HomeMy WebLinkAboutAB 5 - Gonzalez and AB 252 Ridley-Thomas CITY OF PALM DESERTTr.....--1/4„j
DEPARTMENT OF ADMINISTRATIVE SERVICES
STAFF REPORT
REQUEST: CONSIDERATION TO APPROVE LETTERS OF OPPOSITION TO AB 5
(GONZALEZ) AND AB 252 (RIDLEY-THOMAS).
SUBMITTED BY: Stephen Y. Aryan, Risk Manager
DATE: March 9, 2017
CONTENTS: 1. AB 5 (Gonzalez) Bill Text
2, AB 252 (Ridley-Thomas) Bill Text
3. California Chamber of Commerce Opposition Letter
Recommendation
By Minute Motion, approve letters of opposition to AB 5 (Gonzalez) and AB 252 (Ridley-
Thomas).
Commission Recommendation
The Palm Desert Legislative Review Committee met on February 17, 2016, and recommends that the
City Council send letters of opposition to AB 5 (Gonzalez) and AB 252 (Ridley-Thomas).
Background
ASSEMBLY BILL 5(GONZALEZ)
AB 5 (Gonzales) creates the Opportunity to Work Act. Specifically, it would:
• Require employers with 10 or more employees to offer additional hours of work to an existing
employee if, in the employer's reasonable judgment, the worker has the skills and experience
to perform the work before hiring any additional employees or subcontractors (includes
temporary agencies);
• Require employers to use a transparent and nondiscriminatory process to distribute the
additional hours of work among existing employees;
• Exempt employers from offering additional work hours if doing so would require paying
overtime compensation; and
• Authorize employees to file civil actions against employers for technical violations.
AB 5 is based on a recently passed law in San Jose (CA), which was approved by voters in
November 2016 (63.94 % approval) and takes effect on March 13, 2017. However, the San Jose
ordinance only affects employers with 36 or more part-time and/or full-time employees.
AB 5 exposes small business to multiple enforcement mechanisms for technical violations. Under this
legislation, an employee can either file a complaint with the Division of Labor Standards Enforcement
(DLSE) or civil litigation for any violation of the bill's provisions. These include failure of an employer
to retain all employee work schedules indefinitely, failing to post in conspicuous place information on
the proposal, or retain other documentation.
Staff Report: AB 5 (Gonzales) & AB 252 (Ridley-Thomas) Opposition
March 9, 2017
Page 2 of 2
AB 5 provides any employee with the right to sue for such administrative violations. The Palm Desert
Area Chamber of Commerce and California Chamber of Commerce both oppose this bill. The Cal
Chamber identified the bill as a "job killer" because it limits employers' ability to effectively manage
their workforce to address both consumer and employee requests. They further state that the bill (1)
creates unnecessary delays and burdens on small employers to accommodate employee and
consumer demands, (2) subjects employers to costly fines and multiple avenues of litigation for
technical violations that do not actually result in any harm to the employee, (3) limit an employer's
ability to communicate truthful information, and (4) reduce job opportunities for the unemployed. For
these aforementioned reasons, the Legislative Review Committee respectfully recommends that the
City Council oppose this bill.
ASSEMBLY BILL 252(RIDLEY-THOMAS)
Existing law authorizes counties, cities, and other local agencies to impose various taxes and fees in
connection with activity or property within those jurisdictions. The California Constitution also
authorizes a charter city to levy local taxes to raise revenues for local purposes. AB 252 (Ridley-
Thomas), until January 1, 2023, would prohibit a city (including a charter city) from imposing a tax on
video streaming services, including, but not limited to, any tax on the sale or use of video streaming
services or any utility user tax on video streaming services. AB 252 defines video streaming service
as the provision of video content sent in compressed form over the Internet and displayed by the
viewer in real time for a fee on a subscription basis. Example of such services includes Netflix, Hulu
and YouTube streaming. As this measure impacts local control and self-governance, the Legislative
Review Committee respectfully recommends that the City Council oppose this bill.
Fiscal Analysis
There is currently no quantifiable fiscal impact associated with opposition to these proposed
legislations.
Submitted By:
---T
Step en Y. ryan, Ri k Man ger
Reviewed By: /
ri Carney, Direc of Administrative Services
Approval:
Lauri Aylaian, City Manager
CALIFORNIA LEGISLATURE-2017-18 REGULAR SESSION
ASSEMBLY BILL No. 5
Introduced by Assembly Members Gonzalez and Kalra
(Coauthors: Assembly Members Chu and Mark Stone)
December 5, 2016
An act to add Section 559 to the Labor Code, relating to employers.
LEGISLATIVE COUNSEL'S DIGEST
AB 5, as introduced, Gonzalez. Employers: Opportunity to Work
Act.
Existing law creates the Division of Labor Standards Enforcement
in the Department of Industrial Relations for the purpose of enforcing
labor laws. Existing law, with certain exceptions, establishes 8 hours
as a day's work and a 40-hour workweek, and requires payment of
prescribed overtime compensation for additional hours worked.
This bill would create the Opportunity to Work Act. The bill would
require an employer with 10 or more employees to offer additional
hours of work to an existing nonexempt employee before hiring an
additional employee or subcontractor,except as specified,would require
an employer to post a notice of employee rights,as specified,and would
require the employer to maintain certain documentation.The bill would
authorize an employee to file a complaint for violation of these
provisions with the division and to, in the alternative,bring a civil action
for remedies under the act.The bill would require the division to enforce
these provisions,as specified and would authorize the division to,among
other things,adopt rules and regulations.The bill would make a violation
of these provisions punishable by a civil penalty. The bill would also
define various terms for these purposes.
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AB5 —2—
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
The people of the State of California do enact as.follows:
1 SECTION 1. Section 559 is added to the Labor Code,to read:
2 559. (a) This section shall be known, and may be cited,as the
3 Opportunity to Work Act.
4 (b) For the purposes of this section, the following terms shall
5 have the following meanings:
6 (1) "Division" shall mean the Division of Labor Standards
7 Enforcement.
8 (2) "Employee"shall mean a nonexempt employee in this state.
9 (3) "Employer' shall mean any employer with 10 or more
10 employees in this state.
11 (4) "Retaliation" shall mean any form of intimidation, threat,
12 reprisal,harassment,discrimination,or adverse employment action,
13 including discipline,discharge,suspension,transfer or assignment
14 to a lesser position in terms of job classification,job security, or
15 other condition of employment,reduction in pay or hours or denial
16 of additional hours, informing another employer that the person
17 has engaged in activities protected by this section. or reporting or
18 threatening to report the actual or suspected citizenship or
19 immigration status of an employee, former employee, or family
20 member of an employee to a federal,state,or local agency because
21 the employee or former employee exercises a right under this
22 section.
23 (5) "Shift" shall mean the consecutive hours an employer
24 requires an employee to work or to be on call to work. Breaks
25 totaling two hours or less shall not be considered an interruption
26 of consecutive hours.
27 (6) "Work schedule" shall mean all of an employee's regular
28 and on-call shifts, including specific start and end times for each
29 shift during a consecutive seven-day period.
30 (c) An employer shall offer additional hours of work to an
31 existing employee who, in the employer's reasonable judgment,
32 has the skills and experience to perform the work before hiring
33 any additional employees or subcontractors, including hiring an
34 additional employee or subcontractor through the use of a
35 temporary employment agency, staffing agency, or similar entity.
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-3— ABS
1 An employer shall use a transparent and nondiscriminatory process
2 to distribute the additional hours of work among existing
3 employees.
4 (d) Notwithstanding subdivision (c), an employer shall not be
5 required to offer an employee additional work hours if the employer
6 would be required to compensate the employee with overtime
7 compensation under any law or under a collective bargaining
8 agreement. This section shall not be construed to prohibit an
9 employer from offering additional work hours to an employee that
10 would result in the employer being required to compensate the
11 employee with overtime compensation.
12 (e) An employer shall retain all of the following:
13 (1) For any new hire of an employee or subcontractor,
14 documentation that the employer offered additional hours of work
15 to existing employees prior to hiring the new employee or
16 subcontractor.
17 (2) Work schedules of all employees.
18 (3) If applicable,the written statement of an employee pursuant
19 to subdivision (k).
20 (4) Any other records or documents that the division requires
21 the employer to maintain to demonstrate compliance with this
22 section.
23 (f) The division shall enforce this section and may adopt rules
24 and regulations to carry out this section. The division shall create
25 and publish a posting notice that details employees rights under
26 this section.An employer shall post the notice of employee rights
27 under this section published by the division in a conspicuous place
28 where it may be read by employees during work hours and in all
29 places where notices to employees are posted physically and
30 electronically.
31 (g) The division may issue guidelines to encourage employers
32 to create training opportunities that permit employees to perform
33 work for which the employer can be expected to have a need for
34 additional hours of work.
35 (h) An employee may file a complaint for violation of this
36 section with the division.Alternatively, an employee may bring a
37 civil action for the remedies provided by this section in a court of
38 competent jurisdiction. If the employee prevails, the court may
39 award reasonable attorney's fees. Upon the filing of a complaint
40 by an employee with the division, the Labor Commissioner shall
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AB 5 —4-
1 enforce this section in accordance with Chapter 4 (commencing
2 with Section 79) of Division 1, including, but not limited to,
3 Sections 92, 96.7, 98, and 98.1 to 98.8, inclusive.
4 (i) It shall be unlawful for an employer or any other party to
5 discriminate in any manner or take adverse action against any
6 employee in retaliation for exercising his or her rights under this
7 section.
8 (j) To the extent required by federal law, all or any portion of
9 the applicable requirements of this section may be waived in a
10 bona fide collective bargaining agreement provided that such
11 waiver is explicitly set forth in such agreement in clear and
12 unambiguous terms.
13 (k) This section shall apply to welfare-to-work programs under
14 which a person is required to perform work in exchange for receipt
15 of benefits, except that a participant employee in such a program
16 shall have the option to file a written statement with his or her
17 employer opting out of the requirements of this section.
18 (1) A violation of this section shall not be punished as a
19 misdemeanor pursuant to Section 553. A violation of this section
20 shall be punished by a civil penalty as determined by the division.
0
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AMENDED IN ASSEMBLY FEBRUARY 28, 2017
CALIFORNIA LEGISLATURE-2017-18 REGULAR SESSION
ASSEMBLY BILL No. 252
Introduced by Assembly Member Ridley-Thomas
(Coauthors:Assembly Members Baker, Bigelow, Mathis, Steinorth,
and Waldron)
(Coauthors: Senators Berryhill and Hill)
January 31, 2017
An act to add and repeal Section 7284.8 of the Revenue and Taxation
Code, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
AB 252, as amended, Ridley-Thomas. Local government: taxation:
prohibition: video streaming services.
Existing law authorizes counties, cities, and other local agencies to
impose various taxes and fees in connection with activity or property
within those jurisdictions. The California Constitution also authorizes
a charter city to levy local taxes to raise revenues for local purposes,
subject to restrictions imposed by that city's charter or preemption in
matters of statewide concern.
This bill, until January I, 2023, would prohibit the imposition by a
city, city and county, or county, including a chartered city, city and
county, or county, of a tax on video streaming services, including, but
not limited to, any tax on the sale or use of video streaming services or
any utility user taxes. tax on video streaming services.
This bill would make a legislative finding and declaration regarding
the statewide concern of the promotion of uniformity in access
throughout the state to video streaming services.
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AB 252 —2—
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
The people of the State of California do enact as follows:
1 SECTION 1. Section 7284.8 is added to the Revenue and
2 Taxation Code, to read:
3 7284.8. (a) A city, city and county, or county, including a
4 chartered city. city and county, or county, shall not impose any
5 tax on video streaming services, including, but not limited to, any
6 tax on the sale or use of video streaming services or any utility
7 user taxes. tax on video.streaming services.
8 (b) For purposes of this section,"video streaming service"means
9 the provision off video content sent in compressed form
10 over the Internet and displayed by the viewer in real time for a fee
11 on a subscription basis.
12 (c) The Legislature finds and declares that the promotion of
13 uniformity in access throughout the state to video streaming
14 services is a matter of statewide concern and, therefore, is not a
15 municipal affair as that term is used in Section 5 of Article XI of
16 the California Constitution.
17 (d) This section shall become inoperative on January 1, 2023,
18 and shall be repealed as of that date.
0
98
•
CaiChamber
CAtlf`)RCIA Lti\MBFR OF COYVtRCL.
January 13,2017
The Honorable Ash Kalra
California State Assembly
State Capitol Room 5160
Sacramento,CA 95814
SUBJECT: AB 5 (GONZALEZ FLETCHER/KALRA) EMPLOYERS: OPPORTUNITY TO WORK
ACT
OPPOSE—JOB KILLER
Dear Assembly Member Kalra:
The California Chamber of Commerce respectfully OPPOSES your AB 5 (Gonzalez Fletcher/Kalra),
which has been labeled a JOB KILLER,because it will limit employers' ability to effectively manage their
workforce to address both consumer and employee requests, will subject employers to costly fines and
multiple avenues of litigation for technical violations that do not actually result in any harm to the
employee, is inconsistent with existing law, and limits job opportunities for unemployed workers.
AB 5 Proposes Unnecessary Burdens on Small Employers:
AB 5 mandates small employers with as few as 10 employees to offer all employees who have the skills
and experience to perform additional hours of work that become available, before hiring a new employee,
temporary employee, or contractor. This mandate creates a host of complications and concerns,
including:
(1) If an employer has facilities in different parts of the state, AB 5 mandates the employer to offer
additional hours of work to employees in facilities where the employee does not work. For
example, under AB 5, an employer who has at least 10 employees throughout the state would
have to contact employees in Southern California who have the skills and responsibilities to
perform additional hours of work in Northern California, even though it is geographically unlikely
the employee would be available to accept the additional hours of work. Requiring employers to
go through this time consuming exercise for all employees who have the skills and responsibilities
to perform the work, but yet, for other reasons such as physical location, are unlikely to accept
those hours creates unnecessarily delay and limits an employer's ability to respond to consumer
demands and last-minute employee requests for time off.
(2) AB 5 mandates an employer to contact each employee who has the skill and experience to
perform the work required, even though that employee may have explicitly told the employer: (a)
the employee is not interested in additional hours of work; (b) the employee is specifically
unavailable on the day/time the additional hours are available; or (c) while offering the additional
hours of work to an employee at that time may not require overtime compensation, the additional
hours of work added to the remaining scheduled shifts of that employee will require the employee
to work overtime,thereby increasing the cost on an employer.
(3) AB 5 fails to indicate what an employer actually has to do to satisfy the "offer" requirement of
additional hours. Is a mass email distribution sufficient? Does the employer have to personally
contact each employee? And, what happens if the employer cannot get a hold of each
employee? How long does the employer have to wait for a response from the employee before
identifying which employee will receive the additional hours of work? These unanswered
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questions will ultimately lead to litigation against the employer when an employee does not
receive additional hours of work.
(4) After contacting each employee whom the employer reasonably presumes can perform the work,
AB 5 requires an employer to use a "transparent and nondiscriminatory process" to pick amongst
numerous available employees who will ultimately receive the additional hours of work. This
requirement exposes an employer to threats of litigation, fines, and administrative complaints
when one employee is given the additional time over the other. In fact, the proposed definition of
"retaliation" in the bill explicitly identifies the "denial of additional hours" as retaliation, thereby
setting an employer up for costly litigation.
(5) AB 5 also imposes an unreasonable document retention mandate on employers. Under AB 5, an
employer shall retain documentation regarding offers of additional hours of work, employee work
schedules, and employee written statements. There is no time limit on this document retention
and therefore an employer essentially has to retain such documents indefinitely. This unlimited
time frame will expose employers to constant threats of penalties and litigation for any missing
documentation.
AB 5 Imposes Multiple Layers of Enforcement and Lawsuits Against Small Employers:
AB 5 additionally exposes small employers to multiple enforcement mechanisms for technical violations
that do not even injure the employee. Under AB 5, an employee can either choose to file a complaint
with the Division of Labor Standards Enforcement (DLSE) or civil litigation for any violation of the
provisions in the bill, including (1) failure of an employer to retain all work schedules of all employees,
indefinitely; (2) failing to post in a conspicuous place information on this proposal; or (3) retaining other
documentation. AB 5 provides any employee with the right to sue for these paper violations, even if such
document violations do not pertain to that specific employee or actually cause any harm or injury.
Moreover, due to the inclusion of this proposal under the Labor Code, an employee can also file a Labor
Code Private Attorney General Act (PAGA) lawsuit and receive $100 per employee, per pay period, for
these violations, in addition to attorney's fees. Piling on litigations costs on small employers for violations
that do not actually harm or injure an employee is simply unnecessary, unfair, and limits their ability to
expand and create jobs.
AB 5 Is Inconsistent with Existing Law:
AB 5 also includes language regarding retaliation concerning the threat of reporting actual or suspected
citizenship or immigration status to a federal, state or local agency that is already addressed in existing
law. In 2013, AB 263 (Hernandez) was signed into law and sets forth in Labor Code section 1019 that no
employer can retaliate against an employee for the exercise of their rights under the Labor Code by
threatening to contact or contacting immigration authorities. AB 263/Labor Code section 1019 balanced
the concern of such retaliation against employees with employers' concerns regarding complying with
federal law. AB 5 does not have that same balance and will place employers in an unnecessary legal
predicament between state and federal law.
AB 5 further seeks to limit an employer's freedom of speech by deeming any communication to another
employer regarding an employee's exercise of rights under this law as "retaliation." This expansive
prohibition on the right to free speech is concerning given that it would limit an employer's ability to
communicate about public information such as a civil litigation as well as inform a successor employer of
potential liabilities for which the successor employer may assume. Labor Code Section 1050 already
prohibits and punishes an employer for making misrepresentations to a future employer in an attempt to
prevent the former employee from obtaining employment. Similarly, Civil Code Sections 44-47 prohibits
defamation and/or false communications regarding any person, except those communications deemed
privileged. It is unnecessary to limit and penalize an employer for communicating truthful information.
AB 5 Limits Opportunities for Other Workers:
AB 5 mandates an employer to offer existing employees additional hours of work rather than offering
those hours to unemployed individuals, favoring one employee against another and potentially prolonging
an individual's unemployment status. Moreover, AB 5 may discourage employers from offering part-time
employment opportunities at all due to this mandate and will encourage those employers to simply
supplement a full-time workforce with contract employees when needed.
Similar Local Ordinances Are Significantly Narrower Than AB 5:
AB 5 appears to be modeled after San Jose and San Francisco local ordinances requiring larger
employers to provide part-time employees with additional hours of work. However, San Francisco is only
applicable to national employers with multiple locations and San Jose has a specific small employer
exemption. Moreover, both ordinances only require an employer to offer additional hours of work to part-
time employees, not full-time employees. AB 5 applies to all employers with only 10 employees, and
does not limit the requirement to offer additional hours of work to only part-time employees, thereby
exposing small employers throughout California to significant scheduling burdens and litigation that they
are not capable of implementing or defending.
For these reasons, we respectfully OPPOSE your AB 5 as a JOB KILLER.
Si erely,
Jennifer Barrera
Senior Policy Advocate
cc: Camille Wagner,Office of the Governor
District Office, The Honorable Ash Kalra
JB:II