Pen Down, Governor Newsom: California’s Newest Employment Laws

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Seyfarth Synopsis: September 30 was Governor Newsom’s last day to sign or veto bills the Legislature passed by its August 31 deadline. Some new laws—including COVID-19 supplemental paid sick leave and workers’ compensation presumption—became effective immediately upon signing. Others—such as an expansion of CFRA and other leave rights, an EEO-1-like annual pay data report, and (believe it or not!) rest break relief to security guard employers—take effect January 1, 2021.

As we summarized here, Monday, August 31st (or, really, the wee hours of September 1) marked the Legislature’s last day to pass bills to Governor Newsom’s desk for approval during the second year of the 2019-2020 Legislative Session. Those thirty days are up, and Governor Newsom used almost every minute of his time, issuing final veto messages late on September 30th. Despite the oddities of 2020a truncated legislative calendar, a smaller number of bills considered, and COVID-related bills crowding out bills introduced in January, before most folks knew what a coronavirus isCalifornia’s governing bodies somehow found a way to create a whole new host of employment compliance challenges.

Below is our annual summary of the most significant employment-related bills approved or vetoed by the Governor. Check out our end-of-session wrap-up for bills that did not make it to the Governor’s desk (and may be back in 2021). All approved bills will be effective January 1, 2021, unless otherwise noted.

Governor-Approved Bills

Bills Effective Immediately Upon Signing
(If you haven’t already taken compliance actions, the best time to do it is now.)

Supplemental Paid Sick Leave & Small Employer Family Leave Mediation. AB 1867 creates new Labor Code section 248.1, which, no later than September 19, 2020, requires COVID-19 supplemental paid sick leave for workers employed by private businesses of 500 or more employees nationally (and certain health care providers and emergency responders). This bill essentially covers all workers in California who may not be entitled to supplemental paid sick leave covered by the Emergency Paid Sick Leave Act established by the federal Families First Coronavirus Response Act (“FFCRA”).

The bill also codifies Executive Order N-51-20, providing supplemental paid sick leave for food sector workers, in new Labor Code section 248. Both new sections require hiring entities to provide a number of hours of COVID-19 supplemental paid sick leave to workers who are unable to work due to specified reasons relating to COVID-19, but only Section 248.1 requires the sick pay balance be stated on those employees’ wage statements. The bill also requires employers to post a notice (available here and here) in the workplace (or distribute it via mail, e-mail, etc.). These provisions expire on December 31, 2020, or upon the expiration of the FFCRA, whichever is later.

AB 1867 went into effect immediately upon the Governor’s September 9, 2020 approval. A similar budget trailer bill, SB 822, did not make the cut. Read our in-depth article on AB 1867 here.

AB 1867 also requires the Department of Fair Employment and Housing (DFEH) to create a small employer family leave mediation pilot program, authorizing small employers and their employees to request mediation through the DFEH’s dispute resolution division within a specified timeframe. Under the program, employers or employees may require DFEH mediation if: (1) the DFEH issues a right-to-sue notice based on a DFEH complaint that is related to family leave and (2) the named employer has between 5-19 employees. AB 1867 prohibits employees from pursuing civil actions until the mediation is complete, and tolls the statute of limitations, including for additional related claims, from receipt of a request to participate in the program until the mediation is complete. These provisions will be repealed on January 1, 2024.

Workers’ Compensation: COVID-19. For employers of five or more, SB 1159 creates a rebuttable presumption that an employee contracted COVID-19 in the workplace if certain circumstances are met for purposes of workers’ compensation. It also requires reporting to workers’ compensation claims administrators and has stiff fines for non-compliance. Effective immediately upon the Governor’s September 17, 2020, signing. Read our analysis of the bill here.

OSHA: COVID-19 Awareness. AB 2043 requires Cal-OSHA to disseminate information on best practices for COVID-19 infection prevention in English and Spanish, together with other awareness and prevention measures, targeted at and to be easily understood by agricultural employees from various ethnic and cultural backgrounds. These provisions expire when the Governor or Legislature terminate the state of emergency. AB 2043 went into effect immediately upon the Governor’s signing, on September 28, 2020.

Security Officers: Rest Periods. AB 1512 provides some relief—through January 1, 2027—from rest period laws for the security industry, possibly paving the way for later legislation benefitting other industries. AB 1512 authorizes registered private patrol operator employers to require certain security officer employees (those registered under the Private Security Services Act) to remain on the premises during rest periods, to remain on call, and to carry and monitor a communication device. The security officer must be permitted to restart a rest period anew as soon as practicable if the rest period is interrupted. This later, uninterrupted rest period would qualify as a compliant rest period. If a security officer cannot take an uninterrupted rest period of at least 10 minutes for every four hours worked (or major fraction thereof), the officer must be paid one additional hour of pay at the base hourly rate. AB 1512 went into effect immediately upon the Governor’s approval on September 30, 2020, but does not apply to cases filed before January 1, 2021.

AB 1512 declares “it is in the public interest that security officers are able to respond to emergency situations without delay. This may require security officers to remain on the premises and on call during paid rest periods, and to carry and monitor a communication device… it is the intent of the Legislature to abrogate, for the security services industry only, the California Supreme Court’s decision in Augustus v. ABM Security Services, Inc. (2016) 2 Cal.5th 257, to the extent that decision is in conflict with this act.”

Certain Petroleum Workers: Rest Periods. AB 2479 extends, past January 1, 2021 and until January 1, 2026, the exemption in Labor Code section 226.75 that applies to rest periods for specified employees who hold safety-sensitive positions at petroleum facilities, to the extent they must carry and monitor communication devices and respond to emergencies, or remain on the employer’s premises to monitor the premises and respond to emergencies.

Worker Classification: Employees and Independent Contractors. AB 2257 recasts and extensively revises the provisions added by AB 5 of 2019, to exempt bona fide business-to-business contracting relationships from the law’s application, as well as to add industry-specific exemptions (including proofers and record directors, persons who provide underwriting inspection, home inspectors, and individuals who contract for the purpose of providing services at a single-engagement event), and clarifies existing industry-specific exemptions. Read our in-depth analysis of the bill here. AB 2257 went into effect immediately upon the Governor’s September 4, 2020, approval.

Entertainment Industry: Minors Sexual Harassment Training. AB 3175 amends Section 1700.52 of the Labor Code to require that a parent or legal guardian accompany age-eligible minors during employer-provided sexual harassment training made available online by the DFEH, and certify to the Labor Commissioner that the training has been completed. AB 3175 went into effect immediately upon the Governor’s September 25, 2020, approval.

Bills Effective January 1, 2021

Employers: Annual Report: Pay Data. SB 973 requires private employers with 100 or more employees that must file the federal annual Employer Information Report (EEO-1) to also submit—on or before March 31, 2021, and each year after—a pay data report to the DFEH that states the number of employees by race, ethnicity, and sex in the following categories: all levels of officials and managers, professionals, technicians, sales workers, administrative support workers, craft workers, operatives, laborers and helpers, and service workers. SB 973 requires the DFEH to make the reports available to the Department of Labor Standards Enforcement (DLSE) upon request, to maintain the pay data reports for at least 10 years, and it authorizes the DFEH to seek an order requiring non-reporting employers to comply. SB 973 prohibits any officer or employee of the DFEH or DLSE from making public any individually identifiable information obtained from the report prior to the institution of certain investigation or enforcement proceedings, and requires the EDD to provide the DFEH with the names and addresses of all businesses with 100 or more employees. SB 973 is a repeat of SB 171 (2019, held in committee), SB 1284 (2018, held in committee), and AB 2019 (2017, vetoed). Critics complain that SB 973 will require California companies to report potentially incomplete or misleading pay data that the companies’ adversaries could use to falsely claim wage disparities. Read our in-depth analysis of the bill here.

Settlement Agreements: No-hire Provisions. Existing law, Section 1002.5 of the Code of Civil Procedure (enacted by AB 749 of 2019), prohibits no-hire provisions in settlement agreements unless the employer has determined in good faith that the aggrieved person engaged in sexual harassment or sexual assault. AB 2143 revises that law to require that the employee has filed the claim in good faith for the prohibition to apply, and that the employer has documented the determination of sexual assault or sexual harassment before the aggrieved person filed the claim. AB 2143 also expands the exceptions to the no-hire provision prohibition to include a determination that the aggrieved person engaged in any criminal conduct, in addition to the existing sexual harassment and sexual assault exceptions.

New Mandated COVID-19 Reporting. AB 685 requires employers, within one business day of receiving notice of potential exposure to COVID-19 in the workplace, to: (1) provide written notice to all employees, the employers of subcontracted employees, and exclusive representatives who were on the premises at the same worksite, (2) provide all employees who may have been exposed and their exclusive representative with information regarding COVID-19-related benefits, including, but not limited to, workers’ compensation, COVID-19-related leave, company sick leave, state-mandated leave, or supplemental sick leave, and (3) notify all employees, the employers of subcontracted employees, and the exclusive representative on the disinfection and safety plan the employer intends to implement. Read our analysis of the bill here.

DLSE Complaints Statute of Limitations. AB 1947 amends Section 98.7 of the Labor Code to extend the deadline for filing Labor Commissioner complaints from six months to one year after a violation. The bill also amends Section 1102.5 of the Labor Code to authorize courts to award reasonable attorney’s fees to plaintiffs who bring a successful Section 1102.5 whistleblower action. Critics pointed out that AB 1947 would undermine administrative resolution of whistleblower cases by authorizing attorney’s fees for retaliation claims, incentivizing litigation over resolution. Governor Newsom vetoed similar legislation last year.

FEHA: Veteran or Military Status. AB 3364, a Judiciary omnibus bill, clarifies in Sections 31-33 of the bill that the Fair Employment and Housing Act (FEHA) protects military or veteran status (as opposed to veteran and military status).

Paid Sick Leave Designation. AB 2017 provides employees sole discretion to designate days taken as paid sick leave under Section 233 of the Labor Code.

CFRA Expansion. SB 1383 expands the California Family Rights Act to require businesses with as few as five employees (eliminating the geographical restrictions) to provide 12 weeks of mandatory family leave per year. The bill also expands family care and medical leave to include leave (1) to care for grandparents, grandchildren, siblings, domestic partners with a serious health condition (in addition to existing leave to care for a parent or spouse), and (2) because of a qualifying exigency related to covered active duty or call to covered active duty of an employee’s spouse, domestic partner, child, or parent in the US Armed forces. SB 1383 also expands the definition of child to include the child of a domestic partner. Finally, SB 1383 eliminates the previous carve out that existed for certain highly paid or key employees.

Wages: Enforcement. AB 3075 makes a successor to any judgment debtor liable for any wages, damages, and penalties owed to any of the judgment debtor’s former workforce pursuant to a final judgment, and sets forth certain criteria to establish successorship. AB 3075 also, by amendment to Labor Code Section 1205, authorizes local jurisdictions to enforce state labor standards requirements with respect to imposition of minimum penalties for failure to comply with wage-related statutes, as set forth in Labor Code Section 1206.

Victims’ Protected Time Off. AB 2992 amends Labor Code Sections 230 and 230.1 to expand the prohibition on discrimination or retaliation against employees for taking time off who are victims of domestic violence, sexual assault, or stalking, to include other crimes or abuses “that caused physical injury or that caused mental injury and a threat of physical injury” and “a person whose immediate family member is deceased as the direct result of the crime.” AB 2992 defines “crime” as “a crime or public offense as set forth in Section 13951 of the Government Code, and regardless of whether any person is arrested for, prosecuted for, or convicted of, committing the crime.”

Paid Family Leave: Military Members & Care Recipients. AB 2399, in Sections 3302 and 3307 of the Unemployment Insurance Code, defines “military member” for—and revises definitions of “care recipient,” “care provider,” and “family care leave” in—the family temporary disability insurance program (paid family leave). These definitions would apply for purposes of the employee’s “qualifying exigency” to covered active duty or call to covered active duty for members of the military.

Mandated Reporters: Human Resource Employees. AB 1963 amends Section 11165.7 of the Penal Code to expand the list of mandated reporters to include human resource employees of a business of five or more employees that employs minors, as well as adults whose duties require direct contact with and supervision of minors in the performance of the minors’ duties in the workplace. AB 1963 requires those employers to provide mandated reporters with training on identification and reporting of child abuse and neglect.

Juries: Eliminating Bias in Peremptory Challenges. AB 3070 prohibits use of a peremptory challenge to remove a prospective juror on the basis of the prospective juror’s race, ethnicity, gender, gender identity, sexual orientation, national origin, or religious affiliation, or the perceived membership of the prospective juror in any of those groups, and establishes a presumption that certain reasons for excluding jurors are improper proxies for racial or gender discrimination. The bill is intended to eliminate the use of group stereotypes and discrimination, whether based on conscious or unconscious bias, in jury selection. The bill requires courts to evaluate the reasons given for a peremptory challenge and, if the court grants an objection to a preemptory strike of a prospective juror, the court may take certain actions, including, but not limited to, starting a new jury selection, declaring a mistrial at the request of the objecting party, seating the challenged juror, or providing another remedy as the court deems appropriate. The law takes effect for criminal cases January 1, 2022, and will apply to civil cases in 2026.

Direct Patient Care Employees: Educational Programs and Training Costs. AB 2855 requires employers to reimburse employees providing direct patient care or an applicant for direct patient care employment for the costs of any employer-provided or employer-required educational program or training.

Corporations: Boards of Directors. Building upon SB 826 of 2018, which required minimum numbers of female directors on boards (discussed here), SB 979 requires publicly held corporations headquartered in California to include at least one person from an “underrepresented community” on their boards by the end of 2021, and two to three, depending on the size of the board, by the end of 2022. The bill defines a 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. Violations of these provisions could subject a corporation to a fine of $100,000 for the violation and $300,000 for subsequent violations.

Vetoed Bills

Unemployment: State of Emergency Rehire of Laid Off Employees. AB 3216 would have required certain (hotel, private club, event center, airport hospitality operation, airport service provider) employers to offer employees who were laid off due to a state of emergency job positions that become available and for which the laid-off employees are qualified. The offers would have been based upon a preference system and in accordance with certain timelines and procedures. The bill also would have required successor employers to give hiring preference to these employees. According to Cal Chamber, AB 3216 would have imposed an onerous and stringent process for specific employers to return employees to the workforce, which would have delayed rehiring and subjected employers to litigation for any alleged mistakes.

Despite some last-minute lobbying by the bill’s author, hospitality employees, and a number of labor unions—including labor unions for major professional sports leagues—the Governor vetoed the measure shortly before his September 30, 11:59 p.m. deadline. In his veto message, Governor Newsom recognized “the real problem this bill is trying to fix—to ensure that workers who have been laid off due to the COVID-19 pandemic have certainty about their rehiring and job security.” But, “[t]ying the bill’s provisions to a state of emergency will create a confusing patchwork of requirements in different counties at different times.” The Governor acknowledged that the hospitality industry and its employees have been “hit hard” by the economic impacts of the pandemic,” but the “requirements of this bill place too onerous a burden on employers navigating these challenges.” He encouraged the legislature to “consider other approaches to ensure workers are not left behind.” Many businesses to which this bill’s rather convoluted provisions might have (likely inadvertently) applied are breathing a sigh of relief.

Labor Commissioner: Required Disclosures. SB 1102 would have amended Section 2810.5 of the Labor Code to require that the notice employers must provide at the start of employment contain information regarding the existence of either a federal or state emergency or disaster declaration issued within 30 days prior to the employee’s first day of employment that may affect health and safety during the employee’s employment. SB 1102 would have also added Sections 2810.6 and 2810.65 to the Labor Code—aimed at foreign agricultural workers and patterned after existing California law that requires employers to provide basic wage and hour information to all employees at the time of hire—to add new disclosure requirements with respect to H-2A farmworkers who are brought into California for work in agriculture on a temporary basis.

In his veto message, the Governor “applauded” the bill’s intent to “create accessible and easy to understand notifications,” but noted that the “statutory construction departs from previous H2-A notice requirements like those found in the Labor Code Section 2810.5 and prevents the [Labor and Workforce Development A]gency from amending the template when new laws are passed or new court decisions affect the rights and obligation of H2-A employers and workers.” Instead of approving the bill, the Governor directed the LWDA to develop and maintain a template contemplated in the bill to make available to H2-A employers.

Workplace Solutions

The bills that the Governor approved affect businesses across the spectrum, and Seyfarth is following their implications closely. California employers need to act quickly to ensure compliance with those new laws that went into effect immediately (including guidance and notices issued by enforcement agencies) and to prepare for the January 1, 2021 effective date for the remainder. We will continue to keep you informed of new developments as they arise.

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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