McLeod Witham

Legislative Update: The "Opportunity To Work" Act


California seeks to make it even harder to hire new employees

Assembly Bill 5, known as the “Opportunity to Work Act” recently cleared the California Assembly Committee on Labor and Employment by a 5 to 2 vote.

The OWA would require employers with as few as 10 employees to “offer additional hours of work to an existing non-exempt employee before hiring an additional employee or subcontractor.”  The employer is required to offer the additional hours of work to any employee who – in its “reasonable judgment” – has the skills and experience to perform the work even if the employee has previously informed the employer he or she does not want additional hours or wishes to remain part time.  In addition, the OWA does not specify the methodology an employer must use when offering the additional hours of work among existing employees or what happens when more than one employee expresses a desire for the additional hours.  The OWA does state that the employer must use a “transparent and nondiscriminatory process” to distribute the additional hours of work, although those terms are not defined.    

The OWA would also allow an employee (defined as a nonexempt employee within the State of California), to file a complaint with the Division of Labor Standards Enforcement or bring a civil action for violation of the statute.  In case you were wondering, the OWA provides that any violation “shall be punished by a civil penalty” and that the court “may award reasonable attorney’s fees” if the employee prevails.  Not surprisingly, the employer is not entitled to its attorney’s fees in the event it establishes it did not violate the OWA when it hired an additional worker. 

Finally, the OWA requires employers to maintain documentation regarding the decision to hire any new employee or subcontractor.  Specifically, for any new hire, the employer must retain documentation that “the employer offered additional hours of work to existing employees prior to hiring” the new employee/subcontractor.  The OWA also requires employers to retain the work schedules of all employees although it does not specify how long the employer is to retain such records. 

The OWA now advances to Assembly Appropriations where it will likely move closer to ultimate passage by the State Assembly.