from Timothy A. Murphy, Sacramento Regional Builders Exchange
CALIFORNIA REOPENS FOR BUSINESS… FINALLY!
After 15 months of emergency regulations and an unprecedented lockdown prompted by the COVID-19 pandemic, California has finally reopened. While reopening brings relief and the opportunity for an economic rebound, many of the businesses upon which the State is relying for this rebound face the re-opening with mixed feelings of relief and apprehension.
The coronavirus brought with it not only a health crisis, but also the threat of liability lawsuits. With the avalanche of virus-inspired regulations and emergency declarations, businesses that struggled to operate during the closure were left exposed to potential legal actions for even minor misunderstandings of covid related regulations.
Government did little to protect businesses from the liability threat. Apprehension over liability lawsuits resurfaces now with the June 15 re-opening, especially since confusion reigns over mask wearing, physical distancing and vaccination requirements. State officials are trying to make Covid-19 related rules uniform. However, while various and confusing rules exist, business operators are at risk.
For years, California businesses have been plagued with disruptive and troublesome legal actions even for minor infractions or misunderstandings of the state’s complicated labor laws. Business owners should be given time to correct minor violations without the threat of facing an expensive lawsuit. Unfortunately, the legislature has not handled this issue properly and with the June 15 re-opening, a new opportunity arises to potentially threaten businesses.
CALIFORNIA EMPLOYERS PERMITTED TO DROP MASK MANDATE FOR VACCINATED WORKERS
After nearly two weeks of back-and-forth rules regarding masking, the Cal/OSHA Standards Board adopted revised COVID-19 Prevention Emergency Temporary Standards that reflect the state’s latest COVID-19 public health order. Following the June 17th ruling, Governor Newsom signed an executive order enabling the revisions to take effect without the normal 10-day review period by the Office of Administrative Law, providing much-needed clarity and consistency for employers and employees as California fully reopens its economy.
Among other updates, Cal/OSHA’s revisions align with the latest guidance from the California Department of Public Health – based on guidelines issued by the Centers for Disease Control and Prevention – on face coverings and eliminate physical distancing requirements, except for certain employees during outbreaks. Unless they show symptoms, fully vaccinated employees do not need to be offered testing or be excluded from work after close contact with a COVID-19-positive person.
With over 40 million vaccines administered and amongst the lowest case rates and transmission rates in the nation, the state eliminated pandemic-related restrictions on June 15th that have been in place over the past year.
Businesses seeking assistance to provide N95 respirators for unvaccinated employees as required by the revised Emergency Temporary Standards can find distribution locations for state-provided N95 respirators here. Information on the revised COVID-19 Prevention Emergency Temporary Standards can be found here.
CHANGES TO EMERGENCY TEMPORARY STANDARDS TO TAKE EFFECT IMMEDIATELY
Cal/OSHA‘s Standards Board adopted further revisions to the existing Emergency Temporary Standards first adopted in November of 2020.Most notably the new ETS makes the following significant changes:
- Allows employers to permit fully vaccinated employees to work indoors without face coverings.
- Eliminates physical distancing requirement in non-outbreak settings.
- Requires employers to make available N95 respirators upon request to unvaccinated employees.
REQUIREMENTS FROM THE NOVEMBER 2020 ETS THAT WILL REMAIN
While much talk relates to what has changed in the revised Emergency Temporary Standards, many provisions remain in place. The ETS still requires:
- An effective written COVID-19 Prevention Program.
- Providing effective training and instruction to employees on the employer’s prevention plan and their rights under the ETS.
- Providing notification to public health departments of outbreaks.
- Providing notification to employees of exposure and close contacts.
- Requirements to offer testing after potential exposures.
- Requirements for responding to COVID-19 cases and outbreaks.
- Quarantine and exclusion pay requirements.
- Basic prevention requirements for employer-provided housing and transportation.
BEST PRACTICES FOR VERIFYING VACCINATION
According to the Emergency Temporary Standards revised on June 17th, vaccination status must be documented by the employer for any employee not wearing a face covering indoors. However, the proposed revised ETS does not specify a particular method. Acceptable options include:
- Employees provide proof of vaccination (vaccine card, image of vaccine card, or health care document showing vaccination status) and the employer maintains a copy.
- Employees provide proof of vaccination. The employer maintains a record of the employees who presented proof, but not the vaccine record itself.
- Employees self-attest to vaccination status and the employer maintains a record of who self-attests.
Employees have the right to decline to state if they are vaccinated or not. In that case, the employer must treat the employee as unvaccinated and must not take disciplinary or discriminatory action against the employee.
Employers cannot retaliate against workers for wearing face coverings, including when the worker is wearing a face covering voluntarily. Also, nothing in the revised ETS prevents an employer from requiring all employees to wear a face covering instead of having a documentation process.
EMPLOYER’S DUTY REGARDING RESPIRATORS
The Emergency Temporary Standards revised on June 17th requires employer to provide respirators in two scenarios: (1) to any unvaccinated employee who works with others indoors or in a vehicle and who requests one and (2) where there is a major outbreak, to any employees in the exposed group for voluntary use. Yet, there is no requirement that an unvaccinated employee wears such a respirator.
Cal/OSHA’s FAQ clarified that to “provide respirators upon request” an employer may either stock respirators and offer them to employees or may poll workers to determine which employees wish to be provided a respirator before obtaining them. However, once an employer has established that it has employees who wish to wear respirators, it should have enough on hand of the correct size and type to fulfill reasonably foreseeable requests upon demand. If an employee prefers to select and purchase his or her own respirator, an employer may permit this alternative, as long as the employer reimburses the employee in a timely manner. Furthermore, in a major outbreak, respirators must be offered to employees regardless of vaccination status and without waiting for a request from the employee. The employer must offer respirators immediately upon determining a major outbreak is underway.
Employers should be advised that respirators must be the right size, and the employee must receive basic instruction on how to get a good “seal” or fit.
CALIFORNIA ESTABLISHES DIGITAL VACCINE RECORD
The California Department of Public Health and California Department of Technology announced a new Digital COVID-19 Vaccine Record on June 18th, available at myvaccinerecord.cdph.ca.gov. The tool allows Californians who received a COVID-19 vaccination to access their record from the state’s immunization registry systems. The Digital Vaccine Record follows national standards for security and privacy, is built by the state, and provides Californians a way to view and save their vaccine record.
The record shows the same information as the paper CDC vaccine card: name, date of birth, date of vaccinations, and vaccine manufacturer. It also includes a QR code that makes these same details readable by a QR scanner. Once the digital record is received, individuals are encouraged to screenshot the information and save it to their phone files or camera roll.
TREATED WOOD WASTE BILL ADVANCES
AB 332 (Treated Wood Waste) passed out of the Senate Environmental Quality Committee on consent June 3rd. Instead of managing treated wood waste as a non-RCRA hazardous waste, the bill would provide an option to manage and dispose of it through alternative standards, if certain criteria are met. The bill has broad industry support as a solution to the December 31, 2020 expiration of Health and Safety Code Section 25150.7, which made the management and disposal of treated wood waste more difficult, expensive, and environmentally unsustainable.
AB 332 was double-referred and will next go to the Senate Judiciary Committee to be heard on June 22. A coalition of industry interests, including SRBX and partner Builders Exchanges, continue to lobby in strong support of the bill. If signed by the Governor, AB 332 has an urgency clause to go into effect immediately.
CALIFORNIA LEGISLATURE PASSES “BUDGET”
The California Legislature passed a state budget on June 14, one day ahead of the state constitution’s requirement that legislators pass a budget by June 15 or see their salaries suspended. However, there are still significant budgetary issues to be settled.
Assembly Speaker Anthony Rendon and Senate President Pro Tem Toni Atkins have unresolved disagreements with Gov. Gavin Newsom, not only on how much to spend but even how much revenue they have to spend. While the two budgets are perhaps 90% in agreement, there are still $20B in proposed spending questions that must be resolved.
When budgets often had months-long delays in passage during Arnold Schwarzenegger’s governorship, voters enacted Proposition 25. Among its provisions was the threat of legislators’ not being paid if a budget did not pass on time. The revised system had its first test during the first year of Jerry Brown’s second governorship in 2011. The Legislature sent a budget to Brown and he vetoed it, declaring it to be unconstitutionally unbalanced. Then-Controller John Chiang backed Brown by suspending legislators’ salaries. The Legislature sued and won a judicial declaration that only the Legislature itself could determine whether the June 15 deadline had been met.
Legislators were thus empowered to pass what they deemed to be a budget bill by June 15, even though it may not be a finished product, as it is this year.
Proposition 25 contained another piece of procedural mischief, allowing any bill the Legislature declared to be connected to the budget to also be enacted with simple majority votes. Thus, budget “trailer bills” often became vehicles for major changes in state policy without full committee hearings and other traditional exposure.
The misuse of trailer bills sparked another ballot measure in 2016, Proposition 54, requiring that bills be in print — and available for public viewing — for at least 72 hours before enactment. It didn’t stop the procedural abuses, but at least made them more obvious.
While the Governor and legislators will eventually settle their differences, the complete budget picture will not emerge for weeks and even months as trailer bills and budget modification measures dribble out of the Capitol.
UNEMPLOYED MUST SEEK WORK IN ORDER TO CONTINUE RECEIVING BENEFITS
Starting July 11, Californians receiving unemployment must be looking for work or be rebuilding their business to stay eligible for benefits.
Before the COVID pandemic sent unemployment to historic levels last spring, people collecting unemployment had to show they were seeking work. The federal government in March 2020 suspended the need to look for a job in order to collect benefits.
But starting July 11, a beneficiary cannot answer “no” on their weekly certification when asked if they’ve sought work if they want to stay eligible. Most people will have to answer “yes” or could be scheduled for a determination interview and potentially lose the aid for that period. The maximum weekly benefit in California is now $750 a week, with $300 of that a boost from the federal government.
Since March 2020, 22.8 million claims have been filed and the state has paid $152 billion in benefits.
CALIFORNIA UNEMPLYMENT INSURANCE FUND WIPED OUT; TAX INCREASES LOOM
The unemployment insurance (UI) fund in California saved millions of workers from COVID job losses, but the devastating impact of the pandemic completely wiped the fund out. In order to continue providing unemployment benefits after the UI fund was emptied, California borrowed over $21 billion from the federal government. Now, California is faced with a dilemma: pay back the debt or steeply raise taxes on employers.
Employers currently pay $42 per year for each employee. But if California fails to pay off its loan from the federal government, the tax will automatically increase—potentially by as much as 900%, or $420 per employee a year. Governor Newsom has proposed using $1.1 billion of California’s estimated $38 billion budget surplus to pay down the $21 billion debt. However, this is not nearly enough to stop the automatic tax increase on employers.
These increased taxes would cripple businesses struggling to recover from the impact of the COVID-19 pandemic. Governor Newsom and the Legislature must work together to come up with a solution to this dilemma before it decimates California businesses.
MATERIAL PRICES CONTINUE TO SKYROCKET
New data from the federal government affirms most U.S. contractors already know: Materials prices are skyrocketing. Nonresidential construction input prices increased 23.9% in May compared to the previous year, according to data released Tuesday. Input prices are 4.8% higher than in April. The price of softwood lumber has expanded 154% over the past year alone.
Other materials have experienced significant increases over the past twelve months:
|
Plumbing fixtures and fittings |
|
2.2% |
|
Concrete products |
|
3.1% |
|
Prepared asphalt, tar roofing and siding products |
|
12.6% |
|
Fabricated structural metal products |
|
18.3% |
|
Nonferrous wire and cable |
|
31.4% |
|
Iron and steel |
|
62.8% |
|
Steel mill products |
|
75.6% |
|
Natural gas |
|
90.3% |
|
Unprocessed energy materials |
|
100.1% |
|
Softwood lumber |
|
154.3% |
|
Crude petroleum |
|
186.7% |
Further, the inflationary pressure contractors and others are experiencing may not be over soon. Inflation and interest rates may not be as low during the decade ahead as they were during the decade leading up to the pandemic.
Commercial and residential builders have struggled with the higher materials prices since this time last year. The National Association of Home Builders reported that lumber costs are adding an average of $35,872 to new single family home prices. Those prices have also added $12,966 to the value of an average new multifamily home. As those are typically built to rent, that in turn is adding $119 a month in rent to new apartments.
Thanks for reading!
Timothy A. Murphy, Chief Executive Officer
Sacramento Regional Builders Exchange
5370 Elvas Avenue ǀ Sacramento, CA 95819
Telephone: 916.442.8991 | Direct: 916.465.8340
Email: tmurphy@srbx.org ǀ www.srbx.org