Newsom Vetoes Bill Protecting California Workers During Mass Layoffs

Newsom Vetoes Bill Protecting California Workers During Mass Layoffs

AB 1356 would have expanded and strengthened protections and notice requirements for employees impacted by recent mass layoffs

Sacramento – Governor Newsom has vetoed a bill that would have strengthened mass layoff protections for over 7 million California workers, including almost 2 million contract workers. AB 1356, authored by Matt Haney (D-San Francisco), would have been the biggest expansion of the California Worker Adjustment and Retraining Notification (WARN) Act in recent decades. Starting on January 1, 2024 workers, including contract workers, would have been entitled to 75 days notice before a mass layoff. Employers would have also been prohibited from pressuring employees from signing away their litigation rights in exchange for their legally guaranteed mass layoff protections. 

The bill was in response to the mass layoffs that started in 2022, which resulted in the tech industry eliminating more than 200,000 jobs. Twitter notably laid off 4,400 of their 5,500 contract workers without notice or severance. Contract workers often do the same work as their directly-employed peers while making less money, receiving fewer benefits, and with less career mobility. The number of contract workers in the tech industry, while already large, is expected to grow in the next few years with contract workers training, developing, and monitoring new models like ChatGPT and generative AI.

“This year’s mass layoffs exposed a real need to update the laws protecting workers from mass layoffs that are not their fault,” said Haney. “Contract workers are now a huge part of the workforce in an overwhelming number of industries. If we want to keep our work force here in California then we have to make sure that all workers — from the software engineers to the janitors and cafeteria workers — get sufficient notice when a company is downsizing instead of kicking them out overnight.”

Newsom’s veto message cited concerns around the inclusion of contract workers posing potential liability on client employers who may not know if their decisions are causing job loss for the employees of their subcontractors. He also expressed concerns around the revised definition of covered establishments in the bill which could subject chain businesses to WARN Act requirements.

“We are disappointed that the Protect Laid Off Workers Act was not signed into law. Extending basic protections like advance notice in the event of a mass layoff is a common sense policy for workers and has been in place nationally and in California for decades. Extending these protections to contract workers—who do critical work for some of the most profitable companies in the world and are already twice as likely to be paid poverty wages compared to workers in any other industry—is a straightforward change that addresses the way that work happens today. We are disappointed but we are not deterred. Thousands of workers lost their jobs over the last year, due to no fault of their own, and we will keep fighting alongside them to ensure that they have the same protections and rights as all workers in our state.” said Samantha Gordon, Chief Program officer at TechEquity Collaborative.

AB 1356 is sponsored by TechEquity Collaborative, California Labor Federation, National Employment Law Project, Temp Worker Justice, National Legal Advocacy Network, CA Employment Lawyers Association and Alphabet Workers Union-CWA. 

“The tech industry comes here to California because of our highly skilled workforce,” said Haney. “That’s a resource that we have to protect if we want to stay competitive. Making sure that workers have enough advanced warning to look for work here in California after a layoff is just a win-win for everyone. I plan to work closely with the Governor to address his concerns when I introduce this bill again next year.”

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