BILL ANALYSIS
AB 842
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Date of Hearing: May 6, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 842 (Swanson) - As Introduced: February 26, 2009
Policy Committee: Labor and
Employment Vote: 4-2
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill revises existing law that requires employers to
provide advance notice of a mass layoff, relocation or
termination. Specifically, this bill:
1 Increases the notice requirement of a mass layoff from 60 to
90 days.
2)Requires that the notice - which is currently provided to the
employees, the Employment Development Department, and local
officials -- to also, be provided to the Labor and Workforce
Development Agency (LWDA), the Department of Industrial
Relations (DIR), and the employees' representative and/or
union.
3)Specifies that in order to qualify for the existing notice
exemption for companies seeking capital, that the company
consult with state and local governments, local economic
development agencies, or workforce investment boards.
Information provided to these agencies would be kept
confidential.
4)Requires the LWDA to maintain a guide of benefits and services
that may be available to dislocated workers and a guide of
economic development benefits and services that may be
available to employers in order to avert mass layoffs or other
triggering events. Requires LWDA to transmit these guides to
an employer for distribution to their terminated employees.
5)Specifies that no more than ten % of the civil penalties
provided under current law may be used to fund the activities
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of LWDA required by this bill.
FISCAL EFFECT
1)Ongoing increased cost to LWDA, potentially exceeding $150,000
per year, associated with expanded responsibilities and
enforcement of violations.
2)Minor one-time costs to LWDA to develop and print guides of
benefits and services available to employers and employees
receiving a WARN notice. Ongoing costs to maintain and
distribute the guides would be absorbable.
COMMENTS
1)Background . Existing law requires that an employer give 60
days written notice of a mass layoff, relocation or
termination to employees, the Employment Development
Department, the local workforce investment board, and the
chief elected official of each affected city and county
government. The requirement applies to any industrial or
commercial facility that employs 75 or more people. A mass
layoff includes any layoff of 50 or more persons during a
30-day period. An employer failing to give required notice is
liable to each employee who lost employment for back pay and
the value of benefits for the period of the employer's
violation, up to 60 days.
2)Rationale . This bill is intended to ensure that workers have
timely and meaningful notice of major job loss in order to
plan accordingly and find other work. The author contends
that this legislation is especially critical when the economy
is suffering and more employees are losing their jobs.
3)Opponents . The California Chamber of Commerce argues that this
bill makes doing business in California more onerous at a time
when California should be seeking solutions to the current
economic challenges rather than creating new costs and
liabilities for employers.
4)Prior legislation . This bill is similar to the final version
of AB 1989 (Swanson, 2008) from last year, which was held in
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the Senate Appropriations Committee.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081