Gilroy Chamber Business Focus-June 2021

June 28, 2021

Gilroy Chamber Urges Governor Signature

The Gilroy Chamber of Commerce sent a letter to Governor Newsom in support of AB 271 requesting his signature on the bill. This important legislation will ensure the timely, safe, and expert construction of the Anderson Dam Seismic Retrofit Project by allowing Valley Water to use the “best value” method to select the construction contractor for the Anderson Dam Seismic Retrofit Project and will require a skilled and trained workforce to ensure expert construction.

Federal, state, and local officials have determined that the Leroy Anderson Dam and Reservoir—owned by the Santa Clara Valley Water District (Valley Water)—would be at risk of an uncontrolled release of water in the event of a large earthquake, which could inundate cities and rural areas from San Francisco Bay south to Monterey Bay, including much of Silicon Valley.

Expert construction is critical for a project of this size and complexity. “Best Value” is a procurement process that allows a public agency to select contractors based on objective criteria for evaluating the qualifications of bidders, rather than the lowest price, with the resulting selection providing the best combination of price and qualifications. Under current California law, Valley Water must select the contractor offering the lowest bid rather than the best value. Because of the size and complexity of the Anderson Project, Valley Water needs authorization in state law to award the contract to the most qualified bidder. An independent panel convened by the Federal Energy Regulatory Commission (FERC) recommended the use of best value method of contractor selection. “Best value” selection of the construction contractor will help ensure the best combination of price, expertise, and value for the Anderson Dam project. 

AB 271 received widespread, bi-partisan support in the Legislature. Neither the Assembly nor the Senate Appropriations Committees found any appreciable fiscal impact to the State from AB 271.

AB 271 will provide the much-needed strategic approach to the challenges of safely completing the Anderson Dam Project, and we are asking the Governor to sign it into law. 

Californians deserve a budget that protects their future and creates jobs

Opinion by Vince Fong, Vice-Chair of the Assembly Budget Committee

Everyday Californians continue to struggle. Our unemployment rate is 8.3%; 1.52 million Californians are jobless. Small businesses are barely hanging on persevering through constant uncertainty. This reality is in stark contrast with a budget windfall of $38 billion.

The conventional wisdom should be to store that money away for an emergency.

Yet, this massive $38 billion discretionary surplus has quickly evaporated into an unsustainable budget that provides no structural reforms to serve Californians who demand results from state government. We need a budget that focused on better management and results, not just more spending.

During the final stages of budget negotiations, the governor is channeling Oprah – awarding prizes and making it rain money at every turn except in job creation and strengthening the state’s savings account. This performative behavior could not be more tone-deaf.

Last year, the Legislature pulled $7.8 billion from the state’s Rainy Day Fund when the state braced for a financially devastating pandemic. We now have a robust surplus. Yet, neither legislative Democrats nor the governor have committed to refill that hole.

They have ignored the sound advice of the non-partisan Legislative Analyst Office who stated, “To avoid reductions to safety net programs that support Californians when economic hardships is most acute, budget reserves are critical.”

Fraud and mismanagement run rampant at the Employment Development Department (EDD). The proposed budget does not fix this essential service that many unemployed Californians rely on as their lifeline. In addition, it fails to pay down the mounting Unemployment Insurance (UI) Fund debt and ignores the crumbling water storage infrastructure that is in desperate need of improvement as we endure this drought.

With a $38 billion surplus, it is evident the state does not have a revenue problem, so it’s baffling that the proposed budget misses the opportunity to build back the state’s resilience and prepare for a strong, healthy future.

According to the Tax Foundation, California ranks second to last in business tax climate – only New Jersey managed to create a more hostile climate for employers. A direct way to improve this dismal status is to restore the research and development (R&D) tax credit and the net operating loss deductions that were taken away last year.

By continuing to deprive our business community of these tools, the state is increasing their tax burden and stifling their ability to maintain or increase their workforce.

As the state experiences a historic surplus, it only makes sense to restore tax relief that employers depend on to continue operations in this state. We saw the strength and innovative capabilities of California’s life sciences ecosystem as they responded to the pandemic – to the benefit of our entire nation and the world. This continued innovation hinges upon aggressive R&D investment that outpaces other states and nations. The return on investment in biotech R&D alone has offered a 134% increase in California jobs since 2019. The state should continue to incentivize these types of investments, which ultimately benefit our communities and enhance our quality of life.

Strengthening the business climate will allow all industries to hire more Californians and reinvest back into local economies. The budget should pay down the growing UI loan debt EDD used. A tax credit of $2 billion does nothing to pay down the $24 billion debt. Without a stronger commitment from the state, employers will be forced to pay higher taxes rather than hiring new employees.

Now is the time to plan responsibly and build up our reserves while reducing burdens on small businesses and families. Let’s restore our savings, revitalize our small businesses, and rebuild our infrastructure. This will put California on a path of economic prosperity.

Vince Fong is vice chair of the Assembly Budget Committee.

Chamber and Car Dealers Host Show and Shine Event

By Erik Chalhoub, Gilroy Dispatch

Classic vehicles and their enthusiasts gathered at Gilroy Chevrolet Cadillac for a Show & Shine event in the triple-digit heat on June 17. The show was organized by the Gilroy Chamber of Commerce, Garlic City Car Show Committee and Gilroy Chevrolet Cadillac, which also featured food and other vendor booths. While the 2021 Garlic City Car Show was canceled due to uncertainties surrounding large gatherings, the event promoted next year’s show, scheduled for June 18 in downtown Gilroy.

Independence Day Events

Gilroy’s Annual Fireworks Show

One of the safest ways to celebrate the 4th of July and fireworks is through Gilroy‘s annual fireworks show. The show will take place on July 4, 2021, with the fireworks beginning around dusk at approximately 9:30 PM and originating from Gilroy High School.  Residents are encouraged to enjoy this annual tradition and time with family in a way that is consistent with current protocols for social distancing and restrictions on gathering.
 
The following closures will be in place starting Sunday evening (UPDATED 6/24):
  • Uvas Creek Levee will be closed between Miller Avenue and Luchessa Avenue
  • 10th Street will remain open through traffic
  •  Orchard Drive and Valley Forge Drive will be closed at 10th Street
  • Street parking on the west side of Uvas Park Drive will be prohibited
  • Street parking on the south side of 10th Street will be prohibited
  • Parking and gathering at Gilroy High School and the overflow parking lot will be blocked off and prohibited
 

Morgan Hill Freedom Fest

The City of Morgan Hill is one of the only two cities in the San Francisco Bay Area that continues to have all day events surrounding the Fourth of July Holiday. The Independence Day Celebration includes the Patriotic Sing, Bike Classic, Family Music Fest, Freedom Run, Parade, Car Cruise & Show and of course, the spectacular Fireworks.

Look through the official event guide here.

 

June 21, 2021

Disaster Loan Expands to All Eligible Businesses

A wider pool of entrepreneurs are now being encouraged to apply for the U.S. Small Business Administration’s Economic Injury Disaster Loans and popular Targeted EIDL Advance grant program. This comes after months of focus solely on small businesses shortchanged by the program in March and April 2020.

  • Background: The Targeted EIDL Advance cash grant program is one of the few remaining SBA Covid-19 relief programs with funds left.
  • Slow rollout: The agency has disbursed just $1.5 billon of the $30 billion in grants allocated to the program.

What’s new: The grant still requires certain qualifications, click here for detailed information.

COVID Sick Leave, Now Vacation Too

By Ellen Savage, CalChamber

Don’t Deny Vacation Due to Recent Use of COVID Sick Leave

My employee used most of her COVID-19 Supplemental Paid Sick Leave over the last couple of weeks. Now she wants to take a week’s vacation. Can I deny the vacation request since several other employees in that department, who have been working lots of extra hours to cover her missed shifts, also want to take that same week off?

Denying your employee’s vacation request because she has been absent a lot lately using her California COVID-19 Supplemental Paid Sick Leave (CSPSL) could result in a claim that you are retaliating against her for using that protected leave.

Employees who use CSPSL are protected from retaliation under Labor Code Section 246.5(c), which prohibits an employer from discriminating in any manner against an employee for using those COVID-related sick days.

Look to Employee Handbook

In this instance, the employer should look to whatever regular policy it has in place for determining which vacation requests to approve. It should first consider any employee handbook that is in place to determine how vacation requests are prioritized if that is covered in the handbook.

Many employers use a seniority system, with more senior employees having priority. Other employers may approve vacation requests based on a “first come, first served” basis, meaning whoever turned in their request first has priority.

There might also be a system in place where a manager must determine which positions have sufficient coverage based on business needs at that time to approve a vacation request.

If the handbook policy provides guidance, then the employer should use that system and not use the employee’s recent use of CSPSL as a factor in making a decision.

Past Practice

If the employee handbook does not specify how vacation requests are considered, then the employer should look to its past practice for guidance. Staying consistent with past practice in how vacation requests are given priority (assuming that practice relies on legitimate and nondiscriminatory factors) may negate the employee’s claim that there was retaliation for exercising her legal right to use CSPSL.

If there is an established non-discriminatory practice, then the employer should use that system and not consider the employee’s recent use of CSPSL as a factor in making a decision.

Be Fair

Finally, if there is no written policy and no past practice, the employer should find a fair way to decide which vacation requests to approve without taking into account the employee’s recent protected COVID-related absences.

Whatever method the employer chooses would then become the company precedent for similar situations in the future.

Masks Begone!

Article by Don Thompson, Associated Press

California regulators on Thursday approved revised workplace pandemic rules that allow employees who are fully vaccinated against the coronavirus the same freedoms as when they are off the job, including ending most mask requirements.

The revised regulations approved by the governor-appointed California Occupational Safety and Health Standards Board come after weeks of confusion. The rules adopted in a 5-1 vote, with one member absent, now conform with general state guidelines that took effect Tuesday by ending most mask rules for vaccinated people.

Gov. Gavin Newsom immediately issued an executive order waiving the usual 10-day legal review. The new rules will take effect as soon as they are filed with the secretary of state.

“While I understand the proposal in front of us today is extremely controversial and inconvenient, now I don’t think is the time to let our guard down,” said David Harrison, a labor representative on the board who voted for the revised rules. “We need to do everything reasonable, and I highlight reasonable … within our power to protect employees in California and across the country.”

The rules apply in almost every workplace in the state, including offices, factories, and retailers.

They are intended to ensure that workers are protected while businesses resume normal or near-normal activity, Eric Berg, deputy chief of health for California’s Division of Occupational Safety and Health, known as Cal/OSHA, told the board.

Business groups had sought the changes but argued they didn’t go far enough. They supported conforming rules for businesses with state guidelines patterned after the latest federal Centers for Disease Control and Prevention recommendations.

The California Chamber of Commerce, which represents more than 14,000 members, still praised a decision it said: “will help employers move forward and fully reopen.”

Board member Laura Stock, an occupational safety expert who cast the lone opposition vote, warned that the pandemic is not over.

“This has real consequences that people can get sick and die due to exposure in the workplace,” Stock said.

She said the rules go too far by eliminating physical distancing and workplace partitions and allowing workers to self-report their vaccination status while relying too heavily on people to be vaccinated.

“What’s very difficult is to figure out what the balance is so that we’re doing the most good for the most people, but not at all dismissing the vulnerable in our population,” said Chris Laszcz-Davis, a management representative on the board.

The move comes after the board did a double-twisting backflip in recent weeks when it first postponed, then rejected, then adopted, then rescinded rules that would have allowed workers to forgo masks only if every employee in a room was fully vaccinated against the coronavirus.

Fully vaccinated employees will not need to wear masks, except in locations like mass transit and classrooms, where they are required for everyone, or in the event of outbreaks.

Physical distancing also will end except for certain workers during major outbreaks. Vaccinated employees won’t need to be tested or quarantine unless they show symptoms, even if they have close contact with an infected person.

Employers must document that workers who skip masks indoors are indeed fully vaccinated. But employers have the choice of requiring workers to show proof of vaccination or allowing employees to self-report their status, with the employer keeping a record of who does the latter.

They also could decide to require everyone to remain masked — vaccinated or not. And vaccinated employees will still be able to wear masks if they choose without facing retaliation.

Public comments to the board before the vote largely split along management and employee lines.

Rob Lapsley, president of the California Business Roundtable, said the requirements that employers provide masks and keep track of employees’ vaccination status add record-keeping that could create liability and privacy issues.

“They do remain a significant barrier to fully reopening the economy,” Lapsley said.

Loosening the masking rules while a majority of Californians are not fully vaccinated and dangerous variants spread “will sicken many and likely kill some workers” as protections ease, countered Mitch Steiger, a legislative advocate for the California Labor Federation, AFL-CIO.

The California Chamber of Commerce praised the move to immediately end social distancing obligations instead of waiting until July 31, as Cal/OSHA had initially proposed. And employers must now provide the most effective N95 masks for free to unvaccinated employees only upon request, under the latest revision.

Newsom promised to provide a one-month supply of the masks after business groups complained they would have to stockpile the N95s in competition with healthcare workers.

There were 700 California workplace outbreaks and more than 10,000 infections in the last 30 days, Cal/OSHA’s Berg said, but he said the N95s are the best alternative as other protections wane.

Lapsley’s organization, joined by groups representing restaurateurs, manufacturers, retailers and others, in a statement called the revised rules “a step in the right direction” but asked Newsom to end what they said are confusing differences between state rules and federal guidelines.

“There is still more work to be done and these new Cal/OSHA regulations do not ensure that the economy can ‘roar’ back,” the groups said.

Slip in Small Business Optimism

Article by National Federation of Independent Businesses

Small-business optimism hit a bump in the road in May, according to today’s release of the National Federation of Independent Business’ Small Business Economic Trends report, also known as the Optimism Index.

“May saw a slight pause in the recovery of small business optimism after steadily increasing each month in 2021,” said a national news release issued by NFIB. “As reported in NFIB’s monthly jobs report, a record-high 48% of owners reported unfilled job openings.”

Commenting locally, John Kabateck, NFIB California’s state director said, “This is not the type of news we would have preferred hearing heading into the vacation months in our state’s tourist-heavy economy. I think some warning lights, if not alarm bells, should be raised especially for our State Legislature. Let’s hit the pause button on the many proposals to increase regulations long enough to let the economy sort itself out—Not that I’m expecting them to do so, but California is the land of dreams.” 

From NFIB Chief Economist Bill Dunkelberg

“The labor shortage is holding back growth for small businesses across the country. If small business owners could hire more workers to take care of customers, sales would be higher and getting closer to pre-COVID levels. In addition, inflation on Main Street is rampant and small business owners are uncertain about future business conditions.”

Other key findings include:

  • Five of the 10 Index components improved, three declined, and two were unchanged.
  • The NFIB Uncertainty Index decreased one point to 79.
  • Job creation plans over the next three months rose to a net 27%, up six points.
  • Owners expecting better business conditions over the next six months fell 11 points to a net negative 26%.
  • Earnings trends over the past three months declined four points to a net negative 11%.

June 14, 2021

Gilroy Chamber Advocacy Pays Off

Gilroy Chamber, CalChamber, and Other Allies Join Forces to Stop 6 Oppose Bills, Amend 2

The Gilroy Chamber of Commerce along with California Chamber of Commerce policy advocates working alongside advocates from allied business groups succeeded in stopping six CalChamber-opposed bills from advancing for the year, while negotiating amendments that allowed CalChamber to remove opposition from two other pieces of proposed legislation.

Amended Bills

  • AB 255 (Muratsuchi; D-Torrance): Before amendments, this bill would have required primarily small commercial lessors to absorb up to 75% of their owed rent from their tenants so long as they claimed a COVID-19 related financial impact, thereby turning mom-and-pop commercial lessors into acting as the state’s safety net. CalChamber position changed to “oppose unless amended.” Placed on Assembly Inactive File on June 3 at author’s request.
  • AB 570 (Santiago; D-Los Angeles): Before amendments, this bill would have required employer-sponsored health plans to cover dependent parents and stepparents, which would have increased premiums and out-of-pocket costs by up to $936 million. Amendments made on May 24, 2021 would require only individual health plans provide this coverage, not employers. CalChamber position changed to “no position.” In Senate Rules Committee.

Bills Stopped for the Year

  • AB 257 (Lorena Gonzalez; D-San Diego): Would have undermined the existence of the franchise model by holding franchisors responsible for all conduct by individual franchisees. Also established the Fast Food Sector Council that would have had unprecedented authority to write its own labor and employment laws for fast food restaurant employees, circumventing the California Legislature and other regulatory agencies’ position in establishing such laws. Failed deadline on June 4, but may be acted upon in January 2022.
  • AB 1252 (Chau; D-Monterey Park): Would have turned every business offering any software or hardware to consumers, including fitness trackers, glucose monitors, mental health apps, websites and mobile applications, if designed to maintain identifiable information about an individual’s mental or physical health conditions, into a provider of healthcare subject to the California Confidentiality of Medical Information Act (CMIA). Failed deadline on June 4, but may be acted upon in January 2022.
  • AB 1371 (Friedman; D-Glendale): Sought to ban critical protective packaging used by small and large online retailers alike to ship millions of products safely. The bill failed to account for whether adequate substitutes, or any substitutes, existed in the marketplace. The bans would have led to more waste created from food spoilage and product breakage, created unintended negative environmental externalities, and substantially disrupted supply chains. Failed passage in Assembly, 36-28, on June 3. May be acted upon in January 2022.
  • SB 342 (Lena Gonzalez; D-Long Beach): Sought to expand board membership and dilute local control and impose limitations on the types of appointees to the local air districts. Failed deadline on June 4, but may be acted upon in January 2022.
  • SB 582 (Stern; D-Canoga Park): Threatened substantial increases in the cost of all goods and services in California by doubling our 2030 carbon emissions reduction goals. Failed deadline on June 4, but may be acted upon in January 2022.
  • SB 746 (Skinner; D-Berkeley): Proposed to require only businesses to disclose detailed information about whether the business uses personal information for political purposes, regardless of whether the use of such information is partisan or whether there is an intent to use such information for political purposes. Failed deadline on June 4, but may be acted upon in January 2022.
Cal/OSHA Changes Its Mind Again

Cal/OSHA to Revise COVID-19 Emergency Temporary Standard Again

By Robert Moutrie, CalChamber

Revisions to California’s COVID-19 workplace emergency temporary standard (ETS) were delayed again this week at a special meeting of the Cal/OSHA Standards Board, but employers may find a silver lining to this cloud.

The Standards Board voted at the end of the four-hour meeting on June 9 to withdraw the revised ETS text it had approved less than a week earlier (on June 3) so the Cal/OSHA staff can make some quick changes and resubmit them to the Standards Board for a vote at its June 17 meeting.

The Board’s action means the revisions approved on June 3 (which included some loosening of requirements and recognition of vaccines as a form of protection) won’t go into effect because the Office of Administrative Law (OAL) will not complete its 10-day review and approval process.

Face Masks – New CDPH Guidance and Potential ETS Revision

The focus of the Board’s special meeting this week was a June 7 letter from the California Department of Public Health (CDPH) stating that CDPH would be issuing new guidance changing face mask requirements, effective June 15.

The new CDPH guidance became public on June 9, and is available at www.cdph.ca.gov/Programs/CID/DCDC/Pages/COVID-19/guidance-for-face-coverings.aspx#June15guidance.

Matching the recommendations from the Centers for Disease Control and Prevention (CDC), the CDPH will no longer require masks for fully vaccinated individuals, except in certain limited settings where masks are required for everyone, regardless of vaccination status (such as health care settings, on public transit, indoors in schools, state and local correctional facilities, and homeless shelters).

For unvaccinated individuals, the new CDPH guidance will require masks in indoor public settings and businesses (such as retailers, restaurants, theaters, family entertainment centers, at meetings and in state and local government offices serving the public).

In order to prevent its new June 3 amendments from being inconsistent with CDPH guidance, the Board voted to recall its standard from OAL to allow staff to make quick revisions to the masking portion of its regulation, as well as potentially revising other sections.

CalChamber Testimony

During the two hours of public testimony at the June 9 meeting, the California Chamber of Commerce and other business representatives urged the Standards Board to make the ETS consistent with CDC and CDPH guidance on face masks; questioned the need to require employers to provide N95 masks to workers upon request; and asked for clarification on any requirement to document the vaccination status of employees.

Several speakers pointed out that N95 masks need to be properly fitted to be effective and should be reserved for use by health care workers, first responders and as already required during the wildfire season, especially considering supply chain challenges that make the N95’s difficult to obtain.

Labor representatives pushed for potentially providing N95’s to all workers, vaccinated or not, and not relying on individuals to self-certify their vaccination status.

Timeline

The text for the new proposed ETS revision should be released by June 11 to allow sufficient public notice before the Standards Board meeting on June 17. Until that text is made public, it remains unclear what issues (besides face masks) the revision will address. If adopted, the revision would go into effect 10 days after the vote (June 28).

Employers should be aware that the present ETS — as passed in November 2020 — will continue in effect until this new text is adopted and goes into effect. That means no changes to workplace standards on June 15, despite the changes applicable to Californians in their personal lives.

New Testing Guidance

Although it wasn’t discussed at the Standards Board meeting, another important guidance was recently released by the CDPH. On June 7, the CDPH posted a memo on “Updated Testing Guidance.” Employers should take a look at the memo as a potentially significant obligation that is outside of the COVID-19 ETS. The new testing guidance appears to require weekly or biweekly testing of unvaccinated employees at workplaces in certain industries on an ongoing basis.

The testing guidance memo is available at www.cdph.ca.gov/Programs/CID/DCDC/Pages/COVID-19/Updated-COVID-19-Testing-Guidance.aspx.

Drought Challenges Ahead

Drought Challenges Increasingly Evident for Both Water Suppliers and Water Users

By Valerie Nera, CalChamber

It’s official. California is in another drought cycle as are most of the western states. A look at the U.S. Drought Monitor shows a state mostly in shades of red.

Drought Responses

The Governor has declared a drought emergency for 41 of the state’s 58 counties.

The State Water Resources Control Board notified some water rights holders that they will not be able to draw surface water this year.

The U.S. Bureau of Reclamation changed its allocation amount to zero for its agricultural water contractors.

The Department of Fish and Wildlife is sounding the alarm that migrating salmon are in dire trouble with river water likely too hot for their survival.

Local water agencies and districts are sending notices to their customers to conserve water and in some areas to reduce water usage by at least 10%.

All this and it’s just the beginning of the summer season when temperatures reach 100 degrees in many parts of the state. The wildfire season is already underway.

Cutbacks, Other Preparations

With the Governor’s drought emergency declaration, the State Water Resources Control Board sent letters to thousands of junior water rights holder to stop drawing water from rivers.

At the same time, the Department of Water Resources is preparing to install a $30 million rock barrier on the Sacramento-San Joaquin Delta to keep salt water from encroaching into the freshwater estuary thereby contaminating drinking water and damaging agricultural fields.

Northern California reservoirs show diminishing water levels, making it difficult to supply cold water to send down the rivers to help migrating salmon and still provide water for municipal and agricultural uses. Wildlife refuges will not be receiving any water, putting many species in jeopardy.

The U.S. Bureau of Reclamation announced that most farm-irrigation districts drawing water from the Central Valley Project are cut off this year. It was initially thought that they would receive 5% of requested amounts, but that was changed due to lack of rain in the spring.

Municipal water agency allocations are slashed from 55% down to 25%, which will put pressure on local water districts in the valley. Water districts from the Oregon border to deep in the Central Valley have sent notices to their customers to reduce use from 10% to 20%. Some, like Westlands Water District, have cut water off for landscaping.

Tough Decisions for Growers

Farmers in California will bear the brunt of water restrictions. Many are making the hard decision to fallow fields or try to salvage what crops they can. Orchardists have begun pulling out trees in hopes of preserving what little water they have.

Producers of every commodity — from the hay fields at the Oregon border to the rice fields in the north valley to the orchards in the Central Valley — are making those tough decisions that will impact food prices in grocery stores, employment numbers and the export markets.

Wildfires

What sometimes gets lost is the fact that wildfires also draw down water supplies. During wildfires, water is pulled from nearby lakes and reservoirs to help control spreading flames.

The likelihood that 2021 will be a challenging wildfire year is strong, given the number of fires so far. Not only is it getting hot earlier in the year; the soil itself is dry from lack of rain, making it easier for fires to ignite.

Power Grid

Another looming problem with the drought is the possibility that the power grid could be affected. Hydropower provides 14% of the power grid’s supply. If the water levels fall too low, the hydropower plants can’t operate. Grid operators say they have enough power now, but if is hot and drought conditions prevail in the western states, California won’t be able to buy power from its usual out-of-state sources.

It’s going to be a challenging year for water suppliers and water users.

Valley Water Declares Water Shortage Emergency Condition

Valley Water Board Chair Tony Estremera statement on declaration of water shortage emergency condition

Santa Clara County is in extreme drought. We can’t afford to wait to act as our water supplies are being threatened locally and across California. We are in an emergency and Valley Water must do everything we can to protect our groundwater resources and ensure we can provide safe, clean water to Santa Clara County residents and businesses.

To better deal with these threats and the emergency they are causing, today my fellow Board Members and I unanimously declared a water shortage emergency condition in Santa Clara County. This declaration, which is among the strongest actions we can take under law, allows Valley Water to work with our retailers, cities and the county to implement regulations and restrictions on the delivery and consumption of water. We also are urging the County of Santa Clara to proclaim a local emergency and join us in underscoring the seriousness of the threats posed by the extreme drought.

Increased conservation is also necessary to protect local water supplies and guard against groundwater overdraft, subsidence, and dry domestic wells, especially if the drought extends into next year.  That’s why my fellow Board Members and I also are calling for a mandatory 15% reduction in water use compared to 2019.

These actions are necessary as we face further challenges to our local water supply. The Federal Energy Regulatory Commission ordered Anderson Reservoir to be drained for public safety as we strengthen the dam. This means the largest surface reservoir in Santa Clara County is out of service while performing this critical work.

Our imported water supplies are decreasing because of the historic dry season. About 50% of our water supply comes from outside our county, and the depleted Sierra Nevada snowpack caused a significant reduction in the amount of imported water we will receive this year.

Valley Water is addressing this by working to withdraw previously banked supplies and purchasing emergency water from our partners.

We thank the many people who acted during the last drought and beyond to reduce their water use significantly. Water saved through the years is water we can use now. We urge the community to keep up that great work.

I ask our residents, businesses, and farmers to do your part to help us weather this extreme drought by taking part in our many rebate and conservation programs. Valley Water offers robust conservation programs that can help you save water and money, including an increase in our Landscape Rebate Program beginning July 1. Learn about all our rebate programs, conservation tips and how to get free water-saving tools at watersavings.org.

A reliable supply of safe, clean water is crucial for public health and the economy. We can’t predict how long this drought will last. But we know now is the time for action to protect our groundwater basins and make sure there is enough water for all our communities. Thank you for doing your part.

June 7, 2021

California's COVID State of Emergency Will Not End on June 15

By Lara Korte, The Sacramento Bee

California Governor Gavin Newsom announces the state will fully reopen its economy June 15 as long as vaccine supplies remain sufficient and hospitalizations low. 

Amid a parade of fanfare surrounding California’s vaccine lottery Friday morning, Gov. Gavin Newsom revealed he will not lift the state of emergency when California reopens its economy on June 15.

“We’re still in a state of emergency,” the governor said. “This disease has not been extinguished. It’s not taking the summer months off.”

California will still reopen its economy on June 15, doing away with the business restrictions, mask mandates and phased reopening for counties. But the state of emergency will remain in effect, allowing the state to continue programs that deal with the ongoing effects of the disaster.

Newsom and other state officials for weeks have careful to note that the COVID-19 situation could change. Vaccination supply, virus variants and human compliance are all factors that could affect the public safety and require the state to reinstate the restrictions it has slowly been rolling back.

For weeks, the governor has been touting June 15 as the day Californians will begin to return to normal. Everyday activities will be allowed and businesses can open with what Newsom’s office called “common sense risk reduction measures.”

But it appears the state of emergency order, which gives the governor additional emergency powers, isn’t going away anytime soon.

Newsom spokesman Alex Stack said the state of emergency allows California to draw down resources and continue operating programs that are needed to deal with the effects of the pandemic. Over the last year, the Democratic governor has issued a slew of executive orders and waived various provisions of law to facilitate such efforts as vaccine distribution and testing.

It’s not unusual for emergency orders to remain after the peak of a disaster has passed, Stack said. Emergency orders still exist for crises like the 2018 Camp Fire, for example.

The fact that the governor will continue to have expanded power angered Republican leaders on Friday afternoon, who have long criticized Newsom’s actions under the state of emergency as an abuse of power.

Some Republican lawmakers have even taken the governor to court to challenge his authority to issue orders under the state of emergency. His emergency orders have led those like the California GOP to label him a monarch and a tyrant, and fueled the effort to recall him.

“If Newsom believes the state is safe enough to reopen, then it’s safe for people to be able to make decisions for themselves without his arbitrary and capricious rules,” said Senate Republican Leader Scott Wilk, R-Santa Clarita, in a statement. “I believe it is time for him to hang up his crown and restore our democracy. In California we don’t grow bananas, so there’s no need for a banana republic.”

State Sen. Melissa Melendez, R-Lake Elsinore, has introduced a measure, Senate Concurrent Resolution 5, that would end Newsom’s emergency powers, though legislative Democrats have not scheduled it for a committee hearing.

“Since the governor refuses to relinquish his crown, the Legislature should pass SCR 5 and do it for him,” Wilk said.

Assemblywoman Laurie Davies, R-Laguna Niguel, said it’s what Californians have “come to expect,” of Newsom’s administration.

“Time after time, the goalpost keeps getting moved,” she tweeted. “Enough already! We have trusted the science and CDC guidelines. California families and businesses are ready to fully reopen.”

Recall candidate Kevin Faulconer also knocked Newsom for not “following the science.”

“Other states have been safely open for months, but Newsom refuses to follow the science. It’s time to recall him,” he tweeted.

The news comes a day after a marathon meeting over the state’s ongoing mask requirements for workers. The standards board of the state’s Division of Occupational Safety and Health, commonly called Cal-OSHA, voted to require workers continue to wear masks unless everyone is vaccinated.

Newsom on Friday declined to say whether he would use an executive action to overturn the decision, which goes beyond guidance from the Centers for Disease Control.

CalOsha Requires Ongoing Mask Wearing... But is That the Final Word?

By Robert Moutrie, CalChamber

After a day-long meeting that included hours of public testimony and internal deliberations, the Cal/OSHA Standards Board ultimately adopted a new set of regulations that will require most indoor workers, including those who have been vaccinated, to wear face masks at work if any other worker onsite is unvaccinated. The rules are out of step with Centers for Disease Control and Prevention (CDC) guidance and the Governor’s own directive to re-open the state on June 15.

The California Chamber of Commerce has urged Cal/OSHA to act in accordance with the CDC and the Governor. The CalChamber is leading a large and vocal coalition of business groups that are calling for elimination of the overly burdensome measures in the new regulations, many of which are in direct conflict with CDC guidance. The CalChamber’s coalition submitted written comments prior to the hearing and offered detailed analysis during testimony yesterday expressing the issues and problems employers and employees will face as a result of these new rules.

In a statement released Wednesday, CalChamber President and CEO Allan Zaremberg called on Cal/OSHA to adopt the same rules and protocols for workers that Governor Gavin Newsom has adopted for the rest of the state—beginning June 15—and that the Centers for Disease Control and Prevention adopted for the rest of the country.

Zaremberg said, “If you are fully vaccinated, you don’t need to wear a mask inside or outside. That’s the science! Under the rules now being considered by Cal/OSHA, workers cannot control their own destiny, like the rest of Californians. Under these rules, workers’ freedoms will be controlled by their fellow workers decisions to get vaccinated, not by their own choices. We join Governor Newsom in encouraging everyone to get vaccinated.”

Notably, the Cal/OSHA Board agreed to establish a new subcommittee to address the multitude of concerns raised during yesterday’s hearing. There was a push to get that effort underway immediately with a resolution promised as quickly as possible. The CalChamber’s coalition will continue all efforts to educate both the subcommittee and the Cal/OHSA Board of the workplace issues created by the new rules and to have a common sense approach adopted to coincide with the Governor’s re-opening plan.

Substantively, the rules adopted yesterday mean some big changes and big questions for employers. Businesses should consult with counsel as soon as possible, because the changes (some of which were made public less than a week ago) will go into effect around June 14, and a second round of changes will go into effect on July 31.

Below is a list of some of the most relevant changes:

  • Vaccinations and Documentation: the amended emergency temporary standard (ETS) allows different precautions for vaccinated and unvaccinated individuals, starting as soon as it goes into effect, and becoming even more significant after July 31. However, there remain questions on how employers should document their workers vaccination status feasibly, while respecting those employees privacy. Cal/OSHA has promised clarification on this point via FAQs. (On a related note, EEOC also released new guidance on employers’ ability to compel vaccination on May 28—available here).
  • June 15 Will Not Change Business Obligations: Businesses will not see changing obligations for their workers on June 15. The amended ETS will go into effect just before June 15, but masking and social distancing requirements will remain in effect for most workers until July 31.
  • N95’s Will Need to Be Stockpiled for Unvaccinated Employees: After July 31, employers will need to make available for voluntary use N95 respirators for each unvaccinated employee, and those N95s will need to be the proper size. That means employers will need to have N95 respirators on hand if they have any unvaccinated, indoor employees after July 31.
  • New Verbal Notice Requirements: For employers dealing with employees who may have “limited literacy,” the amended ETS includes some vague obligations to provide verbal notice of outbreaks, which will likely affect certain industries more than others.

On the positive side, employers will also see some loosening in some areas. Starting when the amended ETS goes into effect, outbreaks will be triggered only among employees, meaning customers massing through the workplace will not trigger outbreak protocols. Similarly, after July 31, social distancing requirements in the workplace will end for all workplaces. Also, outdoor and vaccinated workers will see loosening once employers have documentation of vaccination (which will, as noted above, likely take FAQ clarification).

Cal/OSHA has promised FAQs to clarify a host of ambiguities in the regulation, most notable among them being ambiguity about the documentation required to show vaccination. It is unclear, based on the statements at the Standards Board meeting, when those FAQs will be released, but California’s employers should keep a close watch for them as they move into compliance mode.

For reference, the CalChamber’s comment letter related to outstanding issues in the Amended ETS is here, and the final text (not showing redlines) that was approved by the Board is available here.

EEOC Updates Guidance on COVID-19, Vaccines and the ADA

WASHINGTON – The U.S. Equal Employment Opportunity Commission (EEOC) today posted updated and expanded technical assistance related to the COVID-19 pandemic, addressing questions arising under the federal equal employment opportunity (EEO) laws. The EEOC also posted a new resource for job applicants and employees, explaining how federal employment discrimination laws protect workers during the pandemic. These publications are provided to help employees and employers understand their rights and responsibilities at work during the pandemic.

The expanded technical assistance provides new information about how the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) apply when an employer offers incentives for employees to provide documentation or other confirmation of vaccination when an employee gets a vaccine in the community or from the employer or its agent. The technical assistance answers COVID-19 questions only from the perspective of the EEO laws.  Other federal, state, and local laws come into play regarding the COVID-19 pandemic for employers and employees.

“The updated technical assistance released today addresses frequently asked questions concerning vaccinations in the employment context,” said EEOC Chair Charlotte A. Burrows.  “The EEOC will continue to clarify and update our COVID-19 technical assistance to ensure that we are providing the public with clear, easy to understand, and helpful information. We will continue to address the issues that were raised at the Commission’s recent hearing on the civil rights impact of COVID-19.”

The key updates to the technical assistance are summarized below:

  • Federal EEO laws do not prevent an employer from requiring all employees physically entering the workplace to be vaccinated for COVID-19, so long as employers comply with the reasonable accommodation provisions of the ADA and Title VII of the Civil Rights Act of 1964 and other EEO considerations.  Other laws, not in EEOC’s jurisdiction, may place additional restrictions on employers.  From an EEO perspective, employers should keep in mind that because some individuals or demographic groups may face greater barriers to receiving a COVID-19 vaccination than others, some employees may be more likely to be negatively impacted by a vaccination requirement.
  • Federal EEO laws do not prevent or limit employers from offering incentives to employees to voluntarily provide documentation or other confirmation of vaccination obtained from a third party (not the employer) in the community, such as a pharmacy, personal health care provider, or public clinic. If employers choose to obtain vaccination information from their employees, employers must keep vaccination information confidential pursuant to the ADA.
  • Employers that are administering vaccines to their employees may offer incentives for employees to be vaccinated, as long as the incentives are not coercive. Because vaccinations require employees to answer pre-vaccination disability-related screening questions, a very large incentive could make employees feel pressured to disclose protected medical information.
  • Employers may provide employees and their family members with information to educate them about COVID-19 vaccines and raise awareness about the benefits of vaccination. The technical assistance highlights federal government resources available to those seeking more information about how to get vaccinated.

The new resource for job applicants and employees provides basic information about how federal employment discrimination laws help workers who are being harassed; who need extra protection against getting sick; who are not being allowed to work; or who need a modification of their employer’s COVID-19 safety requirements.

These two publications follow an EEOC hearing on April 28 on the impact of the COVID-19 pandemic on civil rights in the workplace at which the EEOC heard from a wide range of experts. They were prepared prior to the CDC’s new guidance for fully vaccinated individuals issued on May 13, 2021, and do not specifically address that new guidance. As new developments occur, the EEOC will consider any impact they may have on EEOC’s COVID-19 technical assistance and will provide additional updates and assistance to the public as needed.

The EEOC advances opportunity in the workplace by enforcing federal laws prohibiting employment discrimination. More information is available at www.eeoc.gov. Stay connected with the latest EEOC news by subscribing to our email updates.

The Consequences of Drought

By Valerie Nera, CalChamber

It’s official, California is in another drought cycle as are most of the western states. A look at the U.S. Drought Monitor shows a state mostly in shades of red.

The Governor has declared a drought emergency for 41 of the state’s 58 counties. The State Water Resources Control Board notified some water rights holders that they will not be able to draw surface water this year. The Bureau of Reclamation changed its allocation amount to zero for its agricultural water contractors. The Department of Fish and Wildlife is sounding the alarm that migrating salmon are in dire trouble with river water likely too hot for their survival. Local water agencies and districts are sending notices to their customers to conserve water and in some areas to reduce water usage by at least 10%. All this and it’s just the beginning of the summer season when temperatures reach 100 degrees in many parts of the state. The wildfire season is already underway.

With the Governor’s drought emergency declaration, the State Water Resources Control Board sent letters to thousands of junior water rights holder to stop drawing water from rivers. At the same time, the Department of Water Resources is preparing to install a $30 million rock barrier on the Sacramento-San Joaquin Delta to keep salt water from encroaching into the freshwater estuary contaminating drinking water and damaging agricultural fields. Northern California reservoirs show diminishing water levels, making it difficult to supply cold water to send down the rivers to help migrating salmon and still provide water for municipal and agricultural uses. Wildlife refugees will not be receiving any water, putting many species in jeopardy.

The Bureau of Reclamation announced that most farm-irrigation districts drawing water from the Central Valley Projects are cut off this year. It was initially thought the they would receive 5% of requested amounts, but that was changed due to lack of rain in the Spring.  Municipal water agency allocations are slashed from 55% down to 25%, which will put pressure on local water districts in the valley. Water districts from the Oregon border to deep in the Central Valley have sent notices to their customers to reduce use from 10 to 20%. Some, like Westlands Water District, has cut water off for landscaping.

Farmers in California will bear the brunt of water restrictions. Many are making the hard decision to fallow fields or try to salvage what crops they can. Orchardists have begun pulling out trees in hopes of preserving what little water they have. Every commodity from the hay fields at the Oregon border to the rice fields in the north valley to the orchards in Central Valley are making those tough decisions that will impact food prices in grocery stores, employment numbers and the export markets.

What sometimes gets lost is the fact that wildfires also draw down water supplies. During wildfires, water is pulled from nearby lakes and reservoirs to help control spreading flames. The likelihood that 2021 will be a challenging wildfire year is probable given the number of fires so far. Not only is it getting hot earlier in the year, the soil itself is dry from lack of rain, making it easier for fires to ignite.  It’s going to be a challenging year for water suppliers and water users.

June 1, 2021

Gilroy Chamber’s Advocacy Making a Difference

We are pleased to inform you that AB 570 has been dramatically amended – so much so, CalChamber is removing their opposition. The bill originally sought to allow dependent parents and stepparents to be added to employer sponsored health plans. The mandated coverage would have caused employer premiums to increase nearly $1 billion. However, AB 570’s amendments now indicate dependent parents can only be added to individual policies, meaning the bill no longer has any impact on employer sponsored plans and premiums.

A major reason the bill was amended was due to the outward opposition by the Gilroy Chamber of Commerce, CalChamber and other business organizations, which legislators took notice of. They did not realize how dire the consequences were for small businesses before our involvement.  

More Assistance for Small Businesses

SBA Launches  $100M Community  Navigator Pilot  Program

$100 million competitive grant program to strengthen outreach to businesses in underserved communities enacted through the American Rescue Plan 

WASHINGTON – The U.S. Small Business Administration (SBA) announced today that it is accepting applications for its new Community Navigator Pilot Program. This new initiative, established by the American Rescue Plan, will leverage a community navigator approach to reach our nation’s smallest businesses, with a priority focus on those owned by socially and economically disadvantaged individuals, as well as women and veterans. SBA will accept applications through July 12, 2021, and anticipates making award decisions by August 2021. The Biden-Harris Administration has made delivering equitable relief to hard-hit small businesses a top priority and will continue to take steps to ensure equitable distribution of relief.  

“The Community Navigator Pilot Program is a crucial addition to our SBA programs because it helps us to connect with small businesses that have historically been underserved or left behind. These businesses – the smallest of the small in rural and urban America, and those owned by women, people of color, or veterans – have suffered the greatest economic loss from this pandemic,” said SBA Administrator Isabella Casillas Guzman. “We’ll be using a hub and spoke model in local regions across the nation to bridge the gap between local entrepreneurs and SBA’s resources and programs. If we’re going to build back better, we need to ensure that all entrepreneurs have the support they need to recover.”

In February 2021, Congress met to provide a blueprint on assistance to small businesses with provisions under the American Rescue Plan. Members of Congress met with constituents to discover at local levels the impact of the pandemic and the effect it is having on businesses that may have been left out in early rounds of relief.

“I’ve spoken to small businesses in every corner of Arizona. Far too many of them, especially tribal and minority-owned businesses and those in rural communities, have been unable to get the support they need,” said Sen. Mark Kelly of Arizona. It’s why I fought to include the Community Navigator Program in the American Rescue Plan because it will help meet Arizona small businesses right in their communities, including providing assistance for Spanish-speakers, and get them the relief they need to keep their doors open and workers on payroll.” 

“As someone proudly representing one of the most diverse congressional districts in the country, I am glad the Community Navigator Pilot Program will soon be launching,” said Rep. Carolyn Bourdeaux of Georgia. “We have already seen the difficulties diverse communities face in accessing critically-needed relief resources, from securing PPP funds to rental relief. Through targeted outreach to small businesses in underserved communities, we can ensure that everyone is able to take advantage of the resources offered by the American Rescue Plan.”

The Community Navigator Notice of Funding Opportunity will be open to applications from nonprofit organizations, state, local, and tribal governments, SBA resource partners, and other organizations.  Selected partners will engage in targeted outreach for small businesses in underserved communities to help small businesses get the resources and support they need to get back on track as the economy continues to recover from the COVID-19 pandemic.

“Our small business owners—especially those owned by socially and economically disadvantaged individuals, people of color, women, veterans, and Native Americans—they need us the most, and they need us now,” said  SBA Associate Administrator for the Office for Entrepreneurial Development Mark Madrid. “This initiative underscores our Agency’s commitment to connecting distressed small business resources with SBA resources and grant funding.”

“The SBA understands the importance of partnering with organizations as well as smaller, local institutions that are already embedded in the fabric of the Main Street business communities they serve,” said Assistant Administrator for the Office of Women’s Business Ownership Natalie Madeira Cofield. “Community Navigators are the backbone of aiding underserved and underrepresented communities across the nation with recovery.”

Making a Difference in Underserved Small Business Communities.  Key in this initiative are partners and people in the community, serving as a two-way information stream, enabling enterprising business owners to receive the help needed from the SBA. Serving as the foundation of America’s economy, these underserved businesses have areas of concern that need to be addressed. Community Navigator Pilot will provide counseling, networking, and the assistance needed during this time of economic recovery.

Competitive grant awards will range from $1 million to $5 million for a two-year performance period. Applicants have until July 12, 2021, to submit their applications at grants.gov. Performance periods are projected to commence in September 2021. Those eligible to apply must meet and demonstrate abilities to support the requirements of this funding opportunity.

For more information on the Community Navigators Initiative, please visit www.sba.gov/navigators.

Employers Have to Provide N95 Masks?

Cal/OSHA Delays Vote on COVID-19 Emergency Regulation Amendments

By Robert Moutrie, CalChamber

Employers will have to wait a little longer to know what is coming for California’s COVID-19 workplace emergency temporary standard (ETS). The California Division of Occupational Safety and Health (Cal/OSHA) Standards Board was scheduled to vote on a new proposed text for the ETS on May 20. However, agency staff requested that the Board not vote on the amendments in order to give the Division an opportunity to make it more consistent with recent Centers for Disease Control and Prevention (CDC) guidance.

For context—on May 13, just one week before Board was set to vote—the CDC updated its guidance to allow fully vaccinated persons to go without masks in some settings. Around the same time, California Health and Human Services Agency Secretary Dr. Mark Ghaly announced on May 17 that “California plans to implement the CDC’s guidelines around masking to allow fully vaccinated Californians to go without a mask in most indoor settings” starting June 15.

Pointing to these recent developments, Cal/OSHA stated that “it is important to revisit the proposed COVID-19 prevention emergency in light of this new guidance.” And added that “The Division will limit any potential changes to consideration of the recent guidance, in order to make possible a targeted effective date of June 15, 2021.”

Next Steps

Though the Cal/OSHA Standards Board intends to vote on a new text at the June 3 emergency meeting, the text that will be voted upon remains unpublished at this time.  Assuming it is approved, it will go into effect state-wide before June 15, so employers need to be looking to get ahead of compliance issues as soon as possible.

The CalChamber expects that the revised text will likely include all of the major features of the May 20 draft text that was to be considered at the Standards Board Meeting, but with minimal changes to the face mask requirements.

This means that California employers should stay focused on the May 20 text while keeping an eye open for small changes in the new text, which is expected to be released in the coming week. Chief among the issues in the May 20 text (which the CalChamber expects will persist in the upcoming revised text), employers should watch for:

  • Lightened compliance requirements in some sections based on employee vaccination (which will require ambiguous “documentation” of vaccinated status);
  • New requirements to provide N95 respirators to unvaccinated workers in limited setting pre-July 31, and to all unvaccinated indoor employees after July 31;
  • Changes to testing and training obligations; and
  • Slight loosening of disinfect and cleaning obligations to reflect new science regarding the rarity of surface-based transmission.

These concerns (and others) were all raised in the CalChamber’s coalition comment letter, which was submitted to the Standards Board for the May 20 meeting, as is available here.

Looking Down the Road

So, what can employers expect after the June 3 vote? Employers should be clear on one thing: the emergency regulation will not sunset on June 15. Workplace obligations won’t end just because the Governor has opened up the state socially. To the contrary, the emergency regulation will continue in effect until Cal/OSHA’s Standard Board ends it, or the emergency regulation expires (which won’t take place until early 2022 if the Board passes these amends on June 3).

Substantively, employers should keep their eyes on July 31. That’s because the May 20 text of the emergency regulation included a July 31 threshold date for workplace precautions which is the critical date employers will want to watch. This July 31 date is not an expiration date for the entire regulation; instead, certain provisions will change in their application, but not end completely. For example, though social distancing requirements will diminish, new requirements to provide N95 respirators will take their place—so employers will need to read closely and plan their compliance with the long-term in mind. Though the June 3 text has not yet been released, we expect this July 31 transition date will likely be maintained in the June 3 text, so employers should prepare to comply.ds

In the near term, we also expect Cal/OSHA to release FAQs around certain notable ambiguities in the emergency regulation, including the most hot-button issue: exactly how will employers be required to document the vaccination status of their employees?

N95 Respirator & Recordkeeping Concerns

Of particular concern is the requirement that employers stockpile and make available N95 respirators for unvaccinated, indoor workers starting on July 31. The CalChamber estimates that around 2 million workers may be in this category by the end of July.

This change is problematic from both public health and feasibility standpoints. As California employers will need to purchase a significant number of N95 respirators for the duration of the regulation, we have grave concerns that virtually every business in the state will be in competition with health care professionals (both in California and abroad) for that supply.  This competition makes even less sense when you consider that the emergency regulation does not require fit testing or shaving of beards—because such would be infeasible—so employees will likely not have the tight seal necessary for N95’s to work correctly. In short: indoor, unvaccinated employees will be taking N95’s from healthcare, and not getting the full benefit the N95 would provide to properly trained healthcare or first responders. All of this raises the question: why not stick with face masks and save the N95 masks for medical professionals and industries where they are needed?

Another primary concern is the proposed requirement that employers maintain records containing their employees’ vaccine status. This can be problematic for employers because California requires such employee health records to be kept for the duration of employment plus 30 years. Maintaining those records for that long, and in a way that protects privacy, is a concern for many employers, and especially small employers.

California Approves Electric Car Mandate for Uber and Lyft

Article by CalMatters

Ninety percent of miles logged by Uber and Lyft drivers in California must be in electric vehicles by 2030 under a state mandate adopted May 13. 

The so-called Clean Miles Standard, unanimously approved by the California Air Resources Board, aims to curb the climate impacts of emissions from ride-hailing trips. It’s an ambitious target: In 2018, electric vehicles accounted for less than 1% of miles traveled by Uber and Lyft drivers in California.

The big question for the gig-economy fleets is: Who will pay for the cleaner cars? 

It’s not a question that the air board could answer in its three-hour public hearing Thursday. While a 2018 law charged the air board with setting the targets, the California Public Utilities Commission will be in charge of enforcement. 

Environmental groups, labor advocates and drivers are calling for California regulators to ensure that the companies, not the drivers, cover the costs of electrifying their fleets.

Air board member Nathan Fletcher, a San Diego County supervisor, voiced concerns at the meeting about Uber and Lyft putting the burden on drivers since the rule has no mechanism to ensure they don’t.

“I think we should have every assumption moving into this that an industry that is predicated and based on labor exploitation will simply find a way to exploit their workers in order to do this,” Fletcher said.

Representatives of Uber and Lyft told CalMatters before the vote that they support the 90% mandate, but are pushing for state funding and flexibility if they encounter delays meeting the targets.

“We support this regulation and we support the ambitions that it sets out,” Adam Gromis, global lead on sustainability policy at Uber, said. “We do think that there’s work to be done in terms of pairing and marrying the regulation side with supportive policies that can ensure a fair transition for drivers.” 

Paul Augustine, a representative for Lyft, said during today’s hearing that Lyft has consistently pushed for aggressive targets for its fleet, but accomplishing them will take more work from policymakers, environmental groups, auto manufacturers and charging network providers to defeat the barriers to electric car ownership.

In a letter sent to the board this month, Lyft was more assertive: “While we are pleased to see aggressive environmental targets, we are disappointed that the efforts of the past years have culminated in metaphorical sticks with no carrots.”

Yearly costs for ride-hailing companies and drivers, including electricity and home chargers, will reach roughly $400 million in 2030, according to an air board staff report. But staff predicts that savings, including on gasoline and maintenance, will far outstrip them — leading to net benefits of $215 million in 2030. 

An Uber or Lyft driver who racks up 30,000 miles would save $2,212 in 2027 if they are able to take advantage of government subsidies. Without those incentives, air board staff predict that yearly savings drop to roughly $712. 

Still, an air board analysis of driver ZIP codes estimates that about 56% of ride-hailing drivers could be from low-income or disadvantaged communities who may not be able to afford the switch to an electric vehicle.

“The companies should pay all expenses for all the vehicles, all the time. But that’s not happening,” Nicole Moore, who drives a plug-in hybrid part-time for Lyft in the Los Angeles Area and is on the organizing committee for Rideshare Drivers United, told CalMatters before the vote. “The cost of the fleet is on the drivers, the cost of the fuel is on the drivers, everything is on the drivers.” 

Moore called for any state incentives to go directly to drivers. “This is going to basically be a green badge of honor for Lyft and Uber, when it’s the drivers that are paying for this conversion,” Moore said. “And it’s not right.” 

Cuts in greenhouse gases

Under the new regulation, in two years 2% of miles traveled by Uber and Lyft drivers fleetwide must be in electric vehicles, ramping up to 30% in 2026 and 90% in 2030. The 90% mandate will require electrifying less than half of the high-mileage drivers’ vehicles, according to an air board analysis.  

It is expected to cut greenhouse gas emissions by 1.81 million metric tons from 2023 to 2030, plus nearly 400 tons of smog-forming gases and particles. That’s equivalent to removing nearly 400,000 cars from California’s roads. 

The fleet is fast-growing so the environmental impact is increasing. Rideshare drivers logged about 1.2% of the total miles traveled by light-duty vehicles on California’s roads in 2018, up from 0.05% in 2014. Uber and Lyft dominate the ride-hailing sector, which produces about 1% of the greenhouse gases from light duty cars and trucks in California. Overall, transportation is the biggest greenhouse gas polluter in California. 

The fleets have outsized climate impacts, pumping out about 50% more carbon dioxide in 2018 than the average personal vehicle for every mile traveled with a passenger, according to an air board analysis. 

That’s because ride-hailing drivers travel a lot between trips or while waiting for a fare. These so-called “deadhead miles” without a passenger account for about 40% of total miles traveled by ride-hailing vehicles. 

Factoring in public transit, the Union of Concerned Scientists pegs the impact even higher — estimating that ride-hailing trips produce 69% more planet-warming pollution than the forms of transportation they replace. 

The rule also calls for cutting the companies’ carbon dioxide emissions from miles traveled with passengers to zero by 2030, partially by using credits earned by encouraging public transit and improving walkability and access to biking.

Air board members expressed frustration with how little data they have about California’s ride-hailing drivers and how this policy might affect them. 

“How does this impact our drivers? Are we disproportionately affecting people who are people of color here in California? We have no data, no demographics. We’re not requiring it. So how are we going to properly evaluate this standard that we’re creating?” said air board member Davina Hurt, who represents San Mateo County cities on the Bay Area’s air district board. 

The board urged the California Public Utilities Commission to collect key socioeconomic data on drivers in order to better evaluate the policy’s effects. The Commission has fined Uber millions of dollars in the past for failing to comply with information requests

Air board member Daniel Sperling, founding director of the UC Davis Institute of Transportation Studies, proposed weakening the electrification targets in favor of pushing ride-hailing companies to instead reduce miles traveled by their fleets. But the proposal was voted down with only two votes in favor from Sperling and air board vice chair Sandra Berg

“We’re going to succeed on the electrification,” Sperling said. “I’m not feeling good that we’re going to succeed on (vehicle miles traveled).” 

Environmental groups pushed back against the proposal, saying that weakening electrification targets could disincentivize companies from helping lower income drivers. The comments echoed those raised by Dave Weiskopf, senior policy advisor for NextGen California, a progressive advocacy group founded by Tom Steyer

Starting too slowly, Weiskopf said, will allow the companies to lean on state and federal subsidies as well as on higher-income drivers who were already going to purchase electric vehicles, rather than provide incentives to help lower-income drivers afford them. 

“Then the companies can free-ride off of investments that its employees are making — sorry, contractors are making,” Weiskopf said. “The idea that it’s important to set weak standards in the early years in order to protect drivers is actually exactly backwards.”

‘No assurance’ drivers will be reimbursed

An earlier proposal, released last summer, would have electrified 60% of vehicle miles traveled.

But Lyft already pledged to electrify its entire fleet by 2030, and Uber has the same goal for vehicles in US, Canadian and European cities, with full electrification by 2040. Uber also said it would commit $800 million to help drivers transition in the United States, Canada and Europe. 

Joshua Cunningham, the air board’s branch chief of advanced clean cars, said it’s up to the companies to determine how to meet the targets. 

“We do not dictate how the companies spend their money to comply. We don’t dictate whether they give money to drivers. That’s up to them,” Cunningham said. Still, he said, “We hope that the companies will provide financial incentives to drivers.” 

Because of Uber and Lyft’s exemptions from labor rules, “there is no assurance that (ride-hailing companies) will pay drivers for the extra costs of electrification,” the staff report said.

A 2021 Chevrolet Bolt EV can start around $36,500, and the costs of installing and maintaining a home charger can run more than $1,400 starting in 2023, the air board says. Renters or people without garages might have to rely on public charging, which can be pricier, Cunningham said.

Government funding shouldn’t take the place of investments from the companies themselves, the Union of Concerned Scientists said. “It would cost less than 4 cents per ride-hailing mile driven to cover the upfront costs of drivers.” 

Uber and Lyft together spent more than $108 million on a massive campaign to win voter support for Proposition 22, which exempted companies that employ drivers through apps from a law requiring them to classify their workers as employees and offer employee benefits. 

“Those 200 plus million dollars could buy a lot of (electric vehicles),” said John Balmes, a professor of medicine at the University of California, San Francisco and a member of the air board. 

Honoring Their Last Full Measure of Devotion

History of Memorial Day

The history of Memorial Day 2021 dates back to the American Civil War. It started as an event to honour soldiers who had died during the war. It is said to be inspired by the way people in the Southern states honoured the dead. The original national celebration of Decoration Day took place on 30 May 1868. There was over twenty four cities and towns across the United States that claim to be the birthplace of Memorial Day. Waterloo (New York) was officially declared the birthplace of Memorial Day by President Lyndon Johnson in May 1966. In the late 19th century, the holiday (previously known as Decoration Day) became known as Memorial Day and was expanded to include the deceased veterans of all the wars fought by American forces. Originally, the holiday used to be celebrated on May 30, regardless of the day of the week that it fell on. In 1968, the Uniform Holidays Bill was passed and as a result the day changed.

Traditions of Memorial Day

Traditionally Memorial Day is viewed as a time of honour and remembrance. Throughout the United States it is common to visit cemeteries, particularly military ones, and decorate graves of the deceased with flowers, small flags and wreathes. Other common traditions of Memorial Day 2021 that are still practiced today include the raising the U.S. flag quickly to the tops of flagpoles, slowly lowered to half-mast, and then it is raised again to full height at noon. The lowering of the flag at half-mast is meant to honour the fallen soldiers who have died for their country over the years. While re-raising the flag is meant to symbolize the resolve of the living to carry on the fight for freedom so that the nation’s heroes will not have died in vain. On the United States Capitol Building’s West Lawn, a Memorial Day concert is held annually and is broadcasted live around the country. Additionally, there are thousands of Memorial Day 2021 parades all across the country in cities small and large. Many will wear or put on a display of red poppies on this day as a symbol of fallen soldiers. This tradition grew out of the famous poem by Canadian John McCrae known as ‘In Flander’s Fields’, where Moina Michael conceived an idea to wear red poppies on Memorial day in honour of those who died serving the nation during war.

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