California Lawmakers Delay Opportunity to Work Bill

Legislators are looking to San Jose’s ordinance before moving forward with a potential statewide law

By June Bell Jun 2, 2017
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A bill that would bar California employers from hiring new workers unless they first offer extra hours to their part-time employees has been put on hold for a year.

Modeled on a San Jose ordinance that took effect March 13, the Opportunity to Work Act (A.B. 5) would require businesses with 10 or more employees to give their part-time workers dibs on extra hours before filling those slots with temporary workers or new hires. Employers would have to keep detailed records showing compliance.

The bill's sponsor, Assemblywoman Lorena Gonzalez Fletcher, D-San Diego, wanted to first see how implementation fares in San Jose, a spokesman for her office said. A hearing on the measure before the Appropriations Committee—which Gonzalez Fletcher heads—was postponed in May, five months after she introduced the legislation.

Michael Kalt, an attorney with Wilson Turner Kosmo in San Diego, said he expects the bill to resurface next spring, perhaps with some tweaks.

"Before you take something statewide, it might help to see how it actually played out so you can either adopt what worked or change what didn't," said Kalt, who is also the government affairs director for the California State Council of the Society for Human Resource Management (CalSHRM). CalSHRM had opposed the bill and recommended a year's delay to see what happens in San Jose, he said.

[SHRM members-only toolkit: Complying with California Wage Payment and Hours of Work Laws]

Voters Approved Local Law

San Jose's Measure E, the Opportunity to Work Ordinance, was vigorously opposed by business groups that criticized the law's vague terms and the hiring constraints it placed on owners and managers. The measure, which was approved with 64 percent of the vote, applies to businesses with at least 36 employees. It affects about 1,200 businesses and 35,000 part-time workers.

Proponents of the measure claimed it would boost the incomes of low-wage part-timers struggling to make ends meet in Silicon Valley, one of the country's most costly regions. Business owners who opposed the measure feared it would trigger frivolous litigation and deter employers in industries with fluctuating staffing needs—such as food service and retail—from adding workers.

San Jose's Office of Equality Assurance, which educates businesses about compliance and enforcement, fielded many questions about implementation. As of late May, however, the office had received only two complaints since the ordinance took effect. Both were from restaurant workers, one employed by a chain restaurant and the other by a fast-food franchise, according to Nina Grayson, the office's director.

In both cases, the part-time workers claimed their hours were reduced. The Office of Equality Assurance has asked their employers for more information, since the workers didn't know whether their hours were cut because their employers had added new staffers—a possible violation of the ordinance—or if their employers had experienced a downturn in business, Grayson said.

No Penalty for First Violation

The San Jose ordinance imposes no penalty for the first violation. After that, employers are on the hook for back wages, additional hours and a $50 fine for each day of the violation—plus attorney fees and costs. Businesses may request a hardship exemption for up to 12 months if compliance would be "impracticable, impossible or futile," but none have yet done so.

Unlike minimum-wage laws, where a pay stub can be valuable evidence in a claim, the Opportunity to Work Ordinance is more challenging to investigate and enforce, Grayson said. A violation wouldn't necessarily be uncovered in a paperwork trail or in payroll records. "It's going to be a back-and-forth [process]" with employers, she said. "It will have to be a conversation."

In response to a flood of queries from San Jose business owners, her office prepared information in four languages covering compliance, notification, suggested steps for employers and answers to frequently asked questions. Those materials will continue to be updated and refined.

More Local Laws

San Francisco has had a similar ordinance on the books since 2015, but it applies only to "formula retail establishments," those with at least 40 locations worldwide and with at least 20 workers in San Francisco. Emeryville's Fair Workweek Ordinance, which takes effect July 1, pertains to businesses with 56 or more employees. Employers must post the additional hours that are available on an internal website or in a conspicuous location. Workers have 24 hours to accept work that is expected to last two weeks or less.

California cities aren't the only ones facing such laws. New York City Mayor Bill de Blasio signed several bills on May 30 that will apply to fast-food workers, including one that will require employers to offer additional hours to current employees before hiring new ones.

Some Municipalities Might Wait

Although it's not uncommon for California municipalities to draft labor and employment ordinances, they're likely to hold off on introducing their own versions of San Jose's Opportunity to Work legislation because they know a statewide version is pending, Kalt said.

"They may just say it's too early and potentially not necessary," he said. "It's not worth their time."

Provisions in the pending Assembly bill require employers to offer additional hours to workers with the skills to do the job and not to discriminate when offering extra hours. Employers wouldn't need to offer extra work hours to employees if doing so would require them to pay overtime.

June D. Bell, a regular contributor to SHRM, covers legal issues for a variety of publications. Contact her at june@junebell.com.

 

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