While sponsors of Assembly Bill 880 suggest it would affect only a few large and profitable companies, the facts are quite different. This legislation would have a broad and devastating impact on organizations in nearly every industry in this state, including nonprofits such as the Community College Foundation.
The Community College Foundation serves at-risk youths to improve communities through education. We can employ more than 500 tutors to work with thousands of K-12 youths who are one to three grade levels behind. We also employ people who need to gain new job skills to enter or re-enter the workforce. These part-time jobs help them improve lives, afford college, or meet welfare-to-work requirements.
Most of our good work for those most at risk could screech to a halt if AB 880 passes; if it forced us to shut down, 500 more Californians would become unemployed and thousands of our most vulnerable youths would lose our much-needed help.
And we are not unique. Many other large nonprofits, and businesses in agriculture, tourism, trucking, security, manufacturing, construction, grocery, restaurants and retail would face a similar fate if the Legislature passes AB 880.
The special interests behind this legislation are spending significantly to advocate for it (according to a recent article in The Bee), while misleading the public on what this legislation would actually do.
Here are the facts:
There is no provision in AB 880 to limit its mandates to companies that reduce employees' hours the so-called "loophole" in the Affordable Care Act. AB 880 is so broad it would affect nearly every industry in the state, including nonprofits, with a chilling effect on jobs.
AB 880 would penalize employers who offer health care coverage by fining them if an employee uses Medi-Cal coverage, even if the employer offers other broad medical coverage at no cost to the employee.
Most employers are working diligently to ensure that they are in compliance with ACA, not slashing hours and wages. AB 880 could break employers struggling to voluntarily provide competitive benefits and wages to keep their employees in the face of their already higher costs of doing business in California.
This legislation would have a devastating impact on the underserved communities in this state. AB 880 targets, penalizes and discourages organizations that provide jobs to people who are entering the workforce, coming off of welfare assistance programs, or unemployed. These employers would be subject to new taxes and penalties, and would be more likely to be sued, if they hire the people who are most in need of jobs in this state.
AB 880 would have a far-reaching impact that would potentially affect more than a 1,000 employers that provide part-time, temporary, seasonal and full-time jobs to people in most of the industries that are critical to our state's economy. It would also end jobs in nonprofits that provide vital services to our most vulnerable residents.
Employers complying with ACA requirements would be harmed by this legislation. AB 880 does not have a definition to specify which employees are included, so companies would be penalized for out-of-state employees who occasionally work in California, as well as seasonal or temporary employees who only work in extremely limited capacities.
AB 880 would not allow an employer to discharge for any reason an employee who enrolls in Medi-Cal or obtains subsidized health coverage through the California Health Benefit Exchange. Under AB 880, job security becomes a function of a medical coverage that the employer cannot ask about, rather than job performance.
AB 880 would increase lawsuits because its broad and uncertain language invites various interpretations and inconsistent opinions on compliance.
Nonprofits thrive with a healthy private sector economy and responsible government. Wouldn't it be better for our state to focus on the huge tasks of implementing the ACA and the Health Benefits Exchange before mandating broad and expansive new programs that would add huge fines to organizations struggling to survive in this slow economic recovery?
We, along with 55 organizations representing many thousands of businesses, health care organizations and nonprofits collectively employing millions of Californians, urge our legislators to stop AB 880 before it damages good organizations and increases unemployment in California.
Rick Fowler is president and CEO of the Community College Foundation.