Governor Schwarzenegger Says "Hasta La Vista, Baby" to Majority of Bills Affecting California Employers
October 7, 2004

Summary

California employers can breathe a sigh of relief about the new statutes affecting the workplace in 2005. September 30th marked Governor Schwarzenegger’s deadline to sign or veto any pending bills sent to him for approval by the legislature. In stark contrast to last September—when Governor Davis signed dozens of bills into law that significantly impacted California employers — Schwarzenegger’s veto pen rejected all of the employment-related bills that were designated as “job killers” by the California Chamber of Commerce.

Indeed, a new attitude regarding employment laws was heard in Sacramento with Governor Schwarzenegger’s veto message to AB 606, which would have expanded the rights of California’s hotel room attendants, "California does not need more labor laws, just tough enforcement of its existing laws, . . .”

Vetoes

This year, the story out of Sacramento was not the bills the Governor signed but those he vetoed. In his continuing effort to encourage California’s economic recovery and to sell our state as an attractive place to do business, Governor Schwarzenegger vetoed legislation that would have:

• Increased the state minimum wage to $7.75 by 2006, giving California the highest minimum wage in the nation. In his veto message, Governor Schwarzenegger stated that this bill would “increase the costs to California employers by at least $3 billion and create barriers to California’s economic recovery.” (AB 2832)
• Increased the penalties and damages obtainable by an employee who sues for gender pay equity violations. Governor Schwarzenegger noted that the penalty for violating the equal pay requirement was recently increased and that it was too soon to consider additional penalty increases. (AB 2317)
• Expanded the liability of employers for failing to provide safe workplaces for employees. (AB 2545)
• Prohibited employers from charging any fees when cashing an employee’s paycheck or other negotiable instrument. Governor Schwarzenegger stated that there was no reason to ban the check cashing option offered by many employers, and perhaps forcing employees to use more expensive check cashing services. (SB 1499)
• Prohibited employers from monitoring employee activity through the use of electronic devices, including computers, without first providing notice of the monitoring to employees. In his veto message, Governor Schwarzenegger explained that this bill would have placed an unrealistic burden on employers wishing to monitor the electronic activity of their workers. (SB 1841)
• Restricted California employers’ ability to conduct operations abroad. Known as the "offshoring" California jobs bills, these bills would have required health care providers to disclose and obtain consent for allowing medical information to be transmitted outside the United States (SB 1492); prohibited employers from using employees working on information essential to homeland security at a location outside the United States (SB 888); and prohibited any state or local government agency from contracting for services with a contractor or subcontractor unless it certified in its bid that the contract would be performed solely with workers within the United States (AB 1829).

Legislation Approved By the Governor

The more significant new laws for employers effective January 1, 2005, include:

• AB 1825: Requires employers who have 50 or more employees to provide at least 2 hours of sexual harassment training to all supervisory employees by January 1, 2006, and once every two years thereafter. The training should be provided by trainers or educators with knowledge and expertise in the prevention of harassment, discrimination, and retaliation and must include information regarding state and federal laws concerning the prohibition, prevention, and correction of sexual harassment and the remedies available to victims of sexual harassment in employment.
• AB 1706: Amends existing laws to prohibit employers from using a family support assignment order as grounds for taking any employment action against an employee.
• AB 1950: Requires California businesses that own or license personal information about California residents (i.e., social security numbers, driver’s license numbers, or information that would permit access to an individual’s financial account) to implement and maintain reasonable security practices to protect personal information from unauthorized access, destruction, use, modification, or disclosure.
• SB 1618: Requires all California employers, by January 1, 2008, to furnish each employee with an accurate itemized statement, at the time of the payment of wages, showing no more than the last four digits of the employee's social security number or an existing employee identification number other than a social security number.

A review of these laws, as well as other new laws that impact California employers, such as the Paid Family Leave laws that went into effect in July and the Domestic Partner Rights and Responsibilities Act of 2003 which goes into effect on January 1, will be presented during our Fall Seminar, “Workplace Law 2005,” on October 28, 2004. Please see the announcement below for more information and to register for the seminar.

This E-Update was authored by Lonny Zilberman and Michael Minguet. If you have any questions about this E-Update, please contact the author or any PPS&C attorney at (619) 237-5200.

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