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As states look to get welfare recipients working, employers are concerned about potential tort liabilities associated with hiring people unaccustomed to workplace culture.
While business associations in some states are just beginning to discuss those concerns, the California Chamber of Commerce already plans to propose legislation that would limit an employer's liability for wrongful termination when firing former welfare recipients.
Between 15% and 20% of recipients have relied on welfare for more than five years, according to Fred Main, who is general counsel for the California Chamber of Commerce.
"They have very little connection to the workforce and need a significant amount of help learning how to show up on time and the culture of work," he said.
"When you are hiring an additional 200,000 to 300,000 individuals who have had less of a connection to work, some of them are not going to work out," Mr. Main observed.
Without some form of tort relief, California's employers will be reluctant to find additional jobs needed for hundreds of thousands of potential workers whose benefits will end under state and federal reform efforts, Mr. Main explained.
"California is an easy state to bring and win employment liti-gation cases already," he said. "So most other states wouldn't have nearly the problem that we think we would have here."
But the issue also is being discussed in other states that are pursuing welfare reform.
"There is an awareness that this is a population of new workers that employers are going to have to take a little chance on," said a spokesman for Wisconsin's Department of Work Force Development. Liability has been brought up in Wisconsin, he said, because there are concerns that if some of these employees don't meet standards and are fired, they will sue.
In Virginia, the Greater Richmond Chamber of Commerce is developing a project called Welfare to Workfare that would train new workers and make the city a prime location for high-tech businesses, a Chamber spokesman said. Employer liability "is a concern in our planning stages," he said. "If you look at the whole picture, that is something that is going to have to be dealt with sooner or later."
The California Chamber of Commerce is talking with state lawmakers about authoring legislation that would grant employers some measure of immunity from wrongful termination suits by former welfare recipients, Mr. Main said. He declined to name those legislators. But, he said, "I don't believe we will have trouble finding one."
One option would be a cap on damages, though the Chamber did not specify a figure. Another would be ensuring "at will" dismissal means just that for a period, such as one year.
In theory, California is an "at will" state, where most employees can be dismissed without the presumption of a contract. But case law developed in the late 1970s and early 1980s expanded the arguments for bringing employment litigation, Mr. Main said.
Of note is "the idea you can establish an implied contract for employment pretty easily," he said. "And, if you win that, you can prove your damages would have lasted as long as you were without work," meaning a 40-year-old worker could seek lost wages until retirement age.
There is also a broad definition of "termination in contrast to public policy," which lets plaintiffs seek punitive damages, he explained.
The chance of reform passing is slight. In each of the past three years, legislation the Chamber has introduced to limit employment liability in hiring in general has failed each time. But lawmakers may have incentive now. California risks losing federal funds if it does not move 80% of its welfare case load into jobs, Mr. Main said.
A spokeswoman for the Washington-based National Restaurant Assn., which represents companies such as McDonald's Corp. and Burger King Corp., said the increased labor pool will help meet a critical need for less-skilled workers.
The group plans to educate members on managing employees who may need to learn basic work skills, such as proper dress and arriving on time, which could cut turnover. "We are really trying to prevent a situation where liability will come into play in the first place," she said.