By Dennis Albiani and Faith Borges
Late in the evening on Sunday September 30, stakeholders, advocates, and constituents received the last email notification from Governor Jerry Brown providing a legislative update on the final bills to be signed or vetoed. In his four-term tenure as governor, he has signed over 20,000 bills into law, including 1,016 this year. This year he also vetoed 16.5 percent of bills that made it to his desk, which is consistent with similar percentages in the 15 other signing periods. Final outcomes for several bills that were a high priority for the Family Business Association at the end of this session are outlined below.
In the final days of session Senator Galgiani introduced SCA 24, which would have limited the tax exclusion for the purchase or transfer of a principal residence from parents or grandparents to their children and would require the property to continue as a principal residence of the transferee. The measure would also have deleted the exemption on the first $1 million of the full cash value of all other real property (often a family business or farm), thereby requiring these properties to be reassessed upon a purchase or transfer.
Families would have been forced to dissolve companies, lay off employees, or sell land in order to pay the substantial tax obligation under required by this bill, supplanting working capital to create jobs and allow business expansion. FBA immediately met with the senator, submitted our oppose letter and alerted the coalition we led last year on the estate tax. While FBA advocates were successful in holding this measure, we expect related efforts to continue next year under the new administration.
Employers also escaped a few burdensome bills due to the Governor’s veto pen. Brown vetoed AB 1870 (Reyes) that would have extended the statute of limitations from one year to three years for all discrimination, harassment, and retaliation claims filed with the Department of Fair Employment and Housing. Brown also vetoed AB 3080 (Gonzalez-Fletcher), which would have prohibited arbitration and settlement agreements for labor and employment claims, creating significant litigation exposure and expense for employers and significantly delaying the resolution of disputes for employees. Both authors have vowed to reintroduce these efforts after the next administration take office.
Of the bills signed into law, employers should be particularly aware of two.
SB 1300 (Jackson) bans nondisclosure agreements in sexual harassment and assault disputes, a practice that was publicly scrutinized as tools of predator filmmaker Harvey Weinstein. And SB 1343 (Mitchell) reduces the sexual harassment training requirement threshold from employers with 50 or more employees to employers with just five or more employees, includes non-supervisorial employees in the training, and requires that the Department of Fair Employment and Housing develop an online training course and make it available on the Department’s Web site. The bill requires that all employers must provide training by January 1, 2020.
In his 50-year career in politics, employers have come to know what to expect from Governor Brown, from the good (stabilizing the budget and workers compensation rates), to the bad (increasing labor and energy costs). We wish Jerry well as he rides off into the Colusa sunset — it’s truly the end of an era. Here’s hoping the next administration will be a golden era for California and not an error. In either instance, FBA will remain at the Capitol to serve you. Thank you for your membership.
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