Legislative Wrap-Up Leaves Challenges Ahead for Small Businesses

Tom Scott
CA Executive Director, National Federation of Independent Business

With the conclusion of the first year of the 2017-2018 legislative session last week, small business owners are taking stock of the unfortunately long list of new taxes, mandates, and regulations passed this year. The supermajority party did not shy away from utilizing their 2/3 voting power in both the Senate and Assembly to raise gas and car taxes, drastically expand the costly Cap and Trade program, gut the elected Board of Equalization of their taxpayer protection powers, all in addition to ramming another regressive tax on documents at the 11th hour on the last day of session.

There is no question: this was a rough year for struggling small businesses and working families. California is already home to the highest taxes, the highest cost of living, and the most unfriendly climate to run a business, yet this legislature found new, creative ways to make it even harder to survive in this state.

Our list of Good, Bad, and Ugly bills served as a guide throughout the year, and we focused on a handful of key bills which would have the greatest impact on small businesses in the final few weeks of session. Below is a wrap-up of these key issues which either went to Governor Brown for his signature/veto, or they failed to pass this year. While we celebrate holding some bills from getting to Governor Brown this year, we know those bills will be alive and well come January for the second half of the 2017-18 session.

Little Victories

Bad Bills Which Failed to Pass

AB 1250 (Jones-Sawyer): Effectively prohibits local government contracting out for services with private businesses by imposing new strict guidelines and new costs and compliance rules for businesses. This interferes with elected officials’ ability to use the most cost-effective means for providing services.

AB 1565 (Thurmond): This bill bypasses the new wage law by increasing the exempt base salary to $47,476. While it will eventually exceed this under current law, by moving it up prematurely, it places a significant financial burden on employers.

SB 100 (de Leon): Arbitrarily expands California’s current 50% renewable resources portfolio requirement to 100% by 2045, which would create drastic cost increases for small businesses and working families.

Good Bill–Urging Governor Brown to SIGN

AB 1583 (Chau): Prop. 65 Reform: Requires the Attorney General to serve a letter on a notifying party and the alleged violator when it determines that the relevant allegations have no merit in a Prop. 65 lawsuit. The bill makes some other minor reforms. It will help reduce frivolous litigation.

Challenges Ahead—Urging Governor Brown to VETO

AB 168 (Eggman): Employee Wages: Prohibits employers from asking applicants about their salary history, and requires them to provide a pay scale upon request. It effectively eliminates an employer’s ability to negotiate wages, and creates a new reason to sue.

AB 450 (Chiu): Unfairly punishes employers for cooperating with federal immigration agents. This bill forces them into a no-win situation by imposing steep fines for allowing access to the worksite to federal agents without a warrant. It will only serve to paint a target on employers, while creating new legal liabilities and huge penalties.

AB 1008 (McCarty): Prohibits employers from asking applicants about convictions until they make a conditional offer of employment. It creates new obligations and liabilities for employers and allows for new lawsuits. It will hamstring a small business owner’s ability to quickly fill a position.

AB 1701 (Thurmond): Unfairly holds businesses liable for employment actions for which they are not responsible, and it creates a new private right of action to sue innocent businesses.

SB 2 (Atkins): A direct, regressive $75-225 tax on real estate documents, paid for by those who are least able to afford it such as widows, the elderly, and homeowners facing foreclosure.

SB 63 (Jackson): Requires employers with as few as 20 employees within a 75-mile radius to provide 12 weeks of parental bonding leave, in addition to the other leaves of absence California already imposes, including maternity leave. Creates new legal liabilities for employers.

Tom Scott is the State Executive Director for NFIB California, which represents 22,000 dues-paying small business members across the state.

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