On September 22, 2021, California’s Governor signed Assembly Bill 701 (AB 701) which regulates the use of quotas at warehouse distribution centers in California. The new law applies to large employers who meet industry definitions for General Warehousing and Storage, Merchant Wholesalers (Durable and Non-Durable Goods), and Electronic Shopping and Mail-Order Houses.

AB 701 requires employers with large warehouse distributions centers to disclose quotas and pace-of-work standards to each employee upon hire or within 30 days of the law going into effect. Employers are required to provide “a written description of each quota to which the employee is subject to, including the quantified number of tasks to be performed or materials to be produced or handled, within a defined period of time, and any potential adverse employment action that may result from failure to meet the quota.”

The new law also provides that employees are not required to meet quotas that prevent compliance with meal or rest periods, use of bathroom facilities, or occupational health and safety laws.

If a current or former employee believes that a quota has caused a violation of such laws, the employee may request, and the employer must provide a written description of each quota applicable to the employee and a copy of the most recent or last 90 days of the employee’s own personal work speed data. A former employee is limited to one request.

There is a rebuttable presumption of unlawful retaliation if an employer discriminates, retaliates, or takes any adverse action against any employee within 90 days of the employee either: (1) initiating the first request in a calendar year for information about a quota or personal speed data; or (2) making a complaint related to a quota alleging a violation of the labor code.

Employees are authorized to pursue injunctive relief and to recover costs and reasonable attorney’s fees upon prevailing in that action.

The requirements of this legislation go into effect on January 1, 2022.