Labor Committee’s Small Business Assault Largely Thwarted
In terms of the Labor and Public Employee Committee’s agenda this year, the writing was on the wall before the legislative session even began.
CBIA once again successfully advocated against virtually every one of the committee’s proposed workplace mandates this session.
However, the stars aligned for organized labor around one proposal pursued for decades—the so-called captive audience bill, SB 163.
The bill allows employees to walk out of any employer-sponsored meeting if the employee subjectively believes the employer is discussing political matters, including legislation or regulations that impact business operations or employer involvement in civic or community events.
CBIA learned early in the legislative session that despite then Attorney General George Jepsen’s warning that an identical bill was preempted by federal law back in 2019, the issue was organized labor’s top priority.
Labor’s efforts were bolstered when Attorney General William Tong testified that he believed the bill was different enough to avoid the preemption issue, without citing any legal developments or additional court precedent.
Regardless, this provided cover to sympathetic lawmakers, like many of those serving on the Labor Committee, to push the bill through the legislature.
Numerous employer groups, including CBIA, vigorously opposed SB 163, which has a particularly adverse impact on small businesses and their employees based on its ambiguous and overly broad language.
“Not only does it reflect an adversarial attitude towards employers as they work to rebuild our economy,” said CBIA’s Eric Gjede, “it’s also a flagrant preemption of federal law and if not vetoed by the governor, will be settled by the courts.”
Gjede thanked the Republican and Democratic lawmakers who opposed SB 163, adding that employers “appreciated their courage for standing up to special interests determined to destroy our ability to compete.”
State lawmakers also enacted SB 418, which bars any contractor that knowingly or willfully fails to pay the prevailing wage to any mechanic, laborer, or construction worker—or enters into a settlement agreement—from receiving public works contracts for three years.
On the bright side, a few positive employment law measures were enacted by the legislature:
HB 5248: Removes barriers to professional licensure for individuals with felonies that were unrelated to various professions. Licenses include those necessary to be a barber or cosmetician, funeral director, dietician, esthetician, social worker, art therapist, nail technician, architect, various trades, sanitarian, gas technician, pesticide, accountant, and security officer.
SB 210: Although largely just technical changes to various labor statutes, the bill eliminates the unemployment experience rate calculations based on a single year for the years 2026 and 2027.
This prevents the continuation of an unexpected problem that arose from a law enacted during the 2021 session that attempted to shield employers from a spike in experience rates related to the pandemic-driven surge in unemployment.
The fix based the normal three-year experience rate calculation off of a single year—2019. While this helped the vast majority of businesses, a few were harmed as they had unexpectedly high layoffs in 2019 and no layoffs during the pandemic.
HB 5442: Studies the effects on certain businesses that had their experience rate increase despite the passage of Public Act 21-5.
When it comes to measuring the success of CBIA’s advocacy in the Labor Committee, it’s critical to examine what didn’t happen.
The committee proposed more than than 25 private sector mandates this year. Here are some of the major bills CBIA stopped:
HB 5245: Allowed the deputization of nonprofit organizations and unions to sue employers on behalf of employees that had agreed to settle disputes by arbitration and to bundle unrelated claims.
This bill is more commonly known as the Private Attorney General Act, and has been devastating to businesses in California—the only state that has enacted it.
SB 317: Allowed striking employees to collect unemployment benefits after two weeks, despite the fact that they did not lose their job, nor are they available for work or looking for another job as is required of all other workers to collect benefits.
HB 5249: Invalidated all noncompete agreements for non-exempt (hourly) employees, exempt workers earning not less than three times the minimum wage, independent contractors earning less than five times the minimum wage, or if an employee subjectively believes the employment relationship ended for good cause attributable to the employer.
HB 5353: Required employers in the retail, restaurant or hospitality industries that have 500 or more employees, or where all franchisees collectively have 500 or more employees, to provide 14 days notice to employees of their work schedules. Any deviation from that schedule results in financial penalties to the employer.
SB 312: Expanded the state’s paid sick leave statute to require that all employers provide every employee up to five sick days per year and two weeks of COVID-19 leave.
SB 314: Required employers at warehouses employing 100 or more employees to provide information about quotas or work speed requirements to employees and imposes various penalties on employers for violations of OSHA requirement or the failure to provide employees with various requested documents.
HB 5246: Extended for another year a requirement that employers that employed but laid off after March 10, 2020 and individuals performing building services or janitorial work, contractual on-site food preparation services, hotel services, or was a third party contractor providing such services, contact that person by mail and text to let them know of any available positions for which they are qualified.
HB 5439: Makes a contractor liable for the unpaid wages of a subcontractor.
HB 5444: Adds new unfair labor practices like permanently replacing a striking employee and establishes a timeline for representatives to commence first negotiations after elected or designated.
HB 5445: Implements policies that promote hiring in state agencies, such as automatically refilling job vacancies and continuous recruitment.
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