New California Law Aims to Curb Warehouse Production Quotas

Author: Emily Scace, XpertHR Legal Editor

September 24, 2021

Aiming to reduce injuries and improve workplace safety at warehouses and distribution centers, a new California law imposes transparency requirements for production quotas and limits the quotas employees at these facilities may be required to meet. Amazon and other major retailers with operations in the state will be heavily impacted.

AB 701 applies to employers with either:

  • 100 or more employees at a single warehouse distribution center in the state; or
  • 1,000 or more employees at multiple warehouse distribution centers in the state.

A warehouse distribution center includes establishments classified in four specific North American Industry Classification System (NAICS) codes covering general warehousing and storage, wholesalers for durable or nondurable goods, and electronic shopping and mail-order businesses.

Affected employers must provide employees with a written description of any production quotas to which they are subject within 30 days of the law's effective date of January 1, 2022. The information must include:

  • The quantified number of tasks to be performed or materials to be produced or handled within the applicable time period; and
  • Any potential adverse employment action that could result from an employee's failure to meet the quota.

New employees must be provided with this information upon hire.

Citing the "rapid growth of just-in-time logistics and same- and next-day consumer package delivery," the law highlights several alleged consequences of harsh quotas in these industries, including increased accidents and injuries, and incentives for unsafe work practices.

To that end, employees may not be required to meet quotas that prevent compliance with required meal or rest periods or workplace health and safety standards or interfere with the reasonable use of bathroom facilities. Employees have the right to request written information about the quotas they are subject to and their own personal work speed data for the past 90 days if they believe a quota has led to a violation of these requirements.

The law also contains antiretaliation provisions. Covered employers may not take adverse employment action against employees for failing to meet quotas that interfere with required meal and rest breaks or occupational safety laws or that have not been disclosed to the employee. It is presumed that an employer has retaliated if it takes adverse action against an employee within 90 days of the employee engaging in certain protected activities, and the employer has the burden of disproving that presumption.

The state Labor Commissioner may issue citations under the law and access workers' compensation data to identify facilities with high injury rates that may be related to the use of unsafe quotas. In addition, current and former employees may seek injunctive relief to obtain an employer's compliance with the law and may be entitled to recover costs and reasonable attorney fees if they prevail.