A new mandate to measure performance quotas at warehouse facilities is raising questions about the impact on inflation, litigation, and workplaces facing operations difficulties amid the COVID-19 pandemic.
A large industry coalition led opposition to AB 701, arguing the bill targeted at ecommerce stalwarts like Amazon and Walmart would have sweeping effects on agriculture, manufacturing, and impact all parts of the supply network.
“The California supply chain is still struggling from the effects of the COVID pandemic and our industry still struggles to compete domestically, with high costs and California-specific laws,” Gino DiCaro, SVP of Communications & President, California Manufacturers & Technology Association Service Corporation, said in an email response to the Northern California Record.
“Manufacturers continue to deal with supply-chain bottlenecks, goods shortages, and price increases,” DiCaro said. “AB 701 will raise costs on warehousing which will create further challenges to putting goods on store shelves, food on tables and other essential products.”
A veto letter signed by 50 organizations including CMTA, Western Growers, as well as the Napa, Fresno, and other county farm bureaus, noted that AB 701 will shift workplace safety away from Cal/OSHA and lead to lawsuits under the state’s Private Attorneys General Act (PAGA), which has been criticized as monetarily incentivizing for plaintiffs’ attorneys while failing to remunerate the employees.
“AB 701 will result in substantial harm to consumers, the warehousing industry, and the many well paying jobs associated with manufacturing,” DiCaro said. “The bill is unnecessary, as the specific complaints being made are already enforceable under existing occupational regulatory standards, including the General Duty clause as well as the existing standard on repetitive motion injury (RMI).”
AB 701, sponsored by Assemblywoman Lorena Gonzalez, D-San Diego, and local union organizations, was signed by Gov. Gavin Newsom late last month.
The Teamsters Union at its June convention passed a Special Resolution to address Amazon workers.
AB 701 takes effect on Jan. 1, 2022.