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Newsom Signs First-in-Nation Bill Regulating Computer-Driven Productivity Quotas at California Wareh

Updated Thursday, Sept. 23

California has become the first state to implement a law that addresses working conditions for warehouse workers, like those working for Amazon, Walmart and other major retailers.

Gov. Gavin Newsom signed AB 701, which takes effect in the new year, into law on Wednesday. The law aims to address the impact of quotas on worker injuries and health.

It establishes new standards for companies to make clear to warehouse staff what their production quotas are. The legislation ensures workers cannot be fired or retaliated against for failing to meet an unsafe quota.

“We cannot allow corporations to put profit over people. The hardworking warehouse employees who have helped sustain us during these unprecedented times should not have to risk injury or face punishment as a result of exploitative quotas that violate basic health and safety,” Newsom said in a statement.

“I’m proud to sign this legislation giving them the dignity, respect and safety they deserve and advancing California’s leadership at the forefront of workplace safety.”

The law gives the state Labor Commission the authority to issue citations to companies in violation of the new rules. The department is also allowed to access workers’ compensation data to find facilities where there are high rates of injury and investigate if they are due to unsafe quotas.

The law also bars the use of algorithms that track rests and bathroom breaks and specifically prohibits the firing of workers for failing to meet unsafe quotas because they were taking rest or bathroom breaks in compliance with health and safety laws.

Though not explicitly stated, the new rules are widely considered to be targeted toward Amazon. The Seattle-based behemoth runs more than 60 warehouses across the state, and is known for its demanding productivity requirements.But the bill, authored by Assemblymember Lorena Gonzalez, D-San Diego, is intended more generally to help state regulators get a better handle on how a growing number of employers are using tech in the workplace to control the productivity of their workforce.

According to the U.S. Bureau of Labor Statistics, there were about 206,700 workers in the warehousing and storage industry in California as of June. That figure, however, doesn’t include temporary workers, like the many likely to take on warehouse work in the run-up to the holiday shopping season.

A significant portion of that workforce is employed by Amazon. Behind the big yellow “Place your order” button on the company’s site is a vast network of warehouses, filled with nearly 1 million non-union logistics employees across the country — 40,000 in the Inland Empire alone, according to Amazon.

And while the tech-obsessed retailer is famous for using robots, sensors and software to maximize productivity, it’s also infamous for burning out its workers, many of whom head to the exit doors suffering from repetitive stress injuries and, well, stress overall.

“How did you come up with this rate? Was it based on what your understanding of what a human body can do? Or was it based on what you think you need to get through in order to make a profit this quarter?” said Sheheryar Kaoosji, executive director of the Warehouse Worker Resource Center in Ontario, California.

Around the clock, an army of trucks and trains transport cargo from the ports of Los Angeles and Long Beach to vast warehouses in the Inland Empire counties of San Bernardino and Riverside. There, imported goods are sorted and redistributed onto long-haul trucks, which move them to distribution centers across the West.

Amazon’s rivals, like Walmart and Home Depot, are nipping at the tech titan’s heels, eager to adopt the algorithm-driven productivity tracking tools employed by the company, which logistics experts widely agree is the industry leader in this practice.

“It’s not that those companies can’t afford to do the right thing,” said Kaoosji, who has pushed for them to institute humane working conditions that follow labor laws in spirit, as well as practice. “It’s what those companies can get away with. And if they’re not held accountable, that’s what they’ll continue to do.”

In a letter this summer to the state Senate Judiciary Committee in support of her legislation, Gonzalez wrote, “The demand for speed in these warehouses has led to the increasing use of workplace performance metrics and the imposition of work quotas that employees must meet or suffer adverse consequences, including potentially losing their jobs altogether. There is evidence strongly suggesting that the pressure to meet these quotas leads to significantly higher workplace injury rates.”

Now that it’s a law, the legislation will prohibit the kind of company policies — like ever-rising production quotas or “time off-task” penalties — that essentially pressure workers to forgo their state-mandated breaks, or to wait until the end of their shifts to use the bathroom. The legislation would also bar companies from retaliating against workers who raise concerns about warehouse conditions.

But Kaoosji, of the Warehouse Worker Resource Center, argues there “will never be enough enforcement agents to address the millions of workplaces in California.”

He and other industry watchers say labor regulation at the state level has historically been weak and largely complaint-driven, and that’s made many workers who are afraid of retaliation unlikely to seek redress from authorities.

“The key is giving workers the protections, voice and power to feel like they can speak up at work about injustices and legal violations and not face immediate retaliation, termination,” Kaoosji said.

He considers the new requirements laid out in AB 701 to be only modest improvements, a compromise between labor organizers and big business.

Amazon declined to comment specifically on the legislation, but a spokesperson said in an email that the company abides by state and federal laws, such as providing paid breaks and ready access to toilet facilities.

“If you read some of the news reports, you might think we have no care for employees,” Jeff Bezos, Amazon’s CEO at the time, said in his 2020 letter to shareholders. “In those reports, our employees are sometimes accused of being desperate souls and treated as robots. That’s not accurate. They’re sophisticated and thoughtful people who have options for where to work.”

Given the absence of union representation on warehouse floors, a modest set of new workplace improvement measures may be all that can be accomplished right now, according to Catherine Fisk, a labor law professor at UC Berkeley.

Amazon, among other logistics companies, has so far successfully fought attempts to unionize any constellation of its vast employee base.

“Workers have been trying to unionize warehouses for years, with no success, because companies are so adept at thwarting it by using turnover, anti-union campaigns, restrictions on employee communication with each other, and prohibitions on union organizers from contacting workers,” Fisk said in an email.

Beth Gutelius, research director of the Center for Urban Economic Development at the University of Illinois Chicago, has studied the logistics industry for more than a decade. She said that current state and federal laws are notably outdated, to the detriment of workers.

“The problem with existing law is that, in general, in California and nationwide, it just hasn’t kept up with the state of technological change and productivity gains, coming at the cost of workers’ health and safety,” Gutelius said.

Gutelius noted, however, that she is encouraged by AB 701’s requirement that warehouse operators disclose quotas and work-speed metrics to their employees and to government agencies.

“Right now, it’s kind of a black box. And I think the case of Amazon offers us pretty ample evidence that we can’t just rely on companies to weigh these costs and benefits and act in the interests of workers,” she said. “Someone else has to do that and that is traditionally what government’s role has been.”

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