Two California Chamber of Commerce job killer bills made it out of the Legislature late on August 31, the last night of the session, and are headed to the Governor’s desk.
Governor Gavin Newsom has until September 30 to sign or veto these bills.
California’s businesses are enduring historic economic hardship and challenges, and have been struggling simply to continue operations and avoid going completely out of business. It is more critical than ever that they are not saddled with new and unworkable mandates that will slow the economy and further cripple the state’s job creators.
September 17 Update: The Governor has signed SB 1383. Read CalChamber statement.
SB 1383 significantly burdens small employers by requiring small employers with only five employees to provide eligible employees with 12 weeks of mandatory family leave, which can be taken in increments of 1–2 hours, and threatens these small employers with costly litigation if they make any mistake in implementing this leave.
The bill also is problematic because the leave it mandates is enforced through a private right of action that includes compensatory damages, injunctive relief, declaratory relief, punitive damages, and attorney fees. Any employee who believes an employer did not properly administer the leave, interfered with the leave, or denied the leave, can file litigation.
Lastly, even though the leave required in SB 1383 is not “paid” by the employer, that does not mean the employer will not endure added costs. The leave is “protected,” meaning an employer must return the employee to the same position the employee had before going out on leave. This means holding a position open for three months or more.
This 12-week leave of absence on small employers cannot be viewed in isolation, but must be considered with regard to all of the other California-specific leaves employers must juggle, such as Pregnancy Disability Leave (up to four months); workers’ compensation injury (amount of leave based upon doctor’s recommendation); and California Paid Sick Leave (minimum of 3 days), among many others.
AB 3216 imposes an onerous and stringent process for specific employers to return employees to the workforce, which will delay rehiring and subject employers to litigation for any alleged mistakes.
The bill establishes a new “right to recall” requirement that applies to certain hotels, event centers, airport hospitality operations, or the provision of building services to office, retail, or other commercial buildings. These rights also extend where an employer goes out of business and there is a change in control or ownership.
Among other things, AB 3216 requires covered employers not only to offer to rehire the employee who held the same position, but also to offer the position to any employee who “is or can be qualified for the position.” This is vague and unworkable and would appear to require the employer to offer almost any position to employees by order of seniority as virtually any employee “is or can be qualified” for a given position with appropriate training.
Lastly, since AB 3216 establishes a new section of the Labor Code, any violation (even a technical or minor one) would subject a business to liability under the Labor Code Private Attorneys General Act (PAGA).
The CalChamber is urging members to contact the Governor and ask him to veto SB 1383 and AB 3216.