utilities Commission a deadline of just 30 days to evaluate those plans. Significant Cost Increases Per kilowatt hour electricity rates in California are already among the highest in the nation. As of April 2017, some ratepayers pay a premium of 68% for electricity and 73% for natural gas over the national average, which has an impact on businesses’ ability to be competitive if they continue to be located in California. The RPS standard uses the “least-cost, best-fit” competitive bidding process to meet California’s ambitious goals in a cost-effective manner. According to CalChamber’s letter, AB 893 thwarts that process by forcing utilities to purchase more expensive power and pass along increased rates to California ratepayers. AB 893 is on the Senate Floor. The Legislature has until August 31 to send bills to the Governor’s desk. For up-to-date information on the job killer list, follow @CAJobKillers on Twitter. The California Chamber of Commerce (CalChamber) is the largest broad-based business advocate to government in California. Membership represents one-quarter of the private sector jobs in California and includes firms of all sizes and companies from every industry within the state. Leveraging our front-line knowledge of laws and regulations, we provide products and services to help businesses comply with both federal and state law. CalChamber, a not-for-profit organization with roots dating to 1890, promotes international trade and investment in order to stimulate California’s economy and create jobs. Please visit our website at www.calchamber.com A California Chamber of Commerce-opposed job killer bill to ban settlement agreements and arbitration agreements for labor and employment claims is awaiting action by the Senate. The CalChamber has tagged AB 3080 (Gonzalez Fletcher; D-San Diego) as a job killer because it will create more litigation, significant delays in the resolution of disputes, and higher costs for employers and employees. Besides interfering with and essentially eliminating settlement agreements for labor and employment claims, AB 3080 exposes employers to criminal liability regarding arbitration agreements and essentially prohibits arbitration of labor and employment claims as a condition of employment. AB 3080 is likely preempted under the Federal Arbitration Act (FAA) and will only delay the resolution of claims. Banning such agreements benefits the trial attorneys, not the employer or employee. by federal law. Delays AB 3080 interferes with and will essentially eliminate settlement agreements as it prohibits an employer from requiring an applicant or employee to waive any right, forum, or procedure, or the right to pursue any claim in court under the Fair Employment and Housing Act (FEHA) or the Labor Code as a condition of any “contractual agreement.” Precluding the informal resolution of civil claims would simply overwhelm California’s judiciary system by forcing all claims to be tried by a jury or judge, creating significant delays that would harm individuals who have suffered a wrong. Criminal Liability Given where AB 3080 provisions have been placed in the Labor Code, any violation will be a misdemeanor. Accordingly, an employer will face not only civil liability for any violation of the various provisions of AB 3080, but can face criminal charges as well. Pre-Empted by Federal Law AB 3080 prohibits arbitration agreements made as a condition of employment for any claims arising under the Labor Code or FEHA and/or including class action waivers. Arbitration is a less formal, less costly, and less time-consuming forum to resolve a dispute. The cost savings is not in the compensation paid to the employees; it is in the fees paid to attorneys. Although studies demonstrate that employees generally win the same percentage of cases in arbitration, if not more, the trial attorneys may not recover as much in fees. The ultimate beneficiaries of an arbitration and class action waiver ban are trial attorneys, not the employers and not the employees. AB 3080 is also likely preempted, and therefore will create significant litigation without actually providing any benefit to employees. AB 3080 is very similar to AB 2617 (Weber; D-San Diego), passed and signed into law in 2014, which prohibited as “a condition of entering into a contract for the provisions of goods or services” the waiver of a forum for the resolution of claims, i.e. an arbitration clause. On March 14, 2018, the Second District Court of Appeal held in Saheli v. White Memorial Medical Center that AB 2617 was preempted under the FAA. The court stated: “The above legislative history clearly shows the motivating force behind the enactment of AB 2617 was a belief that arbitration is inherently inferior to the courts for the adjudication of Ralph Act and Bane Act claims. In accordance with this dim view of arbitration, the Legislature placed special restrictions on waivers of judicial forums and procedures in connection with such claims. In practice, such restrictions discourage arbitration by invalidating otherwise valid arbitration agreements. It is precisely this sort of hostility to arbitration that the FAA prohibits.” Similar to AB 3080, the “special restrictions” at issue in AB 2617 was that arbitration clauses could not be created as a condition of the contract. The court in Saheli deemed such restrictions as preempted under FAA. The decision in Saheli is consistent with a long history of cases on the issue of FAA preemption. To the extent that AB 3080 will undoubtedly be challenged as preempted under the FAA if passed and potentially invalidated, it will serve only to create additional litigation and not necessarily benefit employees as intended. Action Needed The CalChamber is asking members to contact their senators to urge them to oppose AB 3080. California is home to nearly two million residents who choose to work for themselves. As pillars of the workforce, these independent contractors are part of virtually every industry in the state including child care, healthcare, insurance, financial services, construction, technology and transportation. A recent California Supreme Court ruling, however, has called into question the ability of these independent contractors to continue to work for themselves in their chosen professions. The practical consideration is whether a business and its associated workers have an employee-to-employer relationship or not. In such a relationship, the state regulates working conditions; independent contractors determine for themselves when and how they perform their jobs. OpinionBecause of the potential disruption, the business community is asking the Legislature to immediately limit the court’s ruling to the workers directly involved in the Dynamex case and not have the decision apply to other contractors for the next two years. The Dynamex decision created a new test that assumes workers are employees. This occurred because the company changed its workers’ status from employees to independent contractors without a significant change in circumstances. The workers sued to regain their status as employees, and the court agreed. But what may have been an appropriate outcome for Dynamex employees has much broader implications for many different types of independent contractors and self-employed professionals, and jeopardizes the businesses that rely on their services. This includes on-demand services such as transportation, child care and health care, as well as music instructors, insurance agents and physicians. Although the justices may have had all the necessary facts to make an appropriate decision in the Dynamex situation, they could not consider all the other workers, businesses and consumers who rely on the independent contractor business model. The appropriate role of the Legislature is to determine the broad-based rule beyond what was decided by the court. It is important to note that the court based its ruling on a government regulation that was last reviewed before invention of the smart phone. The Industrial Welfare Commission, which was established in 1913 to regulate hours, wages and working conditions, created the rule. But it has not been funded since the Gray Davis administration and the commission could never have imagined an on-demand economy powered by mobile devices. It seems obvious that it is time for the state to fund and reconvene the commission to update this obsolete regulation. With all that is at risk for workers and our economy, the Legislature should act quickly. 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 August 17, the date by which fiscal committees must send the bills along for consideration by the entire Senate or Assembly. In addition, seven tax-related job killer bills remain alive because they were not subject to the July 6 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 Two Senate job killer bills and one Assembly job killer bill remain active. The California Chamber of Commerce has identified 28 job killer bills to date. The following job killers are still moving:
CalChamber is asking businesses to contact their legislators and urge them to oppose these job killers. Easy-to-edit sample letters are available at www.calchambervotes.com. More than a dozen wildfires are raging up and down California, forcing evacuations and bringing tragedy and loss. The monstrous Carr fire in Shasta County has taken several lives, destroyed hundreds of residences and burned nearly 99,000 acres — and its currently only 20 percent contained. During this trying time, the California Chamber of Commerce often receives questions from the employer community about how to help their employees, and employers must remember some key obligations. Here are a few things you should know about paying employees, leaves of absences, workplace safety and planning ahead for emergencies. Paying Employees Even in an emergency, employers must be mindful of obligations under state employment laws and consider pay issues for exempt and nonexempt employees related to office closures. Employers must pay exempt employees a full weekly salary for any week in which any work is performed. If the business is closed for the whole week, however, employers don’t need to pay exempt employees. In emergencies, special pay rules apply for nonexempt employees. If your business shuts down for any of the following reasons, you must pay nonexempt employees only for the hours they worked prior to being sent home:
However, if you shut down your business at your discretion (and not for one of the above reasons), reporting time pay may be owed. When a nonexempt employee shows up for work as scheduled and is not put to work or is given less than half of his/her scheduled hours, the employee would be eligible for reporting time pay: pay for one-half of the scheduled shift, but no less than two hours and no more than four hours. Of course, employers are always free to pay employees or let them use vacation or other personal time. Many employers may choose to provide some paid time during emergency situations. Just remember to be consistent! EDD Resources for Disaster Victims and Employers The California Employment Development Department (EDD) provides a variety of disaster-related services to individuals and businesses affected by disasters in California, including assistance filing claims for unemployment insurance (UI) benefits and extensions of time for filing and paying payroll taxes. Generally, once the Governor has issued an emergency proclamation for a specific disaster area, the one-week waiting period for UI benefits is waived, and individuals can begin receiving partial wage replacement benefits for the first week they are unemployed due to the disaster. The EDD maintains a current list of state declared disasters where the waiting period has been waived. In addition, as with the wildfires last year, a Presidential Disaster Declaration makes federal Disaster Unemployment Assistance (DUA) benefits available. DUA provides temporary unemployment benefits to people whose jobs or work hours are directly impacted by emergencies. The EDD will provide updates on its website as DUA benefits become available. Employers directly affected by a disaster may request extensions of time from the EDD to file state payroll reports and/or deposit payroll taxes — some employer extensions have already been granted. The IRS also may provide help during disasters. Employers and affected workers should stay abreast of recent developments by visiting www.edd.ca.gov. Leaves of Absence for Emergency Personnel Some of your employees may serve as volunteers for local fire departments or other emergency response entities. All employers must provide leaves of absence for employees who are required to perform emergency duty. Employers are not required to compensate the employee during this time off. Leave for Health Issues Employees may be entitled to time off to deal with health issues that occur as a result of the disaster. For instance, employees may use their California mandatory paid sick leave for the care or treatment of a health condition for themselves or a family member, as defined by the law. They also may be eligible for time off for family or medical leave for themselves or to care for family members with any serious health conditions under the federal Family Medical Leave Act (FMLA) or the California Family Rights Act (CFRA). The FMLA and the CFRA cover employers with 50 or more employees and provide a maximum of 12 weeks of unpaid leave in a 12-month period. Employers may have obligations to reasonably accommodate an employee under the federal Americans with Disabilities Act (ADA) and the state Fair Employment and Housing Act (FEHA). Should an employee suffer a physical or mental injury because of a natural disaster, they may be entitled to protections under these laws. In some situations, State Disability Insurance (SDI) partial wage replacement benefits may be available for individuals injured by the disaster (non-work related injury). Similarly, Paid Family Leave (PFL) partial wage replacement benefits may be available for workers who take time off to care for a covered family member injured in the disaster. The EDD can provide support services for employers and employees with these determinations. School or Childcare Leave Employers with 25 or more employees working at the same location may need to provide unpaid time off to employees whose children’s school or child care closed due to a natural disaster, such as a fire, earthquake or flood. For emergency situations, the time must not exceed 40 hours per year. Keeping Workers Safe and Cal/OSHA Guidance Wildfires pose health hazards, Smoke can contain chemicals and fine particles that harm health. And other hazards, such as electrical hazards, unstable structures, flammable gasses, ash, soot and dust are rampant. As an employer, you have an obligation to create and maintain a safe workplace for your employees. Cal/OSHA advises employers to take special precautions to protect workers from hazards related to fires and smoke. Cal/OSHA provided guidance on how to keep workers safe in heavy smoke conditions and during fire clean-up. Planning Ahead The single, most important thing employers can do is create an Emergency Action Plan (EAP) and communicate that plan to employees. Employers should inform employees that the plan exists and what steps it outlines. All California employers are required to have an EAP designating the actions that must be taken to protect employees from fire and other emergencies. California employers must also have a Fire Prevention Plan (FPP) that details the fire hazards your employees may face and how to handle a fire should the situation arise. When employees are initially assigned to a job or transferred to a new position, the employer should review parts of the EAP and FPP employees must know so they can protect themselves in the event of an emergency. Employers should retrain employees if they change the EAP or FPP and should periodically conduct emergency training and drills. When considering emergency situations, employers should plan how they will handle and communicate office closings and determine who will make the final decision on whether or not to close. Also, determine if alternative workplaces are available, whether certain employees can work from home, or whether to shut down all work during the emergency. CalChamber members can find more information on Emergency Action Plans and Fire Prevention Plans on HRCalifornia. Cal/OSHA offers resources as well. Not a member? See how CalChamber can help you. |