Melendez To Protect Small Businesses from Unnecessary Fines and Penalties Stemming from Coronavirus

SACRAMENTO – Assemblywoman Melissa Melendez, R-Lake Elsinore, announced today that she will be introducing a measure that seeks to protect small businesses from unnecessary fines due to the unemployment insurance auditing process in the wake of the coronavirus.

“Small businesses are feeling some of the harshest consequences from the shelter-in-place orders in the wake of coronavirus,” said Melendez. “We as lawmakers now need to make sure they are not frivolously targeted by civil actions, penalties and fines that result from the unintended consequences of employees filing for unemployment benefits.”

Assembly Bill 2457 will be amended when the Legislature returns from the coronavirus recess to accomplish the following: (1) It will prohibit a claimant for unemployment benefits from also suing their employers under the Private Attorneys General Act (PAGA) at the same time, thereby protecting small businesses from double jeopardy; (2) Prohibits the Labor Commissioner and the Employment Development Department from using an employment audit for any other purpose than for the determination of an unemployment claim; and (3) Prohibits the Labor Commissioner from assessing any penalties or fines against a small business under the misclassification provisions of AB 5.

“AB 5 has not only been a complete disaster for the people who were self-employed and now seeking help, but for the small businesses who are now at risk of audits, fines and lawsuits,” Melendez said. “I agree with the Governor who said ‘So often, we take them for granted, even in the best of times. Right now, they have been devastated.’ I hope the Governor and my democrat colleagues will join with me to really help the backbone of our local economies to get them back on their feet.”