New biz laws in the wings for 2014

Great American Car Wash in Fresno is among the non-unionized car washes in the state that will see their required bond to be posted increase from $15,000 to $150,000 when a new law takes effect next year. Photo via Great American Car WashGreat American Car Wash in Fresno is among the non-unionized car washes in the state that will see their required bond to be posted increase from $15,000 to $150,000 when a new law takes effect next year. Photo via Great American Car WashLeave of absence rules will change and more protections against discrimination will go into effect, but the minimum wage hike has caused the biggest stir in the local business community when it comes to new state laws for 2014.

On Sept. 25, Gov. Jerry Brown signed Assembly Bill 10, which raises the state minimum wage from $8 per hour to $9 per hour beginning on July 1, 2014, then to $10 per hour beginning Jan. 1, 2016.

Both the Fresno and Clovis chambers of commerce voiced opposition to the bill for the increased payroll expenses it will cause for California employers.

“We believe the marketplace should determine what wages are, and this particular increase will create hardships on small businesses, particularly restaurants,” said Ruth Evans, the Fresno Chamber’s Government Affairs Council chair.

She said the increased minimum wage could cut into the margins of restaurants, which traditionally have small margins to begin with. She believes many will not be able to absorb the expense.

“If the restaurants cannot pass the costs on to customers, it could be very devastating to the owners,” Evans said.

Assemblymember John A. Pérez (D-Los Angeles), who supports the bill, felt the increase was long overdue for the working class of California.

“Our workers are among the most productive in the world, and with the signing of the minimum wage increase, working people will see significant relief and help California’s economy continue to outshine the rest of the nation,” Perez said in a release.

He estimated the wage increase will generate $2 billion in additional spending for the state economy annually, which he believes will be spent on items such as groceries and school supplies.

However, Fran Blackney, communication director for the Clovis Chamber,  believes it will actually have a disproportionate impact on the youth of the state. She refers to the bill as “the teenage unemployment act,” because she feels employers will not longer be willing to take a chance on hiring teenagers because of the cost and will look for workers who have already developed work skills.

“This means they will not acquire the skills as teens to become highly-skilled workers in the workplace,” Blackney said.

She anticipates it will also have a ripple effect on employees beyond just minimum wage earners.

“When you give minimum wage hike, it gives a raise to those on bottom rung and everyone else wants a raise too,” Blackney said.

She also pointed out it will also raise the worker’s compensation insurance and social security taxes, which are based on payroll.

Another new law, AB 442, increases the penalties for citations from the Labor Commissioner for failing to pay minimum wage to also include payments of liquidated damages to the employee.

Both chambers also opposed SB 770 that expanded the parameters of the Paid Family Leave program. Currently under the program, employees can collect state disability insurance for as much as six week if they take time off to care for a seriously ill child, spouse, parent or domestic partner, or also to bond with an adopted child or foster child.

The new law expands it to include time off to care for seriously ill grandparents, grandchildren, siblings and in-laws.

“Our state’s Paid Family Leave Program will now more accurately reflect the broader range of caregiving responsibilities that families have in our state,” said Sen. Hannah-Beth Jackson (D-Santa Barbara), who authored the bill.

However, Evans argues the current law provided enough opportunity for employees to care for family members and the expansion will create an undue hardship on employers throughout the state.

“It’s extending addition time off, which is burden to employers when you look at all the leave that is already available,” Evans said. “We think the employers that can accommodate already do accommodate. To mandate additional leave is too costly.”
The Clovis Chamber shared a similar view.

“It disrupts the employers’ schedules and they have to hire someone to fill in while the employee is unavailable,” Blackney said.

SB 770 will go into effect on July 1.

Additionally, Brown signed SB 288, SB 400 and AB 11 — all involving leaves of absence.

SB 288 allows for leaves of absence for crime victims to appear in court but only applies to specific crimes, such as solicitation for murder and vehicular manslaughter while intoxicated.

SB 400 provides protection of victims of stalking and domestic violence, including allowing time off for treatment, court appearances and safety planning for employers with more than 24 employees.

The law also prohibits retaliation or discrimination of victims and requires accommodations deemed reasonable, such as safety measures.

AB 11 requires employers to allow employees to take as many as 14 days off per calendar year to receive training reserve peace officers and emergency rescue personnel. Previously the law only pertained to volunteer firefighters.

Neither chamber took a stance on the protections afforded to employees with the signing of SB 496, AB 263 or SB 666.

SB 496 protects employees who report violations of local laws. It also protects employees from retaliation by an employer, supervisor or another employee who may investigate an alleged violation.

AB 263 protects employees from employers engaging in “unfair immigration-related practices” when an employee claims rights protected under the state labor code.

The law includes prohibiting employers from threatening to contact immigration authorities if an employee complains about being paid less than minimum wage or other violations.

SB 666 takes it a step further by giving the state authority to revoke an employer’s business license for reporting or threatening to report immigration violations in response to complaints made by employees regarding employment issues.

Also attorneys could face disbarment for threatening or reporting witnesses or other parties involved in a lawsuit for the same issues.

A bill that caused a very specific stir was AB 1387, which was directly related to the car wash industry.

Car washes that employ non-union workers are required to “post a $15,000 bond for the benefit of the state to compensate employees damaged by the employer’s nonpayment of wages,” according to the bill’s summary.

The law was scheduled to be repealed on Jan. 1, but in October Brown signed a bill that increases that bond to $150,000. However a business does not have to post a bond if its workers are unionized and they have a collective bargaining agreement in place.

AJ Rassamni, owner of the Great American Car Wash in Fresno, said this law will cause expenses to go up that will cut into the bottom line.

In his eyes, the car wash industry is so competitive that businesses will not be able to raise prices and pass the expense along to the customer.

“We cannot raise our prices, but how much can we keep on squeezing? I do not know,” Rassamni said.

He couldn’t confirm or rule out if his car wash will be looking at layoffs for the coming year.

“We’re taking it one step at time,” Rassamni said. “If we have to tighten more, we’ll have to tighten more.”