Local owners react to new laws affecting business
With the new year here, a handful of new laws affecting business has local owners concerned.
Effective today, new state business laws, including criminal history, prior salary and a minimum wage increase, will affect both employers and employees alike.
Criminal history
Brawley Chamber of Commerce Executive Director Katie Luna noted that while the new criminal history law, Assembly Bill 1008, presents employers with additional risks, it gives some applicants a much-needed chance.
Employers can no longer ask for criminal history information on job applications. The new law also prohibits employers from asking about or considering an applicant’s criminal history before they’ve made a conditional offer of employment.
The new bill was created in hopes of giving former convicts a better opportunity to be considered for a job, rather than being denied solely based on their past convictions. Excluded from the bill are positions that require criminal background checks by federal, state or local law.
Employers may still conduct a background check on applicants only after making a conditional offer of employment.
“When you take away those questions there is an additional risk, but when you hire you’re supposed to be an equal opportunity employer,” stated Luna.
Brett Driscoll, owner of Driscoll’s Surf and Skate Shop in El Centro, believes that employers need to know who they’re hiring.
“It wouldn’t matter the criminal offense, but why are we hiding this stuff,” questioned Driscoll. “I believe people can have a second chance, but hiding the facts is asinine.”
Pioneers Memorial Healthcare District in Brawley has already adjusted their applications and removed the reference to prior convictions, stated PMHD Chief Human Resources Officer Robert Brown.
“This is not an added risk as we do background checks post hire, so we do know an employee’s history by the time they start working,” explained Brown. “If there is a conviction that conflicts with the area of employment, we can act accordingly to address the concern at that time.”
Prior salary
The Brawley Chamber’s executive director sees both a positive and negative aspect to the new prior salary law, Assembly Bill 168, which makes it illegal for employers to inquire about an applicant’s prior salary, compensation or benefits.
Applicants are no longer required to disclose his or her salary from previous employment on their application.
An employer may also no longer use an applicant’s previous salary to determine how much to pay them or whether to hire them.
The new law also requires that applicants are presented a pay scale for the position they apply for upon reasonable request.
Luna explained that while it will be beneficial for businesses, as it forces them to be more organized and structured by knowing their pay scale for each of their positions available, it could possibly hurt their employment process.
“At the same time, they could be at risk for losing a potential good candidate if they’re under offering or over offering and hurting themselves,” noted the Brawley Chamber executive director, who also believes the prior salary law is a good step in the right direction in closing the gap in unequal pay between men and women.
While the Driscoll’s owner enjoys that the new law speeds up the process of employment, it’ll be of little use to him as he never relies on an applicant’s prior salary before hiring them.
“I don’t base people off what they made before, I pay what their position is going to be,” stated Driscoll. “I don’t see that being such a big deal.”
Brown clarified that the new salary history law is more of a concern for applicants rather than employers.
“You would be surprised how many employees do not remember or know their rate of pay,” said PMHD’s chief human resources officer. “In most cases, they truly don’t know their rate of pay so the information may not be accurate.”
Minimum wage increase
In 2017, the minimum wage was set at $10.50 an hour for businesses with 26 employees or more and $10 an hour for businesses with 25 employees or less.
As of today, the state minimum wage was raised to $11.00 per hour for businesses with 26 employees or more while minimum wage was raised to $10.50 an hour for businesses with 25 employees or less.
By 2023, it will be raised to $15.00 per hour for all businesses in the state.
“It’s going to affect our bottom line a little, but I have good employees that I want to keep so it’ll be worth it,” explained the Driscoll’s owner.
PMHD’s chief human resources officer explained that regularly reviewing and matching salaries across Southern California to remain reasonably competitive has been a challenge.
“Health care is a business where many suggest our professionals should be paid more. Insurances and the government insist on paying less for services provided, while regulations mandate services be provided, regardless of a person’s ability to pay,” said Brown.
While PMHD has already built in the adjustment to minimum wage in their pay structure, Brown noted that the pay increase could have a negative affect for all hospitals throughout the state.
“Just look at the number of hospital closures in California and across the country every year,” mentioned the chief human resources officer. “Look at well-known systems that are having challenges across the country — there is a concern.”
For small business owners, the wage increase could be detrimental if they aren’t taking a step ahead and looking toward the future, indicated Brawley Chamber’s executive director.
“It’s difficult for employers every year to sustain the increased cost of employees, and unfortunately, that could have a huge negative effect locally being that we are a suppressed, or low–income, area,” stated Luna. “I think it’s a common myth that every business owner is wealthy. When we look at the businesses that are barely getting by, they may be forced to cut back on jobs.”
The Brawley Chamber executive director advises owners to educate themselves on the new policies and legislations.
“The best thing for businesses to do is really dig into their finances and plan now for what they can accommodate and what they can do,” said Luna. “We hope there’s not going to be job loss here in the county.”