Amid a public debate over the growing gap between rich and poor, major new laws affecting California businesses this year are squarely aimed at improving the lot of low-wage workers.
At the federal level, key parts of the Affordable Care Act take effect in 2015, including a provision that companies with 100 or more employees must provide health insurance to most of their workers.
At the state level, businesses are now liable if contract workers hired through staffing agencies – an increasingly common practice – are injured on the job or denied wages they’ve earned.
Another measure requires California officials to report annually on how many employees of large businesses get public health care because of their low wages, and how much that costs taxpayers.
In July, California will be become the second state, after Connecticut, to require companies to grant their employees sick leave pay.
Beyond those sweeping new laws, a host of measures target specific businesses and constituencies.
• Assisted living facilities must buy liability insurance – a measure prompted by injuries to the elderly.
• State construction contractors may no longer ask applicants to disclose a criminal record at the start of the hiring process – an effort to make it easier for ex-offenders to get jobs.
• Upholstered furniture must now be labeled as to whether or not it contains flame-retardant chemicals linked to cancer and other illnesses.
• Local governments get more power to control massage parlors suspected of being fronts for prostitution.
• Dog owners may now bring leashed pooches to restaurant patios, if the establishment doesn’t object and local ordinances don’t forbid it.
• Employers subject to rules requiring sexual harassment training must also include prevention of “abusive conduct,” i.e. bullying.
In its legislative roundup, the California Chamber of Commerce noted that of 27 major bills it opposed – which it dubbed “job-killers” – only two passed: the temp worker bill, sponsored by the Teamsters, and a measure making it easier for consumers to file lawsuits despite having signed arbitration agreements.
“A lot of our success is based on stopping harmful bills,” said chamber lobbyist Jennifer Barrera. She noted that a measure allowing workers to place wage claim liens on their bosses’ property was defeated, as was an effort to raise commercial property taxes.
Business groups initially fought the sick pay law, affecting some 6.5 million Californians, which worker advocates count as a major victory. The Chamber, noting that 90 percent of its members offer sick pay, backed down after minor amendments were made to the bill.
Business groups also opposed the law to reveal how many of their employees get government assistance – a measure the Chamber contends “publicly shames employers.”
Here are details on significant new employment laws:
AFFORDABLE CARE ACT
Summary: New provisions of the 2010 law, also known as Obamacare, take effect in 2015. Companies with 100 or more workers must offer health insurance to 70 percent of those who work 30 hours a week or more. Otherwise they must pay a penalty. In 2016, the mandate extends to 95 percent of their employees, and also applies to companies with 50 to 99 workers.
Whom it affects: Most employers will not be significantly affected. They already offer health insurance to some or all of their employees, or are too small to fall under the law. The beneficiaries: Citizens and legal residents who previously could not afford insurance, or were excluded because of pre-existing medical conditions.
Why it passed: The U.S. rate of uninsurance was chronically high – about one in six – before the law took effect, and many sick people were unable to get adequate medical attention. Hospital emergency rooms were often overwhelmed with patients who had no regular doctors or preventive care.
How it works: Employer coverage must be affordable: An employee’s share of a single policy can be no more than 9.5 percent of his income. It must cover at least 60 percent, on average, of the group’s medical expenses and provide such “essential health benefits” as inpatient hospital stays, ER trips, postnatal care, mental health, prescription drugs, pediatrics and free preventive services.
TEMP WORKER PROTECTION
Summary: Companies that use a subcontractor to supply workers are liable for labor law violations.
Whom it affects: Workers hired by staffing or temp agencies and the businesses that use those agencies.
Why it passed: Hiring of contract workers has exploded in recent years into what’s been dubbed “the perma-temp economy.” One in five manual labor jobs are now temporary. Hotels, farms, construction firms, warehouses, retailers, and other companies have often been insulated from legal consequences when temp agencies fail to pay promised wages or compensate workers for injuries. The new law will reward “the use of responsible contractors, rather than a race to the bottom,” according to the California Labor Federation.
How it works: Both sides are now liable – the “client employer” as well as its third-party labor supplier – for payment of wages, accurate reporting of hours, benefits, tax deductions and insurance for victims of on-the-job injuries. The “client employer” may not shift responsibility for workplace safety to the staffing agency. Companies with five or fewer temp workers, or with fewer than 25 employees overall, are exempt.
Summary: Beginning July 1, California companies must provide at least three days a year of paid leave to ill workers.
Whom it affects: All businesses, large and small. Part-time and temporary workers as well as full-timers. The law excludes 360,000 workers paid with government funds to provide in-home care for the low-income disabled and elderly.
Why it passed: Low-wage workers are often crippled by loss of pay when they must take time off to care for themselves or their families. As the California Catholic Conference noted, “Just three unpaid days off can cost a family without access to paid sick days, on average, their entire monthly grocery budget.” Nationwide, 39 percent of workers have no paid sick leave, including those in retail and restaurant jobs where they interact with the public. The California Medical Association called the law “a public health strategy” to avoid spreading disease.
How it works: Employees who work 30 or more days in a year may accrue paid sick leave at a rate of one hour per 30 hours worked. The employer may cap the leave at 24 hours per year. Workers may use sick days after 90 days of employment. They can use the leave to care for children and other sick family members.
Summary: California agencies must compile an annual report naming employers with the most workers enrolled in Medi-Cal, the government-funded health care program for the poor.
Whom it affects: The law is aimed in part at Walmart, which employs 80,000 Californians and has been the target of protests over the number of its workers on public assistance. Other retailers such as Target, along with large restaurant chains like Olive Garden and Cheesecake Factory, may also fall under the law. A UC Berkeley study found that big companies – those with more than 500 workers – employ more than 300,000 Californians who earn little enough to qualify for Medi-Cal.
Why it passed: As wages fail to keep up with inflation and employers cut back benefits, workers turn to government for health care subsidies. Medi-Cal now covers 32 percent of the state’s population at an annual cost of $74 billion. “Large, profitable employers should pay wages and benefits that do not impoverish workers or shift costs onto taxpayers,” Section 1 of the law declares. Some lawmakers have proposed penalties on large companies with many Medi-Cal-enrolled workers.
How it works: Beginning in January 2016, the Department of Finance will issue an annual publicly available report to the legislature listing the 500 employers with the most employees enrolled in Medi-Cal. The report would show the overall cost to the government of each company’s publicly assisted workers. Employers will not have to submit data for the report. It will be compiled from existing state records.
For the full text of new laws, go to leginfo.legislature.ca.gov.