Here’s What’s Ahead For California Businesses In 2022

What does 2022 hold? Layered on top of pandemic uncertainty is the question of what policymakers might do for — and to — businesses. 

“2022 is going to be a very busy legislative year,” said Jennifer Barrera, CEO of the California Chamber of Commerce. 

Here are some of the issues ahead for California businesses in 2022.

Pandemic rules and paid leave

Workers were guaranteed extended sick leave for COVID-19 quarantining or vaccine side effects in spring of 2021, and then saw it run out in September. “That expired, in our minds, at the worst possible time,” said Eduardo Martinez, legislative director of California Labor Federation, mentioning the Delta variant surge, which seemingly peaked in late August. 

With the rise of the Omicron variant, Los Angeles Democrat Wendy Carrillo said she’s looking for an opportunity to bring back extended COVID-19 sick leave. Last time California had federal assistance helping cover the cost; this time it would have to go it alone, she said. Pointing to the state’s projected $31 billion budget surplus, she said “there’s an opportunity for the governor and for the legislature to ensure that the health of the 40 million people across the state of California is prioritized.”

Also potentially on the docket: legislation to boost the share of their wages that workers receive when they take paid family leave, according to San Jose Democrat Ash Kalra, who chairs the Assembly’s labor and employment committee. “The current (wage) replacement rate is especially inadequate for low wage workers,” said Kalra. 

A rate increase was passed by the legislature last year, but was vetoed by Gov. Gavin Newsom, who said it would create “significant new costs.” In his veto statement, Newsom said he looked forward to partnering with the legislature on the issue of family leave access.

In 2021, Oakland Democrat Buffy Wicks proposed a bill that would have required all workers to provide proof of vaccination to their employers or submit to weekly testing. Days later, with the end of the legislative session encroaching, she put the idea on hold, saying she would take time to work with colleagues and stakeholders “to make this the strongest bill possible headed into 2022.”

Since then, the Biden administration unveiled a vaccine requirement for large companies in November, which immediately drew lawsuits and is currently wending its way through the legal system, and New York City imposed a vaccine requirement for all in-person workers at private businesses. 

“We cannot be a New York,” said Robert Lapsley, president of California Business Roundtable. “We need flexibility. And, so, hopefully, the governor, OSHA, et cetera, will not go down that path.” 

In an August poll of 353 small business owners, 59% with employees said they’d support a law requiring businesses to mandate vaccines or weekly testing.

It’s unclear if a similar proposal is in the cards for California. Wicks’ communications director, Erin Ivie, wrote that the office was “still in the process of considering what types of vaccine legislation we hope to introduce in the upcoming session.” When asked if Cal/OSHA had any plans to roll out a vaccine requirement for all workers, spokesperson Erika Monterroza said she was not aware of any such plans. 

A spokesperson from the governor’s office said, “We know that boosters are the strongest protection we have against serious illness from COVID-19, that is why the state is requiring that healthcare workers get boosted, and encouraging all other Californians to protect themselves from the Omicron variant by getting boosted.” Health secretary Dr. Mark Ghaly has signaledthat the state is not on a path to shutdowns. 

Ballot measures aplenty

A final list of the initiatives that actually make it onto your ballot in November won’t be settled for many months. But there are already some proposals in the pipeline that could impact businesses: 

• Investor-turned-antipoverty-advocate Joe Sanberg has put forward a measure that would increase the minimum wage in California to $18 per hour by 2025, with an additional year for small employers to comply;  
• A proposal aimed at housing affordability that would raise renters’ income tax credit and increase the amount of a property’s value that is tax exempt while raising taxes on commercial and residential properties worth more than $4 million; 
• And a measure, backed by the California Chamber of Commerce and other business groups, that would repeal a law that lets employees sue employers over certain labor violations and receive monetary penalties, while requiring the legislature fund the labor rule enforcers adequately to carry out laws. 

Small businesses, farmworkers, and taxes

In addition to nearly $1.2 billion federal dollars for loans potentially coming the way of California small businesses, state lawmakers will continue to try and aid them, said Corona Democrat Sabrina Cervantes, who chairs the Assembly’s committee on jobs and economic development. She plans to continue work on a bill that would incentivize landlords to give small businesses rent relief. 

The legislature may also take another look at how farmworker union elections are conducted. In 2021, Santa Cruz Democrat Mark Stone introduced a bill that would have given workers the option to fill out their ballot at home, rather than requiring they vote via an in-person election. Newsom vetoed the measure, which opponents said left workers more vulnerable to coercion, becoming the third consecutive California governor to veto such a bill. Stone will continue working on it in 2022, per his office.  

Business groups plan to raise a stink about the debt that California’s unemployment insurance fund owes the federal government, which ballooned during the pandemic as more workers lost their jobs and collected benefits. Unless lawmakers intervene, the debt is set to be paid down by a tax increase for businesses that would show up on their 2022 taxes, said Barerra. 

Also on the horizon is a debate about employee data privacy. Employee data was initially exempted from the data privacy law Californians voted for in 2020, but that carveout ends on the first day of 2023, creating a deadline for the legislature to figure out what they want to do, if anything, around worker data. 

Martinez, from the labor federation, says he’s increasingly hearing from unions that employers are collecting data on workerswithout their knowledge or consent. “There’s an opportunity to get some privacy rights for workers to curb some of the abuses,” said Martinez.

But the ongoing pandemic could disrupt even the best laid legislative plans. 

“If next year is anything like the past two years,” said Martinez, “you think you know what you’re working on and then all of a sudden something happens and — nope — you’re working on something else.” 

(Grace Gedye covers California’s economy for CalMatters. Previously, she was an editor at the Washington Monthly. She is a graduate of Pomona College.)