California’s AB 701 Amends section 138.7 and adds a new part to the Labor Code to specifically address Warehouse Distribution Centers.

Which Employers Will be Affected by the New Law?

Any company that employs (directly or through third parties and agencies): 

• 100 or more nonexempt warehouse distribution workers at a single warehouse distribution center; OR 
• 1,000 or more employees at one or more warehouse distribution centers in the state of California.

New Notice Requirement

Beginning January 1, 2022, Certain employers will need to provide non-exempt employees with a written description of each quota the employee is subject to. 

What must be in this notice?

• The quantified number of tasks to be performed by the employee, or materials to be produced or handled.
• The time period tasks must be performed or materials must be produced in.
• The adverse employment action that could result if the employee does not meet the quota.

When must subject employers give the notice to warehouse distribution center employees?

• At the time of hire; or
• By January 31, 2022. 

New Employee Protections for Failure to Meet Quotas 

The new law provides that an employee is not required to meet a quota that prevents compliance with meal or rest periods, use of bathroom facilities, or occupational health and safety laws, as specified. 

Employers are prohibited from taking adverse action against an employee who fails to meet a quota that was not disclosed or if the employee fails to meet a quota that does not allow a worker to comply with meal or rest periods, to use the restroom, or to comply with occupational health and safety laws. 

Right to Work Speed Data:

• The new law gives current and former employee who believe that meeting a quota caused a violation of their right to a meal or rest period or required them to violate any occupational health and safety law or standard, the right to request a written description of each quota to which the employee is subject and a copy of the employee’s own personal work speed data.
• Employers must provide work speed data for the last 90 days prior to an employee’s termination.
• A former employee is limited to one request 

An employer that does not monitor this data has no obligation to provide it. However, if an employer does monitor this data, the new law requires that any time an employee spends on actions taken to comply with occupational health and safety laws shall be considered time on task and productive time for purposes of any quota or monitoring system.

Employee’s Right to Sue

• The new law allows a current or former employee to bring an action for injunctive relief to obtain compliance with specified requirements, and may, upon prevailing in the action, recover costs and reasonable attorney’s fees in that action.

Reporting of Injury Rates to the Labor Commissioner Could Lead to Investigations

• The Division of Occupational Safety and Health or the Division of Workers’ Compensation must notify the labor 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 labor commissioner will then determine whether an investigation is appropriate.

PRACTICAL TIPS:

The new law places significant emphasis on quotas that prevent workers from taking the meal and rest breaks to which they are entitled, that prevent them from using the restroom, and/or that prevent them from complying with occupational health and safety laws. This is a signal for employers to pay close attention and analyze the quotas that are put in place. Data analysis is appropriate around the following questions:

• Is the quota achievable given that employees are entitled to meal and rest breaks and additional time to use the restroom, including time to travel to and from the restroom? 
• Is the quota achievable given that employees must spend some of their work hours ensuring compliance with occupational health and safety laws? 
• Is the quota achievable without creating an increased risk of injury to employees?

Additionally, employers who keep speed data, must review their system to ensure that time spent on actions taken by employees to ensure compliance with health and safety laws are considered productive time for quota purposes.

Lastly, employers who keep work speed data must keep data for at least 90 days to ensure the ability to comply with any requests for the data from employees and/or former employees. Furthermore, employers should keep the data in a format that allows for ease of retrieval and collection, including the ability to easily extract data for each employee. 

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