The Impact of California’s New Warehouse Law

Warehousing operations might not seem like significant climate or public health dangers to many. However, warehouse operations include significant commercial truck activity. These vehicles emit copious amounts of pollutants into the air, affecting not just the overall climate but also the well-being of the surrounding community.

Assembly Bill (AB) 98 may not go into effect for another year. Even so, employer defense lawyers and others encourage those businesses that the new law will impact to familiarize themselves with its provisions now.

California AB 98’s Requirements

California Assembly Bill 98 is one of several new laws aimed at addressing growing problems in the warehouse industry. This law specifically regulates new warehouse construction projects and their operation, including expansion projects for existing warehouses. The law will take effect on January 1, 2026.

Under the law, any facility that’s 250,000 square feet or larger must do the following:

Implement Energy-Saving Features

First, any new warehouse construction or expansion project after AB 98’s effective date must include energy-efficient or energy-saving features. This could be adding solar panels to the facility or installing electric vehicle charging stations.

Include a Community “Buffer Zone”

Next, warehouse projects undertaken after January 1, 2026, must include additional space between the facility and parks, residential areas, and schools. This “buffer zone” is intended to insulate private citizens and children from the noise, air pollution, and other hazards associated with the trucking and warehouse industry.

Phase In Zero-Emission Forklifts Within Four Years

Another major requirement AB 98 imposes is that affected facilities only use zero-emission forklifts by 2030. The delay in implementing this requirement is likely to allow additional time for forklifts to meet this requirement to become available in numbers sufficient to meet demand.

Redesign Truck Routes

Finally, truck routes leading into and out of the warehouse must be reviewed under the new Assembly Bill.

Routes should minimize the exposure of residential areas to commercial trucking traffic as much as possible. This will not only reduce harmful carbon emissions near these sensitive areas but also decrease the safety risk and noise pollution caused by commercial trucking.

In passing this law, the state of California has wrested considerable power and authority away from local community governments. This may make new warehouse and warehouse expansion projects more costly and cumbersome in the future.

How Warehouse Owners Will Be Affected

Once the new law takes effect, business owners looking to establish or expand warehouses may find additional hurdles to overcome. These could include:

More Extensive Planning

Business owners should expect the planning phase to require more time and effort. Not only will the facility itself need to include additional features, but care must be taken when planning how trucks will arrive at and leave the facility. This could lead to delays in commencing and completing the project.

Increased Costs

Assembly Bill 98’s provisions will result in additional costs that the warehouse owner or operator must bear, at least in part. For example, the warehouse owner will have to pay for the mandatory energy-saving features and zero-emission forklifts.

Similarly, constructing necessary entrances and exits to comply with route requirements will create further expense. Even the additional pre-construction planning can negatively impact the warehouse owner financially.

Fewer Available Locations for Projects

The establishment of mandatory buffer zones separating warehouses and their associated truck traffic from nearby residential areas means there will be fewer places to build or expand warehouse projects. Some communities may not have any suitable locations, which could hamper a warehouse owner’s ambitions.

In those areas where acceptable locations can be found, the number of construction sites meeting the law’s requirements may decrease after January 1, 2026. As a result, the remaining locations could increase in price.

How an Employer Defense Law Firm Can Help Warehouse Owners Prepare

In the run-up to the time that AB 98 takes effect, warehouse owners and operators can get ready for the upcoming changes in the following ways:

Determine the Law’s Applicability

Assembly Bill 98 only applies to new warehouse construction or expansion projects commencing on or after January 1, 2026. The warehouse must be at least 250,000 square feet in size. Owners should consider their plans for the next few years and consult an employer defense attorney to find out what impact AB 98 will have on them.

Make Plans to Purchase Equipment in Advance

Certain required components, like electric forklifts and solar panels, can take time to source. If the new rules apply to your warehouse construction project, it’s critical to build additional time into your project to account for the shipment of these items. Otherwise, you may find your project grinding to a halt while you await their arrival.

Reevaluate Where You Want Your Project to Take Place

Let’s say you’re considering building a new warehouse in a certain community. If your project will be affected by AB 98, you may want to take a second look at your plans. Think about whether the community and location where you intend to carry out your project will allow you to comply with the law’s demands.

If your intended location will drive up the costs of your project, it might make more financial sense to consider another location, which would call for more planning and preparation.

Be Prepared for Delays

Company leaders should expect warehouse construction projects to take longer to complete in the near future. Unfortunately, not every delay can be avoided, even with extensive planning.

Whether they’re facing unforeseen supply chain issues or difficulty obtaining the necessary approval for truck routes or building plans, warehouse owners who anticipate unexpected delays and plan accordingly will be better able to keep their projects moving forward.

How an Employer Defense Lawyer Can Facilitate Your Project

Consulting an experienced California employer defense attorney early in the planning stages of your project can provide significant benefits.

As a warehouse owner or operator, you may be facing the upcoming changes under California’s AB 98 law. At Pearlman, Brown & Wax, LLP, our expert attorneys are here to help you navigate this new legislation with confidence. We’ll guide you through the requirements, from energy-efficient features and buffer zones to meeting emissions standards, so you can plan ahead, minimize costs, and avoid delays.

Let’s work together to ensure your warehouse project is fully prepared for the changes set to take effect in 2026. Contact us today for the support you need.