A new proposal in Sacramento could beat up companies that depend on part-time workers.
Called AB 5, the proposed bill is a roundhouse punch to all but very small companies because it would make employers offer more hours to their part-time workers before hiring anyone new or bringing on a contractor.
Businesses don’t get many exceptions under the proposal. There’s this: additional hours wouldn’t need to be offered to an existing employee who, “in the employer’s reasonable judgment,” does not have the skills or experience to perform the work. And the offer would not be required if it would result in the existing employee working overtime. But that’s it.
Although employers with fewer than 10 workers would not be subject to the law, assuming it is enacted, there’s no exception for you if you have, for example, a restaurant staffed with part-timers who work the lunch shift and a different crew of part-timers for the dinner shift. If AB 5 passes and one person on your evening shift quits, you may have to offer workers on the lunch crew those evening hours. If one accepts, you have a new full-time worker.
As you can see, your two part-time shifts would pretty quickly be transformed into one full-time shift. But that’s the goal of the legislation. Assemblywoman Lorena Gonzalez Fletcher, a Democrat from San Diego who introduced what she titled the Opportunity to Work Act, said that the percentage of part-time workers in the state has risen to 20 percent since 2014, and she wants to stop that trend.
Among the other problems with the bill: There’s no exception if you have different locations in the state. So, as the bill stands (it was in committee as of last week), if you need to hire someone for your Oakland location, you’d have to offer the extra hours to the part-time workers in your Woodland Hills location.
Now, of course, you might say that’s silly. The Woodland Hills employees wouldn’t take the extra work if it required a commute to Oakland. But here’s what’s not silly: AB 5, if approved as it stands, would mandate that the employer still offer the hours and document that each employee in Woodland Hills refused.
In other words, even if all your part-time workers want to remain thus, you’ll still have more recordkeeping and documentation duties and the expenses that go along with them. That’s apparently of no concern to the elected types in Sacramento, who seem to think that all businesses are big and rich and can afford the extra costs.
But most businesses are neither big nor rich. There are few Fortune 500 companies in the entire Los Angeles area. Most employers here don’t have compliance departments. They are small and medium-sized, and many of them struggle to deal with all the mandated wage and employment requirements issued from Sacramento and local governments.
AB 5, if passed, would have outsized impact in the Valley area because we have so many retailers and restaurants along with smaller businesses that rely on part-time workers.
People such as Gonzalez Fletcher may not know this, but one main way businesses deal with increasing costs and recordkeeping requirements (and the legal and regulatory hazard that goes along with those requirements) is to reduce costs by making more jobs part time. And now, if part-time jobs come under regulatory assault, businesses may respond by increasing automation.
You may have seen the article a couple of weeks ago about the Pasadena chain CaliBurger that is rolling out an artificial-intelligence operated robot named Flippy that will be installed in its restaurants starting next year. The robot flips burgers and cooks each one “perfectly,” according to the company’s press release. (Interestingly, the CaliBurger chain developed the robot through a separate company, which may make it easier to sell to other restaurants.)
I’m just guessing here, but I don’t imagine Flippy will be paid the state-mandated higher minimum wage, and it won’t need to be asked if it wants to work another shift.
Charles Crumpley is editor and publisher of the Business Journal. He can be reached at firstname.lastname@example.org.