AB 3056 Page 1 ASSEMBLY THIRD READING AB 3056 (Gonzalez) As Amended June 10, 2020 Majority vote SUMMARY: Prohibits an employer, as specified, from imposing an unreasonable quota, as defined, upon an employee who works at a warehouse and requires that employer to pay a wage premium of one and one-half times the employee's regular rate of pay for any hour the employee is required to perform work in excess of the previously established quota. Major Provisions 1) Defines "defined time period" as any unit of time measurement equal to or less than the duration of an employee's shift, and the includes hours, minutes, and seconds and any fraction thereof. 2) Defines "employee" as an employee who works at a warehouse distributions center. 3) Defines "employer" as a person who directly or indirectly, or through an agent, including a third-party employer, temporary service, or staffing agency, employs 100 or more employees at a single warehouse distribution center or 1,000 or more employees at one or more warehouse distribution centers in the state. 4) Defines "quota" as a performance standard under which an employee is assigned or required to perform a quantified number of tasks, or to handle or produce a quantified amount of material within a defined time period and under which the employee may suffer an adverse employment action if they fail to complete the performance standard. 5) Defines "warehouse distribution center" as an establishment as defined by the North American Industry Classification System Codes for general warehousing and storage, merchant wholesalers of durable goods, electronic shopping and mail-order houses, or merchant wholesalers of nondurable goods. 6) Authorizes the Attorney General or the district attorney of any county to enforce the provisions of the bill. 7) Permits a city, county, or city and county to enact ordinances that provide equal or greater protection. 8) Prohibits an employer from including in the time to complete a quota a reasonable amount of time for an employee to: a) Access and use a restroom or handwashing station or accessing adequate and sanitary hydration. b) Report to the employer or to the responsible government authority a colorable claim of a Labor Code violation but clarifies that an employer is not required to allow an employee to leave the premises of the warehouse distribution center to make such report. AB 3056 Page 2 c) Take any legally mandated rest, recovery, or meal period. 9) Requires an employer to pay a wage premium of one and one-half times the employee's regular rate of pay for any hour the employee is required to perform work in excess of the previously established quota. 10) Provides that an employer who violates the reasonable quota provision is subject to civil penalties as follows: a) For an initial citation, $250 per employee per violation, and b) For subsequent citations, $1,000 per employee per violation. COMMENTS: Recent research suggests that technology and the rise of e-commerce have affected warehouse work pace. E-commerce consumers expect shipments to arrive quickly. This increases the pace warehouse workers must move to assemble customer orders. According to the Bureau of Labor Statistics, warehouse workers suffer injuries at a rate of nearly two times the national average of other private industries, higher than coal mining, construction, and most manufacturing industries.1 Reports indicate that the higher injury rates at these facilities are connected, in part, to production quotas. These reports did not take into account the effect COVID-19 has had on worker safety and public health in general. Recently, the California Department of Industrial Relations, Division of Occupational Safety & Health (Cal/OSHA) issued guidance for logistics employers and employees, stressing the importance of frequent hand-washing and scrubbing with soap for at least 20 seconds. This bill would help address the safety issues that arise at warehouse distribution centers by allowing employees reasonable time to wash their hands, use the restroom, and report Labor Code violations. According to the Author: "We rely on warehouse workers in the course of everyday life, and even more so during the current public health emergency as they help distribute food, cleaning supplies, and other essential items around the state. However, these essential workers are subject to work standards and conditions which do not respect their basic human dignity, including sanitation needs, or properly compensate them for the back-breaking work performed. Strict employer imposed quotas mean workers are afraid to perform basic human necessities such as going to the bathroom or cleaning their work space because it can be counted against them and lead to them being fired, and yet they are expected to perform at ever increasing speeds and work mandatory extra hours without additional compensation that recognizes the grueling nature of these demands. In order to protect these workers from unreasonable and unsafe working conditions, AB 3056 would require that certain activities such as an employee using the restroom or washing their hands not be counted towards the time required to complete their quota, and provide that any work required to be performed in excess of an established quota be compensated at timeand-a-half of the employee's regular pay." 1 Bureau of Labor Statistics, U.S. Department of Labor: "Injuries, Illnesses, and Fatalities 2018," . AB 3056 Page 3 Arguments in Support: The California Labor Federation argues "[a]utomated systems generate warnings when too much time off task occurs, and accumulated warnings can result in workers being fired without a human manager ever being involved. This means that workers at companies like Amazon are unable to perform basic human necessities without fear of being fired. In one facility in Riverside, employees had to walk for 7 minutes to the nearest restroom, leading many to forego bathroom breaks rather than face penalties for the time-off-task and subsequent termination. These quotas can also change over time, forcing workers to adapt and work faster. . . AB 3056 will improve safety and pay standards for these workers." Arguments in Opposition: A coalition of employer organizations, including the California Chamber of Commerce, argues that this bill "increases the cost and burden on employers in the warehouse and distribution center industry through a new, premium hourly wage for employees, time off from work to file a claim, and exposure to costly litigation under PAGA." With regard to premium pay, the Chamber argues that the bill would require premium pay "for having an employee work harder during the normal workday. This is an unnecessary increased cost on employers in this industry and government intrusion into how employers manage the workload during a workday." They continue, "AB 3056 provides an employee with a protected leave of absence from work to file a claim [of a Labor Code violation]. California already offers employees with multiple leaves of absences to deal with personal issues. Adding another leave of absence on employers, enforced through penalties and litigation, is simply another layer of costs on employers in this industry." FISCAL COMMENTS: According to the Assembly Appropriations Committee, annual special fund costs to DLSE of $1.8 million in the first year and $1.7 million each year thereafter. This cost estimate assumes approximately 1,700 new claims per year based on a conservative assumption on the share of California warehouse employees that would file a claim. VOTES: ASM LABOR AND EMPLOYMENT: 6-1-0 YES: Kalra, Carrillo, Diep, Gonzalez, Jones-Sawyer, Luz Rivas NO: Flora ASM APPROPRIATIONS: 14-4-0 YES: Gonzalez, Bauer-Kahan, Bloom, Bonta, Calderon, Carrillo, Chau, Diep, Eggman, Gabriel, Eduardo Garcia, Petrie-Norris, McCarty, Robert Rivas NO: Bigelow, Megan Dahle, Fong, Voepel UPDATED: VERSION: June 10, 2020 CONSULTANT: Justin Delacruz / L. & E. / (916) 319-2091 FN: 0003046