2014 brings new laws regulating CA businesses

In 2013, California’s Legislature busied itself passing more than 800 new laws. In the coming weeks, CalWatchdog.com will report on the many affecting businesses in 2014.

Overtime for nannies and domestic workers

The “Domestic Workers Bill of Rights,” Assembly Bill 241, by Assemblyman Tom Ammiano, D-San Francisco, “would specially regulate the wages, hours, and working conditions of domestic work employees,” according to the bill’s language. And it would “include childcare providers, caregivers of people with disabilities, sick, convalescing, or elderly persons, house cleaners, housekeepers, maids, and other household occupations.”

It also would mandate pay for “travel time spent by a personal attendant” and regulate “accommodations for a domestic work employee who is required to sleep in a private household.”

In 2010, the State Legislature passed a Resolution for a Domestic Workers Bill of Rights, which spawned a study by UCLA on the issue. What was promised in the Legislature as just a resolution recognizing this group of the workforce morphed into AB241.

According to Ammiano:

“The campaign to adopt a California Domestic Worker Bill of Rights attempts to address one core principle: domestic workers deserve equal treatment under the law. Unfortunately, California suffers from a unique and confounding contradiction: Domestic workers who care for property such as landscaping or housekeeping are generally entitled to overtime. Those domestic workers who care for children, the infirm, the elderly, and those with disabilities do not.”

The California Chamber of Commerce explained its opposition:

“The wage-and-hour burden that AB241 creates on individual homeowners as well as third-party employers is significant, and unprecedented. …

“Failure to comply invokes costly statutory penalties and litigation, including an employee’s right to attorneys’ fees. The detrimental impact of this potential liability will either discourage the employment of ‘domestic work employees,’ thereby increasing the unemployment rate in California; or force such homeowners and ‘third-party employers’ into the underground economy.”

Expanding the prevailing wage

Senate Bill 7 is by state Senate President pro Tem Darrell Steinberg, D-Sacramento. It expands the prevailing wage law to the projects of charter cities. According to the California Department of Industrial Relations, the “prevailing wage” is determined by several factors in each sector, but is heavily dependent on wages from union contracts.

Before SB7, state law already mandated that the prevailing wage be paid by “general law” cities, which have less autonomy than the state’s 121 charter cities. (Charter cities tend to be larger, such as Los Angeles and Anaheim.)

The California Constitution guarantees California’s charter cities broad authority over their municipal actions, including setting prevailing wage laws. According to the state Senate floor analysis of SB7, several court cases have upheld the charter cities’ rights in this matter. That’s why SB7 does not outright order charter cities to pay the prevailing wage. Instead, it withholds state funds from charter cities that refuse to pay the prevailing wage.

According to an analysis by the Haight Brown & Bonesteel law firm, “The fight about SB7 will likely now turn to the courts given the constitutional ramifications of the legislation.”

If SB7 remains the law, charter cities might have to forego important infrastructure projects because of higher costs. The League of California Cities had asked Governor Brown to veto the bill, noting that “using political leverage to punish those exercising rights provided by the Constitution is unjust.”

The bill was sponsored by the powerful State Building and Construction Trades Council, AFL-CIO, which would benefit from SB7’s punishment of construction firms using non-union labor. SBCTC President Robbie Hunter explained why he thought the bill was needed:

“Low-ball contractors have used charter cities as a loophole to get around the state policy of requiring prevailing wage on public works projects. SB7 makes it clear that such tactics are not in the best interest of California, and cities who permit these substandard wages on their projects won’t be rewarded with state funds.”

Prevailing wage in private businesses

SB54 is by Sen. Loni Hancock, D-Berkeley. It expands the payment of prevailing wages to privately financed refinery construction projects. “We have people dying in the refineries,” said Hancock at a September hearing. “We need a skilled work force, they need to be trained in a state-accredited program.”

Catherine Reheis-Boyd, president of the Western States Petroleum Association, explained industry opposition:

“Despite a strong and vocal opposition from oil industry workers, small businesses, labor, safety officials, and regional newspapers, California Governor Jerry Brown yesterday [Oct. 13, 2013] signed into law SB54. The bill requires refiners to pay prevailing wages to contract workers and restricts their ability to hire qualified employees to a limited pool of applicants.”

Assemblyman Tim Donnelly, R-Twin Peaks, said at the September hearing.

“This bill is going to make it harder to build another refinery in California. We need at least two more. If we want to lower gas prices for the average hard-working Californian, we need to get off the backs of those who are refining the fuels that operate the vast majority of vehicles in this state. This is the government coming in and interfering in the name of safety in a private contract. We need to make it easier for those who are willing to go through the inordinate amount of regulation we already have on them to put a refinery in to refine the special fuels we use in California. We need more refineries. This is not going to add refineries.”

Hancock’s response to these objections, according to the state Senate floor analysis of SB54:

“[T]he author’s office states that ensuring that outside contractors that work at chemical refineries have properly trained workers through approved apprenticeship programs will reduce public health and safety risks. The author’s office states that outside contractors at these facilities should be using a qualified workforce, not unskilled, low-wage workers hired off the street or brought in from other states to save money.”

New whistle-blower protections

SB496 is by Sen. Rod Wright, D-Los Angeles. Starting Jan. 1, employers will be prohibited from engaging in anticipatory retaliation, or taking action against an employee based on the belief he or she might report suspected illegal activity. The new law also expands employee whistleblower protections to prohibit retaliation by any person acting on behalf of the employer.

And it protects employees who disclose, or may disclose, information regarding alleged violations “to a person with authority over the employee or another employee who has authority to investigate, discover or correct the violation.” The bill was passed unopposed in both the state Senate and the Assembly.

Explained attorney Laura Reathaford, writing for the Society of Human Resource Management:

“Because a violation of California’s general whistle-blower statute can have serious consequences for employers — not the least of which are civil penalties of up to $10,000 per violation — California employers would be well advised to update their whistle-blower protection policies to reflect the changes effected by SB496 and to train managers and supervisors about the new retaliation provisions applicable to their conduct. Of particular concern to employers should be the fact that they can now be found liable for ‘anticipatory retaliation’ if they, or any person acting on their behalf, take adverse action against an employee based on the mere belief that the employee has disclosed or might disclose information about a reasonably-believed violation of federal, state, or local law.”