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AB 701 Passed in California- How This May Affect Your Workplace Quotas

On September 22, 2021, California Governor Gavin Newsom signed AB 701 into law. This new law regulates production quotas for warehouse distribution center employees. The law goes into effect on January 1, 2022 as the first of its kind. However, many expect it to set a precedent for other states to follow suit.

What is AB 701?

AB 701 requires warehouse distribution employers to provide employees with a detailed written description of each quota within 30 days of hire. Additionally, it prohibits employers from disciplining or terminating employees who fail to meet their quota If they did not receive the notice in a timely manner.

Lastly, the law prohibits any quota that would interfere with an employee’s ability to take a meal/rest period or to use the restroom- including the time it takes to get to and from the restroom. Through AB 701, employees have the right to request records of the last 90 days of their work speed data. Subsequently, this includes any information that the employer collects in regards to the employee’s performance of a quota.

A former labor leader, Democratic Assemblywoman Lorena Gonzalez wrote the law citing Amazon’s practice of disciplining workers through an algorithm as the main reason behind the bill.

Who does this affect?

AB 701 applies to employers with 100 or more employees at a single warehouse distribution center or 1,000 or more employees at one or more centers in the State of California. A warehouse distribution center is an establishment:

  • General storage warehousing
  • Merchant wholesalers of durable & non-durable goods
  • Electronic and mail-order shopping

Additionally, farm product warehousing and storage does not fall under this category.

What kind of disclosures?

A Quota is defined as a work standard under which an employee is assigned or required to perform at a specific speed or perform/produce a quantified number of tasks/products. As a result if the standards are not met, the quota stipulates that an employee may suffer adverse action.

Employers must provide each employee a written description of each quota that applies to them, within 30 days of hire. The description must include the quantified number of tasks to be performed or materials to produce/handle within the defined period. Similarly, it needs to include any potential consequences.

If employees believe that meeting a certain quota violates their right to take a break or violates a health and safety law they may request the following from the employer:

  • A written description of each quota applicable to them AB 701
  • The employee’s personal work speed data

Employers have 21 days from the date of request to provide the information.

Compliance involves various moving parts and is a crucial part of operating a successful business. Therefore, employers should speak with a trusted professional to ensure your organization is in compliance on a federal and local level.

How can Payroll Systems help you with workforce management? We offer a combination of software and human support for your business. Contact us to learn more about our highly scalable HR and payroll solutions.


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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.