Doing Business in 2020: California’s New Workplace Legislation

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Part 1: New Labor & Employment Laws Impacting California’s Public and Private Entities

California lawmakers passed a range of employment laws last year aimed to extend benefits and workplace protections to more workers and add greater defenses against discrimination and harassment, as well as provide guidance on the appropriate accommodations and treatment surrounding lactating mothers, hairstyles, organ donors and more.

In Part 1 of this annual Legal Alert series, Best Best & Krieger LLP explores the legislation and developments that will impact how employers do business in 2020 — a year in which employers will have to reevaluate their relationships with independent contractors and arbitration and settlement agreements.

Unless otherwise noted, all laws became effective Jan. 1.

Anti-Discrimination & Harassment

AB 9 Employment discrimination: limitation of actions
Employees now have more time to file discrimination claims under the Fair Employment and Housing Act with the Department of Fair Employment and Housing. The filing timeframe was extended from 1 year to 3 years from the violation date. While the law doesn’t revive lapsed claims under the former 1-year rule, claims that were set to expire after Jan. 1 likely have an extended life. Claims filed under the Unruh (civil rights), Ralph (hate crimes) or Bane (threats and intimidation) acts remain subject to a 1-year filing period. Employers should maintain employment records according to the extended statute of limitations.

SB 188 Discrimination: hairstyle
California became the first state to protect people’s right to wear natural hairstyles and considers any prohibition against certain hairstyles evidence of racial discrimination. SB 188 (dubbed the CROWN Act) expands the definition of “race” under the FEHA to include “traits historically associated with race, including, but not limited to, hair texture and protective hairstyles.”

SB 778 Committee on Labor, Public Employment and Retirement. Employers: sexual harassment training: requirements
Employers with five or more employees now have until Jan. 1, 2021 to provide at least 2 hours of anti-harassment training to supervisors and 1 hour to non-supervisors. SB 778 extends the compliance deadline, which was originally set for January 2020. The bill further clarifies that employers who provided anti-harassment training in 2019 are compliant and not required to provide the training again for 2 years.

Arbitration & Other Settlement Agreements

AB 51 Employment discrimination: enforcement
In an effort to ensure California workers enter into employment agreements voluntarily and without coercion, AB 51 pushes greater restrictions on arbitration agreements. Employers can no longer require employees and applicants — as a condition of employment — to waive any right, forum or procedure for a violation of the FEHA or the Labor Code. The law also prohibits threats, retaliation, termination or discrimination against employees who refuse to waive such a right, forum or procedure. Agreements governed by the Federal Arbitration Act are not invalidated.

AB 749 Settlement agreements: restraints in trade
Historically, employment settlement and severance agreements have included “no rehire” provisions to prevent claims of discrimination in refusal to consider an aggrieved employee for rehire. AB 749 prohibits and invalidates all provisions in such agreements that could be interpreted as an attempt to prevent workers from obtaining employment with a settling employer or any affiliates.

Consumer Privacy

AB 25 California Consumer Privacy Act of 2018
The California Consumer Privacy Act, which became effective on Jan. 1, 2020, grants consumers various rights regarding their personal information held by businesses, including the right to know, access and request deletion of their data. AB 25 clarifies that the CCPA extends these rights to all individuals a business collects personal information from, including applicants, current and former employees, contractors, emergency contacts and dependents/spouses. AB 25 also delayed the obligation to inform consumers of the categories of personal information to be collected until Jan. 1, 2021.

Domestic Partnerships

SB 30 Domestic partnership
The State’s definition of a “domestic partner” was revised to remove the requirement that the partnership be between a same-sex couple or the couple both be older than 62. The law still requires — among other things — that the members of the couple not be married, already in a domestic partnership or blood related. This affects rights under policies, benefits and other employment matters not preempted by federal law.

Employee Classification

AB 5 Worker status: employees and independent contractors
Perhaps the most controversial employment law of 2019, AB 5, reclassifying gig-economy and traditional contract workers as employees, already faces legal challenges from freelance writers and truckers — the latter of whom won a temporary injunction — but employers will still have to review their work and agreements with independent contractors.

AB 5 adopted the strict, three-part “ABC” test created by the California Supreme Court in 2018 in Dynamex Operations West v. Superior Court. Under the test, a worker is presumed an employee, unless the hiring entity can prove that the contractor:
(a) is free from the control and direction of the entity,
(b) performs work outside the usual course of the entity’s business and
(c) is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed.

A number of industries and occupations (fishing, insurance brokers and dentists included) secured exemptions but aren’t free from scrutiny as potential employees — the decades-old Borello test still applies.

Previous BB&K Legal Alerts explore how businesses and public agencies can adhere to AB 5 and the potential joint-employer liability claims AB 5 presents for public agencies.

Expanded Leave

AB 1223 Living organ donation
Previously, state law mandated that private employers with 15 or more employees had to provide organ donors with up to 30 days of paid leave in any 1-year period. Employers are now required to make an additional 30 days of unpaid leave available.

Lactation Accommodations

SB 142 Employees: lactation accommodation
California lawmakers continued carving out protections for mothers in the workplace, laying out additional guidelines for lactation accommodations for moms who pump breastmilk. Employers were already required to allow reasonable time for a woman to express milk without loss of pay. They were also required to make reasonable efforts to provide a private location, other than a restroom, for pumping. SB 142 lays out parameters of acceptable spaces, requiring they be shielded from view, free from intrusion, clean and free of hazards, and have access to a place to sit, surface to pump, electricity, a sink and refrigerator or cooler. New-construction buildings and those undergoing significant improvements will be required to build such spaces. Employers will also be required to adopt a “lactation accommodation” policy.

OSHA Reporting

AB 1805 Committee on Labor and Employment. Occupational safety and health
The test that triggers an employer’s obligation to report “serious injury or illness” and “serious exposure” to CalOSHA was refined under AB 1805. Historically, employers were required to report to CalOSHA when an employee was hospitalized for 24 hours, suffering loss of member of body or suffering permanent disfigurement following a work-related incident. AB 1805 eliminates the 24-hour hospital requirement, instead stating that a hospital stay must be for “other than medical observation or diagnostic testing.” The law also expressly includes loss of an eye in its definition of “loss of member.”

Wage & Hour Penalties

AB 673 Failure to pay wages: penalties
AB 673 expands an employee’s rights to collect penalties for their employer’s failure to timely pay wages. Employees can either recover penalties under Labor Code section 210 at a Labor Commissioner hearing or through a Private Attorney General Act claim.
There is also an added penalty for an employer violating the State’s Equal Pay Act.

SB 688 Failure to pay wages: penalties
The California Labor Commissioner’s enforcement ability was expanded under SB 688. The Labor Commissioner could previously only enforce actions for violations alleging unpaid minimum wages, but now has the same authority where an employer has contractually promised to pay more than minimum wage (even if an employee was paid the minimum wage) but failed to do so.

Also in this Series:

  • Part 2 Doing Business in 2020: Courts Tackle Employment Law (coming soon)

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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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