A law that goes into effect next year that will greatly expand the California Division of Occupational Safety and Health’s ability to impose fines for pandemic-related offenses is a wake-up call for businesses with multiple locations, legal experts say.
There are “a lot of concerns from employers,” said Ilana Morady, counsel in the Labor & Employment Practice in the San Francisco office of Seyfarth Shaw LLP. “The new law dramatically increases Cal/OSHA’s enforcement powers” to look at workplace infections.
Despite outcry from the business community, California Gov. Gavin Newsom signed S.B. 606 on Sept. 27. Ms. Morady said proponents of the law “leveraged the COVID-19 pandemic — you might say exploited it.”
The law, which goes into effect Jan. 1, 2022, establishes two new categories of workplace safety violations: enterprise-wide and egregious.
Specifically, it creates a rebuttable presumption that a violation committed by an employer that has multiple worksites is “enterprise-wide” if the employer has a written policy or procedure that violates existing workplace safety provisions, or the division has evidence of the same violation committed by an employer at more than one of its worksites.
Under the second new classification of workplace violation, Cal/OSHA will have the authority to issue a citation for an “egregious” violation. The law defines as egregious a violation that takes place under seven conditions, including that the employer “intentionally, through conscious, voluntary action or inaction, made no reasonable effort to eliminate the known violation” and the violation “resulted in worker fatalities, a worksite catastrophe, or a large number of injuries or illnesses.”
The law defines “catastrophe” as “inpatient hospitalization, regardless of duration, of three or more employees resulting from an injury, illness, or exposure caused by a workplace hazard or condition.”
The California Chamber of Commerce said in a statement endorsed by more than three dozen business organizations in the state that S.B. 606 provides for “massive changes to the existing Cal/OSHA precedent and enforcement practices by introducing uncertainty, vagueness, and duplication into an already complex regulatory environment” and that the law will slow business recovery.
Meanwhile, unions and workplace safety advocates praised the law.
“We’ve seen just how rapidly COVID-19 infections spread in California’s workplaces and how workers paid the price for these outbreaks with their health and lives,” said Andrea Zinder, president of the United Food and Commercial Workers Union Western States Council and UFCW Local 324, in a statement issued by the office of bill sponsor Sen. Lena Gonzalez. “As the pandemic continues to put workers at risk with the rise of the delta variant, it is imperative that California continue to prioritize workplace safety.”
Legal experts said the new law’s implications are as uncertain as the virus itself.
“The issues that jump out at me are the ones that are pandemic-related,” said Sean Paisan, a Cal/OSHA defense attorney with Jackson Lewis P.C. in Irvine, California, adding that under the definition of an egregious violation a business will have experienced a catastrophe if “three or more employees are hospitalized for illness.”
“The problem here is the definition; three or more illnesses has occurred for every employer during the pandemic,” he said. “There is a big problem with the way they have structured what an egregious violation is.”
The bill, with some exceptions, requires “each instance of an employee exposed to that violation to be considered a separate violation for purposes of the issuance of fines and penalties,” Mr. Paisan said. For a large company, “these numbers can add up pretty quickly,” he said.
Add into the mix an employer with multiple locations and S.B. 606 could prove costly, Ms. Morady said, adding that employers should take steps to prepare for the law taking effect.
“Any employers with multiple locations, the first thing to do is to dot your i’s and cross your t’s and ensure that you don’t have compliance issues,” she said. “You always want to do that but that risk of liability is now greatly expanded.”
This article was first published in Business Insurance.