California Employment Legislative Update: Governor Newsom Gets to Work

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Seyfarth Synopsis: The California Legislature has passed a series of bills for Governor Newsom to consider. He now has until October 13 to approve or veto bills such as a Dynamex codification bill and a San Francisco-inspired lactation accommodation bill.

Friday, September 13th marked the Legislature’s last day to pass bills to Governor Newsom’s desk for approval in the first year of the 2019-2020 Legislative Session. The most notorious employment bill has been AB 5, the Dynamex codification (and exceptions) bill. A more stringent lactation accommodation bill has also made its way to the Governor’s desk, as have leave of absence, anti-arbitration, and various industry-specific bills. Bills that did not make the cut may resurface in January in the second part of the two-year session. Below are the most significant employment-related bills of 2019 that the Governor has already approved or that await his action by the October 13th deadline. All approved bills will be effective January 1, 2020, unless otherwise noted.

APPROVED

Independent Contractors Worker Status. The bill creating the greatest buzz has been AB 5, which would codify the California Supreme Court’s 2018 decision in Dynamex Operations West, Inc. v. Superior Court, while also specifying some heavily-lobbied-for exemptions. See our in-depth analysis of it here and here. Governor Newsom signed the bill into law on Wednesday, September 18, 2019.

Sexual Harassment Training. As we reported, SB 778 will extend the deadline for non-supervisory employee training from January 1, 2020 until January 1, 2021 and confirms—in a much needed clarification—that those supervisors who received 2018 training need not be trained again until 2020.

Hairstyle Discrimination. SB 188, the Crown Act, will expand the FEHA’s definition of race to include traits historically associated with race, such as hair texture and “protective hairstyle” (e.g., braids, locks, and twists). The bill aims to chip away at “Eurocentric” professional norms by addressing “workplace dress code and grooming policies that prohibit natural hair, including afros, braids, twists, and locks.” The Legislature has concluded that these policies “have a disparate impact on Black individuals as these policies are more likely to deter Black applicants and burden or punish Black employees than any other group.”

Collegiate Athlete Compensation. AB 1518 will allow student athletes to contract with agents without losing their student athlete status—provided the contract complies with the student’s educational institution’s requirements and the bylaws of the NCAA—and to receive compensation. The Fair Pay to Play Act, SB 206, which passed both houses unanimously and next awaits the Governor’s approval or veto, would, among other things, beginning January 1, 2023, allow student athletes to more easily earn compensation from endorsements. While LeBron James and Draymond Green have praised the bill, the NCAA has strongly opposed it, stating in a letter to the Governor that it has the potential to kill amateur athletics and “erase the critical distinction between college and professional athletics.”

Reporting Occupational Injuries and Illnesses. AB 1804 will require employers to report serious workplace injuries, illnesses, or death immediately by telephone or through an online platform to be developed by the Division of Occupational Safety and Health. Until the online platform is available, employers are permitted to make these reports by telephone or email. Noncompliance carriers a $5,000 civil penalty.

Employment of Infants in the Entertainment Industry. AB 267 will expand the definition of “entertainment industry” beyond a movie set or location to include motion pictures, theater, television, photography, recording, modeling, rodeos, circuses, advertising, and any other performance to the public. The bill will require that all qualifying entities receive—as a prerequisite to employment of an infant under one month of age—a licensed, board-certified pediatrician’s certification that the infant is at least 15 days old, was carried to full term, was of normal birth weight, is physically capable of handling the stress of working in the entertainment industry, and has sufficiently developed lungs, eyes, heart, and immune system to withstand the potential risks.

Employment of Motion Picture Production Workers. SB 271 will allow temporary or transitory employment performed outside of California to count towards unemployment benefits as long as the individual is a California resident, is hired and dispatched from the state, and intends to return to the state to seek reemployment following the outside-California work.

Payment of Wages for Print Shoot Employees. SB 671, the “Photoshoot Pay Easement Act,” authorizes payment of wages to “print shoot employees”—defined as individuals hired for a limited duration to render services relating to or supporting a still-image shoot for use in print, digital, or internet media—on the next regular payday after the employment ends, rather than subjecting the employer to liability for failure to pay final wages on the last day of employment. In another break for employers, the final wages can be mailed to the employee or made available to the employee at a location specified by the employer in the county where the employee was hired or performed labor and the payment is deemed to have been made on the date of mailing or being made available to the employee at the specified location. The bill thus creates an exception mirroring the one existing for motion picture employees. The bill’s urgency clause—making it effective immediately upon its September 5, 2019 signing—highlights what a relief its passage will be to businesses that use short-term models and that have faced legal actions threatening sometimes huge potential liability under the prior law.

Civil Action Damages: Gender, Race Ethnicity. SB 41 aims to narrow the consequences of observed differences in the pay of groups defined by gender or ethnicity. This bill, applying in personal injury and wrongful death cases, will forbid any reduction in damages resulting from an estimation, measure, or calculation or past, present, or future damages for lost or impaired earning capacity that is based on a person’s race, ethnicity, or gender.

Paid Family Leave Expansion & Task Force. Under SB 83, beginning July 1, 2020, the California Paid Family Leave benefit will be eight weeks instead of six weeks, paralleling an increase in San Francisco’s Paid Parental Leave benefit. The bill requires the Governor’s Office to convene a task force to develop a proposal by November 2019 to extend the duration of paid family leave benefits to six months by 2021-22 for parents to care for, and bond with, their newborn or newly adopted child. The November 2019 proposal will also address job protections for workers and the goal of providing a 90 percent wage replacement rate for low-wage workers utilizing the Paid Family Leave program to bond with a child. Approved by Governor Newsom on June 27, 2019, the bill became effective immediately.

AWAITING THE GOVERNOR’S APPROVAL

Independent Contractors Worker Status. AB 170 attempts to slide another exemption into AB 5, via a separate bill, for a newspaper distributor working under contract with a newspaper publisher and a newspaper carrier working under contract with either a newspaper publisher or distributor, until January 1, 2021.

Lactation Accommodation. Based upon the very similar San Francisco lactation ordinance, SB 142 would require employers to provide a lactation room for employees that meets the following requirements: not a bathroom; in close proximity to the employee’s work area; shielded from view; free from intrusion while the employee is lactating; safe, clean, and free of hazardous materials; containing a surface to place a breast pump and personal items; containing a place to sit; with access to electricity or alternative devices (e.g., extension cords, charging stations) that may be needed to operate an electric or battery-powered breast pump; and with access to a sink with running water and a refrigerator suitable for storing milk. If a multipurpose room is used for lactation and other uses, lactation must take precedence over the other uses.

The bill would make a denial of lactation break time or space a violation under rest period laws, and subject the employer to a $100 penalty per violation. The bill contains an anti-retaliation provision and an undue hardship exemption for employers with fewer than 50 employees. The bill would also require an employer to develop and implement a policy regarding any lactation accommodations, and make it readily available to employees. This inordinately comprehensive bill is a repeat of SB 937 (2018), which Governor Brown vetoed given his approval of a less onerous lactation accommodation law, AB 1976.

Sexual Harassment Retaliation Protection. Very similar to AB 3081 (2018), AB 171 would amend the Labor Code to add sexual harassment to the prohibitions on an employer from discriminating or retaliating against an employee because of the employee’s status as a victim of domestic violence, sexual assault, or stalking. The bill would also create a rebuttable presumption of retaliation if the employer takes an adverse action against the employee within 90 days of notice of the employee’s status as a victim. If signed, the bill would become effective January 1, 2020, and these provisions would become operative July 1, 2020.

Sexual Harassment Training: Construction and Temporary Employees. SB 530 would extend the date by when seasonal, temporary, or other employees that are hired to work for less than six months must begin receiving mandatory sexual harassment training to January 1, 2021, and incorporate special training provisions for construction industry employers that employ workers pursuant to a multiemployer collective bargaining agreement.

Leave Rights: Private Cause of Action. AB 1478 would amend Labor Code section 230 to authorize a private right of action (as an alternative to the existing remedy of filing a complaint with the Labor Commissioner) by an employee who takes time off for jury duty, for legal proceedings relating to being a victim of a crime, and for retaliation for being a victim of domestic violence, sexual assault, or stalking. The bill would also make the same changes to Section 230 as AB 171 (discussed above) if AB 171 is approved and AB 1478 is approved after AB 171 (to ensure that AB 171’s provisions also become law).

Organ Donation Leave of Absence. AB 1223 would require employers to grant an employee an unpaid leave of absence—in addition to the existing one-year paid leave—for the purpose of organ donation. The bill would require a public (not private) employee to first exhaust all available sick leave before taking the unpaid leave.

Local Government Enforcement of FEHA. SB 218 would allow local governments within the County of Los Angeles to enforce, administer, and establish penalties for claims arising under local antidiscrimination laws that also fall under the FEHA, removing these claims from the sole jurisdiction of the DFEH. As if dealing with the downtown L.A. traffic maze weren’t enough, this bill would force employers who do business within Los Angeles to navigate a new network of municipal laws.

FEHA Administrative Exhaustion Extension. A repeat of 2018’s AB 1870, vetoed by Governor Brown, AB 9 seeks to extend the period within which an aggrieved person may file a complaint with the DFEH from one year to three years.

Division of Labor Standards Enforcement for Complaints. AB 403 would extend the statute of limitations for complaints alleging workplace retaliation from six months to two years, and would authorize attorney fees to any employee who successfully sues for retaliation based on whistleblowing.

Labor Commissioner Citations. SB 229 would expand the appeal and enforcement mechanisms available when the Labor Commissioner (“LC”) cites an employer for violating the Labor Code’s anti-retaliation provisions. The bill would establish procedures and deadlines the LC, court, and employers must follow when adjudicating or contesting a citation. SB 688 would expand the LC’s citation authority to include citations for failures to pay contract wages when the LC determines an employer had paid an employee below minimum wage.

Penalties for Failure to Pay Wages. AB 673 would authorize an employee to pursue a private right of action to recover penalties for the late payment of wages through the Private Attorneys General Act, and would remove the authority for the Labor Commissioner to recover civil penalties in an independent civil action. The bill would prohibit the employee from also recovering statutory penalties for the same violation.

Arbitration Prohibition. For agreements entered into, modified, or extended on or after January 1, 2020, AB 51 would prohibit any business from requiring that a job applicant or employee waive any right, forum, or procedure for a violation of the FEHA or Labor Code, including any requirement that an individual “opt out” or take affirmative action to preserve such rights. This bill seems to be another unconstitutional attempt by the California Legislature to forbid arbitration agreements.

AB 51 would make actionable any threatened or actual retaliation against an individual who refuses to consent to the forbidden requirements. AB 51 would authorize injunctive relief and attorney’s fees to any plaintiff who proves a violation. Possibly because much of AB 51 could be held preempted by the Federal Arbitration Act, AB 51 contains a severability clause by which the rest of the law will remain in effect if a court finds certain sections invalid. These provisions of AB 51 are very similar to part of last year’s vetoed AB 3080.

Arbitration Agreement Fees/Costs. SB 707 would require an employer or drafter of an arbitration agreement to pay costs and fees associated with the arbitration. Failure to pay the fees could constitute material breach of the arbitration agreement, or the employee could withdraw the claim from arbitration, or be entitled to attorney’s fees and costs. The bill would also require a private arbitration company to collect and report aggregate demographic data regarding the ethnicity, race, disability, veteran status, gender, gender identity, and sexual orientation of all arbitrators.

Settlement Agreements Future Employment Restraints. AB 749 would prohibit settlement agreements that contain a provision restricting an employee from working for the employer against which the employee filed the claim.

Unfair Immigration-Related Practices. AB 589 would impose penalties on an employer that withholds an employee’s immigration-related documents and would create a Worker’s Bill of Rights concerning the employee’s freedom of movement and the payment of wages.

Workplace and School Gun Violence Restraining Orders. Beginning September 1, 2020, AB 61 would authorize an employer, or a coworker who has had substantial and regular interactions and approval of their employer, to file a petition for an ex parte, one-year, or renewed gun violence restraining order.

Call Center Protections. AB 1677 would require any employer with a call center currently in the state intending to relocate the call center to notify the LC at least 120 days before the relocation or face a civil penalty.

Industry-Specific Bills Awaiting Approval

Continuing Education: Implicit Bias in the Medical Field. AB 241 would require, by January 1, 2022, that continued education for physicians, surgeons, nurses and physician assistants include courses on implicit bias. The bill would require the Board of Registered Nursing and the Physician Assistant Board to adopt regulations requiring implicit bias training by January 1, 2022.

California Family Rights Act: Flight Crews. AB 1748 would amend the California Family Rights Act to conform flight deck and cabin crewmember eligibility requirements with the federal Family and Medical Leave Act, which has special hours of eligibility for airline flight attendants and other cabin crew. Flight attendants are eligible for FMLA if, during the previous 12 months, they have worked at least 504 hours and have been paid at least 60% of the monthly guarantee, which means that they worked 60% of the minimum number of hours which the employer scheduled the employee for any given month.

Sexual Violence and Harassment Prevention Training for Janitorial Workers. AB 547, the Janitor Survivor Empowerment Act, would require the Director of the Department of Industrial Relations to organize a training advisory committee that will generate a list of qualified organizations and trainers that janitorial employers would be required to use to provide biennial, in-person sexual violence and harassment prevention training for janitorial workers. This is in addition to the Property Service Workers Protection Act that kicks in on January 1, 2020, which we previously covered here.

Occupational Safety and Health for Valley Fever. AB 203 would require construction employers operating in counties where Valley Fever—a microscopic fungus which lives in the top few inches of the soil in many parts of California—is “highly endemic,” to provide effective training on the disease to employees annually and before an employee is anticipated to cause substantial dust disturbance.

Workplace Solutions

These bills are affecting businesses across the spectrum, and Seyfarth is following their passage (and potential passage) closely. We will continue to keep you informed of new developments as they arise, and please do not hesitate to reach out to your favorite Seyfarth counselors to discuss how to approach these new developments for your company.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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