Seyfarth Synopsis: Businesses at the San Francisco International Airport (SFO) may need to make significant changes to employee health benefits under San Francisco’s Healthy Airport Ordinance by April 1, 2021. These FAQs cover employers’ most-pressing questions regarding the Ordinance and its implications for employers.

The seatbelt sign has been on for San Francisco employers for quite some time. Loyal readers know the City of San Francisco’s long and storied history of passing peculiar ordinances imposing obligations upon employers that neither federal nor state laws mandate.

Even though SFO is beyond the boundaries of the City and County of San Francisco (fun fact: SFO is located in San Mateo County), geographical realities have not stopped the City from making the trip bumpy for employers with SFO workforces. For example, San Francisco’s longstanding Health Care Accountability Ordinance (HCAO) requires most employers to make healthcare expenditures on behalf of certain employees who work in the City and at SFO.

On November 10, 2020, San Francisco’s Board of Supervisors shook things up again by unanimously passing yet another COVID-related ordinance: the Healthy Airport Ordinance. This Ordinance amends the HCAO to require employers of employees covered by the Quality Standards Program at SFO to either (a) provide family health insurance at no cost to those employees or (b) contribute to a Medical Reimbursement Account at the City on the employees’ behalf at a rate of $9.50 per hour worked.

Compliance with this new Ordinance will not be a smooth ride. Providing the benefits under the Ordinance is expected to result in significant administrative complications associated with employee health benefits and major cost increases, adding another layer of complexity and costs for managing employees working at SFO. Below we hope to answer some questions that might be flying through your head.

Which employees are covered under the Ordinance?

The Healthy Airport Ordinance applies to employees covered by SFO’s Quality Standards Program (QSP). This Resolution required the implementation of minimum standards for hiring, training, performance management, and compensation and benefits for employees covered by the QSP.

QSP-covered employees are those who either (1) require Airport Badge issuance with Airfield Operations Area (AOA) access, and work in and around the AOA to perform their job duties or (2) are directly involved in passenger and facility security or safety (e.g., checkpoint screenings, passenger check-ins, and skycap and baggage check-in and handling).

What health care benefits must employers provide to covered employees?

Employers of QSP-covered employees must choose to either provide them with no-cost family health insurance (including coverage for their dependents) or pay $9.50 per hour (up to $380 per week) on behalf of the employee to the City Option Program.

To comply with the family health insurance requirement, benefits must (1) be offered at no cost to the covered employee, (2) be actuarially equivalent to at least 90% of the full actuarial value of the benefits provided, (3) include all benefits listed in California’s Essential Health Benefit Benchmark Plan, and (4) be offered to covered employees within 30 days of their start date.

Can compliance requirements be waived?

A covered employee may voluntarily waive an offer of health plan benefits by providing proof of a current health plan coverage, including coverage for their dependents, and completing the Voluntary Waiver Form.

Compliance requirements cannot be waived in a collective bargaining agreement. It will be important for unionized employers to carefully consider whether they can unilaterally impose changes to comply with the Ordinance without bargaining with their unions. Employers also may want to consider whether they can avail themselves of any labor law-related preemption arguments with respect to their labor contracts.

When must employers begin to comply with the Ordinance?

Originally, employers had to either provide family health insurance by March 21, 2021 or contribute to the City Option Program by April 15, 2021. A proposed amendment to the ordinance delays the deadline for health insurance coverage to April 1, 2021.

How would the ordinance change if the proposed amendment is enacted?

Supervisor Rafael Mandelman’s proposed amendment would (i) delay health benefit requirements until April 1, 2021, (ii) allow employers offering multiple health benefit plans to charge a limited share of premium costs on more expensive plans, and (iii) clarify who must be covered by the family health benefits offered under the ordinance.

Pending enactment, the San Francisco Office of Labor Standards Enforcement (OLSE)—the agency that enforces labor laws—does not intend to take enforcement action regarding health plans that are consistent with this proposed amendment (e.g., employers complying by April 1).

What is the penalty for non-compliance?

The OLSE has the right to charge an employer the amount owed plus annual interest of 10% from the date payment was due and liquidated damages, in addition to any other rights or remedies available under the terms of any employer agreement or applicable law.

Workplace Solutions

To ensure safe landings in an atmosphere featuring potentially turbulent penalties, employers with SFO workforces should review their benefit plans immediately to create a compliance plan. If you need help complying with the Healthy Airport Ordinance or any other ordinance affecting employers in San Francisco or at SFO, or in responding to an OLSE audit, please feel free to contact a Seyfarth attorney.

Edited by Michael Wahlander

Seyfarth Synopsis: During the COVID-19 pandemic, California grocery, drug store, and other front-line workers have continued to sell essential products, stock shelves, clean buildings, and otherwise keep our economy moving. Several cities and counties have taken action—often in hap-hazard ways—to force the employers of these workers to provide them with premium pay, commonly called “hazard pay” or “hero pay.” Within the last week alone, ordinances took effect in six jurisdictions, including San Jose, San Francisco, and Irvine.

The Broad Landscape

Roughly 47 cities and counties in California have considered ordinances providing additional pay to grocery and drug store employees, as well as some other essential workers, such as maintenance workers and security guards. So far, roughly 25 have enacted hazard pay ordinances. That number is anticipated to grow, with ordinances in American Canyon, Coachella, Daly City, Irvine, San Francisco, and San Jose most recently going into effect.

Hazard pay is not something that politicians ask taxpayers to fund. Rather, the pay is in the form of an immediate (and sometimes retroactive) hourly wage increase ($3, $4, or $5) that local governments impose on local businesses. The California Grocers Association has launched legal challenges to the hazard pay ordinances, arguing that they violate the affected employers’ right to equal protection and that they are preempted by the National Labor Relations Act.

Hazard Pay Ordinances Currently In Effect

As of March 29, 2021, the following cities or counties have hazard pay ordinances in place, requiring additional wages ranging from $3 to $5, effective as of the dates shown:

Hazard Pay Ordinances That Have Passed But Are Not In Effect

As of March 29, 2021, the following cities or counties have adopted ordinances that will become effective on the dates indicated:

The Basics

Common elements among the ordinances include the scope of coverage (which employers are covered), the amount of required hazard pay, and the duration of the ordinance. Additional provisions often prohibit retaliation, provide credits for employer-initiated hazard pay, require employers to post notice of the ordinance at the workplace, and require certain record-keeping standards.

Who and What is Covered

The City of Los Angeles’s Premium Hazard Pay for On-Site Grocery and Drug Retail Workers Ordinance has served as a template for other local jurisdictions (with some exceptions noted below). The Los Angeles ordinance has these key terms:

“Premium Hazard Pay.” Los Angeles premium pay ($5 per hour) is in addition to all other forms of compensation (from hourly wages to bonuses) and reimbursement.

“Employer.” A Los Angeles covered “employer” is

  • a grocery, drug, or retail store, with more than 300 employees nationwide and more than 10 employees on-site at a Los Angeles store that
  • either primarily sells grocery items (including both food and household goods) or sells various prescription and nonprescription medicines, along with other sundries or is a retail store with over 85,000 square feet of retail space, 10% of which is dedicated to either groceries or drug retail.

“Employee.” A Los Angeles covered “employee” is any individual who, during a particular week,

  • performs at least two hours of work for a covered employer within the city and
  • is entitled to the California minimum wage.

Depending on the ordinance, salaried managerial workers may or may not be entitled to hazard pay. For example, exempt managers are ineligible for hazard pay in Los Angeles. Likewise, Daly City expressly excludes managers, supervisors, and confidential labor relations employees from receiving this premium pay. But San Francisco employees, both hourly and salaried, are entitled to hazard pay to the extent that they earn less than $35 per hour (whether paid hourly or by an equivalent salary, based on a 40-hour workweek).

Other Common Requirements

Anti-retaliation: Most hazard pay ordinances state that employers cannot discharge employees, reduce their compensation, or otherwise discriminate against them for asserting their rights under the ordinances.

Credit for previous employer-initiated hazard pay: The ordinances typically allow employers who are voluntarily providing hazard pay to offset the amount already being paid against the mandated additional pay. The credit typically must be clearly identified on wage statements.

Enforcement: Most ordinances empower not only local enforcement officials but also employees to sue the employer for violations of the ordinance.

Notice: The ordinances usually require employers to post a notice in a conspicuous spot at the workplace, to provide a copy of the notice to employees, or both. San Francisco provides the requisite poster for employers online, and Irvine promises to do so soon. In locales that do not provide a sample, employers must create the notices.

Sunset: Most ordinances are set to expire 90 or 120 days after the ordinance takes effect. But some cities, such as South San Francisco, have linked the effective dates of the ordinance to California’s Blueprint for a Safer Economy: once a pre-designated reopening tier applies, the ordinance sunsets.

Individual Quirks

While most hazard pay ordinances are similar, a few have special quirks. For example:

  • South San Francisco requires employers to pay employees up to four hours for time spent obtaining a COVID-19 vaccine. (California has passed a statewide 2021 COVID-19 SPSL law, effective March 29, 2021, which also covers paid leave for vaccinations and which we blogged about here.) South San Francisco’s ordinance (effective February 25, 2021) also makes hazard pay retroactive to February 11, 2021.
  • San Francisco imposes a cap on the mandated hazard pay. Covered San Francisco grocery and drug store employers must pay all employees an additional $5 per hour, up to a maximum of $35 per hour. So an employee who already earns $33 per hour is entitled to hazard pay of only $2 per hour. San Francisco more narrowly defines Covered Employers than does Los Angeles, requiring only eligible grocery and drug stores with at least 500 employees nationwide and at least 20 employees in San Francisco to provide hazard pay. But the San Francisco ordinance also covers third-party janitorial and security contractors whose employees work in covered grocery and pharmacy retail stores, regardless of how many employees the contractor has. So if a small security contractor services a large grocery store, then the security contractor must comply with the ordinance.

Keep an Eye Out

These ordinances pass at the local level, often with little advance notice and with little statewide or national fanfare. And each jurisdiction often has its own idea of what obligations should fall on the grocery, drug, and retail stores operating in the area. We anticipate the number of localities with these laws to grow, confronting larger employers operating in multiple California locations with a bewildering patchwork of local obligations.

Workplace Solutions

If you have applicable operations in any of the above mentioned localities, please reach out to Seyfarth’s Workplace Solutions Team with questions about the applicability of hazard/hero pay ordinances to your company.

 

Edited by Coby Turner

Seyfarth Synopsis: On March 18, 2021, the California Senate voted to revive and expand the COVID-19 related supplemental paid sick leave law that expired on December 31, 2020, and Governor Newsom signed it into law the following evening. The law became effective immediately once signed, with a 10-day grace period for compliance, and it applies retroactively to January 1, 2021 (thereby requiring back payments). The new law expands the scope of covered employers, as well as the covered reasons for taking the leave. The new law is set to expire September 30, 2021.

Refresher On The Recent History of CA-SPSL

On September 9, 2020, California enacted a state-wide COVID-19 supplemental paid sick leave law to fill gaps left by the federal Families First Coronavirus Response Act (“FFCRA”) related to large employers. This law, a budget trailer bill, went into effect immediately as California’s Supplemental Paid Sick Leave (“CA-SPSL”).

The old CA-SPSL law required most employers with over 500 employees to provide up to 80 hours of paid leave for three COVID-related reasons, if the employee had to leave their home to perform work: (1) when an employee was subject to an isolation or quarantine order, (2) when a healthcare provider recommended the employee isolate or quarantine, or (3) when the company prevented an employee from working due to COVID-19 transmission related concerns. The leave was automatically set to expire December 31, 2020, unless the FFCRA was extended. At the eleventh hour, the Labor Commissioner determined that the FFCRA’s tax credit expansion would not trigger an expansion of the old CA-SPSL law, which then expired at the end of the year.

For the next few months, employers had to wonder whether or how California would extend paid sick leave for COVID-related reasons. Local governments throughout California—Los Angeles City and County, Oakland, Sacramento City and County, San Francisco, San Jose, and others—enacted their own COVID-related paid sick leave laws to fill in the gaps. Meanwhile,  as we reported, the California Legislature considered bills that would expand COVID-related SPSL obligations.

The Legislature has now approved SB 95, and Governor Newsom signed it into law on March 19, 2021, effective immediately as new Labor Code section 248.2. The DLSE promptly published FAQs on the new 2021 COVID-19 Supplemental Paid Sick Leave Law, and the DIR published the required poster to be included in the workplace (or distributed to remote employees).

What Are The Big Differences With The New CA-SPSL?

The New CA-SPSL Law Covers Additional Employers

Unlike the old CA-SPSL the law, which covered only employers with 500 or more employees, the new law applies to employers with more than 25 employees.

Additional Covered Reasons For Leave

As noted above, the old law required employer-paid SPSL leave only under fairly narrow circumstances. The new CA-SPSL greatly expands covered uses. It also permits employees to take paid leave whenever they are unable to work or telework, meaning that the new law applies even to individuals who do not leave home for work.

The new covered reasons for leave include situations when the employee cannot work or telework because the employee:

  • is subject to a quarantine or isolation period related to COVID-19 as defined by an order or guidelines of the State Department of Public Health, the CDC, or a local health officer with jurisdiction over the workplace,
  • has been advised by a health care provider to self-quarantine due to concerns related to COVID-19,
  • is attending an appointment to receive a vaccine for protection against contracting COVID-19,
  • is experiencing symptoms related to a COVID-19 vaccine that prevent the employee from being able to work or telework,
  • is experiencing symptoms of COVID-19 and seeking a medical diagnosis,
  • is caring for a family member who is subject to a quarantine or isolation order or guidelines, or who has been advised to self-quarantine by a health care provider, or
  • is caring for a child whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19.

Retroactive Effect

The obligation to provide leave begins 10 days after the law is enacted (March 29, 2021), at which point the requirements apply retroactively, to January 1, 2021.

Employers are required to issue retroactive payments to employees who took leave for a covered reason, upon written or verbal request by an employee. For example, if an employee got vaccinated in February 2021, and put in a request for pay for that leave, the employee is eligible for a retro-payment of CA-SPSL under the new law. The retroactive payment has to be paid “on or before the payday for the next full pay period after the oral or written request of the covered employee.” As noted by the DLSE in its FAQs on the new law, an employee’s request for retroactive payment must be made on or after March 29, 2021, to be valid. So, an employer does not have an affirmative obligation to go back and audit prior absences or PTO for potential coverage under the new CA-SPSL law.

Retroactive payments have to be reflected on written notices, and this obligation is in addition to the pre-existing obligation to provide paid sick leave to employees who were already on paid leave when the previous law expired on December 31, 2020.

Employers need to begin complying with the written notice requirements the next full pay period following the March 19, 2021, effective date of the legislation.

Amount of Leave

Like the old law, the new law requires employers to provide full-time employees with a new allotment of up to 80 hours of CA-SPSL for 2021 (with some exceptions for firefighters). Note that a prior version of the new law was set to implement an allotment of up to 80 hours per year, if federal law extended the Emergency Paid Sick Leave Act beyond 2021, but that annual renewal of the grant has been deleted from the operative version of the law.

Part-time employees who work normal schedules are entitled to the total number of hours they are typically scheduled to work in a two-week period. Part-time employees with variable schedules are entitled to the average number of hours in the preceding six months, or during the period the employee has worked for the employer. Employees who have worked 14 days or fewer are entitled to receive the total number of hours they have worked for the employer.

Like the previous law, CA-SPSL has to be made available upon written or oral request.

Rate of Pay Amended, Cap Tied To Federal Law

The new law more closely aligns with the method of payment for regular non-COVID-related sick leave, but there is one notable difference. It specifies that nonexempt employees must be paid at the highest of (i) their regular rate during the workweek in which they take the leave, (ii) the total wages (not including overtime) divided by the total hours worked in the past 90 days of employment, or (iii) the state or local minimum wage. Exempt employees should be paid through the same method they are normally paid leave. This may be good news for employers that were trying to figure out multiple calculations in payroll tied to different types of paid sick leave—recall the last version of CA-SPSL required pay at the regular rate of pay from the pay period prior to the leave, which was not the case under any other law. However, for employers that normally pay regular CA Paid Sick Leave under either the 90 day average regular rate or the current rate across the board, they will now need to determine which of those two is higher for each instance of CA-SPSL taken.

The new law would also track FFCRA’s daily cap of $511, and aggregate cap of $5,110 (unless federal legislation increases these caps, in which case, the new federal cap will apply).

Notification Requirements

As with the previous (non-food sector) version of the leave, employers have to provide the available leave balance on wage statements or in a separate writing, and it must be listed separately from regular paid sick days available (see new Labor Code section 248.2(d)(2)). Thankfully, now, when employees have variable schedules, employers can comply with their obligation by performing an initial calculation of paid leave available, and then indicate “variable” next to that calculation. But updated calculations would need to be provided upon request, or when the employee requests to use the leave.

Also, food sector employers are now subject to the wage statement requirement of including CA-SPSL for the first time. For all covered employers, the requirement to include available balances of CA-SPSL on the wage statement or in a separate writing kicks in the next full pay period after the law’s March 29, 2021 effective date.

The Labor Commissioner has published a model notice of the new law to post or provide to employees. Pursuant to Labor Code section 247, this poster must be placed in a conspicuous location in the workplace (such as a breakroom or by time clocks), or it may be distributed by electronic means to employees that do not regularly come into the workplace.

Interplay With Other Paid Leave

The new CA-SPSL leave is in addition to other paid sick leave that employees have available, and employers cannot require employees use other paid or unpaid time off before using new CA-SPSL. But the law clarifies that “an employer may require a covered employee to first exhaust their COVID-19 supplemental paid leave” before an employer will be required to pay out earnings continuation under the Cal/OSHA Emergency Temporary Standard for absences related to COVID-19 exposure or illnesses in the workplace.

In addition, COVID-related paid leave provided at the same (or greater) rate for the same covered reasons since the beginning of the year may be counted towards the hours the employer is required to provide. This offset may include leave provided under any federal or local law that was effective on or after January 1, 2021 (but not regular non-COVID-related California paid sick leave). For example, if an employer provided leave under a county ordinance while an employee was quarantining in January 2021, or if an employer provided paid leave while an employee took time off of work to be vaccinated in February 2021, this leave could be offset against the new CA-SPSL allotment.

In-Home Providers

A separate section under what will become Labor Code section 248.3 outlines similar requirements for providers of in-home supportive services.

Workplace Solutions

As the landscape of federal, state, and local COVID-related leave laws continue to quake, employers must continue to modify policies and practices to ensure compliance. For more information on COVID-19 issues, please contact your favorite Seyfarth attorney.

 

Edited by Liz Watson

Seyfarth Synopsis: On March 4, 2021, the California Department of Fair Employment and Housing (“DFEH”) provided some much needed clarity in its updated COVID-19 Related Guidance. The Guidance answers many pressing questions for employers regarding COVID-19, including the all-important question: Can employers mandate their employees to get a vaccine?

In short, yes, California employers may require their employees to receive a FDA-approved vaccination for COVID-19. But there are caveats. Notably, any policy or practice mandating employees be vaccinated must comply with the Fair Employment and Housing Act (“FEHA”).

How To Comply with FEHA When Mandating COVID-19 Vaccinations

Do Not Discriminate or Harass Based upon a Protected Characteristic

Discrimination and harassment in the workplace based upon a protected characteristic are expressly prohibited under the FEHA. Any employer’s policies and practices requiring or encouraging vaccination may not discriminate against or harass employees or job applicants based on any protected characteristic (for example, disability, perceived disability, or religion).

Disabilities and Sincerely Held Religious Beliefs Must Be Reasonably Accommodated

An employee’s objection to complying with a vaccination policy due to their disability or sincerely held religious belief or practices triggers the employer’s obligation to engage in the interactive process, accommodating the employee where possible. California’s approach here is very similar to EEOC guidance regarding federal law, as we previously addressed here.

Whether a reasonable accommodation is feasible is a very fact specific inquiry. But, the DFEH guidance gave examples of possible reasonable accommodations for disability-based objections, such as telecommuting and on-site safeguards that may allow an employee to be on-site without endangering the employee or others. In the religious objection context, the DFEH guidance notes that reasonable accommodation is one that eliminates the conflict between the employee’s religious belief (or “creed”) and the vaccine. Examples of this could include job structuring, job reassignment, or modification of work practices. However, the DFEH guidance notes that unless specifically requested by an employee, an accommodation related to religious beliefs or practices will not be considered reasonable if it results in the segregation of the employee from other employees or the public.

An employer may exclude the employee from the workplace if an employer can show that 1) the accommodation would impose undue hardship, 2) the employee cannot perform their essential duties even with reasonable accommodations, or 3) the individual cannot perform their essential duties without endangering employees or others, even with a reasonable accommodation.

Do Not Retaliate Against an Employee for Engaging in Protected Activity

Requesting an accommodation due to one’s disability or sincerely-held religious belief cannot result in retaliation. Likewise, employers must safeguard employees from retaliation for engaging in any protected activity related to a vaccination policy or practice, such as complaining that an employer’s mandatory vaccine policy is discriminatory or has a disparate impact on a protected group.

No Accommodation for Philosophical Objections

Employees may be hesitant to be vaccinated because they do not “trust that the vaccine is safe,” they don’t believe in vaccines based on some personal philosophy, or they have similar objections unrelated to a disability or sincerely held religious belief. Employers need not reasonably accommodate these employees. While cautioning against retaliation for engaging in protected activity, the DFEH gives the green light for employers to impose reasonable discipline in this situation if any employee refuses to participate in a mandatory vaccination program.

What Information An Employer Can Receive Related to Vaccinations

Mandatory “Proof of Vaccination” Allowed

If an employee secures a vaccine on their own (for example, through their own medical provider or local pharmacy), employers can ask employees for a proof of vaccination. Doing so is not a disability related inquiry, a religious creed related inquiry, or a medical examination, under the DFEH guidance. In requesting this proof, the employer should instruct the employee to eliminate or redact any medical information (but for the vaccination record), and should maintain the proof of vaccine as a confidential medical record.

Employers May be Able to Elicit Medical Information When Administering Vaccines Themselves

If an employer is administering the vaccine—rather than having employees go to an third party—the employer may need to present employees with a pre-vaccination screening questionnaire. Similar to COVID-19 health screening before entering the workplace, such questions presented by the employer might elicit some information about a disability. Consequently, such questions must be both “consistent with business necessity” and “job-related.” Likewise, any employer-kept records of vaccination, whether the questionnaire responses or proof of vaccination, must be treated as confidential medical records.

Workplace Solutions

While the DFEH guidance stopped short of commenting on whether an employer should make their employees get vaccinated, the DFEH is clear that disability and religious creed related objections should be met with reasonable accommodations where possible. These are fact specific inquires which, along with the implementation of a mandatory vaccination program and policy, should be discussed with legal counsel. Employers should also keep in mind that this landscape is subject to change. For more information on COVID-19 related issues, please contact your favorite Seyfarth attorney. Also, feel free to attend Seyfarth’s free upcoming webinar on vaccination related issues, which you can register for here.

Edited by Coby Turner and Elizabeth Levy

Seyfarth Synopsis: Headlining the number of employment-related bills California legislators introduced by the February 19th deadline are those that would extend COVID-19 Supplemental Paid Sick Leave and provide other leaves and accommodations.

After last year’s pandemic-caused truncation of the 2020 legislative session—in which the governor signed only 372 new laws, the fewest since 1967—many expected the introduction of a large number of bills. Yet “only” 1,560 bills were introduced in the Assembly this year, the lowest number in six years—though there is no shortage of labor and employment-related bills.

Below, we summarize the most significant labor and employment bills introduced, which help mark the legislative playing field for California employers this year. The bills will now make their way through the committee process. Many of these measures will undergo significant amendment.  Some will make it through the legislative process and some will not. Stay tuned for more in-depth analyses of the proposed bills as the session continues.

Top COVID-19-Related Bills

Headlining our bill count this year are two bills designed to accomplish something employers have anxiously wondered about since the prior COVID-19 Supplemental Paid Sick Leave law (AB 1867 in 2020, which we summarized here) expired at the end of 2020.

COVID-19 Supplemental Paid Sick Leave: AB 84 & SB 95 are parallel budget trailer bills that would, effective immediately upon the Governor’s signature, extend the expiration date for COVID-19 supplemental paid sick leave (SPSL) for food sector workers (EO N-51-20), and other covered workers, to September 30, 2021, or any expiration of any federal extension of the EPSLA, and make the provisions retroactive to January 1, 2021. The bills would provide an annual allotment of up to 80 hours of available SPSL until the eventual expiration date. The bills would expand SPSL beyond people who leave their home to perform work to also include persons who telework.  The bills would also extend SPSL entitlements to reasons related to vaccinations, and similar to the now-expired FFCRA, it would expand coverage to those seeking medical diagnosis for COVID-19 symptoms, and caring for individuals who are quarantining or seeking medical diagnosis or whose school or place of care is closed due to COVID-19. The bill would also remove the 500-employee qualification for an entity to be subject to the law, add public employers generally to its application, and make other changes.

Rehiring and Retention of Displaced Workers: AB 1074, bringing back AB 3216 (2020) (which Governor Newsom vetoed), would require certain employers to offer preferential recall to employees who were laid off because of the pandemic. If an employer hires someone other than a laid-off employee, it must notify the employee within 30 days, providing specified reasons for the decision and information on those hired. The bill would additionally expand 2020’s Displaced Janitor Opportunity Act to hotel services employers, requiring successor contractors or subcontractors to retain employees for 60 days after transition, and continued employment for satisfactory performance.

COVID-19 Contact Tracing and Safety Policies: SB 46 would require employers to develop and implement contact tracing and safety policies for their employees, including requiring notice to the employer when an employee receives a positive COVID-19 test.

Pandemics Priority for Medical Treatment: AB 93 would prioritize workers in the food supply industry, such as field workers and grocery workers, for rapid testing and vaccination programs in response to pandemics, including COVID-19.

COVID-19 Rent Relief: AB 255 is earmarked to provide commercial rent relief protections for small businesses affected by the COVID-19 pandemic.

Spot Bills: Bills introduced without substance but to hold a “spot” into which amendments will later be made include AB 257, which creates a FAST Recovery Act to address the COVID-19 pandemic’s effect on the fast food industry. AB 757 would authorize a private employer to request prescribed documentation of a positive COVID-19 test or diagnosis if (1) an employee reports that the employee is unable to work due to a positive for COVID-19 test result and (2) the employer determines that an employee may be subject to a 14-day exclusion from the workplace as required under certain law or regulations. Employers must continue to comply with existing privacy protections when requesting documentation.

Discrimination and Retaliation Prevention

Political Affiliation Protection: SB 238 would add political affiliation as a protected characteristic under the FEHA.

Employment Discrimination: AB 1119 would expand FEHA-protected characteristics to include “family responsibilities,” defined as the obligations of an employee to provide direct and ongoing care for a minor child or a care recipient, and add it as a basis for which employers must engage in the interactive process and provide reasonable accommodation to an applicant or employee.

Cannabis Screening: Answering that question, “When will California ever get around to protecting marijuana users from employment discrimination?,” AB 1256 would prohibit employers from discriminating against a person in hiring, termination, or any term or condition of employment because a drug screening test has found the person to have tetrahydrocannabinol (THC) in their urine. (This bill would exempt employers required to drug test based on federal law or regulations, those that would lose monetary or licensing benefits for failing to drug test, and building and construction employers.)

Required Disclosures to Temporary Agricultural Workers: AB 857 would prohibit employers from retaliating against an H-2A employee for raising questions that relate to employment, housing, or working conditions. and would require an employer to provide an H-2A employee on the day the employee begins work in the state a written notice in Spanish and, if requested by the employee, in English, containing specified information relative to an H-2A employee’s rights pursuant to federal and state law. It would also require an employer to provide compensation for travel time at their regular rate of pay to or from employer provided housing to the worksite, as well as other requirements (with certain exemptions for employees covered by CBAs).

More Spot Bills: AB 1122 would encourage employers to develop and implement personnel policies that incorporate workforce diversity. AB 316  is aimed to achieve pay equity in state employment across gender, racial, ethnic, and under-represented groups.

Leaves

Bereavement Leave Act of 2021: AB 95 would require employers with 25 or more employees to grant employees unpaid bereavement leaves of up to ten business days, and would require employers with fewer than 25 employees to grant unpaid bereavement leaves of up to three business days. Leave entitlement would be triggered by the death of a spouse, child, parent, sibling, grandparent, grandchild, or domestic partner.

Employer Provided Backup Childcare Benefit: AB 1179 would require employers of 1,000 or more employees to provide employees, on or after January 1, 2022, with up to 60 hours of paid backup childcare benefits, to be accrued and used as provided. Accrued paid childcare shall carry over to the following year of employment. But, employers could limit use of the accrued paid backup childcare benefits to 60 hours during each year of employment.

Paid Sick Leave Accrual and Use: AB 995 would modify the employer’s alternate sick leave accrual method to require that an employee have no less than 40 hours of accrued sick leave or paid time off by the 200th calendar day of employment or each calendar year, or in each 12-month period. The bill would raise the employer’s authorized limitation on the employee’s use of carryover sick leave to 40 hours or 5 days.

Family Member Definition Expansion: AB 1041 would expand the definition of the term “family member” under the Healthy Workplaces, Healthy Families Act of 2014 (CA PSL) to include individuals related by blood or whose close association with the employee is the equivalent of a family relationship. The bill, in its current form, does not define how “close” an association must be to be considered the “equivalent of a family relationship.” The bill would also expand the universe of employees eligible to take CFRA leave, or Paid Family Leave (PFL) to care for to individual to include such a “close association.”

Paid Family Leave Weekly Benefit Increase: AB 123 would revise the formula for determining benefits available pursuant to the family temporary disability insurance program, for periods of disability commencing after January 1, 2022, by redefining the weekly benefit amount to be equal to 90% of the wages paid to an individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest, divided by 13, but not exceeding the maximum workers’ compensation temporary disability indemnity weekly benefit amount established by the Department of Industrial Relations.

Paid Family Leave Expansion Where Child Deceased In Childbirth: AB 867 would expand eligibility for benefits under the Paid Family Leave program by to include leave for a parent who was pregnant with a child, if the child dies unexpectedly during childbirth at 37 weeks or more of pregnancy.

Small Employer Family Leave Mediation Pilot Program: AB 1033 is a re-run bill that would attempt again to establish pilot program for a small employer family leave mediation. The measure would also expand CFRA to include leave to care for a parent-in-law within the definition of family care and medical leave and make numerous other changes.

Wage and Hour

Telecommuting Employees: AB 513 is a welcome bill to employers that would authorize employees working from home to receive legally required notices and postings electronically and sign certain documents electronically, and would deem that the final wages due to an employee working from home are  paid on the date that the paycheck is mailed to the employee.

Telework Flexibility Act: AB 1028 would authorize telecommuting employees to waive overtime up to 10 hours of work per day, and waive split shift premiums if the employee requests an employee-selected remote work flexible schedule, and it would permit an employee to choose when to take any meal or rest period during the workday. Similarly, watch for when substance is amended into spot bill AB 55 toward its stated purpose of affording certain rights and benefits to telecommuting employees.

Workplace Flexibility Act of 2021: AB 230, would permit an individual nonexempt employee to request an employee-selected flexible work schedule, allowing for workdays of up to 10 hours per day within a 40-hour workweek, where the employee would not be entitled to overtime compensation for those additional daily hours.

Wage Records Inspection: AB 436 would amend Labor Code § 226(b) to harmonize the time frame to respond to requests pursuant to Labor Code § 226(b) with requests for personnel records pursuant to Labor Code § 1198.5 by allowing the former records to be produced within the same time frame as the latter (i.e., 30 days).

Wage Theft: AB 1003 would amend the Penal Code to make punishable as grand theft an employer’s intentional theft of wages in an amount greater than $950, in aggregate (involving one or more employees).

Wage Withholdings: SB 505 would provide that, prior to garnishing wages when the employer is required or empowered to do so by state or federal law, employers must make a good faith effort to consult with an employee to obtain a written authorization to resolve a monetary obligations before employing third-party collection services or commencing a civil action. Where a written authorization provides for a withholding or diversion of an employee’s wages, the amount withheld or diverted shall not exceed 5% of the employee’s monthly gross wages.

Expansion of Garment Manufacturing Definition: SB 62 would potentially expose persons or entities contracting for the performance of garment manufacturing to joint and several liability with any manufacturer and contractor for the full amount of any unpaid wages, any other compensation, damages, liquidated damages, attorney’s fees, civil penalties, and any other penalties to any and all employees who performed garment manufacturing operations for any violation. The measure would also eliminate piece rate compensation in the garment industry. This measure almost precisely replicates SB 1399, which did not quite make it to the Governor’s desk in 2020, likely simply a result of timing and other priorities in 2020.

Warehouse Distribution Centers Quota Disclosures: AB 701 would require that employers provide nonexempt employees who work at a warehouse distribution center a written description of each quota the employee must meet, including the quantified number of tasks to be performed, or materials to be produced or handled, within the defined time period, as well as notice that failure to meet the quota could result in adverse employment action, and would prohibit an adverse action against an employee for failure to meet any quota that has not been disclosed.

Limitations to PAGA: AB 385 aims to ease the litigation risk of the pandemic on employers by prohibiting employees from maintaining an action under PAGA for violations of the Labor Code arising between March 4, 2020, and the state of emergency termination date. AB 530 would require the “aggrieved employee” to inform the employer which specific violations of the Labor Code are being alleged under each subdivision of PAGA and to inform the employer if statutory right-to-cure provisions apply.

Independent Contractors: Three bills have been introduced thus far in the continued attempt to reform AB 5, including AB 231, which would make permanent the exemption from the ABC test for licensed manicurists, by providing that they be indefinitely governed by the multifactor Borello test instead of the ABC Test. AB 612 would create a new exemption from the ABC test for a bona fide business-to-business arrangement that involves a voluntary deposit, to be made available to entities that utilize their own employees to produce, locate, or procure tangible personal property, which it owns, leases, or otherwise has the lawful right to possess. And, least likely to gain traction, AB 25 would replace the ABC test with the multifactor Borello test.

Settlement Agreements

Another year, another potential restriction on settlement agreements. SB 331, the “Silenced No More Act,” would amend Section 12964.5 of the Government Code (enacted by SB 1300 of 2018) to prohibit employers from including in separation agreements any provision that might deny the employee the right to disclose information about unlawful acts in the workplace. The bill would also amend Section 1001 of the Code of Civil Procedure (enacted by SB 820 of 2018) to extend the prohibition on confidentiality provisions in settlement agreements to all forms of workplace discrimination—not just discrimination based on sex. This bill would build upon CCP Section 1002.5 (enacted by AB 749 of 2019 and amended by AB 2143 in 2020).

Cal/OSHA

Safety Citations and Retaliation Prohibitions: SB 606 would require that Cal/OSHA issue a citation to an egregious employer (defined as an employer that intentionally made no reasonable effort to eliminate a known violation) for each willful violation, and each employee exposed to that violation would be considered a separate violation for purposes of the issuance of fines and penalties. It also establishes a rebuttable presumption of retaliation if an employer takes adverse action against an employee within 90 days of the employee doing certain things, such as disclosing a positive test or diagnosis of a communicable disease, requesting testing as a result of exposure, or reporting a possible violation of an OSHA standard.

COVID-19 Income Tax Credits: AB 62 would allow a credit against corporate taxes beginning January 1, 2021, in an amount equal to the total amount paid or incurred to comply with the regulations adopted by the Cal OSH Standards Board on November 19, 2020, relating to COVID-19 prevention.

Employee Benefits

Large Group Health Insurance: SB 255 would authorize an association of employers to offer a large group health care service plan contract or large group health insurance policy consistent with ERISA if certain requirements are met, including that the large group health care service plan contract or large group health insurance policy has been in continuous existence since January 1, 2014.

Workers’ Compensation & Unemployment

Also borne out of the pandemic was a clear need to update California Workers’ Compensation and Unemployment Insurance rules, leading to a number of new bill proposals.

Hospital Employee Injuries: SB 213 would define “injury” for a hospital employee to include infectious diseases, cancer, musculoskeletal injuries, post-traumatic stress disorder, and respiratory diseases. The bill would, for purposes of workers’ compensation, create rebuttable presumptions that these injuries that develop or manifest in a hospital employee who provides direct patient care in an acute care hospital arose out of and in the course of the employment.

Civil Litigation

Streamlining Discovery: SB 241 is a spot bill aimed to enact legislation that would streamline discovery processes to reduce costs to the courts and litigants. A welcome change to litigators and businesses alike.

Workplace Solutions

While there are some small glimmers of hope, many introduced bills are worrisome for the business community. While employers should prepare for the passage of SPSL retroactive to January 1, 2021, it is not yet time to fret about the rest—the legislative session is in its infancy, and each measure—apart from, perhaps, SB 62—will almost certainly be amended. We’ll keep you updated here at Cal Peculiarities, and you can also check out our Policy Matters podcast and newsletter for regular check-ins on California (and national) policy and legislative updates as well.

Edited by Coby Turner

 

 

 

Seyfarth Synopsis: In 2020, California enacted SB 1383 which, as of January 1, 2021, amended Government Code section 12945.2 to expand the California Family Rights Act (“CFRA”). These changes will require employers who have been subject to the CFRA to ensure their policies are up to date, as well as bringing new employers into the family of businesses who must comply with the CFRA’s requirements.

Will my company now be subject to the CFRA?

The biggest change is the expansion of the CFRA’s coverage to a new class of employers. Before, the CFRA applied only to companies with 50 or more employees (20 for bonding leave only) within 75 miles of a California worksite. Now, as of 2021, the mileage threshold is gone, and any company with five employees anywhere in the U.S. (even if just one person in California) must provide 12 weeks of family leave to California employees. So Pritchett’s Closets & Blinds now (maybe for the first time) will need a written CFRA policy, and will need to provide CFRA leave to qualifying employees.

When do I need to provide CFRA leave?

First, for those of you who, like Jay Pritchett, may be new to the CFRA family—or may just need a reminder—the CFRA requires covered employers to provide 12 weeks of unpaid protected leave to employees who have at least 1250 hours of service in the 12 months prior to the leave.

This eligibility requirement didn’t change for 2021, but the qualifying reasons that open the door to CFRA leave have expanded. Employees now will be eligible to take a leave of absence to care for grandparents, grandchildren, siblings, and domestic partners with a serious health condition (in addition to existing leave to care for a parent or spouse). And while employees once could take leave to care for children only if they were disabled and/or under age 18, there is no longer an age limit or a disability requirement. One likely consequence of this expansion will be employees taking leave to care for adult children who have given birth—which would have meant Claire could have taken protected time off to help Haley recover from having the twins!

And the expansion does not stop there. Qualifying employees now can also take leave due to 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, for things such as a need to secure alternative childcare, attend military ceremonies, or meet with family support programs.

These expansions create an ever larger potential for employees to stack CFRA leave with FMLA leave where the leave is for different uncovered reasons. For instance, now, if Luke had taken time off of work to care for his ailing Grandpa Frank under CFRA, he would potentially still be eligible for FMLA leave later in the year if he personally had a serious health condition.

What about those exceptions to CFRA coverage?

As of January 1st, two exceptions to CFRA leave have been eliminated. First, where both parents of a new child work for the same company, employers can no longer limit the amount of leave taken by both parents to a combined total of 12 weeks—employers now must separately provide 12 weeks to each employee.

Second, employers no longer can refuse to grant CFRA leave under the “key employee” exception, which allowed employers to opt out of providing the leave to salaried employees who are among the highest paid 10 percent of the company’s employees. So, Jay and Claire now would both be eligible for leave from Pritchett’s!

Workplace Solutions

The expansion of the California Family Rights Act brings the vast majority of businesses with California operations into the modern CFRA family. And this expansion will require those who have been complying with CFRA to make sure they stay up to date with the new reasons for leave. But remember, CFRA has a mandatory written policy requirement, so all covered employers need to ensure they have an up-to-date CFRA policy in the employee handbook. If you need assistance, reach out to your favorite Seyfarthian.

Edited by Coby Turner

By Annette Tyman, Michael Childers, and Shardé Skahan

Seyfarth Synopsis: On February 1, 2021, California’s Department of Fair Employment and Housing released key information regarding the recently enacted Pay Data Reporting Law.  Materials include a template of the pay report, along with user guidance.

With the first filing of the California Pay Report just around the corner on March 31st, employers have been anxiously awaiting additional guidance from the California Department of Fair Employment and Housing (DFEH) regarding the reporting template and implementation requirements of California’s recently enacted Pay Data Reporting Law (SB 973), codified at Government Code section 12999. On February 1, 2021, the DFEH released a portal User Guide, Excel Template and an example of a data submission.

Of note, the template and user guides break down the structure of the pay data reports and provide reporting examples to assist employers with the piecemeal clarifications released thus far. While the portal itself will not be available until February 16, 2021, the user guide also provides screen shots and detailed instructions about functionality and use of the portal.

As Seyfarth reported, the DFEH previously released rounds of FAQs addressing threshold issues regarding who must file pay data reports, which employees the reports must include, and, more recently, how the DFEH will define hours worked and methodologies for determining an employee’s pay, among other questions.  The FAQs highlight a number of departures from the previous EEO-1 Component 2 reporting requirements. Some notable differences include:

  • Who is Included: The applicability of these reports is far-reaching and there is no exemption for small establishments. Employers have the option of reporting on all employees, however, the reports must include, at a minimum, all employees who:
    • Work in California;
    • Live in California; or
    • Report to a Location in California
  • Definition of Pay: The DFEH advised that employers must calculate total earnings using W-2 Box 5 wages (versus the Box 1 wages used in Component 2 ).
  • Definition of Hours Worked: Unlike EEO-1 Component 2, which used the FLSA definition of hours worked, the DFEH is requiring employers to include time for which the employee was paid regardless of whether that time was spent working or was paid time off. Paid time off could include paid vacation, paid sick time, or paid holidays.

Workplace Solutions

As the pay reporting requirements develop, we will continue to provide updates.  Seyfarth’s Pay Equity Group will further discuss the nuances of California pay reporting in a webinar on February 4, 2021, at 10:00 a.m. PT/12:00 p.m. CT/1:00 p.m. ET, and registration is available here.

For more information or for assistance with preparing for reporting, please feel free to reach out to Annette Tyman (atyman@seyfarth.com), Mike Childers (mchilders@seyfarth.com), Shardé Skahan (sskahan@seyfarth.com), or your Seyfarth attorney.

Edited by Elizabeth Levy

Seyfarth SynopsisOn January 26, 2021, the County of Los Angeles passed an ordinance requiring both large and small employers in unincorporated parts of the County to provide supplemental COVID-19 related paid sick leave.

In the wake of the expiration of Families First Coronavirus Response Act (“FFCRA”)’s paid sick leave, and California’s state-wide COVID-19 supplemental paid sick leave, many locales (such as the Cities of Sacramento, Oakland, San Jose, and Sacramento and San Mateo Counties) have extended their COVID-19 paid sick leave ordinances.  On January 26, 2021, Los Angeles County followed suit with an ordinance that became effective immediately, and retroactively applies as of January 1, 2021.

While the newly amended Los Angeles ordinance largely tracks the County’s previous ordinance, which expired December 31, 2020, notable differences are outlined below.

Covered Employers. Unlike the original ordinance, which covered employers with 500 or more employees nationwide, the amended ordinance requires both large and small private employers in unincorporated parts of Los Angeles County to provide Supplemental Paid Sick Leave (“SPSL”).  There is no longer a threshold based on the number of employees.

Covered Employees. The ordinance covers persons who perform any work within the unincorporated parts of the County.  As was the case with the original ordinance, employers may still exclude Emergency Responders and Health Care Providers.

Amount of SPSL Required and Offset Against FFCRA Leave. Employees classified as full-time or who work at least 40 hours per week receive a maximum of 80 hours of SPSL under either the federal FFCRA or the ordinance.  If an employee exhausted available FFCRA leave for a covered reason, or already exhausted leave available under the original County ordinance, the employee is not entitled to additional County leave.

Employees who are not classified as full-time, or work less than 40 hours per week, still receive SPSL in an amount not greater than their average two-week pay.

The SPSL is calculated based on the employee’s highest average two-week pay between January 1, 2020 and the effective date of the ordinance.

The maximum amount of SPSL remains $511 per day or $5,110 in total.

Covered Reasons. As was the case with the original ordinance, SPSL is available upon written request (including text or email) when the employee cannot work or telework because (1) a public health official or healthcare provider requires or recommends that the employee self-isolate or quarantine to prevent the spread of COVID-19; (2) the employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19 (e.g., is at least 65-years-old or has a health condition such as “heart disease, asthma, lung disease, diabetes, kidney disease, or weakened immune system”); (3) the employee is caring for a family member who is subject to a federal, state, or local quarantine or isolation order related to COVID-19, or has been advised by a health care provider to isolate or self-quarantine; or (4) the employee needs time off to care for a family member whose senior care provider, school, or child care provider has ceased operations in response to a public official’s recommendation.

The ordinance permits employers to require documentation for employees to use SPSL.

Immediate Effect of Ordinance.  The ordinance takes immediate effect and applies retroactively as of January 1, 2021.

Expiration of Ordinance.  The ordinance’s lifespan is currently indefinite.  Like the City of Los Angeles COVID-19 paid sick leave ordinance, the Los Angeles County ordinance will remain in effect until two calendar weeks after the expiration of the COVID-19 local emergency as declared by the County.

Workplace Solutions. Navigating a patchwork of COVID-19 laws continues to be a challenge. For more information on COVID-19 related issues, please contact the authors or your Seyfarth attorney.

Seyfarth Synopsis: In a unanimous decision, the California Supreme Court held that the worker friendly “ABC” test set forth by the Court in its 2018 landmark ruling, Dynamex Operations West, Inc. v. Superior Court, applies retroactively. The ABC test thus applies to all pending cases governed by the California Wage Orders in determining whether a worker is an independent contractor or an employee.

Let Me Tell You What It’s All About

Jan-Pro Franchising, International, Inc. is a franchisor whose franchisees offer cleaning and janitorial services. In Vazquez v. Jan- Pro (“Vazquez”), in May 2017, the Northern District of California granted Jan-Pro summary judgment in a case brought by independent contractor franchisees claiming they should have been treated as Jan-Pro employees. The plaintiffs then appealed the ruling to the U.S. Court of Appeals for the Ninth Circuit.

While the appeal was pending, the California Supreme Court issued its decision in Dynamex (which we previously posted about here). In Dynamex, the court held that, for purposes of claims arising from the Wage Orders, the “ABC” test governs whether workers are properly classified as independent contractors rather than employees.

To satisfy the ABC test, a hiring entity must prove:

  1. that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;
  2. that the worker performs work that is outside the usual course of the hiring entity’s business; and
  3. that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

Dynamex represented a major shift in the law in the eyes of many businesses, practitioners, and courts, who presumed (incorrectly, as explained below) that the multi-factor common law test for employment articulated in a 1989 California Supreme Court case, S.G. Borello & Sons, Inc. v. Department of Industrial Relations, governed the classification question where the Wage Orders were at issue.

In the Vazquez matter, on May 2, 2019, the Ninth Circuit vacated the summary judgment ruling for Jan-Pro entered prior to Dynamex, holding that Dynamex applied retroactively, and remanded the case for further proceedings. Then, on September 24, 2019, the Ninth Circuit asked the California Supreme Court to determine whether Dynamex applied retroactively.

Sit Yourself Down, Take a Seat—California Supreme Court’s Decision Is In

On January 14, 2021, the Supreme Court held that the Dynamex decision applies retroactively to its April 30, 2018, publication in all cases currently pending. The Supreme Court based its Vazquez decision on two grounds.

First, the Supreme Court emphasized that the misclassification test applicable to Wage Order claims was a question of first impression, rather than a settled rule. The Wage Orders define the term “employ,” in part, to mean “suffer or permit to work.” But the Wage Orders do not define the term “independent contractor,” nor do they address the distinction between workers entitled to the protections of the Wage Orders and independent contractors who are not. Dynamex represented the first time the Supreme Court explicitly ruled on the meaning of the “suffer or permit to work” language in the Wage Orders in the context of independent contractors. Because Dynamex did not overrule a prior Supreme Court decision nor disapprove any prior Court of Appeal decision, the Supreme Court held that Dynamex applied retroactively.

Second, the Supreme Court found no reason to depart from the general rule that judicial decisions apply retroactively. Jan-Pro, backed by numerous business groups, argued that in classifying workers as independent contractors it reasonably relied on the multi-factor common law test set forth in Borello, and businesses could not reasonably have anticipated that the ABC test would apply. The Supreme Court was not persuaded. The Supreme Court noted that Borello was not a Wage Order case, and that the Supreme Court in two cases had expressly declined to rule on whether Borello applied to Wage Order claims.

The Supreme Court also rejected the contention that litigants must have foresight of the exact rule that a court ultimately adopts in order for the rule to have retroactive effect. The Supreme Court then went on to state that because the ABC test drew on the factors set forth in Borello, its retroactive application was within the scope of what businesses reasonably could have expected. The Supreme Court also claimed that fairness and policy considerations justified retroactive application of Dynamex, as some workers would be denied the protections of the Wage Orders if Dynamex applied only prospectively.

Now I’m Gonna Teach You What Vazquez Means For Businesses

Dynamex was characterized as a sea change in the law by its proponents and its detractors alike. Vazquez, however, insists that it was not, as the Supreme Court suggests that businesses reasonably could have foreseen that the ABC test applied to Wage Order claims all along. While reasonable minds will disagree with that suggestion, what is clear is that businesses must comply with an increasingly complex web of statutory and case law governing independent contractor relationships in California.

As a result of Vazquez, the ABC test applies to all independent contractor misclassification-related claims arising from the Wage Orders arising prior to 2020, while the Borello test applies to non-Wage Order misclassification-related claims arising during the same time period. And, as of January 1, 2020, when California’s infamous Assembly Bill No. 5 (“AB 5”) took effect, the ABC test applies to all independent contractor misclassification-related claims arising from the California Labor Code, as well as Wage Order claims—that is, unless a business can find comfort in one of the myriad occupation-based exemptions from the ABC test set forth in Assembly Bill No. 2257 (which recently repealed and replaced AB 5, and which we blogged about here) applies. App-based transportation and delivery drivers may also be exempted from the ABC test with the passage of Proposition 22 in November 2020. You can read more on Prop 22 here.

Workplace Solutions

To put it mildly, the landscape for independent contractors in California is hardly as simple as Do Re Mi. If you have questions regarding the Vazquez decision, how to analyze the employee v. independent contractor status of individuals or entities your company may work with, or would like further information, please contact your authors Eric Lloyd or Pamela Vartabedian, or your favorite Seyfarth counsel.

Edited by Coby Turner

Seyfarth Synopsis: The California Department of Industrial Relations’ Office of Administrative Law (OAL) approved an Emergency Temporary Standard regarding COVID-19, effective November 30, 2020. After holding a stakeholders meeting in December, the Division released its second iteration of frequently asked questions, which included nearly 40 new FAQs.

As we reported, on November 30, 2020, the California Office of Administrative Law (OAL) approved Cal/OSHA’s COVID-19 Emergency Temporary Standard (ETS). Soon after, Cal/OSHA published its first set of FAQs, which left many crucial questions unanswered, leaving employers struggling to understand a complex new set of safety standards (some of which contradicted the California Department of Health), COVID-19 testing, reporting, and employee pay continuation requirements.

In the wake of a mid-December stakeholders meeting designed to address questions surrounding the new ETS, Cal/OSHA promised to update the FAQs. Governor Newsom also stepped in and issued an Executive Order on December 14, 2020, requiring Cal/OSHA to follow the state Department of Health guidance and to date any updates to the ETS or FAQs, so that employers would understand when, and what, the Division was changing. Weeks after the regulated community had been anticipating the update, Cal/OSHA finally posted additional FAQs on January 8, 2021. The newest slew of FAQs provide a number of clarifications and updates. We highlight some of the notable issues below.

What’s New?

  • Earnings Continuation For “Able and Available” Employees. The FAQs confirm that the earnings continuation obligation is designed for “available and able” employees who have been removed from the workplace due to transmission related concerns (as opposed to those who are sick, who are not eligible). Along these lines, the FAQs explain that if someone cannot return after the normal quarantine period has run, the person is likely not available and able to work due to illness (which would render them ineligible for the earnings continuation).
  • Workers’ Compensation Eliminates Earnings Continuation. Employees who are receiving temporary disability benefits under workers’ compensation are not entitled to also receive earnings continuation, because Cal/OSHA deems those eligible for disability as not “able and available” to work.
  • Other Earnings Continuation Exceptions. The FAQs explain that the same framework an employer would use to rebut the presumption an employee contracted COVID in the workplace under SB 1159 would apply to determine if the “exposure” was work related, such that an employee would be eligible for earnings continuation. Under this framework, for employers to demonstrate exposure is not work related, they should conduct “comparable investigations” to show it is more likely than not that the exposure didn’t occur in the workplace.
  • ATD Standard. As we previously blogged, the ETS does not apply to (1) employees who are already covered under the Cal/OSHA Aerosol Transmissible Diseases (“ATD”) standard, (2) employees who are working from home, and (3) single-employee employers who do not have contact with others. Importantly for the healthcare industry and other employers covered by the ATD standard, the FAQs clarify that an employee in a single-person workplace cannot be subject to both the ETS and the ATD standard. This means, for example, that an employee covered by her employer’s ATD plan due to occupational exposure to aerosol transmissible diseases (including but not limited to COVID-19) is still covered by the ATD plan even if she’s in an area of the hospital that serves a purely administrative function.
  • Barriers. Many employers may already be familiar with the ETS provision that requires solid partitions (e.g. Plexiglas) to be installed at fixed work locations where it is not possible to keep six feet of separation. Cal/OSHA’s guidance now clarifies that unless they are complete barriers (presumably meaning floor to ceiling), employers need to consider workers within six feet of each other as close contacts for purposes of contact tracing, testing, and quarantine.
  • Location and Testing Requirements. Cal/OSHA clarifies that when testing must be provided, it does not need to be provided at the employee’s work location. Companies can refer employees to a free testing site, clinic, or their own physician, so long as the employees incur no cost for the testing, including reimbursement for any testing-related costs such as mileage or parking fees. Cal/OSHA also clarified that employers do not have to mandate or require that employees be tested in an outbreak setting—they are only required to offer testing.
  • Length of Quarantine. Although a 14-day quarantine period is recommended, “an exposed employee who does not develop symptoms of COVID-19 may return to work after 10 days have passed since the date of last known exposure.” Health care, emergency response, and social services workers may return to work after 7 days with a negative PCR test result collected after day 5 when there is a critical staffing shortage. (This update was mandated by the Governor’s Executive Order that Cal/OSHA align with the California Department of Public Health’s updated quarantine guidance.)
  • Potential Waivers For Staffing Shortages. As many employers may already know, the ETS permits companies to seek a waiver from Cal/OSHA’s return to work criteria for employees who have COVID-19 or who have been exposed to COVID-19, but the details of the waiver process have been unclear. While the waiver submission process remains unclear, Cal/OSHA clarified that “an operation must provide goods or services, the interruption of which would cause an undue risk to a community’s health and safety in order to qualify.” Cal/OSHA noted that this is intended to be narrower than the definition of “critical infrastructure” industries, and to receive such an exemption, an employer must provide specific information, including describing their operations and the effect of the quarantine on such operations.
  • How To Calculate An Outbreak. The FAQs address a number of questions related to outbreak testing. A common question from employers has been how to measure the 14-day period to determine if an outbreak under the ETS has occurred. Cal/OSHA now confirms that employers “should look to the testing date of the cases and review any cases for which the tests occurred within a 14-day period to evaluate whether the other criteria for an outbreak have been met.”
  • Considering Shifts in Determining Outbreaks. Employers were also uncertain about whether or how to consider shifts when evaluating whether there have been three or more COVID-19 cases in a single exposed workplace. For example, if an employer had three COVID-19 positive employees in the breakroom on Monday, but each one of them was on a different shift and they didn’t cross paths, would that trigger outbreak testing? Cal/OSHA now says no, employers can consider each shift as a separate “exposed workplace” if the facility is well ventilated and the cleaning and disinfection requirements of the ETS are met between or before shift changes.

Will There Be More Guidance?

The FAQs state that they will be updated on an ongoing basis to help stakeholders understand the ETS.  In addition, the Consultation Branch will be available to answer employer questions.

What Happens If Our Company Has Issues Complying With the ETS?

We previously covered some of the penalties that could result from non-compliance with the new ETS. Cal/OSHA states that it will consider employer good-faith efforts to comply with the ETS before issuing citations. Additionally, the FAQs state that Cal/OSHA will not assess monetary penalties for any alleged violations until February 1, 2021, if those alleged violations would not have been considered a violation of a pre-existing Cal/OSHA standard such as the respiratory protection standard, or the “IIPP standard.”

So, employers have been given a bit of good news that the new provisions under the ETS won’t result in monetary penalties from Cal/OSHA for a few more weeks.

How Do Our Company’s Obligations Change Once Our Employees Are Vaccinated?

In short, they don’t. Cal/OSHA’s guidance clarifies that once an employee is vaccinated, all prevention measures must continue to be implemented. Cal/OSHA says that the impact of vaccines will likely be addressed in a future revision to the ETS.

What Else Is Cal/OSHA Going To Do?

Cal/OSHA’s statement that the impact of vaccines will probably be addressed in a future revision to the current ETS indicates that Cal/OSHA plans to release a new version of the ETS in the near future. As always, we closely track Cal/OSHA’s news releases and pending legal challenges to the ETS.

Workplace Solutions

For more information on this or any related topic, please contact the authors, your Seyfarth attorney, or any member of the Workplace Safety and Health (OSHA/MSHA) or COVID-19 Task Force Team.