IWLA Questions Constitutionality of California Warehouse Labor Law

In response to reports of minimum wage, overtime and safety violations involving temporary workers in warehousing, California’s proposed Assembly Bill 1855 was approved by the Assembly Labor and Employment Committee in Sacramento. If passed by the senate, the measure as written would “provide warehouse workers the same protections as is afforded to temporary workers in the construction, farm labor, garment, janitorial and security guard industries under current law.”

The International Warehouse Logistics Association (IWLA) has characterized this bill as a jobs killer. In particular, the IWLA believes AB 1855 would require companies serving the warehouse industry to reveal their contracts with customers. IWLA President & CEO Joel Anderson said the legislation as currently written is unfair, unjust, unnecessary and possibly unconstitutional.

"What it will achieve is enormous and unnecessary harm to one of the very few industries in California that effectively addresses structural unemployment in the semi-skilled population," Anderson wrote in a May 30 letter to Assemblywoman Norma Torres, who introduced AB 1855.

In particular, he believes the bill would force companies that provide contracted workforces to warehouses in California to disclose trade secrets, including pricing and terms of private contracts, to the California Labor Commissioner. He noted, however, that companies governed by collective bargaining agreements will not be required to do the same. IWLA believes this legislation is being driven by groups and individuals who seek to unionize non-union warehouse companies operating in the state.

"These representatives painted a one-sided picture of an industry," Anderson said. "That is why IWLA testified and submitted data rebutting this testimony."

In an official statement about the bill, Torres defended its purpose.

“While there has always been a need for temporary and seasonal work, the long-term use of workers by staffing agencies can lead to wage, hour, health and safety violations,” she said. “This is not an indictment of the temporary staffing industry as a whole. Like in any field, there are good and bad actors.”

Her statement noted there are more than 85,000 warehouse workers employed in California’s logistics industry. It is estimated that half of these workers are employed by temporary staffing agencies and making minimum wage. Many of these workers are hired on a day-to-day basis and are paid “piece-rate” earnings (paid by the load or shipping container, she said.

Anderson believes that if enacted, the law would do nothing to help the plight of temporary workers.

"This legislation will fail to improve the safety of workers or the financial stability of companies that employ these workers,” he wrote in his letter to Torres. “It is misguided in its purpose. What it will achieve is enormous and unnecessary harm to one of the very few industries in California that effectively addresses structural unemployment in the semi-skilled population."

He added that any company shown to be guilty of safety and wage law abuses should be prosecuted to the fullest extent of the law, but that this law would indict an entire industry.

“This legislation starts with the supposition that all employers of warehouse workers, no matter how clean their Cal-OSHA record might be, should be presumed guilty,” he wrote. “Only in California do the employers of warehouse workers face this negative assumption and such a hostile and damaging stance by state policymakers."

He concluded that by excluding companies with union contracts from having to reveal their terms to the Labor Commissioner, the bill also may violate the Constitution.

“Unfortunately, AB 1855 singles out only non-union firms for this hostility,” he said. “This fact calls into question Constitutional issues of equal protection.”

The bill has passed the California Assembly and moves to the senate for debate.

Related Editorial:

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IWLA Seeks Changes to New Labor Practices

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