As discussed in a prior article, unsuccessful bills proposed in the California legislature in 2017 can carry over into the 2018 session. State lawmakers may revive measures that did not make it through both chambers of the legislature —or reintroduce bills that Governor Brown vetoed.

With the next legislative session in California underway as of January 3, 2018, this article sneaks a peek at several bills that may see further consideration. Let’s grab some popcorn and preview these potential coming attractions…

• Opportunity to Work

We begin with a recap of last year’s AB 5, a measure that would have required employers with ten or more employees to offer additional available hours of work to current nonexempt workers before hiring more help. This obligation would have extended to employees who, in the employer’s reasonable judgment, have the skills and experience to perform the work. For qualified workers, AB 5 would have required the employer to implement “a transparent and nondiscriminatory process to distribute the additional hours of work among existing employees.” The bill did not obligate an employer to offer additional hours where such would require the payment of overtime. AB 5 also would have imposed workplace posting and recordkeeping duties, prohibited retaliation, and authorized aggrieved employees to both file complaints with the state labor agency and initiate civil actions.

The purpose of this Opportunity to Work measure was to enable employees to achieve full-time employment if desired. Although the bill stalled in the committee process, these types of laws and other predictive scheduling proposals are gaining momentum across the country. Employers in the Golden State should not be surprised if AB 5 picks up steam in 2018.

• Workers’ Compensation: Day Laborers & Immigration Status

Another proposal under consideration, AB 206, would expand the definition of “employee” for workers’ compensation purposes. Current law generally covers employees who work for the owners or occupants of residential dwellings (such as homeowners), whose “duties are incidental to the ownership, maintenance, or use of the dwelling, including the care and supervision of children, or whose duties are personal and not in the course of the trade, business, profession, or occupation of the owner or occupant.” Benefits are not afforded, however, to employees who, in a 90-day period, work for less than 52 hours or for less than $100. AB 206 would broaden the term “employee” to include employees who worked or were contracted to work less than 52 hours. It would thus extend benefits to day laborers, for example, along with occasional babysitters.¹

AB 206 further clarifies that employees are covered for workers’ compensation regardless of their immigration status. This measure is currently scheduled for a committee hearing on January 10, 2018.

• Compensability of Sleep Time for Domestic Workers

SB 482, if resuscitated, seeks to clarify the treatment of sleep time for live-in domestic employees and personal assistants who are required to be on duty for 24 or more consecutive hours. The proposal authorizes domestic workers to enter into written agreements by which they could exclude a bona fide sleeping period from their hours worked (and thus from their pay). Sleeping periods would be regularly scheduled and would not exceed eight hours for uninterrupted sleep. Sleep time could be excluded so long as the employer complies with the law generally and respects eight hours for the employee to be off-duty for continuous sleep.

According to SB 482, if the designated sleeping period is interrupted by an emergency, only the time spent working during the emergency would be compensable. Moreover, if the parties do not execute a written agreement, all time remains compensable. The bill’s author has asserted that these amendments are necessary to fix the uncertainty created in this industry by the Mendiola v. CPS Security Solutions, Inc. decision and to ensure that California law conforms to federal law on this point.²

• Holiday Overtime Exemption for Retail Workers

One assembly bill likely to draw attention in the upcoming legislative year is AB 1173, which relates to overtime compensation. California law generally provides that employees working more than eight hours in a day, or 40 hours in a week, are entitled to overtime pay at one-and-a-half times the regular rate. It also permits employees to establish an alternative workweek schedule under certain circumstances, such as through collective bargaining or where two-thirds of the employees in a work unit agree to do so.

AB 1173 would create another overtime exemption for retail workers during the holiday season. The measure would allow individual, nonexempt workers in the industry to set a flexible work schedule with their employers, applicable for the months of November through January. The employees could agree to work up to ten hours a day without overtime compensation. Overtime would kick in for hours worked in excess of ten per day or 40 per week, and double time would apply for other specified hours.

There appear to be several open issues with AB 1173, including, for example, that the term “retail industry” has yet to be defined. A hearing on the bill is scheduled before the assembly’s Labor and Employment Committee for January 11, 2018.

• Disability Complaints: Public Access Claims against Small Businesses

Another measure that could be resurrected in 2018, AB 150, addresses the concerns of small business owners (employing fewer than 50 full-time employees) facing certain types of disability claims. Existing state law permits individuals with disabilities to sue businesses that deny or interfere with their enjoyment of public facilities.

AB 150 would amend the California civil code and impose certain prerequisites to filing suit over such claims. Under the bill, a plaintiff could not initiate a civil action unless he or she provided notice, at least six months prior to filing a complaint, to the business about the alleged violation. Notice must include specific facts describing the violation and specifying a remedy. AB 150 then would give the business six months to cure the violation. A plaintiff would not be permitted to file suit under the state’s disability antidiscrimination law if the business made a good faith effort in that time to correct the alleged violation. The bill faces serious opposition on a number of legal points but remains in the assembly committee process.³

• Unemployment Benefits for Employees Separating Due to Trade Dispute

The California assembly is positioned to consider an amendment to the unemployment compensation law. Under current law, employees who leave their jobs because of a trade dispute are deemed ineligible for unemployment benefits. AB 306 would eliminate this limitation, however. The proposal states that an individual has left a job “with good cause” if he or she was prohibited from working due to “a trade dispute with the employer regarding wages, hours, or other terms or conditions of employment.” Benefits would also be extended to individuals who leave work during a bona fide strike of more than 50% of bargaining unit employees. The bill is pending before the Insurance committee but has not been set for hearing.

• Universal Single-Payer Health Care

As uncertainty over federal health care regulation lingers, the state senate passed a sweeping measure (SB 562) in 2017 that would establish the Healthy California program. This program would provide universal, single-payer health care, as well as a cost-control system, to apply to all state residents. Under SB 562, every resident would be eligible to enroll for coverage. Private health plans and insurers could not offer competing benefits but could offer benefits for services not covered by the program, including for non-residents.

SB 562 did not make much headway in the assembly in 2017. But with the state of health care in flux, the California legislature may revisit this issue. That being said, even if enacted, as currently worded SB 562 would not become operative until revenues exist to fund the costs of implementing the program.

• Private Attorney Generals Act

The Private Attorney Generals Act (PAGA) authorizes aggrieved employees to step into the shoes of the state Labor Commissioner to help enforce California’s labor laws. Under this unique California law, employees may bring actions against employers to recover civil penalties on behalf of the state, themselves, and other aggrieved employees—in addition to any other remedies available to them under state or federal law. Since its enactment, PAGA has been the source of much confusion. California legislators regularly entertain amendments to PAGA that might clarify the law or narrow its scope.

There are several assembly bills carrying over into 2018 that would substantively affect PAGA. The first, AB 281, would extend the time limit for employers to cure certain violations before an employee could bring an action.⁴ A hearing on AB 281 is scheduled for January 11, 2018 before the Labor and Employment committee.

AB 1429, meanwhile, would reduce the number of labor code offenses subject to PAGA—limiting civil penalty recovery to a smaller set of alleged violations. It would also cap recovery at $10,000 per aggrieved employee and would no longer allow claimants to recover their filing fees.

Finally, AB 1430 would revise the pre-lawsuit procedures applicable to PAGA claims. This proposal would require the state’s Labor and Workforce Development Agency (LWDA) to investigate all PAGA claims. Following investigation, the LWDA would either issue its own citation or determine if there is a reasonable basis for a civil action. Aggrieved employees could not file suit unless: (1) they receive notice from the LWDA that a reasonable basis for a civil cation exists; or (2) the LWDA fails to issue any notice as required.

In addition to these legislative measures, there are a few ballot initiatives that could significantly alter PAGA. As summarized in a prior PAGA-related article, these initiatives may offer California voters the opportunity to amend the statute at the polls in November 2018. Options might include a repeal of PAGA, limitations on discovery, or added restrictions on penalty recovery.⁵

As we start the new year, California employers should be on the lookout for potential legislative developments. The measures noted above merit watching, along with the possible reintroduction of bills previously vetoed by Governor Brown.

We will continue to monitor the progress of noteworthy labor and employment bills in the Golden State and beyond.