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Bruce Bialosky

California Government’s Total Control Over Employers

California made a dramatic splash with the passing of the now infamous AB5. The bill, which became law on January 1, 2020, codified and expanded a California Supreme Court ruling dictating that virtually anyone working for your company except specifically excluded professions is a W-2 employee. These employees include ever-escalating minimum wages, egregious unemployment and worker compensation costs. The California state government continues to intensify their micromanaging of California businesses.

In addition to the dramatic AB5, the state legislature passed and the governor signed into law 18 bills in one year that control how business owners operate their businesses. That might make sense if the elected leaders knew how to run businesses or even had experience working in private industry beyond a teenage job at a burger joint. The Assembly has 80 members, of which 61 are Democrats. Those Democrats collectively have six who actually worked in private industry for any discernible time. Two of those were doctors/dentists who ran a practice. The remainder either were attorneys, labor leaders or spent their entire careers in positions related to government or as an elected official. That is the expertise they have to tell businesses how to operate and treat and interact with their employees.

One of my favorites of the new laws is regarding lactation. We all know more women are staying in the workplace after having a child, and we also know there is an emphasis on breastfeeding among some people. The legislature could not leave it for employers to work things out with the employee. They had to establish a law. A very detailed law.

The law requires that the employer must provide a room other than a bathroom that has a sink with running water and a refrigerator. It must be safe, clean and free of hazardous materials. It must have a table, a chair, electricity or a charging station. It must be shielded from view and free from intrusion while the employee is lactating (forget the company kitchen area). It must be in close proximity to the employee’s work area. The employer must develop a policy and include it in the employee handbook.

So if you employ more than 50 employees, you have to hire an employment lawyer to rewrite your employee handbook at some untold cost. Then you have to take functioning space away from another purpose and build a lactation room with plumbing and electricity which would mean altering your lease. All at significant costs, if you are able to get the building permits, because let me assure you virtually no current workspace has a room akin to what is described in this law.

Now, if you don’t have facilities as described in the law, you can be sued by the employee (probably by the very same lawyers who wrote this law) and be subject to significant fines for non-compliance. Then someone can come in and tell you the new facility is inadequate and you have to alter the room. If you have fewer than 50 employees, you might be exempt if you can prove undue hardship. Who wants to take that chance?

And this is just one of 18 new laws passed other than AB5.

Then there is this doozy. Janitorial service companies are required to use a government approved “qualified training organization” to train nonsupervisory personnel. They must pay a fee of $65 for this required service. Then once done with that class — which is nothing but an avenue to recruit employees to unions (SEIU) — companies will have to retrain their new employees to their own way of operating. All this will add to the cost of the companies’ hiring these services which are typically used in office buildings. The costs are passed on to tenants and then their customers.

Now employers are required to provide 30 days’ paid leave for an employee to donate an organ. Talk about micromanagement. As if donating an organ happens regularly. The new law requires an additional 30 days’ unpaid leave. These situations used to be worked out on a case-by-case basis between the employer and employee. No more. The government dictates the rules.

Here is another micromanagement special. Companies that establish flexible spending accounts that are tax benefited programs must notify their employees in TWO different ways of the plan’s year-end. Choices are email, telephone, text, USPS or in person. Now an errant employee can ignore two notices and still complain they weren’t notified.

Harassment training got another clarification with it being defined that it must begin by January 1, 2021, and then repeat within every two years. The employer obviously must keep clear records of when each employee had training. The employee must take time off to do the training and the employer must pay a third party to train the employee.

In a most confusing action, the state has established strict and complicated laws protecting consumer data only for the purpose of assessing fines against the company breached – as though the victimized company wanted to be breached. Sure they did, in the same way one wants their fingernails pulled out. This laws covers employees and job applicants. These persons can ask for their records to be deleted despite the fact that the government might demand these records at a further time. Try to make sense of this one.

This column addresses just six of the 18 actions taken by the state legislature to tell employers how to run their businesses and this is just one year. Many of these bills were vetoed by former Governor Jerry Brown but signed into law by current Governor Gavin Newsom. Who would have dreamed someone would have made Jerry Brown appear like the moderate?

Some of these ideas certainly have some sound basis. But usually they emanate from a small sample that is then exploded to be applied against every business and all their employees. There is no regard for cost to the employer or loss of productive time. There is no positive encouragement, only severe penalties. The aggrieved employee is not the recipient of those penalties; rather the government reaps the financial benefit. In fact, they calculate those penalties into their budgets. Or maybe the litigators line their pockets since they own the legislature along with their government union buddies. Why does the state government need to stick their noses into everything that turns their wheels that day totally disregarding the effect of their laws?

The fascinating thing is they have no idea the harm they do. They can’t imagine that what they do harms businesses and by extension the employees. They don’t understand this has direct correlation to the reduced population with the outflow of businesses to neighboring states.

When the financial downturn inevitably comes, they will have zero understanding of how their actions are directly tied to the decline. They will point to other factors postulated by some economist and they mimic. The question remains when will the people of California awaken from their slumber??