On September 22, 2021, Governor Newsom signed AB 701 into law. Aimed at the use of quotas in distribution centers, AB 701 will go into effect on January 1, 2022. The new law, which was originally drafted to curtail the practices of Amazon, may potentially apply to many employers across a range of industries involved with warehousing and distribution.
The bill, among other things, prohibits employers from requiring quotas or monitoring systems that prevent compliance with meal or rest periods, use of bathroom facilities, or occupational health and safety laws. Furthermore, the time spent by an employee to comply with occupational health and safety laws must be considered as “on task” and productive for purposes of any quota.
The bill applies broadly to “warehouse distribution centers” that are primarily engaged in operating merchandise warehousing and storage facilities, that sell durable and/or nondurable goods to other businesses, or that are primarily engaged in selling merchandising using non-store means, such as through the internet or via catalogs.
In order for the bill to apply to a qualifying warehouse or distribution center, the company must employ 100 or more employees at a single warehouse center, or 1,000 or more employees at one or more distribution centers in California. The employee count must also include workers who are provided through third parties, such as staffing agencies.
Under the bill, qualifying employers must provide to each employee upon hiring, or within 30 days of the effective date of the law, a written description of each quota to which the employee is subject that includes: the quantified number of tasks to be performed, materials to be produced or handled within the defined time period, and any potential adverse employment action that could result from the failure to meet the quota.
The bill provides employees who believe that the quota violated their right to meal or rest periods or any occupational health safety laws, the right to request a written description of each quota that applied to them over the past 90 days. Employers must provide this information within 21 days of the date of the request. The bill presumes retaliation if the employee is subject to adverse action within 90 days of a request for the written quota or complaint to their employer or a government agency about an alleged violation of the bill. In addition, the law provides for plaintiffs to include violations of the bill in PAGA actions.
Employers, including staffing agencies, must evaluate whether their facilities would fall under the new obligations of AB 701. If so, if there are any quotas being used, your company must first evaluate it to ensure that it does not run afoul of the new obligations, and be prepared to provide a written description of the quotas to employees by January 31, 2022. If you have any questions about the obligations under AB 701 please contact Nicholas Roxborough at (818) 992-9999, ext. 222, Drew Pomerance at ext. 212, Michael Adreani, at ext. 234, Marina Vitek, at ext. 236, or Trevor Witt, at ext. 224.