AB 701 – America’s First Law Protecting Employee’s Lunch Over Efficiency

Author: Rico Dominguez

Guest Editor: Grace Shuman

Related Articles: Employment, California

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January 13, 2022 8:39am

 

Introduction

On January 1, 2022, the nation’s first warehouse transparency law will go into effect, permanently changing the quota requirements in the warehouse distribution industry.  AB 701 requires warehouse employers provide employees with written disclosures related to distribution quotas.[1]  Employees will not be required to fulfill these quotas at the expense of meal or rest breaks.

Originally introduced in State Assembly by Assemblymember Lorena Gonzalez (D – California), the bill was signed on September 22, 2021, by Governor Newsom.[2]  In signing AB 701 into law, Gov. Newsom cited “[t]he hardworking warehouse employees who have helped sustain us during these unprecedented times [who] should not have to risk injury or face punishment as a result of exploitative quotas that violate basic health and safety.”[3]  The anecdotal evidence of the elevated injury rate in warehouse distribution centers with quotas is not a new phenomenon.  According to the Senate Committee on Appropriations documents discussing AB 701, the warehouse and storage industry reported 5.2 injuries per 100 full-time workers, on par with agriculture (5.3 injuries per 100 full-time workers) and beef cattle ranching (8.5 injuries per 100 full-time workers).[4]

 

Which “Warehouse Distribution Centers” are affected under AB 701?

“Warehouse distribution center” means an establishment as defined by any of the following North American Industry Classification System (NAICS) Codes:

(A) 493110 for General Warehousing and Storage.

(B) 423 for Merchant Wholesalers, Durable Goods.

(C) 424 for Merchant Wholesalers, Nondurable Goods.

(D) 454110 for Electronic Shopping and Mail-Order Houses.[5]

Any warehouse distribution center which employs or exercises control over 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 are required to follow AB 701.[6]  Notably, “warehouse distribution center” does not include NAICS Code 493130, Farm Product Warehousing and Storage.[7]

 

Employer Requirements

Employers who meet the above requirements will be required to give employees written disclosures about the specific quota requirements, including “quantified number of tasks to be performed, or materials to be produced or handled, within the defined time period, and any potential adverse employment action that could result from failure to meet the quota.”[8]  Employers are prohibited from taking any adverse action against an employee who cannot meet quota requirements at the expense of their compliance with state occupational health and safety laws.[9]  Importantly, any employer who takes adverse action against an employee within 90 days of the employee either initiating the employee’s first request in the calendar year for information about a quota or work speed or making a complaint related to a quota allegedly is in violation of AB 701.[10]

 

Employee Rights

In addition to not being required to comply with quota requirements at the expense of the employee’s health and safety, employees are afforded multiple protections to insure the enforcement of their rights.  Current and former employees, who believe an employer violated meal or rest breaks to enforce quotas, have the right to one-time request written descriptions of quotas and the employee’s “personal work speed data.”[11]  If the employees’ rights have been violated, AB 701 provides for an action for injunctive relief to obtain compliance with specified requirements, and “may, upon prevailing in the action, recover costs and reasonable attorney’s fees in that action.”[12]  The injunctive relief is limited to suspension of the quota and any adverse action that resulted from the enforcement of that quota.[13]

 

Takeaway

As we begin a new year, both employees and employers must be familiar with AB 701.  Employers should review, finalize, and distribute all the necessary disclosures related to specific quota requirements, defined time periods, and the potential adverse actions against an employee who fails to meet the required quotas.  To ensure employee notice of the necessary disclosures, employers should require employees read and sign the documents.  Furthermore, employers should end the year reviewing their policies and procedures related to possible adverse employment actions to defeat the new presumption in favor of the employee.  As always, employers can consult with an employment attorney to ensure compliance with AB 701.

 

 

 


 

[1] Assem. Bill 701, 2021-2022 (Cal 2021).

[2] Assem. Bill 701, 2021-2022 (Cal 2021).

[3] Governor Newsom Signs Nation-Leading Legislation Expanding Protections for Warehouse Workers, Office of Governor Gavin Newsom, (Sep. 22, 2021), https://www.gov.ca.gov/2021/09/22/governor-newsom-signs-nation-leading-legislation-expanding-protections-for-warehouse-workers/.

[4] AB 701 – Warehouse Distribution Centers, Senate Committee on Appropriations, July 15, 2021.

[5] California Labor Code Section 2100(i)(1)(A)-(D).

[6] California Labor Code Section 2100(f).

[7] California Labor Code Section 2100(i)(2).

[8] California Labor Code Section 2101.

[9] California Labor Code Section 2102.

[10] California Labor Code Section 2105.

[11] California Labor Code Section 2104.

[12] California Labor Code Section 2108.

[13] California Labor Code Section 2108.

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