Employing People in California Really is Harder
August 2, 2017
California is a uniquely difficult place for companies trying to actually employ people rather than robots. Owning a business in that state, you could be forgiven that the legislation actually embarked on a program to explicitly punish companies for hiring people. The state has spent the last ten or twenty years defining a myriad of micro offenses employees for which may sue employers and make large recoveries -- everything from having to work through lunch to having the wrong chair and not getting to sit in that chair at the right times of day.
To illustrate this, I want to show you the insurance application I just received. Most companies have something called employment practices liability insurance. This insurance helps pay legal and some settlement expenses if and (nowadays) when a company is sued by an employee for things like discrimination or harassment or any of the variety of sue-your-boss offenses California has established. In that multi-page application, after the opening section about name and address, the very first risk-related question asks this:
They specifically ask about your California employment, and no other state, in order to evaluate your risk.
The other insurance-related result of California's regulatory enviroment is that if one is in California, it is almost impossible to get an employee practices insurance deductible under $25,000. This turns out to be just about exactly the amount of legal costs it takes to get a nuisance suit filed with no real grounding dismissed. It essentially means that any disgruntled ex-employee, particularly one in a protected class, can point their finger at a company without any evidence whatsoever and cost that company about $25,000 in legal expenses. Rising minimum wages is not the only reason MacDonald's is investing so much in robotics.
coyoteblog.com |
