How Will California’s New Governor Approach Workplace Bills?

Gov. Gavin Newsom was sworn in Jan. 7

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Democratic Gov. Gavin Newsom took the reins of the California state government Jan. 7, and many employers are hoping that he will be more responsive to business needs because of his entrepreneurial background. Here's what California employers should know about the new governor.

Newsom started a winery in the early 1990s and subsequently opened several related restaurants and retail stores. "That has led some to speculate that he may intuitively understand some of the issues facing business owners in California, from bureaucratic red tape to a hostile litigation environment," said Benjamin Ebbink, an attorney with Fisher Phillips in Sacramento.

In the last session, the outgoing governor, Jerry Brown, signed some significant employee-friendly bills, including expanded anti-harassment provisions and training requirements. "A lot of employers think Newsom's approach will be the same, but with his business background, they are hopeful that he'll be a bit more employer-friendly," said John Kuenstler, an attorney with Barnes & Thornburg in Los Angeles.

It's hard to predict how Newsom will differ from Brown on workplace issues, noted Bruce Sarchet, an attorney with Littler in Sacramento. "We can expect more protection for workers, but the question is how far he will go."

Past Practices

Newsom became the mayor of San Francisco in 2004 and lieutenant governor of California in 2011. Shortly after taking office as mayor, he granted the first official marriage licenses to same-sex couples in the United States. The controversial move violated California law and the licenses were later nullified, but Newsom made a name for himself as an advocate for the lesbian, gay, bisexual, transgender and queer community.

[SHRM members-only resource: California Labor and Employment Law Overview]

As lieutenant governor, Newsom showed strong support for SB 63, which extended job-protected parental leave rights to workers at small businesses with 20-49 employees.

"New mothers and fathers should never be forced to choose between keeping their job and spending time with their newborn child during those first critical months of a newborn's life," he said in a statement after Brown signed the bill.

He has also supported the #MeToo movement and related anti-harassment measures and seeks to expand workplace protections for victims, according to his website.

Newsom's Priorities

Newsom's top priorities include "standing up for California values that are under attack from Washington—from civil rights to immigration," according to his website.

He wants to do a number of things but is worried about the deficit, Kuenstler said. The new legislative session started Dec. 3, and lawmakers already proposed $40 billion in new spending, according to The Sacramento Bee. "All of this will be whittled down, and we all will live within our means," Newsom said to The Sacramento Bee. "We're not going to deviate from being fiscally prudent."

He has also discussed offering better health care options to more people, Kuenstler said. Newsom has advocated for single-payer health care, Ebbink noted, but one of the biggest issues has been coming up with ways to pay for the program.

Legislative Proposals Introduced

Employers are likely focused on how California lawmakers will respond to the state high court's recent decision that made it harder to classify workers as independent contractors. Under the new, three-part "ABC test," the California Supreme Court said all three of the following factors must be met for a worker to be properly classified as an independent contractor:

  • The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
  • The worker performs tasks that are outside the usual course of the hiring entity's business.
  • The worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed for the hiring entity.

Members of the state assembly have already introduced competing bills on the issue. AB 5 would codify the California Supreme Court's test, and AB 71 would revert the standard to the multifactor test that was in place before the ABC test.

This will be the issue for employers to watch in 2019, and Newsom will have to deal with it in one way or another, Ebbink said.

Newsom has talked a lot about fostering innovation, Sarchet said, so it will be interesting to see how he deals with issues affecting the future of work, job creation, the gig economy and the independent-contractor test. 

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