With California’s phased reopening now in progress, industry leaders from across the state have presented the governor with a plan that aims to address the dramatic rise in unemployment.
“California has gone from a full employment economy at 3.2% unemployment to a projected unemployment of almost 20% in just six weeks,” according to the report, which was issued May 6 by the California Business Roundtable and includes 19 trade groups as signatories.
The “Restarting California” plan emphasizes the need for adjustments to laws and regulations that could drive up costs just as businesses are reopening, including relief from PAGA (Private Attorneys General Act) lawsuits.
“It’s just with irregular business activity and people working at home, any business would be more vulnerable to PAGA lawsuits, which are a revenue opportunity for the legal industry that doesn’t balance with the intent of the law,” Lynn Mohrfeld, president and CEO of the California Hotel and Lodging Association (CHLA), told the Northern California Record.
Hotels serving frontline workers and vulnerable populations need indemnification from litigation, said Mohrfeld, adding that the CHLA has sent letters to Newsom and legislators seeking such protections.
“Typically, an insurance policy will not cover COVID-19, so we are asking the Governor can you give hotels indemnification so that we won’t be sued if someone contracts COVID-19. It’s incredibly difficult to refute one way or another, and we’re serving first responders and the homeless, and for doing the right thing, we don’t want to get sued,” Mohrfeld said.
The Restarting California plan also calls for a pause in the minimum wage increase, and equally important, Mohrfeld said, it seeks clarity on reopening guidelines.
Along with the state’s guidelines, counties and cities can formulate their own.
“We are running into some state guidance that is vague; there’s a lot of gray area that local and county officials have to try to fill in the blanks, and it’s been a real challenge,” Nathan Ahle, president and CEO of the Fresno Chamber of Commerce, told the Record.
Under the state’s Phase 2 reopening, counties can submit a reopening plan with greater latitude than state guidelines, which state public health officials must approve.
“Fresno County has been working to develop the plan that they will be submitting to the state to get the go-ahead to reopen,” Ahle said. “The County Board of Supervisors is aware of the challenges that businesses are facing right now, and doing everything they can to push as responsibly as they can to get them reopened quickly.”
But after two months of mandated closures and stay-at-home orders, it will be a gradual process, Dan Dunmoyer, President and CEO of the California Building Industry Association (CBIA), told the Record.
“One of the macroeconomic effects is any time you have a major economic engine turn off, to restart it, you can’t just turn on a switch – it’s tough to restart.” Dunmoyer said. “This is the time to reduce complexity, to reduce costs and reduce litigation, and help us restart this economy,” Dunmoyer said.
“Our concern is it’s a different world than what we lived in three months ago. For instance, some of the rules on wage and meals, for families with kids at home, there needs to be some flexibility for parents,” Dunmoyer said. “That’s where it’s difficult; it might be better to work on your job when the kids are asleep, but is that legal in California? There needs to be some recognition some of the old rules don’t work, and there needs to be some flexibility in the old rules.”
Ahle of the Fresno Chamber added that the governor’s new Executive Order on workers’ compensation and COVID-19 is laudable in intent but poor in execution.
“We’re still digesting what this Executive Order means and looks like and could look like. The workers’ comp system was working in California, there was relief for workers who sustained a verifiable injury, and there are still going to be cases in the COVID era where that sort of thing can be verified, but an automatic assumption that you contracted COVID while you were on the job, particularly without adequate contract tracing and testing, there’s no way to prove it. It is patently unfair,” Ahle said.
As the pandemic continues to evolve, new challenges will arise but also new solutions, Peter Tateishi, CEO of the Associated General Contractors of California, told the Record by email.
“There are plenty of challenges to restarting the economy, especially doing so in a way that doesn’t jeopardize public health,” Tateishi said.
“One benefit we’ve seen coming out of this crisis is the increased use of technology by public agencies,” he added. “Inspectors are able to teleconference with our construction firms to conduct virtual jobsite reviews, keeping projects moving. Continuing that process after stay-at-home orders are lifted would certainly create greater efficiencies in the future.”