Job Killer Bill Allowing Local Government to Adopt Stricter Labor Standards to Be Heard in Committee

A job killer bill that would result in chaotic and inconsistent enforcement of wage and hour laws by local jurisdictions by authorizing them to impose their own wage payment requirements as long as they are “at least as stringent” as state law requirements will be heard in the Assembly Appropriations committee tomorrow.

The bill, AB 3075 (Gonzalez; D-San Diego), also interferes with corporate formation.

Inconsistent, Chaotic Enforcement

AB 3075 purports to authorize local jurisdictions to “enforce labor standards requirements regarding the payment of wages that are at least as stringent as those” in the Labor Code.

While it is unclear what additional regulation is being proposed to be authorized at the local level, this would appear to open the door to local enforcement of an unknown and potentially unlimited number of “wage” standards that meet or exceed the requirements of state law. This could include things like the time for payment of wages, overtime standards, penalties for violations of wage standards, and even a stricter definition of “independent contractor.” Under this proposal, a local jurisdiction could attempt to require an employer to pay wages daily, or to pay overtime wages after six hours in a day, or establish entirely new penalties for wage violations on top of penalties already imposed at the state level, as long as they are “at least as stringent” as state law.

This would make it extremely difficult for employers to operate in California, and would subject them to overlapping, duplicative and contradictory labor standards.  Employers already have difficulty operating in jurisdictions that have different minimum wage, paid sick leave, “ban the box” and other standards – all of which differ from each other and differ from state law, resulting in confusion, chaos and inconsistent enforcement.

AB 3075 would exponentially make that problem worse by extending such authority to unspecified local labor standards regarding “payment of wages.”

Labor standards regarding the payment of wages should be enacted and enforced at the state level by the DLSE, which is completely funded by assessments on the employer community

Interference with Corporate Formation

AB 3075 would also require articles of incorporation to include an attestation signed under penalty of perjury that the filer is not an owner, director, officer, managing agent, or any other person acting on behalf of an employer, that has an “outstanding judgment” for violation of any wage order or provision of the Labor Code.

AB 3075 does not provide that the “outstanding judgment” must be a final judgment for which all time to appeal has lapsed.  Therefore, a corporation may be penalized with respect to an “outstanding judgment” that is not final and is currently under appeal, either within California Division of Labor Standards Enforcement (DLSE) or in superior court.  Interfering with the corporation’s ability to file articles of incorporation under such circumstances would be a violation of due process and unlawful.

This is inconsistent with other provisions of the Labor Code that impose sanctions against an employer with unpaid wage judgments. Those sections generally only apply where the judgment is not “final” and the time to appeal has expired and no appeal therefrom is pending. (See, for example, Labor Code sections 200.5, 226.2, 238 and 273).  AB 3075 has no such standards and therefore seeks to impose sanctions against an employer in situations where a judgment may not be final.

Staff Contact: Jennifer Barrera

Jennifer Barrera
Jennifer Barrera took over as president and chief executive officer of the California Chamber of Commerce on October 1, 2021. Previously, she oversaw the development and implementation of policy and strategy as executive vice president and represented the CalChamber on legal reform issues. She led CalChamber advocacy on labor and employment and taxation from September 2010 through the end of 2017. As senior policy advocate in 2017, she worked with the executive vice president in developing policy strategy. Before joining the CalChamber, she worked at a statewide law firm that specializes in labor/employment defense. Barrera earned a B.A. in English from California State University, Bakersfield, and a J.D. with high honors from California Western School of Law. See full bio.