EMPLOYER UPDATE 2021

It is that time of year again! Yes, time to update your employee handbook. Employers will need to review their employment policies to be sure they comply with new laws coming into effect for 2021. Below are key new laws that may impact your business.   

Arbitration

Labor Commissioner Representation in Arbitration (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. Specifically, this bill amends Labor Code section 98.4 to allow the Labor Commissioner to provide representation to a claimant opposing an employer’s petition to compel arbitration of the claim, and/or in any arbitration hearing ordered for resolution of the claim where the employee cannot afford representation.

What Should Employers Do? Employers do not need to take any action at this time, but employers should be aware that employees may have representation from the Labor Commissioners office in arbitration related proceedings.   

Harassment, Discrimination, and Retaliation

Mandatory Minority Representation on Board of Directors for Publicly Traded Corporations (AB 979): Currently, California requires publicly traded corporations with principal executive offices in California to have at least one female director on their board, and that amount must increase to two or three female board members (depending on the size of the board) by the end of 2021. This bill expands on the diversification requirements by requiring that at least one director be from an underrepresented community by the end of 2021. The bill 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. This bill takes effect no later than the close of the 2021 calendar year, but employers should start planning now.  

What Should Employers Do? Employers at publicly traded companies should review their boards and assess whether they currently meet the above requirements, and if they do not, start planning to comply by the end of 2021. If companies do not comply by the end of 2022, they may face fines between $100,000 and $300,000 for each offense.[i]

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 March 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.

What Should Employers Do? Employers should determine if they are large enough to trigger this requirement, and if so, begin reviewing their employee data to ensure they will be able to compile and provide the required information.

Revisions to No Rehire Provisions (AB 2143): Currently, employers are prohibited from including “no-hire” provisions in settlement agreements unless the employer has made a good faith determination that the aggrieved person engaged in sexual harassment or assault. This bill slightly modifies this “no-hire” ban and requires that the aggrieved person has filed the claim in good faith, and the employer made the determination of sexual assault or sexual harassment, or criminal conduct, before the grievant filed the claim.  

What Should Employers Do?  Employers should review their settlement agreements and ensure that they only retain a “no-hire” ban if it meets the above restrictions.

Sexual Harassment Guidelines for Postsecondary Institutions (SB 493): No later than January 1, 2022, postsecondary institutions that receive state financial assistance must comply with training, notice, and investigation requirements related to sexual harassment complaints. This bill builds on the federal Title IX requirements and California’s Equity in Higher Education Act to further protect students from sexual harassment and provide students with procedural protections relating to complaints of sexual harassment.

What Should Employers Do? Postsecondary institutions should review their sexual harassment policies and procedures to ensure they meet the revised notice, training, and procedural requirements under this new law.

Leaves of Absence and Sick Leave

Expanded Protections for Victims of Crime or Abuse (AB 2992): This bill expands current protections for victims of domestic violence, sexual assault, or stalking to include protections for victims of crime or abuse. Currently, 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 bill  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. Some of these requirements vary based on the employers’ size.

What Should Employers Do? Employers should be mindful of these requirements when employees disclose that they are victims as described above. Employers should consider training its frontline supervisors on these requirements to ensure an employee’s request for time off for the above reasons are granted and the victim-employee does not experience retaliation.  

Employees Have 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 bill clarifies that employees have sole discretion to decide when to use sick leave for Kin Care Leave, and employers cannot require the use of this leave. 

What Should Employers Do? Employers should allow employees to decide whether to use their accrued sick leave for Kin Care leave and not require its use.

Expanded CFRA (SB 1383): Currently, under the California Family Right Act (CFRA) employers with 50 or more employees must provide 12 workweeks of unpaid leave for family care and medical leave, and under the New Parent Leave Act of 2018 (NPLA), employers with 20 or more employees must provide 12 workweeks of unpaid leave during any 12-month period to bond with a new child. This bill expands the CFRA in several ways:

1. The CFRA will apply to employers with five or more employees (previously 50 or more), requiring them to provide the same job-protected 12 workweeks of leave for family care and medical leave.
2. The CFRA leave must also be given for any qualifying exigency related to the covered active duty or call to covered active duty (previously only covered under the FMLA).
3. The new CFRA also provides for baby bonding leave (repealing the NPLA).
4. This bill 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 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.
5. This bill abolished the “key employee” exemption.

What Should Employers Do? Employers with five or more employees that were not previously covered by the NPLA or CFRA will need to develop of CFRA policy. Employers that are currently covered by the NPLA or CFRA will need to revise their existing policies to comply with the new CFRA requirements.

Small Employer CFRA Mediation (AB 1867): This bill considers the fact that CFRA has been expanded to apply to small employers that may have limited resources to manage CFRA disputes and creates a family leave mediation pilot program for these small employers. The program allows small employers or the employee to request a mediation through the 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 includes a sunset provide that expires January 1, 2024.

What Should Employers Do? No action is needed at this time for employers, but small employers should consider requesting a mediation through the DFEH for CFRA related disputes because it is provided at no cost, and small employers should anticipate mediation requests from employees for this purpose. 

COVID-19

Supplemental COVID-19 Paid Sick Leave (AB 1867): This bill established COVID-19 supplemental paid sick leave for specified employers. Click here [https://www.lbbklaw.com/knowledge-center/expanded-covid-19-paid-sick-leave/] to read more about these requirements.

COVID-19 Worker’s Compensation Presumption (SB 1159): This bill created 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, not including the employee’s home. This law applies to employers with five or more employees and went into effect on September 17, 2020 and expires January 1, 2023.

What Should Employers Do? If an employee tests positive or is diagnosed with COVID-19 within 14 days after working at the employer’s place of employment the employer should immediately begin collecting evidence of other possible locations the employee may have contracted COVID-19, including interviewing the employee, and then the employer should provide this information to its worker’s compensation carrier within 30 days. 

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.  

What Should Employers Do? Employers should prepare template notices so it will be ready to issue the notices when the requirements are triggered, and ensure compliance with Orders Prohibiting Use relating to COVID-19 hazards and reporting requirements to avoid a shut down and/or citations by Cal/OSHA.

PPE for Acute Care Hospital Workers (AB 2537): This bill requires public and private employers of workers in a general acute care hospital to supply their employees who provide direct patient care or services that directly support personal care with personal protective equipment (PPE). On or before January 15, 2021, a general acute care hospital must be prepared to report to the Department of Industrial Relations (DIR) its highest seven-day consecutive daily average consumption of protective equipment during the 2019 calendar year. By April 1, 2021, these employers must maintain a three-month supply of specified PPE and provide an inventory report and its written procedures to Cal/OSHA upon request.

What Should Employers Do? Employers should ensure it has the required supply available and can provide proof to Cal/OSHA or the DIR upon request because failure to maintain the required stockpile could result in a $25,000 civil penalty.

Privacy

California Consumer Privacy Act’s Employer Exemption Extended (AB 1281): This bill extends the employer exemption from certain provisions of the California Consumer Privacy Act (CCPA) from January 1, 2021 to January 1, 2022. Although this bill extends the employer exemption from certain provisions of the CCPA to January 2022, employers must still satisfy the existing notice provision of the CCPA.

What Should Employers Do? Covered employers should continue providing the CCPA notice to applicants and employees of information collected by the company and the purposes for which said information is collected. Further, employers should consider preparing for the additional requirements for January 2022.

Wage and Hour

On-Call Rest Breaks Exemption for Security Officers (AB 1512): This bill provides an exemption to employers that employ persons in the security services industry as a security officer who is registered pursuant to the Private Security Services Act. Specifically, this bill allows these security guards to remain on-call during their rest breaks. This bill was in response to Augustus v. ABM Security Services, Inc., (2016) 2 Cal.5th 257, which prohibited on-call rest breaks for covered employees. AB 1512 took effect on Sept. 30, 2020, and the provisions sunset on Jan. 1, 2027.

What Should Employers Do?  Employers that employ persons in the security services industry as a security officer who is registered pursuant to the Private Security Services Act can revise their rest break policies and practices to allow for on-call rest breaks for these registered security officers.   

Extension of Rest Period Exemption for Petroleum Facilities (AB 2479): Current law exempts employees who hold safety-sensitive positions at petroleum facilities from rest period requirements, provided they fulfill specific requirements. This exemption would have expired on January 1, 2021, but this bill extends the exemption to January 1, 2026.

What Should Employers Do?  Employers with employees who hold safety-sensitive positions at petroleum facilities can continue to exempt these employees from rest break requirements.

Extended Time to File Labor Commissioner Complaints (AB 1947): Under this bill employees will now have one year (instead of six months) to file a claim with the Labor Commissioner if the employee believes they were discharged or otherwise discriminated against in violation of any Labor Code provisions enforced by the Labor Commissioner.

What Should Employers Do? Employers do not need to do anything at this time, but they should anticipate an increase in Labor Commissioner complaints given this extended time to file a claim. 

New AB 5 Independent Contractor Exemptions (AB 2257): This bill builds on AB 5, the bill that codified the ABC Test for the independent contractor analysis. Some new exemptions include referral agencies (e.g., consulting, youth sports coaching, caddying, interpreting services, and wedding services), music industry and performers, professional services, fine artist, single-engagement events, international and cultural exchange services, competition judging, and expansions to the existing business-to-business contracting relationship exemption. These exemptions went into effect upon on September 4, 2020 and apply retroactively where applicable.

What Should Employers Do? Employers may want to review the classification of employees who were independent contractors prior to AB 5 to determine if they fit within one of the new exemptions. If so, they can be reclassified as independent contractors. This analysis is fact-specific, and misclassification claims carry severe penalties. Thus, 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 to include any construction, alteration, demolition, installation, or repair work done under private contract on a project for a charter school when the project is paid for with the proceeds of certain bonds.

What Should Employers Do? Employers performing to include any construction, alteration, demolition, installation, or repair work done under private contract on a project for a charter school when the project is paid for with the proceeds of certain bonds must ensure they are paying the applicable prevailing wage rate for this work.

Successor Employer Liability & Statement of Information (AB 3075): This bill adds section 203.3 to the Labor Code providing that successor employers that meet specified criteria will be liable for any wages, damages, and penalties. This bill also adds a requirement, beginning January 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.  

What Should Employers Do? If you are going through a merger or acquisition, or other business transition wherein you may become a successor employer, you should carefully review the predecessor employer’s wage practices and records to assess the potential exposure for wages, damages, and penalties.

Miscellaneous

Retail Food Facility Handwashing Requirement (AB 1867): This bill 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 September 9, 2020.

What Should Employers Do? Allow employees to wash their hands every 30 minutes and additionally as needed.

Mandated Child Abuse Reporting (AB 1963):  This bill amends Penal Code section 11165.7 to add to the list of mandated reporters of child abuse: (1) Human Resources employees of a business of five or more employees that employs minors and (2) for the purpose of reporting sexual abuse, an adult whose duties require direct contact with and supervision of minors in the performance of the minors’ duties in the workplace of a business of five or more employees. The bill requires employers who are subject to this law to provide to employees who are mandated reporters training on child abuse and neglect.

What Should Employers Do? Covered employers should revise their mandated reporting policies and provide training and the required notices to newly covered employees.

For more information on these new laws, how they affect your workplace, suggested policy revisions, or other employment issues, please contact Jennifer Branch (jbranch@lbbklaw.com), Lisa Magorien (lmagorien@lbbklaw.com), or Jessica Yang (jyang@lbbklaw.com or at Lagasse Branch Bell + Kinkead LLP, 4365 Executive Drive, Suite 950, San Diego, California, 92121; (858) 345-5080.

[i] This bill has already invited litigation challenging its constitutionality. Specifically, 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).