Coronavirus

Los Angeles Might Force Broke Businesses To Keep Paying Workers During Coronavirus Outbreak

The mandates would be retroactive, potentially punishing businesses for violating rules they did not even know existed.

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As businesses across the country are roiled by the uncertainty caused by Covid-19, many are forced to make difficult and complicated decisions to stay afloat. Some have already been forced to close permanently. Others, including some in the delivery sector, have been faced with the prospect of onboarding hundreds of thousands of new workers overnight to keep up with demand.

The reality is that the pandemic-triggered economic crisis we find ourselves in affects different businesses in different ways, which is why it is paramount that government's maintain hyper-flexibility and a general deregulatory posture during Covid-19 to allow businesses the flexibility to adapt on the fly. The many jurisdictions that have enacted temporary waivers to allow traditionally dine-in restaurants and bars to deliver food and alcohol to customers is an example of government getting out of the way and enhancing business flexibility.

Unfortunately, rather than enacting positive change like many locales, the Los Angeles City Council seems determined to move in the opposite direction. The Council plans to vote on several workplace related resolutions during an emergency session today. Among other things, the council is asking the city attorney to draft an ordinance  that would only allow employees to be terminated for just cause, which could potentially complicate layoffs made for financial reasons; require any layoffs to be made in order of seniority; require any re-hired workers after the crisis to also be based on seniority; and give workers a right of retention if their employer sells its business to a new firm.

Furthermore, the Council is planning to have these mandates apply retroactively to the beginning of March, which could lead to businesses facing lawsuits or fines for violating rules they did not even know existed.

During economic turmoil, there's always a high likelihood that employers will need to make tough decisions about their workforce. While no one likes to see someone lose their job, the reality is that businesses—not bureaucrats—are the ones best positioned to make decisions for their future. These businesses need to be able to dynamically react and evolve to sudden revenue declines or other unanticipated situations, and implementing onerous rules about what order they can reduce or increase their workforce prevents them from doing so.

If these rules are implemented, the result will not be less layoffs, but rather more. If they are not given the flexibility to adapt, businesses could be forced to close completely, ensuring that none of their workers will have a job. If anything, now is a time to relax labor laws—such as re-thinking California's controversial AB5 legislation that limits the use of independent contractors—not implement new ones.

The future of California businesses—and workers—may depend on it.

NEXT: Pandemic-Related Unemployment and Shutdowns Are a Recipe for Social Unrest

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  1. Being out of cash seems like a just cause to terminate employment.

    1. Well, this is California. The business owner just has to open his Scrooge McDuckian vault and pay his poor, oppressed, hard working serfs.

      1. This.

        Most people have been duped in to thinking that every company is run by a guy twirling his mustache as he counts gold coins.

        In reality most businesses are run by regular people trying to do anything they can to keep the doors open.

        1. exactly right…its like all these clowns don’t actually know anyone in business for themselves.

          all the people i know who are bust their ass to make a decent (but not excessive) living.

          1. No such thing as excessive. And no need to apologize to anyone who has their own resentful ideas about what is excessive. That’s their problem.

    2. This whole thing shows us the best fix is to terminate the CA state assembly.

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  2. Well, if it was illegal to pass ex post facto laws, we wouldn’t have to worry, because CA has never, ever, done anything unconstitutional.

    1. In this case I’m fairly certain they couldn’t win this in circuit court. The constitution explicitly bans ex post facto laws, without exception, and there aren’t any weaselly precedents they can try to expand to slip through.

      The businesses are still probably screwed, because it’d take 2 years to get the case settled if the government decides to be bullheaded about it (and why wouldn’t they, when it’s just the taxpayers’ money they’re wasting). And just the threat (however slight) of a negative judgement hanging over them could complicate their business relationships, and that assumes they win the initial injuction against full enforcement in the first place. As always, heads the government wins, tails you lose.

  3. “The future of California businesses—and workers—may depend on it.”

    This assumes that California businesses, and their employees, have a future of any kind in the first place. And we know what can happen when we “assume.”

  4. Admittedly, I am not a bureaucrat. Thus, I concede I do not possess as much wisdom and knowledge as our betters. HOWEVER, if these business owners end up with no cash flow due to these mandated shut downs, what funds are they supposed to pay these employees with?

    1. The fines extracted by government. You know, blood from a turnip.

    2. California is already getting the plurality of the stimulus. They will just demand more or another stimulus. They are going to cry that businesses can’t make payroll, and not mention they are the ones forcing them to meet a payroll they can’t make.

    3. Bureaucrats are all under the impression that businesses have Jackson Tree orchards out back, and the business owner can go out and harvest some.

      1. I guess if these business owners didn’t want to be forced to pay employees with money they don’t have, they should have thought of that before they opened their businesses. This mandate only serves to expose them for the fools that they are.

        1. Sarcasm?

          1. Sarcasm times a billion. As others have noted, leftists seem to think business owner = guy sitting on huge piles of cash.

            1. I know I heat mine before going for a dip; much more comfortable…

        2. Good Rev Cuckoo impression.

  5. “require any layoffs to be made in order of seniority; require any re-hired workers after the crisis to also be based on seniority”

    lol

    1. Well, since such a policy would more-than-likely effect women and minority employees more than others, it won’t fly… so…. they will have to rely on other parameters…. Hey, how about “merit?” (Yes, I know it’s a revolutionary concept…)

    2. Those labor union dicks must be mighty tasty.

  6. “The reality is that the pandemic-triggered economic crisis we find ourselves in affects different businesses in different ways, which is why it is paramount that government’s maintain hyper-flexibility and a general deregulatory posture during Covid-19 to allow businesses the flexibility to adapt on the fly.”

    The reality is that the economic crisis was caused by governments’ response to a disease which has yet to prove worse than many others we’ve experienced. And the governments’ response was to over-regulate.
    Now you’re hoping the same governments to relax regulations?
    You want a pony with that?

  7. give workers a right of retention if their employer sells its business to a new firm.

    Hmm. How about requiring that “new firm” to be the city of Los Angeles?

    1. It’s the progtard dream. Having government take over business. It worked well in Venezuela.

      1. *Archer voice* Wait I had something for this… something about “not real Socialism.”

  8. This is crazy. When I emailed my rep, Bonin, who is a signatory to the motion and sponsor, he said he hadn’t even read it yet. The staff must be doing this and it’s nuts. We could have personal liability (under state law for failure to pay wages) for failure to pay laid off workers, retroactively, for businesses that will never open again!

  9. Where does it say they have to be paid during the crises?
    Some of this is already state law if you lay off someone for financial reason they have the first choice when you need to start hiring again.

  10. It’s Los Angeles. The politicians there consider bankrupting small businesses to be a good thing.

  11. Most governmental units can’t just pass new ordinances. They have to advertise for 30 days, have public hearing, and jump through red tape that they enforce it comes to, say, trying to get a building permit. In L.A. I guess they have a FYTW rule.

  12. If you’re operating a business in LA, you expect this kind of thing. Proceed at your own peril.

  13. The good news is, we no longer have 18 kinds of toilet paper to choose from, so it’s almost like Bernie did win the presidency.

  14. Proof that there’s no situation that government can’t make worse.

  15. [T]he reality is that businesses—not bureaucrats—are the ones best positioned to make decisions for their future.

    This kind of wavering completely misses the point. It’s not that the government is poorly positioned to make these decisions. The government has neither the constitutional nor the moral authority to interfere in the relationship between employees and employers at all, ever.

    1. Correct. California is violating the Contracts Clause, the Due Process Clause, and the Takings Clause, for starters.

      1. The only amendment California isn’t violating is 3A.

  16. That just proves what we have always known that the government does not understand the concept of broke. At least not for people than cannot print their own money.

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  18. Anyone who still lives or works in these Blue Commie states have no more excuses. Leave now or you face even worse at the hands of the Commies in charge of those Blue states.

  19. I fully support the right of California to self-destruct.

    1. +10000

      Unfortunately when Commifornia implodes to become the 5th worse economy in the World, many of those Socialists will have moved into Oregon, Washington, Idaho, Utah, Nevada, Colorado, Arizona, and Texas to fuck those states up beyond repair.

      On the bright side, California might just become a nice place to live again after the majority Lefties leave the state. Maybe the remaining non-Lefties can repair the damage and make California cool again.

  20. “Well, if those stupid laid-off employees won’t form a union, we’ll form one for them.”

    CB

  21. I wrote to my California assemblyman and explained how shelves were being stripped bare because hoarders had bought out supplies. This meant that a few got what they wanted and the masses have to do without.

    He wrote back and told me that he is doing everything he can to prevent price gouging. The man doesn’t have a clue.

    A sign for hand sanitizer in grocery store in Denmark:

    Buy 1 for $3.09
    Buy 2 for $95.00

    I sent this to the assemblyman, but I don’t think he gets it. Virtual signalling always wins over rational outcome even when hundreds of thousands are getting the shaft.

    1. I like that sign.

  22. I thank the Good Lord, I live in a place where the people in power aren’t functionally retarded like in California.

    What the heck California?

    1. Well we may have the worse roads and schools in the country, but at least we have the highest income taxes, the highest gas taxes and Uber can no longer higher people who want to work at their own hours. It is a great state, except for all the others if you ignore Illinois and New York.

      1. Don’t forget that CA also has the highest poverty rate (supplemental) and ranks third-worst in the nation in income equality. I am sure their proggie government is also proud of that.

  23. Stupid fucking communist pieces of shit.

  24. Ex post facto laws are unconstitutional.

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