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New 2006 Laws: What’s In That Blush?

By Howard Fine

California businesses face only a handful of new bills for the second year in a row in 2006.

Dozens of other bills that concerned business groups,such as an increase in the minimum wage or new healthcare mandates,failed in the Legislature or were vetoed by Gov. Arnold Schwarzenegger.

“Most of the bills we were most concerned about were not ultimately successful,” said Michael Shaw, assistant state director of the National Federation of Independent Business.

Some failed bills may come back in this year’s session. First up could be one to raise the minimum wage. Labor groups are readying a minimum wage push to counter the threat of an expected Schwarzenegger veto.

Among the new laws that did make it: one allows employers to issue an employee’s final paycheck through direct deposit; another allows motion picture and broadcast employers more flexibility in scheduling meal breaks for union workers; and one requires cosmetics makers to list toxic chemicals in their products.

The new law with arguably the biggest impact on employers is 2004’s AB 1825 by former Assemblywoman Sarah Reyes, which requires all businesses with 50 or more workers to put managers through sexual harassment training by Jan. 1 of this year and once every two years thereafter.

Of the bills passed in 2005, a ban on junk faxes attracted the most attention. SB 833, by Sen. Debra Bowen, D-Redondo Beach, requires the sender of fax advertisements to get the written permission of the recipient before sending the fax.

Unlike federal law, there is no exemption for advertisers who have existing business relationships with the recipient. This would include a vendor sending out a fax to clients about its latest specials.

The Bowen law does contain an exemption for tax-exempt nonprofits and trade groups that send information to their members. Business groups had opposed the law, saying that it would restrict the ability of businesses to communicate with potential customers.

But the junk fax law didn’t go into effect this week. In November, the U.S. Chamber of Commerce and Xpedite Systems Inc., a Delaware-based broadcast fax company, filed suit to stop the law. On Dec. 21, a federal judge in Sacramento ordered the law be put on hold at least through Jan. 31. A hearing is set for Jan. 23.

Pay Flexibility

Business groups supported another law, AB 1093, by Barbara Matthews, D-Tracy, that allows employers more flexibility in making final payments to workers who are leaving.

Until now, employers have had to cut a check for that final payment and present a paper copy to the departing worker. Under AB 1093, employers have the option to use direct deposit, as long as the employee had been paid regularly via direct deposit.

Entertainment industry employers now have more room in scheduling meal and rest breaks, thanks to AB 1734, by Paul Koretz, D-Los Angeles. The law allows for clauses in collective bargaining pacts covering the rescheduling of meal periods. If that’s not possible, employees get compensation.

The bill, sponsored by the Motion Picture Industry Association of America, represents a win for employers. But it’s a far cry from what business groups originally sought: the right for all employers to have flexibility in scheduling meal and rest periods.

When the Schwarzenegger administration quietly proposed that a year ago, it provoked a furious response from labor unions and the administration withdrew the idea.

The cosmetics industry is being hit with a new disclosure. Under SB 484, by Sen. Carole Migden, D-San Francisco, all cosmetics makers selling products in California must provide state regulators with a list of all chemicals in their products identified as causing cancer or reproductive problems. The master list is to be maintained by state regulators.

Arbitrary List

“The concern here is that the list of chemicals is arbitrary to begin with,” said Gino DiCaro, communications director for the California Manufacturers and Technology Association, which opposed the bill. “Every time the list changes, manufacturers have to change all their labels and notifications.”

This bill was all that survived of a larger effort to create a registry of carcinogenic and toxic chemicals, with the long-term aim of eliminating them from products made and sold in California. Schwarzenegger vetoed that bill.

Fine is a staff writer with the Los Angeles Business Journal.

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