Opposition: Opportunity to Work Act would create confusion, opportunities to sue

By Angela Underwood | Aug 23, 2017

SACRAMENTO, Calif. (Legal Newsline) – The Opportunity to Work Act, introduced several months ago in the California Assembly, would require businesses to offer extra hours to employees before hiring new ones - and create myriad problems in the process, a Los Angeles defense attorney says.

For now, Assembly Bill 5 - sponsored by Assemblyman Ash Kalra, D-San Jose, and Assemblywoman Lorena Gonzalez Fletcher, D-San Diego - sits idle in the Appropriations Committee, which postponed a May hearing on it.

Should the bill pass this legislative session or in a future one, Seyfarth Shaw partner Timothy Hix said it will create more lawsuits that will focus on the ambiguity or lack of clarity on how to comply with it, as well as allegations of discrimination in the assignment of hours.

“The bill in its current version will create far more problems than it hopes to solve. Right now, business owners will be left to guess as to how to comply with AB5 should it pass,” Hix, a partner in the firm's Labor & Employment practice group, told Legal Newsline

The bill would require an employer with at least 10 employees to offer additional hours of work to current employees before it can hire an additional employee or subcontractor. It would also allow employees to file complaints or lawsuits for any alleged violation.

In April, the Assembly Labor and Employment Committee approved the bill 5-2 and re-referred it to the Appropriations Committee.

But the bill has received opposition from dozens of groups, according to analysis from L&E Committee Chief Consultant Jennifer Richard.

That analysis, released in April, shows 117 groups are formally opposing it. Many local chambers of commerce are listed, as are trade groups, the state Chamber of Commerce, the California Employment Law Council and the National Federation of Independent Business.

Twelve groups issued their support for the bill, including Consumer Attorneys of California, California Teamsters Public Affairs Council and SEIU California.

The bill is modeled after an ordinance passed in San Jose in November, and those opposing the bill think it would be wise to see the effects in that city before enacting a statewide law.

"AB5 also reduces flexibility for both employers and employees," wrote the California State Council of State Human Resource Management.

"Many employers need to hire limited, specialized or part-time workers in a short timeframe, which stimulate job creation and growth. By frustrating this ability, AB5's new procedural hurdles could prolong unemployment for some."

In support of the bill, Consumer Attorneys of California countered that the bill will create stable earning opportunities for part-time workers whose hours fluctuate regularly and who lack access to employer-provided health care.

"According to the Federal Reserve, variable work hours are the single most common reason so many Americans experience income fluctuations from month to month," the group wrote.

"Working one or more part-time jobs also has a negative effect on total income. Nationally, part-time work often pays one-third less per hour than full-time work."

Good or bad, the bill remains inactive. Kalra did not respond to multiple interview requests.

Hix said he is unsure why the bill has not progressed since May but suspects that part of the delay is due to the lack of clarity to California employers on how to comply, specifically noting Fletcher's efforts.

“As the bill's co-author indicated, she wanted to work with California businesses to address their concerns. This may be part of the delay and explain the lack of a proposed amendment to the original version of the bill,” Hix said.

Hix says the bill is far broader than the two city ordinances that inspired it.

"The San Francisco ordinance focused specifically on nation-wide retail employers, while AB5 applies to all business that employ more than 10 employees,” Hix said, arguing that the broader application seems unnecessary and ignores the true needs of many workers in California.

And if employers don't abide by the bill, AB 5, "the bill would make a violation of these provisions punishable by a civil penalty," according to the AB5 text.

The amount of that penalty does not appear to be specified in the text or analysis.

“The temporary staffing industry and those businesses that utilize temporary staffing services stand to have the greatest impact on their operations,” Hix said. 

“The impact, however, will be felt by all but the smallest businesses since compliance will take considerable effort and the law is unclear as to how to comply.”

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