Several new pieces of California legislation have either recently gone into effect or will take effect on January 1, 2021, impacting nearly all employers and how they handle COVID-19 related issues, leaves of absence, workers' classification, discrimination disputes, arbitration agreements, union relations, and other miscellaneous issues.
Our round-up will help you determine which key issues may impact you in 2021; contact us to be sure you're ready for all these upcoming changes.
New COVID-19 Reporting Obligations
Governor Newsom added to California's growing list of COVID-19 health and safety related laws by signing AB 685, imposing additional reporting obligations on employers and expanding the California Division of Occupational Health and Safety's (Cal/OSHA) authority to issue shutdown orders for workplaces that pose a risk of an "imminent hazard" relating to COVID-19.
The new notice requirements, which take effect January 1, 2021, impose stringent time limits within which employers must provide notifications. Upon being informed of a potential COVID-19 exposure at the workplace, employers have one business day to notify all employees and employers of subcontracted employees who were at the worksite during the infectious period of their potential COVID-19 exposure. Where applicable, employers must provide written notice to employee representatives, including unions.
The reporting obligations do not end there. Once an employer is notified of a number of COVID-19 positive cases sufficient to meet the definition of an outbreak as defined by the State Department of Public Health, employers must also provide notice to the local health department within 48 hours.
These notice requirements do not apply to employees who:
- Conduct COVID-19 testing or screening as part of their job duties
- Provide direct patient care or treatment to individuals who are known to have tested positive for COVID-19,
- Are persons under investigation, or are in quarantine or isolation related to COVID-19, unless the "qualifying individual" is an employee at the same worksite.
"Qualifying individual" means any person who has any of the following: a laboratory-confirmed case of COVID-19, as defined by the State Department of Public Health; a positive COVID-19 diagnosis from a licensed health care provider; a COVID-19-related order to isolate provided by a public health official; died due to COVID-19, in the determination of a county public health department or per inclusion in the COVID-19 statistics of a county.
In addition to the notification requirements, AB 685 invests Cal/OSHA with the power to investigate employers, shut down worksites and bar entry into the place of employment when the agency determines that the workplace exposes employees to the risk of COVID-19 infection in a way that constitutes an imminent hazard.
What this means for employers: Employers should update their written COVID protocols for employees, and prepare template notices that include the information required under the new law. Given the short turnaround time for providing notices to employees, employee representatives, and the local health department, having the appropriate notices on hand and ready to go when the circumstances require will help ensure compliance.
COVID-19 Workers' Compensation Presumption
SB 1159, enacted on September 17, 2020, creates a disputable workers' compensation presumption that illness or death related to COVID-19 is an occupational injury and therefore eligible for benefits.
The presumption applies to first responders and healthcare workers where each of the following is true:
- The employee tests positive for COVID-19 within 14 days after the employee performed work at their place of employment, at the employer's direction
- The day the employee performed work was on or after July 6, 2020
- The place of employment where the employee performed work was not the employee's home or residence
The presumption also applies to employees who work for an employer with five or more employees, where the first two conditions above are met, as well as if the positive test occurs during a period of an "outbreak" at the employee's specific place of employment.
An outbreak exists if within 14 days one of the following occurs at a specific place of employment:
- Four employees test positive, if the employer has 100 employees or fewer
- Four percent of the number of employees who reported to the specific place of employment test positive, if the employer has more than 100 employees
- A specific place of employment is ordered to close by a local public health department, the State Department of Public Health, Cal/OSHA, or a school superintendent, due to a risk of infection of COVID-19
The presumption will exist through January 1, 2023.
What this means for employers: The presumption is disputable, meaning that employers have an opportunity to refute the presumption by providing evidence to indicate that an employee did not contract COVID-19 at the workplace. Employers should ensure that they implement adequate measures to reduce potential transmission of COVID-19 in the workplace and that these measures are well documented. This will be one of the primary pieces of evidence that an employer can use to rebut the presumption.
Temporary Cal/OSHA "COVID-19 Prevention Rule"
On November 30, 2020, California's Office of Administrative Law approved Cal/OSHA's emergency COVID-19 Prevention Rule, which will remain in effect through at least October 2, 2021.
One of the key provisions of the new rule requires California employers to establish and implement a written prevention program tailored toward preventing the spread of COVID-19 in the workplace. The rule outlines 11 elements that must be a part of employers' written program, including:
- A system for communication with employees about COVID-related policies and procedures
- Identification and evaluation of COVID-19 hazards
- Effective procedures for investigating and responding to COVID-19 cases in the workplace
- Effective training and instruction on preventing the spread of COVID-19
The new rule requires employers to exclude COVID-19 cases and exposures from the workplace for 14 days after the last known exposure. Significantly, the rule requires employers to maintain an excluded employee's earnings, seniority, and all other employee rights and benefits, as though the employee had not been removed from the job. Under the new law, employers are required to provide COVID-19 testing to all employees who have been exposed to COVID-19 at the workplace at no cost to employees, during employees' working hours.
What this means for employers: The above provisions highlight only a few areas covered by the new COVID-19 Prevention Rule. The rule is expansive and imposes a number of significant burdens on employers. Employers should consult with counsel upon reviewing each of the Rule's mandates to ensure compliance.
Significant Expansion of Family Leave Requirements to Almost All CA Employers
SB 1383, which was signed into law in September 2020, markedly expands the obligations of employers in California to provide employees with unpaid, job-protected family leave under the California Family Rights Act (CFRA).
Expansion to Cover Small Employers
Previously, employers with 50 or more employees were required to provide up to 12 weeks of unpaid, job-protected leave in a 12-month period to eligible employees, to bond with a new child and/or to care for themselves or a family member with a serious health condition. Under the related New Parent Leave Act (NPLA), employers with between 20 and 49 employees are required to provide up to 12 weeks of job-protected leave for baby bonding.
As a result of the passage of SB 1383, effective January 1, 2021, the NPLA will be repealed and the CFRA will expand its coverage and eligibility criteria to cover small employers with five or more employees – who were never before covered. It also eliminates the requirement that employees work within 75 miles of the worksite in order to be eligible for CFRA leave.
This means that as of January 1, 2021, all employers with 5 or more employees will be required to provide otherwise eligible employees with up to 12 weeks of job-protected leave under the following circumstances:
- The birth of a child, adoption, or foster care placement of a child
- The employee needs to care for an immediate family member with a serious health condition
- The employee is unable to work because the employee suffers from a serious health condition
Expanded List of Covered Family Members
SB 1383 also expands the list of covered family members for whom employees may use CFRA to include siblings, grandparents, and grandchildren – this is in addition to the existing use to care for the employee's parent, child, spouse, or registered domestic partner.
The new law also expands the definition of "child" to cover all adult children, regardless of whether they are dependent, and children of a domestic partner, bringing it in line with the list of family members for whom an employee may use their accrued sick leave under California Paid Sick Leave law.
This expansion significantly impacts larger employers (those with 50 or more employees) who must also provide eligible employees with leave under CFRA's federal counterpart, the Family and Medical Leave Act (FMLA). CFRA and FMLA leaves typically run concurrently (with some exceptions for expectant mothers) so that the total time an employee can take leave is a maximum of 12 weeks.
However, the changes to the list of covered family members will create circumstances in which an employee's CFRA leave may not run concurrently with the employee's FMLA leave. For example, an employee may be eligible for 12 weeks of job-protected leave under CFRA to care for a sibling (or other qualifying family member), return to work after exhausting such leave, and then be eligible for an additional 12 weeks of job-protected leave under FMLA for the employee's own serious health condition.
Thus, employers subject to both CFRA and FMLA may be required to provide up to 24 weeks of job-protected leave in a 12-month period to eligible employees – under certain circumstances.
Other Significant Changes to CFRA
SB 1383 makes other notable changes to the CFRA, including the following:
- Addition of qualifying exigency leave: SB 1383 creates an additional circumstance under which an employee can take qualified exigency leave under CFRA to include when an employee needs time off related to their covered active duty, or call to covered active duty of the employee's spouse, domestic partner, child, or parent in the U.S. Armed Forces.
- Separate leave when both parents are employed: The new legislation eliminates the restriction in CFRA that allows an employer who employs both parents to limit their total amount of CFRA leave for both individuals to a total of 12 weeks for leave in connection with the birth, adoption or foster care placement of a child. Where both parents are employed by the same employer and take CFRA bonding leave, the change in the law will now require employers to provide 12 weeks to both employees in this situation.
- Elimination of "key" employee exemption: SB 1383 removes language from the CFRA that previously authorized an employer to deny reinstatement to "key" employees who are among the highest paid 10 percent of the employer's employees, where the denial is necessary to prevent substantial and grievous economic injury.
What this means for employer: Managing the overlapping – and sometimes conflicting – employee rights and employer obligations under the FMLA, CFRA, pregnancy disability leave laws, and other state and federal laws presents a number of challenges for employers. Navigating the interaction between various leaves promises to become even more complicated with the passage of the new CFRA. California employers should consult with labor counsel in assessing their obligations under the new law and its interplay with other various leave laws, ensuring that they are complying with the mandates of each.
Employee Will Have Sole Discretion to Designate Paid Sick Leave Time
California's "Kin Care" law under Labor Code section 233 currently requires an employer that provides sick leave for employees to permit an employee to use at least half of the employee's accrued and available sick leave for any of the following reasons specified in California's Paid Sick Leave law (Labor Code section 246.5(a)):
- Diagnosis, care, or treatment of an existing health condition of, or preventive care for, an employee or an employee's covered family member
- Obtaining relief if the employee is a victim of domestic violence, sexual assault, or stalking
On September 28, 2020, Governor Newsom signed AB 2017 into law, which revises Labor Code section 233 so that sick leave being used for any of the above reasons is at the employee's "sole discretion." AB 2017 does not require employers to provide any additional paid or protected time off – it simply clarifies who has the right to designate whether sick leave is being taken for one of these protected reasons. For example, under the revised Kin Care law, an employee can now indicate that sick leave taken for their own illness not count towards the amount of sick leave protected under Labor Code section 233, so the employee can then have protected sick leave still available later for other purposes.
It is important to note that if an employer only provides the minimum amount of sick leave required under the Paid Sick Leave law, all use of sick leave is protected and AB 2017 will have no impact on those employers. It will also likely have no effect on employers who have sick leave policies that do not limit the amount of sick leave used for authorized purposes.
What this means for employers: This change in the law will primarily impact employers with sick leave policies that provide annual use caps exceeding the minimum requirements of the state and/or any local ordinance. Employers with such policies may consider implementing tracking procedures to differentiate between sick leave use that an employee designates as protected under the new Labor Code section 233, versus other sick leave used by the employee. In circumstances where sick leave is not designated by an employee for protection under Labor Code section 233, and is not otherwise designated as CFRA, FMLA or other protected leave, then use of sick time would technically be unprotected and subject to the impacts of the employer's absenteeism policies and procedures.
California Has Expanded Protections for Employees Who Are Victims of a Crime or Abuse
Under Labor Code section 230, employers are prohibited from discharging an employee for taking time off to serve on a jury or appear in court pursuant to a subpoena or court order. Further, Labor Code section 230.1 requires employers of 25 or more employees to allow an employee who was a victim of domestic violence, sexual assault, and/or stalking to take time off to seek medical attention or related services.
On September 28, 2020, Governor Newsom signed AB 2992, which amends and expands the protections offered under Labor Code sections 230 and 230.1. Under AB 2992, an employer is prohibited from "discharging, or discriminating or retaliating against, an employee who is a victim of a crime or abuse for taking time off from work to obtain or attempt to obtain relief."
"Crime" is construed broadly under the new bill, and includes a crime or public offense, wherever it may have taken place, "that would constitute a misdemeanor or a felony if the crime had been committed in California by a competent adult." There does not need to be an arrest or conviction in order for a covered employee to be entitled such leave.
Further, AB 2992 expands existing law providing protected leave for employees who are victims of domestic violence, sexual assault, or stalking, to include leave for victims of other crimes or offenses "that caused physical injury or that caused mental injury and a threat of physical injury." Protected leave is also provided for an employee "whose immediate family member is deceased as a direct result of a crime." An employee must provide the employer with "reasonable advance notice" of the leave if feasible, but the new law does not define "reasonable."
Finally, the bill expands the types of documentation for leave eligibility that an employee may provide to verify that a crime or abuse occurred. The bill goes into effect on January 1, 2021.
What this means for employers: Employers may wish to revise applicable policies and circulate them no later than January 1, 2021. Employers should also consider educating supervisors, managers, and human resources personnel regarding these changes.
New PPE Requirements for Hospitals
Beginning April 1, 2021, California hospitals will be required to maintain a stockpile of new, unexpired, and unused personal protective equipment (PPE) and ensure that employees use the PPE that is supplied to them. Hospitals must stockpile the following seven types of personal protective equipment in an amount equal to three months of normal consumption:
- N95 filtering facepiece respirators
- Powered air-purifying respirators with high efficiency particulate air filters
- Elastomeric air-purifying respirators and appropriate particulate filters or cartridges
- Surgical masks
- Isolation gowns
- Eye protection
- Shoe coverings
The law also imposes recordkeeping requirements – hospitals will need to establish and implement written procedures for periodically determining the quantity and types of equipment used in their normal consumption, and upon request, must be prepared to provide Cal/OSHA with records of their inventory and procedures.
Additionally, on or before January 15, 2021, hospitals must be prepared to report to the Department of Industrial Relations the highest 7-day consecutive daily average consumption of PPE during the 2019 calendar year.
Failing to comply with this law can result in a civil penalty of up to $25,000 for each violation to maintain the required stockpile.
What this means for employers: Because hospitals will need to stockpile a three-month supply of the equipment listed, they will need to know what that amount is. Hospitals that do not already do so should start monitoring the incoming and outgoing personal protective equipment, as this will provide them with the information they will need to start complying with the law in April 2021.
New Diversity Requirements for Boards of Directors of California-Based Publicly Held Corporations
AB 979, signed by Governor Newsom on September 30, 2020, requires publicly-held corporations headquartered in California to diversify their boards to include "director(s) from an underrepresented community."
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."
By December 31, 2021, all publicly-held corporations headquartered in California must have at least one director from an underrepresented community on their boards. By December 31, 2022, covered corporations with boards of nine or more directors must have at least three directors from an underrepresented community on their boards; covered corporations with boards of more than four but less than nine directors must have a minimum of two directors from an underrepresented community on their boards. Corporations are permitted to increase the number of directors on their boards to comply with these requirements.
Beginning March 1, 2022, the California Secretary of State will publish annual reports documenting compliance with AB 979. Companies that fail to comply by the deadlines will be fined $100,000 for the first violation and $300,000 for subsequent violations.
What this means for employers: Covered corporations should start preparing for the December 31, 2021, deadline, including – if necessary – expanding their boards to comply with these requirements and/or making hiring decisions.
No Rehire Clauses in Settlement Agreements in Employment Disputes
The Code of Civil Procedure section 1002.5 prohibits the use of no-rehire provisions in the settlement agreements of employment-related disputes, except where the employer has made a good faith determination that the aggrieved party engaged in sexual harassment or assault. AB 2143 amends this section to limit the protections to persons who have made protected claims in good faith and also permits the use of no-rehire provisions where the aggrieved party has engaged in criminal conduct.
What this means for employers: An employer may only lawfully include the no-rehire provision when the employer has made and documented a good faith determination – before the aggrieved person filed the claim – that the aggrieved person engaged in sexual harassment, sexual assault, or any criminal conduct.
Employers May Now Require Certain Security Officers to Remain on Premises and On Call During Rest Periods
On September 25, 2020, Governor Newsom signed AB 1512, determining that it is in the public interest that security officers are able to respond to emergency situations without delay. The bill covers any security officer who is registered pursuant to the Private Security Services Act, whose employer is a registered private patrol operator, and who is covered by a collective bargaining agreement containing certain provisions.
These security officers can be required to remain on premises, remain on call, and carry and monitor a communication device during rest periods. If the security officer's rest period is interrupted (i.e., called upon to return to performing active duties before the employee can complete the rest period), the employee can restart the rest period as soon as practical. If the security officer is then able to take an uninterrupted rest period, the employer's rest period obligation is satisfied. If not, the security officer will be entitled to the premium of one additional hour of pay. While this bill went into effect on September 25, 2020, these requirements do not apply to existing cases filed before January 1, 2021.
What this means for employers: Companies employing security officers should adjust how they track rest periods to accommodate the new requirements, and ensure that officers take all required breaks to avoid fines.
New Data Reporting Requirements for Employers
Beginning January 1, 2021, private employers with 100 or more employees who are required by federal law to file an annual Employer Information Report (EEO-1) will also be required to report to the Department of Fair Employment and Housing (DFEH) pay and hours-worked data by job category and by sex, race, and ethnicity. These pay data reports must cover the prior calendar year. Covered employers must submit their pay data reports to the DFEH on or before March 31, 2021, and then on or before March 31 each year thereafter.
Employers must include the following information in their pay data reports:
- The number of employees by race, ethnicity, and sex in each of
the following ten job categories:
- Executive or senior level officials and managers
- First or mid-level officials and managers
- Sales workers
- Administrative support workers
- Craft workers
- Laborers and helpers
- Service workers
- The number of employees by race, ethnicity, and sex, whose annual earnings fall within each of the pay bands used by the United States Bureau of Labor Statistics in the Occupational Employment Statistics survey, and the total number of hours worked by each employee counted in each pay band during the reporting year.
To comply with the above, employers will need to create a "snapshot" of their workforce – any single pay period of the employer's choice between October 1 and December 31 of the reporting year. Once employers have created the snapshot, they will need to calculate the annual earnings, as shown on their IRS Form W-2, for each employee that was employed during the snapshot, as well as the total number of hours each employee worked in the reporting year.
Employers with multiple establishments must submit a report for each establishment as well as a consolidated report that includes all employees. The DFEH is currently in the process of developing a sample report form and a submission portal that will specify the required information.
Federal Law Requirements
The new California reporting requirements are modeled after the federal EEO-1 pay data collection form, with which employers are already familiar. Federal law already requires private employers with 100 or more employees to file the EEO-1 form with the Equal Employment Opportunity Commission (EEOC), reporting the number of individuals they employ within the ten categories identified above by race, ethnicity, and sex. Reporting pay data was also a previous requirement under federal law, but had been suspended. Employers covered by the new California law will need to resume reporting pay data.
What this means for employers: Because the pay data report due on or before March 21, 2021 will be based on pay data from this year, employers should begin preparing for compliance by ensuring that they can generate the required data for their first reports. Employers should work with counsel to review their pay practices and assess any pay disparities that may exist.
New Requirements for Corporations' Statement of Information
AB 3075, signed by Governor Newsom on September 30, 2020, expands the information corporations must include in their statement of information filed with the California Secretary of State. Specifically, AB 3075 requires a corporation to include whether any officer or director of a company (or in the case of a limited liability company, a member or manager) has an outstanding final judgment issued by the Division of Labor Standards Enforcement (DLSE) or court of law for a violation of any wage order or labor code violation. AB 3075 also provides that a successor to any judgment debtor shall be liable for any wages, damages, and penalties owed to a judgment debtor's workforce pursuant to a final judgment.
What this means for employers: Corporations and LLCs should ensure that this type of information is disclosed in their statements of information filed with the California Secretary of State in 2021.
Labor Code Complaints with the DLSE, Representation of Financially Disabled Persons, and Sexual Harassment Prevention Training for Minors in Entertainment
A number of state assembly and senate bills will impact discrimination complaints, representation of indigent claimants, and requirements for minors working in entertainment.
AB 1947 extends the time for a person who believes they were discriminated against or discharged in violation of any law enforced by the Labor Commissioner to file a complaint with the DLSE from six months after the occurrence to one year. It also authorizes a court to award reasonable attorney's fees to a plaintiff who brings a successful action for such violations.
SB 1384 expands Labor Code section 98.4 to allow the Labor Commissioner to represent indigent claimants in both appeals of Labor Commissioner wage claim awards and in arbitrations, including proceedings to determine whether arbitration agreements are enforceable. It also requires employers to serve petitions to compel arbitration on the Labor Commissioner.
AB 3175 requires minors between 14 and 17 years old, and their parent or legal guardian, to complete online sexual harassment prevention training on the DFEH website before the minor can be issued an entertainment work permit. This training must be in the language understood by the minor and their parent or legal guardian whenever reasonably possible. The parent or legal guardian must certify to the California Labor Commissioner that the training has been completed.
What this means for employers: Employers should consult with appropriate counsel to determine if any of these new bills impact planning or compliance in 2021.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.