A new California law, effective January 1, 2022, closely regulates productivity quotas for warehouse distribution centers.  AB 701 applies to employers of 100 or more employees at a single warehouse distribution center or 1,000 or more employees at one or more warehouse distribution centers in the state and purports to address warehouse safety concerns by imposing the following:

  • Requires employers to provide a written description of each quota to which an employee is subject and any potential adverse employment action that could result from failure to meet the quota;
  • Prohibits employers from requiring that workers meet a quota that prevents them from taking meal or rest breaks or complying with other health and safety laws;
  • Prohibits adverse action against an employee for failure to meet a quota that has not been disclosed or does not allow a worker to comply with meal and rest break or occupational health and safety laws;
  • Allows a current or former employee (who believes their rights have been violated due to a quota) to request one written description of each quota to which the employee is subject and a copy of the most recent 90 days of the employee’s own personal work speed data. An employer must abide by this request and there shall be a rebuttable presumption of unlawful retaliation if an employer in any manner discriminates, retaliates, or takes any adverse action against any employee within 90 days of the employee requesting quota information or making a complaint related to a quota;
  • Authorizes a current or former employee to bring an action for injunctive relief to obtain compliance with specified requirements, and that employee may, upon prevailing in the action, recover costs and reasonable attorney’s fees in that action;
  • Requires the Labor Commissioner to enforce these provisions and the Division of Occupational Safety and Health or the Division of Workers’ Compensation to notify the Commissioner if a particular worksite or employer is found to have an annual employee injury rate of at least 1.5 times higher than the warehousing industry’s average annual injury rate.

The California Chamber of Commerce initially placed AB 701 on its “job killer” list.  Although it was removed from this list, opponents warned that it would adversely impact small businesses, consumers and farmers by increasing costs for everyday goods, creating disruptions across vital supply chains and making it more challenging to keep goods on shelves.  This law also risks encouraging frivolous lawsuits by creating new causes of action under the Private Attorneys General Act of 2004 (PAGA).

The author of this new law, Assemblywoman Lorena Gonzalez (D-San Diego), is the same legislator who brought us Assembly Bill 5 (which largely outlawed independent contractors in California).  Assemblywoman Gonzalez is the former CEO and Secretary-Treasurer of the San Diego and Imperial Counties Labor Council, AFL-CIO.  She received approximately 40 percent of all of her campaign contributions last year from organized labor.

We will continue to monitor this new law and provide any relevant updates.