Janitorial Bills Would Raise Costs for Buildings

Two bills in the California legislature would raise the cost of janitorial services in the state. Some buildings could see costs rise by as much as $100K a month! 

Assembly Bill 2374 expands requirements for displaced janitors, and Assembly Bill 2364 imposes production rate limits. 

Both bills represent new costs for an industry still reeling from market uncertainty. 

Assembly Bill 2374

AB 2374 is also referred to as the "Displaced Janitors" bill. It expands current requirements for employers or those who contract for janitorial services. 

The bill would do the following: 

• Expand the definition of "contractor" to include any person who employs janitor employees and enters into a service contract with the awarding authority. Current law defines "contractor" as any person who employs 25 or more individuals. 
• Companies that take over a contract must retain employees for 90 days instead of the current law's requirement of 60 days. Employees with satisfactory work performance must be offered continued employment after 90 days. 
• The new employer would need to maintain a preferential hiring list based on the seniority of covered employees. 

This bill's changes to how janitorial business is conducted will be burdensome and result in higher operating costs. 

If a new contractor could work with fewer people, state law would require the company to retain extra employees. 

The result is higher costs for the property and, by extension, for the tenants. 

Assembly Bill 2364

Not satisfied with just one challenging janitorial bill, the legislature also considers AB 2364. 

This bill would impose production rate limits and increase the costs of mandatory harassment training programs. 

The overall bill is demanding and costly, with the critical issue being the production rate limit. 

A production rate is the amount of space that a janitor can clean. 

The current average rate is between 5000 and 6000 square feet. 

AB 2364 more than halves that. More janitors would need to be hired to complete the job. 

One member said that up to 16 additional full-time employees could need to be hired for a million-square-foot office building at an extra cost of up to $100,000 a month. 

The production rate limits also do not consider the different nature of cleaning a fully occupied office versus a hybrid space. 

This act is the legislature requiring work conditions to be better negotiated through employment contracts. 

It also burdens buildings more as they try to adjust to meet new tenant needs. 

Status of the Bills

Both bills are in the committee process and have pending hearing dates. Currently, we are working with BOMA California to build a direct advocacy plan to oppose these bills. 

We cannot overstate the negative impacts of these two bills. If they pass, the consequences will reverberate across the industry. 

Janitorial costs would rise almost immediately. Following that, building owners would be required to cut investments elsewhere. 

These policies would further erode the region's attractiveness for real estate investment. 

And ultimately harm the community's economic well-being. 

Stay connected with BOMA on the Frontline for updates on this and other state legislative developments. We will contact you soon for help fighting these bills.