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

Let Me Tell You What It’s All About

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Workplace Solutions

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

Edited by Coby Turner

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

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

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

What’s New?

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

Will There Be More Guidance?

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

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

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

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

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

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

What Else Is Cal/OSHA Going To Do?

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

Workplace Solutions

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

Seyfarth Synopsis: As previously discussed here, on September 29, 2020, Governor Newsom signed AB 1963, an amendment to the Child Abuse and Neglect Reporting Act, which will become effective January 1, 2021. The revised Act imposes reporting and training requirements on new categories of employees. These changes may have a significant impact on industries like entertainment and fast food.

More Employees Deemed Mandatory Reporters

Through the Child Abuse and Neglect Report Act, California has long protected children in workplaces—with at least five employees—by requiring certain adults (i.e., “mandated reporters”) with whom those children interact to report abuse or suspected abuse. The Act now adds “human resource employees” as mandatory reporters of all types of suspected abuse, and any “adult person whose duties require direct contact with and supervision of minors in the performance of the minors’ duties” as mandated reporters of suspected sexual abuse.

The Act has a broad view of what it means to be a “human resource employee.” Accordingly, anyone designated to receive complaints within the organization—even if those lacking a title reflecting a “human resource” position—as well as those people having supervisory responsibility for any minors employed, now have responsibilities to report known or suspected abuse.

Expansion of Employee Training Requirements

Additionally, the Act now requires that employers of newly mandated reporters provide them with training in child abuse and neglect identification, and training in child abuse and neglect reporting. Employers can comply with these training requirements by having the mandated reporters complete the general online training offered by the Office of Child Abuse Prevention in the State Department of Social Services. That training can be found free of charge here, and covers topics such as the reason for reporting, what constitutes child abuse, what needs to be reported, when you need to report, and where you need to report.

While the law does not set forth a particular time frame within which employees must complete the training, employers should keep in mind that these training videos are quite lengthy. Thus, starting employees on the trainings right away (especially if you need to stagger your supervisory employees taking the trainings) will allow your company to come into compliance promptly.

What Happens If a Mandated Reporter Doesn’t Report Known or Suspected Abuse?

If a mandated reporter fails to report known or reasonably suspected child abuse or neglect, then the individual is guilty of a misdemeanor punishable by up to six months in jail or a $1,000 fine, or both. Mandated reporters can also be sued for damages, especially if the minor-victim or another minor is further victimized because of the failure to report.

The Impact of AB 1963

There can be little doubt that the impact of AB 1963 will be much more significant for some industries than others. This is unsurprising as some industries regularly employ minors (e.g., fast food), whereas others (e.g., law) almost never employ minors. For human resources professionals in those industries with high concentrations of minor employees, the additional training requirement imposed by the law will likely not seem all that onerous—human resources employees are accustomed to spending lots of time in training and being trained on personnel issues. But AB 1963’s reporting and training requirements are likely to have much more significant impacts for those non-human resource professionals who are now “mandated reporters.”

Consider the entertainment industry, which is massive within California. That industry hires a disproportionate number of minors relative to other industries (particularly when considering minors under sixteen-years-old). Because the concept of “mandated reporter” now extends to every adult person whose duties require direct contact with and supervision of minors, the category of mandated reporter may now include directors, producers, hair/makeup professionals, and wardrobe professionals within any organization employing more than five people, and those people may now be subject to the training requirements of the law, as well as the penalties for failure to meet its requirements.

It may well be that many sets, recording studios, and live theaters are populated by different entities for any one production, such that none of the involved organizations technically meets the five-employee threshold under the law. But, in light of the severity of the penalties for failure to comply with the law, organizations that employ minors within the entertainment industry would be well-advised to carefully examine both their headcount and the duties of their adult employees, so as to make a considered determination whether AB 1963 applies to their employees.

Similarly, the fast food industry also employs large numbers of minors. Restaurant locations generally have multiple levels of supervisors in each location, including shift supervisors, leads, and assistant managers, who may also be individuals whom employees are authorized to come to with complaints. These individuals now also have the potential to be “mandated reporters” subject to the training requirements and the ramifications of a failure to report. Employers within the fast food industry will also therefore need to look carefully at employee duties to determine who may reasonably fall under the mandated reporter definitions, and ensure that those employees are trained.

Workplace Solutions

For many employees in industries that employ minors, both identifying and reporting known or suspected abuse will be a completely new concept. Companies that employ minors will need to ensure these employees get up-to-date training on how to satisfy their mandatory reporting obligations. As always, please contact your Seyfarth counsel if you have any questions about how the new Act may apply to your employees and workplace.

Edited by Coby Turner

Seyfarth Synopsis. On December 18, 2020, San Francisco imposed a 10-day mandatory quarantine on most people traveling or returning to the city for more than 24 hours. The order does not apply to travel within the larger Bay Area, or to certain visitors, including those not staying more than 24 hours, those seeking medical treatment, and those coming to the city to perform essential services. While the order does not require employers to monitor their employees’ personal travel, the order requires employers to prohibit employees from returning to the workplace if they become aware of the travel. Any time off of work due to this travel quarantine is controlled by the employers’ existing time off policies. The order is effective through at least January 4, 2021. Fortunately the order likely won’t affect one famous traveler on December 24, unless his sleigh breaks down and he must stay in the city for more than 24 hours.

In response to COVID-19-related holiday travel concerns, San Francisco issued a mandatory quarantine order for many people traveling to or from the city. The order runs from December 18, 2020 through January 4, 2021, and requires most individuals traveling to the city for more than 24 hours, or returning home after travel to quarantine for 10 days. While impacted individuals may leave their homes to get tested for COVID-19, a negative test does not shorten the 10-day quarantine period.

Exceptions.

The order makes exceptions for some travelers. For example, it does not apply to:

  • Individuals who started their travel prior to December 18;
  • Individuals moving through San Francisco, but not staying for more than 24 hours; and
  • Other Bay Area residents (defined as individuals from Alameda, Contra Costa, Marin, Napa, Santa Clara, Santa Cruz, San Francisco, San Mateo, Solano, and Sonoma Counties).

The order, however, does encourage Bay Area residents and individuals who commenced travel before the order’s enactment to comply with the quarantine directive.

For parents and children concerned about the order’s impact on Santa, the 24 hour exception likely covers his work on December 24.

The order also excepts a number of essential workers, and others coming to the city for certain tasks, including:

  • Licensed healthcare professionals
  • Anyone coming to San Francisco to perform work at an acute care hospital
  • Individuals performing Essential Government Functions or working on Essential Infrastructure
  • Individuals providing care to minors, the elderly or persons with disabilities
  • Individuals obtaining healthcare
  • Individuals required by their employer to enter the city to work for an Essential Business in San Francisco due to a lack of staffing
  • Individuals traveling for law enforcement or a court order
  • Individuals who are members of professional or collegiate sports teams, traveling for a game
  • Individuals who are part of a film production, provided they meet certain requirements

Effect on Employers.

The city’s FAQs make clear that employers may have some responsibilities under the order. Businesses have no obligation to restrict their employees’ personal travel (and they cannot under existing California law), nor must businesses inquire where their employees have traveled to. However, if an employer learns that an employee has traveled outside of the Bay Area, then the employer must prohibit the employee from returning to the workplace during the quarantine period.

The order does not require businesses to approve paid time off for employee quarantines. Instead, it defers to an employer’s normal policies. If the employee is entitled to time off under those policies, then they should be given it. However, if the employee’s conduct or time off violates the employer’s normal policies, then the employee can be disciplined.

Notice.

The only businesses required to give notice of the order are transit facilities. They must provide notice to arriving travelers, either by giving travelers a copy of the notice attached to the order, or by posting the notice and making regular announcements.

Although hopefully a brief restriction, employers should brush up on San Francisco’s travel order, and be prepared should they learn of employees traveling outside of the Bay Area around the holidays.

Seyfarth’s Workplace Solutions is here to help with these and other COVID-19 related questions.

Seyfarth Synopsis: The California Department of Industrial Relations’ Office of Administrative Law has approved a California OSHA emergency temporary standard regarding COVID-19, effective November 30, 2020. The temporary standard brings with it new documentation, COVID-19 testing, earnings continuation, and reporting obligations affecting most companies.

As we have previously blogged, Cal/OSHA’s Emergency Temporary Standard (ETS) was adopted at the Standards Board’s November 19, 2020, meeting. The evening of November 30, 2020, the California Office of Administrative Law (OAL) approved the ETS. The ETS became effective immediately: all employers must comply with its requirements right away. Shortly after it became effective, Cal/OSHA, a.k.a. the Division issued Frequently Asked Questions and template documents.

What Are The Biggest Developments For Our Company?

As we previously blogged, the ETS does not apply to (1) employees who are already covered under the Cal/OSHA Aerosol Transmissible Diseases standard, (2) employees who are working from home, and (3) single-employee employers who do not have contact with others.

For employers who are covered, some ETS provisions already causing 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 is 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 requires notification to independent contractors who were present at the workplace. Other seemingly semantic inconsistencies exist. For example, AB 685 refers to a COVID-19 “infectious period” whereas the ETS refers to a “high-risk exposure period”; both terms apparently refer to the time period employers must use in evaluating who may have had a COVID-19 exposure. The underlying definitions of these periods are essentially the same under AB 685 and the ETS.
  • Employers now must track and record all COVID-19 cases with the employee name, contact information, occupation, location of work, the most recent date worked 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).
  • Employers now must “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.” 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. Note that Cal/OSHA refers to “possible” separation instead of “feasible” separation.
  • In what has been criticized as a 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 eighty 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 it provides no cap on the amount of earnings that must be continued if employees are excluded from work. This eliminates the cap on paid time set forth in Labor Code section 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 the existing requirements for employers when there are COVID-19 workplace “outbreaks,” the ETS includes additional, and quite burdensome, 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.” This requirement does not change based on the number of employees at a workplace: an employer with ten employees and an employer with 1,000 employees at a workplace both must test 100% of employees, with vastly different cost considerations. For larger employers, testing has the potential to be very costly.
  • For employers who provide housing and transportation to employees, there are special requirements such as ensuring housing units are cleaned at least once a day, providing six feet of distancing in dormitories, and providing private spaces for exposed employees to isolate.
  • The standard includes various other requirements, such as creating a written COVID-19 Prevention Program, which appears nearly duplicative of an Injury and Illness Prevention Program (IIPP).

What Happens If Our Company Doesn’t Comply With The ETS?

Non-compliance with the new ETS can result in an OSHA citation and penalty 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 penalties typically attach for violations having some non-serious relationship to safety and health, and Serious penalties 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 alleged violations in connection with COVID-19 could 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, then the violation can be classified as Repeat. And, a Willful citation may issue 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.

Penalties 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?

Cal/OSHA’s Chief told the Standards Board that “some employers are going to need more time. We intend to fully take that into account in determining how they’re implementing the rule.” He also noted the Division would consider “good faith” efforts on the part of employers. The Board also indicated it would convene a stakeholder committee to suggest updates to the ETS to address the top concerns from employers—information on this committee is still forthcoming.

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: 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 eliminates 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