CRA Spring Newsletter II: Budget, Legislative, Regulatory and Public Affairs Updates

CRA Spring Newsletter

May 21, 2021 | CRA Spring Newsletter: Budget, Legislative, Regulatory and Public Affairs Updates

Message from the President

So much to update on in California! It has been a very busy few weeks working with the Governor’s office on re-opening, watching CalSOHA and expected new guidelines and this week both the Assembly and Senate had hearings on bills referred to the Suspense file. More on that in the body of the newsletter, but because of the hard work of the CRA team we were able to get our Assembly Bill 331 which continues the funding for the Organizations Retail Crime Taskforce to the Assembly floor and stop Senate Bill 289 on battery take back from moving forward. We still have a laundry list of bills to watch over the next few months, including AB 701 focusing on warehouses and distribution centers, but today we celebrate a few small victories!

June 15, 2021 is the big day in California! That is when both the mask mandate and physical distancing will no longer be in effect in California. Today Dr. Ghaly announced “Beyond the Blueprint”, which outlines what happens when the state fully re-opens. As of that date, the only restrictions will be on indoor events over 5000 and outdoor events over 10,000. I do have to caution; counties can be MORE restrictive than the state and they have made it very clear that employers must comply with CalOSHA emergency orders. CalOSHA was set to vote on May 20^th on new regulations but have postponed to June 3^rd. CRA is actively monitoring the situation and as soon as we see the revised regulations we will send to our members. I am anticipating more regulations around vaccine and mask wearing in the workplace.

Just this week, in another bit of good news – the Speaker of the Assembly and the President Pro Tem of the Senate announced that each legislator will be limited to moving 12 bills to the other house. We will find out in the next few weeks which priority bills will be moving forward and hope a few of the bills we are tracking, that we are opposed to, do not make the list. In addition, we are waiting for a decision from legislative leadership on whether they will re-open the State Capitol to the public. While we do not anticipate the Capitol opening prior to the July Summer recess, we are hopeful the Capitol will be open for the final few weeks of the session when the Legislature reconvenes on August 15^th.

As we anticipate the legislative and congressional redistricting process in California, it was announced that California will LOSE a Congressional seat. Odds on favorite is the loss will be in Southern California. As a reminder, California’s redistricting process is done by an independent appointed body. In addition, the 2022 race for State Attorney General is already heating up. As you recall, former AG Xavier Beccera was appointed HHS Secretary in the Biden Administration, which allowed Governor Newsom to appoint his successor, former Assemblymember Rob Bonta. Per the California State Constitution, he will need to run for election in 2022. Current County District Attorney Anne Marie Schubert has announced she will run against Bonta. Schubert is known for her investigation, arrest and conviction of the Golden State Killer and has been very engaged with CRA on the issue of Organized Retail Crime. As the race heats up, CRA will be inviting both candidates to engage with CRA members who are part of the CRA Political Action Committee. Not a member of the PAC? Send me an email so we can get you engaged today!

This month Governor Newsom released his Budget May Revise, which kicks the California budget process into high gear. While there has been some speculation on the numbers he used and the amount of surplus he reported, it is clear California is in good financial shape. CRA, in collaboration with other business associations, is advocating the state focus on paying down the Unemployment Insurance Fund and take the burden off business.

Now our focus turns to June 15^th and seeing California move past the pandemic. We continue to monitor and I am sure we will encounter a few bumps in the road. As California begins the process of fulling re-opening and moving “Beyond the Blueprint”, please do not hesitate to reach out to me directly if you have any questions or need any assistance from our end.

Rachel

Legislative and Political Updates

Warehouse Production Rules & Limits Update

Assembly Bill 701 adds new restrictions on warehouse employers, new employee rights and other onerous mandates that would significantly impact warehouse distribution center (DC) operations. (NAICS Codes: 493110, 423, 424, and 454110)

Not surprisingly, Assembly Bill 701 (Gonzalez) passed the Assembly Appropriations Committee and now moves to the Assembly Floor. As amended, this bill now:

Requires Cal/OSHA to adopt a duplicative regulatory standard for warehouse musculoskeletal injuries and consider as part of the new standard factors related to such injuries including work pacing, work activity levels, and repetitive motion.
Prohibits employers from taking adverse employment actions against employees based upon performance quotas that do not account for “health and safety laws”.
Requires all employees to be given written notice of any performance “quotas” to which the employee may be subject.
Establishes an employee’s right to access the most recent three months of the employee’s “work speed data”.
Provides that any discrimination, retaliation, or adverse employment action taken against an employee who has exercised any of the above employee rights within the previous 90 days is rebuttably presumed to be unlawful retaliation.
Creates a private right of action for employees for any violation of the above, in addition to Attorney General, Cal/OSHA, and local enforcement.

As such, the bill now creates greater uncertainty with regard to employee productivity at DC’s and whether there might be regulatory limits on such. It also creates vague standards over which DC’s can be sued and essentially creates bullet-proof job protection for employees as long as they “exercise” a right under this part every 90 days, such as requesting their personal work-speed data.

CRA will continue to actively oppose this measure in the Assembly, but we expect that it will pass the Assembly and set up a battle in the Senate.

Please contact Steve McCarthy with any comments or questions.

CRA Members Meet with State Controller Betty Yee on

California's Future of Workforce

CRA Executive Committee members met with State Controller Betty Yee and her senior staff to discuss retailer concerns surrounding AB 1192, the Future of Work Commission's planned employment data collection practices. Retail is a critical industry for job creation and often serves as the entry point for first time job seekers. CRA does not have a formal position on the bill yet, but important points in the discussion included:

Bill is not intended to be punitive and instead meant to showcase, incentivize and model sectors promoting job quality and employment in CA
Industries cannot be compared directly. Retail is very different from other sectors in terms of turnover rates.
Hiring, promotion and other employment practices are proprietary and should not be publicly posted opening up businesses for frivolous lawsuits and shake down letters with data taken out of context
Retailers investments in the job economy need to be included in the data collection metrics

If you have any feedback or comments on the bill please reach out and let us know.

California Connectivity Act

CRA submitted a letter of support for Senator Bill Dodd's SB 556, which will bring California into conformance with existing federal and state laws seeking to accelerate the deployment of wireless broadband network infrastructure throughout California.

Visit CRA's member portal to access the letter.

Lithium-on Batteries Recycling- SB 289- Dead for the Year

SB 289 (Newman) on lithium-ion batteries was held in the Senate Appropriations Committee today. The bill is officially dead for this year.

The CRA team expects to see further legislation on this issue in future years and we will also continue to push for passage of SB 244 (Archuleta), which will develop a local consumer education program for battery disposal.

Thanks to our members for their help and input in defeating this measure!

CRA Master Bill List

Click here to view CRA's latest list of bills the association team is tracking and engaging on.

Visit CRA's member portal to access the latest bill tracking list and legislative letters and contact Steve or Ryan with questions and feedback.

Gender Neutral Kids' Departments Update

CRA has been in discussions with Asm. Low’s office regarding his AB 1084 for more than two months. For the last several weeks we have had an understanding with the author’s office that CRA would oppose the bill if the reference to clothing was not removed prior to the second policy hearing. Unfortunately the amendment has not been taken.

Accordingly, we are now taking a position of Oppose Unless Amended. CRA was joined by a coalition of business groups in this effort including the California Business Properties Association, International Council of Shopping Centers and the Orange County Business Council.

This bill passed the Assembly Appropriations Committee and now moves to the Assembly Floor. We will continue to oppose AB 1084 and engage with Low’s office on amendments.

Visit CRA's member portal to view previous letters submitted on this legislation.

Broadband Support

CRA sent letters of support for SB 378 (Gonzalez) and & AB 537 (Quirk) addressing broadband support. SB 378 requires that broadband be installed in the quickest, safest and most cost-effective way, so Californians can benefit from high- speed internet connectivity as soon as possible. AB 537 ensures Californians quickly benefit from high-speed internet projects by requiring local governments to approve or deny broadband permits within federally mandated timelines.

Visit CRA's member portal to access these letters.

AB 331 (Jones-Sawyer) - Organized Retail Crime

CRA-sponsored AB 331 (Jones-Sawyer), which extends for four and a half years the CHP’s ORC Task Force and the criminal statute on organized retail theft, passed the Assembly Appropriations Committee unanimously and now moves to the Assembly Floor.

Once the bill passes the Assembly our focus will turn to the Senate. CRA has also met twice with the Governor’s Office to request his support for this Urgency legislation.

Visit CRA's member portal to view previous letters submitted on this legislation including an updated letter sent to the Appropriations Committee.

Workers’ Compensation Liability

CRA sent a letter in opposition to Senator Cortese's SB 335, which fundamentally alters longstanding rules and timeframes for determining eligibility for workers’ compensation claims and moves California outside of the mainstream when compared to other states.

The bill substantially cuts the amount of time available to California employers to review whether claimed workplace injuries are, in fact, related to work. This is fundamentally unfair to employers, who deserve a fair opportunity to complete an investigation and make a thoughtful determination about the validity of a claimed injury. We are unaware of any data or studies showing that the existing rules and timeframes are unfair or have created any systemic problems for injured workers.

In contrast, these new deadlines will ultimately lead to additional denials because investigations cannot be completed and questions as to compensability are likely to remain at the expiration of the statutory timeframe.

Visit CRA's member portal to access the opposition letter.

Agriculture: olive oil: labeling

CRA sent a letter in opposition to AB 535 (Aguiar-Curry), which criminalizes the selling of olive oil with brand names containing geographical terms, including “California” and regional names such as “Yosemite” or “Sacramento.” Blending olive oil from a variety of locations is common industry practice, such as blending with an assortment of high-quality extra virgin olive oils (EVOO) from across the world or other quality oils to meet consumer and dietary preferences. This bill also establishes a concerning precedent for regulating businesses with geographic names and trademarks in other food and agriculture industries.

Read the letter here, also available on CRA's member portal.

Next Steps in Gubernatorial Recall Effort

Secretary of State Shirley Weber confirmed that the recall petition has more than enough signatures to trigger an election.

The threshold for running in a recall race is relatively low compared to a regular election, which means Californians could have dozens of candidates to choose from on the ballot.

Here's what happens next:

Notification and withdrawl period (40 days)
Estimating Costs (30 days)
Signature certification and election date confirmation (60-80 days from certification)
Recall election (November)

A recall ballot has two questions. The first question will ask the voter whether or not they want to recall Gavin Newsom. The second question will ask who should succeed Newsom if he is recalled.

The election will likely be conducted mostly by all-mail ballots, per SB 29, signed into law earlier this year which will automatically send California voters a ballot in the mail for 2021 elections, similar to the way in which the state conducted the 2020 election.

In order for Newsom to hold his seat, a simple majority of voters (at least 50% plus one) must vote against recalling him. If the majority of voters choose to recall him, the candidate with the most votes from question two will finish out Newsom’s term, which runs until early 2023.

CRA's VP of Public Policy Steve McCarthy also testified in opposition to the ISR during the day-long hearing.

Read CRA's media statement responding to the ISR passage here.

Visit CRA's member portal to view previous opposition letters CRA submitted to the District on this proposal.

CRA is working with our partners on next steps to continue to fight for our members’ best interests on this important and wide-reaching issue for retail and many other industries.

CRA's statement was picked up by KFI-AM 640 LA: South Coast AQMD Requires Warehouses To Curb Equipment Emissions.

CRA Testifies on Port Congestion and its Effects on CA's Supply Chain

CRA's VP of Public Policy Steve McCarthy testified before the State Department of Food and Agriculture Board relaying members' concerns around delays of three weeks or more in receiving goods and the ripple effects on the state's supply chain including increased consumer costs and reduced ability to meet demand. McCarthy also presented several potential solutions to resolve the problem.

The CRA team is very proud of the work retailers and our partners all along the supply chain have done during this pandemic. Collectively, we overcame numerous obstacles to ensure not only Californians, but the nation, had food, medications, toilet paper, supplies and other needed items. We need to continue to work together to ensure our goods market remains strong.

Predictive scheduling

CRA is working with a coalition to address key issues with a predictive scheduling ordinance proposed for the City of San Diego.

While predictive scheduling has been offered as the solution to income volatility, difficulties in implementation and punitive enforcement mechanisms often create unintended consequences. Increased administrative burdens and predictability pay requirements leave employers with less flexibility to accommodate employees changing scheduling needs, and increased employment costs reduce profitability margins, leading to a potential reduction in staffing altogether.

CRA submitted a letter to the author of the proposed ordinance, San Diego City Councilmember Raul Campillo, which included a white paper addressing gaps in the existing literature as it pertains to the applied effects of local predictive scheduling ordinances. The paper also offers considerations for the city to help local businesses meet the needs of their workforce.

Visit CRA's member portal to access the letter and white paper.

County of Los Angeles Paid Sick Leave

The LA County Board of Supervisors this week passed additional eight hours of paid sick leave for vaccinations. Specifically, the ordinance:

Applies to ALL businesses in unincorporated LA County
Requires four hours of paid leave per shot
Retroactive to January 1st
Sunsets on August 31st
Includes employees who have exhausted the 80 hrs of additional sick leave as required by SB 95 (Skinner).

Read Ordinance Here

CRA submitted a letter to the Board of Supervisors to ask the county to tap into the American Rescue Plan stimulus funds so businesses didn't have to foot additional costs. Unfortunately, the supervisors did not consider the amendment.

The City of Los Angeles is considering a similar motion still to be reviewed in the city's COVID-19 Recovery and Neighborhood Investment Committee. In addition to the eight hours of sick leave, the motion asks for additional time off if an employee becomes ill from the vaccination. The ordinance is still forthcoming.

CRA will continue to monitor this issue. Please do not hesitate to reach out should you have any questions.

CRA News and Activities

Californians for a Safe and Rapid Recovery Update

CRA’s President and CEO Rachel Michelin and the Family Business Association of California's Executive Director Robert Rivinius co-authored an op-ed in CalMatters, a premier statewide media outlet focused on CA politics, policies and regulations, focused on getting the need to get Californians back to work.

Michelin: “Local governments from Coachella to La to SF are pushing mandates that fail to recognize the progress we have made w/vaccinations & lowering our daily case rates. Instead, they are supporting premiumpay ordinances pushed by powerful special interests that will force store closures job losses and a higher cost of living for everyone. It is simply counterproductive and will slow our economic recovery.”

CRA Addresses San Francisco County Board of Supervisors on the County and City's Ballooning Organized Retail Crime Problem

CRA’s President and CEO Rachel Michelin spoke at a San Francisco Board of Supervisors Public Safety and Neighborhood Services Committee hearing that addressed commercial shoplifting in neighborhood small business and anchor stores. Impacted member companies Walgreens, CVS Pharmacy and Safeway also provided comments.

Michelin: “Leaders of ORC rings are funding trafficking, terrorism and other terrible things all over the world. We are working to extend funding for the ORC Task Force, funded in 2018, and now a national standard for ORC helping CHP and local law enforcement share information. ORC rings are targeting homeless and other vulnerable individuals to go into stores and steal so they can keep their hands clean from these crimes. We want to be partners with local jurisdictions to get these offenders, who have fallen prey to ORC rings, access to treatment programs and help stem theft. But we need to also stop these rings at the top."

SF Supervisor Ahsha Safai: "ORC has been out of control. People are scared to go in stores. We have to solve this.”

San Francisco Chronicle covered the hearing: 'Out of control': Organized crime drives S.F. shoplifting, closing 17 Walgreens in five years. Read the article here.

CRA Chamber and Small Business Outreach

CRA was invited to participate in a virtual panel discussion on COVID-19 recovery alongside LA County Supervisor Kathryn Barger and Mike Colonna, President & CEO of NORMS Restaurants. The "Policy on Tap" forum was hosted by the San Fernando Valley Chamber of Commerce and include the sharing of ideas surrounding what retail will look like post pandemic. The event is part of CRA's small retailer program.

Michelin: "It is very challenging right now to fill job positions. Retailers are offering well above minimum wage and supply chain, ports, logistics jobs going unfilled is starting to have major impacts on what consumers can access in stores. The second wave of the pandemic is still affecting our small businesses across CA and nationwide, which were operating with limited capacity or completely closed and now that everything is open they do not have the people to work the hours needed and they wind up not being to operate all over again. I am impressed by the resiliency of the retail and larger business community and small retailers in particular with new out of the box and innovative ideas to stay open taking shape and transforming the future of retail. The collaboration across industries developed relationships that will strengthen the business community and CA’s economic recovery into the future."

KPCC Air Talk Radio Host Larry Mantle Speaks with CRA’s President and CEO Rachel Michelin to Check In On The Retail Industry’s Recovery As SoCal Moves Into The Yellow Tier

Although retail stores have dealt with fewer drastic coronavirus-related closures than indoor restaurants, museums and other recreational businesses, the pandemic has still radically restructured the industry.

Michelin: “The supply chain has been a big issue. Our smaller retailers have had to shut their doors because of backups in our ports, logistics supply chain. This is affecting more than just CA- we are the gateway when it comes to the supply chain. We are watching the issue closely including the rise in gas prices and how that affects how quickly goods get on shelves and the cost of goods. We are focusing on recruitment for getting people to work in our ports and logistical systems and streamlining goods delivery to our stores and consumers.”

Listen Here

CRA Joins Spark Plug Podcast

CRA was invited to record an episode focused on the future of retail in a post pandemic world. The episode will be recorded on Tues. April 18, featuring CRA President and CEO Rachel Michelin, and will air at a future date to be announced on sparkplug.audio.

The upcoming podcast episode, sponsored by snowshowstamp.com, will focus on understanding what a retail association does in terms of policy directives and shaping the future for the 5^th largest economy in the world. Retail will be at the forefront of the recovery in CA with pharmacies providing vaccinations throughout the state. The episode will also highlight organized retail crime, expectations consumers have now about retail with the increased reliance on online shopping and delivery during the pandemic, CRA’s work on state and local regulations and top priorities of dealing with congestion at ports and the ripple effect on the supply chain, retail moving into the healthcare space, online marketplace and the pivots small retailers made to survive the pandemic including new ways of doing business and implementing out of the box ideas that will likely stay into the future.

Michelin: "Retail is very good at reinventing itself".

The episode will also discuss efforts to regulate what products retailers sell and how they sell them in their stores including gender neutral legislation and efforts in local jurisdictions throughout the state to mandate premium pay.

CRA 2021 Policy Calls

The remainder of CRA's 2021 monthly policy calls covering this year's legislative session is listed below (dates are subject to change). For CRA members' designated contacts who are not regularly receiving these policy call reminders and calendar invites, please email cra@calretailers.com to be added moving forward. Policy calls are held on Fridays at 10:00am PT.

June 18
July 9
August 20
September 10

Upcoming Policy Issues that will Impact Retail in California

As we look towards the 2021-22 California Legislative session there will be many policy and regulatory proposals that CRA will advocate on. Some of these issues include, but are not limited to:

Organized Retail Crime task force funding and extending the Legislative sunset
Packaging and Environmental Sustainability
Warehouse and Distribution Centers
Labor issues (both in the Legislature and CalOSHA)
On-line Marketplace
Third Party Delivery services
Supply Chain regulations

As we continue to navigate the COVID-19 crisis, now more than ever, I hope you are finding that your CRA membership is a good investment. We are advocating to protect our members from increased costs related to sick leave, worker’s compensation and liability threats, advocating to the State Legislature and Governor, in addition to working county by county to ensure new regulations or ordinances do not negatively impact the retail industry.

We are all in this together and the California Retailers Association is here to fight for your interests and that of the retail industry in California.

CRA Member Highlights

Recycling Today: Best Buy hits zero waste goal at reverse logistics center

Retailer’s reverse logistics center in Chino, California, achieves 99 percent landfill diversion making environment a priority.

"We have collected more than 2 billion pounds (1 million tons) of tech from customers for recycling since 2009. Our recycling program is part of our continued effort to protect the environment and support our customers throughout the life cycle of their products, making it easier for them to give their tech a second life and out of landfills.”

The Home Depot Foundation Expands Trades Training Initiatives with

Path to Pro Scholarship Program

New Program Provides $250,000 in Scholarship Funding to SkillPointe Foundation for Next Gen Tradespeople

The Home Depot Foundation is expanding its $50 million trades training commitment with the launch of the Path to Pro scholarship program to train the next generation of skilled tradespeople.

The scholarship program will grant $250,000 in financial assistance to high school seniors and graduates entering or currently enrolled in building construction trade programs.

Scholarships will be awarded by The Home Depot Foundation’s nonprofit partner, SkillPointe Foundation, and will be selected based on requirements including:

Candidate must be a current high school senior, high school graduate or have a GED equivalent planning to attend an accredited building construction trade college or postsecondary program in the U.S.
Candidate must be intending to enroll or currently enrolled in an accredited building construction trade college or postsecondary program in the U.S.
Candidate must be currently enrolled in a building construction trade college or postsecondary program in the U.S.

To learn more about The Home Depot Foundation’s Path to Pro scholarship program and to apply visit www.myscholarship.app/homedepotfoundation.

CRA Partner Events

The White Label World Expo - Las Vegas 2021

The ultimate destination for resellers and branding experts is finally back! The White Label World Expo will be held at the Las Vegas Convention Center on September 1 & 2, and is 100% free-to-attend ! Experience the awe-inspiring knowledge of over 200 speakers from industry experts, 50+ masterclasses and 300+ exhibitors!

White label and private label experts will gather to source all of the newest products and services, maximize their profitability and discover new ways to generate revenue - The White Label World Expo is an unparalleled, cutting-edge event covering the ins & outs of eCommerce and retail capabilities.

All CRA members who attend the expo will be treated as VIP attendees and gain access to the VIP After PArty during night one of the event.

COVID-19 Resources and Updates

The CRA team continues to send updates to our members with the latest information and resources related to COVID-19 including city, county and statewide executive orders and guidance, status of color-coded county tier system, latest sector updates and more. This information is also compiled on CRA's COVID-19 Resources and Updates web page. To receive this proprietary information, members can send an email to cra@calretailers.com.

CLICK HERE TO ACCESS RESOURCES FOR MEMBERS

CRA Member Portal

CRA members get access to CRA's exclusive online member portal, which contains coalition letters, floor alerts, regulatory comments and testimony that California Retailers Association authored or signed on to during previous Legislative sessions as well as the latest updates on the 2021-2022 legislative session. The portal also contains newsletter, news alert archives and important association governance documents for your reference. If you have not yet received your login credentials and access instructions please email cra@calretailers.com. We are also available to answer any questions you may have regarding portal navigation.