NFIB California Main Street Minute

For the legislative and political week January 31-February 4

Welcome to the January 31-February 4 edition of the NFIB California Main Street Minute from your NFIB small-business-advocacy team in Sacramento.

Big NFIB Victory on the Federal Vaccine Mandate 

• Following NFIB’s U.S. Supreme Court victory, the U.S. Labor Dept. announced on January 25 that the Occupational Safety and Health Administration (OSHA) has withdrawn its vaccine emergency temporary standard. See Karen Harned’s statement in the national section below. Harned is executive director of NFIB’s Small Business Legal Center. 

The Deadline is Today 

• Today (January 31) is the deadline for legislative bills to pass out of their house (Assembly or Senate) of origin or are dead for the year. 

• The next big deadline is February 18, the last day for new bills to be introduced. 

Do or Die Monday for Single-Payer Health Care 

• Assembly Bill 1400 must either pass the full Assembly today (January 31) or is dead for the year. In a coalition letter NFIB co-signed to Assembly members, it pointed out, “Approximately 94% of Californians have health care coverage in some fashion. A majority of the uninsured population is comprised of undocumented individuals. Governor Newsom’s 2022-2023 Budget addresses this very issue and would make California the first state to offer health care coverage for all income-eligible residents regardless of immigration status. 

• “AB 1400 will reduce the level and quality of health care and benefits currently enjoyed by millions of Californians. It will lead to increasingly long wait times to see a physician and will take away choice. Not just choice in physicians but choice in coverage. Under current law, those who wish to buy more, less or different coverage than others can often make those choices, just as those who have other priorities can exercise them in the market. Under AB 1400 one size fits all, no matter what an individual’s preference might be.” 

• UPDATE–Single-Payer Health Care Bill Dead for the Year

Paid Sick Leave to be Extended 

• Gov. Gavin Newsom, Senate President Toni Atkins, and Assembly Speaker Anthony Rendon announced last week (January 25) a framework for re-starting supplemental COVID-19 paid sick leave through September 22 of this year. It would also be retroactive to January 1. NFIB and its business coalition co-signers had expressed their opposition to doing so in this December 17 letter to legislators. 

• Perhaps as a sugar coating to get small business to swallow the pill, the news release announcing the framework said, “Early budget actions will also include restoring business tax credits, including research and development credits and net operating losses, that were limited during the COVID-19 Recession; tax relief for recipients of federal relief grants for restaurants and shuttered venues; and additional funding for the Small Business Covid-19 Relief Grant Program. The framework includes significant funding to bolster testing capacity, accelerate vaccination and booster efforts, support frontline workers, strengthen the health care system, and battle misinformation.” 

• Commenting on the paid-leave extension for a January 25 story in The Sacramento Bee, State Director John Kabateck said, “Small business is still reeling from government closures, reduced commerce and inflationary pricing. If this is the policy direction of our leaders, we would have hoped some of the state’s surplus would have been used to subsidize small businesses for the cost of COVID leave.” 

Bereavement Leave Bill Dead 

• California and many employers themselves already offer 16 types of leave time, a list of which the Shouse Labor Law Group has compiled here. Bereavement leave is offered by some employers but is not legally mandated. Assembly Bill 95 would have mandated 10 days of unpaid “bereavement leave upon the death of a spouse, child, parent, parent-in-law, sibling, grandparent, grandchild or domestic partner.” NFIB registered its opposition to AB 95 and continues to maintain that the best leave programs are the ones tailored by employees working with the employers. Another bill is expected to be introduced. 

Another Leave Bill Falls Short 

• According to the synopsis of Assembly Bill 1119, “The Fair Employment and Housing Act (FEHA), among other things, prohibits employment discrimination on the basis of a number of ‘protected characteristics,’ including race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status. This bill would expand this list of protected characteristics to include ‘family responsibilities,’ which is defined to mean an obligation to provide ongoing care to a minor child or ‘care recipient,’ defined as a person who resides in the employee’s household and relies upon the employee for medical care or to meet the needs of daily living. By adding this provision, an employee would have a cause of action against an employer who discriminated against the employee, or took any adverse employment action, because of the employee’s family responsibilities.” 

• After taking inventory of its likelihood of passage, Assembly Member Buffy Wicks pulled AB 1119 from its January 20 hearing, effectively killing it for the year. 

Bill Taking Aim at Fast Food Industry Passes Assembly 

• It’s on to the Senate now for Assembly Bill 257, which, according to the bill’s analysis, “Enacts the Fast Food Accountability and Standards (FAST) Recovery Act that establishes the Fast Food Sector Council (Council) and tasks the council with conducting a full review every three years on the adequacy of fast food restaurant health, safety, and employment standards and establishing sectorwide minimum health, safety, wage, working hours, and employment standards. Requires a report be provided to the Legislature at least 60 days before a standard is effective.” 

• Big labor has always hated the decades-old and highly beneficial franchise model, seeing all sorts of evildoing at a Del Taco where everyone else sees just a menu board and napkin dispensers. They’ve taken runs at it through Congress, through the U.S. Dept of Labor, and through state legislatures. Last year, they succeeded in getting the Labor Department to rescind a Trump-era rule clarifying “the standard for finding two separate entities to be ‘joint employers’ under the Fair Labor Standards Act (FLSA).” 

• Assembly Bill 257 takes a different tack, but the goal is the same. In a guest editorial published by CalMatters, Matt Haller, president and CEO of the International Franchise Association, points out the destruction AB 257 could cause. 

• “Franchises are known to give women, members of the LGBTQ-plus community, new immigrants and people of color unprecedented business-owning opportunities – 60% of California restaurants are owned by people of color. From auto repair to childcare, the franchise model meets customer needs with a known and trusted brand. 

• “In fact, new research shows franchises offer better pay and more opportunity than similarly situated non-franchised businesses – paying 2-3% higher wages, offering more than 65% of employee’s health insurance, and 76% of franchise employees are offered vacation, holiday and sick leave.” 

• NFIB is part of a coalition to protect the franchise model and the wonderful opportunities it has given millions of Americans to start their first jobs and open their own businesses. Click No Takeout Takeover to learn more.

   

• UPDATE–Assembly passed AB 257 on to Senate on January 31

Minimum Wage 

• Last Monday (January 24), the state’s non-partisan Legislative Analyst’s Office pointed out two troubling fiscal effects a proposed ballot initiative raising the state’s minimum-wage rate to $18 an hour could have on state and local governments. 

• • “Unclear change in annual state and local tax revenues, likely between a loss of a couple billion dollars and a gain of a few hundred million dollars. 
     
  • “Increase in annual state and local government costs likely between half a billion dollars and a few billion dollars.” 

Private Attorneys General Act (PAGA) 

• “PAGA lawsuits have increased over 1,000% since the law took effect in 2004. By 2016 and every year since, the Labor and Workforce Development Agency (LWDA) has received between 4,600 to 6,000 PAGA notices. Employers have paid out billions of dollars in PAGA penalties since 2004.” So said a new anti-PAGA website launched last Thursday (January 27).  

• There have been three ballot initiatives dealing with PAGA cleared for signature gathering:
  • 1923. (21-0029A1) Required pre-lawsuit notice and limits plaintiffs’ attorneys’ contingency fees in consumer protection and tort cases.  

• • 1924. (21-0030A1) Limits plaintiffs’ attorneys’ contingency fees in consumer protection and tort cases. 

• • 1925. (21-0031) Limits plaintiffs’ attorneys’ contingency fees in tort cases. 

Two Members Added to NFIB California Leadership Council 

• Last week, State Director John Kabateck announced small-business owners Phebe Mansur and Jim Mayfield would be joining the NFIB California Leadership Council.  

• Mansur is the owner of Copy Right SB, located in Goleta (Santa Barbara County). She has been a member of NFIB since 2013. Jim Mayfield is the owner of Rainbow Ag, which is primarily located in Ukiah, but has multiple locations throughout Northern California. Mayfield has been an NFIB member since 1987.  

• “In the past year, both Phebe and Jim stepped up when we needed them and have done a spectacular job, helping represent NFIB and ensure the Voice of Small Business is heard,” said Kabateck. “Please join me in welcoming them.” Mansur can be reached at [email protected], Mayfield at [email protected].  

• NFIB California’s Small Business Leadership Council (LC) provides direct input and counsel into the legislative and public policy agenda of NFIB. Members of the leadership council serve in an advisory capacity. The members of the LC, through voluntary participation, are committed to promoting and implementing the principles embodied in the mission of NFIB to fight for the rights of its members to own, operate, and grow their businesses. 

Nationally … 

• From Karen Harned, executive director of NFIB’s Small Business Legal Center, following the U.S. Labor Dept.’s announcement that OSHA would withdraw its vaccine emergency temporary standard.  

• “The small business community is relieved to hear that OSHA has officially withdrawn the vaccine ETS on businesses and will no longer move to enforce the mandate. As NFIB argued at the U.S. Supreme Court, OSHA does not have the emergency authority to regulate the American workforce with such a mandate and we are pleased the Court agreed. We urge OSHA to also withdraw the proposed rule as small businesses continue to face extraordinary challenges and this mandate would exacerbate those. This is a win for small businesses who are working hard to get their businesses and the economy back on track.”

We Warned This Would Happen 

• When Congress passed the Corporate Transparency Act, which requires corporations and limited liability companies (LLCs) with 20 or fewer full-time employees to file new reports with the Treasury Department’s FinCEN bureau containing the personally identifiable information of small business owners and update that information periodically, NFIB warned of the many impending devil in the details. The devil has arrived.
• In a letter to the U.S. Treasury Dept. sent last Wednesday (January 26), Kevin Kuhlman, NFIB vice president of federal government relations, wrote, “The beneficial ownership reporting requirement proposed rules from the Treasury Department and Financial Crimes Enforcement Network (FinCEN) are a significant concern for small business owners. The proposed rules will further challenge struggling small businesses with new paperwork requirements and will create a first of its kind federal registry of small business owners, which is a privacy concern for many. The proposed regulations overreach on who must file, when they must file, and what information they must provide. Treasury and FinCEN: 
  • propose to expand the definition of beneficial owner beyond the statute and previous regulations
  • propose insufficient time for small business owners to file and update reports
  • and propose small business owners report more personal information than Congress intended.

• “At the same time, Treasury and FinCEN fail to clarify exactly which types of businesses must file, ultimately resulting in small businesses being forced to seek legal advice before filing paperwork. We urge the Treasury Department to adjust the rules and reduce the burden on small businesses, as the law requires.”  

• NFIB members are encouraged to read the entire letter, which contains more information small-business owners need to know. According to this article on the legal website J.D. Supra, “The Proposed Rules—55 pages in length—would begin to implement the ambitious goals of the CTA by identifying the types of entities and individuals that must report to FinCEN under the CTA and the information that must be reported. Those goals include: 
  • (i) improving information collection, retention, and coordination among national security and anti-terrorism agencies,
  • (ii) modernizing U.S. anti-money laundering laws in accordance with international standards,
  • and (iii) blocking terrorists, malign actors, and corrupt officials from hiding funds in anonymous “shell” companies.  

• “These statutory goals, and the Proposed Rules intended to achieve them, are broad in scope and will fundamentally change the entity formation process and disclosure requirements in the United States.” 

• According to NFIB’s letter, “Treasury estimates the proposed rules to implement the Corporate Transparency Act will require more than 25 million existing small businesses to spend an aggregate of $4 billion to submit reports on their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).” 

Next Main Street Minute February 7.