California Closes Out Legislative Session

September 24, 2020

Governor Signs a Range of Legislation, Endorses a Significant November Ballot Initiative

IAM closely followed the recent close of the California state legislative session, as several pieces of legislation that passed could impact nearly all IAM member companies with locations and businesses in the state. These high profile bills pertain primarily to employment, as the legislature grappled with several issues surrounding how businesses can safely operate within the context of COVID-19. 

Key highlights and legislative takeaways are below:

Senate Bill 1159 (Workers’ Compensation – COVID-19)

The issue of workers’ compensation was dominant throughout the 2020 session. Early in the pandemic, Governor Newsom issued an Executive Order applicable to essential workers stating that a COVID-19 infection will have been presumed to have occurred at work, with treatment and expenses covered by the employer’s workers’ compensation policy, unless it could be proved that the infection occurred otherwise. That Executive Order expired in July, resulting in SB 1159, legislation to further address the issue.

After significant debate and amendments, the final version of SB 1159 struck a balance between an employer's responsibility for coverage (should certain criteria be met) and other factors surrounding a positive test. A key metric that must be met includes an "outbreak" occurrence at the workplace (defined as 4 or more employees testing positive for workplaces with 100 or fewer employees), or a 4% overall positive COVID-19 test rate, for workplaces with over 100 employees. Any existing and unpaid sick leave must also be exhausted, prior to the employer compensation requirement kicking in. STATUS - Governor Newsom signed into law - While the bill goes into immediate effect, its provisions sunset in January 2023

Assembly Bill 685 – COVID-19 Exposure and Reporting in the Workplace

Legislators also worked to address workplace reporting of COVID-19 cases. AB 685 requires employers to provide written notice and instructions to employees (and any subcontractors) who may have been exposed to COVID-19 at their worksite, within one business day of an employer becoming aware of a positive test. The notification must also include all employer-provided benefits that exposed workers may be eligible to receive. STATUS - Governor Newsom signed into law - This bill will go into effect on January 1, 2021

Assembly Bill 1867 (Committee on Budget) – COVID-19 Supplemental Paid Sick Leave

This proposal was amended into a budget bill days before the end of the session. It is similar to an earlier Executive Order that provided two additional weeks of supplemental sick leave for food sector workers, but in the bill, expands that leave to all workers who work for employers with over 500 or more employees. STATUS -  Governor Newsom signed into law

Senate Bill 1383 – Family and Medical Leave Rights Act

SB 1383 contained the Governor’s proposal on family leave. The bill would reduce the employee threshold for the California Family Rights Act to 5 employees (down from the current requirement of 50), and expands the list of family members that an employee can take their 12-weeks of unpaid, job-protected leave for. STATUS - Governor Newsom signed into law

Proposition 15: Split Roll Tax (November Ballot Initiative)

Proposition 13, which became law in 1978, limited California's property taxes for residential, commercial, and industrial properties, by basing taxes on the purchase price of the property rather than current market value. Proposition 15 would “split” the property tax roll, allowing commercial and industrial properties worth more than $3 million to be assessed at current market value. This change would go into effect in 2022, but delayed until 2025 for those properties where more than 50% of the tenants are small businesses. This initiative covers warehouses, storage and other staging facilities commonly used by the moving industry.

Governor Newsom recently endorsed Prop. 15 while rejecting other proposals to tax high income earners in California. Opponents and proponents of Prop. 15 are expected to spend more than $100 million in advertising to sway voters prior to the November 3rd election, where they will also decide this ballot initiative. Polling from earlier this month has voters in favor of approving the initiative, by a margin of 50 percent to 40 percent, with roughly 10 percent undecided. 

Please contact Bryan Vickers, bvickers@pacellp.com, 703-403-2882, with IAM's government affairs team with any questions, or to follow up for more information.