Business Legislative Wins and What Employers Can Expect in 2024

In this episode of The Workplace podcast, CalChamber Associate General Counsel Matthew Roberts sits down with CalChamber Senior Policy Advocate Ashley Hoffman and Chris Micheli, partner at Snodgrass & Micheli, LLC, to review some of the key bills and topics that arose during the 2023 legislative session and whether they will be discussed again this year as well as topics that may return from years past.

Below is a brief summary of the topics discussed in this podcast episode.

Artificial Intelligence

One of the hottest topics in 2023 was artificial intelligence (AI). President Joe Biden and Governor Gavin Newsom issued executive orders in late 2023 to set early standards for the development and use of AI, Roberts said.

While President Biden and Governor Newsom issued some guidance, there is significant concern among California legislators about how AI can be used positively or negatively in the workplace, Micheli said. This is an area that will certainly be addressed in some way during the 2024 legislative session.

Employers looking to use AI in their organization should remember that using AI tools does not exempt employers from state and federal labor laws. For example, Hoffman says, discrimination is illegal and employers using AI in hiring should make sure they’re not inadvertently discriminating against certain applicants or in favor of certain applicants.

“Make sure that whatever tools you’re using, you’re still following all of the applicable laws,” she says.

Predictive Scheduling

Even before the COVID-19 pandemic, there had been several efforts to create statewide predictive scheduling rules and some localities have recently established ordinances regarding this, Hoffman says.

Currently, the ordinances are industry specific. Berkeley’s new ordinance is the most expansive, picking up hotels and building service employees, and dropping the threshold for the number of employees needed to be subjected to the city’s predictive scheduling rules, Roberts says.

Micheli points out that a potential strategy that predictive scheduling proponents are attempting is to build momentum from the local level — get as many local ordinances as possible on the books and then proceed at the state level.

“Even if the Legislature doesn’t contemplate doing a bill this year, as both of you have mentioned, it’s alive and well at the local level,” he says.

2023 Successes

A win for the business community was that AB 1356 (Haney; D-San Francisco), which was opposed by the CalChamber, was stopped last year. This bill significantly expanded the California Worker Adjustment and Retraining Notification (WARN) Act by increasing the notice period (from 60 days to 75), changing the definition of “covered establishment,” and expanding applicability to workers under an overly broad definition of “employee of a labor contractor.”

“We were fortunate enough that Governor Newsom agreed with a number of the points in the CalChamber veto request letter and actually ended up vetoing that bill, but I would expect it to come back,” Micheli said.

Another success for the business community was that CalChamber job killer bill AB 524 (Wicks; D-Oakland) was vetoed by the Governor. This bill would have exposed employers to costly litigation under the Fair Employment and Housing Act (FEHA) by asserting that any adverse employment action was in relation to the employee’s family caregiver status, which was broadly defined to include any employee who provides direct care of any person of their choosing and created a de facto accommodation requirement that would have burdened small businesses.

Particularly concerning was that this bill was filled with broad and vague language and did not define important key terms. One key term that was not defined, for example, was what “direct care” was. The CalChamber, Hoffman says, was concerned the broad language could trigger litigation against well-meaning employers. Moreover, there are many leaves already on the books that deal with the caregiving concerns the bill sought to address.

While AB 524 was stopped in 2023, Hoffman expects a similar bill to be introduced this year as well.

Another problematic bill that was stopped was CalChamber-opposed AB 747 (McCarty; D-Sacramento). This bill jeopardized benefits programs by prohibiting employers from offering certain bonuses or tuition payments in exchange for a specific length of employment and imposed a steep, mandatory $5,000 per employee penalty on businesses of any size if it was determined that their program or policy qualified as a non-compete.

As a two-year bill, AB 747 can be considered again this year. Micheli explains that because the California Legislature works in two-year sessions, bills that were introduced in the first year (the odd-numbered year) can carry over and be considered in the second year (even-numbered year).

Micheli points out that when Hoffman and he were doing lobbying visits on AB 747, people in the restaurant industry and grocers up and down the state mentioned that signing bonuses were helping attract workers back to the workplace as they had been particularly hard hit in the pandemic when they were forced to shut down.

So, what economic incentive would there be for them to operate and grant those types of signing bonuses and get people back working for them, if the individual could turn around and leave the next day or the next week, Micheli asked?

The last bill discussed on the podcast was CalChamber job killer bill SB 627 (Smallwood-Cuevas; D-Los Angeles). Vetoed by the Governor, this bill would have imposed an onerous and stringent process to hire employees based on seniority alone for nearly every industry, including hospitals, retail, restaurants and movie theaters.

Hoffman points out that bills establishing worker retention rules were typically industry specific and were born out of very specific events. For example, a number of years ago, a retention bill (that did pass) related to grocery stores was introduced because there had been mergers and grocery worker unions were concerned about layoffs.

SB 627 strayed from this approach, providing transfer rights to employees of chain employers of more than 100 establishments nationally, Roberts says.

The veto of the original COVID-19 hotel rehire bill made it pretty clear that the administration “is not a fan of this kind of…blanket concept, and that if you are going to do something like this, it needs to be pretty narrowly tailored for a very specific reason. So, it will be intriguing to see if we see something like this back again,” Hoffman says.