Guests | Members | Community | Environment
What is AB 2883 and why is it a big deal?
In 2016 worker cooperatives were unintentionally wrapped in up in legislation to fix workers' compensation abuses throughout California's corporations. The new law, AB 2883, requires owners of corporations hold at least 15% of the company in order to waive workers' compensation insurance. Although this legislation did not target cooperatives like ours directly, the Sustainable Economies Law Center states that AB 2883 "is a substantial setback for the worker cooperative movement at a time when worker-ownership has been recognized as a path to better and more stable livelihoods in California."
Before AB 2883, cooperative members (i.e. owners with voting rights) were allowed to opt out of workers' compensation insurance in order to receive higher wages, long term disability insurance or comprehensive health coverage. As a result of this new legislation, Coops are scrambling to understand exactly what this means for their businesses. We have already seen reductions in worker salaries by 15 - 20% and a handful of organizations are considering restructuring as LLCs or partnerships which were unaffected by this legislation.
Isn't Workers' Compensation Insurance a good thing?
Absolutely! Workers' Comp requirements were a huge win for the workers' rights movement! Cooperatives; however, are much different than the stock corporation model of "share holders vs. employees" that led to the need for a workers' rights movement. Worker cooperative are owned by their members and democratically controlled through a one vote per member system, so members they have direct control over safety protocols and procedures. Also note that before AB 2883 each Cooperative member had the right to elect or waive this coverage, so if a CoOp member wanted Workers' Comp they would elect coverage!
Is the Cooperative Community doing anything to fix this?
YES! The Campaign to Fix AB 2883 is well underway and is comprised of cooperatives from all over California! Niles Pie Co, Drought Smart, Arizmendi on 9th Avenue, Cheeseboard, Three Stone Hearth, Echo Adventure Cooperative, Home Green Home and the Sustainable Economies Law Center have all teamed up to help legislators fix small problems that effect all types of corporations as well as advocating to restore the previous provisions of the law in its application to Cooperative Corporations.
Where can CoOps or individuals go to learn more?
Learn more and sign a petition put together by the Sustainable Economies Law Center.
Read a quick Cooperative Fact Sheet put together by the Campaign to Fix AB 2883.
Cooperatives should check out this great Blog Post on how this law effects your cooperative.
Listen and share the Commonsplace Podcast! Although the entire podcast is fantastic, information about our campaign begins at 21 minutes and 41 seconds: