Various Sides Line Up on California Labor Law Proposal

Sacramento, CA The various interests lining up and staking their positions in a new California labor law proposal are polarized in their respective points of view. California Assembly Bill 1897 (AB 1897) as of this writing remains on the desk of California Governor Jerry Brown for either passage or veto. Sponsors of the bill, which amongst other statutes will hold a business or contractor liable when a subcontractor violates the California labor code, claim it will help workers by promoting responsible contracting.

Business groups claim the proposed bill will serve as a business and jobs killer in California. Critics of the bill say that California labor law is fine just the way it is, thank you.

Under current statutes, a primary contractor cannot be held liable for the behavior of a subcontractor in terms of violations to California and labor law. The proposed bill would impose a certain degree of liability on the businesses hiring those subcontractors.

The proposed bill is a priority for labor unions in the state. Caitlin Vega, a lobbyist for the California Labor Federation, told the Sacramento Bee (9/22/14) that the new legislation will do a better job at holding contractors accountable to California labor employment law.

Business advocates hate it. “Worker protection laws in California are already in place for labor violations and should be enforced,” said John Kabateck, executive director of the California chapter of the National Federation of Independent Business, in comments published in the Sacramento Bee. “The only thing this bill is going to do is hurt our state’s economy and jobs.”

That view is mirrored by blogger Andrea Deveau of TechNet, identified as “the national, bipartisan network of innovation economy CEOs and senior executives.”

Deveau, identified as the Executive Director of TechNet, notes in the Fox&Hounds blog (9/26/14) that AB 1897 will impact a California labor lawsuit in that an employee that alleges a violation to have occurred would only be able to litigate against the third-party business, and not against the employer that actually (and allegedly) committed the violation. Business groups view this as unfair and misguided.

However, a respondent to the Fox&Hounds blog noted a multi-year relationship with small sub-contractors. The respondent noted that there was rarely, if ever, overtime paid for work performed beyond an eight-hour day or a 40-hour week. The respondent also noted that whenever a California labor lawsuit was launched, the small subcontractor would simply file for bankruptcy and shut down in an effort to avoid the litigation, only to soon resurface under a different business name and address.

AB 1897, say advocates, will improve adherence to California state labor laws by requiring businesses and contractors to have a stake in the behavior of their subcontractors, and in so doing provide better oversight - and perhaps make better choices in the subcontractors they hire.

“This bill is really about promoting responsible contracting,” lobbyist Vega said, in comments published in the Sacramento Bee. “This bill is going to help the companies that are following the law and being responsible, and this bill is going to help get companies out of the business that have a model of cheating workers.”

The other proposed bill to land on Governor Brown’s desk would prohibit contracts containing a clause requiring an individual to waive all rights to pursue a California labor lawsuit regarding a civil rights claim. The California Chamber of Commerce doesn’t like that one, either…