Proposal Will Devastate Small Business in California

The California Chamber of Commerce today announced that SB 1383 (Jackson; D-Santa Barbara) has been identified as a job killer bill.  The bill proposes a mandatory 12-week leave of absence on any employer with one or more employees and would overwhelmingly hurt the state’s smallest employers.

More than 85 associations that represent thousands of employers have joined CalChamber in opposing the measure.

“Now is not the time to place costly burdens on employers who are struggling to reopen and rebuild,” said Jennifer Barrera, CalChamber executive vice president.  “To be clear, the bill is not limited in scope to only address COVID-19.  It would disproportionately impact the smallest of employers in California at a time when they can least afford it.  SB 1383 will put California’s small businesses out of business.”

The bill is further deemed a job killer due to the threat of litigation it poses.  SB 1383 includes a private right of action which will result in increased litigation costs for employers who must defend themselves in court even for unintentional mistakes.  As written, the bill currently allows any employee to sue their boss if they believe the employer did not correctly administer the leave, interfered with the leave, or denied the leave.

CalChamber’s opposition also turns on the fact that SB 1383 will impose a significant administrative burden on employers and drive up their costs.  Even though the leave prescribed in SB 1383 is unpaid, employers must still pay to train and hire temporary help to cover the workload of the employee who is on leave or pay overtime if they shift work to other workers.  Further, the employer may also be required to maintain the health benefits of any employee out on an unpaid leave.

Finally, CalChamber has also identified the fact that large employers will be seriously impacted by the proposal.  For employers with 50 or more employees, SB 1383 will expand the amount of protected leave an employee may take to half a year.  The measure changes requirements for qualifying for the California Family Rights Act (CFRA) leave by amending the definition of family member for whom the employee can take leave.  This creates non-conformity between the Family and Medical Leave Act’s (FMLA) and CFRA’s qualifying requirements.  As such, an employee who already took 12 weeks of leave under CFRA may also be able to qualify for a subsequent 12 weeks of leave under FMLA should the measure become law.

A copy of CalChamber’s letter in opposition can be found here.

The California Chamber of Commerce (CalChamber) is the largest broad-based business advocate to government in California.  Membership represents one-quarter of the private sector jobs in California and includes firms of all sizes and companies from every industry within the state. Leveraging our front-line knowledge of laws and regulations, we provide products and services to help businesses comply with both federal and state law. CalChamber, a not-for-profit organization with roots dating to 1890, promotes international trade and investment in order to stimulate California’s economy and create jobs. Please visit our website at www.calchamber.com

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