Legislative Victories and Many Challenges Ahead for Small Businesses in California

John Kabateck
NFIB State Director in California

With Governor Jerry Brown’s final bill signature/veto deadline in our rear-view mirror, and the upcoming election of a new Governor and legislature just around the corner, now is an important time for small business owners—and all California taxpayers—to reflect on some of the greatest victories from this past session and important challenges ahead in the coming new year.

From looking at overhauling our tax code with a new sales tax on services to considering numerous employer mandates to address sexual harassment in the workplace, 2018 was anything but a slow legislative year for the employer community. And while the next Governor and legislature will potentially consider sweeping policy issues such as a multi-hundred-billion-dollar single payer health care system, or taking on Proposition 13 tax protections with split roll, below are some of the key legislative issues small businesses faced this year in California.

Victories

AB 1870 (Reyes) – Vetoed by Governor.

Would have drastically expanded the statute of limitations for all employment harassment and discrimination claims from 1 year to 3 years, which would ultimately prevent employers from promptly and effectively eradicating improper behavior in the workplace while increasing litigation costs.

AB 2732 (Gonzalez Fletcher) – Vetoed by Governor.

Sought to add a new, burdensome “Bill of Rights” signage and document retention mandate on all employers while adding no new benefits or protections to workers. This bill seemed to be a solution in search of a problem, and we’re pleased with the Governor’s veto.

AB 3080 (Gonzalez Fletcher) – Vetoed by Governor.

Unfortunately, this bill was broadly mischaracterized as part of the #MeToo movement by its supporters, but the reality is AB 3080 would have gone far beyond sexual harassment in the workplace and would have banned all arbitration agreements as a condition of employment in California. This would have led to significant litigation costs for small, medium, and large businesses alike.

ACA 22 (McCarty) – Failed Assembly deadline.

In reaction to federal tax cuts, ACA 22 would have raised California’s 8.84% corporate tax rate, already one of the highest in the nation, to 18.84% for gross revenues above $1 million.

AB 1745 (Ting) – Failed Assembly deadline.

Would have banned the registration of new passenger vehicles with an internal combustion engine on California roads beginning in 2040 without any regard to cost to small businesses and working families.

AB 2841 (Gonzalez Fletcher) – Failed Assembly deadline.

Would have drastically expanded California’s existing 3-day paid sick leave mandate for all employers to 5 days, without considering any reforms or revisions to our existing flawed law.

SB 993 (Hertzberg) – Failed Senate deadline.

Another attempt by Senator Hertzberg to impose an unprecedented $100+ billion tax on services, which would ultimately impact small businesses and consumers hardest in the supply chain. We fully expect to see this issue to reappear in the new year.

Challenges Ahead

SB 100 (De Leon) – Signed by Governor.

Drastically expands California’s statutory goal of obtaining 50% of its energy from renewable resources by 2030 by increasing the goal to 100% by 2045 without any regard to infrastructure or cost to ratepayers.

SB 1300 (Jackson) – Signed by Governor.

Although significantly amended and less harmful to small business than as originally introduced, this bill still creates new litigation threats by creating unprecedented joint employer liability for sexual harassment claims by non-employees.

AB 2596 (Cooley/Kiley) – Vetoed by Governor.

Would have required the Governor’s Office of Business and Economic Development to create a statewide economic development plan to attract and retain job creators in California. With our ever-rising cost of doing business and hostile business climate, California must come to terms with reality, and a comprehensive economic development plan would be a start.

AB 2671 (Fong) – Failed Assembly Committee.

Would have required that state agencies review and revise existing regulations to address inconsistent, duplicative, overlapping, and outdated provisions. Regulatory reform has repeatedly been a bipartisan issue and must be raised again next year.

AB 2482 (Voepel) – Failed Assembly Committee.

Sought to allow employees the ability to request to work 10-hour days for four days per week rather than a traditional 8-hour, five-day work week. In our new economy and changing needs of our workforce, this flexibility would be a win-win for employers and employees.

John Kabateck is the State Director for NFIB in California, which represents over 20,000 dues-paying small business members across the state.

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