The Family Business Association continues to review and analyze the 2,124 bills that have been proposed this year by state lawmakers, along with dozens of bills from 2023 that are still under consideration. A number of these bills would have significant impacts on family businesses, and FBA – the only organization that lobbies lawmakers and regulators exclusively on issues affecting the state’s thousands of family-owned businesses – has taken positions on several of them so far this year.
California Assembly in session
Given that many of the bills pending in the Legislature punish businesses rather than help them succeed, FBA will eventually oppose many of them. That’s especially true since lawmakers frequently engage in a practice called gut and amend, in which a bill is stripped of its original language and replaced by text that radically changes the intent of the bill.
“Unfortunately, too many bills continue to be introduced that would make it harder for family businesses to prosper and be passed down to the next generation,” said FBA consultant Robert Rivinius. “California’s 1.4 million family businesses employ some 7 million people and because they are firmly rooted in their communities they strongly support their employees and the communities they serve. State government needs to make it easier, not harder, for these companies to remain in business.”
FBA is now supporting two more 2024 measures:
SB 1243, by Sen. Bill Dodd, D-Napa, which would make compliance with campaign contribution laws more manageable, and
SCA 4 by FBA’s 2023 Legislator of the Year, Sen. Kelly Seyarto, R-Murrieta, which would restore the tax treatment of passing single-family residences to immediate family members without requiring the tax base.
These are in addition to two measures FBA had already weighed-in on: AB 2011 by Asm. Rebecca Bauer-Kahan, D-Orinda, which would make the state’s small employer family leave mediation program permanent, and AB 2371 by Asm. Juan Carillo, D-Palmdale, which FBA is cosponsoring along with FBA member AMAROK. The bill would create uniformity in local permitting requirements for specified security alarm technology.
FBA is now opposing eight additional 2024 bills:
AB 2248 by Asm. Ash Kalra, D-San Jose, which would invite more litigation under the onerous Private Attorneys General Act.
AB 2499 by Asm. Pilar Schiavo, D-Chatsworth, which would lower the threshold for jury duty and crime victim leave from 25 employees to just one.
ACA 3 by Asm. Alex Lee, D-Milpitas, which would impose a wealth tax and eliminate the voter-approved Gann Limit.
ACA 11 by Asm. Phil Ting, D-San Francisco, which would abolish the State Board of Equalization, removing the only tax agency made up of elected officials directly accountable to taxpayers.
And four measures by Sen. Lola Smallwood-Cuevas, D-Los Angeles – SB 1089, which would require grocery stores and pharmacies to provide at least 90-day notice to employees before a closure; SB 1446, which would require grocery stores and pharmacies to employ one employee per two self-checkout stations, whose sole job would be to monitor the self-checkout stations; SB 1434, which is a vast reworking of California’s unemployment insurance system and would massively increase unemployment insurance taxes on all employers in California by providing, among other changes, a 55% increase in maximum UI benefits for all workers; and SB 1345, which aims to restrict the use of criminal background checks by employers.
FBA previously had expressed opposition to SB 1116 by Sen. Anthony Portantino, D-La Canada-Flintridge, which would effectively require employers to subsidize striking workers even if those workers or the strikes had nothing to do with the employer.
The Association also continues to support two bills introduced in 2023 – SB 393 by Sen. Steve Glazer, D-Orinda, which would require CEQA plaintiffs to disclose contributors of $1,000 or more to fund the legal action, and SB 585 by Sen. Roger Niello, R-Fair Oaks, which would give small businesses time to correct construction-related accessibility issues before claims could be filed under the Unruh Civil Rights Act.
FBA continues to oppose SB 399 by Sen. Aisha Wahab, D-Hayward, which would effectively prohibit any discussion of political matters in the workplace.
FBA is monitoring the 2,124 bills state lawmakers introduced this year (not to mention hundreds of measures introduced in 2023 and still alive in the Legislature) and has taken positions on three priority bills for family businesses so far.
FBA is opposed to SB 1116, which would force employers to pay unemployment insurance (UI) payments to striking workers, raise taxes on employers, overturn more than 70 years of precedent, and put California’s UI program at risk of violating federal law. This bill is a repeat of last year’s SB 799, which was vetoed by the Governor because of the debt it would add to California’s UI Fund – which is an even more pressing concern with this year’s budget concerns.
The Association is cosponsoring AB 2371 with FBA Member AMAROK, a commercial security company. This bill would enable property owners and businesses to install and employ electric security fences in a timely manner, while still allowing local government authorities to regulate or prohibit installations that do not comply with all requirements under State law.
Finally, FBA supports AB 2011, which would make the Civil Rights Department’s small employer family leave mediation program permanent, benefitting both workers and small employers.
Ken Monroe, the longtime president of Holt of California and for several years the chairman of FBA, recently sat down for a video interview with Pat Soldano, president of Family Enterprise USA, the advocacy group representing family businesses in Washington, DC.
Monroe shares stories of his three-family company, how family businesses give back to the community, and the challenges of doing business in California. The You Tube video is available here.
A recent ruling by the California Supreme Court is just one more reason why family businesses are working to pass the California Fair Pay and Employer Accountability Act in November. Doing so will be by far the best shot at reforming how the state deals with Labor Code violations and ensuring that both employees and employers benefit.
At issue is the Private Attorneys General Act, or PAGA, signed into law by Gov. Gray Davis as he was about to be recalled as a thank-you gift to trial lawyers and unions for their support. This law deputizes employees to file lawsuits against employers on behalf of the state for even minor and inconsequential violations of the 800-page Labor Code – and allows trial lawyers to receive huge sums that are far greater than the alleged victims receive.
In a recent settlement, attorneys made $21 million while the employees received $108 each. Family businesses and nonprofits have become major targets for predatory lawsuits that are often minor technical violations.
Attorney Bruce Scheidt, a shareholder with Kronick Moskovitz Tiedemann & Girard in Sacramento – a proud sponsor of the Family Business Association – says the Supreme Court decided that trial courts do not have inherent authority to dismiss or narrow PAGA lawsuits on manageability grounds, overturning a lower court ruling.
“This major ruling will continue to permit plaintiffs’ lawyers to use the threat of a PAGA lawsuit to bring broad and unrelated wage-and-hour claims to put pressure on employers to settle companion class action lawsuits, which are governed by manageability requirements that require plaintiffs to prove an employer consistently imposed a uniform policy or de facto practice that dominates over individualized issues,” Scheidt wrote.
“The high court refused to adopt the same manageability requirements on PAGA claims, holding that trial courts have ‘numerous tools’ to manage PAGA claims, such as limiting the presentation of evidence at trial and encouraging plaintiffs to be ‘prudent in their approach to PAGA claims,’ and that trial courts have discretion to reduce civil penalties that ‘may help to lessen the manageability concerns inherent with these [PAGA] actions.’ However, these tools are not a substitute for a trial court’s ability to dismiss a PAGA lawsuit where the plaintiffs cannot prove a uniform policy or practice of violating the Labor Code.”
It is expected that the Fair Pay Act would substantially reduce the number of lawsuits by eliminating the financial incentive to plaintiffs lawyers who use PAGA to extort millions of dollars from employers. The initiative would benefit employees and employers by:
Replacing PAGA’s bounty hunter provision with an alternative enforcement mechanism through the state’s Labor Commissioner: Only the Labor Commissioner could file an enforcement action to collect penalties under PAGA, and workers would not be able to hire a private attorney.
Requiring the Legislature to provide funding for enforcement.
Allowing employers to correct identified Labor Code violations without penalties.
Ensuring that 100% of penalties for uncorrected violations go to workers.
And doubling penalties if employers willfully violate the law.
Comstock’s Magazine, a leading business publication covering the greater Sacramento area, recently included articles about five FBA members in its annual family business issue. You can learn more about
Ceronix, an Auburn-based company that pivoted to become a leader in the replacement market for gaming machines;
the Fruit Bowl, a 76-year-old produce stand that attracts customers from all over the greater Stockton area;
Morrow Surveying, which has provided high-quality land surveying and mapping services throughout California and western Nevada;
Pyro Spectaculars, which produces stunning fireworks displays for the Macy’s Fourth of July show, Super Bowls and more;
and Ramos Oil, which has been delivering bulk fuel to farms, ranches, construction companies and more since 1951.
In addition, you can also read FBA Chairman Ken Monroe’s column on the difficulties of running a family business.
Two more family businesses recently joined FBA – the only organization working solely on behalf of family businesses at the California state capitol. The new businesses are:
Jackson Properties. The Sacramento-based company was founded in 1974 and specializes in construction, commercial building, and facility management.
Bosley Electric Company, a full-service commercial electrical contractor founced in 1991 and serving the greater Sacramento region and northern Nevada.
Thank you to both family businesses for joining the FBA family!
