California Passes Slew of Labor & Employment Laws

The California state legislature passed several labor and employment laws in the last two weeks with significant implications for employers, including a pair of bills that would set wage floors for the fast-food and health care industries. For fast-food workers, the law would create a council that could set other workplace standards. Notably, the bills are a step back from previously passed legislation that would have essentially established sectoral bargaining for the fast-food industry. 

The fast-food industry could be subject to industry-wide standards-setting by a pro-worker-run council. 

• AB 1228 and SB 525 would establish minimum wages for fast food workers ($20 per hour) and health care workers (starting at $21 per hour depending on the facility). 
  
  
• More significantly, AB 1228 would establish a Fast-Food Council, comprised of a majority of worker advocates and other representatives, that could develop workplace standards such as future wage increases, health and safety regulations, and paid leave requirements. The State Labor Commissioners would have to approve the recommendations. 

Final bill “a lesser evil:” AB 1228 is a compromise between organized labor and fast-food industry employers that is significantly less onerous than a similar bill passed by the state legislature last year (AB 257). Under that bill the Council would have had unlimited authority to impose binding regulations, rather than make recommendations to the Labor Commissioner. Further, AB 1228 as passed does not impose joint employer liability on franchisors for the violations of their franchisees, as the original version of the bill did. In exchange for these concessions, the employer community agreed to scrap ballot initiatives that would have challenged AB 257. 

Other bills passed by the state legislature include: 

• Expanded paid sick leave requirements (5 days instead of 3). (SB 616)
  
  
• Anti-“caste” discrimination: Employers would be prohibited from discriminating based on an individual’s “perceived position in a system of social stratification on the basis of inherited status.” (SB 403)
   
• Unemployment benefits for striking workers, beginning two weeks after an employee goes on strike. (SB 799)
  
  
• Requiring employers to adopt workplace violence prevention programs with certain recordkeeping obligations. (SB 553)
  
  
• Up to five days of unpaid leave for a “reproductive loss” (failed adoption, failed surrogacy, pregnancy loss). (SB 848)

Outlook: The bills have been sent to Gov. Newsom’s (D) desk for his signature, and the health care and fast-food worker bills are virtually certain to be signed into law. The fast-food bill could be a model that catches on  in other industries and in other states, and accordingly merits monitoring by non-fast food industry employers. Meanwhile, because of its broad definitions, the anti-caste discrimination bill,  could spur increased litigation against employers.