Property & Casualty Insurers Defeat Wildfire Residential Property Insurance Measure
One of the major components of the Legislature’s fire insurance legislative package, SB 897 (McGuire, Dem-Healdsburg) – Wildfire Residential Property Insurance, was defeated this week as a result of heavy lobbying by the property and casualty insurance carriers in the state. The bill:
(1) requires additional living expense (ALE) coverage to include all reasonable expenses incurred by the insured to maintain a comparable standard of living following a covered loss;
(2) requires, in the case of a total loss that is a result of a state of emergency, an insurer to provide an advance payment of no less than four months of ALE or fair rental value, to make an initial advance payment of no less than 25% of the policy limit for a claim for contents related to a total loss of a primary residence without completion of an inventory, to offer no less than 80% of the policy limits for contents without requiring the insured to file an itemized claim, and prohibits an insurer in the case of a claim for contents from requiring the use of a company-specific inventory form;
(3) requires insurers, in the event of a state of emergency, to grant a 30-day grace period for payment of premiums for all homeowners’ policies covering properties within the affected area; and,
(4) makes provisions retroactive for any claim filed after July 1, 2017 but not submitted by January 1, 2019.
The bill is supported by the California State Association of Counties and United Policyholders. It is opposed by the American Insurance Association, National Association of Mutual Insurance Companies, Pacific Association of Domestic Insurance Companies, Personal Insurance Federation of California, and Property Casualty Insurers Association of America.
The author, Senator Mike McGuire (Dem-Healdsburg) declined a compromise with the industry, a mandate required by Senate Insurance Committee Chair Steven Glazer (Dem-Orinda), which was 50% of the policy limits for contents without requiring the use of an inventory form. Senator McGuire offered 75% of a policy’s maximum limit. The author said, “This fight is far from over … which is why this state may eventually need to put this on the ballot for voters to decide.”
Full Assembly Acts On Significant Labor Legislation Before Bill Passage Deadline
AB 1870 (Reyes, Dem-San Bernardino) Unlawful Employment Practices
The Fair Employment and Housing Act makes specified employment practices unlawful, including discrimination against or harassment of employees. Current law authorizes a person claiming to be aggrieved by an alleged unlawful practice to file a complaint with the Department of Fair Employment and Housing within one year from the date upon which the unlawful practice occurred. This bill extends the period to 3 years for which complaints alleging unlawful employment or housing practices may be filed with the Department.
Support & Opposition: This bill is supported by the American Civil Liberties Union, California Employment Lawyers Association, and California Teamsters, among 16 other unions and consumer groups. The opposition is led by the California Chamber of Commerce, 15 large industry trade organizations, as well as multiple local chambers of commerce.
Vote: Assembly Passed 57-4. Ordered to the Senate.
AB 3080 (Gonzalez-Fletcher, Dem-San Diego) Employment Discrimination Enforcement
This legislation prohibits an employer from, as a condition of employment or as a condition of entering into a contractual agreement, prohibiting an employee or independent contractor from disclosing to any person an instance of sexual harassment that the employee or independent contractor suffers, witnesses, or discovers in the workplace or in the performance of the contract.
Support & Opposition: This bill is sponsored by the California Labor Federation and supported by the American Civil Liberties Union of California and California Employment Lawyers Association. The opposition consists of the California Chamber of Commerce, the 15 largest industry trade groups, and the Civil Justice Association of California.
Vote: Assembly Passed 47-25. Ordered to the Senate.
AB 3081 (Gonzalez-Fletcher, Dem-San Diego) Workplace Sexual Harassment
Current law prohibits an employer from discharging or in any manner discriminating or retaliating against an employee who is a victim of domestic violence, sexual assault, or stalking for taking time off work to obtain relief or because of the employee’s status as a victim of domestic violence, sexual assault, or stalking, if the victim provides notice to the employer of the status or the employer has actual knowledge of the status. This bill also prohibits an employer from discharging or in any manner discriminating or retaliating against an employee because of the employee’s status as a victim of sexual harassment. The bill makes the filing deadline for these prohibitions and the reasonable accommodations requirement 3 years from the date of occurrence of the violation. It contains employer-employee joint liability.
Support & Opposition: The bill is supported by the California Teamsters and several women’s organizations, among 12 other entities. It is opposed by the Chamber, 13 business trade groups, and 12 local chambers.
Vote: Assembly Passed 47-23. Ordered to the Senate.
SB 937 (Wiener, Dem-San Francisco) Workplace Lactation Accommodation
This bill requires a lactation room or location to include prescribed features and requires an employer to provide access to a sink and refrigerator in close proximity to the employee’s work space. The bill requires an employer to develop and implement a policy regarding lactation accommodation and make it available to employees.
Support & Opposition: The bill is supported by the California Employment Lawyers Association, California Labor Federation, and California Teachers Association. Opponents include the California Chamber of Commerce, American Insurance Association, and 8 large industry trade groups.
Vote: Senate Passed 24-6. Ordered to the Assembly.
SB 1038 (Leyva, Dem-San Bernardino) Employee Sexual Harassment History Discrimination
Current law prohibits discrimination and harassment in employment based on factors, including race, religious creed, gender, or sex. Current law prohibits discharging or discriminating against a person who has opposed any practices prohibited by these provisions. This bill imposes personal liability on employers for violating the prohibition against discharging or discriminating against a person who has opposed any practices prohibited by these provisions or has filed a complaint, testified, or assisted in any proceeding for a violation.
Support & Opposition: This bill is supported by the California Employment Lawyers Association and Equal Rights Advocates. Opponents include the California Chamber of Commerce and California Council of the Society for Human Resources Management.
Vote: Senate Passed 21-13. Ordered to the Assembly.
SB 1284 (Jackson, Dem-Santa Barbara) Employer Paydata Reporting
This bill requires private employers with more than 100 employees to submit an annual paydata report to the Department of Industrial Relations. This bill requires the Department to make the reports available to the Department of Fair Employment and Housing upon request. It imposes a civil penalty of $500 on any employer who does not comply with the reporting requirement, and requires any penalties collected to be deposited into the Labor Enforcement and Compliance Fund, to be allocated upon appropriation by the Legislature to the Division of Labor Standards Enforcement to enforce wage differential laws.
Support & Opposition: The bill is supported by the Consumer Attorneys of California and the Service Employees International Union – California. There are 20 local chambers in opposition, in addition to the California Chamber of Commerce, as well 11 large industry trade organizations.
Vote: Senate Passed 24-13. Ordered to the Assembly.
SB 1300 (Jackson, Dem-San Diego) Sexual Harassment Legal Standard
This measure provides that a plaintiff in an action alleging that a defendant failed to take all reasonable steps necessary to prevent discrimination and harassment from occurring is not required to prove that the plaintiff endured harassment or discrimination and provides that it suffices for the plaintiff to show that the employer knew that the conduct was unwelcome to the plaintiff, that the conduct would meet the legal standard for harassment or discrimination if it increased in severity or becomes pervasive, and that the defendant failed to take all reasonable steps to prevent the same or similar conduct from recurring.
Support & Opposition: This bill is sponsored by the California Employment Lawyers Association and Equal Rights Advocates. It is California Chamber of Commerce-opposed, along with over 15 industry trade groups and 12 local chambers.
Vote: Senate Passed 22-11. Ordered to the Assembly.
SB 1343 (Mitchell, Dem-Los Angeles) Workplace Sexual Harassment Training Requirements
Requires an employer who employs 5 or more employees to provide at least 2 hours of sexual harassment training to all employees by January 1, 2020, and once every 2 years after that. The bill requires the Department of Fair Employment and Housing to develop a 2-hour video training course on the prevention of sexual harassment in the workplace.
Support & Opposition: The bill is supported by 16 organizations, including 10 labor unions, such as California Teamsters, and the Consumer Attorneys of California. The California Manufacturers & Technology Association is the only registered opposition.
Vote: Senate Passed 38-0. Ordered to the Assembly.
Defeated Legislation
AB 2613 (Reyes, Dem-San Bernardino) Failure to Pay Wage Penalties
Current law provides for a civil penalty, in addition to, and entirely independent and apart from other penalties, on every person who fails to pay the wages of each employee and requires the Labor Commissioner to recover that penalty. Current law requires that a specified percentage of the penalty recovered under that provision be paid into a fund within the Labor and Workforce Development Agency dedicated to educating employers about state labor laws and that the remainder be paid into the State Treasury to the credit of the General Fund. This bill repeals those provisions and makes an employer or other person acting individually or as an officer, agent, or employee of another person who fails to pay wages of each employee subject to a penalty of $200, payable to each affected employee, per pay period where the wages due are not paid on time. Penalties escalate financially for additional wage payment failure.
Support & Opposition: This bill is supported by 17 organizations, largely labor unions, such as the California Labor Federation, the Service Employees International Union – California, and the California Employment Lawyers Association. The 30 member opposition consists of the 15 large industry trade organizations, such as the California Chamber of Commerce.
Vote: No Vote Taken
AB 2946 (Kalra, Dem-San Jose) Labor Standards Enforcement Division Complaint Filing
Current law authorizes a person who believes has been discharged or discriminated against in violation of any law under the jurisdiction of the Labor Commissioner to file a complaint with the Division of Labor Standards Enforcement within 6 months after the occurrence of the violation. This bill extends the period to file a complaint to within 3 years after the occurrence of the violation.
Support & Opposition: This bill is supported by 20 organizations, including the Employee Rights Center, the National Immigration Law Center, and the Service Employees International Union – California. The opposition consists of 38 industry trade groups and local chambers. The California Chamber of Commerce is opposed to the legislation, as well as the California State Association of Counties and Civil Justice Association of California.
Vote: Assembly Failed 19-30
Senate Passes Bill To Institute Net Neutrality
The Senate this week 21-12 passed SB 822, a Net Neutrality bill (Wiener, Dem-San Francisco) that codifies portions of the rescinded Federal Communications Commission (FCC) rules related to net neutrality by prohibiting internet service providers (ISPs) from engaging in certain practices, including:
1) Blocking lawful content, applications, services, or non-harmful devices;
2) Discriminating between lawful internet traffic;
3) Engaging in third-party paid prioritization;
4) Engaging in application-specific differential pricing, and engaging in deceptive or misleading marketing practices;
5) Prohibiting monetary agreements between ISP's and edge providers and prohibits most zero rating.
This bill is supported by 164 entities, including the Electronic Frontier Foundation, the American Civil Liberties Union, Common Cause, Consumers Union, The Utility Reform Network, former FCC commissioners, and local officials. It is opposed by 86 entities, including the California Cable & Telecommunications Association, CTIA-The Wireless Association, and California Chamber of Commerce.
The majority-Republican FCC repealed the 2015 Open Internet Rules in December 2017, calling the rules government overreach and harmful to broadband investment. As for net neutrality's fate on the national level, the United States Senate recently passed its own bill in favor of restoring the regulations, too.
SB 822 will be referred to its jurisdictional committee in the Assembly in the coming days.
Senate Approves Far Reaching Legislation To Impose Data Breach Penalty
The Senate this week on a vote of 22-13 passed SB 1121 (Dodd, Dem-Napa), the Personal Information Data Breach Liability measure that expands the civil liability of companies of all sizes providing goods and services in California. The legislation expands the scope of who can sue companies and nonprofits for data breaches.
This bill imposes a minimum of $200 and a maximum of $1,000 in statutory damages per consumer breach. Current law requires a business to take all reasonable steps to dispose of customer records containing personal information and imposes other requirements on a business relating to the custody of customer records containing personal information.
This bill is supported by the American Civil Liberties Union, Consumer Federation of America, Privacy Rights Clearinghouse, and 12 other consumer and privacy protection advocacy groups. Opponents include the Independent Insurance Agents & Brokers of California, Personal Insurance Federation of California, California Chamber of Commerce, California Cable & Telecommunications Association, and 14 large industry trade organization.
Under SB 1121, people do not even have to be customers or users of a service to sue, which lets them take action against 3rd party data brokers such as Equifax. Damages could be sought if a company is found to have been lax in applying data-security measures or to have failed to notify consumers in a timely manner.
The bill will be referred to its jurisdictional committees in the Assembly in the coming days.
Measure To Require Female Membership On Corporate Boards Of Directors Passes Upper Chamber
The Senate this week on a vote of 22-11 approved SB 826 (Jackson, Dem-Santa Barbara) – theWomen Corporate Board of Directors Requirement measure that requires a corporation or foreign corporation that is a publicly held corporation whose principal executive offices are located in California to have a minimum of one female on its board of directors. On or before December 31, 2021, the bill increases that required minimum number to 2 female directors if the corporation has 5 authorized directors or 3 female directors if the corporation has 6 or more authorized directors. The bill requires the Secretary of State to publish various reports on its website documenting the number of corporations in compliance with these provisions.
This bill is sponsored by the National Association of Women Owned Businesses – California, and supported by the Consumer Attorneys of California as well as Small Business California. The opposition is led by the California Chamber of Commerce, and is opposed by the Personal Insurance Federation of California, 7 large industry trade organizations, and 12 local chambers of commerce.
The CalChamber points out that SB 826 seeks to manage the directors of publicly traded corporations that have its principal executive offices in California yet are incorporated in another state. The internal affairs doctrine appears to dictate that the laws of the state where the company is incorporated apply for these issues, not the law of where the principal executive offices are located, such as California. Such confusion and ambiguity will only lead to costly fines as proposed under the bill and potential litigation.
The bill will be referred to its Assembly committee next week.
