One thing that most business owners agree on is that California is not the easiest or often the most financially wise place to do business. The Labor laws in CA are so radical and ever-changing that it’s almost impossible for even the most informed to navigate through the legal landscape (ie. minefield) that’s become the norm for CA. One example, right off the top of my head is a section of the California Occupational Safety and Health Act (Cal/OSH). The law actually mandates the acceptable temperature for the toilet seats CA employees can use (it’s 68 degrees by the way). Yep, we have a law for that. You just can’t make this stuff up.
Things can get better for employers, right? Business owners and developers hope for better days ahead, and more business-friendly legislation in our beautiful Golden State. So, can we look forward to more business friendly legislation? Well, probably not for 2016. The CA Chamber of Commerce has just released its preliminary list of “job killer” bills that have been proposed in the 2015 California Legislature for 2016. I’m sorry to say, the outlook for the next year is not promising.
Before we even look at those new proposed legislation, let’s step back and remind the lawmakers that California holds the honored position of forth place for the highest rate of unemployment in the country at 6.7%. Businesses are already fleeing to more employers friendly States like Texas and Nevada at an alarming rate. CA is already saying goodbye to tons of tax revenue on a daily basis and legislators are being told over and over “It’s too expensive to do business in California”.
So what’s on the docket for 2016? There are currently 16 proposed laws, including four new “Increased Labor Costs” mandates, and one “Increased Unnecessary Litigation Costs” mandate, which will directly impact California employers should the bills become law. Chamber President and CEO Allan Zaremberg said that the preliminary list for the 2016 potential new laws “represents the worst of the worst” in proposed legislation. “These proposals will unnecessarily increase costs on California employers” for yet another year.
Here’s a quick peak at what has been proposed:
• AB 357 – Predictable Scheduling Mandate and Predictability Pay For Food and Retail Establishments: This proposed Act would require food and retail establishments to provide employees with two weeks’ advance notice of their schedules and additional “predictability pay” when the retail establishment cancels or reschedules its employees’ shifts. The bill would further require food and retail establishments to allow employees to take unpaid absences for up to eight hours twice per year to attend required appointments at county human services agencies.
• SB 3 – Automatic Minimum Wage Increase: Raises the minimum wage to $11 per hour by January 1, 2016 and $13 per hour by July 1, 2017. The results of this law would increase California’s minimum wage by more than 40% over the next two years.
• SB 406 – Expansion of California Family Rights Act: This proposed legislation would redefine “employer” under the California Family Rights Act to include all employers with at least 5 employees within 75 miles of the employee’s worksite instead of the already restrictive number being set at least 50 employees within a 75-mile radius.
• SB 563 – Increase in Workers’ Compensation Costs: do you remember a few years ago when the big push was to lower employers Workman Comp costs? This bill would prohibit the utilization review process for certain treatment recommendations, resulting in increasing the cost of workers’ compensation for employers. The bill would further require employers to file with the administrative director methods of compensation and any incentive payments contingent upon the approval, modification, or denial of a claim for an individual or entity providing services pursuant to the utilization review process.
And last, but not least:
• AB 465 – Bars Mandatory Arbitration Agreements: The proposed legislation provides that employers cannot make it a condition of employment to require a waiver of a legal right, forum or procedure. This would result in precluding mandatory pre-dispute employment arbitration agreements, which many California employers currently use to guard against the high costs of litigation resulting in juried court proceedings.
As Georgie Boorman, writer for the Federalist, summed it up: “The Golden State’s labor code is prescriptive without being clear, mandatory without accounting for an array of working relationships, and burdensomely superfluous without producing significant benefit to the workers it claims to protect. Indeed, it sometimes works against them. One wonders how a business can survive under the burden of California’s regulations. Will more and more small businesses in California be able to grow and prosper in the sands of the Golden State without sinking completely? Sorry to say, it doesn’t look good for 2016.
Eileen has practiced HR for over 30 years and has served in both large companies and boutique companies, including Disney, Hasbro, and Umpqua Bank. She currently serves on the board of directors for the EDD/EAC as well as the NCHRA. A Bay Area native, Eileen enjoys visiting Lake Tahoe, reading, and spending time with her family.