The other forty-nine states do not fully comprehend how the Golden State has engineered the demolition of a positive job environment. The only thing most hear about today is the drought and our government-enhanced water shortage. The way most Americans become familiar with the anti-employer environment is if another one of our companies moves to their area or one of our residents moves to their area, telling horror stories of how their business was killed by the force of the accumulated regulations. The only businesses that seem to be impervious are located in Silicon Valley or the new Silicon Beach (Santa Monica). More ‘do gooder’ legislation regarding employees has been passed which will send more California companies coming your way.
I had one of my regular lunches with Eli Kantor, an attorney who specializes in employment issues, to discuss some of the current issues facing employers in California. If you run a business today, even as small as ten employees or less, you need an attorney on retainer to educate you about the employment issues. This is why many small companies are turning their employees over to leasing companies just to get out from under the exposure to the ever-changing federal and state laws with all the related litigation. Also, if you confront the Employment Development Department (EDD) in California regarding an employee’s complaint, you better know that as an employer you are considered guilty until proven innocent. Even if the employee is not filing a complaint, the EDD will enforce rules against your company if they perceive an opening to do such.
The latest proclamation from the potentates of Sacramento is the Paid Sick Leave Act that goes into effect July 1st. One can make an argument that sick leave should be provided by employers and, in a competitive marketplace, many employers will do so to attract quality employees. Many already do such. Now they have no option in California.
The basic elements of the plan are as follows for an employer:
1. You must provide at least 24 hours per year of paid sick leave for each eligible employee to use per year.
2. You must display posters for employees and alert them to their sick leave rights at the time of hire.
3. You must keep records of how many sick leave hours have been earned and used for three years.
4. You must show on the employee’s pay stub each pay period how much sick leave has been accrued and unused.
The law comes with the usual government threat today – a penalty of $50 per day per employee for non-compliance. Of course, the national payroll services are all over this and will help protect the employer and keep them in compliance for an additional fee.
When I met with Eli not only was he fully abreast of the law, but he was deep into changing employment plans. Many companies have adopted a policy of what is referred to as “Paid Time Off (PTO).” Under PTO plans, a set amount of days is allocated for the year by the employer (say 15) for which you can use for whatever purpose you wish, whether it be sick days, vacation or a family event like a graduation. In California, PTO’s are out because those employers must regress to earlier days where employees did not have as much flexibility so that the employer can comply with the law keeping separate records for sick leave.
So now we not only have new costs for employers to provide sick leave, but for even the employers who did provide sick leave they have new payroll record costs and legal costs for changing employment plans to meet the new law. It is always so easy to dictate things like the Sacramento potentates do without worrying about the related costs of the rules they foist upon businesses.
If this is not bad enough, Eli and I Iurched into a discussion of the myriad of other new requirements. Just leasing out employees does not protect you against compliance with a new law protecting against transgender discrimination. Though one cannot argue all people should be treated fairly, it may be a little challenging when the transgender person gets to choose the bathroom of their wishes.
The choicest new law is one regarding employment bullying. This goes beyond sexual harassment to require “bullying” education classes. Eli perceives this as a trial lawyer’s dream as anyone who does not like their boss can claim they were a bully. There goes the lawsuit machine and settlements dictated by insurance companies to save legal costs.
With the generation that is coming into the workplace that has had an outsized focus on their self-esteem, i.e., awards for losing on sports teams and now demanding to be alerted in their college classes (triggers) about possible things that might offend them in their college literature, we have now completed the cycle by allowing them to legally whine if their boss tells them to do something that offends their sensibilities. The days of Swimming with Sharks is certainly over.
We are not in the days of The Jungle by Upton Sinclair. These days many employers are providing perks to employees that some of us consider distractions from what they are there for – work. In California, the companies that abuse the labor laws are the entertainment companies (shocking). Yet, the California Legislature continues to attempt to correct every perceived wrong and another plant closes (Heinz) and jobs are moved to another state. California moves further toward a segregated society of haves and have-nots.
The political class still have their jobs.