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December 26, 2019 - Some of the bills signed into law this year made significant changes to California employment law, while others made small, but important changes of which employers must be aware.
New laws were passed in the areas of recruiting and hiring; discrimination, harassment and retaliation protections; leaves of absence and benefits; workplace safety; arbitration; privacy; and wage and hour.
Below is a sampling of important employment laws employers should know, taken from the California Chamber of Commerce free white paper New 2020 Labor Laws Affecting California Employers.
Unless otherwise noted, the new laws take effect on January 1, 2020.
Recruiting and Hiring
- AB 5 codifies and expands the “ABC test” that’s used to distinguish employees from independent contractors under the Industrial Welfare Commission (IWC) Wage Orders.
Under the ABC test, a worker is classified as an employee unless the employer can establish all three of the following:
- The worker is free from the hiring entity’s control and direction in connection with the performance of the work, both under the contract for the performance of the work and in actually performing the work;
- The worker performs work that’s outside the usual course of the hiring entity’s business; and
- The worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed.
AB 5 carves out numerous exceptions from the ABC test for various industries. If an exception is applicable, the more flexible common law multi-factor “Borello test” typically applies, focusing on the entity’s control over the worker. While some of the exceptions detailed in the bill provide clarity for certain professions/ industries, several are complex and subject to numerous criteria. Employers should consult with legal counsel on the potential application of exceptions under AB 5 and the different classification standards.
- AB 51 effectively bans mandatory arbitration agreements entered into between employers and employees. The bill specifically prohibits an employer from requiring an applicant or employee to waive any right, forum or procedure for any employer violations of the FEHA and the Labor Code. The Legislature was clear this was intended to target arbitration agreements, in which employers and employees generally agree to resolve employment disputes outside of court. The bill also prohibits retaliation and discrimination against an applicant or employee who refuses to enter such agreements.
The bill would not apply to any arbitration agreements entered into prior to January 1, 2020, but employers may wish to seek legal counsel on how to proceed with amending such agreements in the new year.
- SB 707 provides consumers or employees remedies if the drafting party (the business or employer) breaches an arbitration agreement. The bill states that if the employer doesn’t pay the costs associated with beginning or continuing arbitration within 30 days after they are due, then the employer is in material breach of agreement, in default of arbitration and waives its right to compel arbitration.
In that case, the employee may withdraw the arbitration claim and proceed in court or compel arbitration in which the employer is required to pay reasonable attorney’s fees and costs. The bill also requires the court or arbitrator to impose monetary sanctions on an employer who breaches an arbitration agreement and authorizes additional sanctions beyond that.
- AB 749 provides that employers, as part of a settlement agreement, cannot prohibit or restrict an “aggrieved employee” (employee who has filed a claim against employer) from working for the employer. In other words, settlement agreements between employers and employees can no longer contain “no rehire” clauses. When the employer has made a good faith determination that the employee has engaged in sexual assault or sexual harassment, however, this prohibition does not apply.
- AB 25 exempts from the California Consumer Privacy Act (CCPA) employee data, i.e., information collected and used within the context of a person’s employment or application for employment. This exemption is good for only one year. Importantly, employers subject to the CCPA must still comply with the act’s requirement to disclose, at or before the time of collection, the categories of personal information collected about an applicant or employee and the purposes for which the information will be used. Employers should consult with legal counsel on how to amend employee privacy notices or otherwise comply with their obligations under the act.
Wage and Hour
- SB 671 allows employers of “print shoot employees” — individuals hired for a limited time to render services for a still image shoot, including film or digital photography, for use in print, digital or internet media — to pay wages owed upon termination on the next regular payday rather than immediately.
- AB 673: Current law imposes, independent from other penalties, a civil penalty on employers who fail to pay wages as provided in certain sections of the Labor Code. The Labor Commissioner may recover these penalties, which amount to $100 for the initial violation and $200 plus 25 percent of the amount unlawfully withheld for subsequent violations. Now, AB 673 gives employees the ability to bring a private action to either:
- Recover statutory penalties against the employer in a hearing before the Labor Commissioner; or
- Seek to enforce civil penalties under the Private Attorneys General Act.
They may not do both.
- SB 688 expands the Labor Commissioner’s authority regarding citations for wage violations, authorizing the Labor Commissioner to issue citations and recover amounts owed by an employer who has paid less than the wages set by contract, even if it was more than minimum wage.
Discrimination, Harassment and Retaliation Protections
- AB 9 extends the statute of limitations from one year to three years for all discrimination, harassment and retaliation claims filed with the Department of Fair Employment and Housing.
- SB 778 pushed California’s harassment prevention training requirements deadline back one year; now, employers with five or more employees must provide one hour of sexual harassment prevention training to nonsupervisory employees and two hours of such training to supervisors by January 1, 2021.
Employers who provided training to employees in 2019 aren’t required to provide it again until two years from the time the employee was trained. Employers who provided training in 2018 must provide training in 2020 to maintain the two-year cycle and comply with the new deadline. Employers who trained employees in 2017 under the prior training law should provide training in 2019 in order to maintain their two-year training cycle.
SB 778 didn’t change the training timeline for seasonal and temporary workers, which requires that employers must provide training to such workers within 30 days or 100 hours of employment beginning January 1, 2020 — but SB 530 pushed the requirement out one year. Under the new law, employers must provide training to seasonal and temporary workers beginning January 1, 2021.
- SB 530 also requires the Division of Labor Standards Enforcement (DLSE) to develop harassment and discrimination prevention policy and training standard recommendations for use by employers in the construction industry. It also clarifies how employers in the construction industry with workers under a multiemployer collective bargaining agreement may satisfy training requirements.
- SB 142: Currently, employers must provide a location other than a bathroom for lactation accommodation. SB 142, modeled after San Francisco’s lactation accommodation ordinance, creates expanded accommodation requirements for employers.
SB 142 also requires employers to create and implement a lactation accommodation policy, including publishing the policy in the employee handbook and providing the policy when an employee asks about or requests parental leave.
The 2018 lactation accommodation bill included an undue hardship exemption, which SB 142 keeps in place but limits to employers with fewer than 50 employees.
- SB 188: Under the Fair Employment and Housing Act (FEHA), it is unlawful to discriminate on the basis of race — and SB 188 expands the law to prohibit discrimination against employees and students based on their natural hairstyles. Per the bill, workplace dress codes and grooming policies that prohibit certain hairstyles can have a disparate impact on race and may be a proxy for racial discrimination.
Leaves of Absence and Benefits
- SB 271 allows temporary or transitory employment performed outside the state to count toward unemployment eligibility requirements as long as the motion picture worker is a California resident, is hired and dispatched from the state, and intends to return to the state to seek re-employment when the out-of-state work is finished.
- SB 30 changes how California law defines “domestic partnership.” Under current law, a domestic partnership could be entered into only by either two adults of the same sex, or two adults of the opposite sex who were over the age of 62. SB 30 removes those requirements, allowing any two adults over the age of 18 to enter into a domestic partnership.
- SB 83: Beginning July 1, 2020, the maximum duration of Paid Family Leave (PFL) benefits individuals may receive from California’s State Disability Insurance (SDI) program will be extended from six to eight weeks, per SB 83. The PFL program provides partial wage replacement benefits to employees who are absent from work to care for a seriously ill family member or to bond with a minor child within one year of birth or placement of the child via foster care or adoption.
- AB 406 requires that, beginning January 1, 2025, the Employment Development Department distribute its application for paid family leave in English and in all non-English languages spoken by a substantial number of non-English-speaking applicants, as defined.
- AB 1554 requires an employer to notify employees who participate in flexible spending accounts of any deadline to withdraw funds before the plan year’s end in two different ways, which may include email, telephone, text message, postal mail and in-person notification.
- AB 1223 requires employers to provide an additional unpaid leave of absence, up to 30 days per year, to an employee donating an organ.
- AB 203 requires construction employers working in counties where a fungal infection called Valley Fever is highly prevalent to provide employee training on Valley Fever annually and before an employee begins work that’s “reasonably anticipated” to expose them to the fungus.
Free White Paper Available
For a complete list of laws or for more in-depth information on the laws mentioned above, download the CalChamber’s white paper New 2020 Labor Laws Affecting California Employers.