California’s economy is showing encouraging signs of a rebound, yet we cannot take this current economic improvement as a sign of mission accomplished. For our state to prosper and thrive long term, California needs to continue on a path that encourages businesses to invest, expand operations and employ more Californians.
Even during an economic uptick, it’s not a good time to put a road block on economic growth and make it harder to create well-paying jobs for California. That’s why it’s disturbing to see legislation that hurts small businesses headed to the governor’s desk for his signature or veto.
Assembly Bill 1897, authored by Assembly member Roger Hernández (D-West Covina), attempts to shift accountability in a subcontractor relationship by unfairly holding the majority of California employers liable for the wage and hour violations of another company. This legislation will endanger the growth of small and large businesses, and the jobs they provide, by targeting countless law-abiding companies in the pursuit of a few bad actors. For situations where there is evidence of unlawful practices and abuse, liability shouldn’t be passed from the responsible party to another party. Shifting reasonability through this allowance is irresponsible. The current worker-protection laws should be enforced.
The Los Angeles Area Chamber of Commerce is not alone in our opposition to this unreasonable legislation. AB 1897 is facing widespread opposition from state and local business organizations because it will create a host of problems for every industry that depends on subcontractors and temporary help including construction, agriculture, hospitals, restaurants, newspapers, retailers, food processors and banks.
The state’s Department of Finance noted that this bill will result in unknown state costs. It said that AB 1897 “exposes California employers to liability for Labor Code violations that are committed by other employers. This additional liability could diminish incentives for businesses to operate in California and therefore be a sole or contributing factor to a business’s decision to close or downsize.”
AB 1897 also would threaten job opportunities for our state’s temporary workforce, which provides employers with workers for seasonal jobs.
It should also be noted that this legislation targets the private sector while exempting government organizations. There is no community benefit in holding taxpayer-funded government agencies to a different standard.
When business owners see additional government-imposed penalties, it translates into increased risk and, therefore, increased costs. Unnecessary regulations like AB 1897 only hinder business expansion and reduce small-business employment opportunities for Californians. Although our legislative leaders failed to acknowledge this important point, we’re hopeful that Gov. Jerry Brown will continue working to preserve our state’s economy. Californians want to work.
Governor, please veto AB 1897. Our citizens want shorter, not longer, unemployment lines.
Gary Toebben is chief executive of the Los Angeles Area Chamber of Commerce.
