On January 1, 2022, AB 701 will come into effect in the state of California, heralding an effort to regulate the use of production quotas in the state's large warehouses. The law will cover employers posting at least 100 employees in a single warehouse, or at least 1,000 employees in multiple warehouses throughout the state.

AB 701 defines a quota broadly to include many employment standards imposing productivity speed and volume requirements upon employees and that punish employees for failing to meet those standards. Employers will have to provide new employees a written description of all quotas they are subject to. For existing employees, employers have 30 days from AB 701 coming into effect to provide the above notice.

Further, AB 701 limits the actual implementation of quotas by protecting employees from enforcement of quotas that prevent employees from using restrooms or complying with required meal or rest periods.

This law will also require employers to provide employees, upon request, a written description of all quotas applying to them as well as the last 90 days of the requesting employee's work speed data. This reflects the reality that employers operating large warehouses often meticulously track and record their employees' productivity.

The Bill is apparently crafted to target large warehouse employers such as Amazon, which recently became politically unpopular due to allegedly poor working conditions in its warehouses. One of the major practices Amazon came under fire for was its extensive use of automated software and algorithms to monitor worker productivity and guide employment decisions. AB 701 attempts to grapple with these issues by providing some transparency and, at least theoretically, protecting employees from quotas that violate California's requirements for meal and rest periods.

This bill signals that California's legislature is now closely watching the warehouse and logistics industry. Businesses falling under the scope of this law should consult with attorneys about any existing quota policies to ensure compliance with AB 701.