As businesses across the state adjust to work amid the COVID-19 pandemic, a coalition of trade groups has written to Gov. Gavin Newsom to ask for workplace guidance and relief from labor laws during the emergency.
The prospect of looming litigation will compound the daunting task of slow economic recovery, Luke Wake, senior staff attorney at the National Federation of Independent Business (NFIB), told the Northern California Record.
“California has an exceedingly difficult regulatory environment. Any hyper-technical violation of the labor code can lead to a really ruinous PAGA (Private Attorneys General Act) lawsuit, and in this time of true crisis for the small business community, it’s the last thing we need,” Wake said.
The California Business Roundtable (CBT), California Manufacturers & Technology Association (CMTA) and the NFIB are among the 26 signers of the letter, which addresses the need for guidance as businesses incorporate remote work for employees.
“Employers want to keep their employees working, but the state’s current laws related to workplace wage and hour violations and associated litigation threaten to do unnecessary harm and deepen the unemployment and economic crisis,” the letter states.
A particular concern is potential liability for injuries that might occur when an employee is working from home.
“Businesses should not be held liable for a teleworker who steps on a child’s toy or similar incidents such as this during regular business hours,” the letter states.
“Personally, I was shocked that this was even raised as an option, when so many are having to work remotely, it seems quite punitive and basically unfair,” Mike Betts, CEO of the Betts Company in Fresno and a CMTA member, told the Record.
Four key points addressed in the letter:
- Flexibility on the 8-hour workday mandate.
- Flexibility on meal and rest break mandate.
- Clear standards for workers compensation claims.
- Litigation relief and a suspension of PAGA.
“Currently you have a lot of industries that potentially might not recover, local restaurants, gyms, salons, smaller businesses, the odds of them recuperating from this are very, very slim, so I would think especially now a lot of these labor laws really should be suspended because they are too difficult to manage in the first place,” Tom Manzo, founder and president of the California Business and Industrial Alliance (CABIA), told the Record.
Other groups have expressed support for PAGA. The Consumer Attorneys of California (CAOC), along with a coalition of 26 other groups wrote Newsom last week, urging him not to suspend the PAGA statute.
“We are mindful that businesses are under enormous stress and will continue to be in the months of recovery that lie ahead,” the CAOC letter states. “We recognize that workers and businesses alike must cooperate in response to these times. Cooperation does not mean, however, that workers should be silenced – even for a day. Now is not the time to discourage workers from insisting that businesses follow the law.”
Businesses dealing with unforeseen circumstances brought on by the virus need thorough guidance and some form of leniency, Wake said.
“Substantive concerns require a common sense response,” Wake said. “Not that they shouldn’t be complying with the labor laws, but suspending PAGA in this situation makes a lot of sense. There are some businesses that haven’t been able to get PPP (Paycheck Protection) loans, a lot of people have lost livelihoods, and want to understand what they need to do going forward.”
The CBT letter asks for an Executive Order to implement some flexibility amid the pandemic:
1. Executive Order issuing an immediate suspension of PAGA and written notice and voting requirements to allow for individualized work plans addressing 8-hour workdays and meal and rest periods.
2. Issue immediate guidelines clarifying that employees who are being paid all or part of their hourly wages but not working are not classified as employees for the purpose of wage/hour and workers compensation laws.
3. Require the Workers Compensation Appeals Board to issue temporary regulations that require workers show any injury sustained while teleworking is directly connected to the actions/duties being performed by the employee and not as a result of actions taken by the employee outside their regular work duties.
As the pandemic continues to progress, businesses would like to see legal protections in place soon.
“What we don’t want to have in this country is open season on businesses in the form of massive lawsuits, when everybody is doing what they need to do to keep people safe,” Betts said.
“No one wants massive increases in the cost of doing business, when businesses are struggling horribly to keep the lights on,” he added.