New California Laws Set Stage for the Future
The Biden Plan for Strengthening Worker Organizing Collective Bargaining and Unions specifically endorses several California employment laws as models for the whole country. Accordingly, the many new employment laws set to take effect in California in 2021 (and a few that have already taken effect) may very well be a taste of what’s to come for employers everywhere. Therefore, companies that operate in California, and even those that don’t, should become familiar with new laws going into effect in the Golden State. We have prepared a summary of these laws here:
AB 685 (COVID Notice and Record Keeping)
AB 685 requires employers to provide notice to employees, unions, and employers of subcontractors who have been at the employer’s worksite if an individual at the worksite has been ordered to quarantine due to COVID-19, has tested positive for COVID-19, has been diagnosed with COVID-19, or has died from COVID-19. The notice to employees must inform them they were potentially exposed to COVID-19, describe the company’s disinfection and cleaning procedures, and provide them with information about benefits available to them. The notice to an employee union must provide the same information that an employer would record on a Cal/OSHA Form 300 injury and illness log. Employers may also have reporting requirements to the state Department of Public Health under this law.
AB 1867 (COVID Supplemental Sick Time)
Effective September 19, 2020, AB 1867 added COVID-19 supplemental paid sick leave requirements for employers with more than 500 employees, and codified COVID-19 supplemental sick leave requirements for certain food sector workers. Employers covered by this law must grant up to 80 hours of supplemental paid sick leave to employees that are subject to a government-mandated isolation order due to COVID-19, advised by a health care provider to self-quarantine due to COVID-19, or prohibited from working due to concerns of potential transmission of COVID-19. AB 1867 is in effect until federal COVID-19 supplemental paid sick leave (Families First Coronavirus Response Act) expires, currently on December 31, 2020.
AB 2537 (COVID PPE for Direct Patient Care)
In response to the COVID-19 pandemic, AB 2537 requires employers of workers in general acute care hospitals to provide personal protective equipment (PPE) to employees with direct patient care duties. Employers must also ensure that these employees use the PPE supplied to them. Starting April 1, 2021, these employers must maintain a stockpile of at least three months’ worth of PPE, and provide an inventory to the Division of Occupational Safety and Health upon request.
AB 1731 (Process to Approve Work Sharing Plans)
Currently, subject to the approval of the Director of the Employment Development Department, employers may create “work sharing” plans to avoid layoffs that make the affected employees eligible for unemployment benefits for their reduced hours. AB 1731 creates a faster, electronic alternative submission process for work sharing plan applications. Work sharing plans submitted until September 1, 2023, will be deemed approved for one year upon approval of the director. This law is in effect until January 1, 2024.
AB 2257 and Proposition 22 (Employee Classification)
Passed in September 2019, AB 5 codified the Dynamex decision, which effectively eliminated the flexible multifactor (Borello) test for determining independent contractor classification and replaced it with a more stringent test, known as the “ABC” test. Certain professions, such as physicians, dentists, lawyers, and architects, among others, remain exempt from the “ABC” test.
AB 2257 creates dozens of additional exemptions from the “ABC” test. Broadly, the bill exempts certain occupations in connection with the music and performing arts industries, certain sales and marketing professions, a variety of consulting services, and several other specific categories, such as people engaged in an international exchange visitor program or registered professional foresters. In addition, the bill revises the exemption for business-to-business relationships and the exemption criteria for referral agencies and service providers providing services to clients. AB 2257 also revises exemptions for photographers, photojournalists, freelance writers, editors, and newspaper cartoonists. Finally, the bill creates an exemption for business-to-business relationships between two or more sole proprietors.
Proposition 22, which passed on November 3, 2020, provides that an app-based driver may be classified as an independent contractor if certain conditions are met. This law also requires that app-based drivers be provided a guaranteed minimum earnings amount and provides certain benefits, including a health care subsidy.
SB 1383/AB 1867 (Expansion of Protected Family Leave)
SB 1383 expands the California Family Rights Act (CFRA) (which is similar to the FMLA and allows eligible employees to take up to 12 workweeks of leave for their own or a family member’s serious health condition or to bond with a new child) to apply to employers with five or more employees. This law also expands the definition of “family member” for whom the employee may provide care during this leave to include grandparents, grandchildren, and siblings. In addition, AB 1867 creates a pilot CFRA mediation program through January 1, 2024, for businesses with 5-19 employees through the Department of Fair Employment and Housing’s dispute resolution program.
AB 2017 (Kin Care)
AB 2017 amends Section 233 of the Labor Code to give an employee the right to designate when the use of accrued sick leave is used to care for a family member, also known as “kin care.” Employers who provide sick leave are currently required to allow employees to use up to half of their sick leave for the purpose of “kin care.” AB 2017 clarifies existing law to make it clear that the employee has sole discretion over whether sick leave is designated as kin care or not.
SB 973 (Required Reporting of Race and Gender Information)
SB 973 requires employers with 100 or more employees to report pay data to the Department of Fair Housing and Employment by March 31 annually. Employers are required to report the number of employees by race, ethnicity, and sex in each of the following job categories: executive- or senior-level officials and managers, first or midlevel officials and managers, professionals, technicians, sales workers, administrative support workers, craft workers, operatives, laborers and helpers, and service workers. Employers count individuals in these groups by looking at a single pay period of their choosing between October 1 and December 31 of the calendar year preceding March 31. The law does not specify whether an employer must have 100 or more employees in California, or if the employer must provide information for all employees or only those in California.
AB 979 (Directors From Unrepresented Communities)
AB 979 requires that any publicly held corporation with its principal executive office in California must have at least one director from an underrepresented community by the end of 2021. By the end of 2022, corporations with boards of fewer than four directors must have at least one director from an underrepresented community; boards of four to nine directors, at least two directors from underrepresented communities; and boards of more than nine directors, at least three directors from underrepresented communities. A director who is from an underrepresented community is defined as an individual who is “Black, African-American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian or Alaska Native or who self-identifies as gay, lesbian, bisexual, or transgender.”
AB 2143 (“No-Rehire” Provisions in Settlements)
AB 2143 amends Section 1002.5 of the Code of Civil Procedure, which prohibits the use of no-rehire clauses in settlement agreements with current or former employees. The law now requires that the underlying claim must be made in good faith. The law also expands the exemption for scenarios in which the employer has made a good faith determination that the employee engaged in sexual harassment or sexual assault to also include a good faith determination that the employee engaged in “any criminal conduct.” This law does not apply to agreements entered into before January 1, 2020.
Proposition 24 (California Consumer Privacy Act)
Proposition 24 modifies the California Consumer Privacy Act (CCPA) as it applies to employee data and information collected as part of a person’s employment or application for employment. Proposition 24 exempts this employee information from the CCPA for an additional two years, pushing the effective date of CCPA coverage for this kind of data to January 1, 2023.
AB 1963 (HR Personnel as Mandated Child Abuse Reporter)
AB 1963 adds human resources employees in businesses with more than five employees to the list of individuals mandated to make a report if, in their professional capacity or within the course of employment, they observe or reasonably suspect a child has been the victim of child abuse or neglect. The law defines “human resources employee” as an employee who is designated by the employer to accept complaints of misconduct. Employers with employees that are now designated reporters must train the employees about their reporting requirements. The training must include training in child abuse and neglect identification and reporting. The training requirement may be met by completing the general online training for mandated reporters offered by the Office of Child Abuse Prevention in the state Department of Social Services.
AB 1947 (Statute of Limitations for Complaints to Division of Labor Standards Enforcement)
AB 1947 extends the time in which individuals may file an unlawful discharge or other unlawful discrimination complaint with the Division of Labor Standards Enforcement from six months to one year. AB 1947 also allows for attorneys’ fees to be granted to successful whistleblowers.
AB 1512 and AB 2479 (Rest Periods for Certain Industries)
AB 1512 allows employers of security guards with valid collective bargaining agreements to require security guards to remain on the premises during their rest period and remain on call during that time. If the security guard is interrupted during this break, the security guard must be allowed to restart the rest period as soon as practicable. If this is not possible, the employer must pay one additional hour of pay for each workday the rest period is missed. This law is in effect through January 1, 2027.
AB 2479 extends the exemption from general rest period rules for specified employees who hold safety-sensitive positions at petroleum facilities until January 1, 2026.
AB 2992 (Prohibition of Discrimination of Crime Victims)
AB 2992 prohibits an employer from discharging, discriminating, or retaliating against an employee who is a victim of crime or abuse. The law permits employees to take time off (using accrued paid leave time, sick leave time, or unpaid leave time) from work to seek medical attention for injuries caused by crime or abuse, to obtain services from prescribed entities as a result of crime or abuse, to obtain psychological counseling or mental health services related to an experience of crime or abuse, or to participate in safety planning and take other actions to increase safety from future crimes or abuse. An employee must give the employer reasonable notice of the need for leave, but if it is infeasible to provide notice, the employee may provide documentation to support the need for leave within a reasonable time. Acceptable documentation includes: a police report, a court order protecting or separating the employee from the perpetrator, documentation from a licensed medical professional or similar, or any other form of documentation that reasonably verifies the need for leave.
AB 3364 (Prohibition of Discrimination Based on Veteran and Military Status)
AB 3364 clarifies that the Fair Employment and Housing Act prohibits discrimination against individuals who are veterans or because of the individual’s military status. Previously, the law prohibited discrimination based on veteran and military status.
AB 2399 (Definition of “Qualifying Exigency”)
Beginning on January 1, 2021, employees will be able to use Paid Family Leave (benefit payments, but not job protection for qualifying family care) for certain purposes related to the service of an individual's spouse, domestic partner, child, or parent in the Armed Forces of the United States. These purposes are called “qualifying exigencies” under the law. An employee may take paid family leave for a variety of qualifying exigencies related to a military member, including attendance at official ceremonies, making financial and legal arrangements, and preparation for departing for or returning from active duty. AB 2399 defines the term “military member” to mean “a child, spouse, domestic partner, or parent of the employee, where the military member is on covered active duty or call to active duty in the Armed Forces of the United States.”
AB 3075 (Expanded Local Enforcement of Statutory Wage Requirements)
AB 3075 allows local jurisdictions (e.g., city, county, district, or agency) to enforce state labor standard requirements regarding the payment of wages.
Regulations Regarding Age and Scheduling Questions in Interviews
The Department of Fair Employment and Housing issued new regulations that took effect on July 1, 2020, prohibiting an employer from asking questions “regarding an applicant's availability for work on weekends or evenings” when the purpose is to ascertain the applicant’s religious creed or avoid the requirement to provide a reasonable accommodation. Employers may still ask schedule-related questions “where reasonably related to the normal business requirements of the job.”
The Department of Fair Employment and Housing also revised its age discrimination regulations to create a presumption of discrimination whenever “a facially neutral practice has an adverse impact on an applicant(s) or employee(s) age 40 or older, unless the practice is job-related and consistent with business necessity.”
Software Employees Overtime Exemption
Beginning January 1, 2021, employers must pay computer professional employees a salary of at least $98,907.70 annually ($8,242.32 monthly) or an hourly rate of at least $47.48 for each hour worked in order to remain exempt from paying such employees overtime compensation.
State Minimum Wage Increase
On January 1, 2021, California’s minimum wage will increase to $13 per hour for employers with fewer than 26 employees, and $14 per hour for employers with more than 26 employees. The state minimum wage will continue to increase by $1 every January until 2023, when all employers, regardless of size, will be required to pay employees at least $15 an hour. Minimum wage increases could potentially affect the exempt status of certain employees, so it is important to conduct a review of salaries to ensure continued compliance with overtime requirements.