Los Angeles area businesses face a constant barrage of regulations, whether from City Hall, local environmental agencies or lawmakers in Sacramento. To comply with these regulations, businesses must spend significant amounts of time and money; so much so that in surveys, business owners cite the cost of complying with regulations as one of their top concerns. With that in mind, the Business Journal this week launches a biweekly column that will highlight some of the more significant regulations and laws both proposed and implemented that affect L.A.-area businesses.
It’s an annual tradition in Sacramento as California businesses are once again put in the crosshairs of state legislators. A host of recently introduced bills would place significant financial or regulatory burdens on employers.
Topping the list is AB 1835, by Assemblywoman Sally Lieber, D-Mountain View, which would raise the state’s minimum wage to $7.75 an hour from the current $6.75 an hour and then permanently index it to inflation. While Gov. Arnold Schwarzenegger in January announced he would support an increase in the minimum wage (which now stands at $6.75 an hour) and some business groups have reluctantly agreed to remain neutral on this, both Schwarzenegger and the business community remain strongly opposed to indexing the minimum wage. Restaurateurs, grocers, hotel operators and other employers who pay minimum wages argue that it could force wage hikes on businesses even when the economy is in a slump. But hanging in the wings is a labor-backed initiative effort that could qualify for the November ballot; it would both raise the minimum wage by $2 an hour and permanently index it to inflation.
Another bill catching the eye of businesses is SB 1414, by Sen. Carole Migden, D-San Francisco. Dubbed the “Wal-Mart bill,” after a similar proposal in Maryland, this bill would require all businesses with more than 10,000 employees in the state to spend at least 8 percent of their total payrolls on health care benefits or pay a fee into a fund that would be used to supplement Medi-Cal payments. Besides Wal-Mart, nearly every major grocery store chain in the state would be hit as would hospital chains and health care plans, major oil companies and defense contractors and a host of other industries. Several organizations including Kaiser Permanente, Boeing Co., Northrop Grumman Corp., the University of Southern California and Bank of America Corp. have 10,000 employees in Los Angeles County alone.
Three years ago, the Legislature approved a much more far-reaching law requiring all employers with more than 50 workers to provide health insurance or pay into a state-funded program; business groups put that law to a referendum in 2004 and it was overturned.
Dozens of other bills, including several that would impose higher penalties on polluters, have also been introduced. Among these is SB 1205, by state Sen. Martha Escutia, D-Montebello, which would increase penalties for most air pollution violations from $1,000 to $10,000, with some penalties going as high as $100,000 per day for “serious and chronic violators.”
In past years, bills like these have either died in the Legislature or been vetoed by the governor; but in an election year where Schwarzenegger is tacking to the left, there is concern among business groups that some of these bills may slip through.
For more information, go to the Legislature’s bill search site at leginfo.ca.gov/bilinfo.html and enter the bill number.
Port Pollution
The South Coast Air Quality Management District is developing a trio of regulations that would reduce emissions at the ports under its Clean Port Initiative.
The first of these would require the ports and related facilities to inventory all their emissions and then develop health risk assessments. Another proposal would require all port-related facilities to use the cleanest available equipment when they expand their operations. The third would be similar to the second, except it would only focus on those processes that generate toxic air emissions.
“The ports are the largest single fixed source of air pollution in Southern California. This is the top priority for not only reducing emissions but also limiting new emissions as the ports grow,” said AQMD spokesman Sam Atwood.
Another AQMD regulation, this one targeting industrial boilers, will be heard in May. The rule would reduce nitrogen oxide emissions from new boilers at oil refineries, manufacturing plants and major commercial buildings. The regulation, Rule 1146.2, applies to owners and operators of large water heaters and small boilers with a rating of less than 2 million btu/hr. The units also are found in apartment buildings.
Court Watch
The California Supreme Court has agreed to take up the thorny issue of employee rest breaks and meal times. Last year, the Schwarzenegger administration proposed rolling back regulations proscribing rest breaks and meal times for hourly workers in favor of a more flexible approach. After an outcry from organized labor, the administration quietly withdrew its proposal earlier this year.
However, the issue isn’t over. Instead, it’s moved to the question of penalties. At issue is whether there should be a one-year or three-year statute of limitations.
This difference in interpretation could translate into hundreds of thousands of dollars in back pay in the most egregious and long-running violations, said Dean Fryer, spokesman for the state Department of Industrial Relations, which through the office of the Labor Commissioner enforces the meal and rest break regulations.
*Staff reporter Howard Fine can be reached by phone at (323) 549-5225, ext. 227, or by e-mail at
[email protected]
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