Pub. 7 2018-2019 Issue 2

8 San Diego Dealer W hilemuch of the attention this midtermelection has been focused on Congress and federal issues - the “blue wave” and a “referendum” on the Trump presidency - California employers know all too well that employment and labor policy is largely being driven at the state and local level. Here in California, we have a new governor in the form of former Lieutenant Governor and former San Francisco Mayor Gavin Newsom. Continued overwhelming Democrat majorities in both the State Senate and the State Assembly will help ensure that labor and worker advocates will have little trouble gettingmeasures through the legislature and onto the new governor’s desk. What will this new administrationmean for California employers—more of the same, or a fresh voice? It’s pretty clear that labor will continue to have a friendly voice in the governor’s office in Sacramento, so we’re not looking at monumental change on the horizon. But previous comments and campaign statements by Newsom may shed some light on the course he may forge on labor and employment issues once he officially takes office. Business Owner Background Many employers have noted with hope that Newsom comes from a business background, developing awinery business into a growing empire with a number of restaurants, wineries, and other similar establishments. That has led some to speculate that he may intuitively understand some of the issues facing business owners in California, from bureaucratic red tape to a hostile litigation environment. Like most politicians, Newsom voiced his support on the campaign trail for small businesses. Whether that translates into a better business environment for small businesses remains to be seen. After all, what politician has not expressed support for small businesses during their campaign? But some employers cling to the hope that, as an entrepreneur himself, Governor Newsommay be more receptive to certain concerns of the employer community. It’s All About Dynamex By far the most significant and pressing concern Governor Newsomwill have to deal with is the continued fallout from the blockbuster decision by the California Supreme Court in the Dynamex case, where the court adopted an entirely new test for determining whether an individual is an employee or an independent contractor. This new legal standard, known as the “ABC Test,” makes it more difficult for businesses to utilize independent contractors and threatens to upend entire industries in our state. There was an attempt late in the year by the business community to come up with a legislative solution to some of the difficulties created by this new standard, but that effort fizzled when legislative leadership announced there would be no discussion of the issue. But this issue has not gone away. If anything, in fact, the angst and concern in the employer community has only intensified in recent months. There are likely to be numerous bills on the matter – from industry-specific bills to more comprehensive solutions. All of this means Governor Newsomwill be forced to deal with Dynamex one way or another in 2019. What Will Governor Newsom Mean for California Employers? By Benjamin Ebbink, Of Counsel with Fisher Phillips