California Legislative Update: House Of Origin Deadline Unplugs Employment Bills

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Seyfarth Synopsis: While the Buggles took creative liberties when they claimed that Video Killed The Radio Star, the House of Origin deadline axed a number of employment-related bills. California legislators began this legislative session at the apex of the pandemic, introducing a flurry of COVID-19-related bills, many of which failed to survive the June 4, 2021 deadline to pass out of the bill’s House of Origin. Most remaining bills will increase employer obligations if enacted, while many employer-friendly proposals fell by the wayside.

Friday, June 4, marked the first major deadline of the 2021 legislative year—for bills to pass out of their House of Origin—and also marked the end of the road for many employment-related bills. The surviving Senate Bills will now wind their way through the committee and floor vote process in the Assembly, and vice-versa. Many of these measures will continue to undergo significant amendment, and not all will make it through the legislative process. Stay tuned for more in-depth analyses of the proposed bills as the session continues.

School House Rock: No Longer “Just a Bill

COVID-19 Supplemental Paid Sick Leave: SB 95 was a budget trailer bill that—effective immediately upon its signing on April 16, and retroactive to January 1, 2021—extended COVID-19 supplemental paid sick leave (SPSL) to September 30, 2021 for employers with over 25 employers. The new law provides an annual allotment of up to 80 hours of available SPSL, covers persons who telework, and extends SPSL entitlements to reasons related to vaccinations and family care. See our in-depth analysis of the measure here.

Rehiring and Retention of Displaced Hospitality Workers: As we detailed here, SB 93 requires certain hospitality employers—hotels, private clubs, event centers, and airport hospitality services—and successor employers, to offer preferential hiring to employees laid off because of the pandemic. The bill carried an urgency clause, making it effective the same date the Governor signed it, April 16, 2021.

Stayin’ Alive/Break On Through to The Other Side

The bills below have officially broken through to the other legislative house, and are thus stayin’ alive for the time being.

A. Leave

Family Member Definition Expansion: AB 1041 would expand the definition of “family member” for purposes of the Healthy Workplaces, Healthy Families Act of 2014 (CA PSL) in Labor Code Section 245.5 to add “designated person,” defined as “a person identified by the employee at the time the employee requests paid sick days.” The bill would similarly amend the California Family Rights Act (CFRA), Gov’t Code § 12945.2, to add “designated person,” defined as “a person identified by the employee at the time the employee requests family care and medical leave,” as a person for whom an employee may take leave for family care and medical leave, similar to many existing municipal paid sick leave laws. Both laws would allow an employer to limit an employee to one designated person per 12-month period.

Paid Family Leave Weekly Benefit Increase: AB 123 would revise the formula for determining benefits available pursuant to the family temporary disability insurance program, for periods of disability commencing after January 1, 2022, by redefining the weekly benefit amount to be equal to 90% of the wages paid to an individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest, divided by 13, but not exceeding the maximum workers’ compensation temporary disability indemnity weekly benefit amount established by the Department of Industrial Relations.

B. DFEH

Small Employer Family Leave Mediation Pilot Program and CFRA Parent-in-Law Care Leave: AB 1033 would require the Department of Fair Employment and Housing (DFEH) to notify an employee who requests an immediate right-to-sue letter alleging CFRA violations of the requirement for mediation prior to the employee filing a civil action. The bill would toll the statute of limitations applicable to the employee’s claim from the date the employee contacts the DFEH’s dispute resolution division regarding the intent to pursue a legal action until the mediation is complete or deemed unsuccessful. The bill would allow employers of between 5 and 19 employees who do not receive the required modification as a result of the employee’s failure to contact the DFEH’s alternate dispute resolution (ADR) division, to stay the civil action pending completion of ADR. The measure would also expand CFRA to include leave to care for a parent-in-law within the definition of family care and medical leave.

C. Workplace Safety

Safety Citations and Retaliation Prohibitions: SB 606 would require that Cal/OSHA issue a citation to an egregious employer (defined as an employer that intentionally made no reasonable effort to eliminate a known violation) for each willful violation, and each employee exposed to that violation would be considered a separate violation for purposes of the issuance of fines and penalties. The bill has already been amended to remove a rebuttable presumption of retaliation if an employer takes adverse action against an employee within 90 days of the employee doing certain things, such as disclosing a positive test or diagnosis of a communicable disease, requesting testing as a result of exposure, or reporting a possible violation of an OSHA standard.

For more information on the saga of Cal/OSHA’s changes to its own emergency temporary standard, see our blog here.

Warehouse Distribution Centers Quota Disclosures: AB 701 would require that employers provide nonexempt employees who work at a warehouse distribution center a written description of each quota the employee must meet, including the quantified number of tasks to be performed and materials to be produced or handled. The bill would prohibit an employer from requiring employees to meet a quota that causes them to miss a meal or rest period, and employers must provide employees a copy of the most recent three weeks of the employee’s own personal work speed data. When complaint alleging violations of this provision is filed, the Labor Commissioner must provide a written notice of the right to report violations, anti-retaliation measures for reporting unsafe workplace conditions or participating in an investigation by an enforcement agency. The bill would also authorize a current or former employee to sue for injunctive relief, costs, and reasonable attorney’s fees in that action.

D. Wage and Hour

Expansion of Garment Manufacturing Definition: As summarized here, SB 62 would potentially expose persons or entities contracting for the performance of garment manufacturing to joint and several liability with any manufacturer and contractor for the full amount of any unpaid wages, any other compensation, damages, liquidated damages, attorney’s fees, civil penalties, and any other penalties to any and all employees who performed garment manufacturing operations for any violation. The measure would also eliminate piece rate compensation in the garment industry. This measure almost precisely replicates SB 1399, which did not quite make it to the Governor’s desk in 2020, likely as a result of timing and other priorities.

Wage Theft: AB 1003 would amend the Penal Code to make an employer’s intentional theft of wages, payments, or gratuities over $950 punishable as grand theft. The bill would apply to employees and independent contractors.

Wage Withholdings: SB 505 would provide that, prior to garnishing public employees’ wages when the employer is required or empowered to do so by state or federal law, employers must make a good faith effort to consult with an employee to obtain a written authorization to resolve monetary obligations before employing third-party collection services or commencing a civil action. Where a written authorization provides for a withholding or diversion of an employee’s wages, the bill would prohibit the amount withheld or diverted from exceeding 5% of the employee’s monthly gross wages.

E. Civil Procedure

Court Changes: SB 241, the “2021 California Court Efficiency Act,” was originally a spot bill aimed to enact legislation that would streamline discovery processes to reduce costs to the courts and litigants. This would have been a welcome change to litigators and businesses alike. However, the measure was significantly amended, and now would authorize an entity that is not a shorthand reporting corporation to engage in specified acts relating to shorthand reporting if the entity is approved for registration by the Court Reporters Board of California. The bill would also require courts to electronically serve documents on a party that has agreed or consented to accept electronic service. It would also authorize, until January 1, 2024, a witness in a proceeding to appear and give testimony by remote electronic means that provide a live audiovisual connection to the court, if the parties stipulate to this manner of appearance.

Another Potential Restriction on Settlement Agreements: SB 331, the “Silenced No More Act,” would amend Section 12964.5 of the Government Code (enacted by SB 1300 of 2018) so that employers implementing non-disparagement agreements as a condition of employment (or in a separation agreement) would need to carve out an employee’s ability to discuss conduct the employee has reason to believe is unlawful. The bill would also amend Section 1001 of the Code of Civil Procedure (enacted by SB 820 of 2018) to extend the prohibition on confidentiality provisions in settlement agreements to all forms of workplace discrimination—not just discrimination based on sex. This bill would build upon CCP Section 1002.5 (enacted by AB 749 of 2019 and amended by AB 2143 in 2020) by expanding the prohibition to include acts of workplace harassment or discrimination regardless of sex.

F. Labor

Unionization Process for Agricultural Employees: AB 616 essentially eliminates secret ballot union elections by permitting a labor organization to be certified as the exclusive bargaining representative of a bargaining unit through a representation ballot card election where at least 50 percent of the employer’s workforce votes in favor of unionization. Even more concerning, the bill would create a presumption of retaliation—that can be rebutted only by clear, convincing, and overwhelming evidence—whenever an employer disciplines, suspends, demotes, lays off, or terminates a worker during a labor organization’s representation ballot card campaign.

G. Miscellaneous

Gender Neutral Retail Departments: AB 1084 would require a retail department store with 500 or more employees that sells childcare items, children’s clothing, or toys, to maintain a gender-neutral section in which a reasonable selection of the items, articles, and toys for children that it sells shall be displayed, regardless of whether they have been traditionally marketed for either girls or for boys. The requirements of this bill would be enforced by the State of California through the Attorney General, a district attorney or city attorney, in any court of competent jurisdiction and provides for recovery of attorneys’ fees. Failure to comply with the measure’s requirements would be penalized by a civil penalty, not to exceed $250 for a first violation, and $500 for a subsequent violation.

Displaced Janitor and Hotel Worker Opportunity Act: AB 1074 was the original version of the measure requiring rehiring and retention of displaced hospitality workers, which eventually passed as SB 93, as noted above. After the passage of SB 93, AB 1074 was amended to simply rename the “Displaced Janitor Opportunity Act” the “Displaced Janitor And Hotel Worker Opportunity Act” and to extend the provisions of the Act to hotel workers. The bill would also redefine “awarding authority” under the act to include any person that awards or otherwise enters into contracts for hotel services including guest service, food and beverage, or cleaning performed within the state.

Required Disclosures to Temporary Agricultural Workers: AB 857 would prohibit employers from retaliating against an H-2A employee for raising questions that relate to employment, housing, or working conditions. and would require an employer to provide an H-2A employee on the day the employee begins work in the state a written notice in Spanish and, if requested by the employee, in English, containing specified information relative to an H-2A employees’ rights pursuant to federal and state law. It would also require an employer to provide compensation for travel time at the regular rate of pay to or from employer provided housing (with certain exemptions for employees covered by CBAs).

Large Group Health Insurance: SB 255 would authorize an association of employers to offer a large group health care service plan contract or large group health insurance policy consistent with ERISA if certain requirements are met, including that the association is headquartered in California, has continuously been a Multi-Employer Welfare Arrangement under ERISA (MEWA) since before March 23, 2010, and that the large group health care service plan contract or large group health insurance policy have provided a specified level of coverage since January 1, 2019.

“End of the Road” for These Bills

Like the crooners from Boyz II Men in this famous ditty, the bills below have come to the end of the metaphorical road. But while these measures failed to make it past the deadline, employers should be prepared for similar measures to be re-introduced at a later date because, as the song lyrics go, it is possible the California Legislature just “can’t let go.”

A. A Sigh of Relief

Bereavement Leave Act of 2021: AB 95 would have required employers with 25 or more employees to grant unpaid bereavement leaves of up to ten business days, and would have required employers with fewer than 25 employees to grant unpaid bereavement leaves of up to three business days. Leave entitlement would be triggered by the death of a spouse, child, parent, sibling, grandparent, grandchild, or domestic partner.

Employment Discrimination: AB 1119 would have added “family responsibilities”—defined as the obligations of an employee to provide ongoing care for a minor child or a care recipient—to the list of FEHA-protected characteristics for which employers must engage in the interactive process and provide reasonable accommodation to an applicant or employee.

Paid Sick Leave Accrual and Use: AB 995 would have modified the employer’s alternate sick leave accrual method to require that an employee have no less than 40 hours of accrued sick leave or paid time off by the 200th calendar day of employment or each calendar year, or in each 12-month period. The bill would have raised the employer’s authorized limitation on the employee’s use of carryover sick leave to 40 hours or 5 days.

Worker Metrics Program: AB 1192, referred to by the California Chamber of Commerce as the “Public Shaming of Employers” bill, would have required annual reporting of wage and hour data and employee benefits for an employer’s entire United States workforce that would have been published on the Labor and Workforce Development Agency’s website.

Employer Provided Backup Childcare Benefit: AB 1179 would have required employers of 1,000 or more employees to provide employees, on or after January 1, 2022, with up to 60 hours of paid backup childcare benefits.

COVID-19 Hazard Pay for Healthcare Workers: AB 650 would have required all private healthcare providers to pay mandatory bonuses through the end of 2022 to all workers, including employees of contractors. The bill did not provide any credit for any other bonuses, pay increases, or other benefits employers provided during the pandemic.

Fast Food Council / Franchisor Joint Liability: AB 257 would have established the Fast Food Sector Council, responsible for creating a fast food workers bill of rights, including wages, working conditions, etc. This onerous bill would have required franchisors to insure franchisee compliance with a variety of employment, worker, and public health and safety laws and orders, including those related to unfair business practices, general liability, employment discrimination, the California Retail Food Code, a range of labor regulations, and emergency orders. The measure would have established joint and several liability for franchisee non-compliance. The bill would have nullified any potential work around by prohibiting any waiver or indemnity provisions. Finally, while the bill would have been mostly enforced through the DLSE, ominously, it would have also given franchisee employees a private right of action for retaliation against franchisors.

Paid Family Leave Expansion Where Child Deceased In Childbirth: AB 867 would have expanded eligibility for benefits under the Paid Family Leave program to include leave for a parent who was pregnant with a child, if the child dies unexpectedly during childbirth at 37 weeks or more of pregnancy.

Political Affiliation Protection: SB 238 would have added political affiliation as a protected characteristic under the FEHA.

Cannabis Screening: AB 1256 would have prohibited employers from discriminating against a person in hiring, termination, or any term or condition of employment because a drug screening test detected tetrahydrocannabinol (THC) in their urine. (This bill would have exempted employers required to drug test based on federal law or regulations, those that would lose monetary or licensing benefits for failing to drug test, and building and construction employers.)

Workplace Diversity: AB 1122 was a spot bill that would have encouraged employers to develop and implement personnel policies that incorporate workforce diversity. The measure was sponsored by the California Employers Association.

B. That Would Have Been Helpful

Limitations to PAGA: AB 385 sought to ease the litigation risk of the pandemic on employers by prohibiting employees from maintaining an action under PAGA for violations of the Labor Code arising between March 4, 2020, and the state of emergency termination date. AB 530 would have required an “aggrieved employee” to inform the employer which specific violations of the Labor Code are being alleged under each subdivision of PAGA and to inform the employer if statutory right-to-cure provisions apply.

Independent Contractors: Three bills have been introduced thus far in the continued attempt to reform AB 5, including AB 231, which would make permanent the exemption from the ABC test for licensed manicurists, by providing that they be indefinitely governed by the multifactor Borello test instead of the ABC Test. AB 612 would create a new exemption from the ABC test for a bona fide business-to-business arrangement that involves a voluntary deposit, to be made available to entities that utilize their own employees to produce, locate, or procure tangible personal property, which it owns, leases, or otherwise has the lawful right to possess. And, as expected, the least likely to gain traction, AB 25 would have replaced the ABC test with the multifactor Borello test.

Documenting COVID-19 Tests: AB 757 would have authorized a private employer to request prescribed documentation of a positive COVID-19 test or diagnosis if (1) an employee reports that the employee is unable to work due to a positive for COVID-19 test result and (2) the employer determines that an employee may be subject to a 14-day exclusion from the workplace as required under certain law or regulations.

Wage Records Inspection: AB 436 would have amended Labor Code § 226(b) to harmonize the time frame to respond to requests pursuant to Labor Code § 226(b) with requests for personnel records pursuant to Labor Code § 1198.5 by allowing the former records to be produced within the same time frame as the latter (i.e., 30 days).

Telecommuting Employees: AB 513 was a welcome bill to employers that would have authorized employees working from home to receive legally required notices and postings electronically and sign certain documents electronically, and would deem that the final wages due to an employee working from home are paid on the date that the paycheck is mailed to the employee.

Telework Flexibility Act: AB 1028 would have authorized telecommuting employees to waive overtime up to 10 hours of work per day, and waive split shift premiums if the employee requests an employee-selected remote work flexible schedule, and it would permit an employee to choose when to take any meal or rest period during the workday. The bill also would have prohibited an employee from recovering PAGA penalties meal and rest break violations if the employee engaged in remote work. Similarly, AB 55 was introduced as a spot bill with its stated purpose of affording certain rights and benefits to telecommuting employees, but it was not amended.

Workplace Flexibility Act of 2021: AB 230 would have permitted an individual, nonexempt employee to request an employee-selected flexible work schedule, allowing for workdays of up to 10 hours per day within a 40-hour workweek, where the employee would not be entitled to overtime compensation for those additional daily hours.

C. COVID-19 Bills That Were Stopped In Their Tracks

COVID-19 Contact Tracing and Safety Policies: SB 46 would have required employers to develop and implement contact tracing and safety policies for their employees, including requiring notice to the employer when an employee receives a positive COVID-19 test.

COVID-19 Income Tax Credits: AB 62 would have allowed a credit against corporate taxes in an amount equal to the total amount paid or incurred to comply with COVID-19 restrictions.

COVID-19 Rent Relief: AB 255 was earmarked to provide commercial rent relief protections for small businesses affected by the COVID-19 pandemic.

Keep California Working Act: SB 74—introduced on a bipartisan basis by Senators Caballero (D-Salinas) and Borgeas (R-Fresno)—would have appropriated $2.6 billion for grants to small businesses and nonprofit entities that meet specified criteria, including that the entity had experienced economic hardship resulting from the COVID-19 pandemic.

Pandemics Priority for Medical Treatment: AB 93 would have prioritized workers in the food supply industry, such as field workers and grocery workers, for rapid testing and vaccination programs in response to pandemics, including COVID-19.

D. Unemployment / Workers’ Comp. Bills That Didn’t Make the Cut

Enhancing Unemployment Convenience: AB 274 would have revised the definition of prepaid card by requiring cards to be chip-enabled. AB 24 would have required the unemployment development department (EDD) to provide a claimant with a notification of the computation used to determine their benefits. And AB 8 would have permitted the rightful recipient of unemployment compensation benefits to elect whether the benefits payments are directly deposited into a qualifying account or applied to a prepaid debit card.

Preventing Unemployment Fraud: AB 23 would have required the unemployment development department to cross-check all claimant information with state and county correctional facility inmate data in an effort to detect fraudulent applications. The bill was borne from California coming to grips with its fraudulent unemployment insurance payments of almost $1 billion to state prisoners after Congress passed the CARES Act.

COVID-19 Temporary Benefits: AB 19 would have required the EDD to provide, until July 1, 2022, and following the termination of unemployment assistance programs created by the CARES Act, benefits equivalent to the terminated federal or state supplemental unemployment compensation payments for the remainder of the duration of time the individual is unemployed due to the COVID-19 pandemic. Unemployment benefits provided under this legislation would not be charged against the reserve account of any employer.

Advisory Committee on Unemployment Insurance: AB 42 was a spot bill set up to establish an advisory committee to advise the EDD on matters within the department’s jurisdiction, including, but not limited to, unemployment insurance.

Hospital Employee Injuries: SB 213 would define “injury” for a hospital employee to include infectious diseases, cancer, musculoskeletal injuries, post-traumatic stress disorder, and respiratory diseases. The bill would have, for purposes of workers’ compensation, created rebuttable presumptions that injuries in a hospital employee who provides direct patient care in an acute care hospital arose out of and in the course of the employment.

Workplace Solutions

Thankfully, many of the most concerning bills introduced were unable to survive beyond the House of Origin deadline. Aside from the sudden retroactive passage of SPSL and immediately effective Right to Recall laws, the remaining bills are not yet set in stone. The legislative session is still in its infancy, and each measure—apart from, perhaps, SB 62—will almost certainly be amended. We’ll keep you updated here at Cal Peculiarities, and you can also check out our Policy Matters podcast and newsletter for regular check-ins on California (and national) policy and legislative updates as well.

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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