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Legislative Weekly
October 17, 2002
Sick Leave bill signed by Governor
 Romero |
SB 1471 amends Section 233 of the Labor Code that permits an employee to use half of their annual accrued sick leave in a calendar year to attend to the illness of a child, parent, spouse, or domestic partner. This provision allows employees to use up to half of their annual sick leave to attend to family members who would not otherwise qualify under the federal and state family medical leave acts covering only serious health conditions. LC Section 233 covers brief illnesses such as colds, high temperature, sore throats etc. that are more likely to be associated with children and are less likely to involve a physician or hospital care. It is precisely the ease with which an employee can allege an illness under the above provisions that allow many employees to abuse this provision to the detriment of their coworkers and employers and to avoid workplace sanctions.
In order to develop production schedules, employers expect employees to be at work to perform the assigned tasks. When employees don't show up or show up late for work, it hurts production. Since LC Section 233 became law in 1999, employers have seen a steady rise in the use and abuse of sick leave under this provision. For example, when employees' attendance records are examined and patterns of use involving sick leave show unusually high usage on Fridays, Mondays, and in conjunction with holiday weekends, the employee may be counseled and if the pattern continues, subject to some form of discipline. In other instances, the leave is used to cover for tardiness that would otherwise be sanctioned under the employer absence control program by calling in just before the shift begins in order to avoid a late shift start.
In order to mitigate this problem, many employers have implemented absentee control programs that include employee sanctions such as counseling, suspension and termination. An employer's absence control policy is essential to provide a fair way to identify and deal with those employees who have trouble coming to work as scheduled and/or on time. SB 1471 would eliminate that option and could force employers to take more drastic action to resolve the problem.
Employers are not required to provide sick leave so SB 1471 only applies to employers who voluntarily provide sick leave for their employees. SB 1471 provides a strong incentive for employers to simply eliminate their sick leave program.
The bill is effective on January 1, 2003. CMTA recommends that affected employers review their absence control program to insure compliance.
Senate hearing on economic development
On October 9th, State Senator John Vasconcellos (D-Santa Clara) convened his Senate Select Committee on Economic Development for a dialogue on accountability for state investment in economic development. This hearing marked the first of a series of discussions on what the definition of economic development ought to be and how the state invests in that economic development.
Participants included CMTA, the California Chamber of Commerce, Members of the California Economic Strategy Panel, the Corporation for Enterprise Development, the California Budget Project, and the Legislative Analyst's Office. Those that participated in the hearing have been asked by Senator Vasconcellos to join a working group to continue the dialogue on how best to invest state money into economic development efforts. CMTA will join this working group to promote the perspective of California manufacturers.
The first and, possibly, the biggest challenge for this working group will be to agree on what programs should be scrutinized as "economic development". While some advocate for a definition so wide that it would encompass certain social programs and other work force development programs, others take a narrower view to include programs specifically designed to reduce the overall costs of doing business and stimulate actual job growth. CMTA looks forward to being a productive partner in this on-going dialogue of how to improve the state's economic development investments.
Additionally, CMTA President Jack Stewart recently participated in a legislative forum on state sales tax issues. The forum was the second in a series of events sponsored by the Senate Office of Research, Senate Revenue and Taxation Committee, University of California and the California State University system. The forums are focusing on state policy related to property, sales, and personal income taxes. The event is structured as a panel discussion to allow members of the audience to interact with expert panelists from the legislature, academia, and the business community.
As the legislature gears up to address the looming budget deficit for next year, CMTA expects more of these informational hearings and forums and will be an active partner focused on problem solving.
Exit fee decision near
The long anticipated vote by the California Public Utilities Commission (CPUC) on exit fees could come as early as next week. The CPUC is scheduled to take up a proposed decision (PD) and several alternate decisions in the direct access (DA) customer cost responsibility proceeding (R.02-01-011) on Thursday, October 24.
The proposed decision by Administrative Law Judge (ALJ) Pulsifer establishes “cost responsibility surcharges” with an overall cap of 2.7 cents per kilowatt hour to cover both historic costs incurred between January 17, 2001 and the issuance of the exit fee decision and prospective costs. The cost responsibility surcharges would include four components:
- DWR Bond Charge, covering historic purchases from January 17, 2001 to September 20, 2001;
- DWR Power Charge, covering DA customers’ share of procurement costs between September 21, 2001 and December 31, 2002;
- DWR Power Charge, covering DA customers’ share of prospective DWR costs for the calendar year 2003; and
- A charge to cover the ongoing above-market utility-related generation costs.
The standard adopted for judging the accuracy of these charges is whether “bundled service customers are indifferent” as to the cost impacts of the “significant migration” of customers from bundled service to direct access service between July 1, 2001 and September 20, 2001. Because it is not known in advance how much of the DWR contract power is uneconomic, whatever fees are established must be annually adjusted to maintain the appropriate level of collection and ensure bundled customers’ indifference.
The proposed decision determines how to calculate the cost allocation to ensure indifference, establishes a process for periodic updating in future years, and adopts an overall cap of 2.7 cents per kWh.
In this proceeding CMTA has argued for an overall cap of 2.0 cents per kWh in order to preserve the viability of direct access. The sensitivity to energy prices is what forced many businesses to enter into direct access contracts, and even 2.0 additional cents per kWh could make direct access uneconomic. These concerns fell on deaf ears at the CPUC, as reflected in the assertion by the ALJ that the “subjective judgment and anecdotal accounts of discussions with industry representatives” was not sufficient to justify a lower cap.
Earlier this week, CMTA submitted formal comments in response to the proposed decision, noting that its treatment of certain critical issues will impose costs on DA customers which go well beyond achieving “ratepayer indifference.” Overall, CMTA is deeply concerned that the combined effect of the PD’s ruling on these [critical] issues will result in a "death of a thousand cuts" for the DA program.
Additionally, there are three alternate decisions. Commissioner Michael Peevey’s alternate decision differs only slightly from the proposed decision, and is viewed as a “placeholder” for additional changes. CPUC President Loretta Lynch and Commissioners Carl Wood have sponsored alternate decisions which seek either to remove any cap on the exit fees or to increase the cap to a substantially higher level. In comments filed earlier this week, CMTA argued that there is no convincing evidence that a higher cap is needed.
The proposed decision and three alternate decisions do not address the issue of departing load cost responsibility. In a related development, settlement discussions have been underway for several weeks on the departing load issue. A draft proposal currently being circulated addresses many of CMTA’s concerns, and incorporates CMTA’s proposal to exempt 250 MW per year of new departing load from exit fees beginning in 2003. All new departing load projects completed by the end of 2002 (or completed in 2003 if authority to construct was filed by August 29, 2001) also would be exempt from the ongoing DWR exit fee.
CMTA co-sponsors environmental conference
CMTA is partnering with the San Diego Industrial Environmental Association (IEA) this year to host a comprehensive environmental issues conference. The conference is scheduled for December 12 and 13 at the Sheraton Shelter Point Hotel in San Diego. It will feature a full day of air quality, water quality, and hazardous materials tracks; and half-day programs on chemical security, the 2003 legislative session, and a California/Mexico border issues track. USEPA Region IX Administrator Wayne Nastri will be the keynote speaker. The conference program is in the final stages of development and will be posted on CMTA’s website shortly. CMTA encourages members and other interested parties to take advantage of this unique event. Inquiries are welcome at 916-441-5420. Please ask for Jeff Sickenger or Marisa Hull.
Manufacturing fact
For every one manufacturing job, 2.5 more jobs are created - the highest "multiplier" of any sector.
Talking point
The creation of manufacturing jobs does more for growing California's economy than any other type of job creation.
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