Democratic legislators in Sacramento have sponsored so many anti-business bills in the current legislative session that they must not be aware that California’s unemployment rate is a dreadful 11.8 percent. Chief Executive Magazine places California dead last in its ranking of business-friendly states, concluding that “Sacramento seems to take perverse delight in job-killing legislation.”
The California Chamber of Commerce has compiled a list of “job killer” legislation that contains 30 bills introduced this year, 18 of which remain active. They include tax increases, sunsetting of tax credits, increasing the ability of local governments and districts to raise taxes and increasing employer litigation costs.
To that woeful list, add AB 350. It’s called the “Displaced Property Service Employee Opportunity Act,” but a more accurate name might be the “We’re Telling You Who You Have to Hire Act.”
It requires that when a building owner or manager hires a new contractor to provide security, maintenance, window cleaning or food services, the new contractor must retain the employees of the former contractor for 90 days and then offer those employees continued employment unless their performance is unsatisfactory. It will impact hospitals, restaurants, grocery stores, universities, hotels and other commercial properties.
For example, the owner of a building in an unsafe area hires a security firm to patrol the building at night, but soon finds out that supplies are disappearing on a regular basis. As a result, he replaces that firm with one that has a track record of excellence. However, under AB 350, all of the security guards, including those who had been sleeping on the job and possibly even participating in the thefts, will have to remain on duty.
It’s sponsored by Assemblyman Jose Solorio, a Democrat from Anaheim, who argued that it provides security and stability for workers who otherwise might lose their job with little or no warning while retaining flexibility for employers.
The problem is that by protecting the employees who work for the fired contractor, Solorio’s bill discriminates against the employees who have been working for or would like to work for the replacement contractor. They are forced to wait 90 days and hope that one or more of the retained employees gets a bad performance review.
And where is the flexibility for the new service contractor who is not allowed to determine who works for him and must hire people he doesn’t know? Without knowing the cost of those employees, how can a contractor bid on a service contract without risking losing money? And why should a building owner, who wants to replace a poorly performing contractor, be stuck with those poorly performing employees for three more months or longer?
If AB 350 reaches Gov. Jerry Brown’s desk, we hope he will veto it as he did the United Farm Workers’ attempt to end secret union elections and the attempt to give public employee unions control over the commissions that oversee public employees.