California Job Killer Bills 2023

For the past several years after the end of the California Legislative Session in September I have taken the opportunity to review the legislation which has been introduced which negatively impacts job creation, economic development and business. The best source of these bills is the California Chamber of Commerce. This year they identified 19 Job Killer Bills. Even with the super majority control of the State Senate and Assembly by the Democrat Party, the State Chamber local Chambers and businesses throughout California have historically been surprisingly successful in defeating or amending Job Killer Bills. However, they were not as successful in 2023. 7 Job Killers were passed by the Legislature and sent to Governor Newsom. While he vetoed 3 of these bills, he signed 4 of them. This compares to each previous year of the Newsom Administration when only 2 Job Killer Bills were passed each year by the Legislature and the Governor signed only 1 year

Here is a review of some of the key Job Killer Bills of 2023.

Labor and Employment

AB 524 (Wicks; D-Oakland) Expansion of Litigation Under FEHA. This bill would have exposed employers to costly litigation under the Fair Employment and Housing Act (FEHA) by asserting that any adverse employment action was in relation to the employee’s family caregiver status, which is broadly defined to include any employee who provides direct care of any person of their choosing, and creates a de facto accommodation requirement that will burden small businesses. The Governor Vetoed.

AB 647 (Holden; D-Pasadena) Grocery Workers. Significantly expanded the current law related to successor grocery employers. It included disrupting the ability for independent small stores to join together and creating a significant new private right of action. Signed by the Governor. Chapter 452, Statutes of 2023.

SB 365 (Wiener: D-San Francisco) Undermines Arbitration. Further negatively impacted the use of arbitration agreements by allowing trial courts to continue trial proceedings during any appeal regarding the denial of a motion to compel. Signed by the Governor. Chapter 710, Statutes of 2023.

SB 616 (Gonzalez; D-Long Beach) Costly Sick Leave Expansion on All Employers. Imposed new costs and leave requirements on employers of all sizes, by nearly doubling existing sick leave mandate, which is in addition to all other enacted leave mandates that small employers throughout the state are already struggling with to implement and comply. Signed by the Governor. Chapter 309, Statutes of 2023.

SBX1 2 (Skinner; D-Berkely) Windfall Profits Tax. Created an arbitrary cap on the amount of profit that a refiner operating in the state of California can earn over a quarterly basis. This measure would further diminish supply, discourage operational efficiencies, and would limit the amount of capital a refiner could reinvest into their infrastructure to support California’s long-term climate goals. Signed. Chapter 1, Statutes of 2023–24 First Extraordinary Session.

SB 627 (Smallwood-Cuevas; D-Los Angeles) Onerous Return to Work Mandate. Would have Imposed an onerous and stringent process to hire employees based on seniority alone for nearly every industry, including hospitals, retail, restaurants and movie theaters. It is expected this would delay hiring and eliminate contracts for at-will employment. The Governor Vetoed.

SB 799 (Portantino; D-Burbank) Increased Unemployment Insurance Taxes to Subsidize Striking Workers. This bill would have allowed striking workers to claim UI benefits when they choose to strike. The UI Fund is paid for entirely by employers so this bill would have effectively added more debt onto California employers. In addition, this bill would have effectively forced employers to subsidize strikes at completely unrelated businesses because the UI Fund’s debt adds taxes for all employers, regardless of whether they’ve had a strike. The Governor Vetoed.

SB 525 (Durazo; D-Los Angeles) Costly Minimum Wage Increase. Imposed significant cost on health care facilities and any employer who works with health care facilities by mandating increase in minimum wage to $25. Job killer tag and opposition removed due to September 11, 2023 amendments, which phased in certain minimum wage increases based on hospital size and operations. Signed. Chapter 890, Statutes of 2023.

SB 723 (Durazo; D-Los Angeles) Onerous Return to Work Mandate. Unnecessarily extended sunset on COVID-19 specific law that created an onerous and stringent process for specific employers to return employees to the workforce for specified industries, including hotels and restaurants that have been disproportionally impacted by this pandemic. Job killer status removed due to September 7, 2023, amendments. Signed. Chapter 719, Statutes of 2023.

Taxation

AB 259 (Lee; D-San Jose) / ACA 3 (Lee; D-San Jose) Wealth Tax. Imposed a massive tax increase upon all forms of personal property or wealth, whether tangible or intangible, despite California already having the highest income tax in the country. This tax increase would have likely driven high-income earners out of the State as well as the revenue they contribute to the General Fund. Held in Assembly Revenue and Taxation Committee, March 30, 2023.

SB 220 (Senate Budget and Fiscal Review Committee) Corporate Tax Hike. Increased the corporate tax rate to 10.99% for many California employers which likely would drive them out of the state and decrease the revenue they contribute to the General Fund. Held in Senate Budget and Fiscal Review Committee, May 25, 2023.

Housing

AB 68 (Ward; D-San Diego) Quashes Housing. Would have negatively impacted California’s existing housing crisis by preventing local governments from permitting new housing units in most of their jurisdictions. Held in Assembly Housing and Community Development Committee.

Environmental

AB 1000 (Reyes; D-San Bernardino) De Facto Ban of Warehouses. Would have mandated a statewide setback of 1,000 feet from sensitive receptors for all new or expanded logistics use facilities, regardless of environmental impacts, establishing a de facto ban. Also created a new private right of action in California. Failed passage in Assembly Local Government Committee, April 26, 2023.

Climate/Energy

AB 9 (Muratsuchi; D-Torrance) Greenhouse Gases. Imposed additional evaluation criteria on California’s cap-and-trade program that would lead to market instability and increased costs for consumers. Held on Assembly Inactive File, June 1, 2023.

SB 12 (Stern; D-Canoga Park) Arbitrary Greenhouse Gas Target. Arbitrarily changed the State’s GHG reduction goal from 40% of 1990 levels by 2030 to 55%. By the State’s own estimate this proposal would force 17 million gas-powered cars off the road in the next 10 years. Held in Senate Appropriations Committee, May 18, 2023.