Seyfarth Synopsis: California’s Department of Fair Employment and Housing released 16 new FAQs regarding the recently enacted Pay Data Reporting Law, previously summarized here. The new FAQs address several key issues, including how to calculate the triggering 100-employee threshold and what the reporting requirements are for employees who work, live, or telecommute inside or outside of California.

Employers have anxiously awaited additional guidance from the California Department of Fair Employment and Housing (DFEH) regarding the implementation requirements of California’s recently enacted Pay Data Reporting Law (SB 973), codified at Government Code section 12999. The DFEH just released its newest FAQs, addressing threshold issues regarding who must file pay collection reports and which employees the reports must include.

The FAQs provide information needed to identify the employees covered by this new law. As described further below, a notable departure from the federal EEO-1 reporting requirements is that employers must consider not only where an employee “reports” but also where the employee lives.

Here, we dive into some of the key issues addressed in the new FAQs.

How Does My Company Calculate “100 Employees” To Know If We Must Report?

U.S. employees located inside and outside of California are counted when determining whether an employer has enough employees (100 or more) to trigger application of the Pay Data Reporting Law requirement. Thus, if an employer has at least one employee who lives or works in California, that employer must submit a report even if its 99 other employees work only elsewhere throughout the country.

The DFEH will determine an employer has the requisite 100 employees if either one of these two conditions appears:

(1) The employer employed 100 or more employees in the Snapshot Period chosen by the employer (i.e., the single pay period of the employer’s choice between October 1 and December 31 of the Reporting Year), or

(2) The employer regularly employed 100 or more employees on a “regular basis” during the Reporting Year.

(“Regular basis” refers to the “nature of the business that is recurring rather than constant.” For instance, in industries that have a “three month season during a calendar year,” a report would be required from those employers who regularly employed 100 employees or more during the season, so long as that employer is also required to file an EEO-1 report.)

Part-time employees count towards the 100-employee threshold. Temporary workers, including those from staffing agencies or independent contractors, do not count towards the threshold count unless the individual is on the employer’s payroll and the employer must withhold federal social security taxes from that individual’s wages.

Does The Report Include Only California Employees or All Employees?

Reports must include all employees who are assigned to California locations or who work or live in California. If an employee is assigned to a California location but works at a client site outside of California, then that employee should also be included in the report. The FAQs also consider that many employees telework, and sometimes in states other than their home state, as addressed below.

How Do I Comply If I Have Multiple Establishments Across Different States?

The reporting requirements affect employers that have multiple establishments across several states, so long as they have some establishments with employees in or assigned to California locations, or have employees living in California.

  • Required Reporting: Employers must include all employees who work at or are assigned to a California establishment, even if the employee resides outside of California. Employers must also include California employees who telework from California to a non-California location. This requirement means that California employers must track where an employee resides, in addition to where the employee works or reports.
  • Optional Reporting for Non-California Establishments: The FAQs provide that employers may also report on non-California establishments and employees.

For example, where an employer has a California location with 50 employees (with three employees telecommuting from Nevada to California), and a Nevada location with 50 employees (with three employees telecommuting from California to Nevada), the employer must submit three reports:

(1) an establishment report for the California location that covers all 50 employees, including the three employees teleworking from Nevada (i.e., “reporting to” a California location);

(2) an establishment report for the Nevada location that covers either only the three employees teleworking from California or all 50 employees assigned to the Nevada establishment; and

(3) a consolidated report that includes either all 53 employees who work in or are assigned to a California location or all 100 employees.

The reporting requirement raises significant data privacy concerns, given that there is no threshold establishment size for reporting. As set forth in the FAQs, the example provided means that employers will need to choose between providing the State of California with information concerning its non-California workers, or providing pay data and hours worked data for very small employee counts, which could provide insight into the pay of specific employees.

What If Some of My Employees Telework?

As noted above, in addition to reporting on all employees who physically work in California, reporting is also required for those out-of-state workers who telework to a California location. In addition, those employees who reside in California must also be included in the pay data report, even if they are assigned to or teleworking for an out-of-state location. Accordingly, employers will need to implement a strategy for capturing data for everyone who works at or telecommutes to a California location, as well as those who live in California but telework to a non-California location.

How Do Employers Report Race, Ethnicity, and Sex?

Race and ethnicity should be reported consistent with the EEO-1 Instruction Booklet.

Consistent with California’s Gender Recognition Act of 2017, “sex” should be reported as female, male, or nonbinary. Self-reporting is the preferred method for collecting sex information.

What’s Next?

The DFEH will be releasing further guidance on reporting requirements related to pay, hours worked, multi-establishment employers, and acquisitions, mergers, and spin-offs. Although no timetable has been provided, we anticipate receiving additional guidance before the end of the year. For the time being, employers should continue preparing for compliance by

  • determining the employees and establishments on which the company will be required to report,
  • deciding how non-California employees and establishments will be reported,
  • collecting data needed to categorize employees’ race, ethnicity, and sex, and identifying whether gathering additional information is necessary, and
  • engaging the internal resources that will be necessary for purposes of completing the required reports, including understanding the pay bands that will be used for reporting purposes, available here.

Workplace Solutions

As the pay reporting requirements develop, we will continue to provide updates. For more information or for assistance with preparing for reporting, please contact any member of our Pay Equity Group or your favorite Seyfarth attorney.

Edited by Coby Turner

Seyfarth Synopsis: California Department of Industrial Relations’ (DIR) Occupational Safety and Health Standards Board adopted a California OSHA emergency temporary standard regarding COVID-19. The emergency temporary standard will go into effect after it is reviewed and approved by the California Office of Administrative Law, which may be as soon as November 29, 2020. It brings with it new documentation, COVID-19 testing, wage payment, and reporting obligations affecting most companies.

If you’ve been following our blogs, you know that Cal/OSHA’s draft emergency standard was the topic of the Standards Board’s November 19, 2020 meeting. The meeting, which began at 10 a.m. PST and went well into the evening, concluded with the Board unanimously voting to approve the COVID-19 Emergency Temporary Standard (ETS) as drafted by Cal/OSHA, despite its many flaws. The Board acknowledged that the standard has flaws, and consequently requested that Cal/OSHA (a.k.a. the Division of Occupational Safety and Health) convene an Advisory Committee meeting in December to work on improvements with stakeholders. Representatives from labor and management, and other occupational safety and health professionals, will be invited to participate on the Committee. But in the meantime, employers can expect the ETS to become effective as soon as November 29, 2020, depending on when the Office of Administrative Law (OAL) approves the standard and submits it to the Secretary of State. The public will have an opportunity to comment on the standard before the OAL makes a decision, but the general belief is that OAL will also approve the standard as written.

Concerns about the ETS are numerous. Generally, the regulation has been criticized as redundant of already existing state and local requirements, as well as Cal/OSHA’s Injury Illness Prevention Program (“IIPP”) standard, which the Division has been using throughout the pandemic to enforce COVID-19 safety and health at workplaces throughout California. In fact, the Standard Board’s own staff recommended against an ETS for that very reason. Comments from Board members during the November 19, 2020, meeting implicitly confirmed, however, the tremendous pressure felt by the Board in the face of a public health calamity. Despite the near certainty that the ETS will add complexity and confusion to an already difficult regulatory landscape with, at best, minimal improvement to workplace safety and health, the Board wants a clear conscience.

What Are The Biggest Developments For Our Company To Watch Out For?

The ETS will not apply to employees that are already covered under the Cal/OSHA Aerosol Transmissible Diseases standard, employees working from home, and single-employee employers who do not have contact with others.

For employers not excepted, some of the provisions of the ETS that are already causing heartburn and confusion are:

  • Whenever there has been a COVID-19 case at a workplace, employers must “offer COVID-19 testing at no cost to employees during their working hours to all employees who had potential COVID-19 exposure in the workplace.”
  • The ETS notification provisions that apply within one business day when a COVID-19 case has been identified in the workplace are not the same as what’s required under AB 685 (which goes into effect January 1, 2021), addressed in our blog here. For example, AB 685 requires the notice to be written and the ETS does not. AB 685 requires notification to “employers of subcontracted employees,” whereas the ETS also requires notification to independent contractors who were present at the workplace. Other inconsistencies exist too, seemingly just semantic. For example AB 685 refers to a COVID-19 “infectious period” whereas the ETS refers to a “high-risk exposure period,” both apparently in reference to the relevant time period employers must use when evaluating who may have had a COVID-19 exposure. These periods are defined essentially the same under AB 685 and the ETS.
  • Employers will be required to track and record all COVID-19 cases with the employee name, contact information, occupation, location where the employee worked, the date of the last day at the workplace, and the date of a positive COVID-19 test. The information must be made available to employees and authorized employee representatives (with personal identifying information removed). It’s foreseeable that employees and unions may use this information to question employer’s analysis of whether certain COVID-19 infections are “work-related.”
  • Employers will be required to “evaluate the need for respiratory protection in accordance with [the Cal/OSHA Respiratory Protection Standard, 8 CCR 5144] when the physical distancing requirements…are not feasible or are not maintained.” The physical distancing requirement is that employees must be separated by 6 feet, and although there are exceptions for momentary or incidental exposures while employees are moving around and where employers can demonstrate that six feet of separation is not “possible,” the ETS has the potential to bring many employers under the Respiratory Protection Standard. Notably, and quite concerning, is Cal/OSHA’s use of “possible,” which is seemingly more difficult to avoid than “feasible.”
  • In what has been criticized as a staggering Cal/OSHA over-reach, the ETS mandates that when employees are excluded from work for certain COVID-19 related reasons (i.e. having, or having been exposed to COVID-19), but remain otherwise able and available to work, “employers shall continue and maintain an employee’s earnings, seniority, and all other employee rights and benefits, including the employee’s right to their former job status.” While some current paid sick leave laws, like the California Supplemental Paid Sick Leave law (which we blogged about here), provide that an employee may choose to use up to 80 hours of paid sick time to replace earnings while they are kept out of work due to concerns about spreading COVID-19, the new Cal/OSHA ETS mandates that employers pay for this time and provides no cap on the amount of earnings that must be continued if employees are excluded from work. This eviscerates the cap on paid time set forth in Labor Code 248 and 248.1, as well as the 500 employee threshold imposed by the statewide law. The only bright spots for employers are that the ETS language about maintaining earnings (1) does not apply where the employer demonstrates the COVID-19 exposure is not work-related and (2) it allows benefit payments from public sources (e.g., unemployment benefits) to be considered in maintaining earnings.
  • Despite already existing requirements for employers when there are COVID-19 workplace “outbreaks,” the ETS includes additional testing, investigation, correction, and notification requirements, and creates two categories for when these requirements attach: “Multiple COVID-19 Infections and COVID-19 Outbreaks” and “Major COVID-19 Outbreaks.”
  • For employers that provide housing and transportation to employees, there are special requirements such as ensuring housing units are cleaned at least once a day, providing 6 feet of distancing in dormitories, and providing private spaces for exposed employees to isolate.
  • The proposed standard also includes various other requirements, such as creation of a written COVID-19 Prevention Program, which appears to be nearly duplicative of an IIPP.

What Happens If Our Company Isn’t In Compliance With The ETS?

Non-compliance with the new ETS can result in a fine in accordance with the Division’s penalty structure. Different penalties attach to the different classifications of citations, which are Regulatory, General, Serious, Repeat, and Willful. Regulatory penalties typically attach to posting and recordkeeping requirements, General is typically for violations having some non-serious relationship safety and health, and Serious may attach if there is a realistic possibility that death or serious physical harm could result from the actual hazard created by the violation.

Given the seriousness of COVID-19, many if not most, alleged violations in connection with COVID-19 would likely be classified as Serious. If any violation under any classification is found by Cal/OSHA to be substantially similar to a violation issued in the five years prior, it can be classified as Repeat. And a Willful citation is issued if Cal/OSHA determines the employer either knew what it was doing was a violation, or was aware of an unsafe condition, and made no reasonable effort to eliminate it.

Penalty amounts run the gamut, with the maximum penalty for Regulatory or General being $13,277, the maximum for Serious being $25,000, and the maximum for Repeat or Willful being $132,765.

Is There Any Light At The End Of The Tunnel?

If reading this is causing you to sweat, perhaps find comfort in words Cal/OSHA’s Chief and Deputy Chief offered during the Board meeting. These top officials said there “might” be delayed enforcement to allow employers to come into compliance. They also assured the regulated community that Cal/OSHA would publish a model COVID-19 Prevention Program, FAQs, and guidance, though they made no indication of when this might occur. And on the issue of wage continuation, they assured employers that the Division’s counsel confirmed this was within their authority.

Workplace Solutions

This is a rapidly developing area that we are closely tracking. We will update our readers as additional guidance or legal challenges develop with the new ETS. 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.

Seyfarth Synopsis: Although there’s no right or wrong time to do a handbook and policy update, we recommend doing them annually, as California law continually changes. Fall is a good touch point to make changes for the next year start, particularly since new laws typically become effective on January 1.

Though it’s late October, California temperatures just now are dropping out of the 90s. Meanwhile, stores are full of pumpkins and you may even spy leaves falling from the trees. Could Fall be finally here?

Fall is not just the time to get your sweaters out from under the bed and dust off last year’s Halloween decorations—in fact, with the recent end of the legislative session, it’s a gourd time to make sure your employee handbook is ready for the year ahead. We have some tips for your company to make sure your handbook and policies are as perfect as that first slice of warm pumpkin pie.

It’s Not Just The Color Of The Leaves That Are Changing

This year, the California legislature has made plenty of changes to the various leave laws on the books, many of which will require employers big and small to update handbook policies and draft new policies from scratch. Your company will be thankful for you proactively addressing these new issues:

  • California Family Rights Act (CFRA) Expansion: Starting January 1, 2021, all companies with five or more employees nationally (and anyone in California) must provide 12 weeks of unpaid, protected family leave for qualified employees. This means that businesses with fewer than 50 employees must implement a general CFRA leave policy for the first time. In addition, those employers with 20 to 50 employees within 75 miles who had implemented a policy in response to last year’s New Parent Leave Act will also need to expand what they are offering to meet the requirements of the amended CFRA.

The new CFRA also expands the categories of family members for which employees may take covered leave. This expansion is in line with California’s paid sick leave law and Paid Family Leave benefit program definitions. As a result, there will be additional circumstances where CFRA and FMLA will no longer run concurrently. The new CFRA also eliminates the current carve-outs for certain highly paid or key employees, and company hardship, as well as the mileage threshold for employer CFRA coverage. The new CFRA further adds a qualifying exigency reason for use similar to FMLA. So because the CFRA has a mandatory written policy requirement for employers doing business in California, all covered employers should implement an updated CFRA/FMLA or new CFRA policy and any associated notification letters and designation forms.

  • PSL (Paid Sick Leave–not Pumpkin Spice Latte): As of January 1, 2021, employees have the sole discretion to designate days taken as personal paid sick leave, as opposed to kin care sick days. If current policies mandate employees’ use of paid sick leave in certain circumstance, employers should update their policies and practices as needed.
  • Paid Family Leave: Also as of January 1, 2021, California’s Paid Family Leave program is expanding to cover families needing to deal with a qualifying exigency for a covered family member being deployed to a foreign country. The new “Military Assist” benefit will provide paid time off for eligible Californians who need time off work to participate in a qualifying event because of the military deployment of their spouse, registered domestic partner, parent, or child. While there is no handbook policy requirement for PFL, the many employers that include it will need to update their written documentation for these new changes. Employers should also be on the lookout for corresponding changes to the EDD’s PFL pamphlet, and ensure that they’re using the most recent version.
  • Organ and Bone Marrow Donation Leave: As a reminder, employees employed for at least 90 days may take up to five business days of paid leave during any one-year period to donate bone marrow, and may take up to 30 business days of paid leave during any one-year period to donate an organ. But, as of 2020, under Labor Code § 1510, employers must grant an additional unpaid leave of absence, up to 30 business days during a one-year period, for the purpose of organ donation. So if your employee handbook has been sat around gathering cobwebs, make sure your Organ and Bone-Marrow Donation Leave is up to date.
  • Victims’ Protected Time Off: The last ingredients to add to the cauldron of Leave Policy amendments—Labor Code Sections 230 and 231—prohibit discrimination or retaliation against employees for taking time off who are victims of domestic violence, sexual assault, or stalking. Effective January 1, 2021, this protection will be expanded to include other crimes or abuses “that caused physical injury or that caused mental injury and a threat of physical injury” and “a person whose immediate family member is deceased as the direct result of the crime,” regardless of whether anyone was arrested, or whether the crime was ultimately charged or resulted in a conviction.

Forego The Haunted House For Lactation Accommodation Spaces

It’s been nearly a year now, but some companies still struggle with implementing California’s lactation law updates. As of January 1, 2020, employers have been required to provide a lactation space that has a lot more specifications than the spooky Halloween closet-type rooms many nursing employees were relegated to in the past. The new law requires that a lactation space be (a) not a bathroom, (b) close to the employee’s work area, (c) shielded from view, (d) free from intrusion while the employee is lactating, (e) safe, clean, and free of hazardous materials, (f) contain a surface to place a breast pump and personal items, (g) contain a place to sit, (h) accessible to electricity or alternative devices (e.g., extension cords, charging stations) needed to energize a breast pump, and (i) accessible to a sink with running water and a refrigerator suitable for storing milk.

Notably, California’s lactation law also requires employers to develop and implement a written policy which must appear in the employer’s handbook or policies, and must be distributed to new hires and to employees who ask about or request parental leave rights. No time like the season of change to check and see if your handbook and onboarding materials are compliant with this relatively recent update.

What’s A Hotter Fall Trend Than Tie-Dye? Remote Work Policies!

And last but not least, no discussion of potential policy updates in 2020 would be complete without revisiting remote work policies. Since we last wrote about remote working, a large part of the California workforce has moved to working from home this year and that doesn’t look like it’s changing anytime soon. So employers should make sure they don’t Fall behind by ensuring they have sound remote working policies and practices, including addressing California specifics on timekeeping practices, expense reimbursements, and reasonable accommodations.

Seyfarth has a Remote Work team that can answer any questions you have, inside and outside California, as you continue to weather the changes this season.

Workplace Solutions

Not every change in the law requires a new handbook, but as we move our lives back indoors (did we ever leave this summer?!), why not curl up under a blanket with your favorite read—your employee handbook—and make sure you’re set with the change in seasons. There aren’t enough Fall puns to cover everything your handbook should in this one post, so please get in touch with your favorite Seyfarthian to ensure your handbook won’t turn into a pumpkin.

Edited by Coby Turner

Seyfarth Synopsis: The Sacramento Board of Supervisors has joined many other California locales, including Los Angeles City and County, San Francisco, Oakland, and San Jose, in requiring employers to provide covid-related paid sick leave. On top of required paid sick leave for designated reasons, the Ordinance contains numerous other employer obligations, such as vigorous cleaning protocols and an employee’s right to refuse to work.

Traditionally, a business operating in an unincorporated community has benefited from the comparative dearth of local regulation. Late last month, however—consistent with the flurry of COVID-19 mandatory paid sick laws across the state—the Sacramento County Board of Supervisors passed the Sacramento County Worker Protection, Health, and Safety Act of 2020.  The law went into effect October 1, 2020, and requires compliance starting on October 16, 2020.

This Ordinance applies only to businesses located in the unincorporated areas of Sacramento County, which include the communities of Antelope, Arden-Arcade, Carmichael, Clay, Courtland, Elverta, Fair Oaks, Florin, Foothill Farms, Franklin Freeport, Fruitridge Pocket, Gold River, Herald, Hood, La Riviera, Lemon Hill, Mather, McClellan Park, North Highlands, Orangevale, Parkway, Rancho Murieta, Rio Linda, Rosemont, Vineyard, Walnut Grove, and Wilton.

The Ordinance is almost identical to an ordinance passed by the Sacramento City Council in July, which we wrote about here. The Board appears to have taken its inspiration from Los Angeles County, which passed its own Sick Leave Ordinance on the heels of the City of Los Angeles doing the same. Like the City of Sacramento Ordinance, the County Ordinance contains two main thrusts: (1) employee safety protocols and (2) additional paid sick leave requirements. The Ordinance took effect on October 1, 2020, and sunsets on December 31, 2020, but it is possible it may be extended if the state of emergency continues.

Which Employers Are Covered?

Like most other, local sick leave ordinances, as well as the statewide COVID-19-related sick leave requirement —which we wrote about here—the supplemental paid sick leave provisions only apply to employers with 500 or more employees nationally, but health care providers and emergency responders are exempt. Employers of all stripes and sizes, however, must comply with the Ordinance’s COVID-19 safety protocols.

What Are The Safety Protocols?

The Ordinance requires all employers to implement specified social distancing, mitigation, and cleaning protocols and practices. Specifically, employers must (i) maintain and implement specified cleaning and disinfection protocols, (ii) establish protocols for specific steps if a worksite is exposed to a person with a probable or confirmed case of COVID-19, (iii) provide employees with regular access to handwashing, hand sanitizer, and disinfectant supplies, (iv) clean common areas daily and between shifts, (v) provide face-coverings for employees, and (vi) establish physical distancing protocols for the workplace, including mandatory face coverings.

Employers must provide written notice of the new protocols to employees in both English and any language spoken by at least 10% of the employees at the worksite.

For employers that have employees who work at worksites owned, maintained, leased, or controlled by another party (such as temporary agency workers and subcontracted employees), the employer can satisfy its obligations under the Ordinance by contacting the entity that covers the worksite to encourage compliance with the safety protocols. As a best practice, any such communications with third parties should be in writing and be maintained.

What About The Paid Sick Leave?

The Ordinance, like the Sacramento City Ordinance, requires employers to provide full-time employees with 80 hours of paid sick leave; part-time employees receive paid time off equal to their average number of hours worked over a two-week period (based on a six-month look back of average hours worked).

Where an employee is unable to work or telework, available reasons for taking leave under the Ordinance essentially track the FFCRA and California’s new COVID-19 Supplemental Paid Sick Leave, including:

  1. The employee is subject to quarantine or isolation by federal, state, or local order due to COVID-19, or is caring for a family member who is quarantined or isolated due to COVID-19.
  2. The employee is self-quarantining, or caring for a family member who is self-quarantining, because of COVID-19 based on a health-care provider’s advice.
  3. The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.
  4. The employee is off work because the employer or the specific work location temporarily ceases operation due to a public health order or other public official’s recommendation.
  5. The employee is caring for a minor child because a school or daycare is closed due to COVID-19.

And the Ordinance also includes a unique qualifying reason:

  1. The employee has chosen to take off work because the employee is over the age of 65 or is vulnerable due to a compromised immune system.

The sick leave is in addition to, not in lieu of, any other paid sick leave. In other words, an employer may not require an employee to use other accrued paid time off before using sick leave hours mandated by the Ordinance. Also, the Ordinance, like most other paid sick leave laws, allows employers to request the reason for using sick leave, but does not employers to require documentation or a doctor’s note.

As under the FFCRA, employees under the Ordinance are entitled to a reduced rate of pay if they take time off to care for a family member as opposed to themselves. For time spent caring for a family member, the employer may pay two-thirds of the employee’s regular rate of pay, up to a maximum of $200 per day.

The Ordinance does contain an offset provision, enabling employers that have granted additional paid sick leave since March 19, 2020, specifically for COVID-19-related reasons, to credit that leave against the number of hours the Ordinance requires. For example, if an employee is a food-sector worker entitled to leave hours under Executive Order N-51-20 (now codified by AB 1867), the employer may use those leave hours as a credit against the number of  hours required by the Ordinance. Moreover, an employee is not entitled to “carry over” unused sick leave—it expires when the Ordinance sunsets.

Note that the Ordinance does not contain an exemption for workplaces subject to a collective bargaining agreement, despite lobbying for the exemption from local groups.

The Ordinance Gives My Employees A Right To Refuse To Work?

An employee may refuse to work where the employee has a reasonable belief that the employer is in violation of the Ordinance’s required safety practices and protocols, and the employee has provided notice to the employer of the alleged violation. The County may—but need not—investigate the allegations, and the employer, within 15 days of written notice from the County, must cure any alleged violation the County has substantiated.

If the County finds no violation, or if the employer provides proof that it’s cured any violation, then the employee no longer has the right to refuse work. The Ordinance does not explain what happens if the County does not investigate the alleged violation, or if the employee can continue to refuse to work if no investigation is initiated.

What About Enforcement?

The Ordinance creates a private right of action for employees, but only when pressing a claim for retaliation for exercising rights under the Ordinance, i.e., where an employee is fired or discriminated against for a proper refusal to work.

But employees may commence an action only after (1) the employee provides written notice of the provisions alleged to have been violated and (2) the employer has had 15 days to cure the alleged violation. The Ordinance also provides the County authority, not to impose criminal sanctions, but to remedy any violation of the Ordinance pursuant to Sacramento County Code Chapter 16.18. The County may also bring a civil action in Superior Court.

Workplace Solutions

Navigating federal, state, and local COVID-19 related laws and ordinances remain a significant challenge, particularly in California, where many localities have passed some kind of sick leave requirement. While there is now a statewide requirement to provide supplemental sick leave to employees, the new Sacramento Ordinance’s permitted reasons for use are more expansive than the statewide requirements, and determining the interplay between them may be complicated. As such, if you have questions or concerns regarding which types of regulations may apply to your workforce, and how to implement them, reach out to your favorite Seyfarth attorney.

Edited by Elizabeth Levy

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

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

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

Governor-Approved Bills

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

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

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

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

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

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

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

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

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

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

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

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

Bills Effective January 1, 2021

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

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

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

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

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

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

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

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

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

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

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

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

Direct Patient Care Employees: Educational Programs and Training Costs. AB 2588 requires employers to reimburse employees providing direct patient care or an applicant for direct patient care employment for the costs of any employer-provided or employer-required educational program or training.

Corporations: Boards of Directors. Building upon SB 826 of 2018, which required minimum numbers of female directors on boards (discussed here), SB 979 requires publicly held corporations headquartered in California to include at least one person from an “underrepresented community” on their boards by the end of 2021, and two to three, depending on the size of the board, by the end of 2022. The bill defines a director from an “underrepresented community” as an individual who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender. Violations of these provisions could subject a corporation to a fine of $100,000 for the violation and $300,000 for subsequent violations.

Vetoed Bills

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

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

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

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

Workplace Solutions

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

Contact your Seyfarth attorney or any of our California Workplace Solutions counselors to discuss how your these new developments affect your company.

Edited by Coby Turner and Elizabeth Levy

Seyfarth Synopsis: With the most contentious election of our lifetimes fast approaching, we might expect employees to engage in political conduct and share strong, controversial opinions while off duty, especially on social media. What can employers do about employees who share messages the employer “dislikes”? California, of course, does not provide many easy answers.

What’s the “Story” With an Employer Regulating Conduct Away From Work?

In just nine months, 2020 has offered more than a year’s worth of momentous issues, including a global pandemic, raging wildfires, an unprecedented number of hurricanes, and widespread protests over racial injustice. And then there is the election season. Online forums and, in particular, social media, are fertile grounds for people opining on such subjects through posts, photos, stories, and threads, all of which can trigger “likes,” “dislikes,” emoji reactions, and user comments.

What if some employee opinion—shared with the world—offends an employer or threatens to harm its business? Can the employer legally discipline the employee for publicizing the opinion? Can employers treat other employees better because the employer “likes” their opinions? What about restricting related behavior? The answer, of course, is that it depends.

Many people—from Tomi Lahren at the Blaze to a writer-producer for Law & Order: SVU—have found themselves in hot water with their employer after making an uncouth public comment. Several people recently were fired for such unsavory off-duty conduct as making racist comments that went viral. And an employee at a well-known tech company in California was fired after posting a “manifesto” containing opinions the company concluded were sexist. The firing prompted a lawsuit against the tech giant for discriminating against political viewpoints in violation of California law. So what laws may prevent California employers from “disliking” their employees’ behavior?

The “story” begins with the notion that employment in California is at will, so an employer can discipline an employee for any reason, so long as it does not do so for an unlawful reason. What are those unlawful reasons with respect to off-duty political conduct? California regulates two areas implicated here, political activity and lawful off-duty conduct. We discuss both below.

What’s to “Like”: the Judicial Definition of “Political Activity”

California’s statute on employee political activity is very broad. Labor Code Section 1101 precludes employers from creating rules that prevent employees from engaging in politics, running for office, or controlling employee political activity or affiliation. And Section 1102 bars employers from attempting to coerce employee political activity through demotion, pay reduction, or termination.

The case law defining “political activity” is sparse. The first definition (from 1946) said the test was whether the conduct related to the orderly conduct of government and the peaceful organization, regulation, and administration of government. Later on, the California Supreme defined it as “the espousal of a candidate or a cause, and some degree of action to promote the acceptance there of by other persons.”

Under this framework, courts have found that protected political activity includes advocating for gay rights, publicly criticizing a public official, wearing symbolic arm bands, and associating with others for the advancement of beliefs. On the other hand, courts have found that activities such as jury duty and filing administrative complaints are not political activity. Conduct that falls under “political activity” will continue to develop, but it is safe to assume that the current definition will encompass quite a bit of conduct.

Did California Pull a “Vague-book” Post on “Off-Duty” Conduct?

Vague-booking is posting something intentionally vague in order to garner attention. California’s off duty conduct statute is similarly attention-grabbing: it describes lawful off-duty conduct in terms that are, well, vague. Specifically, Labor Code Section 96(k) prohibits employers from taking adverse action against employees for lawful conduct away from work. Employees may enforce this right through a lawsuit, or the Labor Commissioner may enforce it for them.

As with Sections 1101 and 1102, the case law interpreting Section 96(k) is sparse. At first glance, the statutory language “lawful conduct occurring during nonworking hours away from the employer’s premises” seems quite expansive. But case law has defined what conduct falls within the statute—activity that is already an existing right under the state and federal constitutions, such as activity protected by privacy or free speech rights.

How Can an Employer “React” to Employee Political Activity or Off-Duty Conduct?

The good news is that employers are not “blocked” and do not have their accounts completely “disabled” when it comes to limiting political activity or off-duty conduct. Any employer action must relate to a legitimate business concern, and, in the case of political activity, must not be politically motivated. Examples from the case law of legitimate limitations have involved actions against employees for violating company policies regarding insubordination, destruction of employer property, violating editorial policies, and dating subordinates. Other cases have involved more pragmatic issues, such as firing an employee, recently elected as a county supervisor, because the employee would now lack time to devote to the job.

Before “Unfollowing” An Employee, Don’t Forget The NLRA

While we focus mainly on California law, no piece on the intersection of employment and social media would be complete without mentioning the NLRA. The NLRA provides that employees are free to engage in “concerted activities” for the purpose of “mutual aid and protection.” They thus can, without employer interference, discuss with other employees complaints about their jobs, supervisors, and working conditions. Social media posts and conduct can certainly implicate concerted activity, so it is important to consider NLRA implications before acting against an employee for such conduct. But again, legitimate business interests can justify the actions. Indeed, according to a 2018 NLRB advice memorandum, determining whether discipline for a social media post violates the NLRA requires courts to balance any business justifications with the invasion of employee rights.

Workplace Solutions

Employers should tread carefully when considering taking adverse action against employees for conduct implicating political activity or lawful off-duty conduct. Indeed, employers should consider the reasons for taking action. Is it because the employer simply did not like the conduct? Or did the conduct violate some company policy grounded in a legitimate business interest? If you are considering limitations on employee political activity or off-duty conduct, feel free to contact the authors of this post or your favorite Seyfarth attorney for more information. You can also check out our recent presentation on employee political speech at work and on social media here.

Edited by Coby Turner

Seyfarth Synopsis: Senate Bill 1159 was signed into law by Governor Newsom on September 17, 2020, and went into effect immediately. Under the new law, if employees test positive for COVID-19 under specific circumstances, there is a rebuttable presumption that their exposure occurred at the workplace. Unless rebutted, this presumption creates a compensable injury for purposes of qualifying for workers’ compensation benefits. SB 1159 also creates reporting requirements for employers through January 1, 2023.

Who Is Eligible For The New Workers’ Compensation Presumption?

As we previously reported, Executive Order N-62-20 created a rebuttable presumption surrounding certain COVID-19 workplace exposures. SB 1159 codifies Executive Order N-62-20 in new Labor Code section 3212.86. Under this section, there is now a statutory rebuttable presumption of industrial exposure (i.e., the assumption that someone got sick at work) for workers who tested positive or were diagnosed with COVID-19 within 14 days after performing services at their place of employment at their employer’s direction between March 19, 2020, and July 5, 2020. To be entitled to the presumption, an employee diagnosed with COVID-19 must have had the diagnosis confirmed by testing within 30 days of the diagnosis.

Since Governor Newsom’s Executive Order sunset on July 5, 2020, employers have been left in the dark as to whether and how its requirements might be extended. Now, the answer is clear—SB 1159 created a new framework for this rebuttable presumption that went into effect immediately on September 17, 2020.

Under the new Labor Code section 3212.88, there is a rebuttable presumption of workers’ compensation coverage when an employee tests positive for COVID-19 within 14 days after performing services at their place of employment at the employer’s direction if the positive test occurs on or after July 6, 2020, and the positive test occurred during a period of an “outbreakat the workplace.

However, there is a slightly different avenue for people working in healthcare or in public safety positions. For these employees to qualify for the presumption, they must only test positive for COVID-19 within 14 days of performing services at their place of employment on or after July 6, 2020 (regardless of whether there has been an “outbreak”).

Also note that across the board, employees must exhaust all available supplemental COVID-19 sick leave pay, such as the new CA COVID supplemental sick pay, before receiving temporary disability benefits from the worker’s compensation carrier.

What Does It Mean To Have An “Outbreak”?

For purposes of this new law, an “outbreak” is when, within 14 days, any of the following occurs at a place of employment:

  1. The employer has 100 employees or fewer at a specific place of employment, and four employees test positive for COVID-19.
  2. The employer has more than 100 employees at a specific place of employment, and 4% of the workforce at that place test positive for COVID-19.
  3. A specific place of employment is ordered to closed because of COVID-19.

(Note that this definition of “outbreak” is specific to this workers’ compensation presumption. The California Department of Health and other state and local laws use different definitions of “outbreak” for different purposes.)

But I Have A Huge Facility—What Does “Specific Place Of Employment” Mean?

Many employers have sites that cover several acres, encompassing multiple buildings, fields, and processing floors and departments. In these instances, the workers’ compensation liability presumption might not apply if someone works in a different or distinct part of a facility from any other employees who may have contracted COVID-19, because it may not be considered the “specific place of employment” under the new statute.

For purposes of the new law, a “specific place of employment” is defined as “the building, store, facility, or agricultural field where an employee performs work at the employer’s direction.” The employee’s home or residence is excluded unless the employee provides home health care services to another individual at the employee’s home or residence. (And, if that is the case, the home office must be the exclusive location where the employee performs their work.)

So, if an employer has one employee test positive in Building A, and another test positive in Building B on the opposite side of campus (and they don’t otherwise share facilities, like a break room or restroom), the employer may have a good argument the presumption does not apply.

If My Employee Tests Positive For COVID-19, What Do I Have To Do?

In addition to other requirements that may be in place under state or local laws, SB 1159 creates employer reporting requirements. An employer that “knows or reasonably should know” that an employee has tested positive for COVID-19 must report to the workers’ claims administrator in writing—via email or fax—all of the following within three business days:

  1. An employee has tested positive. But the employer must not reveal any personally identifiable information about the employee unless the employee has asserted the infection is work-related or has filed a claim form pursuant to Section 5401.
  2. The date that the employee tested positive, which is the date the specimen was collected for testing.
  3. The specific address of the specific place of employment during the 14-day period preceding the date of the positive test.
  4. The highest number of employees who reported to work at the specific place of employment during the 45-day period preceding the last day the employee worked at each specific place of employment.”

Employers also must retroactively report to their carriers any employees who tested positive on or after July 6, 2020, and prior to September 17, 2020.

Following these reporting requirements is of paramount importance—employers that intentionally submit false or misleading information or fail to submit information when reporting can trigger civil penalties in amounts up to $10,000.

Workplace Solutions

The laws surrounding workers’ compensation and COVID-19 infections have been changing rapidly. If you have questions about the current state of reporting requirements or what to do if you have employees that test positive, then please contact your favorite Seyfarth attorney.

Edited by Coby Turner and Elizabeth Levy

Seyfarth Synopsis: As California’s legislative session comes to an end, a wave of new COVID-19 related laws that impact employers are being signed into law. On September 17, 2020, Governor Newsom signed AB 685, which will require employers to provide specific notices to employees exposed to COVID-19 within one business day of becoming aware of the exposure, and impacts COVID-19 related alleged Cal/OSHA violations.

When we last we blogged about Assembly Bill 685, it was awaiting Governor Newsom’s approval, but it was signed into law on September 17, 2020. Under the new law, which will be in effect from January 1, 2021, until January 1, 2023, employers must comply with specific notification requirements any time there has been a potential COVID-19 exposure in the workplace. AB 685 also enhances Cal/OSHA’s enforcement abilities in the COVID-19 realm.

COVID-19 Exposure Notification Requirements

  • Who Do I Need To Notify?

Any time an employer is put on notice that a “qualifying individual” (someone who tested positive for or was diagnosed with COVID-19, or is subjected to an isolation order) was in the workplace while they were considered potentially infectious, the employer is subject to notice requirements.  First, notice must be provided to individuals who “may have been exposed” in the workplace within one business day.  This notice must be sent to employees, subcontractors, and union representatives.

Employers with multiple buildings or floors do not necessarily need to provide notice of potential exposure throughout the entire company— the notice requirement is limited to the specific “worksite” the qualifying individual entered, such as “Building A” or “Field 1,” and not necessarily the entire company or facility site.

Employers are also required to notify the local public health department within 48 hours of becoming aware of a COVID-19 workplace “outbreak,” as defined by the California Department of Public Health. (Note that the California Department of Public Health currently defines an outbreak as three or more laboratory-confirmed cases of COVID-19 within a two-week period among employees who live in different households. However, as with all things COVID-19 related, local definitions may vary and guidance may be subject to change, so employers should continue to regularly check on the most up to date applicable information.)

When notifying the local health department, employers should be prepared to report the number of COVID-19 cases at the worksite, as well as names, occupations and worksites of qualifying individuals. Employers required to report an outbreak must also notify the local health department of any subsequent laboratory-confirmed cases of COVID-19 at the worksite.

  • What Information Does The Notification Need To Include?

The notice must inform individuals who were at the workplace during the qualifying individual’s infectious period that they “may have been exposed to COVID-19.” This notice also needs to provide information to all employees “who may have been exposed” about benefits to which employees may be entitled under federal, state, or local law, including workers’ compensation, paid sick leave, negotiated leave, and anti-retaliation and anti-discrimination protections.

In addition, all employees must be notified about the disinfection and safety plans that the employer plans to implement and complete per CDC guidelines.

  • How Do I Need To Distribute The Notice?

The written notification of potential exposure must be sent in a manner normally used by the employer to communicate employment-related information (including personal service, email, or text), must be in both English and the language understood by the majority of the employees, and must protect employee privacy (i.e., not disclose the names of qualifying individuals). Non-employee individuals entitled to this notice may be notified in a similar manner.

Also note employers are required to maintain records of the written notification for at least three years.

  • Are There Any Exceptions?

The “outbreak” reporting requirement will not apply to “health facilities” as defined in the Health and Safety Code. In addition, neither the “outbreak” reporting nor the notification-of potential-exposure requirement will apply to employees who, as part of their duties, conduct COVID-19 testing or provide direct care to individuals known to have tested positive for COVID-19, or are in quarantine or isolation—unless the qualifying individual is an employee at the same worksite.

Cal/OSHA Enforcement

Cal/OSHA has long had the authority to shut down a worksite if it determines the worksite presents an “imminent hazard.” However, AB 685 adds Section 6325(b) to the Labor Code, which reiterates that the Division of Occupational Safety and Health can close down a business if it deems there is an “imminent hazard” related to potential COVID-19 transmission.

AB 685 also exempts the Division from sending notices of intent to issue serious citations (as is normally required) when the alleged hazard is COVID-19 related. Normally, if Cal/OSHA plans to issue a serious citation, it first sends a notice of intent, and employers have the option of responding with evidence. But now, if Cal/OSHA intends to issue a serious citation for an alleged COVID-19 hazard, it need not issue a notice of intent or consider the employer’s evidence.

Workplace Solutions

Navigating ever-changing COVID-19 related laws remains a significant challenge, particularly in California. Seyfarth continues to keep employers updated in its COVID-19 Resource Center. If you have questions or concerns regarding which types of regulations may apply to your workforce, and how to implement them, reach out to your favorite Seyfarth attorney.

Edited by Coby Turner

Seyfarth Synopsis: On September 9, 2020, Governor Newsom signed Assembly Bill 1867, which requires private employers with 500 or more employees nationwide to provide COVID-19-related supplemental paid sick leave to their California employees. Impacted employers must begin providing this leave no later than September 19, 2020.

On September 9, 2020, California Governor Gavin Newsom signed AB 1867 into law, creating two new Labor Code sections: 248 (food service workers) and 248.1(covered workers), and also amending Labor Code § 248.5 (enforcement procedures). Governor Newsom’s office touted this bill as “eliminat[ing] coverage gaps to ensure every employee has access to paid sick days if they are exposed or test positive to COVID-19 for 2020” and delivering on his “commitment to work with the Legislature to expand paid sick days.”

As a budget trailer bill, the provisions are effective immediately, and require private businesses with 500 or more employees nationwide (as well as certain health care providers and emergency responders) to provide their California employees with COVID-19 related supplemental paid sick leave no later than September 19, 2020.

The bill was intended to close the gaps between federally mandated paid COVID-19 related sick days and the Governor’s previous Executive Order that only provided paid sick leave for food sector workers. The new law implicates all private employers with over 500 employees, as well as public and private employers of first responders and health care employees who opted not to provide leave under the federal law.

When Do I Have To Give Employees Leave Under The New Law?

Under this new California law, employees who must leave their home to perform work are entitled to COVID-19 supplemental paid sick leave if they are unable to work when they are:

  1. Subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  2. Advised by a health care provider to self-quarantine or self-isolate due to concerns related to COVID-19; or
  3. Prohibited from working by the employer due to health concerns related to the potential transmission of COVID-19.

How Do I Have To Pay For The New COVID-19 Leave?

Employees are entitled to COVID-19 supplemental sick pay based on their regular schedules as follows:

  1. For employees who work “full time” and were scheduled to work or did work on average at least 40 hours per week in the two weeks preceding the date of taking this leave, 80 hours (with exceptions for certain firefighters);
  2. For employees with a normal weekly schedule, the total number of hours the employee is normally scheduled to work over two weeks;
  3. For employees who work a variable number of hours, 14 times the average number of hours the employee worked each day in the six months preceding the date the employee took COVID-19 supplemental paid sick leave (or, if the employee has worked less than six months but more than 14 days, the average hours worked over the entire employment period);
  4. For employees who work a variable number of hours and have worked for a period of 14 or fewer days, the total number of hours the employee has worked for that employer.

The law authorizes the employee to determine how many hours of COVID-19 supplemental paid sick leave to use, and requires the employer to make COVID-19 supplemental paid sick leave available for immediate use upon the employee’s oral or written request.

The COVID-19 supplemental sick pay must be paid at an hourly rate of the highest of: (1) the employee’s regular rate of pay for the last pay period (including amounts subject to any applicable collective bargaining agreement); (2) state minimum wage; or (3) local minimum wage. However, like the federal law, employers are not required to pay any more than $511 per day and $5,110 total to an employee for COVID-19 supplemental sick pay.

The law prohibits employers from requiring an employee to use any other paid or unpaid leave, paid time off, or vacation time before COVID-19 supplemental paid sick leave or in lieu of COVID-19 supplemental paid sick leave, and expressly provides additional leave on top of any paid sick leave that may already be available to employees under Labor Code Section 246. The supplemental sick leave requirement runs concurrently with other types of leave other than regular paid sick leave.

But What If I Already Provided COVID-19 Paid Sick Leave?

There is some good news for employers who have already provided COVID-19 related paid sick leave, even where they were not required to do so.

Where an employer provided leave, but did not pay it at the rates required under the new law, the law expressly authorizes an employer to retroactively provide supplemental pay to that covered worker in an amount equal to or greater than that required under the law, rather than providing additional leave time.

Also, if an employer already provides or provided employees with a supplemental benefit, such as supplemental paid leave, that is payable for the COVID-19 reasons identified in the statute, then the employer may count the hours of that other paid benefit or leave toward the total number of hours of COVID-19 supplemental paid sick leave that it is required to provide under this law.

These provisions are effective until the latter of December 31, 2020, or expiration of any federal extension of the Families First Coronavirus Response Act (which Seyfarth has discussed at length here and here.)

But Wait — There’s More!

Food sector employees. Specific to employees in the food sector, the law requires employees working in any food facility (as defined by the Health & Safety Code) be permitted to wash their hands every 30 minutes and additionally as needed and, retroactive to April 16, 2020, mandates supplemental paid sick leave for food sector workers if they are unable to work due to any of the specified reasons relating to COVID-19 (codifying Executive Order N-51-20).

Update Wage Statements/Written Notice. Employers outside of the food sector must update their wage statements (or separate writing) to provide notice of the amount of supplemental paid sick leave available each pay period under this new law, and could be subject to liability for failure to do so starting with the next full pay period following the bill’s September 9, 2020, enactment. We recommend doing so as a separate line item for tracking purposes (such as CA Supp. Sick Leave or COVID Leave). Employers should be sure to apply any applicable offsets for supplemental COVID paid time already granted to an employee for a reason covered by the new law. Note: Food sector employers are not subject to the every pay period notice requirement of Labor Code § 246(i) for the new leave available under new Labor Code § 248.

Enforcement. The law authorizes the Labor Commissioner to cite employers for a lack of paid sick days, which the Governor states is “a critical enforcement tool that will promote safety for employees and customers alike.” The Labor Commissioner issued a model notice for posting in the workplace which you can access here, as well as FAQ’s on the program here.

The bill will also create a DFEH small employer family leave mediation pilot program—but only if SB 1383 is approved by the Governor.

Workplace Solutions

Navigating federal, state and local COVID-19 related laws and ordinances remain a significant challenge, particularly in California. If you have questions or concerns regarding which types of regulations may apply to your workforce, and how to implement them, reach out to your favorite Seyfarth attorney.

Edited by Coby Turner

Seyfarth Synopsis: Businesses operating in California have had all of eight months to adapt since Assembly Bill 5, a landmark piece of legislation governing their relationships with independent contractors, took effect on January 1, 2020. Now, with the passage, executive signature, and immediate enactment of Assembly Bill 2257, businesses must once again adapt to another drastic shift in the employee classification calculus.

On September 4, 2020, AB 2257, which substantially revises and clarifies California’s independent contractor laws, went into effect immediately upon receiving California Governor Gavin Newsom’s signature.

AB 5, as businesses are all too aware, installed the “ABC Test” as the default standard to determine whether independent contractors should be treated as employees of a hiring entity, and also set forth a labyrinthine list of exemptions from its purview. From its inception, AB 5 has stirred an inordinate amount of controversy—not only have we written extensively on the measure, we also have our own tag dedicated exclusively to the issue. Our prior analysis of AB 5 can be accessed here. AB 2257, which preserves the ABC Test for independent contractor classification, now expands the universe of available exemptions from this test. The new law will no doubt delight some businesses, frustrate others, and confound anyone responsible for keeping track of the exemptions.

Background On AB 5

AB 5, as of January 1, 2020, codified the ABC Test for employee status adopted in the California Supreme Court’s 2018 decision in Dynamex Operations West, Inc. v. Superior Court. Dynamex held that in order to defeat claims arising under California’s Wage Orders premised on independent contractor misclassification, a defendant must prove that (A) the worker is free from control and direction of the hiring entity in connection with performing the work, both under contract and in fact, (B) the worker performs work outside the usual course of the hiring entity’s business, and (C) the worker customarily engages in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

AB 5 expanded the reach of Dynamex by making the ABC Test the default test for all Labor Code, Unemployment Insurance Code, and Wage Order claims. As a result, the ABC Test extended to a host of additional causes of action not previously covered, such as, for instance, claims for failure to reimburse necessary business expenses and for failure to provide accurate wage statements.

In addition to expanding the applicability of the ABC Test, AB 5 also provided for broad governmental enforcement powers. It enabled the Attorney General and certain city attorneys to pursue injunctions against businesses suspected of misclassifying independent contractors.

AB 5 also contained numerous statutory exemptions from the ABC Test. Provided certain criteria were met, the employment status of independent contractors in an occupation covered by one of these exemptions was determined by the common law test for employment (commonly known as the Borello test), a considerably more flexible standard than the ABC Test. The fact that some industries were expressly exempted while others were not, led to controversy, confusion, and requests from hiring entities and workers in dozens of industries for additional and clarifying legislation. As of February of this year, the Legislature introduced 34 stand-alone bills exempting certain industries. As those measures wound through the legislative process, they were, for the most part, distilled into AB 2257.

What’s New In AB 2257?

AB 2257 maintains the essential framework of AB 5. The ABC Test remains the default standard for independent contractor misclassification. However, swift and concerted lobbying efforts have prompted a plethora of new statutory exemptions from the ABC Test, which apply retroactively where applicable. In addition, some existing exemptions have been altered in potentially significant ways.

  • Business-To-Business Exemption: AB 2257 maintains the exemption for “bona fide business-to-business contracting relationships” where a contractor “acting as a sole proprietor, or a business entity formed as a partnership, limited liability company, limited liability partnership or corporation contracts to provide services to another such business.” The exemption now also applies where a “public agency or quasi-public corporation” has retained a contractor. Further, while broadening the availability of the exemption, AB 2257 might also affect how the ABC Test applies to individual workers retained by a contractor, with respect to their relationship with both the contractor and the hiring entity. For example, the ABC Test might determine whether an individual worker retained by a contractor as an independent contractor, and not directly by the hiring entity, is an employee of both the contractor and the hiring entity. While case law holds that the ABC Test does not apply where a worker has been classified as an employee, the unclear phrasing of the new business-to-business exemption could lead to litigation on this subject.
  • “Single-Engagement” Business-To-Business Exemption: AB 2257 creates an exemption from the ABC Test for individual businesspersons who contract with one another “for purposes of providing services at the location of a single-engagement event.” Provided certain criteria are met (including a lack of control over the work, a written contract specifying payment amounts, and each individual’s maintenance of his or her own business location), the ABC Test will not apply where one individual contracts with another to perform services at “a stand-alone non-recurring event in a single location, or a series of events in the same location no more than once a week.”
  • Referral Agency Exemption: AB 2257 also includes clarifications of the referral agency exemption, which may exempt from the ABC Test the relationship between an individual operating as a sole proprietor or a business entity and a business that refers that individual’s services to clients. For starters, AB 2257 expands the referral agency exemption significantly, expressly applying the exemption to a non-exclusive list of additional services, including consulting, youth sports coaching, caddying, wedding or event planning, services provided by wedding and event vendors, and interpreting services. Indeed, according to the Senate Committee on Labor and Employment analysis, the referral agency expansion was one of the most significant changes in AB 2257. In addition to expanding the scope of the exemption, AB 2257 expressly provides that the ABC Test governs “the determination of whether an individual worker is an employee” of the contractor referred to provide services, or an employee of the client to which the contractor was referred. As with the analogous clarification of the business-to-business exemption, this is a potentially significant addition in that it may lead to litigation over whether the ABC Test applies to workers who have been classified as employees.
  • Professional Services Exemption: AB 2257 expands the already lengthy list of occupations that may qualify for an exemption from the ABC Test under the professional services exemption. The following occupations, in addition to those originally identified in AB 5, may be subject to the common law test for employment as a result of AB 2257: content contributors, advisors, producers, narrators or cartographers for certain publications (provided they do not displace existing employees); specialized performers hired to teach a class for no more than a week; appraisers; registered professional foresters; and home inspectors. AB 2257 also eliminates restrictions in AB 5 that threatened to upend the journalism industry. Whereas AB 5 limited the number of “submissions” that independent contractors of various types (including still photographers and photojournalists, videographers, photo editors, freelance writers, translators, editors/copy editors and illustrators/newspaper cartoonists) could publish in a single forum without sacrificing their contractor status, AB 2257 removes the submission cap and instead requires that businesses refrain from displacing existing employees in order to utilize one of these types of contractors.
  • Music Industry & Performer Exemptions: AB 2257 creates several exemptions for the entertainment industry, primarily in the music industry. First, the following occupations involved in creating, marketing, promoting or distributing sound recordings or musical compositions are exempt from the ABC Test: recording artists, songwriters, lyricists, composers, proofers, managers of recording artists, record producers and directors, musical engineers and mixers, musicians, vocalists, photographers, independent radio promoters and certain types of publicists. Notably, however, musicians and vocalists who do not receive royalties from a sound recording or musical composition must be paid the applicable minimum and overtime wages, as though they were employees. Second, musicians and musical groups engaged for a single-engagement live performance event (i.e., a concert) are exempt from the ABC Test unless they (a) perform as a symphony orchestra, or in a musical theater production, or at a theme park or amusement park, (b) are an event headliner in a venue with more than 1,500 attendees, or (c) perform at a festival that sells more than 18,000 tickets per day. Finally, individual performance artists including comedians, improvisers, magicians and illusionists, mimes, spoken word performers, storytellers, and puppeteers who perform original work they created will qualify for an exemption so long as they are free from the hirer’s control, retain the intellectual property rights related to their performance, set their terms of work and negotiate their rates.
  • Miscellaneous Exemptions: Subject to certain requirements, AB 2257 adds exemptions for the following occupations: manufactured housing salespersons; certain individuals engaged by international exchange visitor programs; and competition judges (including amateur umpires and referees).
  • Broader Governmental Enforcement Powers: AB 2257 provides district attorneys the ability to file an injunctive relief action against businesses suspected of misclassifying independent contractors. Previously, only the Attorney General and certain city attorneys possessed this power.

Which Industries Were Excluded From AB 2257?

AB 2257 does not include exemptions for a number of industries that have engaged in extensive lobbying efforts that pre-date even the passage of AB 5. Such industries include, among others, gig economy companies, franchising, trucking and the motion picture and television industries. The 2021-22 legislative session will undoubtedly see these, and other, industries lobbying for additional exemptions; the most immediate task for many in the business community, however, is understanding how AB 2257’s amendments affect their business relationships.

What Will Happen Next?

AB 2257 took effect immediately upon its passage, and is, accordingly, the law of the State of California. It is a given that some industries that did not secure an exemption may continue lobbying legislators. Others may choose to follow the lead of transportation platform companies, which are funding a ballot initiative (Proposition 22) to create a new class of workers applicable to drivers, if their efforts prove successful. Lawsuits currently pending and yet to be filed, including one previously filed by a trucking industry interest group, may yet affect the scope of AB 2257’s application. Finally, it remains to be seen whether governmental officials will avail themselves of the enforcement powers bestowed upon them, as the flood of such lawsuits predicted by many following the passage of AB 5 has not occurred.

Workplace Solutions

As usual, navigating the constantly changing legal landscape for independent contractor status can be very complicated. If your business uses, or is thinking of using, independent contractors to assist with any business functions, make sure you contact your favorite Seyfarth attorney, or reach out to any members of our Independent Worker Strategies Team, to make sure you are staying compliant with the latest legal developments.

Edited by Coby Turner