The Beverly Hills Chamber of Commerce announced last week that it opposes Assembly Bill 5 authored by Assemblywoman Lorena Gonzalez-Fletcher and Assemblyman Ash Kalra because it will limit employers’ ability to “effectively manage their workforce, subject employers to costly fines and multiple avenues of litigation,” and will limit job opportunities for unemployed workers.

Existing law creates the Division of Labor Standards Enforcement in the Department of Industrial Relations for the purpose of enforcing labor laws, and establishes eight hours as a day’s work and a 40-hour workweek. Current law also requires payment of prescribed overtime compensation for additional hours worked.

AB 5 would create the Opportunity to Work Act and require an employer with 10 or more employees to offer additional hours of work to an existing nonexempt employee before hiring an additional employee or subcontractor. AB 5 would require an employer to post a notice of employee rights, as specified, and would require the employer to maintain certain documentation.

The bill would authorize an employee to file a complaint for violation of these provisions with the Division of Labor Standards Enforcement, and to, in the alternative, bring a civil action for remedies under the act. The bill would require the Division of Labor Standards Enforcement to enforce these provisions and would authorize the division to, among other things, adopt rules and regulations. The bill would make a violation of these provisions punishable by a civil penalty.

The Beverly Hills Chamber of Commerce said the bill takes away the flexibility of businesses to manage their work in the way they see fit, and that the bill’s ambiguity is a “trap for the unwary” and will lead to unnecessary and costly litigation.

For example, if an employer believes it is in the best interests of the company to hire a new employee rather than utilize existing staff, that should be their decision, the chamber said.

“This bill represents yet another layer of regulation that is strangling business in this state,” the Chamber added in a statement.

AB 5 was approved by the Assembly Labor and Employment Committee and next will be considered by the Assembly Appropriations Committee, of which Assemblyman Richard Bloom is a member.

To move forward this year, the bill must pass out of the Assembly Appropriations Committee by Friday, May 26th.