Job Killer Bill Creates New Protected Class of Employees; Costly to Implement, Especially for Small Biz

Loren KayeNo legislative session would be complete without a proposal to add more job benefits and protections for California workers. This year is no exception, with numerous bills sent to the Governor to mandate more worker benefits and reduce employer discretion.

One bill stands out because it creates a brand new and very broad protected class of workers who can fight adverse employment actions (dismissals, demotions, etc.) that may be in relation to the employee’s “family caregiver status.” What’s more, an employee may then be able to assert special accommodation in respect to this status as well as take advantage of a private right of action against the employer.

Assembly Bill 524 (Wicks; D-Oakland) adds to the Fair Employment and Housing Act (FEHA) a special protection for any employee who provides direct care not only to certain family members, but also to any person of their choosing.

“Protected status” not only raises the bar for taking any adverse action, but also exposes employers to substantial legal liability under the law—not just damages and attorneys’ fees, but also punitive damages.

The motivation behind the proposed law is understandable: seeking to provide a supportive environment for workers who must care for children or close relatives. California already has generous parental leave mandates and supports, and guaranteed return rights upon completing leave.

AB 524 doubled down on that sentiment. The bill defines “family caregiver” to include any worker who “provides direct care” to certain family members or a “designated person.” A designated person the latter could be any person at all who is designated by the employee, such as a neighbor or family friend.

Even more baffling, the bill does not define what is meant by “providing direct care” to an individual. Left undefined, the nature of the care becomes a subjective determination, leaving the employer with no ability to dispute an employee’s self-designation as having family caregiver status. Because of the potential liabilities in violating an employee’s protected status, employers will be loathe to challenge these self-attributions.

Employers must inevitably accommodate employees’ family caregiver status, again with no guidance from the Legislature. The well-accepted term “reasonable accommodation” is nowhere to be found in AB 524, so again employers will be rolling the dice.

For example, even if the employee did not request time off as an accommodation and simply took time off, whenever they wanted, scheduled or unscheduled, the employer could not discipline or terminate the employee for the time off without risking potential litigation under FEHA for discrimination based on family caregiver status. This will significantly limit an employer’s ability to address discipline issues in the workplace, maintain stability, and eradicate any issues without costly litigation.

What will be especially frustrating to employers is how this bill would layer additional, even questionable protections onto a very generous array of benefits, mandates and protections already in California law:

  • The California Family Rights Act (CFRA) provides up to 12 weeks of leave to care for a family member or other designated person of their choice.
  • State law provides 40 hours of leave for situations were a school or childcare center is unavailable.
  • The Healthy Workplace Healthy Family Act and related “kin care” statutes also allow sick time to be used to care for someone else.
  • Any employer who retaliates against an employee for using these leaves is liable for unlawful retaliation.

About the only policy the Legislature will not consider is more flexible work options to workers by revising California’s overly rigid wage and hour laws that prohibit workplace flexibility.

Naturally, this new employee protection will be costly for employers to implement, and naturally, the biggest impacts will be on small businesses. The FEHA includes a private right of action for any alleged discrimination against a protected classification. A 2017 study by insurance provider Hiscox regarding the cost of employee lawsuits estimated that the cost for a small to mid-size employer to defend and settle a single plaintiff discrimination claim was approximately $160,000. Weigh this financial risk for a small business against the new costs and uncertainties this new protection brings into the workplace, and the calculus may result in minimizing the number of employees to achieve the entrepreneur’s business vision.

Loren Kaye
Loren Kaye was appointed president of the California Foundation for Commerce and Education in January 2006. He has devoted his career to developing, analyzing and implementing public policy issues in California, with a special emphasis on improving the state's business and economic climate. He also was a gubernatorial appointee to the state's Little Hoover Commission, charged with evaluating the efficiency and effectiveness of state agencies and programs. Kaye served in senior policy positions for Governors Pete Wilson and George Deukmejian, including Cabinet Secretary to the Governor and Undersecretary of the California Trade and Commerce Agency. See full bio.