Reliable energy infrastructure is a hallmark of a modern world, and affordable power is vital for economic development and social cohesion. Ensuring that electricity is both affordable and reliable are ultimately the responsibility of our state government leaders when they set the ground rules for how electricity is generated and how it is transmitted around the grid. California’s world-leading greenhouse gas reduction efforts have curbed the state’s carbon footprint, but have also resulted in more expensive electricity and greater challenges to utilities to maintain service reliability, issues of great concern to California businesses. Just as the Legislature has led the way in insisting that more of our electricity come from renewable sources, it must also have a plan to ensure that our electricity grid can deliver power when businesses and residents need it, at the most affordable rates possible. That’s why business groups are encouraging the Legislature to approve legislation that could reshape the future of the state’s energy infrastructure and lower energy costs for consumers and businesses. AB 813, authored by Assemblyman Chris Holden, D-Pasadena, sets the stage for the development of a western regional energy market that would allow California and neighboring states to integrate their energy resources and meet rapidly changing supply and demand conditions in an electricity system increasingly reliant on renewables. Regional energy markets function in a straightforward manner. In a regional market, when the sun is shining in California and producing an oversupply of solar energy within the state, that energy can be exported to other states. Likewise, when the wind is blowing in abundance in the Northwest and creating a surplus of power there, that energy can be imported cheaply to meet demand in California when our own state’s renewable energy resources are unable to meet it. In the absence of a Western regional market, large swings in electricity oversupply and undersupply conditions could increase, threatening the reliable delivery of power. Both scenarios are occurring with more frequency each passing year. When California renewable energy generators are overproducing, solar and wind plants are forced to curtail their output or sell their energy at a loss — undermining the value of the investments California businesses and homeowners have made. On the other hand, when renewable generation is unable to meet demand, the reliability of the state’s grid is threatened, and California is typically forced to rely on fossil fuel generators that are more expensive, undercut our environmental goals and increase the cost of electricity. The economic benefits of such a system are clear. A regional energy market has the potential to reduce energy costs in all participating states by integrating diverse generating resources into a single coordinated grid. A recent economic study estimates that a regional system will reduce energy costs for California households and businesses by up to $1.5 billion annually by 2030, along with boosting the state’s economy and income. AB 813 will incentivize other states in the region who are not as far along in developing renewable energy sources to speed things up. The bill will create a ready market for renewables where one state provides clean power to others during the times when they must now rely on less clean sources of energy like coal. The plan is a win-win because it helps us meet our own environmental goals while also lowering energy prices for consumers who will benefit from access to surplus electricity generated by renewable sources from states that may otherwise dump that power. A Western grid is especially important for cities like San Diego, which is aiming to boost its use of renewable energy to meet citywide electricity demand over the next two decades. An integrated regional grid could help ensure the city has access to the renewable resources it needs to meet its energy demand in a secure, reliable fashion. The promise of energy cost savings and reliability is why the California Chamber of Commerce and many other business groups join Gov. Jerry Brown in supporting a regional energy market. We need a system that will help California meet its climate change goals and mitigate future cost increases. Allan Zaremberg is president and CEO of the California Chamber of Commerce. More Battles Ahead When Legislators Return A review of action on major legislation for business before the Legislature began its summer recess on July 6 shows both good and disappointing outcomes for the employer community. On the plus side was the passage of California Chamber of Commerce-supported job creator education and film tax credit bills as part of the state budget package (see June 29 Alert), as well as a CalChamber-sponsored job creator that enables businesses to avoid hiring repeat sexual harassment offenders. In addition, strong opposition from the CalChamber and its coalitions of business/industry groups and local chambers of commerce helped stop several job killer sbills or provided pressure to secure amendments removing the more onerous provisions of job killers and other CalChamber-opposed proposals. Still, a number of employment-related job killers continue to move in the Legislature and a costly privacy bill increasing business liability was signed into law and requires clean-up amendments (see story here). Many positive and negative proposals will face critical hearings in the fiscal committees of both the Senate and Assembly when legislators return from their summer break in August. Protection from Serial HarassersGovernor Edmund G. Brown Jr. signed on July 9 a CalChamber-sponsored job creator bill that protects sexual harassment victims and employers from being sued for defamation. AB 2770 (Irwin; D-Thousand Oaks) codifies case law to ensure victims of sexual harassment and employers are not sued for defamation by the alleged harasser when a complaint of sexual harassment is made and the employer conducts its internal investigation. This bill also provides additional protections to employers by expressly allowing employers to inform potential employers about the sexual harassment investigation and findings. The bill has been tagged as a job creator because reducing the cost of frivolous litigation allows an employer to utilize these financial resources to grow its workforce. AB 2770 passed the Legislature with unanimous bipartisan support. CalChamber sponsored AB 2770 because alleged harassers are not only suing victims, but also filing suit against employers for defamation. Such lawsuits put employers in an impossible position as they have an affirmative duty to take reasonable steps to prevent and promptly correct harassment. Even worse, if the alleged harasser’s employment is then terminated, or the alleged harasser resigns, employers are put in an even more difficult position. The company has knowledge of the harassing activity and yet its hands are tied. If the company tells a potential employer that the employee was accused of harassing conduct, the company is on the hook for a defamation claim. If the company stays silent, the harasser is then free to victimize more individuals at his/her next job without anyone at the new company ever knowing about the unacceptable behavior. AB 2770 will protect employers and allow them to warn potential employers about an individual’s harassing conduct during a reference check without the threat of a defamation lawsuit. Status Update he following list summarizes top priority bills for the California Chamber of Commerce and their status as of July 6, when the Legislature began its summer recess. Within each subject area, the list presents bills in order of priority with the highest priorities at the top. The CalChamber will publish a second status report in September, showing the status of priority legislation when the Legislature begins its final recess on August 31. September 30 is the last day for the Governor to sign or veto bills passed by the Legislature and in the Governor’s possession on or after September 1. The CalChamber will publish its final status report, showing the ultimate fate of bills sent to the Governor this year, in October. Status of legislative action on bills as of July 6, 2018. Dates listed are the date the bill was assigned to a committee, the latest date of committee action, the next hearing date or when the bill reached the floor, unless action is stated. Download a Print Friendly PDF report here. Agriculture, Food and Natural ResourcesLawsuit Exposure. AB 1335 (Bonta; D-Oakland) Increases frivolous liability claims and exposes beverage manufacturers and food retailers to fines and penalties by mandating state-only labeling requirements for sugar-sweetened drinks. Oppose. Senate Appropriations Hearing 8/6/18 Product Ban. AB 2422 (Bloom; D-Santa Monica) Increases costs to businesses to exterminate pests by banning pesticides containing anticoagulants. Oppose Assembly Water, Parks & Wildlife 4/11/18; Failed Deadline Land Use Restrictions. AB 2528 (Bloom; D-Santa Monica) Potentially limits private land use by expanding areas protected for non-endangered species. Punishes landowners who managed their lands in a way to enhance the habitat of nearby species. Oppose Unless Amended. Senate Appropriations Hearing 8/6/18 Migratory Birds. AB 2627 (Kalra; D-San Jose) Restricts land use by imposing new requirements on the take on migratory nongame birds. Oppose Senate Appropriations Hearing 8/6/18 Defensible Space. AB 1954 (Patterson; R-Fresno) Encourages rural landowners to clear vegetation and timber within 300 feet of a habitable structure without the need for a costly Timber Harvest Plan in order to reduce the spread of wildfires. Support. Senate Floor 7/2/18 Coastal Agriculture. AB 2754 (Levine; D-San Rafael) Helps agriculture operations stay viable in the coastal zone by clarifying their practices are not development activities but rather ongoing and routine maintenance. Support. Assembly Natural Resources 3/19/18; Failed Deadline Timber Harvest Plans. AB 2889 (Caballero; D-Salinas) Expedites the permitting process for a Timber Harvesting Plan (THP). Directs the Department of Forestry to provide guidance and assistance to THP applicants. Support. Senate Appropriations Hearing 8/6/18 Small Business Grants. AB 2335 (Ting; D-San Francisco) Encourages small food stores located in low-income communities to stock fresh fruits and vegetables through grants for refrigeration units. Support. Held in Senate Appropriations Suspense File 7/2/18 Burdensome Regulations. SB 1414 (Beall; D-San Jose) Imposes additional and unnecessary regulations on one company regarding its Timber Harvest Plans. Oppose. Senate Appropriations Suspense File 5/22/18; Failed Deadline Eggs. AB 3021 (Levine; D-San Rafael) Requires all eggs produced and sold in California to be from cage-free hens by 2024. Levels the playing field for producers in California by incorporating federal standards into state law and staggering implementation. Support. Held in Senate Appropriations Suspense File 7/2/2018 Air QualityVehicle Ban. AB 1745 (Ting; D-San Francisco) Bans the sale of combustion engine vehicles in the state by prohibiting the registration of a new vehicle in the state after 2040 unless it is a zero-emission vehicle. Oppose/Job Killer 2018. Assembly Transportation 1/16/18; Failed Deadline Refrigerant Ban. SB 1013 (Lara; D-Bell Gardens) Imposes a costly policy for banning certain fluorinated gasses without transparency and without consideration of alternative methods by exempting the rulemaking process from the Administrative Procedures Act. Opposition removed June 4, 2018 due to amendments. No Position. Assembly Appropriations 6/25/18 Banking and Finance Costly Litigation Against Small Employers. AB 2527 (Muratsuchi; D-Torrance) Exposes small businesses who are seeking financial investors in their company to devastating class action litigation by banning the use of arbitration agreements, which is preempted by the Federal Arbitration Act, prohibiting class action waivers, allowing for the award of treble damages, punitive damages, and attorney’s fees, and interferes with contractual negotiations between sophisticated parties by dictating the choice of forum and choice of law for such litigation. Oppose/Job Killer 2018. Assembly Banking & Finance 3/5/18; Failed Deadline Redundant Requirements. SB 818 (Beall; D-San Jose) Before amendments, reinstated onerous unfair paperwork requirements on banks dealing with foreclosures when no crisis exits and is duplicative of federal law. Opposition removed due to June 21, 2018 amendments. No Position. Assembly Appropriations 6/26/18 Translation of Documents. SB 1201 (Jackson; D-Santa Barbara) Before amendments, opened banks up to liability for misunderstood loan modification documents written in non-English languages prepared by the banks. Opposition removed due to amendments agreed to in Senate Banking and Financial Institutions Committee. No Position. Assembly Appropriations 6/26/18 California Environmental Quality Act (CEQA) Increases Costs and CEQA Litigation. AB 2447 (Reyes; D-Grand Terrace) Before amendments, invited more litigation and increased the complexity and cost of California Environmental Quality Act (CEQA) compliance by 1) requiring local agencies to make a finding as to the discriminatory intent or effect of a proposed project, 2) forcing the local agency to incorporate all oral and written comments from the scoping process into the environmental review document regardless of its accuracy or relevancy, and 3) allocating responsibility for identifying what constitutes a “subject land use” for which new notice provisions will apply to the Office of Environmental Health Hazard Assessment. Job killer tag removed due to April 26, 2018 amendments. Opposition removed due to May 25, 2018 amendments. No Position/Former Job Killer 2018. Senate Appropriations Hearing 8/6/18 Expedites CEQA Process. AB 2341 (Mathis; R-Visalia) Simplifies the environmental review process under the California Environmental Quality Act for refurbishing, converting, repurposing, or replacing existing buildings by stating that lead agencies are not required to perform an aesthetic impacts analysis for such projects so long as they meet certain criteria. Support. Senate Environmental Quality 6/14/18 Expedites CEQA Process for Santa Rosa Post-Wildfire. AB 2267 (Wood; D-Healdsburg) Exempts from the requirements of the California Environmental Quality Act for five years the adoption or approval of amendments to the Downtown Station Area Specific Plan for the City of Santa Rosa and exempts the approval of residential projects that are consistent with the amended Downtown Station Area Specific Plan. Support. Senate Appropriations Hearing 8/6/18 Streamlines CEQA. AB 3030 (Caballero; D-Salinas) Incentivizes investment in California Opportunity Zones by creating a statutory exemption for affordable housing and mixed-use projects that meet very specific environmental qualifying criteria, thereby balancing environmental protection with much-needed economic development in some of California’s poorest communities. Support. Senate Appropriations Hearing 8/6/18 Promotes Housing Development. AB 1804 (Berman; D-Palo Alto) Expedites infill development by expanding the existing California Environmental Quality Act exemption for infill projects to unincorporated areas already surrounded by urbanized land uses and populations. Support. Senate Appropriations Hearing 8/6/18 Expedites and Reduces Costs for Roadway Repair and Maintenance Projects. AB 1901 (Obernolte; R-Big Bear Lake) Streamlines infrastructure development by extending indefinitely, the current CEQA exemption for certain roadway repair and maintenance projects. Support. Senate Environmental Quality 6/20/18 Reforms CEQA. AB 2782 (Friedman; D-Glendale) Improves environmental review under the California Environmental Quality Act by authorizing lead agencies to more comprehensively analyze the pros and cons of a project by considering specific economic, legal, social, technological, or other benefits of, and negative impacts of denying, the proposed project. Support. Senate Appropriations Hearing 8/6/18 Expedites Transportation Projects. AB 1905 (Grayson; D-Concord) Streamlines the construction of transportation projects by precluding a court from enjoining construction due to a challenge under the California Environmental Quality Act when certain conditions have been satisfied. Support Assembly Natural Resources 2/5/18; Failed Deadline Expedites Housing Projects. AB 2856 (Melendez; R-Lake Elsinore) Streamlines the construction of housing projects by precluding a court from enjoining construction due to a challenge under the California Environmental Quality Act when certain conditions have been satisfied. Support. Assembly Natural Resources 3/8/18; Failed Deadline Extends CEQA Streamlining Benefits to Community Plans. SB 948 (Allen; D-Santa Monica) Streamlines the environmental review process under CEQA for community plans that, among other requirements, do not result in any additional net greenhouse gas emissions and will result in a minimum investment of $100,000 in California. Support. Senate Judiciary 4/19/18; Failed Deadline Increases Transparency in CEQA Litigation. SB 1052 (Bates; R-Laguna Niguel) Requires the disclosure of the identity of a person or entity that contributes in excess of $100 toward a CEQA cause of action and that failure to disclose shall result in a dismissal of the action or denial of attorneys’ fees. Support Senate Environmental Quality 4/18/18; Failed Deadline Streamlines CEQA Litigation. SB 1340 (Glazer; D-Contra Costa) Streamlines the CEQA litigation process for much needed housing projects by requiring Judicial Council to adopt a rule requiring courts to fully adjudicate CEQA actions and proceedings relating to any housing project within 270 days of certifying the environmental review document. Support. Senate Judiciary 4/10/18; Failed Deadline Increases Transparency and Expedites CEQA Process. SB 1341 (Glazer; D-Contra Costa) Requires the disclosure of the identity of a person or entity that contributes in excess of $1,000 toward a CEQA cause of action but allows a court to withhold the public disclosure if confidentiality clearly outweighs the public interest in disclosure. Also precludes a litigant from challenging a housing project included in a plan or project that already has been approved following a full CEQA review except on limited grounds. Support. Senate Environmental Quality 4/4/18; Failed Deadline Climate Change Zero-Emission Vehicles. SB 1014 (Skinner; D-Berkeley) Before proposed amendments, imposed unnecessary burdens on transit network carrier drivers by requiring all miles delivered by transit network carriers to be delivered by zero-emission vehicles. Opposition removed due to proposed amendments. No Position. Assembly Appropriations 7/5/18 Corporate Governance Unconstitutional Board Mandate for Publicly Traded Corporations. SB 826 (Jackson; D-Santa Barbara) Requires a publicly traded corporation to satisfy quotas regarding the number of women on its board or face significant penalties, which is likely unconstitutional, a violation of California’s Civil Rights statute, and a violation of the internal affairs doctrine for publicly held corporations. Oppose. Assembly Appropriations 6/26/18 CrimeNew Penalty. AB 1065 (Jones-Sawyer; D-South Los Angeles) Helps limit retailers’ losses from thefts by strengthening penalties by creating a new Organized Retail Crime felony in California law. Support. Senate Floor 5/29/18 Economic Development/Local Government Statewide Economic Development Strategic Action Plan. AB 2596 (Cooley; D-Rancho Cordova) Requires the Governor’s Office of Business and Economic Development (GO-Biz) to lead the preparation of a California Economic Development Strategic Action Plan, with the goal of creating a process by which the office can identify economic challenges that confront the state. Support. Senate Appropriations Hearing 8/6/18 Extended Alcohol Hours. SB 905 (Wiener; D-San Francisco) Creates pilot program giving six cities the ability to extend alcohol sales to 4 a.m. after meeting certain criteria. Support. Assembly Appropriations 7/3/18 Education Career Technical Education. AB 1808 (Committee on Budget) Incorporates job creator policy from AB 1743, which extends and improves the Career Technical Education Incentive Grant program, which provides students with necessary training and education to prepare them for a variety of career options. Support. Signed 6/27/18—Chapter 32 Career Technical Education. AB 1809 (Committee on Budget) Incorporates job creator policy from SB 1243, which establishes the California STEM (Science, Technology, Engineering and Mathematics) Pathways Grant Program, providing $10 million for selected schools to create public-private partnerships to prepare students for high-skilled, high-demand jobs in technology, manufacturing, health care and finance. Support. Signed 6/27/18—Chapter 33 Career Technical Education. AB 1743 (O’Donnell; D-Long Beach) Extends and improves the Career Technical Education Incentive Grant program, which provides students with necessary training and education to prepare them for a variety of career options. Policy included in signed budget trailer bill (see AB 1808). Support/Job Creator 2018. Senate Education 6/7/18 Career Technical Education. SB 1243 (Portantino; D-La Cañada Flintridge) Appropriates $25 million to create the California State Pathways in Technology program, to create public-private partnerships to prepare students for high-skilled, high-demand jobs in technology, manufacturing, health care and finance. Policy included in signed budget trailer bill (see AB 1809). Support/Job Creator 2018. Assembly Higher Education 6/7/18 Career Technical Education. SB 842 (Committee on Budget and Fiscal Review) Incorporates job creator policy from SB 1243, which establishes the California STEM Pathways Grant Program, providing $10 million for selected schools to create public-private partnerships to prepare students for high-skilled, high-demand jobs in technology, manufacturing, health care and finance. Policy included in signed budget trailer bill (see AB 1809). Support. Assembly Floor 6/14/18 Career Technical Education. SB 843 (Committee on Budget and Fiscal Review) Incorporates job creator policy from AB 1743, which extends and improves the Career Technical Education Incentive Grant program, which provides students with necessary training and education to prepare them for a variety of career options. Policy included in signed budget trailer bill (see AB 1808). Support. Assembly Floor 6/14/18 Onerous Disclosure Requirements. AB 2361 (Weber; D-San Diego) Imposes onerous disclosure requirements on contractors of the University of California that will force public reporting of proprietary information as well as personal employee data, with the threat of barring the contractor from bidding on any contract for five years if the contractor makes a mistake or omission. Oppose. Senate Appropriations Hearing 8/6/18 Aerospace Institute. SB 1356 (Wilk; R-Antelope Valley) Contingent upon a budget appropriation, would create an Aerospace Institute at the Antelope Valley College through a public-private partnership. This partnership will allow California to locally develop the talent needed to meet the workforce needs of the global aerospace manufacturing industry. Support. Assembly Appropriations 6/19/18 Education Accountability. AB 3188 (Thurmond; D-Richmond) Encourages schools to prioritize both career and college preparation for students which will help reduce drop out rates, increase graduation rates, and better prepare students for the workforce. Support. Senate Floor 7/2/18 Probationary Teachers. AB 1220 (Weber; D-San Diego) Increases from two to three years the probationary period for new teachers, and for those teachers whose probation is extended to a third year, adds a directed individualized professional improvement plan to increase the prospect for classroom success. Support. Senate Education 6/26/18 Elections and Fair Political Practices Prohibits Compensation on a Per Signature Basis. AB 1947 (Low; D-Campbell) Denies the right to address grievances with government through initiatives, referendums and recalls by making it a misdemeanor for a person to pay for signature collection on a per-signature basis for state or local initiatives, referendums or recall petitions. Oppose Held in Senate Appropriations Suspense File 6/25/18 Prohibits Compensation on a Per Signature Basis. SB 1394 (Newman; D-Fullerton) Denies the right to address grievances with government through initiatives, referendums and recalls by making it a misdemeanor for a person to pay for signature collection on a per-signature basis for state or local initiatives, referendums or recall petitions. Oppose Assembly Elections and Redistricting 6/11/18; Failed Deadline Energy Threatens Energy Reliability. AB 127 (Committee on Budget) Threatens energy reliability and will lead to the elimination of jobs by mandating the closure of the Aliso Canyon Natural gas storage facility. Oppose Unless Amended/Two Year Job Killer. Senate Budget and Fiscal Review 2/15/18 Energy Efficiency and Grid Reliability. AB 813 (Holden; D-Pasadena) Increases efficiency and reliability of energy grid by allowing for sale of excess energy and options for meeting peak energy usage. Following 2018 gut and amend, 2017 oppose unless amended changed. Support. Senate Appropriations Hearing 8/6/18 Increased Energy Costs. SB 100 (de León; D-Los Angeles) Increases the cost of energy by creating an ambiguous zero-carbon energy by 2045 planning goal and requirements for regulatory agencies in the state. Oppose. Assembly Utilities & Energy 7/3/18 Mandates Perfection. AB 1552 (Quirk-Silva; D-Fullerton) Imposes a monetary penalty on public utility companies for late paying an invoice from small businesses or minority owned small businesses without regard for the reason. Oppose. Senate Energy, Utilities & Communications 4/19/18; Failed Deadline Increased Rates. SB 64 (Wieckowski; D-Fremont) Arbitrarily imposes severe limitations on the operation of energy-generating facilities and unnecessarily increases costs for ratepayers by creating a short list of facilities subject to immediate shutdown with only 24 hours’ notice on days when forecasts predict air quality will not attain state/federal standards. Also jeopardizes state’s ability to maintain a reliable electric grid when demand is high while ignoring other air pollution sources. Oppose. Assembly Appropriations 7/3/18 Increased Costs. AB 893 (E. Garcia; D-Coachella) Will substantially increase rates to California ratepayers by requiring procurement of a large amount—3,500 megawatts—of additional geothermal power. Favors one technology over all others in meeting renewable portfolio standard goals, threatening existing renewable jobs and creating a procurement process outside of the current “least-cost, best-fit” competitive procurement process. Creates incentives for utilities to purchase out-of-state power to satisfy the 3,500 MW mandate, threatening even more California jobs. Oppose. Senate Appropriations Hearing 8/6/18 Increased Energy Costs. AB 2431 (Weber; D-San Diego) Increases the cost of energy by expanding the pool of applicants eligible to receive intervenor compensation to include school districts and community colleges. Oppose. Held in Assembly Appropriations Suspense File 5/16/18; Failed Deadline Increased Energy Cost. AB 3232 (Friedman; D-Glendale) Before amendments, would have increased the cost of energy by adding an additional greenhouse gas emissions target on top of already-existing energy efficiency targets. Opposition removed due to May 29, 2018 amendments. No Position. Senate Appropriations Hearing 8/6/18 Increased Energy Costs. AB 3001 (Bonta; D-Oakland) Increases compliance costs by changing the definition of cost-effectiveness in order to favor non-fossil forms of energy. Oppose. Assembly Natural Resources 3/12/18; Failed Deadline Equal Application of Renewable Definition. AB 2809 (Patterson; R-Fresno) Current law allows only small hydroelectric facilities to qualify as renewables under the Renewable Portfolio Standard. Expands the definition of hydroelectric-powered renewables to include existing and future facilities, allowing more flexible procurement and keeping rates lower. Support. Assembly Utilities & Energy 3/8/18; Failed Deadline Provides Energy Certainty. AB 1879 (Santiago; D-Los Angeles) Provides certainty to business by allowing a natural gas supplier to provide a new natural gas connection to homes and businesses in the state. Support. Senate Appropriations Hearing 8/6/18 Environmental Regulation Redundant and Unnecessary Oil Well Testing. AB 3146 (Holden; D-Pasadena) Ignores existing federal, state and local air district compliance/enforcement regulations already in place by requiring duplicative and costly testing and monitoring requirements for idle oil wells. Oppose. Assembly Floor 5/29/18; Failed Deadline Jeopardizes Existing and Future Energy Production. SB 834 (Jackson; D-Santa Barbara) Takes away California’s ability to produce its own resources in state lands by repealing existing authority from the California State Lands Commission to issue, renew, modify or extend a lease or conveyance for oil and natural gas production if the lease would result in an increase of production from federal waters. Oppose. Assembly Appropriations 6/25/18 Jeopardizes Existing and Future Energy Production. AB 1775 (Muratsuchi; D-Torrance) Takes away California’s ability to produce its own resources in state lands by repealing existing authority from the California State Lands Commission to issue, renew, modify or extend a lease or conveyance for oil and natural gas production if the lease would result in an increase of production from federal waters. Oppose. Senate Appropriations Hearing 8/6/18 Undermines California Office of Spill Prevention and Response. AB 2864 (Limón; D-Goleta) Before amendments, provided the California Coastal Commission with regulatory authority, rather than an advisory role, equal to that of the California Department of Fish and Wildlife Office of Spill Prevention and Response despite the Commission having no institutional experience or staff expertise to play such a role. Opposition removed due to May 25, 2018 amendments. No Position. Senate Appropriations Hearing 8/6/18 Sidesteps Safer Consumer Products Program Process. AB 2787 (Quirk; D-Hayward) Despite Department of Toxic Substances Control deciding not to regulate and removing lead-based fish tackle from its Draft 2018-20 Priority Product Work, before amendments, this bill politically rather than scientifically would have banned such tackle to the detriment of anglers, jobs, and at a potential loss of recreational fishing-related expenditures in the state. Opposition removed due to May 25, 2018 amendments. No Position. Senate Rules 7/5/18 Increases Costs On Microfiber Products. AB 2379 (Bloom; D-Santa Monica) Prematurely imposes new costly and misinformed labeling requirements on polyester microfiber products when scientific and academic research on the root cause of emissions from non-apparel textile sources is uncertain. It also places enormous liability on retailers who would be required under this bill to ensure that every piece of clothing sold into the California market that contains 50% synthetic material to have these California-only labels in two places. Oppose. Assembly Inactive File 6/4/18; Failed Deadline Increased Costs for Hazardous Waste Operators. AB 2094 (Kalra; D-San Jose) Imposes unnecessary new costs on hazardous waste permit operators and further delays permit processing by arbitrarily increasing the frequency of inspections for hazardous waste facilities rather than focusing on improving the existing inspection process. Oppose. Senate Appropriations Hearing 8/6/18 Expands Lead Paint Liability. AB 2803 (Limón; D-Goleta) Extends public nuisance liability far beyond the seminal case-law regarding lead paint pigment public nuisance liability to apply to any residential home in the State of California where lead paint is found either inside or outside the home. Oppose. Senate Appropriations 6/20/18 Improves Hazardous Waste Permitting Process. AB 2606 (Fong; R-Bakersfield) Expedites the hazardous waste permitting process and decreases costs for hazardous permit applicants by deeming a hazardous waste permit renewal application approved if the California Department of Toxic Substances Control (DTSC) has not taken action on the application within 90 days after submission and if certain conditions are met, and by capping the amount DTSC can charge a permit applicant for such permits. Support. Senate Appropriations Hearing 8/6/18 Creates Uncertainty and Increases Potential Litigation Regarding Environmental Standards. SB 49 (de León; D-Los Angeles) Creates uncertainty by giving broad and sweeping discretion to State agencies to adopt rules and regulations more stringent than the federal rules and regulations in effect on January 19, 2017 through an expedited administrative procedure without public participation or input, and increases the potential for costly litigation by creating private rights of action under California law, when a State agency takes the foregoing discretionary action. Oppose/Two Year Job Killer. Assembly Rules 9/12/17 Increased Permitting Fees and Delayed Permitting. SB 774 (Leyva; D-Chino) Exposes permittees to unknown, increased fees by providing the Department of Toxic Substances Control (DTSC) a blank check to impose additional fees on permittees to implement and perform its statutory requirements when its primary sources of funding have structural deficits and creates substantial uncertainty and delay of facility permitting by interjecting a new board into the organizational structure. Oppose/Two Year Job Killer. Assembly Inactive File 9/14/17 Acute Toxicity Study Bill. AB 2474 (Quirk; D-Hayward) A positive first step toward reducing the number of products that are treated as hazardous waste when disposed of at retail by requiring the California Department of Toxic Substances Control to evaluate whether either or both of specified tests can be adapted to be appropriate for use in identifying substances as hazardous waste or extremely hazardous waste. Support. Senate Appropriations Hearing 8/6/18 Reduces Consumer Product Hazardous Waste. AB 2660 (Quirk; D-Hayward) Allows surplus consumer products to be donated or recycled by making explicit that a retail location in California may transport surplus consumer products to a reverse distribution location in compliance with applicable shipping regulations. Support. Senate Environmental Quality 5/3/18; Failed Deadline Unnecessary Hazardous Waste Regulation. AB 3138 (Muratsuchi; D-Torrance) Before amendments, imposed increased and unnecessary costs on stationary sources by imposing a punitive $25,000 per day civil or administrative liability on a person or stationary source that violates either the provisions of a risk management plan or other Hazardous Materials Management provisions, even if the violation was unintentional. Opposition removed due to May 25, 2018 amendments. No Position. Senate Floor 6/28/18 Government Contracting Targeted Tax on Contractors. AB 2560 (Thurmond; D-Richmond) Unfairly targets one category of taxpayers to fund a benefit for all of the state by imposing a tax on contractors for the privilege of doing business with the Department of Corrections and Rehabilitation, and requires the contractor to absorb the cost while maintaining a price of lowest responsible bidder. Oppose/Job Killer 2018. Failed Passage in Assembly Revenue & Taxation 4/16/18 Health Care Government-Run Health Care. SB 562 (Lara; D-Bell Gardens) Penalizes responsible employers and individuals and results in significant new taxes on all Californians and California businesses by creating a new single-payer government-run, multibillion-dollar health care system financed by an unspecified and undeveloped “revenue plan.” Oppose/Two Year Job Killer. Assembly Desk 7/14/17; Failed Deadline Health Care Price Controls. AB 3087 (Kalra; D-San Jose) Jeopardizes employers negotiating power and access to care, ignores the drivers of health care costs, and adds another layer of bureaucracy by creating an appointed commission to impose price controls on health care providers and insurers. Oppose/Job Killer 2018. Held in Assembly Appropriations Suspense File 5/23/18; Failed Deadline Increases Health Care Premiums. AB 2384 (Arambula; D-Kingsburg) Before amendments, increased health care premiums by mandating medication-assisted treatment for opioid use disorders and by eliminating all quality control and cost containment mechanisms. Job killer tag removed due to June 14, 2018 amendments, but CalChamber remains opposed. Oppose/Former Job Killer 2018. Senate Appropriations Hearing 8/6/18 Arbitration Discrimination. SB 538 (Monning; D-Carmel) Before amendments, unfairly and unlawfully discriminated against arbitration agreements by restricting the formation of antitrust arbitration agreements in hospital contracts, leading to costly litigation over preemption by the Federal Arbitration Act. Opposition and job killer status removed due to June 11, 2018 amendments. No Position/Former Job Killer 2018. Assembly Health 6/11/18; Failed Deadline Increases Health Care Premiums. SB 399 (Portantino; D-La Cañada Flintridge) Increases costs and undermines the ability of health care issuers to promote and manage applied behavioral analysis for children with autism by making a number of changes to how the autism services are provided. Oppose. Assembly Appropriations 6/20/18 Unreasonable Administrative Cost Cap. AB 2499 (Arambula; D-Kingsburg) Before amendments, potential loss of access by small businesses and individuals to agents who assist in their selection of health plans and management of their coverage, jeopardized proactive fraud prevention efforts and potentially would have driven insurers out of the market by reducing the amount of the premium that can be used to support the insurer’s administrative activities. Opposition removed due to June 18, 2018 amendments. No Position. Senate Floor 7/3/18 Increases Health Care Premiums. AB 2643 (Irwin; D-Thousand Oaks) Increases health care premiums by expanding locations where dental general anesthesia is covered as a benefit. Oppose Held in Assembly Appropriations Suspense File 5/16/18; Failed Deadline Inappropriate Expansion of Attorney General Authority. AB 2874 (Thurmond; D-Richmond) Sets an unacceptable precedent and inappropriate interference by the Attorney General in the financial operation of a private business by requiring both non-profit and for-profit hospitals to receive the Attorney General’s consent to close or eliminate supplemental services. Oppose. Assembly Floor 5/25/18; Failed Deadline Increases Health Insurance Premiums. AB 2193 (Maienschein; R-San Diego) Increases health care costs by driving up health care premiums requiring insurers to develop and make available case management for enrollees who may have maternal mental health conditions. Oppose Unless Amended. Senate Appropriations Hearing 8/6/18 Innovative Health Care. AB 1795 (Gipson; D-Carson) Reduces health care costs with no adverse patient outcomes by allowing paramedics with enhanced training and oversight to transport people to a behavioral health facility or a sober center instead of a hospital emergency room. Support. Held in Assembly Appropriations Suspense File 5/16/18; Failed Deadline Medical Loss Ratio. SB 1008 (Skinner; D-Berkeley) Perpetuates the belief that the medical loss ratio is appropriate for dental coverage and beneficial to the consumer by including it on the uniform benefit form. Oppose Unless Amended. Assembly Appropriations 7/3/18 Avoids Unnecessary Costs. AB 2741 (Burke; D-Inglewood) Offers individuals, families and employers a cost-effective preventive approach to the issue of over-prescribing of opiates by limiting opiate prescriptions to minors with exceptions to provide physicians discretion to meet the needs of their patient. Support. Senate Business, Professions & Economic Development 5/17/18; Failed Deadline Pharmacy Access. SB 1442 (Wiener; D-San Francisco) Before amendments, threatened access to pharmacy services by requiring a pharmacist to be assisted by at least one other employee at all times regardless of unforeseen circumstances. Opposition removed due to June 21, 2018 amendments. No Position. Assembly Appropriations 6/21/18 Housing and Land Use Lowers Vote Requirement for New Tax Increases. ACA 4 (Aguiar-Curry; D-Winters) Unnecessarily reduces the voter threshold from two-thirds to 55% for local governments to enact special taxes, including parcel taxes, for the purpose of improving public infrastructure and affordable housing, which creates an opportunity for discriminatory and higher taxes to be imposed against disfavored industries and commercial property owners. Oppose/Two Year Job Killer. Assembly Local Government 4/24/17 Targeted Retail Industry Tax Increase. ACA 11 (Caballero; D-Salinas) Exposes the retail industry to increased taxes by imposing a quarter-cent sales tax increase to fund affordable housing and homeless shelters, without creating greatly needed market rate housing. Oppose/Two Year Job Killer. Assembly Housing and Community Development 8/22/17 Amends Unlawful Detainer and Eviction Notice Process. AB 2343 (Chiu; D-San Francisco) Before amendments, would have driven up the cost of providing rental housing in the state by tripling the amount of notice a landlord is required to provide a tenant in order to begin a lawful eviction process, extending the due date for rent to the middle of the month, and allowing a tenant who has joined a “tenant association” to stop paying rent merely by claiming landlord retaliation. Opposition removed due to June 25, 2018 amendments. No Position. Senate Floor 7/3/18 Imposes New Penalties for Cannabis Violations. AB 2164 (Cooley; D-Rancho Cordova) Before amendments, provided authority to local governments to impose new fines and penalties on any person responsible for a continuing violation pertaining to building, plumbing, electrical or other zoning issue relating to the cultivation of cannabis with no right of appeal for the property owners, who may have no knowledge that their tenants are violating local and state laws. Opposition removed due to May 29, 2018 amendments. No Position. Senate Floor 7/2/18 Promotes Transit-Oriented Development. SB 827 (Wiener; D-San Francisco) Promotes the construction of much-needed residential housing by up-zoning areas around public transit facilities in order to address California’s housing crisis by increasing housing stock. Support. Senate Transportation & Housing 4/9/18; Failed Deadline Streamlines Permitting for New Accessory Dwelling Units. SB 831 (Wieckowski; D-Fremont) Promotes affordable housing by requiring local agencies to waive permitting fees typically charged for new Accessory Dwelling Units (ADU), also known as granny or in-law units, and streamlines the ADU permitting process by requiring local agencies to decide on any new ADU application within 60 days or else the application is automatically approved. Support. Assembly Local Government 6/20/18; Failed Deadline Improves Assessment for State Housing Needs. SB 828 (Wiener; D-San Francisco) Strengthens the Regional Housing Needs Assessment (RHNA) by increasing state-level oversight over local and regional housing obligations. Support. Assembly Appropriations 7/2/18 Expedites Housing Construction. AB 2973 (Gray; D-Merced) Expedites housing construction in certain jurisdictions by extending the expiration date of existing and unexpired tentative maps, vesting tentative maps, and parcel maps that relate to the construction of single or multifamily housing by 24 months for jurisdictions that remain economically depressed. Support. Senate Appropriations Hearing 8/6/18 Promotes Fairness in Housing Construction. AB 2913 (Wood; D-Healdsburg) Provides that a permit would remain valid if the work on the site authorized by that permit is commenced within 3 years after its issuance, or if the work authorized on the site by the permit is suspended or abandoned for a period of up to 3 years after the time the work is commenced. Support. Senate Transportation & Housing 7/3/18 Spurs Housing Development. AB 3194 (Daly; D-Anaheim) Encourages much needed residential housing construction in California by closing two loopholes often used by local governments to deny extending the protections of the Housing Accountability Act. Support. Senate Floor 7/5/18 Housing Fee Transparency. SB 1296 (Glazer; D-Contra Costa) Promotes public transparency and accountability in the housing development process by allowing agencies and members of the public to compare and analyze fees across jurisdictions in order to determine the reasonableness and purpose of any given fee in relation to the housing costs. Fee transparency provides a clear understanding as to what fees should be anticipated and how those fees will be applied to a proposed housing development project. The historical opacity and variability of development fees across jurisdictions are widely believed to be significant factors inhibiting more housing construction in the state and pushing housing costs higher. Support. Held in Senate Appropriations Suspense File 5/7/18; Failed Deadline Development Fee Disclosure. AB 3147 (Caballero; D-Salinas) Requires that a city, county, and city and county provide at the time an application is deemed complete a good faith statement disclosing the amount of impact and development fees applicable to the proposed housing development project. The disclosure of fees at the time a housing project application is deemed complete will provide greater certainty to developers and result in more cost-effective development. Support. Held on Assembly Appropriations Suspense File 5/23/18; Failed Deadline Immigration New Labor Code Penalties. AB 2732 (Gonzalez Fletcher; D-San Diego) Creates new onerous requirements for employers to provide a worker bill of rights document to all employees, have them sign it, give them a copy of the signed document, and keep the original for three years. Non-compliance with these provisions could result in penalties up to $10,000. Oppose. Senate Appropriations Hearing 8/6/18 Foreign Labor Contractors: Agriculture. AB 1913 (Kalra; D-San Jose) Regulates agriculture foreign labor contractors on top of currently comprehensive rules regulating recruitment and employment. Oppose. Assembly Floor 5/25/18; Failed Deadline Industrial Safety and Health Hotel Worker Panic Buttons. AB 1761 (Muratsuchi; D-Torrance) Creates unworkable requirements for paid leave, allows for a patchwork of state and local rules and unnecessary signage in regards to providing protection for hotel employees working alone and the provision of panic buttons. Job killer status removed due to May 9, 2018 amendments, but CalChamber remains opposed unless amended. Oppose Unless Amended/Former Job Killer 2018. Senate Appropriations Hearing 8/6/18 Usurps Cal/OSHA Priorities. AB 2963 (Kalra; D-San Jose) Requires Cal/OSHA to treat as a serious violation a rule that does not constitute any violation of Cal/OSHA rules, and redirects Cal/OSHA resources, which will undermine existing Cal/OSHA priorities. As a result of a blood lead level of employees reported to the Department of Public Health, the bill requires a workplace inspection by Cal/OSHA within three days, as if a serious violation has been reported where none exists. Oppose. Senate Appropriations Hearing 8/6/18 Expensive Public Database. AB 2334 (Thurmond; D-Richmond) Before amendments, the bill sought to publicly shame employers by disclosing for public review on a searchable website, each employer’s injury and illness records, that can be misconstrued and distorted in a manner that does not reflect employers’ commitment to the safety of their employees while providing no advancement of worker safety. Opposition removed due to May 25, 2018 amendments. No Position. Senate Appropriations Hearing 8/6/18 Valley Fever Awareness. AB 1789 (Salas; D-Bakersfield) Creates a common sense approach to alert construction employees about Valley Fever in areas where it is most commonly contracted by creating a framework for employers to provide Valley Fever Awareness training to all construction employees in Valley Fever-prone areas of the state. Support. Held in Assembly Appropriations Suspense File 4/4/18; Failed Deadline Labor and Employment Significant Expansion of Harassment Discrimination and Retaliation Liability. SB 1300 (Jackson; D-Santa Barbara) Significantly increases litigation by allowing a plaintiff to sue for failure to prevent harassment or discrimination when no harassment or discrimination occurs, limits the use of severance agreements, and prohibits the use of a general release or nondisparagement clause in employer/employee contracts. Oppose/Job Killer 2018. Assembly Appropriations 6/27/18 Disclosure of Company Pay Data. SB 1284 (Jackson; D-Santa Barbara) Unfairly requires California employers to submit pay data to the Department of Industrial Relations, creating a false impression of wage discrimination or unequal pay where none exists and, therefore, subjecting employers to unfair public criticism, enforcement measures, and significant litigation costs to defend against meritless claims. Oppose/Job Killer 2018. Assembly Appropriations 6/26/18 Wage Statement Penalties. AB 2613 (Reyes; D-Grand Terrace) Imposes another layer of Labor Code penalties for wage and hour violations in addition to the penalties already available under the Private Attorneys General Act (PAGA) and imposes personal liability onto employees who have no control over the actual payment of wages. Oppose/Job Killer 2018. Assembly Inactive File 6/4/18; Failed Deadline Portable Benefits for the Gig Economy. AB 2765 (Low; D-Campbell) Imposes onerous and costly mandates on companies in the gig economy labeled as the “digital marketplace” by adding them under the provisions of the Fair Employment and Housing Act (FEHA), expanding the protected classifications under FEHA for contractors of the digital marketplace to include “familial status,” and creates further confusion and uncertainty regarding the use and classification of independent contractors. These new mandates will dramatically increase the amount of frivolous litigation under FEHA and the Private Attorneys General Act (PAGA) for the digital marketplace. Oppose/Job Killer 2018. Assembly Labor & Employment 3/22/18; Failed Deadline Extension of Statute of Limitations. AB 1870 (Reyes; D-Grand Terrace) Unnecessarily extends the statute of limitations from one year to three years for all discrimination, harassment and retaliation claims filed with the Department of Fair Employment and Housing. Oppose Unless Amended. Held in Senate Appropriations Suspense File 7/2/18 Healthy Workplaces, Healthy Families Act. AB 2841 (Gonzalez Fletcher; D-San Diego) Amends the Healthy Workplaces, Healthy Families Act to extend the number of paid sick days employers are required to provide from 3 days to 5 days. Oppose. Held in Assembly Appropriations Suspense File 4/25/18; Failed Deadline Sexual Harassment. AB 3081 (Gonzalez Fletcher; D-San Diego) Places in the Labor Code additional, often duplicative, sexual harassment protections and training requirements, which are already protected under the Fair Employment and Housing Act (FEHA), exposing employers to additional liability, including Private Attorneys General Act (PAGA) claims. The bill mandates leave of absence protections for employees and their “family members,” asserting sexual harassment violations without mandating the same notice requirement that applies to other similar types of leave. The bill also expands labor contractor joint liability for sexual harassment, which is inappropriate in light of the inability to objectively verify and ensure that a contractor’s workers do not engage in such activity. Oppose. Senate Appropriations Hearing 8/6/18 Sexual Harassment Employer/Employee Protection. AB 2770 (Irwin; D-Thousand Oaks) Codifies case law to ensure victims of sexual harassment and employers are not sued for defamation by the alleged harasser when a complaint of sexual harassment is made and the employer conducts its internal investigation. This bill also provides additional protections to employers by expressly allowing employers to inform potential employers about the sexual harassment investigation and findings. Reducing the cost of frivolous litigation allows an employer to utilize these financial resources to grow its workforce. Sponsor/Job Creator 2018. Signed—Chapter 82 Significant Expansion of the Fair Employment and Housing Act (FEHA). AB 1938 (Burke; D-Inglewood) Creates a new protected classification under the Fair Employment and Housing Act (FEHA) for “familial status,” which will significantly increase the amount of frivolous litigation against employers and ultimately hamper their ability to conduct business and manage their employees. Oppose Unless Amended. Assembly Labor & Employment 2/5/18; Failed Deadline Private Attorneys General Act (PAGA) Reform. AB 2016 (Fong; R-Bakersfield) Mitigates the financial threat of frivolous litigation by requiring that plaintiffs provide a more detailed account of the allegations in the required Private Attorneys General Act (PAGA) notice, allowing an employer to utilize these financial resources to grow their workforce instead. Support/Job Creator 2018. Assembly Labor & Employment 2/12/18; Failed Deadline Private Attorneys General Act (PAGA) Reform. AB 2907 (Flora; R-Ripon) Provides employers with a reasonable opportunity to cure specific Labor Code violations before being subject to costly and frivolous litigation under the Labor Code Private Attorneys General Act (PAGA), allowing an employer to invest this financial savings into growing its workforce. Support/Job Creator 2018. Assembly Labor & Employment 3/22/18; Failed Deadline Sexual Harassment Leave Requirement. AB 2366 (Bonta; D-Oakland) Mandates a leave of absence protection for employees asserting sexual harassment violations without mandating the same notice requirement that applies to other similar types of leave. Significantly expands leave of absence protections for victims of sexual assault, stalking, domestic violence, and now, sexual harassment victims to their “family members,” which is broadly defined. (Provisions incorporated into AB 3081). Oppose. Held in Assembly Appropriations Suspense File 5/16/18; Failed Deadline Lactation Accommodation. SB 937 (Wiener; D-San Francisco) Significantly amends current law regarding lactation accommodations by implementing new location standards, employer policy requirements, document retention, new construction requirements and supplementary Labor Code penalties. Oppose Unless Amended. Assembly Appropriations 6/26/18 Lactation Accommodation. AB 1976 (Limón; D-Goleta) Establishes a new mandate regarding lactation accommodations whereby the employer must make a reasonable effort to provide a location other than a bathroom for the employee to express breastmilk, even though this could create an undue hardship on employers with limited space. Oppose Unless Amended. Senate Appropriations Hearing 8/6/18 Disclosure of Personal Contact Information. AB 2455 (Kalra; D-San Jose) Requires the state to turn over personal information of registered home care aides to unions for the purpose of organizing. Oppose. Senate Appropriations Hearing 8/6/18 Sexual Harassment Complaint Document Retention. AB 1867 (Reyes; D-Grand Terrace) Before amendments, created a confusing mandate whereby employers with 50 or more employees must maintain internal complaint records of employee complaints alleging sexual harassment for a minimum of 5 years after the last day of employment of the complainant or any alleged harasser named in the complaint, whichever is later. Opposition removed due to June 21, 2018 amendments. No Position. Senate Appropriations Hearing 8/6/18 Flexible Meal Period Schedule. AB 2509 (Waldron; R-Escondido) Provides non-exempt employees, who work a traditional 8-hour day schedule, the opportunity to request an on-duty meal period in order to leave work 30 minutes earlier, which helps accommodate employee requests, retain employees, and offer more flexible work arrangements. Sponsor/Job Creator 2018 Assembly Labor & Employment 3/15/18; Failed Deadline Flexible Workweek. AB 1173 (Harper; R-Huntington Beach) Provides employers with the opportunity to accommodate employees’ needs as well as business demands by allowing employees to request a voluntary, flexible workweek agreement that can be repealed by the employee at any time with proper notice. Support Assembly Labor & Employment 1/11/18; Failed Deadline Janitorial Workers Training Requirements. AB 2079 (Gonzalez Fletcher; D-San Diego) Mandates additional registration, enforcement, and training requirements on employers and individuals in the janitorial business. Oppose. Senate Floor 7/3/18 Flexible Workweek. AB 2482 (Voepel; R-Santee) Allows for an employee-selected flexible work schedule and relieves employers of the administrative cost and burden of adopting an alternative workweek schedule per division, which accommodates employees, helps retain employees, and allows the employer to invest these savings into growing its workforce. Support/Job Creator 2018. Assembly Labor & Employment 3/5/18; Failed Deadline Joint Liability. SB 1402 (Lara; D-Bell Gardens) Requires customers of a motor carrier service provider to be jointly and severally liable with the motor carrier for unpaid wages, unreimbursed expenses, damages and penalties, including applicable interest. Oppose. Assembly Appropriations 6/26/18 Criminal Background Checks. SB 1412 (Bradford; D-Gardena) Prohibits employers in specific industries from seeking particular conviction history information of an applicant, creating a conflict with federal law requirements. Oppose Unless Amended. Assembly Appropriations 7/3/18 Imposes New One-Sided Attorney’s Fee Recovery. AB 2946 (Kalra; D-San Jose) Undermines the essence of the Division of Labor Standards Enforcement (DSLE) complaint process by requiring a one-sided attorney’s fee provision that will incentivize further litigation. Oppose. Assembly Floor 5/25/18; Failed Deadline Additional Employer Regulations. AB 2212 (Ting; D-San Francisco) Requires food processors that sell direct to consumers to undergo redundant and superfluous regulations regarding food handler card requirements. Oppose. Assembly Health 3/19/18; Failed Deadline CalWORKs Participation. SB 926 (Skinner; D-Berkeley) Before amendments, allowed a participant in the CalWORKs program to refuse to comply with the program based on the participant’s independent determination that the employer-provided schedule is too unpredictable. Opposition removed due to May 26, 2018 amendments. No Position. Assembly Appropriations 6/26/18 General Contractor Wage-and-Hour Liability. AB 1565 (Thurmond; D-Richmond) Prevents general contractor liability for wage theft that the subcontractor committed if the general contractor already paid the subcontractor in full and was not involved in the wage theft. Gutted and amended May 24, 2018. No Position. Senate Floor 7/3/18 Legal Reform and Protection Ban on Settlement Agreements and Arbitration Agreements. AB 3080 (Gonzalez Fletcher; D-San Diego) Significantly expands employment litigation and increases costs for employers and employees by banning settlement agreements for labor and employment claims as well as arbitration agreements made as a condition of employment, which is likely preempted under the Federal Arbitration Act and will only delay the resolution of claims. Banning such agreements benefits the trial attorneys, not the employer or employee. Oppose/Job Killer 2018. Senate Appropriations Hearing 8/6/18 Liability Expansion. AB 2074 (Bonta; D-Oakland) Creates an unprecedented basis for tort liability in California by imposing joint and several liability on any company in the stream of commerce for injury caused by a product, even though those companies did not create the product, know of the harm it posed, or cause the harm suffered. Oppose. Assembly Inactive File 6/4/18; Failed Deadline Interference with Contracts. AB 1902 (Levine; D-San Rafael) Discourages and reduces “personal service contracts” as defined, by unfairly increasing the contract price for these services based upon an undefined and unspecified “area income” rate that presumably will include wages from different industries and different occupations that are not comparable to personal services. It also provides the Department of Industrial Relations with extraordinary authority to value companies, determine “similar services” to be included under the provisions of this bill, and what constitutes “area income.” Oppose/Job Killer 2018. Held in Assembly Appropriations Suspense File 5/2/18; Failed Deadline Disclosure of Trade Secrets and Increased Litigation. AB 889 (M. Stone; D-Scotts Valley) Unnecessarily changes the definition of what information qualifies as a “trade secret” and will essentially force the disclosure of confidential, trade secret information in civil litigation based upon an unproven allegation that a product is defective, which will force companies into unjustified costly settlements as well as overwhelm the judiciary with motions and hearings by parties seeking to protect their trade secrets. Oppose. Assembly Floor 1/8/18; Failed Deadline Liability Expansion. AB 2995 (Carrillo; D-Los Angeles) Significantly expands tort liability for lead paint by stating that any amount of lead paint on the interior or exterior of the home is an injury to the property for which damages can be recovered. Oppose. Assembly Floor 5/3/18; Failed Deadline Confidentiality Provisions. AB 3109 (M. Stone; D-Scotts Valley) Specifies the limitations of a non-disclosure provision in a settlement agreement for claims involving sexual harassment and assault, so that the Legislature, courts, or administrative agencies can resolve disputes or policy debates involving these issues. Support. Senate Floor 7/3/18 Employee-Union Agent Evidentiary Privilege. AB 3121 (Kalra; D-San Jose) Creates a new evidentiary privilege that is one-sided and will provide a union representative with an unfair opportunity to preclude relevant evidence during litigation regarding labor disputes or collective bargaining, that may ultimately result in the miscarriage of justice. Oppose. Senate Floor 6/21/18 Confidentiality Provisions. SB 820 (Leyva; D-Chino) Limits the ability to informally resolve civil cases that include an allegation of harassment or failure to prevent harassment, which will encourage defendants to pursue a trial on the merits of such cases to prove such claims lack merit and clear any public concerns regarding reputation, thereby increasing the burden on the trial courts. Oppose. Assembly Floor 7/5/18 Allocation of Judgeships. SB 38 (Roth; D-Riverside) Increases the number of judges on the Fourth District Court of Appeal in Riverside/San Bernadino to ensure timely resolution of disputes. Support. Held in Assembly Appropriations Suspense File 6/27/18 International Commercial Arbitration. SB 766 (Monning; D-Carmel) Clarifies that out-of-state attorneys and attorneys from foreign jurisdictions may apply to appear and represent parties in international commercial disputes hosted in California, which will create a greater opportunity for California to host these proceedings and provide business opportunities for the state. Support. To Governor Economic Barrier. AB 2192 (M. Stone; D-Scotts Valley) Before amendments, limited publishers’ ability to recoup costs on time, effort, and money invested into peer-reviewed manuscripts that are based upon research developed through state grants by mandating such publications are free and open to the public within 6 months of completion, which would have jeopardized quality of these manuscripts and the continued investment in such manuscripts. Opposition removed due to April 5, 2018 amendments. No Position. Senate Appropriations Hearing 8/6/18 Housing Costs. AB 2353 (Frazier; D-Discovery Bay) Reduces the threat of ongoing litigation against homebuilders for alleged construction defects, which will reduce cost for builders and costs for homes in California. Support. Senate Floor 7/3/18 Litigation Exposure. AB 2648 (Friedman; D-Glendale) Carves out “water contamination” claims from the statute of repose, which could create significant and retroactive liability and costly litigation against property owners, developers, contractors, architects, engineers and other service providers. Oppose. Assembly Judiciary 4/12/18; Failed Deadline Individual Liability. SB 1038 (Leyva; D-Chino) Before amendments, unfairly imposed individual liability on a supervisor employee for making personnel and management decisions that are a part of the supervisor’s duties, placing the supervisor in a conflict of interest with the employer, and subjecting the individual to financial harm. Opposition removed due to June 25, 2018 amendments. No Position. Assembly Floor 7/5/18 Marijuana Medical Marijuana in Employment. AB 2069 (Bonta; D-Oakland) Undermines employer’s ability to provide a safe and drug-free workplace by requiring employers to provide a reasonable accommodation to employees who use marijuana for a disability or medical purposes, exposing employers to costly and unnecessary litigation under the Fair Employment and Housing Act (FEHA) whenever the employer terminates an employee who has created a safety hazard in the workplace. Oppose/Job Killer 2018. Held in Assembly Appropriations Suspense File 5/16/18; Failed Deadline Other Cigarette Filter Ban. AB 2308 (M. Stone; D-Scotts Valley) Increases the cost to manufacturers and puts California at a disadvantage by banning single-use filtered cigarettes in the state. Oppose. Assembly Governmental Organization 5/2/18; Failed Deadline Seismic Safety. AB 2681 (Nazarian; D-Sherman Oaks) Before amendments, caused devaluation of properties in some parts of the state by listing them as vulnerable to earthquake damage on a list at the Office of Emergency Services open to the public. Opposition removed due to April 12, 2018 amendments. No Position. Senate Appropriations Hearing 8/6/18 Privacy and Technology California Consumer Privacy Act of 2018. AB 375 (Chau; D-Monterey Park/Hertzberg; D-Van Nuys). This bill, effective January 1, 2020, would require businesses to do the following, among many other things, upon the request of a consumer: inform the consumer as to what personal information (PI) is being collected about them and whether their PI is being sold and to whom; provide to the consumer the categories and specific pieces of PI the business has collected about that consumer; delete any PI collected from the consumer; and permit the consumer to opt-out of or to opt-in to the sale of their PI, depending on age of the consumer. This bill also creates significant class action liability for a company in the wake of a data breach, creating a private right of action for any consumer whose data has been breached to sue for significant statutory damages without any proof of injury required. Although CalChamber opposed this bill, we preferred it to the privacy ballot initiative, which was much worse and has since been pulled from the ballot due to the passage of AB 375. Signed 6/28/2018—Chapter 55 Technical Clean-Up Vehicle. SB 1121 (Dodd; D-Napa) Originally removed the requirement of economic injury for standing to bring a claim in California against a company for a data breach, undermining the intent of voters, and drastically increasing liability for companies without providing any corresponding benefit to California consumers. Now being developed as a technical clean-up bill for AB 375. CalChamber working with members and other affected parties to create a list of technical fixes that need to be included in SB 1121. Position Pending/Former Job Killer 2018. Assembly Privacy & Consumer Protection 7/3/18 Connected Devices. AB 1906 (Irwin; D-Thousand Oaks) Beginning on January 1, 2020, requires manufacturers of connected devices to equip those devices with reasonable security features appropriate to the nature of the device. Opposition removed due to May 9, 2018 amendments. No Position. Senate Appropriations Hearing 8/6/18 Connected Devices. SB 327 (Jackson; D-Santa Barbara) Before amendments, imposed onerous, duplicative and premature data security and notification mandates on manufacturers and retailers of devices that connect to the Internet. Opposition removed due to January 11, 2018 amendments. No Position. Assembly Appropriations 7/3/18 Digital Commercial Health Monitoring. AB 2935 (Chau; D-Monterey Park) Requires digital commercial health monitoring operators to post a notice and obtain a consumer’s affirmative consent to share, sell or disclose the information to a third party. Oppose Unless Amended. Senate Judiciary 7/3/18 Unmanned Aircraft Systems (UAS). SB 347 (Jackson; D-Santa Barbara) Creates inconsistencies with federal law and risks stunting UAS growth and its associated economic benefits by restricting operations and navigation of UAS and delegating regulation to the California Department of Transportation. Oppose. Assembly Privacy & Consumer Protection 6/5/18; Failed Deadline Third-Party Sharing by Places of Lodging and Bus Companies. SB 1194 (Lara; D-Bell Gardens) Prevents private businesses from sharing guest and passenger information without a court-issued warrant, subpoena, or order except as specified. Opposition removed due to June 20, 2018 amendments that carve out third-party sharing for business purposes. No Position. Assembly Privacy & Consumer Protection 7/3/18 Online Sales. AB 2511 (Chau; D-Monterey Park) Requires online retailers to take reasonable steps to verify the age of the purchaser and to refrain from delivering proscribed products to persons under 18. Opposition removed due to June 14, 2018 amendments. No Position. Senate Appropriations 7/3/18 Automated Technology or “Bots.” SB 1001 (Hertzberg; D-Van Nuys) Makes it unlawful for any person to use a bot with the intention of misleading and without disclosing that it is a bot and is not a natural person. Opposition removed due to June 21, 2018 amendments. No Position. Assembly Appropriations 6/26/18 Spam Emails. AB 2546 (Chau; D-Monterey Park) Before amendments, broadened the definition of spam email and imposed new regulations on businesses communicating with customers or sending marketing emails. Opposition removed due to May 29, 2018 amendments. No Position. Senate Appropriations Hearing 8/6/18 Blockchain Technology Working Group. AB 2658 (Calderon; D-Whittier) Requires the Secretary of the Government Operations Agency to appoint a blockchain working group, on or before July 1, 2019, to evaluate the use of the technology. Support. Senate Appropriations Hearing 8/6/18 Social Media Working Group. SB 1424 (Pan; D-Sacramento) Requires the Attorney General to establish an advisory committee to study the problem of false information on internet-based social media platforms and to make recommendations. Opposition removed due to May 10, 2018 amendments. No Position. Assembly Appropriations 6/26/18 Privacy Policies. AB 2182 (Levine; D-San Rafael) Requires the Department of Justice to maintain a website with links to businesses’ internet privacy policies. Opposition removed due to May 25, 2018 amendments. No Position. Senate Appropriations Hearing 8/6/18 Bot Advertising. AB 1950 (Levine; D-San Rafael) Requires sellers of digital advertising to verify that buyers are natural persons. Oppose. Assembly Privacy & Consumer Protection 2/8/18; Failed Deadline Privacy in Annual Disclosures. AB 1781 (Steinorth; R-Rancho Cucamonga) Requires the Secretary of State to exempt resident addresses and personal signatures contained within certain corporate annual statements from being published online in order to prevent fraud and identity theft. Support. Held in Assembly Appropriations Suspense File 4/25/18; Failed Deadline Unmanned Aircraft Systems (UAS). SB 1355 (Hill; D-San Mateo) Prohibits use of drones above the grounds of a prison or jail. Oppose. Assembly Appropriations 6/26/18 Driver License Information. AB 2769 (Cooper; D-Elk Grove) Prohibits businesses from storing driver license information for more than 24 hours without prior written consent. Concerns were removed based on April 19, 2018 narrowing amendments. No Position. Senate Appropriations Hearing 8/6/18 Product Regulation Misinformed Chemical Regulation. AB 2998 (Bloom; D-Santa Monica) Imposes an overly broad chemical regulatory regime by restricting the sale of any “flame retardant chemical” used in juvenile products, mattresses, or upholstered furniture, even for chemistries not yet invented or evaluated by regulatory authorities. Oppose. Senate Appropriations Hearing 8/6/18 Risks California Jobs and Limits Consumer Options. SB 1249 (Galgiani; D-Stockton) Creates an unworkable framework that could harm manufacturers and severely handicap American cosmetic exports and American jobs by going far beyond the initially proposed alignment of California law with current European regulations banning animal testing on cosmetic products or ingredients. Oppose. Assembly Appropriations 7/2/18 Sidesteps Safer Consumer Products Program Process. AB 958 (Ting; D-San Francisco) Politically rather than scientifically identifies certain chemicals used in food packaging as priority products under the Safer Consumer Products program, and directs the Department of Toxic Substances Control (DTSC) to adopt regulations with regard to those chemicals, unless it determines there is insufficient data to conduct and complete the priority product evaluation and regulatory process. If DTSC makes the foregoing determination, it must pursue the data necessary to conduct and complete the evaluation and regulatory process. Oppose. Senate Floor 6/26/18 Stifles Innovation for Electronic and Appliance Products. AB 2110 (Eggman; D-Stockton) Mandates the disclosure of intellectual property and threatens consumer security and safety by requiring original equipment manufacturers of electronics and appliances sold in the State of California to provide independent repair providers with diagnostic and repair information, software, tools, and parts. Oppose. Assembly Privacy & Consumer Protection 4/5/18; Failed Deadline Misguided Cleaning Product Procurement Mandate. AB 2570 (Nazarian; D-Sherman Oaks) Imposes a misguided cleaning product procurement mandate on California public schools by requiring schools to purchase and use “environmentally preferable cleaning products,” which exclude critical product certification alternatives and the use of disinfectant products to prevent disease and infection. Oppose. Senate Appropriations Hearing 8/6/18 Endorses Controversial Proposition 65 Listing Process. SCR 100 (Lara; D-Bell Gardens) Endorses the controversial Labor Code listing mechanism under Prop. 65 by urging the Office of Environmental Health Hazard Assessment to list processed meat as a Prop. 65 carcinogen based on a determination made by the International Agency for Research on Cancer. Oppose. Senate Environmental Quality 4/9/18 Labeling. AB 2632 (Santiago; D-Los Angeles) Protects consumer product and food manufacturers from lawsuits by clarifying package labeling requirements regarding the amount of product and packaging. Support. Senate Floor 7/3/18 Provides Ingredient Information to Salon Employees. AB 2775 (Kalra; D-San Jose) Ensures that ingredient information is readily available to every salon employee and customer by requiring professional cosmetic products manufactured on or after July 1, 2020, to have a label affixed on the container that satisfies all of the labeling requirements for any other cosmetic pursuant to the federal Food, Drug, and Cosmetic Act and the federal Fair Packaging and Labeling Act. Support. Senate Appropriations Hearing 8/6/18 Clarifies Cleaning Product Right to Know Act. AB 2901 (Committee on Environmental Safety and Toxic Materials) Provides greater clarity for implementation of the 2017 Cleaning Product Right to Know Act by making minor technical changes to certain terminology. Support. Signed—Chapter 28 Public Employees’ Retirement System Public Employee Retirement Systems Investment Policy. AB 2571 (Gonzalez Fletcher; D-San Diego) Seeks to publicly shame investment managers and the hospitality companies in which they invest, by forcing them to submit an annual report subject to a public review, that discloses employee wage information according to gender, ethnicity, and race, exposing such companies to costly litigation. Oppose/Job Killer 2018. Assembly Public Employees, Retirement & Social Security 3/19/18; Failed Deadline RecyclingBurdensome Mandate on Beverage Containers. AB 2779 (M. Stone; D-Scotts Valley) Drives up the cost of beverages, imposes impractical technology requirements, and reverses a decade-long trend of reducing the amount of plastic in PET bottles by requiring that the cap of any single-use plastic beverage container be tethered to the container. Oppose. Assembly Inactive File 6/4/18; Failed Deadline Burdensome Mandate on Beverage Containers. AB 319 (M. Stone; D-Scotts Valley) Drives up the cost of beverages and imposes impractical technology requirements by requiring that the cap of a single-use plastic beverage container be tethered or affixed to the container. Oppose. Assembly Floor 1/10/18; Failed Deadline New Recycling/Composting Requirements. SB 1335 (B. Allen; D-Santa Monica) Forces food service facilities operating in California state agencies or facilities to stop using disposable food service ware by 2021 unless 75% or more of the packaging can be recycled or composted. Since the mandated recycle/compost rate is not achievable within the time frame allotted, the bill serves as a “de facto” ban on single-use cups, take-out containers, plates, trays and bowls in all state facilities. Oppose Unless Amended. Assembly Appropriations 7/2/18 New Recycling Organization for Beverage Containers. SB 168 (Wieckowski; D-Fremont) Increases beverage container manufacturers’ costs and creates uncertainty by establishing a new organization requiring them to develop and submit a plan and budget for recycling of beverage containers similar to that of the Used Mattress Recovery and Recycling Act, including the establishment of a stewardship fee to fund the costs of implementing the program. Oppose. Assembly Appropriations 7/5/18 Regulatory Reform Regulatory Reform. AB 2671 (Fong; R-Bakersfield) Promotes greater accountability, transparency, improved efficiency and modernization of regulations by requiring agencies to review their regulations, as well as to submit major regulations to the Legislature for review, which paves the way to effective and least burdensome regulations. Support. Held in Assembly Appropriations Suspense File, 5/9/18; Failed Deadline Regulatory Reform. AB 2971 (Calderon; D-Whittier) Will save taxpayer dollars, streamline government operations, improve public services, and reduce duplication and waste without compromising public policy goals of regulations by requiring state agencies to review all existing regulations to identify overlap, duplication, inconsistencies or provisions that are out of date, and report the findings to the Legislature. Support. Held in Assembly Appropriations Suspense File, 5/2/18; Failed Deadline State Agency Modernization. AB 2087 (Waldron; R-Escondido) Enhances California’s ability to deliver services by improving and updating our state’s information technology systems to take advantage of modern technologies. Support. Senate Appropriations Hearing 8/6/18 Taxation Tax on Services. SB 993 (Hertzberg; D-Van Nuys) Imposes a 3% tax on services purchased by businesses in California, with some exceptions, adding another layer of taxes onto California companies, raising costs, and putting them at a competitive disadvantage. Oppose/Job Killer 2018. Senate Governance & Finance 5/16/18 Increased Tax Rate. SB 1398 (Skinner; D-Berkeley) Threatens to significantly increase the corporate tax rate on publicly held corporations and financial institutions up to 15% according to the wages paid to employees in the United States, and threatens to increase that rate by 50% thereafter, if the corporation or institution reduces its workforce in the United States and simultaneously increases its contractors. Oppose/Job Killer 2018. Senate Governance & Finance 3/8/18 Targeted Tax on High Earners. AB 2351 (Eggman; D-Stockton) Unfairly increases the personal income tax rate from 13.3% — which is already, by far, the highest income tax rate in the country — to 14.3% for one category of taxpayers (including sole proprietors), who already pay half of California’s income taxes, forcing them to mitigate these costs through means that include reducing workforce, in order to provide more funding for higher education. Oppose/Job Killer 2018. Assembly Revenue & Taxation 4/16/18 Middle Class Fiscal Relief Act. ACA 22 (McCarty; D-Sacramento) Unnecessarily increases California’s 8.84% corporate tax rate, already one of the highest in the nation, to 18.84%, which will encourage companies to leave the state and discourage companies from expanding or relocating here. Oppose/Job Killer 2018. Assembly Print 1/18/18 Extension of Film Tax Credits. SB 951 (Mitchell; D-Los Angeles) Before being incorporated into SB 871, a budget trailer bill, extended California’s current tax credit for motion picture and television productions, which has a sunset date of July 1, 2020, for an additional five years, continuing the success of this tax credit, which has brought more film and television production jobs to this state and has increased business to California companies that supply productions with goods and services. Support/Job Creator 2018. Assembly Revenue & Taxation Hearing 8/6/18 Extension of Film Tax Credits. AB 1734 (Calderon; D-Whitter) Before being incorporated into SB 871, a budget trailer bill, extended California’s current tax credit for motion picture and television productions, which has a sunset date of July 1, 2020, for an additional five years, continuing the success of this tax credit, which has brought more film and television production jobs to this state and has increased business to California. Support/Job Creator 2018. Senate Governance & Finance 6/7/18 Extension of Film Tax Credits. SB 832 (Portantino; D-La Cañada Flintridge) Extends California’s current tax credit for motion picture and television productions, which has a sunset date of July 1, 2020, for an additional five years, continuing the success of this tax credit, which has brought more film and television production jobs to this state and has increased business to California companies that supply productions with goods and services. Support/Job Creator 2018. Held in Senate Appropriations Suspense File 5/25/18 Extension of Film Tax Credits. AB 2936 (Nazarian; D-Sherman Oaks) Extends California’s current tax credit for motion picture and television productions, which has a sunset date of July 1, 2020, for an additional five years, continuing the success of this tax credit, which has brought more film and television production jobs to this state and has increased business to California companies that supply productions with goods and services. Support/Job Creator 2018. Held in Assembly Appropriations Suspense File 5/25/18 Extension of Film Tax Credits. SB 871 (Committee on Budget and Fiscal Review) Extends California’s current tax credit for motion picture and television productions, which has a sunset date of July 1, 2020, for an additional five years, continuing the success of this tax credit, which has brought more film and television production jobs to this state and has increased business to California companies that supply productions with goods and services. Support. Signed 6/27/18—Chapter 54 Extension of Film Tax Credits. AB 1837 (Committee on Budget) Extends California’s current tax credit for motion picture and television productions, which has a sunset date of July 1, 2020, for an additional five years, continuing the success of this tax credit, which has brought more film and television production jobs to this state and has increased business to California companies that supply productions with goods and services. Support. Senate Inactive File 7/5/18 Opioid Medication Excise Tax. AB 2486 (McCarty; D-Sacramento/Gallagher (R-Yuba City). Unfairly targets one category of taxpayer, manufacturers and distributors of opioid medication in California, to raise money for opioid prevention and rehabilitation programs, which will raise their costs, limit their workforce, and increase prices for drugs crucial to California’s vulnerable population, including those in need of medically assisted treatment for substance abuse. Oppose. Senate Health 6/13/18 Abatement of Taxes. AB 2503 (Irwin; D-Thousand Oaks) Extinguishes annual taxes (and related interest and penalties) that continue to improperly accrue to businesses that no longer exist, because they failed to complete the paperwork necessary for dissolution. Support. Senate Appropriations Hearing 8/6/18 Expedited Return of Tax Overpayment. AB 2855 (Brough; R-Dana Point) Expedites tax refund adjustments of net operating loss (NOL) carrybacks, so businesses would have timely access to capital that can be reinvested into the economy. Support. Senate Appropriations Hearing 8/6/18 Abatement of Timeliness Penalty. SB 1082 (Bradford; D-Gardena) Allows the Franchise Tax Board to waive select timeliness penalties imposed on taxpayers who have no prior compliance problems. Support. Held in Senate Appropriations Suspense File 4/30/18 Telecommunications Net Neutrality. SB 822 (Wiener; D-San Francisco) Preempted by federal law and opens the door to a patchwork of unworkable state regulations that will stymie innovation and potentially undermine the backbone of California’s internet economy. Oppose. Assembly Appropriations 6/26/18 Net Neutrality. SB 460 (de León; D-Los Angeles) Preempted by federal law and opens the door to a patchwork of unworkable state regulations that will stymie innovation and potentially undermine the backbone of California’s internet economy. Oppose. Assembly Communications & Conveyance 6/1/18; Failed Deadline Tourism Tourism Stimulus. AB 986 (Gallagher; R-Yuba City) Helps reverse California’s unprecedented decline in recreational fishing participation, which will increase jobs and tourism in the areas that depend on sport fishing, by reducing fishing license fees for veterans. Support. Senate Appropriations Hearing 8/6/18 Tourism Stimulus. SB 518 (Berryhill; R-Twain Harte) Helps reverse California’s unprecedented decline in recreational fishing participation, which will increase jobs and tourism in the areas that depend on sport fishing, by changing the way fishing licenses are issued. Support. Held in Assembly Appropriations Suspense File 6/27/18 Transportation and Infrastructure Lowers Vote Requirement for Tax Increases. SCA 6 (Wiener; D-San Francisco) Unnecessarily reduces the voter threshold from two-thirds to 55% for local governments to enact special taxes, including parcel taxes, for the purpose of providing transportation services, which creates an opportunity for discriminatory and higher taxes to be imposed against disfavored industries and commercial property owners. Oppose/Two Year Job Killer. Held in Senate Appropriations Suspense File 5/25/17 Impedes Regulatory Efforts. AB 87 (Ting; D-San Francisco) Potentially impedes efforts to adopt regulations guiding autonomous vehicle testing by codifying language for regulations before the current rulemaking process is complete. Oppose Unless Amended. Senate Appropriations Hearing 8/6/18 Streamlines Requirements. SB 1080 (Roth; D-Riverside) Streamlines driver licensing requirements for active duty military and their families so they can begin earning extra income through ride-sharing without unnecessary fees and delays. Support. Assembly Appropriations 6/25/18 Encourages Development. AB 427 (Muratsuchi; D-Torrance) Encourages economic development by creating the California Aerospace and Aviation Commission to support the health and competitiveness of California’s aerospace manufacturing sector. Support. Senate Appropriations Hearing 8/6/18 Water Supply and Quality Delta Stewardship Council. AB 1876 (Frazier; D-Discovery Bay) Impedes progress toward achieving a balanced water supply/quality solution in the delta by abolishing the broad-based Delta Stewardship Council and rolling its authority to the much narrower in perspective Delta Protection Commission. Oppose. Assembly Water, Parks & Wildlife 1/29/18; Failed Deadline Irrigation Water. AB 2828 (Friedman; D-Glendale) Increases the costs of produced water used by farmers to irrigate crops. Undermines and circumvents existing regulations covering water quality and safety. Oppose. Assembly Environmental Safety & Toxic Materials 3/8/18; Failed Deadline Land Use. AB 2975 (Friedman; D-Glendale) Before amendments, restricted adjacent and nearby private property owners’ use of their lands by automatically giving any federally delisted wild and scenic rivers protection under the state act, but retaining federal elements. Opposition removed due to May 29, 2018 amendments. No Position. Senate Appropriations Hearing 8/6/18 Governor Signs CalChamber-Sponsored Bill Protecting Victims/ Employers from Serial Harassers7/10/2018
Governor Edmund G. Brown Jr. yesterday signed a California Chamber of Commerce-sponsored job creator bill that protects sexual harassment victims and employers from being sued for defamation. AB 2770 (Irwin; D-Thousand Oaks) codifies case law to ensure victims of sexual harassment and employers are not sued for defamation by the alleged harasser when a complaint of sexual harassment is made and the employer conducts its internal investigation. This bill also provides additional protections to employers by expressly allowing employers to inform potential employers about the sexual harassment investigation and findings. The bill has been tagged as a job creator because reducing the cost of frivolous litigation allows an employer to utilize these financial resources to grow its workforce. AB 2770 passed the Legislature with unanimous bipartisan support. CalChamber sponsored AB 2770 because alleged harassers are not only suing victims, but also filing suit against employers for defamation. Such lawsuits put employers in an impossible position as they have an affirmative duty to take reasonable steps to prevent and promptly correct harassment. Even worse, if the alleged harasser’s employment is then terminated, or the alleged harasser resigns, employers are put in an even more difficult position. The company has knowledge of the harassing activity and yet its hands are tied. If the company tells a potential employer that the employee was accused of harassing conduct, the company is on the hook for a defamation claim. If the company stays silent, the harasser is then free to victimize more individuals at his/her next job without anyone at the new company ever knowing about the unacceptable behavior. AB 2770 will protect employers and allow them to warn potential employers about an individual’s harassing conduct during a reference check without the threat of a defamation lawsuit. The Assembly Judiciary Committee today will consider two California Chamber of Commerce-opposed job killers, one dealing with disclosing pay data and the other about the legal standard for filing certain harassment/discrimination claims.
The committee will consider:
SB 1284 CalChamber has identified the bill as a job killer because it could create a false impression of wage discrimination or unequal pay where none exists and, therefore, subject employers to unfair public criticism, enforcement actions, and significant litigation costs to defend against likely meritless claims. CalChamber is leading a large coalition opposing the bill and has raised the following additional concerns:
SB 1300 SB 1300 is a job killer because it creates a new private right of action for failure to prevent harassment or discrimination where no harassment or discrimination actually occurred and limits the use of nondisparagement agreements and general releases. These provisions will significantly increase litigation against California employers and limit their ability to invest in their workforce. CalChamber is also leading a large coalition opposing SB 1300 because the bill:
SB 1284 and SB 1300 will be heard in the Assembly Judiciary Committee today. CalChamber asks members to contact their Assembly representatives and members of the committee and urge them to oppose SB 1284 and SB 1300 as job killers. Trial Attorneys Benefit from Agreement Ban The California Chamber of Commerce and a large coalition of employer groups and local chambers of commerce are opposing a job killer bill that bans settlement and arbitration agreements. Today the Senate Judiciary Committee will consider AB 3080 (Gonzalez Fletcher; D-San Diego), which significantly expands employment litigation and increases costs for employers and employees by banning settlement agreements for labor and employment claims as well as arbitration agreements made as a condition of employment, which is likely preempted under the Federal Arbitration Act (FAA) and will only delay the resolution of claims. Banning such agreements benefits the trial attorneys, not the employer or employee. Bans Arbitration AB 3080 prohibits arbitration agreements made as a condition of employment for any claims arising under the Labor Code or Fair Employment and Housing Act (FEHA) and/or including class action waivers. Arbitration is a less formal, less costly and less time-consuming forum in which to resolve a dispute. The cost savings is not in the compensation paid to the employees; it is in the fees paid to attorneys. Although studies demonstrate that employees generally win the same percentage of cases in arbitration, if not more, the trial attorneys may not recover as much in fees. Thus, the ultimate beneficiaries of an arbitration and class action waiver ban are trial attorneys, not employers or employees. Hurts Low-Wage Employees Banning arbitration leaves litigation as the only option for employees to resolve many labor and employment claims. This ultimately results in low-wage employees being denied access to justice. The California Democratic Party’s Platform on Civil Justice states that budget cuts to the judiciary have led to extended waits for civil lawsuits and legal issues that touch everyday lives, with the delays meaning only the wealthy can afford to use the civil justice system. Several studies also support the idea that access to civil courts is not a realistic option for low-wage employees. With the civil justice system being accessible mainly to the wealthy, many low-wage workers are left with no alternative if arbitration is not available. Preempted by Federal Law The scope of the FAA is broad and mandates the enforcement of any written arbitration agreement regarding the resolution of any dispute arising out of a transaction involving commerce. The only exception to the mandate is if the contract is unenforceable due to contractual defenses that exist and are applicable to any contract. The U.S. Supreme Court and recent California decisions point to the strength of the FAA. AB 3080 is not applicable to all contracts and is not a general contractual defense. It unfairly targets and discriminates against arbitration clauses in employment contracts, leaving all other terms of employment conditional and mandatory. Accordingly, it is preempted under the FAA. Bans Settlement Agreements AB 3080 prohibits an employer from requiring an applicant or employee to waive any right, forum or procedure under FEHA or the Labor Code for receipt of any “employment-related benefit.” This language precludes any settlement agreement for any claims arising under FEHA or the Labor Code. In an employment context, the value provided in a settlement agreement generally is compensation in some form of wage replacement, be it back pay, loss of wages, or front pay. This compensation would likely be considered an “employment-related benefit” and therefore prohibited by AB 3080. Benefits Trial Attorneys The issue of preemption will unquestionably be litigated if AB 3080 becomes law. Approximately 5–10 years will pass for a case under the FAA to reach the Supreme Court, meaning the employee who has suffered the alleged harm will wait that long to receive any final decision on his/her case. Extended litigation also will force employers to defend unnecessary litigation and pay significant costs and fees. The uncertainty and litigation will benefit only trial attorneys, not the employer or employee. Action Needed The CalChamber is encouraging members to contact their senators and Senate Judiciary members to urge them to oppose AB 3080. Let legislators know that precluding the informal resolution of civil claims would overwhelm California’s judiciary system by forcing all claims to be tried by a jury or judge, creating significant delays that would harm individuals who have suffered a wrong. California’s merchandise export trade largely shrugged off the current turmoil over trade policies and kept growing in April, according to a Beacon Economics analysis of U.S. trade statistics newly released by the U.S. Census Bureau. Foreign shipments by California businesses totaled $14.98 billion for the month, a nominal 6.5% gain over the $14.07 billion recorded one year earlier. The state’s exports of manufactured goods in April were up 5.9% to $9.66 billion from $9.12 billion in April 2017. Exports of nonmanufactured goods (chiefly agricultural products and raw materials) surged 13.6% to $1.92 billion from $1.69 billion. Re-exports, meanwhile, grew by 4.3% to $3.4 billion from $3.26 billion. California accounted for 10.9% of the nation’s overall merchandise export trade in April. California Import Growth Slows The Census Bureau reports that California was the state-of-destination for 18.6% of all U.S. merchandise imports in April, with a value of $35.36 billion, 1.9% higher than the $34.71 billion in imported goods in April 2017. Manufactured imports totaled $31.16 billion, up 0.4% from $31.03 billion. Nonmanufactured imports were valued at $4.2 billion, 14.1% higher than the $3.68 billion recorded one year earlier. Closer Look As always, Beacon Economics cautions against reading too much into month-to-month fluctuations in state export statistics, especially when focusing on specific commodities or destinations. Significant variations can occur as the result of unusual developments or exceptional one-off trades and may not be indicative of underlying trends. For that reason, Beacon Economics compares the latest three months for which data are available (i.e., February–April) with the corresponding period in the preceding year. Leading Export Commodities California’s merchandise exports during the first quarter of the year totaled $45.56 billion, a nominal gain of 7.3% from the $42.46 billion during the same period in the previous year. Of the 13 categories of California exports that normally see shipments valued at more than $1 billion in the latest three-month period, all but one reported increases. On the plus side, shipments of Computer & Electronic Products (computers and peripherals; communication, audio and video equipment; navigational controls; and electro-medical instruments) moved up by 3% to $10.88 billion from $10.56 billion. The state’s exports of Transportation Equipment (automobiles, trucks, trains, boats, airplanes, and their parts) edged up by 0.2% to $5.03 billion from $5.02 billion. Exports of Non-Electrical Machinery (machinery for industrial, agricultural and construction uses as well as ventilation, heating, and air conditioning equipment) improved by 14.8% to $4.87 billion from $4.24 billion. Shipments of Miscellaneous Manufactured Commodities (a catchall category of merchandise ranging from medical equipment to sporting goods) increased by 13% to $3.8 billion from $3.36 billion. Chemical exports (including pesticides and fertilizers; pharmaceutical products; paints and adhesives; soap and cleaning products; and raw plastics, resins, and rubber) gained 2% to $3.38 billion from $3.32 billion. Agricultural exports rose 8.4% to $3.47 billion from $3.2 billion. Shipments abroad of Food & Kindred goods grew 11.9% to $2.37 billion from $2.12 billion. Exports of Electrical Equipment and Appliances increased 11.0% to $1.99 billion from $1.79 billion. Exports of Petroleum and Coal Products leaped 42.3% to $1.56 billion from $1.02 billion. Waste & Scrap exports roared ahead by 42.7% to $1.35 billion from $946 million. Exports of Fabricated Metal Products remained essentially unchanged at $1.07 billion. Shipments of Used or Second-hand Merchandise jumped by 30.5% to $1.04 billion from $798 million. On the minus side, exports of Primary Metal Manufacturing products tumbled 37% to $1.06 million from $1.67 billion Destinations Mexico stayed atop the list of California’s most important export destinations during the year’s first quarter. Shipments south of the border grew by a robust 19.8% to $7.47 billion from $6.23 billion. China took second place among the state’s largest export markets, with shipments increasing 11.8% to $4.52 billion from $4.04 billion. Canada came in third even though California’s exports north of the border grew by 10% to $4.27 billion from $3.88 billion. In fourth place was Japan, which imported $3.39 billion worth of California goods, a decline of 0.6% from $3.41 billion during the same period one year earlier. Exports to South Korea rose 16.4% to $2.87 billion from $2.46 billion. Hong Kong saw its California imports plummet by 29.3% to $2.48 billion from $3.51 billion one year ago. Despite impressive growth in exports to China and South Korea, the state’s overall export trade with the economies of East Asia crawled ahead by just 0.8% to $16.78 billion from $16.64 billion. Meanwhile, California’s exports to the European Union were ahead by only 1.5% to $8.09 billion from $7.97 billion. Underscoring the economic significance of the North American Free Trade Agreement, Mexico and Canada together accounted for 25.8% of California’s merchandise export trade in the latest three-month period, up from 23.7% in the same period one year ago. Exports to the two neighbors soared in value by a remarkable 16.1% in the latest three-month period over the same months last year. Mode of Transport The latest three-month period saw 47% of the state’s $45.56 billion merchandise export trade depart by air, while waterborne transport carried 30.6% of the outbound trade. The balance of the state’s exports moved overland. Outlook The outlook for California in the near term is generally positive as underlying economic conditions remain disposed toward export growth. That said, major forecasting agencies have recently been revising global and national forecasts downward compared to earlier in the year. One impediment is a dollar that has rallied since mid-April, gaining less than 5% against a basket of currencies of major trading partners. The most recent indications for growth in the Eurozone are dimming, in part because of slowing output and in part because Italy’s new government includes avowed euro-skeptics. Debt issues also are re-emerging as a constraint on economic expansion across a range of developing nations. For Beacon experts, what clouds the picture most is the unprecedented unpredictability of trade policy in the United States and abroad. President Donald Trump has opted to use tariffs on imported goods as a cudgel to compel the nation’s trading partners to abandon policies he regards as unfairly restrictive on U.S. exports. As a result, the United States is now engaged in increasingly nasty disputes with not only just about every important trading partner, but also with its most vital military allies. In one of the latest developments, Mexico last week imposed new tariffs on U.S. products ranging from steel to pork and bourbon, retaliating against import duties on metals imposed by the Trump administration. Mexico’s retaliatory list also included 20% to 25% duties on types of cheeses and bourbon. Last year, California accounted for 27% of U.S. cheese exports to Mexico. Staff Contact: Susanne T. Stirling Friday was the deadline for bills to pass the house in which they were introduced. Only five job killer bills subject to the first house deadline have passed to the second house. A bill dealing with wage statement penalties was stopped on the Assembly Floor.
Job Killers in Second HouseMoving on to the second house are the following CalChamber-opposed job killer bills:
Held on Assembly Floor AB 2613 (Reyes; D-Grand Terrace), which would have imposed another layer of Labor Code penalties for wage and hour violations in addition to the penalties already available under the Private Attorneys General Act (PAGA) and imposed personal liability onto employees who have no control over the actual payment of wages, was not brought up for a vote by the bill’s author. CalChamber opposed this bill as a job killer because the provisions would have significantly increased litigation against California employers and limited their ability to invest in their workforce. Policy committee hearings may resume on Monday, June 4. Three Job Killer Bills Held in Appropriations; Six Move to Senate or Assembly Floors for Action5/29/2018
Strong opposition from the California Chamber of Commerce helped to stop three job killer bills from continuing past the Assembly Appropriations Committee on Friday to reach Assembly Floor. CalChamber continues call attention to the negative impacts the remaining job killer bills would have on California’s job climate and economic recovery should they become law.
Following are job killer bills that are awaiting action this week by the full Senate or Assembly:
Three bills were held in the Assembly Appropriations Committee on May 25:
Action Needed The CalChamber is encouraging businesses to contact their Assembly and Senate representatives to urge them to vote “no” on these job killer bills. For more information on the remaining “job killer” bills, visit www.CAJobKillers.com Proposition 68 Authorizes Bonds Funding Parks, Natural Resources Protection, Climate Adaptation, Water Quality and Supply, and Flood Protection. Authorizes $4 billion in general obligation bonds for: parks, natural resources protection, climate adaptation, water quality and supply, and flood protection. Placed on Ballot by: Legislature. CalChamber Position: Support Reasons for Position The CalChamber Board voted to support the measure because it will provide funds for: groundwater cleanups that improve water quality; flood protection and repair; clean drinking water projects; and parks in urban and disadvantaged communities. More Information: www.yes68ca.com Proposition 69 Requires that Certain New Transportation Revenues Be Used for Transportation Purposes. Legislative Constitutional Amendment. Requires that certain revenues generated by a 2017 transportation funding law be used only for transportation purposes and generally prohibits Legislature from diverting funds to other purposes. Placed on Ballot by: Legislature. CalChamber Position: Support Reasons for Position The CalChamber Board voted to endorse this measure to add protections for the new transportation revenues approved under CalChamber-supported SB 1 (Beall; D-San Jose; Chapter 5, Statutes of 2017), which enacted the Road Repair and Accountability Act of 2017. More Information: YesProp69.com Proposition 70 Requires Legislative Supermajority Vote Approving Use of Cap-and-Trade Reserve Fund. Legislative Constitutional Amendment. Beginning in 2024, requires that cap-and-trade revenues accumulate in a reserve fund until the Legislature, by a two-thirds majority, authorizes use of the revenues. Placed on Ballot by: Legislature. CalChamber Position: Support Reasons for Position The CalChamber Board voted to support this measure because it will encourage bipartisan support for a cap-and-trade expenditure plan and allow for a process to negotiate expenditures that furthers the goals of the Legislature as a whole. More Information: www.calchamber.com/ballot Proposition 71 Sets Effective Date for Ballot Measures. Legislative Constitutional Amendment. Provides that ballot measures approved by a majority of voters shall take effect five days after the Secretary of State certifies the results of the election. Placed on Ballot by: Legislature. CalChamber Position: Support Reasons for Position The CalChamber Board voted to support the measure because allowing initiatives and referenda to go into effect before the vote has been certified by the Secretary of State can create confusion and even the erroneous implementation of new law. More Information: kevin.mullin@asm.ca.gov Proposition 72 Permits Legislature to Exclude Newly Constructed Rain-Capture Systems from Property-Tax Reassessment Requirement. Legislative Constitutional Amendment. Permits Legislature to allow construction of rain-capture systems, completed on or after January 1, 2019, without requiring property-tax reassessment. Placed on Ballot by: Legislature. CalChamber Position: Support Reasons for Position The CalChamber Board voted to support Proposition 72 because rain water recapture systems are an effective means of conserving water that should be encouraged. More Information: SaveCaWater.org Election Resources For information on how to register to vote or how to vote, contact the office of the Secretary of State at 1-800-345-VOTE (8683) or visit www.sos.ca.gov. The website includes links to check voter status, register to vote online and the official voter information pamphlet. Election information also is available on the California Chamber of Commerce grassroots website at www.calchambervotes.com. The California Chamber of Commerce today added SB 993 (Hertzberg) to its job killer list, bringing the total number of job killers to 28. The latest bill will be considered as a special order of business in the Senate Governance and Finance Committee on May 16.
SB 993 (Hertzberg; D-Van Nuys) would impose a 3% tax on services purchased by businesses in California. CalChamber has identified SB 993 as a job killer because it adds another layer of taxes onto California companies, raising costs, and puts them at a competitive disadvantage. According to CalChamber’s analysis, SB 993 would increase the cost of doing business in an already costly state by taxing most of the services used by businesses, including those necessary for day-to-day operations, like accounting or janitorial services. Additionally, SB 993 would make an already complex tax system even more costly and challenging for California businesses to navigate. The negative impacts of SB 993 will hit small businesses the hardest. Although the bill has a limited exemption from this tax increase for certain small businesses, it certainly does not protect all of them. Small businesses depend on the services included under SB 993 to conduct their operations. While larger businesses will be able to avoid paying taxes on certain services by bringing them in-house, most small businesses will not be able to do so. The burden of complying with this new tax will also be more challenging for small businesses that provide services – as they likely have limited resources to set up a new tax system within their companies. Additionally, such small businesses could suffer a loss of customers and revenue due to higher prices for their services. Even though SB 993 focuses on business-to-business transactions, and attempts to avoid raising taxes on individuals – this bill would increase the costs of producing and selling goods here in California. These costs would ultimately be passed on to consumers – with the higher prices disproportionately impacting working families, CalChamber’s letter states. SB 993 will be heard in the Senate Governance and Finance Committee on May 16. Only 22 job killer bills remain alive; To view the job killer list, visit www.cajobkillers.com. For up-to-date information on the job killer list, follow @CAJobKillers on Twitter. Four California Chamber of Commerce-opposed job killer bills are likely dead for the session, having failed to advance to the Assembly Appropriations Committee for a vote. In addition, a fifth bill was amended recently to remove the job killer tag.
April 27 was the deadline for all policy committees to hear and report any relevant legislation to the Assembly and Senate Appropriations committees. Missed Deadline • AB 1745 (Ting; D-San Francisco) Vehicle Ban: Would have banned the sale of combustion engine vehicles in the state by prohibiting the registration of a new vehicle in the state after 2040 unless it was a zero-emission vehicle. Failed deadline. Assembly Transportation Committee, 04/27/18. • AB 2527 (Muratsuchi; D-Torrance) Costly Litigation Against Small Employers: Would have exposed small businesses who were seeking financial investors in their company to devastating class action litigation by banning the use of arbitration agreements, which is preempted by the Federal Arbitration Act, prohibiting class action waivers, allowing for the award of treble damages, punitive damages, and attorney’s fees, and interfered with contractual negotiations between sophisticated parties by dictating the choice of forum and choice of law for such litigation. Failed deadline. Assembly Business and Finance Committee, 04/27/18. • AB 2571 (Gonzalez Fletcher; D-San Diego) Public Employee Retirement Systems Investment Policy: Sought to publicly shame investment managers and the hospitality companies in which they invest, by forcing them to submit an annual report subject to a public review, that disclosed employee wage information according to gender, ethnicity, and race, exposing such companies to costly litigation. Failed deadline. Assembly Public Employees, Retirement, and Social Security Committee, 04/27/18. • AB 2765 (Low; D-Campbell) Portable Benefits for The Gig Economy: Would have imposed onerous and costly mandates on companies in the gig economy labeled as the “digital marketplace” by adding them under the provisions of the Fair Employment and Housing Act (FEHA), expanding the protected classifications under FEHA for contractors of the digital marketplace to include “familial status,” and created further confusion and uncertainty regarding the use and classification of independent contractors. These new mandates would have dramatically increased the amount of frivolous litigation under FEHA and the Private Attorneys General Act (PAGA) for the digital marketplace. Failed deadline. Assembly Labor and Employment Committee, 04/27/18. Job Killer Tag Removed As a result of April 26 amendments, CalChamber has removed AB 2447 (Reyes; D-Grand Terrace) from the job killer list, but remains opposed. Before the amendments, the bill would have invited more litigation and increased the complexity and cost of complying with the California Environmental Quality Act (CEQA) by forcing lead agencies to make a no discrimination finding before certifying an environmental impact report or adopting a negative declaration for a project. CalChamber remains opposed to AB 2447 because the bill fundamentally changes how CEQA has operated for more than four decades with substantial fiscal and practical impacts. Next Deadline The next significant deadline for job killing legislation is May 11, which is the last day for policy committees to hear and report nonfiscal legislation to the floor for consideration by the entire Assembly or Senate. Legislative committee hearings today will give lawmakers a chance to cast votes to protect sexual harassment victims and employers from being sued for defamation, as well as block trial lawyer-sponsored attempts to create more avenues for litigation.
AB 2770: Sexual Harassment Employer/Employee Protection Scheduled for consideration in the Assembly Judiciary Committee is California Chamber of Commerce-sponsored AB 2770 (Irwin; D-Thousand Oaks), a job creator that seeks to codify case law to ensure victims of sexual harassment and employers are not sued for defamation. Alleged harassers are not only suing victims, but also filing suit against employers for defamation. Such lawsuits put employers in an impossible position as they have an affirmative duty to take reasonable steps to prevent and promptly correct harassment. Even worse, if the alleged harasser’s employment is then terminated, or the alleged harasser resigns, employers are put in an even more difficult position. The company has knowledge of the harassing activity and yet its hands are tied. If the company tells a potential employer that the employee was accused of harassing conduct, the company is on the hook for a defamation claim. If the company stays silent, the harassers are then free to victimize more individuals at their next job without anyone at the new company ever knowing about the unacceptable behavior. AB 2770 would protect employers and allow them to warn potential employers about an individual’s harassing conduct during a reference check without the threat of a defamation lawsuit. CalChamber is asking members to urge their Assembly representatives to vote yes on AB 2770. AB 2074/AB 2995: Painting Businesses into a Corner Also being considered in Assembly Judiciary this morning are two CalChamber-opposed bills that in focusing on lead-based paint create an extraordinary new scheme of product liability that would collectively result in thousands of new lawsuits, benefiting trial lawyers, wherein businesses could be held retroactively liable for alleged harms that they did not cause. AB 2074 (Bonta; D-Oakland) and AB 2995 (Carrillo; D-Los Angeles) set a troubling precedent for all types of consumer products sold in California by discarding the plaintiffs’ burden to prove which entity caused their alleged harm. The bills place into law a system of absolute liability on various type of businesses, including product manufacturers, sellers and distributors, that did nothing more than stock or sell a legal product at the time. Unless an entity could prove it never manufactured, sold, distributed or promoted the product in the “geographical area” or during the “relevant time period”—both of which are undefined—it would have to pay all of the plaintiff’s claimed damages despite having no connection to the alleged harm. AB 2995 defines the mere presence of lead-based paint on a property as an “injury,” automatically defining every home in California with a drop of lead-based paint as an injured property, regardless of whether actual lead-based paint risks exist. By doing so, AB 2995 would establish the “injury to property” that is required to occur in order for the absolute liability outlined in AB 2074 to apply. CalChamber is asking members to urge their Assembly representatives to vote no on AB 2074 and AB 2995. SB 820: Discourages Settlement AgreementsAlso, this afternoon the Senate Judiciary Committee will consider CalChamber-opposed SB 820 (Leyva; D-Chino), which provides that any settlement agreement in a case where sexual harassment, assault, or discrimination have been alleged cannot include a confidentiality provision regarding the allegations of the case, unless the employee/claimant requests confidentiality. As CalChamber articulates in its letter, this is basically already current law. SB 820 will not provide a victim with any greater protection then he/she has now and will only benefit trial attorneys. Instead, SB 820 simply leverages a confidentiality provision as a higher value item for negotiation so that the trial attorneys can increase the amount of the settlement and, therefore, the amount of their contingency fee. The bill will limit the ability to informally resolve civil cases that include an allegation of harassment or failure to prevent harassment CalChamber is asking members to urge their senators to vote no on SB 820. The California Chamber of Commerce has released its list of job creator bills, calling attention to 11 bills that will stimulate the economy and improve the state’s jobs climate.
Since 2008, the CalChamber has identified bills that will encourage employers to invest resources back into the economy and local communities rather than spend them on unnecessary government-imposed costs. Job creating legislation promotes the following policies:
The 2018 job creator bill list follows: AB 1734 (Calderon; D-Whittier) Extension of Film Tax Credits -- Extends California’s current tax credit for motion picture and television productions, which has a sunset date of July 1, 2020, for an additional five years, continuing the success of this tax credit, which has brought more film and television production jobs to this state and has increased business to California. AB 1743 (O’Donnell; D-Long Beach) Career Technical Education -- Reauthorizes and provides appropriations for the Career Technical Education Incentive Grant program, which provides students with necessary training and education to prepare them for a variety of career options. AB 2016 (Fong; R-Bakersfield) Private Attorneys General Act — Mitigates the financial threat of frivolous litigation by requiring that plaintiffs provide a more detailed account of the allegations in the required Private Attorneys General Act (PAGA) notice, allowing an employer to utilize these financial resources to grow their workforce instead. AB 2482 (Voepel; R-Santee) Flexible Workweek — Allows for an employee-selected flexible work schedule and relieves employers of the administrative cost and burden of adopting an alternative workweek schedule per division, which accommodates employees, helps retain employees, and allows the employer to invest these savings into growing its workforce. AB 2509 (Waldron; R-Escondido) Employee Flexibility -- Provides non-exempt employees, who work a traditional 8-hour day schedule, the opportunity to request an on-duty meal period in order to leave work 30 minutes earlier, which helps accommodate employee requests, retain employees, and offer more flexible work arrangements. AB 2770 (Irwin; D-Thousand Oaks) Sexual Harassment Employer/Employee Protection -- Codifies case law to ensure victims of sexual harassment and employers are not sued for defamation by the alleged harasser when a complaint of sexual harassment is made and the employer conducts its internal investigation. This bill also provides additional protections to employers by expressly allowing employers to inform potential employers about the sexual harassment investigation and findings. Reducing the cost of frivolous litigation allows an employer to utilize these financial resources to grow its workforce. AB 2907 (Flora; R-Ripon) Private Attorneys General Act -- Provides employers with a reasonable opportunity to cure specific Labor Code violations before being subject to costly and frivolous litigation under the Labor Code Private Attorneys General Act (PAGA), allowing an employer to invest this financial savings into growing its workforce. AB 2936 (Nazarian; D-Sherman Oaks) Extension of Film Tax Credits -- Extends California’s current tax credit for motion picture and television productions, which has a sunset date of July 1, 2020, for an additional five years, continuing the success of this tax credit, which has brought more film and television production jobs to this state and has increased business to California companies that supply productions with goods and services. SB 832 (Portantino;D-La Cañada Flintridge) Extension of Film Tax Credits -- Extends California’s current tax credit for motion picture and television productions, which has a sunset date of July 1, 2020, for an additional five years, continuing the success of this tax credit, which has brought more film and television production jobs to this state and has increased business to California companies that supply productions with goods and services. SB 951 (Mitchell; D-Los Angeles) Extension of Film Tax Credits -- Extends California’s current tax credit for motion picture and television productions, which has a sunset date of July 1, 2020, for an additional five years, continuing the success of this tax credit, which has brought more film and television production jobs to this state and has increased business to California companies that supply productions with goods and services. SB 1243(Portantino; D-La Cañada Flintridge) Career Training Education — Establishes the California State Pathways in Technology (CA P-TECH) program, to encourage and assist selected schools, in a public-private partnership, to prepare students for high-skilled, high demand jobs in technology, manufacturing, health care and finance. For more information on the 2018 job creator bills, visit www.calchamber.com/jobcreators. Despite employer objections, the Senate Labor and Industrial Relations Committee this week passed two California Chamber of Commerce-opposed job killer bills. One deals with releasing company pay data and the other with unlawful employment practices.
Both bills are opposed by a large coalition of employer groups and local chambers of commerce. • SB 1284 (Jackson; D-Santa Barbara) Disclosure of Company Pay Data. • SB 1300 (Jackson; D-Santa Barbara) Removes Legal Standing and Prohibits Release of Claims. SB 1284: Pay Data Report SB 1284 requires that in 2019, an employer that is incorporated in California with 100 or more employees must submit a pay data report to the Department of Industrial Relations (DIR). CalChamber has identified SB 1284 as a job killer because the bill creates a false impression of wage discrimination or unequal pay where none exists and therefore subjects employers to unfair public criticism, enforcement measures, and significant litigation costs to defend against meritless claims. Just last year, Governor Edmund G. Brown Jr. vetoed AB 1209 (Gonzalez Fletcher; D-San Diego), which was a very similar bill. SB 1284 provides the same uncertainty and ambiguity as AB 1209. The CalChamber and coalition also oppose SB 1284 because it: • Exposes employers to public shaming for wage disparities that are not unlawful. • Allows employers to use the federal Employer Information Report, otherwise known as the EEO-1 Report. • Utilizes data that may be affected by employee choices. CalChamber Policy Advocate Laura Curtis explains to the Senate Labor and Industrial Relations Committee why SB 1284 (Jackson; D-Santa Barbara) is a job killer. SB 1300: Legal Standing/Release of Claims SB 1300 removes the current legal standing requirement for specific Fair Employment and Housing Act (FEHA) claims and limits the use of nondisparagement agreements and general releases. CalChamber has identified SB 1300 as a job killer because these provisions will significantly increase litigation against California employers and limit their ability to invest in their workforce. The CalChamber and coalition also oppose SB 1300 because it: • Removes the current standing requirement and allows anyone to sue a company for specific harassment claims. • Is unnecessary and exposes employers to costly litigation. Sexual harassment prevention is already regulated by the Department of Fair Employment and Housing (DFEH). • Will deter employers from conducting self-audits and providing severance agreements. • Will chill the use of settlement agreements, disadvantaging employers and employees. Key Vote Both SB 1284 and SB 1300 passed Senate Labor and Industrial Relations on April 11 by votes of 4-1: Ayes: Pan (D-Sacramento), Jackson (D-Santa Barbara), Mitchell (D-Los Angeles), Wieckowski (D-Fremont). No: J. Stone (R-Temecula). Action Needed Both SB 1284 and SB 1300 will be considered next by the Senate Judiciary Committee. The CalChamber is urging members to contact their senator and members of the committee and ask them to oppose SB 1284 and SB 1300 as job killers. Launches Capitol Insider Blog
The California Chamber of Commerce yesterday released its annual list of job killer bills and launched its new Capitol Insider Blog, which, in this first installment, provides details about the list and the 21 bills that have been identified as those that pose the greatest threat to California’s job climate and economy. Sign up to follow the Capitol Insider blog at http://capitolinsider.calchamber.com/ In releasing the job killer list, CalChamber President and CEO Allan Zaremberg said, “Each bill on this year’s job killer list poses a threat to certainty for employers and investors in our state. Besides undermining the state’s economic health, job killer bills have a cumulative negative impact on the businesses and entrepreneurs who provide the resources necessary to fund critical state programs like health care and education. Legislators must measure the impact that each of these proposed new laws will have, not just when the economy is expanding but also when California experiences the inevitable downturn.” The 2018 list of job killer bills follows: AB 1745 (Ting; D-San Francisco) Vehicle Ban — Bans the sale of combustion engine vehicles in the state by prohibiting the registration of a new vehicle in the state after 2040 unless it is a zero-emission vehicle. AB 1761 (Muratsuchi; D-Torrance) Customer Blacklist and Hotel Workers Panic Button — Denies hotel guests due process, by requiring hotels to create a blacklist of guests who have been accused, yet not proven, to have engaged in inappropriate behavior toward hotel employees, and precludes the hotel from allowing those guests on the blacklist to enter their properties for three years. AB 1902 (Levine; D-San Rafael) Interference with Contracts — Discourages and reduces “personal service contracts” as defined, by unfairly increasing the contract price for these services based upon an undefined and unspecified “area income” rate that presumably will include wages from different industries and different occupations that are not comparable to personal services. It also provides the Department of Industrial Relations with extraordinary authority to value companies, determine “similar services” to be included under the provisions of this bill, and what constitutes “area income.” AB 2069 (Bonta; D-Oakland) Medical Marijuana in Employment — Undermines employer’s ability to provide a safe and drug-free workplace by creating a new protected classification of employees who use marijuana for medical purposes, and exposing employers to costly and unnecessary litigation under the Fair Employment and Housing Act (FEHA) whenever the employer terminates an employee in this new protected class who has created a safety hazard in the workplace. AB 2351 (Eggman; D-Stockton) Targeted Tax on High Earners -- Unfairly increases the personal income tax rate from 13.3% – which is already, by far, the highest income tax rate in the country – to 14.3% for one category of taxpayers (including some proprietors), who already pay half of California’s income taxes, forcing them to mitigate these costs through means that include reducing workforce, in order to provide more funding for higher education. AB 2527 (Muratsuchi; D-Torrance) Costly Litigation Against Small Employers — Exposes small businesses who are seeking financial investors in their company to devastating class action litigation by banning the use of arbitration agreements, which is preempted by the Federal Arbitration Act, prohibiting class action waivers, allowing for the award of treble damages, punitive damages, and attorney’s fees, and interferes with contractual negotiations between sophisticated parties by dictating the choice of forum and choice of law for such litigation. AB 2571 (Gonzalez Fletcher; D-San Diego) Public Employee Retirement Systems Investment Policy — Seeks to publicly shame investment managers and the hospitality companies in which they invest, by forcing them to submit an annual report subject to a public review, that discloses employee wage information according to gender, ethnicity, and race, exposing such companies to costly litigation. AB 2765 (Low; D-Campbell) Portable Benefits for The Gig Economy — Imposes onerous and costly mandates on companies in the gig economy labeled as the “digital marketplace” by adding them under the provisions of the Fair Employment and Housing Act (FEHA), expanding the protected classifications under FEHA for contractors of the digital marketplace to include “familial status,” and creates further confusion and uncertainty regarding the use and classification of independent contractors. These new mandates will dramatically increase the amount of frivolous litigation under FEHA and the Private Attorneys General Act (PAGA) for the digital marketplace. AB 3080 (Gonzalez Fletcher; D-San Diego) Ban on Settlement Agreements and Arbitration Agreements — Significantly expands employment litigation and increases costs for employers and employees by banning settlement agreements for labor and employment claims as well as arbitration agreements made as a condition of employment, which is likely preempted under the Federal Arbitration Act and will only delay the resolution of claims. Banning such agreements benefits the trial attorneys, not the employer or employee. ACA 22 (McCarty; D-Sacramento) Middle Class Fiscal Relief Act — Unnecessarily increases California’s 8.84% corporate tax rate, already one of the highest in the nation, to 18.84%, which will encourage companies to leave the state and discourage companies from expanding or relocating here. SB 1284 (Jackson; D-Santa Barbara) Disclosure of Company Pay Data — Unfairly requires California employers to submit pay data to the Department of Industrial Relations, creating a false impression of wage discrimination or unequal pay where none exists and, therefore, subjecting employers to unfair public criticism, enforcement measures, and significant litigation costs to defend against meritless claims. SB 1300 (Jackson; D-Santa Barbara) Removes Legal Standing and Prohibits Release of Claims — Significantly increases litigation by removing standing requirement for plaintiff alleging failure to prevent harassment or discrimination when no harassment even occurs, limits the use of severance agreements, and prohibits the use of a general release or nondisparagement clause in employer/employee contracts. SB 1398 (Skinner; D-Berkeley) Increased Tax Rate — Threatens to significantly increase the corporate tax rate on publicly held corporations and financial institutions up to 15% according to the wages paid to employees in the United States, and threatens to increase that rate by 50% thereafter, if the corporation or institution reduces its workforce in the United States and simultaneously increases its contractors. 2017 JOB KILLER CARRY-OVER BILLS AB 127 (Committee on Budget) Threatens Energy Reliability — Threatens energy reliability and will lead to the elimination of jobs by mandating the closure of the Aliso Canyon natural gas storage facility. ACA 4 (Aguiar-Curry; D-Winters) Lowers Vote Requirement for New Tax Increases — Unnecessarily reduces the voter threshold from two-thirds to 55% for local governments to enact special taxes, including parcel taxes, for the purpose of improving public infrastructure and affordable housing, which creates an opportunity for discriminatory and higher taxes to be imposed against disfavored industries and commercial property owners. ACA 11 (Caballero; D-Salinas) Targeted Retail Industry Tax Increase — Exposes the retail industry to increased taxes by imposing a quarter-cent sales tax increase to fund affordable housing and homeless shelters, without creating greatly needed market-rate housing. SB 49 (de León; D-Los Angeles) Creates Uncertainty and Increases Potential Litigation Regarding Environmental Standards — Creates uncertainty by giving broad and sweeping discretion to State agencies to adopt rules and regulations more stringent than the federal rules and regulations in effect on January 19, 2017 through an expedited administrative procedure without public participation or input, when the State agencies determine that federal action leads to less stringent laws and regulations than those in effect on January 19, 2017; and increases the potential for costly litigation by creating private rights of action under California law, which may be triggered when a State agency takes the foregoing discretionary action. SB 538 (Monning; D-Carmel) Arbitration Discrimination — Unfairly and unlawfully discriminates against arbitration agreements by restricting the formation of antitrust arbitration agreements in hospital contracts, leading to costly litigation over preemption by the Federal Arbitration Act. SB 562 (Lara; D-Bell Gardens) Government-Run Health Care — Penalizes responsible employers and individuals and results in significant new taxes on all Californians and California businesses by creating a new single-payer government-run, multibillion-dollar health care system financed by an unspecified and undeveloped “revenue plan.” SB 774 (Leyva; D-Chino) Increased Permitting Fees and Delayed Permitting — Exposes permittees to unknown, increased fees by providing the Department of Toxic Substances Control (DTSC) a blank check to impose additional fees on permittees to implement and perform its statutory requirements when its primary sources of funding have structural deficits and creates substantial uncertainty and delay of facility permitting by interjecting a new board into the organizational structure. SCA 6 (Wiener; D-San Francisco) Lowers Vote Requirement for Tax Increases — Unnecessarily reduces the voter threshold from two-thirds to 55% for local governments to enact special taxes, including parcel taxes, for the purpose of providing transportation services, which creates an opportunity for discriminatory and higher taxes to be imposed against disfavored industries and commercial property owners. Cumulative Job Killer Vetoes 2017: 27 job killers identified, 3 sent to Governor Brown, 2 signed, 1 vetoed. 2016: 24 job killers identified, 5 sent to Governor Brown, 4 signed, and 1 vetoed; 2015: 19 job killer bills identified, 3 sent to Governor Brown, 1 signed, and 2 vetoed; 2014: 27 job killer bills identified, 2 sent to Governor, signs 2; 2013: 38 job killer bills identified, 1 sent to Governor, signs 1; 2012: 32 job killer bills identified, 6 sent to Governor, signs 4, 2 vetoed; 2011: 30 job killer bills identified, 5 sent to Governor, 1 signed, 4 vetoed; 2010: 43 job killer bills identified, 12 sent to Governor, 2 signed, 10 vetoed; 2009: 33 job killer bills identified, 6 sent to Governor, 6 vetoed; 2008: 39 job killer bills identified, 10 sent to Governor, 1 signed, 9 vetoed; 2007: 30 job killer bills identified, 12 sent to Governor, 12 vetoed; 2006: 40 job killer bills identified, 11 sent to Governor, 2 signed, 9 vetoed; 2005: 45 job killer bills identified, 8 sent to Governor, 1 signed, 7 vetoed; 2004: 23 job killer bills identified, 10 sent to Governor, 10 vetoed; 2003: 53 job killer bills identified, 13 sent to Governor, 11 signed, 2 vetoed; 2002: 35 job killer bills identified, 17 sent to Governor, 12 signed, 5 vetoed 2001: 12 job killer bills identified, 5 sent to Governor, 3 signed, 2 vetoed; 2000: No job killers identified. Of 4 bad bills identified at end of session, Governor Davis signs 2 and vetoes 2. 1999: 30 job killer bills identified, 9 sent to Governor, 6 signed, 3 vetoed; 1998: 64 job killer bills identified, 11 sent to Governor, 11 vetoed. 1997: 57 job killer bills identified, 9 sent to Governor, 9 vetoed. The California economy is humming. Unemployment is at historic lows, even in many parts of the state often left behind in good times.
But even this silver lining has a cloud. Parts of the Bay Area and Southern California are beyond full employment, which means some California regions are creating more jobs than the labor force can support. Talent-Worker Mismatch As Robert Kleinhenz of Beacon Economics wrote, “with the state at full employment, job growth and general economic gains will largely be constrained by the availability of workers. This is good for workers who might achieve pay increases in the coming months and quarters, but it poses a challenge for firms that want to grow but cannot because they are unable to hire the necessary workers.” Nationally, half of open, available positions go unfilled because the candidates aren’t available. At the same time, 40% of businesses can’t take on more work because they can’t fill open jobs. We have an extraordinary mismatch between our talent needs and the pipeline of new or potential workers. The flip side is that many of our students face a different future. Only 40% of the state’s 2.2 million young adults hold an associate’s degree or higher and many lack the skills needed for workforce success. According to the Public Policy Institute of California, California needs an additional 1.1 million career-ready college graduates by 2030 to meet the needs of the economy. Unless trends are reversed, California’s stature as a vibrant, global economy is at risk. In other words, we’re all in this together. Linked Learning Fortunately, many public leaders and groups are working to address these needs. For my part, I want to share the promise of Linked Learning—which we believe can provide a long-term pipeline of well-qualified students, as well as enabling high school and college graduates to stay in California in jobs that pay well and provide for upward mobility. Linked Learning is based on the idea that students work harder and dream bigger if their education is relevant to them. The Linked Learning approach integrates four key elements to develop college- and career-ready graduates:
First, the probability of making a living wage in today’s economy without some form of postsecondary education is already low and will only diminish. Increasingly, career success depends on a postsecondary degree or credential. Second, without an explicit goal for preparing high school students for a full range of post-graduation opportunities, we risk reverting to tracking students whom an adult may think are incapable of college. A core component of the experience in any Linked Learning pathway is work-based learning, which allows students to apply their classroom learning in professional settings and gain real-world experience in the process. Students learn what it takes to thrive in the professional world through partnerships with local employers that offer internships, mentoring, job shadows and similar opportunities. This adds depth and meaning to students’ education, as classroom learning becomes more meaningful and relevant to students when paired with opportunities to experience the subject matter firsthand. Business Challenge Where do we in the business community fit in? Our challenge is to overcome a current lack of engagement by the California business community in providing workplace experiences for youth, despite a strong business case for the recruitment of young people. Talent pipeline strategies support long-term business productivity and competitiveness in an aging society. Investing in young people helps employers engage with their community and strengthen their brand. Growing your own workforce is also more cost-effective than buying the skills on the open market. Our response to the twin challenges of a talent pipeline deficit and high school graduates underprepared for career and college is to continue our momentum to engage chambers of commerce and other local economic development organizations to promote employer engagement in work-based learning. Labor Law Standards Subject to Interpretation
California employers are once again left with uncertainty regarding the Division of Labor Standards Enforcement (DLSE) Enforcement Policies and Interpretations Manual following a California Supreme Court ruling earlier this month. The state high court’s March 5 ruling in Alvarado v. Dart Container Corporation of California dealt mainly with how an employer must calculate overtime compensation for an employee who earns both an hourly rate and a flat sum nondiscretionary bonus. In its analysis, the Supreme Court also provided lengthy discussion on whether the DLSE’s manual was binding authority on the courts. The Supreme Court concluded that the DLSE Enforcement Manual is a void underground regulation and not entitled to any deference. However, the Supreme Court held that it still could consider the DLSE’s interpretation if the court was independently persuaded that the interpretation was ultimately correct. In this case the Supreme Court was persuaded and adopted the DLSE’s method of calculating overtime on flat sum bonuses. The DLSE’s method was more favorable to the plaintiff than the federal standard used by the employer. Earlier Decision This is not the first time that the California Supreme Court has opined about the validity of the DLSE manual. More than two decades ago, the California Supreme Court discussed the legitimacy of the DLSE manual in Tidewater Marine Western, Inc. v. Bradshaw (December 19, 1996). In Tidewater, the Court was tasked with deciding whether the DLSE manual constituted regulations within the meaning of the Administrative Procedure Act (APA). If a policy constitutes a regulation under the APA, it must follow specific protocols to be adopted. The APA outlines a technical process that requires public participation to “ensure that those persons or entities whom a regulation will affect have a voice in its creation as well as notice of the law’s requirements so that they can conform their conduct accordingly.” If a regulation is not properly adopted per the APA requirements, it will be deemed unlawful. Notably, the DLSE manual has never been adopted through the APA process. Procedures Not Identical Although the Labor Code does include procedural protections for adopting some regulations “analogous to those in the APA,” the procedures are not identical to the APA. The procedures also apply only to the Industrial Welfare Commission and not the DLSE manual. Ultimately, the Tidewater court held that because the DLSE manual provided interpretation of the law itself in its policy manual, the manual is actually regulatory in nature. And since “[n]o state agency shall issue, utilize, enforce, or attempt to enforce … a regulation” without complying with the APA’s notice and comment provisions, the DLSE manual was found to be a void underground regulation. The Tidewater court went on to say that the DLSE manual is simply “one among several tools available to the court,” stating that “[d]epending on the context, it may be helpful, enlightening, even convincing,” or “[i]t may sometimes be of little worth.” Employer Uncertainty So, where does this leave employers? Employers are still in the same position they have been in for decades. Tidewater and now Alvarado v. Dart have unfortunately not changed a thing. The DLSE will continue to interpret and enforce state labor laws and employers still will not know in advance whether the courts will uphold the DLSE’s interpretations—potentially subjecting an employer to a retroactive interpretation and penalties and/or damages, as seen in Alvarado v. Dart. Businesses need more certainty that they’re correctly applying the law and shouldn’t be left to guess. For now, employers should still rely on legal counsel when making difficult employment decisions and should assume that the courts will continue to utilize the DLSE manual as “one among several tools available to the court” when interpreting California law. California’s corporate tax base may increase by up to 12% as a result of federal tax reform legislation, according to a study recently released by the State Tax Research Institute (STRI).
This means that revenues from California’s corporate income tax could increase by as much as $1.3 billion—without any action by state lawmakers to increase corporate tax rates or income definitions. Larger tax revenues will result from the new tax reform law, which limited deductions and changed foreign tax rules. The federal tax law imposed new restrictions on companies’ ability to deduct interest payments, exchange property without paying capital gains taxes, deduct some fringe benefits and immediately write off future research costs. At the federal level, those changes were far outweighed by the rate cut. According to Karl Frieden, vice president and general counsel at the Council on State Taxation, the study’s sponsor, “The state tax increase for corporations is totally inadvertent.” The windfall from federal tax reform will likely produce even more revenue than would a recently proposed constitutional amendment to impose a 10% surcharge on corporate net incomes of more than $1 million. The avowed purpose of that measure is “to share with ordinary California taxpayers the economic gains provided by federal income tax cuts for corporations with over one million dollars ($1,000,000) in net income.” It turns out that federal tax reform will accomplish that goal without the Legislature casting a vote. “The Impact of Federal Tax Reform on State Corporate Income Taxes” was prepared for STRI by Ernst & Young. STRI is the 501(c)(3) research affiliate of Council on State Taxation, a nonprofit trade association of multistate corporations. Overtime pay in California is based on the employee’s “regular rate of pay,” which is not always an employee’s normal hourly wage and must include almost all forms of pay that the employee receives. But how do you calculate the regular rate of pay when an employee receives both an hourly wage and a flat sum bonus – such as an extra $15 for working a weekend shift? This week, the California Supreme Court ruled that an employer must calculate the regular rate of pay by dividing the employee’s total compensation by the number of nonovertime hours an employee worked during the pay period, rather than the total number of hours the employee worked, including overtime hours (Alvarado v Dart Container Corporation of California). In the case, Dart Container Corporation of California, which manufactures food service products such as cups and plates, allegedly maintained a policy of paying a flat “attendance bonus” of $15 per day to employees who worked Saturday and Sunday shifts, regardless of the number of hours worked on the weekend shift. An employee sued, claiming he was improperly paid overtime during the weeks that he earned the weekend attendance bonus. The employee argued that overtime pay on any flat sum bonus should be divided only by the “regular” hours he worked that week (the method in the Division of Labor Standards Enforcement [DLSE] manual), not by the “total” hours worked during the week (regular hours plus overtime hours worked, the federal formula). For example, to determine the employee’s regular rate of pay, you would divide only by 40 regular hours instead of 48 total hours (regular hours plus overtime hours). This would result in a higher regular rate of pay and, thus, a higher overtime rate. The lower court followed the federal formula for calculating overtime on flat sum bonuses and rejected the DLSE’s method found in its Enforcement Manual — finding that the manual is only guidance and not legally binding, and that California had no controlling law. Supreme Court Agrees with Employee The California Supreme Court unanimously reversed the lower court and approved the DLSE method of calculating the regular rate of pay when a flat sum bonus is involved: Employers must divide the employee’s total compensation by the employee’s nonovertime hours worked (not by the total hours worked). The Court reasoned that a flat sum bonus is not tied to the number of hours worked – the $15 will be paid when an employee picks up a weekend shift, regardless of how many hours the employee worked that week. Because the flat sum bonus was payable even if the employee didn’t work overtime, only the nonovertime hours should be considered when calculating the regular rate of pay. The Court also based its ruling on two other policy factors:
Interestingly, the Court held that the DLSE manual is a void underground regulation and not entitled to any deference. But, despite this holding, the Court held that it could consider the DLSE’s interpretation of the law if the Court was independently persuaded it was correct —which in this case it was. Tough Decision The California Supreme Court was presented with an employer who was seemingly trying to do the right thing — giving its employees a bonus and taking that bonus into account when calculating overtime pay. The employer relied on a commonly used federal formula to calculate the regular rate of pay where there was no specific controlling state law on the issue. Despite these efforts, the Court found against the employer. The employer asked the Court to only apply the decision going forward – as it would be unfair to hold the employer liable when no statute specifically addressed the flat-sum bonus calculation. Unfortunately, the Court determined that the employer should not be given a “free pass” and that its holding would apply retroactively, not just going forward. This decision is limited to flat-sum bonuses, but we may see employees argue that it should apply to other types of extra compensation. Employers who want to give “extra pay” to hourly workers should consult legal counsel. CalChamber members can test their knowledge of some of the rules and exceptions for paying overtime in California in the Overtime Quiz. Not a member? Learn more about what HRCalifornia can do for you. The Internal Revenue Service (IRS) and the Federal Bureau of Investigation (FBI) recently warned payroll and human resources professionals of a dangerous Form W-2 phishing scam that victimized hundreds of organizations and thousands of employees during the last two tax seasons—and this season is no different.
The scam goes like this: Cybercriminals identify your company’s chief operating officer or other high-level executives, pose as the executive and send emails to payroll personnel. In these emails, the fraudsters request copies of employee Forms W-2 or ask for a list of all employees and Social Security numbers (SSNs). Using a technique called business email compromise or business email spoofing, these emails look like they were sent from within your organization. No Typical Email According to the IRS, the initial email may be a friendly, “Hi, are you working today?” type of exchange before the fraudster asks for all Form W-2 information. But that isn’t always the case. Last year, one actual email simply asked payroll, “[S]end me the updated list of employees with full details (Name, Social Security Number, Date of Birth, Home Address, Salary) as of 2/22/2016.” Criminals then use the stolen personal information and data on the W-2s, such as SSNs, to file fraudulent tax returns for refunds. Or they sell the information on the “Dark Net.” Last year’s scams affected all types of employers—small and large businesses, public schools and universities, hospitals, tribal governments and charities. In 2017, reports about this scam to phishing@irs.gov from victims and nonvictims jumped to approximately 900, up from 100 the previous year. More than 200 employers were victimized in 2017, which translated into hundreds of thousands of employees who had their identities compromised. Action Items Employers need to educate payroll, HR and finance personnel of the W-2 scam. The IRS also urges employers to:
Employers also should immediately notify the IRS if they are victimized. The IRS can then take steps to help prevent employees from being victims of tax-related identity theft. Unfortunately, because of the nature of these scams, some businesses and organizations don’t realize for days, weeks or months that they were scammed. The IRS has a special email notification address specifically for employers to report Form W-2 data thefts. Here’s how Form W-2 scam victims can notify the IRS:
Employers can learn more at the IRS webpage on Form W-2/SSN Data Theft: Information for Businesses and Payroll Service Providers. A February 21 press release from the FBI Internet Crime Complaint Center, ic3.gov, provides additional information about how to report the situation to state tax agencies and other law enforcement officials. The California Chamber of Commerce Board of Directors voted to support Proposition 68 (The California Clean Water & Safe Parks Act), a bond measure that will appear on the June 2018 ballot. The measure funds vital investments in the state’s natural resources, with a crucial emphasis on water quality and reliability. CalChamber is proud to be a part of the broad coalition supporting Prop. 68 and urges members to join in issuing support for the bond today by clicking the link at the campaign website: https://yes68ca.com. CalChamber’s endorsement has been echoed by organizations throughout the state, including the League of California Cities, Association of California Water Agencies, the American Heart Association, California State Parks Foundation, The Nature Conservancy and League of Women Voters. Why CalChamber Supports The state Legislature passed SB 5 (de León; D-Los Angeles) to put the bond measure on the ballot. If approved by voters, the measure would authorize the issuance of $4 billion in general obligation bonds. The funds for water quality and supply total $1.27 billion of the $4 billion (30%). The funds for environmental protection and restoration total $2.83 billion of the $4 billion (70%). The CalChamber Board voted to support Prop. 68 because the measure:
Why Join Endorsers Prop. 68 will help tackle some of the most critical issues facing the state, helping to make California’s water supplies more secure, making needed investments in drought preparedness and ensuring every California community has access to safe, quality parks. The measure will fund projects to ensure clean drinking water throughout California, protect communities from floods, safeguard the state’s oceans, rivers, lakes and streams, and build new outdoor spaces in neighborhoods with the greatest need. The CalChamber invites members to join us in pushing for Prop. 68’s passage by lending their names to the broad coalition of organizations already supporting the measure. For further information on Prop. 68, please contact Sarah Melbostad at smelbostad@fionahuttonassoc.com or (818) 760-2121. California Attorney General Xavier Becerra and Labor Commissioner Julie Su yesterday issued two documents for California employers dealing with California’s Immigrant Worker Protection Act (AB 450).
Attorney General Becerra issued an advisory providing an overview of and guidance on the privacy prescriptions under AB 450. Commissioner Su also issued joint guidance on frequently asked questions to help employers and workers understand and comply with the new state law. Under AB 450, all employers, regardless of size, must limit U.S. Immigration and Customs Enforcement (ICE) agents’ access to both the worksite and employee records, and must follow new notice obligations. This law applies to all California employers and was effective January 1, 2018. Warrants/Subpoenas Required California employers can no longer consent voluntarily to allow ICE to enter nonpublic work areas or to access company records. Instead, ICE must present legal documentation before employers can allow access.
Employers must follow specific requirements related to Form I-9 inspections. For example, within 72 hours of receiving a Notice of Inspection, California employers must post a notice to all current employees informing them of any federal immigration agency’s inspections of Forms I-9 or other employment records. CalChamber added the new Notice to Employee English and Spanish versions to the HRCalifornia website. These forms are available for free. Employers also have obligations once the inspection is over. Within 72 hours of receiving the inspection results, employers must provide each “affected employee” a copy of the results and a written notice of the employer’s and employee’s obligations arising from the inspection. The written notice must contain specific information and must be hand-delivered in the workplace, if possible. An “affected employee” is one identified by the inspection results as potentially lacking work authorization or having document deficiencies. Unions also have the right to receive notices. An employer that fails to follow any of these notice requirements can be fined between $2,000 to $5,000 for a first violation and $5,000 to $10,000 for each subsequent violation. At the same time, federal penalties for Form I-9 violations can range from a couple hundred dollars to more than $20,000. Preparation Is Essential Because the timeframes are so short, preparation is key to meeting the notice requirements. Employers should have a process in place to respond to Notices of Inspection. Employers should identify who in their organization would likely receive a Notice of Inspection and confirm that person knows how to respond. CalChamber members can learn more about Worksite Immigration Enforcement and Protections in the HR Library. Not a member? Learn about the benefits of membership. The white paper, Worksite Immigration Enforcements: What You Need to Know is available for nonmembers to download. CalChamber members can also access this white paper on HRCalifornia. California’s Immigrant Worker Protection Act (AB 450) provides California workers with protection from immigration enforcement while on the job. This law applies to all California employers and was effective January 1, 2018. One of the requirements of this new law is that employers must provide notice to all current employees when a federal immigration agency intends to inspect the employer’s Forms I-9 or other employment records. Required Notice to Employees If an employer receives a Notice of Inspection from a federal immigration agency, the employer must post a required notice to employees in the workplace within 72 hours of receiving the Notice of Inspection. The Labor Commissioner released an official notice for employers to use. The Notice to Employee (Labor Code section 90.2) is available in English and Spanish. The notice must be posted in the language normally used to communicate with employees. A copy of the Notice of Inspection and any accompanying documents must be posted along with the required notice. In addition to posting the notice in the workplace, employers must give the notice to the employees’ collective bargaining representative(s), if any. Additional Notice Requirements Employers also have notice obligations once the inspection is over. Within 72 hours of receiving the inspection results, employers must give each “affected employee” a copy of the results and a written notice of the employer’s and employee’s obligations arising from the inspection. An “affected employee” is one identified by the inspection results as potentially lacking work authorization or having document deficiencies. There is not a template for this notice; it must be specific to the affected employee. Preparation Is Essential Employers only have 72 hours from the time they receive a Notice of Inspection to generate and post the required notice to employees, and only 72 hours from receipt of the inspection results to notify affected employees. Employers who violate the notice requirements can face penalties of up to $10,000 per violation, depending on whether it’s a first or subsequent offense. Because the timeframes are so short, preparation is key to meeting the notice requirements. Employers should have a process in place to respond to Notices of Inspection. Employers should identify who in their organization would likely receive a Notice of Inspection and confirm that person knows how to respond. CalChamber added the new Notice to Employee English and Spanish versions to the HRCalifornia website. These forms are available for free. CalChamber members can learn more about Worksite Immigration Enforcement and Protectionsin the HR Library. Not a member? Learn about the benefits of membership. State agencies must take seriously the requirement to conduct a timely, accurate economic analysis of major regulations, according to a just-released opinion by the 5th District Court of Appeal. In a unanimous opinion upholding the trial court, the appellate justices found that the final economic impact analysis used in rulemaking must be based on evidence, as must the responses to public comments regarding nonspeculative economic impacts which introduce new evidence into the rulemaking file. The California Chamber of Commerce filed a friend-of-the-court brief in the case. The court also ruled that a state agency must address both intrastate and interstate economic competitiveness impacts and concerns. In deciding this case, the appellate court rejected the application of a deferential standard of review to the state agency’s interpretation of its obligations under the Administrative Procedures Act (APA). In effect, the court held that the agency doesn’t get to decide for itself what the Legislature meant by holding the agency accountable. Core Dispute The APA ruling in this dispute, John R. Lawson Rock & Oil, Inc. and California Trucking Association v. State Air Resources Board et al., Case No. F074003, centered around the adequacy of the economic analysis conducted by the Air Resources Board (ARB) when it adopted an amendment to a rule regulating diesel truck engines. The California Trucking Association successfully argued that the analysis was a “rosy scenario without merit,” and that the economic analysis “merely evaluated the Amendments’ ‘benefits,’ and did not include any analysis of the Amendments’ potential ‘adverse economic impact[s]’ on affected businesses.” The appellate court found that behavior unacceptable. The court also rejected the agency’s willful ignorance of evidence of additional economic impacts, developed through the APA’s iterative regulatory analysis and review process. That is, once an agency is made aware of relevant economic information—especially potentially adverse economic impacts—then it must address those impacts in good faith as it completes its final economic analysis. Legislative Authorization The requirement that agencies conduct rigorous economic impact analyses was enacted by the Legislature in 2011 (SB 617; R. Calderon; D-Montebello). The CalChamber was a key supporter of the legislation and has worked closely with the Department of Finance to develop the rules by which agencies must comply with these requirements. Joining the CalChamber in filing the amicus curiae brief in this case were the California Manufacturers and Technology Association, California Business Properties Association, California Retailers Association, Consumer Specialty Products Association, California Independent Oil Marketers Association, Automotive Specialty Products Alliance, National Elevator Industry and Pacific Merchant Shipping Association. As of January 1, California employers must comply with strict rules passed under the new Immigrant Worker Protection Act (AB 450), which protects workers in the state from immigration enforcement while they’re on the job.
Under AB 450, all employers, regardless of size, must limit U.S. Immigration and Customs Enforcement (ICE) agents’ access to both the worksite and employee records, and must follow new notice obligations. The Labor Commissioner and the Attorney General have authority to enforce the act’s provisions and employer missteps can result in fines of $2,000 to $5,000 for a first violation and $5,000 to $10,000 for each subsequent violation. Warrants/Subpoenas Required California employers can no longer consent voluntarily to allow ICE to enter nonpublic work areas or to access company records. Instead, ICE must present legal documentation in the form of a warrant or subpoena before employers can allow access. The employer can take a federal immigration enforcement agent to a nonpublic area to verify the warrant, as long as no employees are present and the employer doesn’t provide consent to search nonpublic business areas in the process. Employers cannot voluntarily allow ICE agents to gain access to, review or obtain employee records without a subpoena or judicial warrant. The prohibition does not apply to Form I-9 or other documents for which a Notice of Inspection (NOI) was provided to the employer. Notify Employees Employers must follow specific requirements related to Form I-9 inspections. For example, within 72 hours of receiving a Notice of Inspection, California employers must post a notice to all current employees informing them of any federal immigration agency’s inspections of Forms I-9 or other employment records. Employers also have obligations once the inspection is over. Within 72 hours of receiving the inspection results, employers must provide each “affected employee” a copy of the results and a written notice of the employer’s and employee’s obligations arising from the inspection. The written notice must contain specific information and must be hand-delivered in the workplace, if possible. An “affected employee” is one identified by the inspection results as potentially lacking work authorization or having document deficiencies. Unions also have the right to receive notices. An employer that fails to follow any of these notice requirements can be fined between $2,000 to $5,000 for a first violation and $5,000 to $10,000 for each subsequent violation. At the same time, federal penalties for Form I-9 violations can range from a couple hundred dollars to more than $20,000. Training/Documentation California employers need to ensure that supervisors and any employees who are likely to interact with authorities arriving at the worksite are aware of the limitations on ICE access and the prohibition against voluntarily granting access without particular documentation. Consider designating a trained point-person(s) for front-line staff to contact if immigration agents arrive at the worksite. These individuals should be trained to ask for a warrant or subpoena. California employers also need to create and document processes to meet all pre- and post-inspection notice requirements. Since the 72-hour timeframes are short, standardized posting and notice processes will help employers meet their compliance obligations. The Labor Commissioner has until July 1, 2018, to create a model posting template. The California Chamber of Commerce has developed a template for CalChamber members to use to meet the posting requirement until the Labor Commissioner develops an official template. The CalChamber Notice to Employees: Government Inspection of Employment Eligibility Records is available for members in English and in Spanish in the Forms & Tools section on HRCalifornia.com. Workplace Eligibility The act also makes it unlawful for employers to reverify the employment eligibility of current employees in a time or manner not allowed by federal employment eligibility verification laws. Federal law already prohibits unlawful reverification practices, such as reverifying unexpired documentation. The new state law adds an additional state civil penalty of up to $10,000. Compliance in this area is going to be tough and only time will tell what legal challenges this new law may bring. In the interim, however, employers will need to comply. Given the potential conflicts or confusion between an employer’s obligations under federal law and these new California requirements—as well as the federal administration’s statements that it intends to increase worksite enforcement actions in 2018—employers should consult a labor or immigration attorney with any questions or concerns. More detailed guidance is available on HRCalifornia. |