United States: California Concludes It's Been Too Hard On Employers, Offers Apology (Nah, Just Kidding!)—A New Raft Of "Job-Killer" Bills Is Heading This Way!

Spring in California can only mean one thing, and no, it's not Coachella, Dodgers games or even the return of the swallows to San Juan Capistrano—it's the annual release of the California Chamber of Commerce's list of "Job Killer Bills."

Once again, this list proves that former California Governor Jerry Brown had it right when he wrote in a legislative veto message: "Not every human problem deserves a law!"

Below we've summarized the nine pending bills affecting California labor and employment law (so far!):

• AB 524 (Wicks, D-Oakland) – FEHA Protections Expanded to Caregivers. This bill would amend California's Fair Employment and Housing Act ("FEHA") to include "family caregiver status" as a protected characteristic (along with race, religion, color, national origin, disability, sexual orientation, etc.). "Family caregiver status" would be defined as "a person who contributes to the care of one or more family members," which includes spouses, domestic partners, children, parents, siblings, grandparents, grandchildren, or "any other individual related by blood or whose association with the employee is the equivalent of a family relationship." If passed and signed by the governor, employees could file charges against their employers with the California Civil Rights Department or sue for damages in civil court for allegations of discrimination or harassment based upon their status as a family caregiver. Assemblymember Wicks proposed a similar bill last year, AB 2182, which sought to add "familial responsibilities" as a protected category under FEHA, but the bill did not advance beyond the Assembly.

• AB 1156 (Bonta, D-Oakland) – Rebuttable Presumption for Health Care Employees' Workers' Compensation Claims. This bill seeks to add new provisions to the Labor Code that would create a rebuttable presumption that hospital employees who provide direct patient care incur certain illnesses and injuries in the course of their employment at the hospital for the purpose of claiming benefits under workers' compensation laws. The covered illnesses and injuries would include infectious diseases, cancer, musculoskeletal injuries, post-traumatic stress disorder, and respiratory diseases. Notably, the presumption established by this bill would extend for several months following the termination of the hospital employee's employment, depending on the injury or illness at issue. An identical bill (SB 213) was introduced by Senator Cortese (D-San Jose) last year, but it did not advance beyond the Assembly.

• SB 525 (Durazo, D-Los Angeles) – Minimum Wage Increase for Health Care Workers. This bill would establish a higher minimum wage for covered health care workers of $25 per hour beginning January 1, 2024. "Covered health care" is broadly defined to include (but is not limited to) employees who work at hospitals (including general, special, acute care, and psychiatric hospitals), clinics (including primary care, urgent care, specialty, and dialysis clinics), licensed nursing facilities and home health agencies, residential care facilities, in patient's homes delivering health care services, county mental health and correctional facilities, and more. The bill also provides for potential annual increases of the minimum wage based upon percent increases in the U.S. Consumer Price Index.

• SB 365 (Wiener, D-San Francisco) – Yet Another Attack on Arbitration. This bill would amend California Code of Civil Procedure section 1294 to explicitly provide that appeals of orders dismissing or denying petitions to compel arbitration would not stay proceedings in the trial court while the appeal is pending. (As we've often noted, arbitration is no stranger to existential threats in California, and this legislative session appears to be no different.)

• SB 399 (Wahab, D-Hayward) – Limits Employer Speech on Political and Religious Issues. This bill seeks to introduce the "California Worker Freedom from Employer Intimidation Act" to the Labor Code. If passed and signed, SB 399 would prevent employers from requiring employees to attend meetings where the employers will share their opinions on religious matters, political matters, or First Amendment rights. It would also provide a private right of action for employees who believe they were discriminated against, were retaliated against, or suffered an adverse employment action resulting from their refusal to attend an employer-sponsored meeting. Certain religious employers, political employers, and higher education institutions would be exempt from this law where such meetings or communications are part of the entity's regular operations.

• SB 616 (Gonzalez, D-Long Beach) – Greatly Expands Sick Leave. This bill would increase the minimum amount of sick leave time eligible employees must accrue each year from 24 hours (three days) to 56 hours (seven days). This bill also would increase the minimum sick leave carry over amount from 24 hours (three days) to 56 hours (seven days) but allows employers to cap an employee's total amount of accrued sick leave at 112 hours (14 days) per year.

• SB 627 (Smallwood-Cuevas, D-Lake Elsinore) – Transfer Rights for Employees of Closed Chain Businesses. This bill imposes a set of requirements for chain businesses, which are defined as those with 100 or more locations nationwide that share a brand and parent company. If passed and signed, SB 627 would require chain business employers to provide 60 days' notice before closing any location of the chain business and would require the chain business to provide employees of the closing location who have worked for the chain for at least six months with the opportunity to remain employed and transfer to another chain business location within 25 miles of the closing location as positions become available. Transfer offers would be given in order of employee seniority. The bill does not contain any provisions explaining the requirements where there are no chain business locations within 25 miles of the closing location.

• SB 723 (Durazo, D-Los Angeles) – Job Preference for Laid-Off Employees No Longer Limited to COVID Layoffs. This bill would amend Labor Code section 2810.8, which was passed in 2021 in response to pandemic layoffs. In its current form, section 2810.8 requires covered employers (including airports, event centers, hotels, private clubs, and business service providers) to offer reemployment to former employees impacted by COVID-19 related layoffs as positions become open for which the laid off employees are qualified. SB 723 seeks to remove the requirement that the layoff be related to the COVID-19 pandemic—if passed, any employee impacted by a layoff resulting from "a public health directive, government shutdown order, lack of business, a reduction in force, or other economic, nondisciplinary reason" would be entitled to an offer of reemployment in a newly-open position for which they are qualified (and, if multiple laid-off employees are qualified, preference would be given to the more senior employee).
• SB 809 (Smallwood-Cuveas, D-Lake Elsinore) – Prohibits Conviction History Considerations in Hiring. This bill, dubbed the "Fair Chance Act," would amend FEHA to make it unlawful for an employer to, among other things, reject an application, end an interview, or otherwise terminate an applicant's employment process based on the applicant's conviction history, whether that information is provided by the applicant or obtained elsewhere. There would be certain exceptions, such as where the employer is required by law to obtain an applicant's conviction history or is legally prohibited from employing someone with that conviction. Finally, employers would also be prohibited from asking employment applicants to share their personal social media accounts.

Bills like these may be part of the reason why so many employers have left California in recent years. In fact, many have decided to relocate to the arguably more employer-friendly states of Texas and Florida. Most recently, in January 2023, San Jose-based cybersecurity company McAfee announced it was moving its headquarters to Frisco, Texas, and in September 2022, global pharmaceutical brand Obagi Cosmeceuticals announced it would move from Long Beach to The Woodlands, Texas. As we previously reported, companies that have been based in the Golden State since their founding – household-name companies like Tesla, Hewlett-Packard, and Oracle – have all moved to Texas.

We'll continue to track the progress of these bills as well as the plight of those California-based employers that continue to hang on, hoping for some light at the end of the tunnel.