Last week, we reported on a new bill that has now been passed by both Houses of the California legislature that would in effect constrain the use of productivity standards for distribution center employees. (See Productivity Standards in Distribution under Attack in Pending California Law.)
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Though such performance standards have been around in distribution sector since the 1970s at now hundreds of companies, often supported by what is generally termed Labor Management System (LMS) software, the law (assuming California law is signed by Governor Newsom and if he survives today’s recall vote) seems targeted very specifically at Amazon, causing some retailers and distributors to claim they will be harmed from the law for the alleged sins of Amazon.
The governor has until October 10th to sign the bill into law.
Performance "quotas" were a key factor in the campaign to organize workers in a union election at an Amazon fulfillment center in Bessemer, Alabama in March. The union lost badly, but is challenging the results.
That even though it is not clear by any means that Amazon’s use of standards is all that different from others.
The law’s provisions include requiring DC operators to disclose any productivity standards it applies to workers in the state. This would enabled state regulators, to review and determine if its workers have adequate time for breaks, or if performance goals are affecting the health and safety of workers in some other way.
One key dynamic is that if the law moves forward in California, it could spread to other states, especially “blue” ones.
“The pressure to make rates is very stressful, and for many warehouse workers, they have to cut corners in safety to make rates,” Ellen Reese, chair of labor studies at the University of California, Riverside and the lead author of a 2019 research paper that examined experiences of Amazon warehouse employees in the state, recently told the Wall Street Journal.
That Journal article, as have reports on this issue by other publications for many years, says that Amazon uses “complex algorithms” to measure productivity But these are likely very similar to measuring productivity against a standard as calculated by an LMS for many years. The LMS considers factors such as travel distance, placement of the product for order picking, weight of the product, time of the day (to account for fatigue) and other variables.
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Clearly the risk for Amazon and others is that the “quotas” (the term often used in media reports) will be deemed too difficult or unsafe by California regulators, forcing companies to lower them. That in turn would likely require distributors to hire more workers – if they can find them.
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Amazon doesn’t disclose its DC standards – and indeed as mentioned above that would be difficult in some cases due to the dynamic nature of their calculation, the company says rate expectations are measured over time and are based on employees’ experience levels, and that they account for health and safety.
It also says that less than 1% of its dismissal of worker is related to lack of meeting productivity standards.
The most feared provision for business: the bill empowers workers to sue their employers over the impact of standards.
A coalition of industries led by the California Chamber of Commerce has spent months lobbying against the bill.
“Productivity standards are not inherently punitive,” the Chamber said in a letter to legislators August 3.
However, after several clarifications to the bill, the chamber softened its opposition, removing it from its annual “job killer” list — a tag that often dooms proposed legislation.
What do you think of this California bill? Will it spread? Let us know your thoughts at the Feedback section below.
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