New California Employment Laws for 2021

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New year, new laws. That's right; it's time to prepare for the new year, which means being aware of the latest labor and employment laws that are sure to impact your organization. Most importantly, it's time to revise those handbooks to keep up with these changes.

For an in-depth analysis of how each law might affect your organization, contact your Hanson Bridgett labor and employment lawyer and join us for our Annual Client Seminars in January. Unless otherwise indicated, each of the following new laws will take effect on Jan. 1, 2021.

Discrimination, Harassment & Retaliation

Mandatory Minority Representation on Your Board of Directors (AB 979): This bill takes effect "no later than the close of the 2021 calendar year." California currently requires publicly traded corporations with principal executive offices in California to have at least one female director on their board (SB 826). That amount must increase to two or three female board members by the end of 2021, depending on the size of the board. AB 979 expands on the diversification requirements by requiring that at least one director be from an underrepresented community by the end of 2021. AB 979 defines "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.

AB 979 is due to take effect at the end of 2021, with an additional year allowed - no later than the close of the 2022 calendar year - for larger boards to find the greater number of minority board members needed. Non-compliance is costly. If companies do not comply by the end of 2022, they may face fines between $100,000 and $300,000 for each offense. However, the bill does not provide companies with any guidance on how best to achieve these requirements. As such, companies should start reviewing their outreach efforts and consider other actions that may assist them with compliance.

The same day that Governor Newsom signed AB 979, Judicial Watch filed a lawsuit in Los Angeles Superior Court challenging AB 979 on constitutional grounds. See Robin Crest et al. v. Alex Padilla, in his official capacity as Secretary of the State of California (No. 20ST-CV-37513). Judicial Watch has a similar lawsuit pending over SB 826. See Crest et al. v. Padilla, (No.19ST-CV-27561). We will be monitoring the Judicial Watch lawsuits for any developments.

Private Employers Must Submit a Pay Data Report to the DFEH (SB 973): Private employers with 100 or more employees must submit a pay data report to California's Department of Fair Employment and Housing (DFEH) by Mar. 31, 2021, and annually thereafter (if the employer is required to file an annual Employer Information Report under federal law). The report must include the number of employees by race, ethnicity, and sex in a variety of job categories, including but not limited to executive or senior-level officials and managers, professionals, laborers and helpers, and service workers. These requirements are similar to the EEO-1 filing requirement.

No Rehire Provisions (AB 2143): Currently, employers are prohibited from including a provision in their settlement agreements restricting an aggrieved person from working for the employer unless "the employer has made a good faith determination that the aggrieved person engaged in sexual harassment or assault." This new law slightly modifies this ban on "no rehire" provisions and requires that the aggrieved person has filed the claim in good faith in order for the prohibition to apply, and the employer must have made the determination of sexual assault or sexual harassment before the grievant filed the claim. Lastly, this new law expands the exception to include a good faith determination that the aggrieved person engaged in any criminal conduct. There is no definition of good faith determination in the statute, so employers act "at their peril" and will have to wait for some case law to flesh out that meaning.

Sexual Harassment Guidelines for Postsecondary Institutions (SB 493): No later than Jan. 1, 2022, postsecondary institutions that receive state financial assistance must comply with training, notice, and investigation requirements related to sexual harassment complaints.

Wage & Hour

Labor Commissioner May Now Represent Claimants in Connection with Arbitrations (SB 1384): This bill expands the Labor Commissioner's ability to represent claimants who are financially unable to afford representation to arbitral proceedings and/or in opposing a petition to compel arbitration. The Labor Commissioner is limited to claims in which the claimant is unable to afford representation.

Limited On-Call Rest Breaks Exemption for Unionized Security Officers (AB 1512): This new law comes as a much-needed break for employers employing persons in the security services industry as a security officer who is registered pursuant to the Private Security Services Act (Chapter 11.5 (commencing with Section 7580) of Division 3 of the Business and Professions Code) from California's rest break law by allowing security officers to remain on-call during their rest breaks. As you might recall, Augustus v. ABM Security Services, Inc., (2016) 2 Cal.5th 257, prohibited on-call rest breaks for covered employees. AB 512 passed as an urgent response to Augustus, allowing security officers to remain on the premises and on-call and restart a rest period as soon as practicable if it was interrupted. AB 1512 took effect on Sept. 30, 2020, and the provisions sunset on Jan. 1, 2027.

Rest Periods Exemption for Petroleum Facilities Extended (AB 2479): Currently, employees who hold safety-sensitive positions at petroleum facilities are exempt from rest period requirements, provided they fulfill specific requirements. This exemption would have expired on Jan. 1, 2021. This new law extends the exemption until Jan. 1, 2026.

Extended Time to File Labor Commissioner Complaints (AB 1947): Employees now have one year, instead of six months, to file a claim with the Labor Commissioner if the claimant believes they were discharged or otherwise discriminated against in violation of any Labor Code provisions enforced by the Labor Commissioner. The major change, which is likely to increase litigation in California, is that this new law also amends Labor Code section 1102.5 to allow for attorney's fees for employees who prevail on a whistleblower retaliation claim pursuant to the code.

New AB 5 Exemptions (AB 2257): Remember AB 5, the legislation that shook the California business community to its core with the adoption of the "ABC Test"? AB 2257 substantially revises AB 5 and tacks on new exemptions to the "ABC Test," including but not limited to exemptions for business-to-business contracts; referral agencies (consulting, youth sports coaching, wedding services); music industry and performers, and professional services. These exemptions went into effect upon the signing of the bill on Sept. 4 and apply retroactively where applicable. These changes — and AB 5's original provisions — are very fact-specific. Employers should consult with counsel before classifying any individual as an independent contractor.

Prevailing Wages for Public Works Expanded (AB 2765): Currently, the general prevailing rate of per diem wages must be paid to workers employed on "public works." This new law expands the definition of "public works."

Employers Must Disclose Final Judgments for Violation of Wage Order on Statement of Information 
(AB 3075): Beginning Jan. 1, 2022, or when the California Business Connect is implemented, whichever is earlier, business entities will have to include on their Statement of Information whether "any officer or any director, or, in the case of a limited liability company, any member or any manager," has outstanding final judgment that was issued for the violation of any wage order. The California Secretary of State Business Connect is an ongoing technology project aimed to help business owners automate their paper-based filings. Full implementation is expected in 2022.

AB 3075 also adds Section 203.3 to the Labor Code providing that successor employers will be liable for any wages, damages, and penalties. The bill provides that successorship is established upon meeting any of the following criteria:

  1. Uses substantially the same facilities or substantially the same workforce to offer substantially the same services as the judgment debtor. This factor does not apply to employers who maintain the same workforce pursuant to Chapter 4.5 (commencing with Section 1060) of Part 3.
  2. Has substantially the same owners or managers that control the labor relations as the judgment debtor.
  3. Employs as a managing agent, any person who directly controlled the wages, hours, or working conditions of the affected workforce of the judgment debtor. The term "managing agent" has the same meaning as in subdivision (b) of Section 3294 of the Civil Code.
  4. Operates a business in the same industry, and the business has an owner, partner, officer, or director who is an immediate family member of any owner, partner, officer, or director of the judgment debtor.

Leaves

Expanded Protections for Victims of Crime or Abuse (AB 2992): This law expands current protections for victims of domestic violence, sexual assault, or stalking to include protections for victims of crime or abuse. That means employers cannot discharge, discriminate or retaliate against an employee who is a victim of a crime or abuse from taking time off work to obtain relief to help ensure the health, safety, or welfare of the victim or the victim's child. This new law further expands the categories of "time off" to include taking time off work to seek medical attention for injuries caused by crime or abuse, to obtain services from prescribed entities, to obtain psychological counseling or mental health services, or to participate in safety planning.

Employees Have Sole Discretion to Use Kin Care Leave (AB 2017): Currently, employees may use their accrued sick leave to tend to the illness of a family member. This new law gives employees the power to use their sick leave at "their sole discretion." As stated, it seems that employers cannot deny an employee the use of their sick leave for whatever reason they deem is necessary of sick leave.

California Family Right Act Expanded (SB 1383): Currently, employers with 50 or more employees must provide 12 workweeks of unpaid leave for family care and medical leave. Under the New Parent Leave Act, employers with 20 or more employees must provide 12 workweeks of unpaid leave during any 12-month period to bond with a new child. SB1383 expands CFRA in several ways.

First, CFRA now applies to employers with as few as five employees, requiring them to provide the same job-protected 12 workweeks of leave for family care and medical leave. This leave must also be given for any qualifying exigency related to the covered active duty or call to covered active duty. The new CFRA also provides for baby bonding leave, repealing the New Parent Leave Act. Second, SB 1383 expands the definition of "family members" to include domestic partners, grandparents, grandchildren, adult children, and siblings. Because the new definitions allow employees to take leave for reasons the federal Family Medical Leave Act (FMLA) does not cover, it is possible that employees may be entitled to up to 24 workweeks of unpaid leave for those leaves that do not run concurrently with the FMLA. Finally, SB 1383 abolished the "key employee" exemption.

For more information, see our alert New California Family Rights Act: State Family Care and Medical Leave Expanded.

Small Employer Family Leave Mediation (AB 1867): Given that CFRA has been expanded to apply to small employers, this bill creates a family leave mediation pilot program for small employers. The program allows small employers or the employee to request a mediation through the Department of Fair Employment and Housing's (DFEH) dispute resolution division. An employee would be prohibited from pursuing civil action until mediation is complete if said mediation is requested by the employer (or employee). Accordingly, the statute of limitations would be tolled for the employee until the mediation is complete. This provision is set to expire Jan. 1, 2024.

Retail Food Facility Handwashing Requirement (AB 1867): AB 1867 also requires employers to allow employees working in any food facility to wash their hands every 30 minutes and additionally as needed. This law went into effect on Sept. 9, 2020.

COVID-19

Supplemental Paid Sick Leave (AB 1867): AB 1867 establishes COVID-19 supplemental paid sick leave covering the following "hiring entities":

  1. Private employers with 500 or more employees;
  2. Public sector agency employers that employ health care providers or emergency responders that elected to exclude such employees from emergency paid sick leave under the federal Families First Coronavirus Response Act (FFCRA);
  3. Private employers with fewer than 500 employees that employ health care providers or emergency responders that elected to exclude such employees from emergency paid sick leave under FFCRA, and
  4. Hiring entities that operate a food facility.

Covered entities are required to provide COVID-19 supplemental paid sick leave to workers who are unable to work due to any of the following reasons:

  1. The covered worker is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  2. The covered worker is advised by a health care provider to self-quarantine or self-isolate due to concerns related to COVID-19; and
  3. The covered worker is prohibited from working by the covered worker's hiring entity due to health concerns related to the potential transmission of COVID-19.

This law took effect on Sept. 9, 2020, and employers had to begin providing the supplemental as of Sept. 19, 2020. This bill is set to expire on Dec. 31, 2020, or when any federal extension of the Emergency Paid Sick Leave Act expires, whichever is later. For more information, see our alert California's New Supplemental COVID-19 Paid Sick Leave Law.

Worker's Compensation (SB 1159): SB 1159 creates a rebuttable presumption that an employee contracted COVID-19 at work if the employee tests positive or is diagnosed with COVID-19 within 14 days after working at the employer's place of employment. This law went into effect on Sept. 17, 2020, and expires Jan. 1, 2023.

CAL/OSHA Expanded Enforcement (AB 685): This bill expands Cal/OSHA's authority to issue Orders Prohibiting Use relating to COVID-19 hazards. Accordingly, Cal/OSHA can shut down a worksite if the worksite exposes employees to a COVID-19 related imminent hazard. It also creates new notice and reporting requirements to employees and subcontractor employers that must be met within one business day of potential COVID-19 exposure. Certain employers must also notify local public health agencies of all workplace COVID-19 outbreaks. For more information, see New Bill Expands Cal/OSHA Enforcement Rules Over COVID-19 Related Illnesses For All Employers.

Workers in a General Acute Care Hospital Must Be Provided with Personal Protective Equipment (AB 2537): Public and private employers of workers in a general acute care hospital must supply their employees who provide direct patient care or services that directly support personal care with personal protective equipment.

As of Apr. 1, 2021, these employers must maintain a three-month supply of specified equipment and provide an inventory report and its written procedures to the Division of Occupational Safety and Health upon request. Failure to maintain the required stockpile could result in a $25,000 civil penalty.

Moreover, on or before Jan. 15, 2021, a general acute care hospital must be prepared to report to the Department of Industrial Relations its highest seven-day consecutive daily average consumption of protective equipment during the 2019 calendar year.

Miscellaneous

California Consumer Privacy Act's Employer Exemption Extended (AB 1281): While this bill extends the employer exemption from certain provisions of the California Consumer Privacy Act (CCPA) to January 2022, employers must still satisfy the notice provision of the CCPA. Accordingly, employers must continue providing notice to applicants and employees of information collected by the company and the purposes for which said information is collected.

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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