New Legislation Affecting the Hospitality Industry

At the end of another legislative year, several new measures passed the California Legislature and will affect businesses across the state. Some have particular impact on the hotel and lodging industry and affect reporting requirements around pay, the deadline for supplemental paid sick leave, and the operating conditions and wages at “fast food” restaurants.

Here is CHLA’s summary of three of the most significant bills from the 2022 session:

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Senate Bill 1162—Pay Disclosures

This law has three major elements:

  • It expands state employment data reporting requirements by requiring a private employer with 100 or more employees hired through labor contractors to submit a separate pay data report to the California Civil Rights Department covering the employees hired through labor contractors for the prior calendar year. The employer also must report the ownership names of all the labor contractors used to supply employees.
  • It expands in-house employee data reporting by requiring businesses with 100 or more employees to include in their annual state reports the mean and median hourly rates for each job category, subdivided by race, ethnicity, and sex.
  • Finally, businesses with 15 or more employees are required to make position pay-scale data available to current employees and to post the information alongside any job posting.

SB 1162 also authorizes the State Labor Commissioner to investigate reports of non-compliance and to order employers to pay fines up to $10,000 per violation. No penalty will be issued for the first violation if the employer corrects the violation.

The bill previously required the California Civil Rights Department to make the information publicly available, which would have been used as a basis for employment discrimination litigation. Additionally, the bill previously included significantly more onerous reporting requirements, record-keeping requirements, and liability presumptions. Both these provisions were removed from the final bill because of industry opposition, including from CHLA.

Assembly Bill 257—Fast Food Accountability and Standards Recovery Act

This law, which garnered considerable coverage in the media, creates a 10-member “Fast Food Council” that will be appointed by the Governor, the Assembly Speaker, and the Senate Rules Committee. It will be comprised of representatives from the fast-food industry, fast food employees, employee advocates, and two representatives from state agencies. It will have the power to regulate operating and wage conditions in most fast-food restaurants across the state (those that have 100 or more locations nationally), and create minimum standards for pay and other working conditions, such as maximum working hours. It also permits the establishment of local Fast Food Councils in large cities (over 200,000 population).

The Council will be created only after at least 10,000 fast-food workers in the state sign a petition approving the Council. The fast-food industry and restaurant advocates have filed a petition for a voter referendum and are in the signature collection phase. If sufficient signatures are collected, the referendum will likely appear on the ballot in 2024. While no official language has been submitted or circulated, there are some rumors that a similar measure could be introduced in the near future with a focus on the hospitality industry.

Assembly Bill 152—Supplemental Paid Sick Leave Extension

This law, approved by Governor Gavin Newsom in September, extends the Supplemental Paid Sick Leave (SPSL) deadline from September 30, 2022 to December 31, 2022. This is only an extension of the previous deadline; it does not increase the amount of SPSL an employee is entitled to receive.

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