On February 17, 2023, Assembly Bill 1356 by Assemblyman Matt Haney (D-San Francisco) was introduced regarding relocations, terminations, and mass layoffs. AB 1356 would amend Labor Code Sections 1400.5, 1401, 1402, and 1403.
Section 1 of the bill would amend Labor Code Section 1400.5 to include a definition of “employer” to include a client employer of a labor contractor, as well as a definition of “employee” to include a person employed by a labor contractor and performing labor with the client employer for at least 6 months of the 12 months preceding the date on which notice is required.
Section 2 of the bill would amend Labor Code Section 1401 to prohibit an employer from ordering a mass layoff, relocation, or termination unless 90 days (instead of the current 60 days) before the order a written notice if provide to employees and the state. In addition, the bill would add that an employer is prohibited from utilizing compliance with this chapter in connection with a severance agreement and waiver of an employee’s right to claims.
Section 3 of the bill would amend Labor Code Section 1402 to provide that an employee working with the employer through a labor contractor and affected by a mass layoff is to be compensated for the remainder of the contract or 90 days, whichever is fewer, by the equivalent of the pay and benefits received by the employee during the last month of employment, or the employee’s final rate of compensation, whichever is higher.
In addition, when this compensation is provided as an additional payment from the employer to the labor contractor, the labor contractor must ensure that compensation is provided to the employee and is prohibited from taking an additional markup above the rate charged on the contract prior to the date on which notice is required.
Section 4 of the bill would amend Labor Section 1403 to provide that any general release, waiver of claims, or nondisparagement or nondisclosure agreement that is made a condition of the payment of amounts for which the employer is liable is void as a matter of law and against public policy.
Finally, an employer who is required to give notice is prohibited from offering an employee a separate agreement that includes a general release, waiver of claims, or nondisparagement or nondisclosure agreement, unless the agreement is offered in exchange for reasonable consideration that is in addition to anything of value to which the individual already is entitled. Any agreement in violation of this subdivision would be void as a matter of law and against public policy.
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