California Warehouse Quota Bill – How AB 701 Changes Things

California’s new warehouse quota bill, AB 701, requires large warehouses like Amazon to tell workers what quotas they are expected to meet. They are also required to inform workers of the penalties for not meeting them. The law forbids quotas from impacting your rest and meal break rights. Covered employers who violate AB 701 can face a PAGA claim.

What is California’s AB 701?

California Assembly Bill 701 (AB 701) is a labor law that was proposed by Democratic state assemblywoman Lorena Gonzalez in the California legislature. It was signed into law by Governor Gavin Newsom on September 22, 2021. After Governor Newsom signed it, the law went into effect on January 1, 2022.

AB 701 regulates how certain warehouses can set productivity quotas for its workers. While the law does not forbid quotas, it prohibits them in certain circumstances. Most notably, it forbids quotas or performance-tracking algorithms that would impact a non-exempt worker’s right to rest periods or meal breaks.

The new law is the first one in the U.S. to regulate warehouse productivity quotas. It is widely seen as a reaction to the aggressive use of production quotas by Amazon on its warehouse workers.¹

What warehouse distribution centers are covered?

AB 701 does not cover all warehouses. Instead, it covers employers who directly or indirectly control either:

• 100 or more employees at a single warehouse distribution center, or
• 1,000 or more employees at one or more warehouse distribution centers in California.²

A “warehouse distribution center” is based on the North American Industry Classification System (NAICS) Code that it uses. An establishment is covered by AB 701 if its NAICS Code is:

• 493110 (general warehousing and storage),
• 423 (merchant wholesalers – durable goods),
• 424 (merchant wholesalers – nondurable goods), or
• 454110 (electronic shopping and mail-order houses).³

However, NAICS Code 493130, which is for farm product warehousing and storage, is expressly excluded from AB 701 coverage.⁴

Does the law only cover Amazon warehouses?

No, AB 701 is not exclusive to Amazon warehouses or distribution centers in California. However, AB 701 only covers extremely large warehousing employers. While some other employers may be regulated by AB 701, Amazon is the company that will be regulated by it the most.

Can warehouses still use production quotas?

Yes, warehouses can still use production quotas. However, the use of those quotas is limited by AB 701.

Under AB 701, a quota is a workplace performance standard that requires you, within a defined time period, to:

• perform at a specified productivity speed,
• perform a quantified number of tasks, or
• handle or produce a certain amount of material.⁵

Failing to meet this work standard can lead to adverse employment actions.⁶

Under the new law, such quotas cannot infringe on your workplace rights. Additionally, your employer has to notify you of the quota system being used. You also have to be notified of the penalties for not meeting your quotas.

You must be notified of the quota system and its penalties

AB 701 requires covered warehouse employers to provide a written description to workers that details:

• each quota the worker is subjected to,
• the number of tasks to be performed or materials to be handled or produced,
• the defined time period for the worker to meet the quota, and
• any adverse employment action that can result from failure to meet the quota.⁷

This written description of each quota must be provided when you are hired. If you were hired before AB 701 went into effect, you must have received it within 30 days of AB 701’s effective date, or January 31, 2022.⁸

Quotas cannot infringe on your workplace rights

Under AB 701, you are not required to meet a quota that infringes on your:

• meal or rest break periods,
• use of bathroom facilities, including the time that it takes to get to and from the restroom for your bathroom break, or
• compliance with state occupational and safety laws.⁹

Your employer is prohibited from taking adverse employment actions if you fail to meet a quota that infringes on these rights. It also cannot take negative action against you for failing to meet a quota that was not disclosed to you.¹⁰

Any time that you spend complying with occupational health and safety laws is considered “time on task” for the purposes of any quota or workplace monitoring.¹¹

What are my options if my employer is violating AB 701?

If you suspect that your current or former employer is not following AB 701, you can request that your employer provide:

• a written statement describing the quotas you are subject to, and
• a copy of your personal work speed data for the most recent 90 days, if your employer keeps such metrics.¹²

If you are a former employee, you can only make this request once. It would include the work speed data for the last 90 days before you left the job.¹³

Once your employer receives this request, they have to comply with it within 21 calendar days.¹⁴

If the information you receive shows that AB 701 is being violated, you can also file a lawsuit or a complaint. A lawsuit can either be filed:

• individually, or
• through the Private Attorneys General Act (PAGA).

If you file the lawsuit individually, you can obtain:

• a court order providing injunctive relief against the alleged violation.
• the costs of filing the lawsuit, and
• reasonable attorneys’ fees.¹⁵

If you file a PAGA claim, your employer will be given the opportunity to cure the problem. If the offending quota or conduct is not fixed, you can recover a civil penalty against your employer.¹⁶

You can also file a complaint with any of the following organizations or entities:

• your employer,
• the California Division of Occupational Safety and Health,
• the California Labor Commissioner, or
• any other local or state governmental agency.¹⁷

If you raise your rights under AB 701, your employer cannot retaliate against you. AB 701 states that there is a rebuttable presumption of unlawful retaliation if you suffer an adverse employment action within 90 days of:

• requesting quota and work speed data for the first time in a calendar year, or
• reporting a violation of AB 701.¹⁸

Such adverse employment actions include, but are not limited to:

• terminations,
• demotions,
• bad performance reviews, or
• cuts in pay.

If you suffer one of these workplace setbacks after complaining about an AB 701 violation, you can file a lawsuit for workplace retaliation.

Also see our article on common wage and hour issues for warehouse workers in California.

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