After Democrat Gray Davis was recalled in 2003 and replaced by Republican Arnold Schwarzenegger, California employers enjoyed an eight-year “reprieve” (relatively speaking) from new state-level employment regulation. Gov. Schwarzenegger frequently wielded his veto pen. With the election of Jerry Brown as governor and both executive and legislative branches returned to Democratic hands, however, California employers should brace themselves in the coming year or two for a flurry of new laws as long-unaddressed demands by labor and other progressives are answered.
In the meantime, on October 8, 2010, new regulations of the California Division of Workers’ Compensation took effect. They require California employers, among other things, to: (1) post a new “Notice to Employees — Injuries Caused by Work” poster (also known as a DWC 7 poster); (2) provide an updated “Your Rights to Workers’ Compensation Benefits” pamphlet to new workers”; and (3) use an updated Workers’ Compensation Claim Form (DWC 1 form) and “Notice of Potential Eligibility” form that contain new information regarding the existence and use of so-called “medical provider networkers” (MPNs). There also have been a variety of changes to the regulations governing notifications that must be provided to employees regarding the institution of — or changes to — MPNs. Careful attention to these new regulations is important, as failure to comply with them can result in fines of up to $7,000. More detailed information about MPNs and the new regulations is available on the Division of Workers’ Compensation Web site.
One bill that Gov. Schwarzenegger did not veto this year was SB 657, the California Transparency in Supply Chains Act. Effective January 1, 2012, this new bill will require every retailer and manufacturer doing business in California with more than $100 million in gross receipts to disclose its efforts to eradicate slavery and human trafficking from its supply chain. The disclosure will have to be posted on the company’s Web site, if it maintains one, or if it does not, provided to consumers in writing upon request. The disclosure will have to include, among other things, information describing the extent to which the company: (1) engages in verification of supply chains to address human trafficking and slavery and uses third parties in that process; (2) conducts independent, unannounced audits of suppliers to ensure compliance with company standards on trafficking and slavery; (3) requires direct suppliers to certify that materials incorporated in their products comply with the laws regarding slavery and human trafficking of the country or countries in which they do business; (4) maintains internal accountability standards for employees and contractors failing to meet company standards on slavery and trafficking; and (5) provides both managerial and non-managerial employees training on mitigating risks of slavery and trafficking in supply chains.
California employers will have some lead time to comply with this new law, as it does not go into effect until 2012. With the number and popularity of false advertising and “unfair competition” class actions increasing year after year, California employers should take the time and effort to make sure they comply in a timely fashion.