By Howard Fine
It’s gotten to be a familiar refrain every Jan. 1: Employers are hit with a slew of costly laws, from minimum wage hikes to paid family leave.
This year is notable for what won’t happen. Only a few new laws are in the offing, thanks to the veto pen of Gov. Arnold Schwarzenegger.
Citing the potential impact on California’s business climate, the governor vetoed legislation involving a minimum wage hike, restrictions on outsourcing and tougher penalties for gender-based pay discrimination.
He also campaigned against Proposition 72, a referendum that would have required many businesses to provide healthcare for their workers.
“It’s nice to have an employer-friendly administration for a change,” said Karen Anderson, vice president of membership and marketing for the Employers Group, a consulting company.
Added Michael Shaw, assistant state director for the California chapter of the yNational Federation of Independent Business: “This year, there are many fewer new laws that business owners need to be concerned about.”
Harassment Training
Perhaps the most publicized law taking effect Jan. 1 requires employers with 50 or more workers to provide two hours of sexual harassment training every two years.
Business groups lobbied against the measure, saying it would impose additional costs and that similar training already is required under other statutes.
“This is a duplicative program,” said Gino de Caro, spokesman for the California Manufacturers and Technology Association. “Supervisors and managers must already undergo six hours of human resources-related training each year.”
Nonetheless, Schwarzenegger, who was dogged by allegations of sexual harassment during the recall election, signed the bill.
The California Chamber of Commerce said it has received some calls from employers confused about whether temporary and part-time workers and independent contractors are included in the 50-employee threshold. (The answer is unclear,regulations still are being formulated.)
The most sweeping changes for employers involve workers’ compensation insurance. Schwarzenegger used the threat of an initiative to push through a major reform package last April.
Since then, there only have been minor cuts in workers’ comp premiums, though many of the law’s provisions didn’t kick in until this year.
New features such as permanent disability benefit ratings and the establishment of medical provider networks are expected to push down rates this year.
In exchange, employers are required to pay for “immediate medical treatment” of up to $10,000 for any workplace injury, regardless of whether the workers’ compensation claim ultimately is accepted or denied.
Also on the healthcare front: a new law that requires health plans to provide the same level of coverage for domestic partners as for spouses.
Employers did avoid what would have been an added expense when voters in November rejected Proposition 72, the referendum on a 2003 law requiring employers with more than 50 workers to either provide healthcare coverage for their workers and families or pay into a fund that would cover the uninsured.
Unemployment Insurance
Businesses face several changes on the unemployment insurance front.
The last of five consecutive planned increases in benefits for unemployed workers goes into effect this week. That will put more pressure on the employer-funded unemployment insurance trust fund that narrowly averted insolvency in 2004.
Meanwhile, a new law dramatically increases penalties for employers who under-report their payrolls to lower their unemployment tax liability.
Another paperwork issue: a new requirement that employers list only the last four digits of employees’ Social Security numbers on payroll information, to protect workers’ privacy and prevent identity theft.
Businesses must comply with the four-digit system by Jan. 1, 2008, but can start switching over now.
Finally, employers must take steps to comply with changes to a law, even though the changes are designed to ease a burden on them.
Last year, an earlier law expanding the right of workers to sue their bosses for workplace violations was gutted. Starting this week, a worker must exhaust internal administrative remedies before filing a lawsuit against his or her employer. Employers must provide the administrative framework for this process.
The revised law also allows employers time to fix some alleged violations of labor codes before any further action, such as filing a lawsuit, can be taken.
Fine is a staff writer with the Los Angeles Business Journal.
