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California Employment Law Alert: New Employment Laws Effective On or Before January 1, 2021

December 18, 2020

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The emergence of COVID-19 has changed the workplace as we once knew it. California employers need to be prepared for unprecedented compliance challenges in recent legislation related to the ongoing pandemic, expanding leave protections, wage and hour compliance risks, and much more. Employers will need to review and adapt their policies and procedures in order to keep up in the coming year with California’s ever-changing employment laws.

The following are the key developments impacting California employers including the expansion of the COVID-19 related laws, the expanded California Family Rights Act, Paid Sick Leave, Workplace Safety, and Workers’ Compensation.

Unless otherwise stated, the new laws take effect on January 1, 2021.

COVID-19-Related Laws

The Legislature responded to the COVID-19 pandemic with several new laws that impact employers in the context of workers’ compensation, paid sick leave and workplace safety.

SB 1159 Workers’ Compensation: establishes a rebuttable workers’ compensation presumption for workers that contract COVID-19 under certain conditions by first, codifying the governor’s workers’ compensation executive order for workers who contracted COVID-19 between March 19, 2020, and July 5, 2020, and, second, creating a rebuttable presumption for first responders and health care personnel who contract COVID-19 after July 6, 2020. Please visit our prior blog post for more detailed information regarding SB 1159.

AB 685 Workplace Safety: establishes stringent COVID-19 recording and reporting requirements when employers receive “notice of a potential exposure to COVID-19” at the workplace. Among other things, AB 685 requires employers to provide a number of notices to different groups of employees within one business day after receiving notice of potential COVID-19 exposure. AB 685 also requires employers to notify their local public health agency within 48 hours of a COVID-19 “outbreak,” as defined by the California Department of Public Health (CDPH). Please visit our prior blog post for more detailed information regarding AB 685.

AB 1867 Paid Sick Leave: also took effect immediately upon being signed on September 9, 2020. This bill expands supplemental paid sick leave for COVID-19-related reasons for employers not already covered by the federal Families First Coronavirus Response Act (FFCRA)—specifically, employers with 500 or more employees nationwide, as well as health care providers and first responders that are excluded from the FFCRA. Like the FFCRA, the law expires on December 31, or the expiration of any extension of the FFCRA, whichever is later. Employers should also be mindful of any city or county requirements to provide paid sick leave due to COVID-19. Please visit our prior blog post for more detailed information regarding SB 1159.

AB 2537 and SB 275 Employee PPE: the governor signed two bills related to personal protective equipment (PPE): AB 2537 and SB 275. AB 2537 requires public and private employers of workers in a hospital to supply certain employees with PPE, maintain a three-month stockpile of PPE and provide inventory information to Cal/OSHA upon request. SB 275 requires the state to develop a stockpile of PPE, and, beginning January 1, 2023, certain employers must maintain PPE stockpiles as specified.

California Protected Time Off

SB 1383 New Family Leave Obligations: This law dramatically expands the California Family Rights Act (CFRA) beginning January 1, 2021, by eliminating the requirement to provide 12-weeks of unpaid leave to employees who work at a worksite with 50 or more employees within a 75-mile radius. The CFRA will now apply to smaller employers with at least five employees. The CFRA still includes the requirement that an employee worked for at least one year and for 1,250 hours prior to the start of a protected leave.

The CFRA will also permit employees to take leave to care for a broader range of relatives than previously permitted, meaning employees may request CFRA leave to care for a parent, spouse, child, grandchild, grandparent, or sibling’s serious health condition.

An eligible employee may take CFRA leave for the following reasons:

  • The employee’s own serious health condition.
  • To care for a parent, child (regardless of age), spouse, sibling, grandparent, grandchild, or registered domestic partner with a serious health condition.
  • Care for and bonding with a newborn or newly adopted child.
  • Because of a qualifying exigency related to the covered active duty or call to covered active duty of an employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States.

Also, under the FMLA, if both parents work for the same employer, they are only entitled to a total of 12 weeks of leave combined for bonding with a new child. Not so under the amended CFRA. Under this new law, each parent is entitled to take up to 12 weeks apiece for baby-bonding leave.

Moreover, the CFRA no longer contains a “key employee” exception.

The expanded CFRA leave means that there are several instances when an employee may take 24-weeks of protected leave provided the employee also qualifies for  FMLA leave. For example, an employee can take 12 weeks of leave to care for a sibling under the CFRA and then another separate 12 weeks to cover a spouse’s illness or their own illness under the FMLA for a total of 24 weeks of protected leave.

Small employers who have not previously had to comply with CFRA or the FMLA should update their leave of absence policies, time off requests forms, and become familiar with the timing and notice requirements for when an employee needs CFRA leave. Regardless, employers of all sizes need to become familiar with the law’s details and be prepared to revise or implement compliant policies and practices by 2021. These important differences between the FMLA and CFRA will require a significant revision to employee handbooks.

AB 2017 Paid Sick Leave Designation: This law provides employees sole discretion to designate days taken as paid sick leave under California’s Kin Care Law. (Lab. Code § 233.) This means that employers will need to consider whether they can mandate employees’ use of paid sick leave in certain circumstances. 

Discrimination, Harassment and Retaliation Protections

AB 2992: expands the prohibition on discrimination and retaliation against employees who are victims of crime or abuse when they take time off for judicial proceedings or to seek medical attention or related relief for domestic violence, sexual assault, stalking or other crime that causes physical or mental injury.

AB 1947: Under current law, workers alleging they were discriminated or retaliated against in violation of any law enforced by the Labor Commissioner, have six months to file a complaint with the Labor Commissioner. AB 1947 extends that time to one year beginning January 1, 2021. The new law also amends Labor Code section 1102.5 to allow for attorneys’ fees for employees who prevail on a whistleblower retaliation claim pursuant to the code. This change will likely lead to an increase in whistleblower litigation.

Wage and Hour

SB-3 Minimum Wage Increase: Effective January 1, 2021, the minimum wage for employers with 25 employees or less will increase to $13/hour, and for employers with 26 or more employees, the minimum wage will increase to $14/hour. Employers should also be mindful of local rules, some of which provide for higher minimums. This increase also impacts the minimum salary requirements for exempt employees. To be exempt from the requirement of having to pay overtime to the employee, the employee must perform specified duties in a particular manner and be paid “a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.” (Lab. Code, § 515, subd. (a).) Employers need to review the base salary for all exempt employees to ensure the employees meet the salary required to be exempt.

SB 1384 Expanded Rights for Representation: expands the Labor Commissioner’s ability to represent claimants under certain circumstances. Currently, the Labor Commissioner can, upon request, represent a claimant in proceedings to appeal a wage claim award if the claimant couldn’t afford counsel. SB 1384 extends the commissioner’s authority to also represent a claimant who’s financially unable to represent themselves in a hearing where a court order has compelled arbitration to determine the claim.

AB 3075 Successor Liability for Wage and Hour Violations: specifically makes a successor employer liable for its predecessor’s unpaid wage judgments and establishes specific criteria to establish successorship. The bill also allows local jurisdictions to enforce state labor standards requirements regarding payment of wages.

SB 973 Pay Data: This bill requires a private employer with 100 or more employees—that is also required under federal law to file an annual Employer Information Report (EEO-1)—to submit a pay data report to the DFEH on or before March 31, 2021, that contains information about their employees’ race, ethnicity and gender in various job categories (similar to the now-rescinded federal EEO-1 Component 2 report).

The law doesn’t specify exactly how the reporting process will be implemented; it only states that employers must submit the report in a searchable and sortable electronic format. The bill gives the DFEH related enforcement authority and it is expected more information will be forthcoming from the department in the coming months.

AB 2257 Worker Classification: AB 2257 amends the provisions of AB 5, the law limiting contractual relationships with workers. Some of the amendments include an exemption for bona fide business-to-business contracting relationships and added industry-specific exemptions. The amendments also clarify existing industry-specific exemptions. AB 2257 went into effect immediately at the beginning of September 2020.

Other Noteworthy Amendments to California Law

AB 2143 No Hire provisions: Current law prohibits “no rehire” provisions in settlement agreements, unless “the employer has made a good faith determination that the aggrieved person engaged in sexual harassment or assault.” (Code Civ. Proc. § 1002.5.) AB 2143 amends the ban on “no rehire” provisions to require the claimant to file the claim in good faith. It also amends the requirement that an employer may include a no rehire provision in a settlement agreement if the employer has made and documented a good faith determination before the aggrieved person filed the claim that the aggrieved person engaged in sexual harassment, sexual assault, or any criminal conduct. Finally, this new law expands the exception to include a good faith determination that the aggrieved person engaged in any criminal conduct.

AB 1281 The California Consumer Privacy Act (CCPA): The Act gives California consumers rights over how and whether the personal data they provide to businesses is collected, retained and sold. Because its definitions are broad, the CCPA applies to employee data collected by employers for employment purposes—which may be problematic because, under the rights established by the CCPA, employees could potentially request to have their personal information deleted.

To address this issue, the Legislature passed AB 25 in 2019, largely exempting employee data from the CCPA’s requirements for one year; this year’s AB 1281 extends the exemption for an additional year to the end of 2021. Employers however must still comply with the additional CCPA requirements that include providing notice either before or at the time of collecting personal information from an applicant or employee. That notice must describe every category of information that will be collected and the purposes for which it will be used. CCPA regulations describing how employers can give a compliant notice are now in effect.

The regulations also require that employers make the notice readily available where applicants or employees will see the notice at the time of, or before, the collection of the information.

AB 979 Corporate Boards of Directors: In 2018, SB 826 required publicly held corporations with principal executive offices in California to have a minimum number of female directors on their boards of directors. AB 979 now requires the same corporations to have a minimum of one director from an underrepresented community no later than the close of the 2021 calendar year.

By 2022, a corporate board with four to nine directors must have two directors from underrepresented communities, and a board with nine or more directors must have three directors from underrepresented communities.

The bill defines a director from an underrepresented community as “an individual who self-identifies as 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.”

Cal-OSHA Emergency Regulations: Although not a new law enacted by the Legislature, California’s Occupational Safety and Health Administration (OSHA) enacted emergency regulations, which require employers to comply with several new notice, training, and investigation requirements, including requiring employers to continue to provide employees with their pay and benefits when excluded from the workplace due to COVID-19. Continuing an employee’s pay and benefits is not required if an employer establishes the employee’s exposure was not work-related. Employers may require employees to exhaust paid sick leave and may offset any payments by any public benefit payments the employee receives.

Mark your calendars for a webinar on February 2, 2021, which will discuss these updates and additional California-related labor and employment laws. Registration information will follow soon.

For more information, please contact Laura P. Worsinger (213-457-1744 or lworsinger@dykema.com) or Allison M. Scott (213-457-1728 or ascott@dykema.com).

As part of our service to you, we regularly compile short reports on new and interesting developments and the issues the developments raise. Please recognize that these reports do not constitute legal advice and that we do not attempt to cover all such developments. Rules of certain state supreme courts may consider this advertising and require us to advise you of such designation. Your comments are always welcome. © 2021 Dykema Gossett PLLC.