Two Job Killer Bills Advance in Senate

Two California Chamber of Commerce-opposed “job killer” bills that could increase business costs and impose new liabilities on innocent businesses passed the Senate Labor and Industrial Relations Committee last week.

AB 1522 (Gonzalez; D-San Diego) seeks to increase employer mandates by requiring all employers, large and small, to provide all employees in California with paid sick leave, and provides statutory penalties as well as litigation for alleged violations.

The bill requires that all employers provide any employee who has worked in California for thirty days with paid sick leave, at an accrual rate of one hour for every 30 hours worked. Any unused sick leave accrued in the preceding year could be carried over to the next year, which is a significant change in existing law. Although many employers voluntarily offer sick leave for full-time employees, mandating that employers provide paid sick leave to temporary, seasonal, and part-time employees will create a huge burden on employers.

AB 1897 (Hernández; D-West Covina) would impose liability on any contracting entity for the contractor’s wage and hour violations, lack of workers’ compensation coverage and/or failure to remit employee contributions, despite the lack of any evidence that the contracting entity controlled the working conditions or wages of the contractor’s employees.

Recent amendments to the bill exempted some businesses, but the overwhelming majority of employers in California will still be held liable for the wage-and-hour violations of another entity that they could neither control nor prevent. AB 1897 also could create significant litigation because any violation of AB 1897 would trigger a potential representative action under the Labor Code Private Attorney General Act (PAGA), Labor Code Section 2699, et seq., thereby expanding the threat of litigation against any third party that utilizes contractors as part of its usual course of business.

Both AB 1897 and AB 1522 will be considered next by the Senate Judiciary Committee. The CalChamber is urging members to contact their senators and committee members to ask them to oppose these bills.

Source: CalChamber, “HR Watchdog” Blog