The state of California possesses some of the strictest labor laws and enforcement tactics in the United States - a factor that largely affects the business climate of the state. County health departments, such as the California Department of Industrial Relations - Occupational Safety & Health Administration (CAL-OSHA), enforce and protect California labor laws, acting against all businesses who violate the laws (West Group, 1999).
This essay will discuss some of California's most important and current labor laws, outlining how each law affects California's business climate. It will also determine whether these labor laws are beneficial or detrimental to the apparel industry.
California's Labor Laws
The following section outlines some of California's labor laws, which are considered some of the most stringent in the nation.
California's overtime laws hold that any employee who works more than eight hours per day must be paid at 1.5 times his or her usual rate of pay (Sessions, 1999). Those who work more than 12 hours per day must be paid twice the usual rate.
If an employee works seven consecutive days, he or she must be paid 1.5 times the usual rate for the first 8 hours, and twice the usual rate for any additional hours. The seventh consecutive day law applies regardless of how many hours an employee worked during the previous six days. In addition, any hours over 40 in a week must be paid at time and a half.
In California, certain employees are exempt from overtime laws, such as those that spend at least half of their working hours doing work that is mainly intellectual, managerial, or creative, and requires the exercise of some sort of discretion and independent judgment.
Therefore, these particular labor laws affect only industries that require manual labor, such as retail, apparel, food service, construction and health care. Other types of businesses, including marketing firms and financial companies, are relatively unaffected by these laws.
Businesses that must adhere to California's overtime laws are forced to be more conscientious of their work schedules, as the costs of scheduling employees for overtime can be tremendous. In addition, if an employee calls in sick or quits unexpectedly, these companies may have to cover his or her shift at a greater cost until a replacement is found.
There are some exceptions to overtime laws. For example, if two-thirds of the workforce agrees to work according to an alternative work schedule, which is decided by a secret ballot election, an alternative schedule may be implemented of up to 10 hours per day, but it still cannot surpass 40 hours per week.
If an individual employee is unable work the alternative schedule, however, the employer must make reasonable effort to accommodate that employee. In addition, If an employee issues a written request to work between 8 and 10 hours per day, then that schedule may be adhered to.
If an employee takes time off work for personal reasons and wants to make up for lost time later in the week, an employee does not have to pay the employee for overtime, unless the employee works more than 11 hours during the make-up day. In addition, the employer is not obligated to allow the employee to make up hours.
California's labor laws extend to mealtime. For example, an employee who works more than five hours is entitled to receive an unpaid thirty-minute meal break. However, this policy does not apply if the employee works less than six hours, and both the employer and the employee agree to waive the mealtime break.
If an employee works more than 10 hours, a second thirty-minute meal break must be allowed. However, if the employee works less than 12 hours, and both the employer and the employee agree, the second meal period may be waived, also.
Under new laws, an employer who requires an employee to work during a meal or rest period must pay the employee one hour's pay for each workday that the meal or rest period is not provided.
California's labor laws are deeply concerned with minors in the workforce. In order to gain employment, all minors under the age of 18 are required to have a work permit. Any employer that hires minors must have a permit that allows them to hire minors.
These permits detail exactly how many hours a minor may work in a day and week, the range of hours during the day that a minor may work, any occupational limitations, and any additional restrictions for employing a minor.
According to California labor laws, a minor must be at least 14 years of age to work. In some cases, 12-year-olds may be issued work permits; however, few occupations are available to them.
There are some exceptions to this rule. For example, high school graduates or minors who are at least 16 years old and have been awarded a certificate of proficiency are exempt from the permit requirements. In addition, minors who are self-employed, providing services like babysitting or lawn mowing, do not require permits.
According to labor laws, minors must be paid at least the minimum wage, as well as applicable overtime rates. Minors cannot be employed in occupations declared hazardous by federal regulation and adopted by inclusion.
Some recent changes to California labor laws have caused an outrage amongst employers, who say that California is becoming far too strict with employment laws, to the point where they are too harsh on businesses (Aspen Publishers, 2002).
In the past, persons who were harassed or discriminated against for their sexual orientation could only be awarded back pay. Today, in California, they can win back pay, front pay, compensatory damages, punitive damages, attorney's fees, and more.
In addition, labor laws have changed the definition of sexual harassment to include "sexual advances, solicitations, sexual requests, demands for sexual compliance, or other verbal, visual or physical conduct of a sexual or hostile nature, based on gender" (Aspen, pp. 211-216). As a result, businesses must initiate and maintain strict company policies regarding discrimination and harassment.
California employers are now at a significant disadvantage if and when economic circumstances force them to layoff employees. New labor laws require 60 days notice of a mass layoff or shutdown or 60 days pay and benefits. If an employer fails to comply, an employee can sue and may be entitled to damages, up to 60 days pay and benefits, and attorneys fees.
In the past, if a company had to reduce its staff in a force situation, an employer was able to select higher paid employees for layoff over lower paid employees, even if this results in the selection for layoff of older employees. New legislation rejects that decision, stating that the use of salary as the basis for terminating employment may constitute age discrimination.
Federal law holds that immigration laws are more important than the labor laws and decided that undocumented workers who were fired for union activities were not entitled to back pay because they were not entitled to work in the U.S.
However, California law states that employment laws and anti-discrimination protections apply to undocumented workers and applicants on the same basis as other employees. As a result, California employers must adhere to labor laws with both legal and illegal workers.
Other new laws adding to the employers' burden expand employees' jury duty rights, create protected leave for domestic violence victims, and require employers to accommodate pregnant workers.
California employment laws now regulate everything, ranging from the kinds of questions employers can ask potential job applicants to how employees are to be treated in the workplace. In most situations, California employment laws are more stringent than the federal employment laws, causing some businesses to steer clear of California.
The Effect of Labor Laws on California's Business Climate
According to a recent study, one in every five California businesses reported that they have restricted hiring because of employment lawsuits (Sullivan, 1996). Nearly half of all businesses surveyed said that California labor laws, such as employment termination laws, have made liability insurance more expensive, while about 10% reported that labor laws have actually caused a reduction in the number of employees on payroll.
In addition, businesses reported that labor laws have made it more difficult to get information on references on prospective employees, and more than half said that they will not provide references on former employees.
Under past law, employers were protected from libel or slander suits for statements made that did not show malice toward a former employee regarding the job performance or qualifications.
As amended, employers are allowed to inform a prospective employer whether or not it would rehire an employee. However, hundreds of lawsuits have been initiated as a result of employee references, which has made employers wary of giving references.
Giving references over the telephone still holds legal peril for employers. Employer references are one of the most fertile grounds for employee lawsuits. As a result, most employers will only give a reference that is in writing; giving the…