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California's AB 1127:The "Be an Employer, Pay a Massive Penalty" Act

California employers will now be subject to much greater civil penalties and new huge criminal penalties for violations of Cal/OSHA regulations.

On October 6, 1999, Governor Gray Davis signed AB 1127 into law. Effective January 1, 2000, AB 1127 amends Cal/OSHA (the California Occupational Safety and Health Act) to add the most massive civil and criminal penalties ever found under an occupational safety and health law. AB 1127 also makes other substantial and troubling changes to Cal/OSHA. While AB 1127 was not given an official name, we believe that the concept of truth in advertising suggests that its appropriate name should be the "Be an Employer, Pay a Massive Penalty" Act. The highlights (or more aptly, the lowlights) of this new law are as follows:

  • A huge increase in criminal penalties under Cal/OSHA. Individual managers and supervisors may now be fined up to $250,000 and be imprisoned for up to four years. Criminal fines range up to a maximum of $3.5 million in fines for corporations and limited liability companies. Labor Code ' 6423 and 6425.
  • An increase in the civil penalty for a serious violation from a maximum of $7,000 to $25,000 for each violation. Labor Code ' 6428.
  • An expansion of the definition of what constitutes a "serious" violation. Labor Code ' 6432(a).
  • An apparent reversal of the burden of proof on serious violations so that employers will be deemed to have knowledge of the violation unless they prove that they did not know, and with reasonable diligence could not know, of the existence of the violation. Labor Code ' 6432(b).
  • An increase from a maximum of $7,000 to $15,000 for each day an employer fails to meet an abatement requirement. Labor Code ' 6430(a).
  • A new criminal penalty for employers who submit a signed statement of abatement, but who are found not to have actually abated the violation. An individual who is found guilty may be punished by imprisonment for up to a year or a fine of up to $30,000. If the defendant is a corporation or limited liability company, the fine can be up to $300,000. Labor Code ' 6430(c).
  • AB 1127 ends the long standing prohibition of the use of Cal/OSHA and Cal/OSHA regulations in personal injury civil litigation. Labor Code ' 6304.5.
  • A violation of Cal/OSHA or Cal/OSHA regulations will now establish a presumption of failure to exercise due care. Labor Code ' 6304.5 and Evidence Code ' 669.
  • A statutory codification, for the very first time, of a procedure for multi-employer citations. Labor Code ' 6400(b).
  • AB 1127 now defines the term "willfully" to simply mean a willingness to commit or not commit an act. The term "willfully" for Cal/OSHA purposes will not require any intent to violate law or to injure someone. Labor Code ' 6425(e).
  • Extension from 30 days to 6 months of the period of time in which a complaint of discrimination may be filed. Labor Code ' 98.7.
  • Expansion of the definition of "employee representative" for purposes of filing a complaint with Cal/OSHA. Labor Code ' 6309.
  • Cal/OSHA civil penalties can now be assessed against government entities. Labor Code ' 6434.

What does this mean for future Cal/OSHA enforcement?

Proponents of the bill argue that it is designed only to punish "bad actors" and not the vast majority of employers. However, there is no "bad actor limita-tion" provision in AB 1127 and the new penalty provisions can apply to every employer in the State of California.

Proponents of the bill also argue that it is designed to improve safety and health. However, proponents of the bill never provided any evidence that increasing penalties or allowing more lawsuits would actually reduce injuries or illnesses in the workplace. What is certain is that employers in California will now face far greater penalties for alleged safety and health violations than employers any-where else in the nation. Undoubtedly, this will lead to much greater litigation of Cal/OSHA citations.

What should California employers do now?

We strongly recommend that employers in California now conduct a careful review of their safety and health programs to ensure full compliance with Cal/OSHA. AB 1127 will become effective January 1, 2000, and the new penalties can be assessed as of that date. Employers should consult with their legal counsel to determine if, and how, such an audit may be conducted pur-suant to the attorney-client privilege and/or work product doctrine.

ASAP TM is published by Littler Mendelson in order to review the latest developments in employment law. ASAP TM is designed to provide accurate and informative information and should not be considered legal advice.

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