Tag Archives: california employment law

Your CA Fast Five – Highlights on Five Major Changes to California’s Employment Laws that You Need to Know Right Now

Contributed by Carlos Arévalo and Michael Faley, October 5, 2020

Wooden judge gavel with USA state flag on sound block – California

While many California employers are challenged on multiple fronts at the moment from the ongoing pandemic and wildfires, they nonetheless need to be mindful of new employment law measures recently signed by Gov. Gavin Newsom. The major changes include stronger family leave protections, new COVID-19-related reporting requirements and rules helping essential workers get Workers’ Compensation, tighter gig-work rules, and data collection requirements to help track race and gender pay gaps. 

1.  New Family Leave Law

On September 17, 2020, Gov. Newsom signed a bill that gives California employees at smaller businesses greater family and medical leave protections.  According to Gov. Newsom, “[t]he COVID-19 pandemic has only further revealed the need for a family leave policy that truly serves families and workers, especially those who keep our economy running.”  

Under Senate Bill 1383, employers with five or more employees must offer 12 weeks of unpaid time off for family or medical leave as of January 1, 2021. The bill also mandates that the companies must continue employer-paid health benefits for each employee who takes leave.  The reasons for leave include time to care for a newborn, a sick loved one or themselves, and now expands leave to include caring for grandparents, grandchildren, and siblings in addition to the current requirement covering an employee’s parent, child, and spouse or domestic partner. California law previously only required, for example, companies with 50 or more employees to provide 12 weeks medical leave. 

The law further calls for employers to grant spouses who work for the same company with 12 weeks of family leave each. Employers will not be able to compel parents to split their leave.

2. COVID-19 Reporting Requirements

On January 1, 2021, California employers’ COVID-19 reporting requirements will change.  Under Assembly Bill 685, employers will need to notify workers that they may have been exposed to COVID-19 within one business day if an employee tests positive.  The law requires written notice to all employees and subcontracted employees who were on the premises at the same worksite within the “infectious period.”  The notice must contain information identifying the COVID-19 related benefits that the employee(s) may receive, and the company’s disinfection protocols and safety plan to stop any further exposures.   

Under the new measure, companies will be further required to notify their local public health department if the number of known COVID-19 cases qualifies as a “COVID-19 outbreak,” as defined by the California State Department of Public Health.  Companies will have 48 hours to send notice to the public health department.  The law specifically empowers California’s Division of Occupational Safety and Health (Cal/OSHA) to shut down a worksite if the virus poses an “imminent hazard.”

Employers should strongly consider developing and implementing a written COVID-19 action plan to comprehensively address prevention, outbreak containment and employee rights and obligations.

3. Workers’ Compensation Changes for Essential Workers

Gov. Newsom also signed into law Senate Bill 1159 addressing workers’ compensation for certain essential workers.  The Bill takes effect immediately and remains in place through January 1, 2023 and creates a “disputable presumption” that illness or death related to COVID-19 arose out of and in the course of employment and is compensable, under certain circumstances. The Bill also requires an employee to exhaust paid sick leave benefits and meet specified certification requirements before receiving any temporary disability benefits or, for police officers, firefighters, and other specified employees, a leave of absence. The Bill would also make a claim relating to a COVID-19 illness presumptively compensable after 30 days or 45 days, rather than 90 days. Until January 1, 2023, the bill would allow for a presumption of injury for all employees whose fellow employees at their place of employment experience specified levels of positive testing, and whose employer has 5 or more employees.

The Bill does state that the “place of employment” does not include an employee’s residence if they are working at home.

The compensation to be awarded for injury pursuant to this Bill includes full hospital, surgical, medical treatment, disability indemnity, and death benefits.

4. Freelancer Exemptions Expansion

As many of our readers may recall, effective January 1, 2020, AB 5 codified what has been known as the “ABC” test, which is commonly used to determine whether a worker is an employee as opposed to an independent contractor.  Specifically, under AB 5, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied:

  1. The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
  2. The person performs work that is outside the usual course of the hiring entity’s business.
  3. The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

After the enactment of AB 5, Uber filed a federal lawsuit challenging the law’s constitutionality. Uber, Lyft and others also championed Proposition 22, a ballot initiative in the November 2020 election to define app-based transportation (rideshare) and delivery drivers as independent contractors. 

In response to AB 5, Gov. Newsom signed into law AB 2257, a bill intended to ease some of AB 5’s restrictions by creating a number of exemptions that allow freelance writers, photographers, translators and musicians to continue working as independent contractors, rather than employees.  For instance, AB 2257 eliminates a 35-submission cap for freelance writers and photographers – current rules dictated that California-based freelancers who contribute more than 35 submissions to an outlet per year must be reclassified as an employee.  In addition, translators, appraisers, and registered foresters have been added to the “professional services” exemption. The “professional services” exemption currently covers graphic designers, travel agents and marketers, among others.  Finally, AB 2257 allows music industry workers, including recording artists, songwriters, producers, promoters and many others, to continue working as freelancers.  AB 2257 went into effect as of its passage.

5. Collecting Pay Gap Data

Senate Bill 973 requires that on or before March 31, 2021, and on or before March 31 each year thereafter, a private employer that has 100 or more employees must submit a pay data report to the Department of Fair Employment and Housing (DFEH) that contains specified wage information. This Bill requires that the information is to be made available in a prescribed format. DFEH then has to maintain the pay data reports for a minimum of 10 years, and it is unlawful for any officer or employee of the DFEH to make public in any manner any individually identifiable information obtained from the report prior to the institution of certain investigation or enforcement proceedings. The Bill also requires the Employment Development Department to provide DFEH, upon its request, the names and addresses of all businesses with 100 or more employees.

The pay data report must include information about the number of employees by race, ethnicity, and sex who are in executive or senior level, professional, technician, and administrative positions.  Data should also include the same information for sales, craft and services workers as well as for laborers and helpers.

If an employer submits a copy of its Employer Information Report, otherwise known as an EEO-1 Report, containing the same or substantially similar pay data information required under the Bill, then the employer will be in compliance with the Bill.

Failure to submit the required report may result in the DFEH seeking an order requiring the employer to comply with these requirements, and pay the costs associated with seeking such an order.

In summary, California employers can be proactive and prepare for these amendments by (1) reviewing and updating employee classifications as well as existing policies and practices to ensure current compliance, (2) collecting the necessary information, if the employer does not already have it, to address the new reporting requirements, and (3) implementing necessary processes to address these developments. For our part, we will continue to monitor and communicate further developments as they occur.

New Years Resolution: Be Compliant In ALL Of Your States!

Contributed by Heather Bailey

For those employers with locations throughout the United States, now is a good time for a New Years’ resolution to brush up on the ever-so-changing state laws that govern your employment practices.  Here are some updates on the various new state laws that are changing with the coming New Year:

Federal:

Due to litigation challenging the rule, the National Labor Relations Board has delayed its requirement to post its Employee Rights Notice until April 30, 2012.

Illinois:

New-Hire Procedures: The new-hire reports you submit must have the date the employee first started to perform any paid services to the company.  (Already in place, effective 11/18/11).

California:

Just when California employers thought they were going to be getting an answer from the CA Supreme Court on how to properly administer rest and meal periods, think again.  The court in Brinker v. Superior Court originally had a deadline date of around February 6, 2012 to make its final decision after hearing oral arguments in November.  However, the court, in a not-so-usual practice, allowed for additional briefing.  Consequently, the court now has until April 12, 2012 to render its decision.   

Effective January 1, 2012, California has added that employers cannot discriminate based upon genetic information (similar to GINA), and, employees must be allowed to appear or dress in line with their gender expression – revising the definition of gender under sex discrimination prohibitions.  Moreover, the misclassification of an employee as an independent contractor to avoid employment status will bring hefty fines to employers starting in January 2012.  For those employers paying commissions, you will have a new requirement to give such payment plans and commission calculations to employees in writing beginning January 2013.

New York:

Effective January 11, 2012, for those employers who offer their employees insured group health plans that provide prescription drug coverage, your plan must now allow participants to fill their prescriptions at network non-mail order retail pharmacies if the pharmacies agree to charge comparable prices as the mail-order pharmacies (this includes fertility drug coverage if such coverage is offered under the plan).

Pennsylvania:

Effective March 8, 2012, your drivers can no longer use a wireless communication device to write, send or even read text messages while driving.  Now is a good time to put that policy in place if you haven’t already done so.

California Dreamin’… of New Compliance Obligations for the New Year! (Part 2)

Contributed by Carly Zuba

Welcome to the second installment of our discussion of the new year’s slew of new legal obligations for employers (scroll down one post for part 1).  This post serves as our “Happy New Year!” gift to California employers as it highlights some of the newest obligations that California employers in particular must keep in mind for 2012.

No Discrimination Based on Genetic Information or Gender Expression: California legislation has added “genetic information” as a protected category under the law.  This means that California employers cannot discriminate against employees based on the genetic tests of their family members or based on the manifestation of a disease or disorder in their family members.  Additionally, California legislation has added protection under the law for “gender expression,” which is a person’s gender-related appearance and behavior, whether or not stereotypically related to the person’s gender at birth.  For example, an employer cannot prohibit a male employee from wearing a dress to work if the employer allows females to wear dresses to work. 

Prohibition on Using Consumer Credit Reports: California employers may no longer use employee credit reports for employment purposes unless (1) the position has access to over $10,000 in cash, other assets, or confidential information, OR (2) the position is managerial, law enforcement-related, in the state DOJ, or is a position for which the information in the report is required to be disclosed by law.

Notices to Employees Upon Hire: California employers must provide written notice to all non-exempt (i.e. overtime-eligible) employees upon their hire that specifies:

  • Rates and basis of pay (i.e. paid by hour, salary, piece, commission, etc.);
  • Allowances, if any, claimed as part of minimum wage, including meal and lodging;
  • Regular payday designated by employer;
  • Name of employer, including any DBA used by employer;
  • Employer’s physical address and phone number; and
  • Name, address, phone number of the employer’s workers compensation carrier

This is merely a taste of the new legal obligations that California employers must keep in mind after ringing in the New Year.  For a comprehensive analysis of your company-specific 2012 compliance obligations, whether in California or elsewhere, you should always consult with your attorney.

California Dreamin’… of New Compliance Obligations for the New Year! (Part 1)

Contributed by Carly Zuba

With the New Year comes the inevitable slew of new legal obligations for employers.  This post serves as our “Happy New Year!” gift to California employers as it highlights some of the newest obligations that California employers in particular must keep in mind for 2012.

New NLRB Posting Requirement (applies to most private sector employers nationwide): Effective April 30, 2012, employers will be required to post a notice informing employees of their federal labor law rights – including the right to unionize – in all areas where the employer customarily posts notices to employees regarding personnel rules and policies.  The original effective date was January 31, 2012, but it has been postponed at the request of the federal court in Washington D.C. The poster itself as well as a copy of the rule requiring the posting can be found here.

Independent Contractor Classification: The Federal Department of Labor 2012 Budget includes $25 million for a joint Labor-Treasury initiative to strengthen and coordinate federal and state efforts to identify and deter misclassification of employees as independent contractors.  This “Misclassification Initiative” will specifically target industries with misclassification characteristics, such as the construction and technology industries.

Now, more than ever, employers nationwide must ensure that the individuals they are treating as independent contractors are truly independent contractors under the law.  In most states, it boils down to control: if the employer is exerting control over the when, where, and how of the independent contractors’ duties, they will probably be considered employees through the DOL’s eyes.

A new California law provides that a person, who for money or other value, knowingly advises an employer to treat an individual as an independent contractor in order to avoid employee status shall be jointly and severely liable with the employer if the individual is found to be an independent contractor.  Since this new law grants impunity to lawyers, this will primarily apply to HR consultants.

Stay tuned for our second post in this series discussing even more California compliance updates and for a comprehensive analysis of your company-specific 2012 compliance obligations, whether in California or elsewhere, you should always consult with your attorney.