(September 15, 2023) California legislators yesterday approved six bills designated by the California Chamber of Commerce as job killers, which will increase labor costs and create more liability for employers.
Legislators also approved a number of harmful bills, including two California constitutional amendment proposals that will make it easier to raise taxes on Californians. The proposals, ACA 1 and ACA 13, will appear before California voters on the 2024 ballot.
Two CalChamber-supported bills, SB 326 (Eggman; D-Stockton) and AB 531 (Irwin; D-Thousand Oaks), were approved and now await the Governor’s decision. These bills will help transform California’s behavioral health care system and provide the resources needed to care for and house those with the most severe mental health needs and substance use disorders.
Governor Gavin Newsom has until October 14 to sign or veto bills passed by the Legislature in the closing days of the session.
Job Killer Bills
The following job killer bills were sent to the Governor’s desk:
- AB 524 (Wicks; D-Oakland): Exposes employers to potentially costly litigation under the Fair Employment and Housing Act (FEHA) by creating an extremely broad, protected class under FEHA: employees with “family caregiver status,” which is broadly defined to include any employee who provides direct care to specified family members, but also to any person of their choosing, and the bill would create a de facto accommodation requirement that will burden small businesses.
- AB 647 (Holden; D-Pasadena): Significantly expands statute related to successor grocery employers, including disrupting ability for independent small stores to join together, expands number of workers covered under the law, and creates a significant new private right of action.
- SB 616 (Gonzalez; D-Long Beach): Imposes new costs and leave requirements on employers of all sizes, by more than doubling existing sick leave mandate, which is in addition to all other enacted leave mandates that small employers throughout the state are already struggling with to implement and comply.
- SB 627 (Smallwood-Cuevas; D-Los Angeles): Imposes an onerous and stringent process to hire employees based on seniority alone for nearly every industry, including hospitals, retail, restaurants, and movie theaters, which will delay hiring and eliminates contracts for at-will employment.
- SB 365 (Wiener; D-San Francisco): Discriminates against use of arbitration agreements by requiring trial courts to continue trial proceedings during any appeal regarding the denial of a motion to compel, undermining arbitration and divesting courts of their inherent right to stay proceedings.
- SB 799 (Portantino; D-Burbank): Allows striking workers to claim UI benefits when they choose to strike. Because the UI Fund is paid for entirely by employers, SB 799 will effectively add more debt onto California employers. Moreover, SB 799 will effectively force employers to subsidize strikes at completely un-related businesses because the UI Fund’s debt adds taxes for all employers, regardless of whether they’ve had a strike.
Former Job Killers
Two former job killer bills also passed:
- SB 525 (Durazo; D-Los Angeles): Increases minimum wage for health care workers to $25 in stages. Job killer tag and opposition removed due to September 11, 2023, amendments. CalChamber neutral.
- SB 723 (Durazo; D-Los Angeles): Imposes an onerous and stringent process for specific employers to return employees to the workforce for specified industries, including hotels and restaurants that have been disproportionally impacted by this pandemic, and removes guardrails on existing law by making mandate permanent and significantly broadening the applicability of the law. Job killer status removed due to September 7, 2023, amendments. CalChamber still opposes.
Some of the CalChamber-opposed bills passed by the Legislature include:
- AB 594 (Maienschein; D-San Diego): Allows all public prosecutors to enforce significant portion of the Labor Code, risking inconsistent enforcement and with no protection against additional recovery under a subsequent PAGA lawsuit.
- AB 652 (Lee; D-San Jose): Increases regulatory red tape through creating a duplicative advisory committee.
- AB 1048 (Wicks; D-Oakland): Increases premiums for California’s employers and employees by prohibiting plans and insurers that cover dental services from imposing dental waiting periods or preexisting condition provisions.
- SB 253 (Wiener; D-San Francisco): Imposes a mandatory climate tracking, and auditing on climate emissions that will fall heavily on all California businesses, impacting competitiveness and increasing costs.
- SB 261 (Stern; D-Canoga Park): Requires any business with revenues over $500 million annually to prepare a climate financial risk assessment on its holdings including any supply chain assets.
The following are some of the CalChamber-supported bills that were passed:
- AB 531 (Irwin; D-Thousand Oaks): Provides $6.38 billion to fund critically needed behavioral health treatment beds and supportive housing through a general obligation bond measure.
- SB 326 (Eggman; D-Stockton): Restructures California’s behavioral health services programs to provide services for substance use disorders and move homeless individuals to shelter for treatment.
- SB 420 (Becker; D-Menlo Park): Reduces approvals required for upgrades to existing projects and new projects at the sub-transmission and distribution level located in designated areas.
- SB 619 (Padilla; D-Chula Vista): Expands the facilities eligible to be certified as environmental leadership development projects by the Energy Commission to include electrical transmission projects at the sub transmission and transmission level.
- SB 621 (Caballero; D-Merced): Reduces pharmaceutical costs and premiums for employers by allowing plans and insurers to utilize less expensive but equally as effective biosimilar drugs prior to administering a reference biologic.