Search results for: final wages

Seyfarth Synopsis: Headlining the employment-related bills that passed the May 27, 2022, House of Origin Deadline is AB 85, which extended COVID-19 Supplemental Paid Sick Leave to September of this year, as well as bills related to accommodations, leaves, retaliation, and workers’ compensation.

On the deadline for bill introduction, back in February, California legislators introduced 611 bills between the two houses, bringing the total number of bills introduced in 2022 to 2,020—1,361 Assembly Bills (“AB”) and 659 Senate Bills (“SB”) 458 of those bills were spot bills, while 181 were intent bills (explanation here). A significant portion of the bills introduced occupy the labor and employment space.

While many measures that would have caused headaches for employers failed to meet the House of Origin deadline, the most concerning provisions remain on a path to Governor Newsom’s desk. Below, we summarize the most significant bills that met the House of Origin deadline and remain in play for California employers.

The bills will now make their way through the committee process in either the Senate or Assembly (depending on which Chamber introduced the measure). Many of these measures will undergo significant amendment, or be completely gutted and amended to look nothing like their genesis. Some will make it through the legislative process, and some will not. Stay tuned for more in-depth analyses of the proposed bills of most interest to employers as the session continues.

COVID-19 Continues to Occupy Legislative Focus

COVID-19 Supplemental Paid Sick Leave (Again): AB 84  

While the California legislature was unable to, or uninterested in, passing a broad vaccination mandate, intense negotiations between the Newsom administration and the business community yielded a whole new tranche of up to 80-hours of mandatory paid sick leave for a variety of COVID-19-related reasons that went into effect on February 19, 2022, and was made retroactive to cover time off taken after January 1, 2022. Despite lobbying efforts by the business community, employers cannot require that this leave be exhausted before using leave available under the Cal/OSHA ETS.

In this iteration of the SPSL, which we blogged about in detail here, there are two buckets of leave available, each up to 40 hours. For the “first bucket,” the qualifying reasons for an employee to be eligible for paid leave are nearly the same as for the 2021 iteration, SB 95, but AB 84 adds leave in order to attend a vaccination appointment for a family member, or to care for a family member experiencing COVID-19 symptoms. Unlike the 2021 COVID-19 SPSL law, AB 84 provides that an employer may limit the total vaccination-related leave to 3 days or 24 hours unless the employee provides verification from a health care provider that they or their family member is continuing to experience symptoms related to a COVID-19 vaccine or booster.

Qualifying reasons for the “second bucket” of up to 40 hours include where the covered employee or a family member tests positive for COVID-19, and employers are allowed to require proof of the positive test. The employer has no obligation to provide the second bucket of leave if the employee does not have proof of the positive test for themselves or their family member.

The rate of pay required for non-exempt employees is the regular rate during the pay period the leave is taken if the employer uses the workweek method, or alternatively the employer can use a 90-day lookback for determining the average regular rate, that is generally the same as with the normal state paid sick leave law (unless the employer has any flat-sum bonuses involved, in which case the employer will need to use the Alvarado-method of calculating the regular rate, as detailed here). The new law provides for the same pay caps as in previous iterations of supplemental sick leave ($511 per day max). Additional FAQs on this new law are available here.

The 2022 COVID-19 SPSL law sunsets on September 30, 2022.

COVID-19 Workers’ Compensation for Critical Workers: AB 1751

This bill extends the current rebuttable presumption (which we previously blogged about here) that specified injuries resulting from COVID-19 were sustained in the course of employment to January 1, 2025. The measure provides that if an employee has paid sick leave benefits specifically available for COVID-19, those benefits must be exhausted before any temporary disability benefits or benefits under the workers’ compensation system become due.

This measure applies only to the following employees: (1) Active firefighting members, whether volunteers, partly paid, or fully paid, (2) Peace officers who are primarily engaged in active law enforcement activities, as defined by the Penal Code, and (3) Rescue services coordinators who work for the Office of Emergency Services.

Legislation Regarding Franchises

Fast Food Accountability and Standards Recovery Act (or FAST Recovery Act): AB 257

This bill, initially introduced in January of 2021—the first year of the regular session—has been carried over.  It has already passed the lower chamber, and is onto the Senate Judiciary Committee for additional consideration. The bill would establish the Fast Food Sector Council, responsible for creating a fast food workers bill of rights, which would address issues related to wages, working conditions, etc. This onerous bill would require franchisors to ensure franchisee compliance with a variety of employment, worker, public health and safety laws, including those related to unfair business practices, general liability, employment discrimination, the California Retail Food Code, a range of labor regulations, and emergency orders.

The bill also would establish joint and several liability for franchisee non-compliance. The bill would nullify any potential work around by prohibiting any waiver or indemnity provisions. Finally, while the bill would, for the most part, be enforced through the DLSE, ominously, it would afford franchisee employees a private right of action for retaliation against franchisors.

Franchise Sales, Renewals, and Discrimination: AB 676

This is a bill intended to fill some ambiguities that arose after the enactment of AB 525 (Holden), which purportedly offered relief to franchisees. This measure would prohibit discrimination against franchisees, in much the same way that FEHA currently prohibits discrimination against employees. Specifically, the bill would prohibit a franchisor from failing or refusing to grant a franchise, or failing or refusing to provide financial assistance, to a franchisee or prospective franchisee that has been granted or provided to other similarly situated franchisees or prospective franchisees based solely on any characteristic of the franchisee or prospective franchisee, or any characteristic of the composition of the neighborhood or geographic area where the franchise is located or the proposed franchise would be located if that characteristic is protected by the Unruh Civil Rights Act. This would confer protected status based on sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status.

The bill proposes a number of modest reforms, such as clarifying the accounting and payment processes that are applicable when a franchise relationship ends, and clarifying that a franchisee cannot be forced to waive various rights under the law either in a franchise agreement or as a condition of receiving emergency financial assistance. Additionally, the bill provides that the Commissioner of the Department of Financial Protection and Innovation may summarily revoke a franchise seller’s registration if the Commissioner finds: (a) there has been a failure to comply with any of the provisions of this law; (b) an offer or sale of the franchise would constitute misrepresentation, fraud, or deceit of the purchasers; (c) an applicant has failed to comply with any rule or order of the commissioner; or, (d) any person identified in the application or any officer or director of the franchisor creates an unreasonable risk to the prospective franchisee.

Privacy / Worker Information

Reporting and Publicizing Salaries and Wages: SB 1162

The California Chamber of Commerce has listed this measure as a “job killer.”

This bill expands upon SB 973 from 2020 (Jackson)—summarized in detail by Seyfarth—which required that employers with 100 or more employees provide the Department of Fair Employment and Housing (“DFEH”) with specified EEO-1 pay data. This measure would expand that requirement to include an employer that has 100 or more employees including those hired through labor contractors.

One of the biggest saving graces to SB 973 for the business community was that the pay data employers were forced to turn over was for the DFEH only, and was not to be made public. Indeed, the measure specifically exempted such data from coverage under the California Public Records Act and considers confidential any individually identifiable information disclosed to the DFEH under these provisions. SB 1162 would make all of that data public.

The bill additionally would require that all employers provide, in a job posting for an open position, the pay scale for that position, and must provide to an employee the pay scale for the position a person is currently employed in, upon request. The measure would permit an aggrieved worker to file a written complaint with the Labor Commissioner within one year after the date the worker learned of the failure to comply with the above requirements and levies a fine of between $100 and $10,000 per violation.

The Senate Committee on Appropriations held a hearing and passed the measure out of committee on May 19, 2022, with amendments to (1) delay publication of DFEH reports by 1 year, (2) exempt businesses with less than 15 employees, and (3) remove Section 3, which required posting all available internal jobs.

Leave / Accommodations / Retaliation

Bereavement Leave: AB 1949

This bill would amend the California Family Rights Act (“CFRA”) to prohibit an employer from denying a request from an employee with at least 30 days of active service to take up to five days of bereavement leave upon the death of a family member, defined as spouse or a child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law. While the days of bereavement leave need not be taken consecutively, the allotted leave must be completed within three months of the date of death of the family member. If the employer does not have a paid bereavement policy, the leave would be unpaid, except that an employee may use vacation, personal leave, accrued and available sick leave, or compensatory time off that is otherwise available to the employee.

The bill also would allow the employer to require documentation of the death of the family member, which can be in the form of a death certificate, a published obituary, or written verification of death, burial, or memorial services from a mortuary, funeral home, burial society, crematorium, religious institution, or governmental agency. The bill would prohibit retaliation for requesting bereavement leave.

Cannabis: AB 2188

The Chamber of Commerce has also labeled this measure a “job killer.” This bill would amend the FEHA by adding off-the-job cannabis use as one of the characteristics protected by the FEHA, which would greatly expand potential monetary exposure through litigation for California employers.

The bill would not prohibit a company from administering a drug test that detects the active presence of THC in an employee’s or prospective employee’s bodily fluids only. But, it would prohibit discrimination against an individual for a positive cannabis test, which the bill contends is unrelated to impairment on the job. The bill would also permit an employer to administer a performance-based impairment test, and terminate the employment of an employee who is determined to be impaired by cannabis on the property or premises of the place of employment.

This provision would not apply to employees in building or construction trades, and it would not preempt state or federal laws requiring employees to be tested for controlled substances.

State of Emergency and Emergency Conditions: SB 1044

This bill provides that, in the event of a natural disaster, emergency condition, or state of emergency, an employer may not: (1) take or threaten adverse action against an employee for refusing to report to or leaving a workplace because they feel unsafe; or (2) prevent an employee from accessing their mobile device for use for emergency purposes. While the definition of a State of Emergency is pretty apparent, the existence of an “emergency condition” is less clear. The bill defines “emergency condition” as either: (1)  conditions of disaster or extreme peril to the safety of persons or property at the workplace caused by natural forces or a criminal act; or (2) an order to evacuate a workplace, a worker’s home, or the school of a worker’s child due to natural disaster or a criminal act.

Recent amendments require the employee to notify the employer of the state of emergency or emergency condition before benefiting from the bill’s provisions, and narrow the definition of state of emergency to require that the emergency poses an imminent and ongoing risk of harm to the worker, the worker’s home, or the worker’s workplace. Regardless, though, the bill would still allow employees to leave work, or refuse to come to work, if the employee subjectively feels unsafe.

Notably, the bill would exclude a health pandemic from a covered state of emergency. It also would exclude from its coverage any employees who are first responders, disaster service workers, healthcare or patient care workers, utility and roadside assistance workers, as well as a number of other categories of essential personnel.

An employer who disciplines an employee for leaving the workplace during an emergency, or prevents any employee from accessing the employee’s mobile device, could be subject to a private lawsuit and penalties under the Private Attorneys General Act (PAGA). A recent amendment, however, added a right to cure for employers, in keeping with worker safety concerns.

Labor

Agricultural Labor Relations: AB 2183

This bill entitles a labor organization to access an employer’s employee list from the Agricultural Labor Relations Board upon providing written notice to the appropriate regional office of the Board that it intends to organize the agricultural employees of the same employer, accompanied by proof of service of the notice upon the employer. The bill attempts to limit the reach of this provision by providing that an employer need not provide more than one employee list within a 30-day period.

As an alternative procedure to the polling place election process set forth in Section 1156.3 of the Labor Code, the bill would permit a labor organization to be certified as the exclusive bargaining representative of a bargaining unit through a representation ballot card election, which permits a bargaining unit to summarily select a labor organization as its representative for collective bargaining purposes without holding a polling place election. The measure sets forth all the various requirements for a labor organization that applies to represent a particular bargaining unit. The Board must certify the labor organization as the exclusive bargaining representative if the board determines that the labor organization has submitted the required number of representation ballot cards and the cards meet specified criteria.

Wage and Hour

Wages, Final Payment: AB 2133

This bill would amend Section 201 of the Labor Code to reduce the amount of time to pay final wages from 72 to 48 hours in the event of a layoff of seasonal employees employed in the curing, canning, or drying of any variety of perishable fruit, fish, or vegetables.

Wage Withholdings: SB 505

This two-year measure has already passed the Senate and is on to the Assembly, but no action has been taken on this measure since June 17, 2021. This bill would provide that, prior to garnishing a public employees’ wages when the employer is required or empowered to do so by state or federal law, employers must make a good faith effort to consult with an employee to obtain a written authorization to resolve monetary obligations before employing third-party collection services. Where a written authorization provides for a withholding or diversion of an employee’s wages, the bill would prohibit the amount withheld or diverted from exceeding 5% of the employee’s monthly gross wages.

Meal and Rest Periods for Public Hospital Employees: SB 1334

This measure would extend to employees of specified public sector employers who provide direct patient care or support direct patient care in a general acute care hospital, clinic, or public health setting the same statutorily required meal and rest break afforded to employees in the private sector. That is, these employees would be statutorily entitled to one unpaid 30-minute meal period on shifts over 5 hours and a second unpaid 30-minute meal period on shifts over 10 hours, as well as one 10-minute paid rest period for every 4 hours worked or major fraction thereof. The same premium pay of one hour of pay at the employee’s regular rate of compensation for each workday that a meal or rest period that is not provided would also be required. Workers covered by a CBA would be exempted.

Private employers across California have long dealt with these kinds of claims in the class and PAGA context—be wary public sector employers!

A Slew of Workers’ Compensation Bills

Liability Presumptions: SB 1127

This bill has three main thrusts: (1) reducing the time period for an employer to reject liability for an injury from 90 days to 45 days; (2) for certain first responders, increases the penalty to five times the amount of the delayed benefits, but not to exceed $100,000, when liability is unreasonably rejected by an employer; and (3) doubles the duration of temporary disability for cancer presumption claims for those same first responders. The Workers’ Compensation Appeals Board would have exclusive jurisdiction to determine whether the rejection of liability is reasonable. As expected, this measure is supported by labor and opposed by the business community.

Requests for Information: AB 399

This bill, or the Medical Provider Network Transparency Act of 2022, as introduced would have solely authorized an employee alleging an on-the-job injury to request the medical provider network name and identification number. The measure underwent a significant gut and amend in the Senate Committee on Labor, Public Employment and Retirement on May 23, 2020.

As amended, for purposes of the workers’ compensation system, this bill would provide that if an independent bill review organization—existing law permits a medical provider to request an independent bill review for disputes relating to the amount of payment and authorizes the imposition of fees for this purpose—finds that an employer owes the medical provider, the bill would require the independent bill review organization to bill the employer for the additional review fees. If the employer is found to not owe the medical provider, the bill would require the independent bill review organization to bill the provider for the additional review fees. Employers would be required to pay any additional amounts found owed within 30 days of the final determination.

Disability Payments: AB 2148

The bill would extend until January 1, 2024, a current law that permits employers to commence a program under which disability payments are deposited in a prepaid card account.

Labor Contracting: AB 2614

Would require a “client employer” that is subject to Industrial Wage Commission (IWC) Orders Nos. 1 or 7—manufacturing and mercantile industries—to procure independently of any labor contractor, a valid workers’ compensation insurance policy for any contracted workers providing labor within its usual course of business. A “client employer” is defined as a business entity, regardless of its form, that obtains or is provided workers to perform labor within its usual course of business from a labor contractor. The stated intent of this legislation is to ensure that all contracted workers of labor contractors performing labor within a client employer’s usual course of business are covered by a valid workers’ compensation insurance policy.

This measure was inspired by a recent string of workers’ compensation fraud by operators of staffing agencies (also known as labor contractors) who are providing services to employers. According to the author, “AB 2614 will close a loophole in state law that allows companies with poor worker safety records to utilize staffing companies to avoid paying the financial costs associated with the companies’ safety records.”

Hospital Employees: SB 213

This is a two-year bill that has already passed the Senate and is now being held by the Assembly. The California Chamber of Commerce has tagged this bill as a “job killer.” This measure would build upon SB 1159, which Seyfarth summarized here, which created two presumptions: one that is specific to frontline workers (peace officers, firefighters, healthcare providers, homecare workers and IHSS workers), and a general presumption for employees who contract COVID-19 in the midst of a workplace outbreak. Of import to SB 213 is the former, which applied to health care workers.

This bill would create rebuttable presumptions within the workers’ compensation system that specified infectious diseases such as COVID-19, cancer, musculoskeletal injury, post-traumatic stress disorder, or respiratory disease are occupational injuries for a direct patient care workers employed in an acute care hospital. This presumption would be extended following termination of employment for a period of three months for each full year of employment, not to exceed 60 months. SB 213 also removes the sunset date of the presumption for COVID-19 for direct care workers in an acute care hospital by including the presumption in a different code section.

Miscellaneous Employment Bills

Call Centers: AB 1601

This bill would require an employer of employees in a call center that intends to relocate from this state to notify the Labor Commissioner at least 120 days before the relocation. The bill would authorize the Labor Commissioner to impose a civil penalty of up to $10,000 for every day that an employer fails to provide this notice. The Labor Commissioner would be required compile a list of employers that provide the requisite notice and employers appearing on the list would be ineligible to be awarded or have renewed state grants or state-guaranteed loans for 5 years after the date that the list is published, and those companies would be ineligible to claim tax credits for 5 taxable years beginning on and after the date that the list is published. Private entities that have contracted with the state for call center services as of January 1, 2023, must ensure that a certain percentage of services are performed in California.

Background Checks: SB 1262

This bill was inspired by the California Court of Appeal decision in All of Us or None of Us. v. Hamrick, which held that an individual’s date of birth and driver’s license number could not be used as data identifying a criminal defendant in public records. This caused courts around the state to redact birth dates and driver’s license numbers from their indexes, making routine background checks much more difficult. This bill would require publicly accessible electronic indexes of defendants in criminal cases to permit searches and filtering of results based on a defendant’s driver’s license number or date of birth.

Extending Statute of Limitations: AB 2777

The concerning measure would amend the Code of Civil Procedure to permit a putative plaintiff, from January 1, 2023, to December 31, 2023, to press a cause of action in court based on sexual assault or “other inappropriate conduct,” regardless of whether that claim would be barred by the applicable statute of limitations, so long as the actions occurred on or after January 1, 2009. Essentially, this would mean that a putative plaintiff may bring one of a number of vaguely-defined claims, regardless of how stale those claims are, from January 1, 2023, to December 31, 2023. This is despite the fact that AB 1619 (Berman – 2018), already provides for a lengthy ten-year statute of limitations for claims relating to a sexual assault.

Moreover, claims that would be brought under this bill can be “revived” during the free for all period include all claims seeking more than two hundred fifty thousand dollars ($250,000) in damages “arising out of a sexual assault or other inappropriate contact, communication, or activity of a sexual nature that would otherwise be barred before January 1, 2023,” but the statute does not endeavor to define what constitutes “activity of a sexual nature.”

An aggrieved employee or former employee can only bring suit against an employer—essentially defined as sole proprietorship, partnership, limited liability company, corporation, association, or other legal entity—where the putative plaintiff alleges that the employer engaged in a cover up or attempted a cover up of a previous instance or allegations of sexual assault or other inappropriate conduct, communication, or activity of a sexual nature.

The measure does try to place some guard-rails, but not enough, on the strikingly broad provisions summarized above—AB 2777 requires an attorney to provide a certification to the court after filing a complaint that: (1) they believe a cover-up or attempted cover-up took place; (2) that they had the victim interviewed by a mental health practitioner, who finds a “reasonable basis to believe” that “sexual assault or other inappropriate conduct, communication, or activity” took place; and (3) that the attorney believes the case is worth filing.

Two Concerning Measures Didn’t Hurdle the January Deadline

The bills below were placed on the inactive file in the summer of 2021. Those measures faced a January 31 deadline to come off the file, but the Legislature declined. As such, those measure are now dead, but it is highly likely that the substance of AB 995 comes back in another legislative form in the future.

Worker Metrics: AB 1192

This bill would have placed new onerous administrative burdens on employers by requiring them to publish extensive, private salary and benefit information on the Labor and Workforce Development Agency’s (“LWDA”) website. Public disclosure of completely lawful policies and conduct could give the false impression of wage disparity where none may exist and subject employers to frivolous litigation and settlement demands.

Paid Sick Days: AB 995

This bill would have imposed new costs and leave requirements on employers of all sizes, by expanding the number of paid sick days employers are required to provide, which is in addition to all of the recently enacted leave mandates (COVID-19 sick leave, Cal/OSHA emergency paid time off, CFRA leave, workers’ compensation, etc.) that small employers throughout the state are already struggling with to implement and comply.

Gone But Not Forgotten: Bills That Failed House of Origin Deadline

The bills below are officially dead for failure to pass before the House of Origin Deadline, but many of the measures can be introduced in a new form in the next session.

COVID-19 Vaccine Mandate: AB 1993

This bill would have added section 12940.4 to the Government Code to require each person who is an employee or independent contractor, and who is eligible to receive the COVID-19 vaccine, to show proof to the employer that the person has been vaccinated against COVID-19. By January 1, 2023, each employer in the state would have been required to affirm that each employee or independent contractor complied with these provisions, and the bill would require the employer to affirm that each new employee or independent contractor is in compliance at the time of hiring or contracting with that person.

Flexible Work Schedule: AB 1761

This bill would have enacted the Workplace Flexibility Act of 2022, which would have permitted a nonexempt employee to request an employee-selected flexible work schedule providing for workdays up to 10 hours per day within a 40-hour workweek, and would allow an employer to implement this schedule without the obligation to pay overtime compensation for hours over 8 in a workday.

Altering the Workweek, Hours and Overtime: AB 2932

This bill would have drastically altered the current 40-hours a week, 8-hours a day working paradigm we have followed in this country for decades. Instead of the current requirement that employers pay time and a half for any work above 40 hours, this bill would have required time and a half for work in excess of only 32 hours a week, and would have prohibited an employer from reducing an employee’s overall previous compensation as a result of this reduced hourly workweek requirement.

Biometric Information: SB 1189

This bill would have, beginning September 1, 2023, required a private entity in possession of biometric information—fingerprints, retina, or iris images, among others—to develop and make available to the public a written policy establishing a retention schedule and guidelines for permanently destroying the biometric information in its possession. Private entities would be prohibited from disclosing biometric information unless certain criteria are met, including where the disclosure completes a financial transaction requested or authorized by the subject of the biometric information, and from conditioning the provision of a service on the collection, use, disclosure, transfer, sale, or processing of biometric information. Perhaps the most worrisome aspect of this measure was that it would have authorized a private right of action against a private entity for violation of the measure.

Worker Metrics: AB 2095

This bill would have required employers with 1,000 or more employees in California to submit various statistics regarding those employees to the LWDA. The LWDA would then use that information to rank employers that would qualify as an employer eligible to be certified as a high-road employer, which comes with certain benefits such as procurement contracts, tax benefits, and workforce development funding. The statute did not define “high-road” employer, but rather directed the LWDA to “develop criteria and a scoring methodology” to determine what qualifies as high-road employers.

The bill would have required employers to divulge an abundance of wage and hour data, including number of workers in the U.S., median pay for all workers in the U.S., and percentage of full-time workers earning above the U.S. living wage, amongst other disclosures. Additionally, this measure would have required the agency to “publish on its internet website all worker-related statistics submitted by all employers.”

Family Responsibilities: AB 2182

A repeat of AB 1119 from last year, and labeled a job killer by the California Chamber of Commerce, this bill would have added “family responsibilities”—defined as the obligations of an employee to provide ongoing care for a minor child or a care recipient—to the list of FEHA-protected characteristics for which employers must engage in the interactive process and provide reasonable accommodation to an applicant or employee.

Gender Disparity: SB 1458

This bill would have increased the payment of disability benefits under the workers’ compensation system by the percentage of disparity in earnings between genders and would have applied prospectively to injuries occurring on or after January 1, 2023. More specifically, after determining the base amount a worker is owed, this bill would have directed the workers’ compensation administrator to add to that amount by the percentage of disparity in earnings between genders as reported by the applicant’s employer in its pay data report to the DFEH.

Licensed Manicurists – Independent Contractor Classification: AB 1818

This measure would have made permanent the exception to the ABC test for the determination of worker classification for licensed manicurists. Whether a licensed manicurist is an independent contractor or employee would have been governed by the standard established in S.G. Borello & Sons, Inc. v. Department of Industrial Relations.

Exclusivity Options: AB 2926

Some may recall AB 1385 from last year, which dealt with workers in the music and television industries. Assemblymember Ash Kalra took on a similar bill this year but it failed the House of Origin deadline. Specifically, this bill would have prohibited a contract for the exclusive personal services of a musician or actor from containing a term that includes option periods which extend more than six months (for a musician) or twelve months (for an actor) after the earlier of: (a) the satisfaction of the delivery obligation for a contract period by the musician or actor or (b) the initial commercial release of the applicable music product or the actor’s commencement of performance.

Opioids: AB 2014

AB 2014 was a spot bill with the stated intent of amending the Labor Code as it relates to Worker’ Compensation coverage for injuries caused by the opioid crisis.

Workplace Solutions

While there are some small glimmers of hope, and indeed some measures that would ease administrative burdens on employers, many of the bills that remain are worrisome for the business community. While employers should prepare for the passage of each of the measures above, the legislative session is still in its infancy, and those bill will almost certainly see significant amendments. We’ll keep you updated here at Cal Peculiarities, and you can also check out our Policy Matters podcast and newsletter for regular check-ins on California (and national) policy and legislative updates as well.

Edited by Coby Turner and Elizabeth Levy

Seyfarth Synopsis: While the Buggles took creative liberties when they claimed that Video Killed The Radio Star, the House of Origin deadline axed a number of employment-related bills. California legislators began this legislative session at the apex of the pandemic, introducing a flurry of COVID-19-related bills, many of which failed to survive the June 4, 2021 deadline to pass out of the bill’s House of Origin. Most remaining bills will increase employer obligations if enacted, while many employer-friendly proposals fell by the wayside.

Friday, June 4, marked the first major deadline of the 2021 legislative year—for bills to pass out of their House of Origin—and also marked the end of the road for many employment-related bills. The surviving Senate Bills will now wind their way through the committee and floor vote process in the Assembly, and vice-versa. Many of these measures will continue to undergo significant amendment, and not all will make it through the legislative process. Stay tuned for more in-depth analyses of the proposed bills as the session continues.

School House Rock: No Longer “Just a Bill”

COVID-19 Supplemental Paid Sick Leave: SB 95 was a budget trailer bill that—effective immediately upon its signing on April 16, and retroactive to January 1, 2021—extended COVID-19 supplemental paid sick leave (SPSL) to September 30, 2021 for employers with over 25 employers. The new law provides an annual allotment of up to 80 hours of available SPSL, covers persons who telework, and extends SPSL entitlements to reasons related to vaccinations and family care. See our in-depth analysis of the measure here.

Rehiring and Retention of Displaced Hospitality Workers: As we detailed here, SB 93 requires certain hospitality employers—hotels, private clubs, event centers, and airport hospitality services—and successor employers, to offer preferential hiring to employees laid off because of the pandemic. The bill carried an urgency clause, making it effective the same date the Governor signed it, April 16, 2021.

Stayin’ Alive/Break On Through to The Other Side

The bills below have officially broken through to the other legislative house, and are thus stayin’ alive for the time being.

A. Leave

Family Member Definition Expansion: AB 1041 would expand the definition of “family member” for purposes of the Healthy Workplaces, Healthy Families Act of 2014 (CA PSL) in Labor Code Section 245.5 to add “designated person,” defined as “a person identified by the employee at the time the employee requests paid sick days.” The bill would similarly amend the California Family Rights Act (CFRA), Gov’t Code § 12945.2, to add “designated person,” defined as “a person identified by the employee at the time the employee requests family care and medical leave,” as a person for whom an employee may take leave for family care and medical leave, similar to many existing municipal paid sick leave laws. Both laws would allow an employer to limit an employee to one designated person per 12-month period.

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

B. DFEH

Small Employer Family Leave Mediation Pilot Program and CFRA Parent-in-Law Care Leave: AB 1033 would require the Department of Fair Employment and Housing (DFEH) to notify an employee who requests an immediate right-to-sue letter alleging CFRA violations of the requirement for mediation prior to the employee filing a civil action. The bill would toll the statute of limitations applicable to the employee’s claim from the date the employee contacts the DFEH’s dispute resolution division regarding the intent to pursue a legal action until the mediation is complete or deemed unsuccessful. The bill would allow employers of between 5 and 19 employees who do not receive the required modification as a result of the employee’s failure to contact the DFEH’s alternate dispute resolution (ADR) division, to stay the civil action pending completion of ADR. The measure would also expand CFRA to include leave to care for a parent-in-law within the definition of family care and medical leave.

C. Workplace Safety

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

For more information on the saga of Cal/OSHA’s changes to its own emergency temporary standard, see our blog here.

Warehouse Distribution Centers Quota Disclosures: AB 701 would require that employers provide nonexempt employees who work at a warehouse distribution center a written description of each quota the employee must meet, including the quantified number of tasks to be performed and materials to be produced or handled. The bill would prohibit an employer from requiring employees to meet a quota that causes them to miss a meal or rest period, and employers must provide employees a copy of the most recent three weeks of the employee’s own personal work speed data. When complaint alleging violations of this provision is filed, the Labor Commissioner must provide a written notice of the right to report violations, anti-retaliation measures for reporting unsafe workplace conditions or participating in an investigation by an enforcement agency. The bill would also authorize a current or former employee to sue for injunctive relief, costs, and reasonable attorney’s fees in that action.

D. Wage and Hour

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

Wage Theft: AB 1003 would amend the Penal Code to make an employer’s intentional theft of wages, payments, or gratuities over $950 punishable as grand theft. The bill would apply to employees and independent contractors.

Wage Withholdings: SB 505 would provide that, prior to garnishing public employees’ wages when the employer is required or empowered to do so by state or federal law, employers must make a good faith effort to consult with an employee to obtain a written authorization to resolve monetary obligations before employing third-party collection services or commencing a civil action. Where a written authorization provides for a withholding or diversion of an employee’s wages, the bill would prohibit the amount withheld or diverted from exceeding 5% of the employee’s monthly gross wages.

E. Civil Procedure

Court Changes: SB 241, the “2021 California Court Efficiency Act,” was originally a spot bill aimed to enact legislation that would streamline discovery processes to reduce costs to the courts and litigants. This would have been a welcome change to litigators and businesses alike. However, the measure was significantly amended, and now would authorize an entity that is not a shorthand reporting corporation to engage in specified acts relating to shorthand reporting if the entity is approved for registration by the Court Reporters Board of California. The bill would also require courts to electronically serve documents on a party that has agreed or consented to accept electronic service. It would also authorize, until January 1, 2024, a witness in a proceeding to appear and give testimony by remote electronic means that provide a live audiovisual connection to the court, if the parties stipulate to this manner of appearance.

Another Potential Restriction on Settlement Agreements: SB 331, the “Silenced No More Act,” would amend Section 12964.5 of the Government Code (enacted by SB 1300 of 2018) so that employers implementing non-disparagement agreements as a condition of employment (or in a separation agreement) would need to carve out an employee’s ability to discuss conduct the employee has reason to believe is unlawful. The bill would also amend Section 1001 of the Code of Civil Procedure (enacted by SB 820 of 2018) to extend the prohibition on confidentiality provisions in settlement agreements to all forms of workplace discrimination—not just discrimination based on sex. This bill would build upon CCP Section 1002.5 (enacted by AB 749 of 2019 and amended by AB 2143 in 2020) by expanding the prohibition to include acts of workplace harassment or discrimination regardless of sex.

F. Labor

Unionization Process for Agricultural Employees: AB 616 essentially eliminates secret ballot union elections by permitting a labor organization to be certified as the exclusive bargaining representative of a bargaining unit through a representation ballot card election where at least 50 percent of the employer’s workforce votes in favor of unionization. Even more concerning, the bill would create a presumption of retaliation—that can be rebutted only by clear, convincing, and overwhelming evidence—whenever an employer disciplines, suspends, demotes, lays off, or terminates a worker during a labor organization’s representation ballot card campaign.

G. Miscellaneous

Gender Neutral Retail Departments: AB 1084 would require a retail department store with 500 or more employees that sells childcare items, children’s clothing, or toys, to maintain a gender-neutral section in which a reasonable selection of the items, articles, and toys for children that it sells shall be displayed, regardless of whether they have been traditionally marketed for either girls or for boys. The requirements of this bill would be enforced by the State of California through the Attorney General, a district attorney or city attorney, in any court of competent jurisdiction and provides for recovery of attorneys’ fees. Failure to comply with the measure’s requirements would be penalized by a civil penalty, not to exceed $250 for a first violation, and $500 for a subsequent violation.

Displaced Janitor and Hotel Worker Opportunity Act: AB 1074 was the original version of the measure requiring rehiring and retention of displaced hospitality workers, which eventually passed as SB 93, as noted above. After the passage of SB 93, AB 1074 was amended to simply rename the “Displaced Janitor Opportunity Act” the “Displaced Janitor And Hotel Worker Opportunity Act” and to extend the provisions of the Act to hotel workers. The bill would also redefine “awarding authority” under the act to include any person that awards or otherwise enters into contracts for hotel services including guest service, food and beverage, or cleaning performed within the state.

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

Large Group Health Insurance: SB 255 would authorize an association of employers to offer a large group health care service plan contract or large group health insurance policy consistent with ERISA if certain requirements are met, including that the association is headquartered in California, has continuously been a Multi-Employer Welfare Arrangement under ERISA (MEWA) since before March 23, 2010, and that the large group health care service plan contract or large group health insurance policy have provided a specified level of coverage since January 1, 2019.

“End of the Road” for These Bills

Like the crooners from Boyz II Men in this famous ditty, the bills below have come to the end of the metaphorical road. But while these measures failed to make it past the deadline, employers should be prepared for similar measures to be re-introduced at a later date because, as the song lyrics go, it is possible the California Legislature just “can’t let go.”

A. A Sigh of Relief

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

Employment Discrimination: AB 1119 would have added “family responsibilities”—defined as the obligations of an employee to provide ongoing care for a minor child or a care recipient—to the list of FEHA-protected characteristics for which employers must engage in the interactive process and provide reasonable accommodation to an applicant or employee.

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

Worker Metrics Program: AB 1192, referred to by the California Chamber of Commerce as the “Public Shaming of Employers” bill, would have required annual reporting of wage and hour data and employee benefits for an employer’s entire United States workforce that would have been published on the Labor and Workforce Development Agency’s website.

Employer Provided Backup Childcare Benefit: AB 1179 would have required employers of 1,000 or more employees to provide employees, on or after January 1, 2022, with up to 60 hours of paid backup childcare benefits.

COVID-19 Hazard Pay for Healthcare Workers: AB 650 would have required all private healthcare providers to pay mandatory bonuses through the end of 2022 to all workers, including employees of contractors. The bill did not provide any credit for any other bonuses, pay increases, or other benefits employers provided during the pandemic.

Fast Food Council / Franchisor Joint Liability: AB 257 would have established the Fast Food Sector Council, responsible for creating a fast food workers bill of rights, including wages, working conditions, etc. This onerous bill would have required franchisors to insure franchisee compliance with a variety of employment, worker, and public health and safety laws and orders, including those related to unfair business practices, general liability, employment discrimination, the California Retail Food Code, a range of labor regulations, and emergency orders. The measure would have established joint and several liability for franchisee non-compliance. The bill would have nullified any potential work around by prohibiting any waiver or indemnity provisions. Finally, while the bill would have been mostly enforced through the DLSE, ominously, it would have also given franchisee employees a private right of action for retaliation against franchisors.

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

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

Cannabis Screening: AB 1256 would have prohibited employers from discriminating against a person in hiring, termination, or any term or condition of employment because a drug screening test detected tetrahydrocannabinol (THC) in their urine. (This bill would have exempted employers required to drug test based on federal law or regulations, those that would lose monetary or licensing benefits for failing to drug test, and building and construction employers.)

Workplace Diversity: AB 1122 was a spot bill that would have encouraged employers to develop and implement personnel policies that incorporate workforce diversity. The measure was sponsored by the California Employers Association.

B. That Would Have Been Helpful

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

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

Documenting COVID-19 Tests: AB 757 would have authorized a private employer to request prescribed documentation of a positive COVID-19 test or diagnosis if (1) an employee reports that the employee is unable to work due to a positive for COVID-19 test result and (2) the employer determines that an employee may be subject to a 14-day exclusion from the workplace as required under certain law or regulations.

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

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

Telework Flexibility Act: AB 1028 would have authorized telecommuting employees to waive overtime up to 10 hours of work per day, and waive split shift premiums if the employee requests an employee-selected remote work flexible schedule, and it would permit an employee to choose when to take any meal or rest period during the workday. The bill also would have prohibited an employee from recovering PAGA penalties meal and rest break violations if the employee engaged in remote work. Similarly, AB 55 was introduced as a spot bill with its stated purpose of affording certain rights and benefits to telecommuting employees, but it was not amended.

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

C. COVID-19 Bills That Were Stopped In Their Tracks

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

COVID-19 Income Tax Credits: AB 62 would have allowed a credit against corporate taxes in an amount equal to the total amount paid or incurred to comply with COVID-19 restrictions.

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

Keep California Working Act: SB 74—introduced on a bipartisan basis by Senators Caballero (D-Salinas) and Borgeas (R-Fresno)—would have appropriated $2.6 billion for grants to small businesses and nonprofit entities that meet specified criteria, including that the entity had experienced economic hardship resulting from the COVID-19 pandemic.

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

D. Unemployment / Workers’ Comp. Bills That Didn’t Make the Cut

Enhancing Unemployment Convenience: AB 274 would have revised the definition of prepaid card by requiring cards to be chip-enabled. AB 24 would have required the unemployment development department (EDD) to provide a claimant with a notification of the computation used to determine their benefits. And AB 8 would have permitted the rightful recipient of unemployment compensation benefits to elect whether the benefits payments are directly deposited into a qualifying account or applied to a prepaid debit card.

Preventing Unemployment Fraud: AB 23 would have required the unemployment development department to cross-check all claimant information with state and county correctional facility inmate data in an effort to detect fraudulent applications. The bill was borne from California coming to grips with its fraudulent unemployment insurance payments of almost $1 billion to state prisoners after Congress passed the CARES Act.

COVID-19 Temporary Benefits: AB 19 would have required the EDD to provide, until July 1, 2022, and following the termination of unemployment assistance programs created by the CARES Act, benefits equivalent to the terminated federal or state supplemental unemployment compensation payments for the remainder of the duration of time the individual is unemployed due to the COVID-19 pandemic. Unemployment benefits provided under this legislation would not be charged against the reserve account of any employer.

Advisory Committee on Unemployment Insurance: AB 42 was a spot bill set up to establish an advisory committee to advise the EDD on matters within the department’s jurisdiction, including, but not limited to, unemployment insurance.

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

Workplace Solutions

Thankfully, many of the most concerning bills introduced were unable to survive beyond the House of Origin deadline. Aside from the sudden retroactive passage of SPSL and immediately effective Right to Recall laws, the remaining bills are not yet set in stone. The legislative session is still in its infancy, and each measure—apart from, perhaps, SB 62—will almost certainly be amended. We’ll keep you updated here at Cal Peculiarities, and you can also check out our Policy Matters podcast and newsletter for regular check-ins on California (and national) policy and legislative updates as well.

Edited by Elizabeth Levy and Coby Turner

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

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

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

Top COVID-19-Related Bills

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

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

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

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

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

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

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

Discrimination and Retaliation Prevention

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

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

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

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

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

Leaves

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

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

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

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

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

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

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

Wage and Hour

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

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

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

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

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

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

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

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

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

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

Settlement Agreements

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

Cal/OSHA

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

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

Employee Benefits

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

Workers’ Compensation & Unemployment

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

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

Civil Litigation

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

Workplace Solutions

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

Edited by Coby Turner

 

 

 

Seyfarth Synopsis: Two new California laws are set to significantly affect the entertainment industry: one will deal a giant blow to productions and studios accustomed to hiring independent contractors; the other will give print shoot productions the opportunity to process payments with regular payroll and avoid liability for not issuing payments at wrap.

Some Not-So-Entertaining News

California’s landmark Assembly Bill 5, which requires gig economy workers to be reclassified as employees, will become effective January 1, 2020. Companies throughout California have been furiously exploring options for how their operations might need to be modified moving forward.

AB 5’s Effect on California’s Entertainment Industry

We previously addressed AB 5 as it applies generally, but here we focus on its broad and significant impact on individuals in the entertainment industry who, until now, would have been classified as independent contractors (e.g., those who are not employed full time by studios or production houses).

AB 5 is the legislative response to the California Supreme Court’s April 2018 decision in Dynamex v. Superior Court. AB 5 codifies Dynamex’s “ABC test” to determine whether a worker is an employee or an independent contractor, and in doing so AB 5 extends the ABC test to all Labor Code, Unemployment Insurance Code, and Wage Order claims.

Applying the same language as Dynamex, AB 5, slated to appear in Labor Code section 2750.3, provides that a person receiving payment for labor or services is an employee rather than an independent contractor unless the hiring entity demonstrates all of the following conditions:

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

While AB 5 provides exceptions for various occupations and relationships (these are evaluated under the test laid out in S.G. Borello & Sons, Inc. v. Department of Industrial Relations—as discussed in our previous post), it will be difficult for entertainment entities to fit many of their production crew members into these exceptions.

AB 5 likely sounds the death knell for the ubiquitous loan-out arrangement, as it will be nearly impossible to satisfy the business-to-business exemption or the professional services exemption. As one can imagine, the nature of the entertainment industry makes it difficult to identify key positions that perform work outside a hiring entity’s usual business. Moreover, most workers are not “free from the control and direction” of these entities. Nonetheless, a handful of limited exceptions may apply to at least some in the industry:

  • Photographers/photojournalists—Services provided by still photographers are exempt so long as they do not license content to a single hiring entity more than thirty-five times per year. [Note: this does not apply to work on “motion pictures,” including, but not limited to, projects produced for theatrical, television, internet streaming services, commercials, broadcast news, music videos, and live shows.]
  • Freelance writers/editors—Services of individuals who do not provide content submissions to a single hiring entity more than thirty-five times per year are exempt.
  • Graphic designers

Meanwhile, though, the freedoms associated with being independent contractors will now no longer be available to individuals working as background actors, grip and lighting crews, camera crews, assistant directors, and production assistants.

AB 5 raises several unanswered questions. Does the graphic designer exemption apply to animators or prop houses? Can screenwriters fall under the freelance writers exception? How will AB 5 apply to gig workers such as session musicians, who do not appear to have been contemplated in the same way that film and photo crews were?

But Wait, It’s Not All Rainclouds!

Although many gloomy impacts of Dynamex and AB 5 appear inescapable, the California Senate was also busy this term. A new law, Senate Bill 671, will add a thin silver lining to the cloud soon to hang over other aspects of the entertainment industry. Thanks to SB 671’s urgency clause, the bill became effective immediately upon its September 5, 2019, signing—a respite to entities that use short-term talent and crew, especially those that have faced lawsuits threatening potentially enormous liability.

How SB 671 Is Changing Print Shoot Rules

Under Labor Code section 201, employers generally must pay a discharged employee all earned wages immediately upon termination of employment, which includes the completion of a project (such as wrapping a print shoot). Employers who fail to timely pay termination wages face “waiting time” penalties in the amount of one day’s pay for each day of delay (including weekends) until final wages are paid, up to a maximum of thirty working days’ worth of pay. In recent years, advertising agencies and production companies have been hit by waiting time penalties for delays in paying terminated print models, even where the model was provided to producers, photographers, and casting directors through talent agencies or loan-out agreements.

SB 671, aka the “Photoshoot Pay Easement Act,” will create or amend Labor Code sections 201.6, 203, 203.1, and 220 and thereby create an exception to Section 201. This exception mirrors the existing Wage Order exception for motion picture employees. Now, payment of wages to “print shoot employees”—defined as individuals hired for a limited duration to render services relating to or supporting a still-image shoot for use in print, digital, or internet media—may be lawfully made on the next regular payday after the employment ends. This legislative improvement enables print shoot productions to pay talent, stylists, photo assistants, and other crew through their regular payroll processes while avoiding waiting-time penalties.

SB 671 adds another reprieve for employers, allowing them to either (1) mail final wages to employees or (2) make them available to at a location specified by the employer in the county where the employee was hired or performed labor. Such payments are deemed to have been made on the date of mailing or being made available at the specified location.

Amid California’s inevitable AB 5 adjustment period, SB 671 thus provides a reason for the entertainment industry to continue doing business in the State. Both bills will affect industry hiring, and we are closely monitoring their progress through implementation. As new developments arise, we will keep you apprised. In the meantime, please do not hesitate to reach out to your favorite Seyfarth attorneys to discuss how to approach these changes as they relate to your business.

Seyfarth Synopsis: Governor Newsom has approved some of the bills most feared by employers, including bills to ban employment arbitration, extend FEHA administrative deadlines, codify the Dynamex ABC test, and create San Francisco-style lactation-accommodation requirements. Governor Newsom also vetoed a few bills that we might expect to be re-introduced in the same or similar form during 2020.

Governor Newsom acted before the stroke of midnight and under a full moon on his October 13 deadline to veto or approve bills passed during the first year of the 2019-2020 Legislative Session. Unfortunately for employers, he did not yield his veto pen as effectively as Governor Brown once did. Instead, Governor Newsom approved most of the bills feared by employers.

The parade of horribles for California employers is set to begin on January 1, 2020. Will a new moon bring constitutional challenges to the notorious AB 51? Will amendments during 2020 somehow make the new laws more palatable? Meanwhile, we summarize the new laws below—from the truly frightening to the merely annoying, with one or two examples of laws that arguably are welcome. Thereafter, we summarize bills that, while not making the cut this year, may come back to life next year. All new laws are effective January 1, 2020, unless otherwise noted.

APPROVED

Arbitration Prohibition. For agreements entered into, modified, or extended on or after January 1, 2020, AB 51 will prohibit any business from requiring that a job applicant or employee waive any right, forum, or procedure for a violation of the FEHA or Labor Code, including any requirement that an individual “opt out” or take affirmative action to preserve such rights. AB 51 will make actionable any threatened or actual retaliation against an individual who refuses to consent to the forbidden requirements. AB 51 will authorize injunctive relief and attorney’s fees to any plaintiff who proves a violation. These provisions of AB 51 are very similar to part of last year’s AB 3080, which was vetoed due to its likely preemption by the Federal Arbitration Act, and this bill includes a severability clause in an attempt to avoid preemption. This attempt is arguably illusory, and will likely find itself challenged as another unconstitutional attempt by the California Legislature to forbid arbitration agreements. As the result of some unclear drafting, and although the author of the bill has claimed to the contrary, AB 51 may call into question the use of traditional settlement and severance agreements.  Read our discussion of AB 51’s scary implications here.

Settlement Agreements Future Employment Restraints. AB 749 will prohibit settlement agreements that restrict an employee right to seek employment with the employer with whom the employee is settling a claim.

Independent Contractors Worker Status. AB 5 codifies the California Supreme Court’s 2018 decision in Dynamex Operations West, Inc. v. Superior Court, while also specifying some heavily-lobbied-for exemptions. See our in-depth analysis of it here and here. Governor Newsom signed the bill into law on Wednesday, September 18, 2019.

Independent Contractors Worker Status. AB 170 slides another exemption into AB 5, via a separate bill, for a newspaper distributor working under contract with a newspaper publisher and a newspaper carrier working under contract with either a newspaper publisher or distributor, until January 1, 2021.

Arbitration Agreement Fees/Costs. SB 707 will require an employer or drafter of an arbitration agreement to pay the costs and fees associated with the arbitration. Failure to pay the fees could constitute material breach of the arbitration agreement, or the employee could withdraw the claim from arbitration, or be entitled to attorney’s fees and costs. The bill will also require a private arbitration company to collect and report aggregate demographic data regarding the ethnicity, race, disability, veteran status, gender, gender identity, and sexual orientation of all arbitrators.

Lactation Accommodation. Borrowing from provisions of a San Francisco lactation ordinance, SB 142 will expand California lactation-accommodation law by requiring employers to provide a lactation room for employees that meets the following requirements: not a bathroom; in close proximity to the employee’s work area; shielded from view; free from intrusion while the employee is lactating; safe, clean, and free of hazardous materials; containing a surface to place a breast pump and personal items; containing a place to sit; with access to electricity or alternative devices (e.g., extension cords, charging stations) that may be needed to operate an electric or battery-powered breast pump; and with access to a sink with running water and a refrigerator suitable for storing milk. If a multipurpose room is used for lactation and other uses, lactation must take precedence over the other uses.

The bill will make a denial of lactation break time or space a violation under rest period laws, and subject the employer to a $100 penalty per violation. The bill contains an anti-retaliation provision and will also require an employer to develop and implement a policy regarding any lactation accommodations, and make it readily available to employees. This inordinately comprehensive bill is a repeat of SB 937 (2018), which Governor Brown vetoed given his approval of a less onerous lactation accommodation law, AB 1976. The new law has an undue hardship exemption for employers with fewer than 50 employees.

Penalties for Failure to Pay Wages. AB 673 will authorize an employee to pursue a private right of action to recover penalties for the late payment of wages through the Private Attorneys General Act, and will remove the authority for the Labor Commissioner to recover civil penalties in an independent civil action. The bill will prohibit the employee from also recovering statutory penalties for the same violation.

FEHA Administrative Exhaustion Extension. A repeat of 2018’s AB 1870, vetoed by Governor Brown, AB 9 will extend the period within which an aggrieved person may file a complaint with the DFEH from one year to three years.  (It does not revive lapsed claims.)

Labor Commissioner Citations. SB 229 will expand the appeal and enforcement mechanisms available when the Labor Commissioner cites an employer for violating the Labor Code’s anti-retaliation provisions. The bill will establish procedures and deadlines to follow when adjudicating or contesting a citation. SB 688 will expand the Labor Commissioner’s citation authority to include citations for failures to pay contract wages when the employer had paid an employee below minimum wage.

Organ Donation Leave of Absence. AB 1223 will require employers to grant an employee an unpaid leave of absence—in addition to the existing 30 days in a one-year period paid leave—for the purpose of organ donation. The bill will require a public (not private) employee to first exhaust all available sick leave before taking the unpaid leave.

Sexual Harassment Training. As we reported, SB 778 extends the deadline for non-supervisory employee training from January 1, 2020 until January 1, 2021 and confirms—in a much needed clarification—that those supervisors who received 2018 training need not be trained again until 2020.

Hairstyle Discrimination. SB 188, the Crown Act, expands the FEHA’s definition of race to include traits historically associated with race, such as hair texture and “protective hairstyle” (e.g., braids, locks, and twists). The bill aims to chip away at “Eurocentric” professional norms by addressing “workplace dress code and grooming policies that prohibit natural hair, including afros, braids, twists, and locks.” The Legislature has concluded that these policies “have a disparate impact on Black individuals as these policies are more likely to deter Black applicants and burden or punish Black employees than any other group.”

Reporting Occupational Injuries and Illnesses. AB 1804 will require employers to report serious workplace injuries, illnesses, or death immediately by telephone or through an online platform to be developed by the Division of Occupational Safety and Health. Until the online platform is available, employers are permitted to make these reports by telephone or email. Noncompliance carries a $5,000 civil penalty.

Civil Action Damages: Gender, Race Ethnicity. SB 41 aims to narrow the consequences of observed differences in the pay of groups defined by gender or ethnicity. This bill will apply to personal injury and wrongful death cases, and will forbid any reduction in damages resulting from an estimation, measure, or calculation or past, present, or future damages for lost or impaired earning capacity that is based on a person’s race, ethnicity, or gender.

Paid Family Leave Expansion & Task Force. Under SB 83, beginning July 1, 2020, the California Paid Family Leave benefit will be eight weeks instead of six weeks, paralleling an increase in San Francisco’s Paid Parental Leave benefit. The bill requires the Governor’s Office to convene a task force to develop a proposal by November 2019 to extend the duration of paid family leave benefits to six months by 2021-22 for parents to care for, and bond with, their newborn or newly adopted child. The November 2019 proposal will also address job protections for workers and the goal of providing a 90 percent wage replacement rate for low-wage workers utilizing the Paid Family Leave program to bond with a child. Approved by Governor Newsom on June 27, 2019, the bill became effective immediately.

Workplace and School Gun Violence Restraining Orders. Beginning September 1, 2020, AB 61 will authorize an employer, or a coworker who has had substantial and regular interactions and approval of their employer, to file a petition for an ex parte, one-year, or renewed gun violence restraining order.

Industry-Specific Laws

Collegiate Athlete Compensation. AB 1518 will allow student athletes to contract with agents without losing their student athlete status—provided the contract complies with the student’s educational institution’s requirements and the bylaws of the NCAA—and to receive compensation. The Fair Pay to Play Act, SB 206, will among other things, beginning January 1, 2023, allow student athletes to more easily earn compensation from endorsements. While LeBron James and Draymond Green have praised the bill, the NCAA has strongly opposed it, stating in a letter to the Governor that it has the potential to kill amateur athletics and “erase the critical distinction between college and professional athletics.”

Employment of Infants in the Entertainment Industry. AB 267 will expand the definition of “entertainment industry” beyond a movie set or location to include motion pictures, theater, television, photography, recording, modeling, rodeos, circuses, advertising, and any other performance to the public. The bill will require that all qualifying entities receive—as a prerequisite to employment of an infant under one month of age—a licensed, board-certified pediatrician’s certification that the infant is at least 15 days old, was carried to full term, was of normal birth weight, is physically capable of handling the stress of working in the entertainment industry, and has sufficiently developed lungs, eyes, heart, and immune system to withstand the potential risks.

Employment of Motion Picture Production Workers. SB 271 will allow temporary or transitory employment performed outside of California to count towards unemployment benefits as long as the individual is a California resident, is hired and dispatched from the state, and intends to return to the state to seek reemployment following the outside-California work.

Payment of Wages for Print Shoot Employees. SB 671, the “Photoshoot Pay Easement Act,” authorizes payment of wages to “print shoot employees”—defined as individuals hired for a limited duration to render services relating to or supporting a still-image shoot for use in print, digital, or internet media—on the next regular payday after the employment ends, rather than subjecting the employer to liability for failure to pay final wages on the last day of employment. In another break for employers, the final wages can be mailed to the employee or made available to the employee at a location specified by the employer in the county where the employee was hired or performed labor and the payment is deemed to have been made on the date of mailing or being made available to the employee at the specified location. The bill thus creates an exception mirroring the one existing for motion picture employees. The bill’s urgency clause—making it effective immediately upon its September 5, 2019 signing—highlights what a relief its passage will be to businesses that use short-term models and that have faced legal actions threatening sometimes huge potential liability under the prior law.

Sexual Violence and Harassment Prevention Training for Janitorial Workers. AB 547, the Janitor Survivor Empowerment Act, will require the Director of the Department of Industrial Relations to organize a training advisory committee that will generate a list of qualified organizations and trainers that janitorial employers would be required to use to provide biennial, in-person sexual violence and harassment prevention training for janitorial workers. This requirement is in addition to the Property Service Workers Protection Act that kicks in on January 1, 2020, which we previously covered here.

Occupational Safety and Health for Valley Fever. AB 203 will require construction employers operating in counties where Valley Fever—a microscopic fungus which lives in the top few inches of the soil in many parts of California—is “highly endemic,” to provide effective training on the disease to employees annually and before an employee is anticipated to cause substantial dust disturbance.

Continuing Education: Implicit Bias in the Medical Field. AB 241 will require, by January 1, 2022, that continued education for physicians, surgeons, nurses and physician assistants include courses on implicit bias. The bill will require the Board of Registered Nursing and the Physician Assistant Board to adopt regulations requiring implicit bias training by January 1, 2022.

California Family Rights Act: Flight Crews. AB 1748 amends the California Family Rights Act to conform flight deck and cabin crewmember eligibility requirements with the federal Family and Medical Leave Act, which has special hours of eligibility for airline flight attendants and other cabin crew. Flight attendants are eligible for FMLA if, during the previous 12 months, they have worked at least 504 hours and have been paid at least 60% of the monthly guarantee, which means that they worked 60% of the minimum number of hours which the employer scheduled the employee for any given month.

Sexual Harassment Training: Construction and Temporary Employees. SB 530 will extend the date by when seasonal, temporary, or other employees that are hired to work for less than six months must begin receiving mandatory sexual harassment training to January 1, 2021, and incorporate special training provisions for construction industry employers that employ workers pursuant to a multiemployer collective bargaining agreement.

VETOED

Sexual Harassment Retaliation Protection. Very similar to AB 3081 (2018), AB 171 would have amended the Labor Code to add sexual harassment to the prohibitions on an employer from discriminating or retaliating against an employee because of the employee’s status as a victim of domestic violence, sexual assault, or stalking. The bill would have also created a rebuttable presumption of retaliation if the employer takes an adverse action against the employee within 90 days of notice of the employee’s status as a victim. In vetoing the bill, Governor Newsom wrote that while he supports the “Legislature’s efforts to strengthen workplace protections for all survivors of harassment and abuse,” he thought this bill would create “a standard for a particular form of sex-based discrimination different from applicable standards for other forms of discrimination that could weaken, rather than strengthen, existing worker protections.” He correctly recognized that incorporating sexual harassment into the Labor Code “duplicates, and in some crucial respects, weakens existing law” under the FEHA, which already provides a protections and remedies sought through this bill, and this bill could create overlapping claims with the DFEH and the Labor Commission, which “could create confusion and potentially limit workers’ rights.”  He concluded by encouraging the Legislature and DFEH to work together to “evaluate if and how the FEHA can be enhanced to better protect survivors of sexual harassment against unlawful employment practices.”

Division of Labor Standards Enforcement for Complaints. AB 403 would have extended the statute of limitations for complaints alleging workplace retaliation from six months to two years, and would authorize attorney fees to any employee who successfully sues for retaliation based on whistleblowing. In vetoing the bill, the Governor acknowledged the Legislature’s other anti-retaliation measures, which provided greater authority to the Labor Commissioner, as recognition that action by the Labor Commissioner is likely more effective than extending a statute of limitations period past one year.

Unfair Immigration-Related Practices. AB 589 would have imposed penalties on an employer that withholds an employee’s immigration-related documents and would create a Worker’s Bill of Rights concerning the employee’s freedom of movement and the payment of wages. The Governor wrote that the bill’s “requirement that every employer in the state provide each employee with an enumerated list of rights” attracted his veto, as “overly burdensome for law-abiding employers” and because it “may not actually help workers who are the targets of trafficking.”  He did cite the bill’s provision that would levy a hefty fine on employers who engage in document abuse to commit trafficking as a “step in the right direction.”

Leave Rights: Private Cause of Action. AB 1478 would have amended Labor Code section 230 to authorize a private right of action (as an alternative to the existing remedy of filing a complaint with the Labor Commissioner) by an employee who takes time off for jury duty, for legal proceedings relating to being a victim of a crime, and for retaliation for being a victim of domestic violence, sexual assault, or stalking. The bill would also have made the same changes to Section 230 as AB 171 (discussed above) if AB 171 is approved and AB 1478 is approved after AB 171 (to ensure that AB 171’s provisions also become law).  The Governor vetoed AB 1478 as “unnecessary” because current law already authorizes “survivors of domestic violence, sexual assault or stalking” “to file a retaliation claim through the [Labor Commissioner’s] Office or through a PAGA action, and to see reinstatement and reimbursement for lost wages and benefits.”

Local Government Enforcement of FEHA. SB 218 would have amended the FEHA to allow local governments within the County of Los Angeles to enact and enforce their own antidiscrimination laws that are at least as protective as the FEHA, removing these claims from the sole jurisdiction of the DFEH. In vetoing the bill, the Governor cited other bills he approved as evidence of his commitment to eradicating discrimination, but noted he does not support this bill’s effort to lift a decades-long preemption which could create confusion, inconsistent enforcement of the law, and increased costs, without increased worker protections, and ambiguity regarding local governments’ ability to enforce both local ordinances and the FEHA.  He invited the Legislature to try again “with a measure that makes it clear that local enforcement measures are exclusively focused on local ordinances.”

Call Center Protections. AB 1677 would have required any employer with a call center currently in the state intending to relocate the call center to notify the Labor Commissioner at least 120 days before the relocation or face a civil penalty. In his veto message, the Governor noted that while he supports efforts to protect jobs in the state, but this bill might have the opposite effect – “dissuad[ing] businesses that have no intention of moving operations from making any further investments in California.”

Workplace Solutions

Please do not hesitate to reach out to your favorite Seyfarth counselors to discuss how to approach these new developments for your company.

Edited by Elizabeth Levy

Seyfarth Synopsis: The California Legislature has passed a series of bills for Governor Newsom to consider. He now has until October 13 to approve or veto bills such as a Dynamex codification bill and a San Francisco-inspired lactation accommodation bill.

Friday, September 13th marked the Legislature’s last day to pass bills to Governor Newsom’s desk for approval in the first year of the 2019-2020 Legislative Session. The most notorious employment bill has been AB 5, the Dynamex codification (and exceptions) bill. A more stringent lactation accommodation bill has also made its way to the Governor’s desk, as have leave of absence, anti-arbitration, and various industry-specific bills. Bills that did not make the cut may resurface in January in the second part of the two-year session. Below are the most significant employment-related bills of 2019 that the Governor has already approved or that await his action by the October 13th deadline. All approved bills will be effective January 1, 2020, unless otherwise noted.

APPROVED

Independent Contractors Worker Status. The bill creating the greatest buzz has been AB 5, which would codify the California Supreme Court’s 2018 decision in Dynamex Operations West, Inc. v. Superior Court, while also specifying some heavily-lobbied-for exemptions. See our in-depth analysis of it here and here. Governor Newsom signed the bill into law on Wednesday, September 18, 2019.

Sexual Harassment Training. As we reported, SB 778 will extend the deadline for non-supervisory employee training from January 1, 2020 until January 1, 2021 and confirms—in a much needed clarification—that those supervisors who received 2018 training need not be trained again until 2020.

Hairstyle Discrimination. SB 188, the Crown Act, will expand the FEHA’s definition of race to include traits historically associated with race, such as hair texture and “protective hairstyle” (e.g., braids, locks, and twists). The bill aims to chip away at “Eurocentric” professional norms by addressing “workplace dress code and grooming policies that prohibit natural hair, including afros, braids, twists, and locks.” The Legislature has concluded that these policies “have a disparate impact on Black individuals as these policies are more likely to deter Black applicants and burden or punish Black employees than any other group.”

Collegiate Athlete Compensation. AB 1518 will allow student athletes to contract with agents without losing their student athlete status—provided the contract complies with the student’s educational institution’s requirements and the bylaws of the NCAA—and to receive compensation. The Fair Pay to Play Act, SB 206, which passed both houses unanimously and next awaits the Governor’s approval or veto, would, among other things, beginning January 1, 2023, allow student athletes to more easily earn compensation from endorsements. While LeBron James and Draymond Green have praised the bill, the NCAA has strongly opposed it, stating in a letter to the Governor that it has the potential to kill amateur athletics and “erase the critical distinction between college and professional athletics.”

Reporting Occupational Injuries and Illnesses. AB 1804 will require employers to report serious workplace injuries, illnesses, or death immediately by telephone or through an online platform to be developed by the Division of Occupational Safety and Health. Until the online platform is available, employers are permitted to make these reports by telephone or email. Noncompliance carriers a $5,000 civil penalty.

Employment of Infants in the Entertainment Industry. AB 267 will expand the definition of “entertainment industry” beyond a movie set or location to include motion pictures, theater, television, photography, recording, modeling, rodeos, circuses, advertising, and any other performance to the public. The bill will require that all qualifying entities receive—as a prerequisite to employment of an infant under one month of age—a licensed, board-certified pediatrician’s certification that the infant is at least 15 days old, was carried to full term, was of normal birth weight, is physically capable of handling the stress of working in the entertainment industry, and has sufficiently developed lungs, eyes, heart, and immune system to withstand the potential risks.

Employment of Motion Picture Production Workers. SB 271 will allow temporary or transitory employment performed outside of California to count towards unemployment benefits as long as the individual is a California resident, is hired and dispatched from the state, and intends to return to the state to seek reemployment following the outside-California work.

Payment of Wages for Print Shoot Employees. SB 671, the “Photoshoot Pay Easement Act,” authorizes payment of wages to “print shoot employees”—defined as individuals hired for a limited duration to render services relating to or supporting a still-image shoot for use in print, digital, or internet media—on the next regular payday after the employment ends, rather than subjecting the employer to liability for failure to pay final wages on the last day of employment. In another break for employers, the final wages can be mailed to the employee or made available to the employee at a location specified by the employer in the county where the employee was hired or performed labor and the payment is deemed to have been made on the date of mailing or being made available to the employee at the specified location. The bill thus creates an exception mirroring the one existing for motion picture employees. The bill’s urgency clause—making it effective immediately upon its September 5, 2019 signing—highlights what a relief its passage will be to businesses that use short-term models and that have faced legal actions threatening sometimes huge potential liability under the prior law.

Civil Action Damages: Gender, Race Ethnicity. SB 41 aims to narrow the consequences of observed differences in the pay of groups defined by gender or ethnicity. This bill, applying in personal injury and wrongful death cases, will forbid any reduction in damages resulting from an estimation, measure, or calculation or past, present, or future damages for lost or impaired earning capacity that is based on a person’s race, ethnicity, or gender.

Paid Family Leave Expansion & Task Force. Under SB 83, beginning July 1, 2020, the California Paid Family Leave benefit will be eight weeks instead of six weeks, paralleling an increase in San Francisco’s Paid Parental Leave benefit. The bill requires the Governor’s Office to convene a task force to develop a proposal by November 2019 to extend the duration of paid family leave benefits to six months by 2021-22 for parents to care for, and bond with, their newborn or newly adopted child. The November 2019 proposal will also address job protections for workers and the goal of providing a 90 percent wage replacement rate for low-wage workers utilizing the Paid Family Leave program to bond with a child. Approved by Governor Newsom on June 27, 2019, the bill became effective immediately.

AWAITING THE GOVERNOR’S APPROVAL

Independent Contractors Worker Status. AB 170 attempts to slide another exemption into AB 5, via a separate bill, for a newspaper distributor working under contract with a newspaper publisher and a newspaper carrier working under contract with either a newspaper publisher or distributor, until January 1, 2021.

Lactation Accommodation. Based upon the very similar San Francisco lactation ordinance, SB 142 would require employers to provide a lactation room for employees that meets the following requirements: not a bathroom; in close proximity to the employee’s work area; shielded from view; free from intrusion while the employee is lactating; safe, clean, and free of hazardous materials; containing a surface to place a breast pump and personal items; containing a place to sit; with access to electricity or alternative devices (e.g., extension cords, charging stations) that may be needed to operate an electric or battery-powered breast pump; and with access to a sink with running water and a refrigerator suitable for storing milk. If a multipurpose room is used for lactation and other uses, lactation must take precedence over the other uses.

The bill would make a denial of lactation break time or space a violation under rest period laws, and subject the employer to a $100 penalty per violation. The bill contains an anti-retaliation provision and an undue hardship exemption for employers with fewer than 50 employees. The bill would also require an employer to develop and implement a policy regarding any lactation accommodations, and make it readily available to employees. This inordinately comprehensive bill is a repeat of SB 937 (2018), which Governor Brown vetoed given his approval of a less onerous lactation accommodation law, AB 1976.

Sexual Harassment Retaliation Protection. Very similar to AB 3081 (2018), AB 171 would amend the Labor Code to add sexual harassment to the prohibitions on an employer from discriminating or retaliating against an employee because of the employee’s status as a victim of domestic violence, sexual assault, or stalking. The bill would also create a rebuttable presumption of retaliation if the employer takes an adverse action against the employee within 90 days of notice of the employee’s status as a victim. If signed, the bill would become effective January 1, 2020, and these provisions would become operative July 1, 2020.

Sexual Harassment Training: Construction and Temporary Employees. SB 530 would extend the date by when seasonal, temporary, or other employees that are hired to work for less than six months must begin receiving mandatory sexual harassment training to January 1, 2021, and incorporate special training provisions for construction industry employers that employ workers pursuant to a multiemployer collective bargaining agreement.

Leave Rights: Private Cause of Action. AB 1478 would amend Labor Code section 230 to authorize a private right of action (as an alternative to the existing remedy of filing a complaint with the Labor Commissioner) by an employee who takes time off for jury duty, for legal proceedings relating to being a victim of a crime, and for retaliation for being a victim of domestic violence, sexual assault, or stalking. The bill would also make the same changes to Section 230 as AB 171 (discussed above) if AB 171 is approved and AB 1478 is approved after AB 171 (to ensure that AB 171’s provisions also become law).

Organ Donation Leave of Absence. AB 1223 would require employers to grant an employee an unpaid leave of absence—in addition to the existing 30 days in a one-year period paid leave—for the purpose of organ donation. The bill would require a public (not private) employee to first exhaust all available sick leave before taking the unpaid leave.

Local Government Enforcement of FEHA. SB 218 would allow local governments within the County of Los Angeles to enforce, administer, and establish penalties for claims arising under local antidiscrimination laws that also fall under the FEHA, removing these claims from the sole jurisdiction of the DFEH. As if dealing with the downtown L.A. traffic maze weren’t enough, this bill would force employers who do business within Los Angeles to navigate a new network of municipal laws.

FEHA Administrative Exhaustion Extension. A repeat of 2018’s AB 1870, vetoed by Governor Brown, AB 9 seeks to extend the period within which an aggrieved person may file a complaint with the DFEH from one year to three years.

Division of Labor Standards Enforcement for Complaints. AB 403 would extend the statute of limitations for complaints alleging workplace retaliation from six months to two years, and would authorize attorney fees to any employee who successfully sues for retaliation based on whistleblowing.

Labor Commissioner Citations. SB 229 would expand the appeal and enforcement mechanisms available when the Labor Commissioner (“LC”) cites an employer for violating the Labor Code’s anti-retaliation provisions. The bill would establish procedures and deadlines the LC, court, and employers must follow when adjudicating or contesting a citation. SB 688 would expand the LC’s citation authority to include citations for failures to pay contract wages when the LC determines an employer had paid an employee below minimum wage.

Penalties for Failure to Pay Wages. AB 673 would authorize an employee to pursue a private right of action to recover penalties for the late payment of wages through the Private Attorneys General Act, and would remove the authority for the Labor Commissioner to recover civil penalties in an independent civil action. The bill would prohibit the employee from also recovering statutory penalties for the same violation.

Arbitration Prohibition. For agreements entered into, modified, or extended on or after January 1, 2020, AB 51 would prohibit any business from requiring that a job applicant or employee waive any right, forum, or procedure for a violation of the FEHA or Labor Code, including any requirement that an individual “opt out” or take affirmative action to preserve such rights. This bill seems to be another unconstitutional attempt by the California Legislature to forbid arbitration agreements.

AB 51 would make actionable any threatened or actual retaliation against an individual who refuses to consent to the forbidden requirements. AB 51 would authorize injunctive relief and attorney’s fees to any plaintiff who proves a violation. Possibly because much of AB 51 could be held preempted by the Federal Arbitration Act, AB 51 contains a severability clause by which the rest of the law will remain in effect if a court finds certain sections invalid. These provisions of AB 51 are very similar to part of last year’s vetoed AB 3080.

Arbitration Agreement Fees/Costs. SB 707 would require an employer or drafter of an arbitration agreement to pay costs and fees associated with the arbitration. Failure to pay the fees could constitute material breach of the arbitration agreement, or the employee could withdraw the claim from arbitration, or be entitled to attorney’s fees and costs. The bill would also require a private arbitration company to collect and report aggregate demographic data regarding the ethnicity, race, disability, veteran status, gender, gender identity, and sexual orientation of all arbitrators.

Settlement Agreements Future Employment Restraints. AB 749 would prohibit settlement agreements that contain a provision restricting an employee from working for the employer against which the employee filed the claim.

Unfair Immigration-Related Practices. AB 589 would impose penalties on an employer that withholds an employee’s immigration-related documents and would create a Worker’s Bill of Rights concerning the employee’s freedom of movement and the payment of wages.

Workplace and School Gun Violence Restraining Orders. Beginning September 1, 2020, AB 61 would authorize an employer, or a coworker who has had substantial and regular interactions and approval of their employer, to file a petition for an ex parte, one-year, or renewed gun violence restraining order.

Call Center Protections. AB 1677 would require any employer with a call center currently in the state intending to relocate the call center to notify the LC at least 120 days before the relocation or face a civil penalty.

Industry-Specific Bills Awaiting Approval

Continuing Education: Implicit Bias in the Medical Field. AB 241 would require, by January 1, 2022, that continued education for physicians, surgeons, nurses and physician assistants include courses on implicit bias. The bill would require the Board of Registered Nursing and the Physician Assistant Board to adopt regulations requiring implicit bias training by January 1, 2022.

California Family Rights Act: Flight Crews. AB 1748 would amend the California Family Rights Act to conform flight deck and cabin crewmember eligibility requirements with the federal Family and Medical Leave Act, which has special hours of eligibility for airline flight attendants and other cabin crew. Flight attendants are eligible for FMLA if, during the previous 12 months, they have worked at least 504 hours and have been paid at least 60% of the monthly guarantee, which means that they worked 60% of the minimum number of hours which the employer scheduled the employee for any given month.

Sexual Violence and Harassment Prevention Training for Janitorial Workers. AB 547, the Janitor Survivor Empowerment Act, would require the Director of the Department of Industrial Relations to organize a training advisory committee that will generate a list of qualified organizations and trainers that janitorial employers would be required to use to provide biennial, in-person sexual violence and harassment prevention training for janitorial workers. This is in addition to the Property Service Workers Protection Act that kicks in on January 1, 2020, which we previously covered here.

Occupational Safety and Health for Valley Fever. AB 203 would require construction employers operating in counties where Valley Fever—a microscopic fungus which lives in the top few inches of the soil in many parts of California—is “highly endemic,” to provide effective training on the disease to employees annually and before an employee is anticipated to cause substantial dust disturbance.

Workplace Solutions

These bills are affecting businesses across the spectrum, and Seyfarth is following their passage (and potential passage) closely. We will continue to keep you informed of new developments as they arise, and please do not hesitate to reach out to your favorite Seyfarth counselors to discuss how to approach these new developments for your company.

Edited by Coby Turner

Seyfarth Synopsis: Employers are starting to consider “on demand” pay for employees. Before considering whether to implement an “on demand” pay program, employers should consider laws on wage deduction and wage assignment as well as the administrative support needed for such a program.

Instant gratification is a fact of daily life, and there is no denying we have come to expect it. When we pay bills, we go online instead of to the post office. When we need a ride, we tap a button on our phones. When we watch movies, we go online instead of to a video store. This expectation has infiltrated our daily lives and, now, it has shown itself in the workplace.

Some gig economy companies offer “on demand” pay through a variety of technology solutions. To stay competitive, other employers are considering flexible pay structures for their own employees. But because the law treats contractors differently than employees, it is important to think through the various laws that may come into play, and to consider the administrative burdens these programs create. Below we describe some common on-demand pay programs and some key issues to consider when analyzing whether to implement on-demand pay for employees.

What is On-Demand Pay?

“On demand” pay refers to programs or “technology solutions” that allow employees to “withdraw” wages that they have already earned for work performed in a pay period before their regular pay date.

How Does On-Demand Pay Work?

On-demand pay programs come in various forms. Two main variations are (1) internal advancements directly from the employer to an employee and (2) advancements from a third party to an employee.

Under the first variation, an employer advances an employee’s wages upon request by the employee. At the end of the pay period, the amount advanced during the pay period is reconciled against the employee’s pay and the employee receives the balance of the net wages.

Under the second variation, a third party advances an employee’s wages upon request by the employee (after receiving a report from the employer). At the end of the pay period, the employer pays the employee the balance of net wages owed and pays the third party the amount previously advanced to the employee.

In addition to the above variations, some third parties have come up with creative accounting arrangements to avoid direct repayment from the employer to the third party.

Considerations?

In analyzing on-demand pay programs, employers should consider not only the administrative costs but the laws governing wage deductions and wage assignments. Legal caution is especially appropriate in California.

Wage Deduction and Wage Assignment Laws

Many states require employee authorization for deductions from pay in connection with advances or overpayments. Because of these requirements, employers should consider whether and when internal advances amount to “deductions” from wages that are subject to state law restrictions. This is an important consideration for employers with employees in many states, as wage deduction laws vary from state to state, and employers need to understand the wage deduction authorization requirements for each state (for example, in some states, a blanket authorization at the time of hire is permissible, while in other states it is not).

In California, deductions from final wages are not permissible. And that is so even if the deductions are authorized in advance by the employee! Employers considering on-demand pay must therefore closely analyze the reconciliation process (and whether the reconciliation of wages occurs at the end of a pay period or a later pay period) and build in safeguards as needed.

When advances are provided by a third party, other issues arise. Employers need to think about whether re-payment to a third party is an “assignment” of wages. California’s assignment law (Labor Code § 300(a)) prohibits employers from paying an employee’s wages to a third party, unless permitted by law.

Similar to wage deduction laws, wage assignment laws are complex and state-specific. Some states significantly limit how much money an employee can assign to a third party, or require specific authorizations. In California, an employee cannot assign more than 50 percent of wages at the time of each payment, and an assignment must be memorialized in a duly notarized writing signed by the employee and the employee’s spouse (if applicable). Such detailed regulations make wage assignment laws another important consideration to keep in mind when evaluating on-demand pay programs.

Administrative Burdens

Employers should also consider the administrative burdens that on-demand pay programs entail. These burdens can include such annoyances as obtaining required authorizations from employees, ensuring compliance with various state laws regarding deductions and advancements, and transmitting employee data to a third party.

Workplace Solutions

On-demand pay requires an analysis of many state specific laws, some of which are onerous (especially in California). Employers should also consider the administrative support needed to employ such a program safely and should weigh the benefits of such a program against the burdens imposed. We are here to help you if you have any questions or need assistance analyzing a specific program.

Seyfarth Synopsis: With the recent partial shutdown of the federal government, many federal contractors have faced tough decisions balancing their reduced revenue with their desire to keep their workforce intact. One potential solution is to impose mandatory employee furloughs to reduce costs. This cost-saving measure has some risks peculiar to California that are worth a look.

The Partial Federal Government Shutdown

On December 22, 2018, key parts of the federal government shut down after politicians reached an impasse over budget spending. By some estimates, the shutdown, lasting until January 25, 2019, cost the economy over $10 billion. The shutdown affected not only 800,000 federal employees but several million government contractors. Shutdowns of this type—the third since January 2017—look to become a regular feature of American politics.

One obvious shutdown impact is reduced revenue for federal contractors. Companies that perform everything from janitorial services to complex Defense Department analysis are suddenly left with revenue that could be significantly lower than previous projections.

Employee Furloughs

So what do companies do when their biggest client shuts down for days, weeks, or even months? Some companies have turned to employee furloughs in an attempt to solve their revenue gap problem. Furloughs are mandatory time off work without pay. Furloughs can be seen as a good solution because the company reduces its payroll expenses while keeping its workforce in place.

Generally, furloughs fall into two categories, partial-week and full-week. We examine both types of furloughs below, as each raises peculiar issues under California law. Note that this discussion is limited to issues raised by furloughs of exempt employees. Because non-exempt employees are paid on a time-worked basis, furloughs of non-exempt employees do not raise the same legal issues as furloughs of salaried exempt employees.

Partial-Week Furloughs

Partial-week furloughs occur when the employer reduces an employee’s workweek. For example, some employers move employees to a four- or even three-day workweek. Under California law, partial-week furloughs are permissible, but care must be given to the arrangement. First, the salary reductions should be done in advance of the furlough to avoid being seen as a “deduction” from an exempt employee’s salary for missed work days. Advance reductions in salaried employee pay to reflect long-term business needs does not destroy the salary basis for an employee’s exemption. But day-to-day or short-term deductions from an employee’s salary would. Along those lines, employers should consider implementing the changes for a substantial period of time, making it look like more of an adjustment to medium or long-term economic forecasts than a short-term reaction to transitory business conditions. Second, companies must ensure that the reduced salary does not fall below the minimum monthly salary rate for exempt employees, which California currently sets at $4,160 for large employers.

Full-Week Furloughs

The California DLSE has determined that a properly executed week-long furlough of exempt employees will not result in those employee losing an exemption. To be done properly, the furlough must have the employee not performing any work during the defined workweek during the furlough. An employee who performs any work at all must be paid for the full week. Further, reasonable advance notice must be given to employees before the furlough begins. As with the partial-week furlough, the employee’s salary cannot dip below the minimum salary threshold for exempt employees.

Finally, employers should ensure that the furlough is not too long and has a clearly defined return-to-work date. If the furlough is too long or if no return date is designated, it may be deemed a termination, entitling the employee to all final wages, including vacation.

Other Issues Implicated By Furloughs

As if the wage and hour issues raised above were not enough, employee furloughs raise many other legal challenges as well. For example, do your executive contracts have severance provisions that may be triggered with salary reductions over a certain threshold? Does the company’s benefits plan include a definition of eligible employees that may be implicated by furloughs? Indeed, as we have previously discussed in this blog, employee furloughs might even inadvertently trigger California’s WARN notice requirements. All of this is to say employers are well-served by being careful and seeking experienced counsel in this area.

By Laura J. Maechtlen and Chantelle C. Egan

It’s payday!  If the employer uses direct deposit, an employee can conveniently and immediately access wages without going to the bank (or waiting for the check to clear).  For that reason, it might seem that every new employee would want direct deposit.  But, employers must be careful.

California requires that employers obtain written authorization from the employee first.  Indeed, while California often bucks the trends of its sister states, when it comes to direct deposit authorization, California is just one of the crowd.  Alaska, Connecticut, Colorado, Delaware, Florida, Idaho, Illinois, Iowa, Maryland, Montana, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oklahoma, Pennsylvania, Rhode Island, Vermont and Wyoming all require written permission authorizing direct deposit.

Employer Tips: 

  • Obtain Written Authorization:  If your company wants to encourage direct deposit, make sure to include a written authorization in a new employee’s welcome packet.  But, keep in mind that an employee’s decision to agree to direct deposit is a voluntary one.
  • Ensure Timely Wage Payment Pending Direct Deposit Set-Up:  Once you have received a new employee’s written authorization, you are free to set up direct deposit.  As a word of caution, direct deposit may take a few pay periods to be up and running.  In the interim, be prepared to timely distribute a check for the new employee’s wages.  Just because the authorized direct deposit is not set up, the employer is not relieved of timely distributing wages.
  • Wage Statements Must Still Be Provided:  Paying by direct deposit does not remove the obligation to provide the employees’ itemized wage statements (aka “pay stubs”) under Labor Code § 226, along with the advice of deposit.

What about final wage payments? 

Inevitably, every on-boarded new employee eventually must be off-boarded.  California’s Labor Code § 213 permits employers to pay final wages via direct deposit if an employee quits or is terminated.  While this may seem like a convenient solution for paying final wages, logistically it may prove difficult, especially if an employee’s last day does not fall on a scheduled payday.  Since there are strict time requirements associated with providing a departing employee his or her final wages, the safest bet is usually to issue a timely paper check for all earned wages, to avoid any penalties.

Workplace Solutions:  Direct deposit arrangements are often the most desirable and convenient way for both employer and employee to conduct the wage payment transaction.  Just remember you can’t do it without the employee’s written consent, and other obligations, such as to paying accurately and on time remain the same.

Up next week:  Our final post in the On-Boarding Series—Uniforms and Tools.

Edited by Julie Yap

By: Kristina M. Launey and Catherine Feldman

Seyfarth Synopsis:  With Governor Newsom’s October 13 deadline to sign bills behind us, we review California’s new employment laws. The most notable among them are new pay equity requirements, amendments to Cal-WARN and leave laws, and extensions of meal and rest period exemptions for certain industries.

According to Chris Micheli, Governor Newsom approved 794 and vetoed 123 of the 917 bills presented to him at the conclusion of this first year of the 2025-26 Legislative Session. Below is our summary of the key labor and employment laws that will soon impact California employers. All new laws are effective January 1, 2026, unless otherwise stated.

Soon-to-be-New Laws

Anti-Discrimination and Harassment Laws

SB 642 – Definition of Pay Scale  

Current law requires that employers with 15 or more employees make available the “pay scale” of a position to a candidate applying for that position. As we explained in detail here, SB 642 revises the definition of “pay scale” to mean a “good faith” estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire. The bill also expands the statute of limitations to assert pay equity claims from two years to up to three years after the cause of action occurs, and allow recovery of lost wages for the entire time during which the violation occurred, up to six years. “Wages” and “wage rates” are defined in the bill as including, for purposes of Labor Code Section 1197.5 only, “all forms of pay, including, but not limited to, salary, overtime pay, bonuses, stock, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits.”

This bill amends Sections 432.3 and 1197.5 of the Labor Code.

SB 464 – Employer Pay Data

SB 464 requires an employer with 100 or more employees to collect and store any demographic information gathered by an employer or labor contractor for the purpose of submitting the required pay data report to the Civil Rights Department (“CRD”) separately from employees’ personnel records, and requires a court to impose a civil penalty against an employer that fails to file the pay data report if requested to do so by the CRD. The bill also, beginning January 1, 2027, increases the number of job categories on which the employer must report from 10 to 23.

This bill amends, repeals, and adds Section 12999 of the Government Code.

AB 250 – Extended SOL for Sexual Assault Claims

AB 250 extends the eligibility period for revival of claims seeking to recover damages suffered as a result of an alleged sexual assault that would otherwise be barred prior to January 1, 2026 because the applicable statute of limitations has or had expired. To revive sexual assault claims, including derivative claims for wrongful termination and sexual harassment, among others, the plaintiff must demonstrate that one or more entities legally responsible for damages engaged in a cover up.

The bill defines a “cover up” as a “concerted effort to hide evidence relating to a sexual assault that incentivizes individuals to remain silent.” The bill permits a cause of action for any such claim to proceed if already pending in court on the effective date of the bill or, if not filed by that date, to be commenced between January 1, 2026, and December 31, 2027.

This bill amends Section 340.16 of the Code of Civil Procedure.

SB 303 – Bias Mitigation Training

SB 303 provides that an employee’s assessment, testing, admission, or acknowledgment of their own personal bias that was made in good faith and solicited or required as part of a bias mitigation training does not constitute unlawful discrimination under FEHA.

This bill adds Section 12940.2 to the Government Code.

SB 617 – WARN

SB 617 amends the California Worker Adjustment and Retraining Act (Cal-WARN) to require employers to include in the WARN notice whether the employer plans to coordinate services through the local workforce development board or another entity, and information regarding the statewide food assistance program known as CalFresh.

This bill amends Labor Code sections 1401 and 2810.8.

Leave Laws

SB 590 – Paid Family Leave – Designated Person

Continuing the “designated person” trend from prior years’ leave legislation, beginning July 1, 2028, SB 590 expands eligibility for benefits under the paid family leave program to include individuals who take time off work to care for a seriously ill “designated person.” The “designated person” definition aligns with the California Family Rights Act “designated person” definition, which includes any individual related by blood or whose association with the employee is the equivalent of a family relationship.

An employee identifies the designated person the first time they file a claim for family temporary disability insurance benefits to care for a designated person, and is required to state under penalty of perjury, how they are associated with that person by blood or the equivalent of a family relationship.

This bill amends, repeals, and adds Sections 3301, 3302, and 3303 of the Unemployment Insurance Code.

AB 406 – Judicial Proceeding and Jury Duty Leaves
** Effective in part October 1, 2025**

AB 406 expands the reasons for use of California Paid Sick Leave under the Healthy Workplaces Healthy Families Act of 2014 (“HWHFA”) and amends the state’s unpaid job-protected leave to include these additional reasons effective January 1, 2026. These amendments continue the state’s recent trend of annual updates to paid sick leave, which was significantly revised in 2024 and 2025.

The most recent changes add in an employee’s right to use paid sick leave and take protected unpaid leave if they or a family member are a victim of certain crimes and are attending judicial proceedings related to that crime. Such judicial proceedings include, but are not limited to, any delinquency proceeding, a post-arrest release decision, plea, sentencing, postconviction release decision, or any proceeding where a right of that person is an issue. The term victim in this specific covered reason is defined as a person against whom a violent felony, serious felony, and/or felony theft or embezzlement is committed, as well as a person who suffers direct or threatened physical, psychological, or financial harm due to the commission or attempted commission or specific crimes or delinquent acts.

The bill also amends the existing jury duty leave law, to remove the requirement that employees must provide reasonable notice prior to taking time off to serve on a jury. However, if an employee uses paid sick leave or unpaid job-protected leave for jury duty, the same notice standard applies for this covered reason as for other covered reasons of use under these provisions, i.e. reasonable advance notice unless advance notice is not feasible.

Additionally, AB 406 reinstates and amends repealed Labor Code sections 230 and 230.1, both of which only apply to alleged conduct occurring on or before December 31, 2024, and amends Labor Code sections 230.2 and 230.5 to apply only to alleged conduct occurring on or before December 31, 2025. These substance of these sections was included under 2024’s amended Government Code section 12945.8, which gave the Civil Rights Department enforcement authority over potential violations. AB 406 reinstates the Division of Labor Standards Enforcement’s authority to enforce potential violations effective October 1, 2025, but only until the respective sunset dates identified below.  

This bill amends Section 12945.8 of the Government Code, and amends Section 246.5 of, amends and repeals Sections 230.2 and 230.5 of, and adds and repeals Sections 230 and 230.1 of, the Labor Code.

Records Requirement Law

SB 513 – Personnel Records

SB 513 requires that personnel records relating to the employee’s performance include education and training records and require the employer ensure those records contain the following information: employee name, training provider name, the duration and date of the training, core competencies of a training – including skills in equipment or software – and the resulting certification or qualification.

This bill amends Section 1198.5 of the Labor Code.

Wage and Hour Laws

AB 692 – “Stay or Pay” Employment Contract Repayment Prohibition

AB 692 seeks to protect employee mobility by making unlawful contracts entered into on or after January 1, 2026, require the worker repay an employer a debt if the worker’s employment or work relationship terminates. The bill authorizes a private right of action and specifies civil penalties. This law exempts certain types of repayment agreements, including those involving tuition payments for transferable credits, discretionary bonuses or relocation payments, provided they meet set criteria. Depending on the subject matter of the repayment, required terms can include: (1) repayment terms must be in a separate agreement from the primary employment contract; (2) the worker must be advised of the right to consult an attorney and given at least 5 business days to do so before signing; (3) any repayment obligation for early separation must be prorated based on the remaining retention period (up to 2 years) and cannot accrue interest; (4) the worker must have the option to defer receipt of the payment until the end of the retention period without repayment obligation; and (5) repayment may only apply if the employee leaves voluntarily or is terminated for misconduct. Any person in violation of the prohibitions set forth in this bill shall be liable for the greater of a worker’s actual damages or up to $5,000 in penalties per worker, injunctive relief, and attorneys’ fees and costs.

This bill adds Section 16608 to the Business and Professions Code, and Section 926 to the Labor Code.

AB 751 – Rest Periods – Petroleum Facility Safety Sensitive Positions

AB 751, signed into law on July 14, 2025, indefinitely extends the exemption from rest period requirements for safety-sensitive positions at a petroleum facility and specifies that the exemption also applies to employees who hold a safety-sensitive position at a refinery that produces fuel through the processing of alternative feedstock. The exemption was previously slated to sunset on January 1, 2026.

This bill amends Section 226.75 of the Labor Code.

SB 648 – Enforcing Tip Theft

SB 648, signed into law on July 30, 2025, authorizes the Labor Commissioner to investigate and issue a citation or file a civil action for any gratuities taken or withheld by an employer.

This bill amends Section 351 of the Labor Code.

SB 693 – Exemption from Meal Period Requirements

SB 693, signed into law on July 30, 2025, expands the categories of employees exempt from the state’s meal period requirements to include employees of a “water corporation.” “Water corporation” is defined as “every corporation or person owning, controlling, operating, or managing any water system for compensation within this State.”

This bill amends Section 512 of the Labor Code.

SB 261 – DLSE Enforcement of Wage Judgments

SB 261 will subject an employer to a civil penalty of not more than three times the amount of an outstanding judgment if a final judgment arising from the employer’s nonpayment of work performed in this state remains unsatisfied after 180 days. The bill permits the employer to demonstrate by clear and convincing evidence that good cause exists to reduce the amount of the penalty. Any Court-assessed civil penalty would be distributed 50% to the employee and 50% to the Division of Labor Standards Enforcement (“DLSE”) for enforcement of labor laws. A prevailing employee will also recoup all reasonable attorney’s fees and costs incurred in enforcing the judgment.

This bill amends Section 98.2 of, and adds Sections 238.05 and 238.10 to, the Labor Code. 

SB 809 – Independent Contractors and Employee Vehicle Business Expenses

SB 809 provides, and states as declarative of existing law, that mere ownership of a vehicle, including a personal vehicle or a commercial vehicle used by a person in providing labor or services for remuneration does not make that person an independent contractor. The bill also provides, and states as declaratory of existing law, that the duty of an employer to indemnify its employees for reasonable business expenses, applies to the use of a vehicle owned by an employee and used by that employee in the discharge of their duties. The bill also establishes the “Construction Trucking Employer Amnesty Program” which relieves eligible construction contractors from liability for statutory or civil penalties from misclassification of drivers as independent contractors if the contractor executes a settlement agreement with the Labor Commissioner by January 1, 2029 that contains certain driver classification provisions.

This bill adds Sections 2750.9, 2775.5, and 2802.2 to the Labor Code.

AB 858 – Rehiring and Retention of Displaced Workers

As we discussed here and here, current law provides certain hospitality employees a right to rehire after being laid off for COVID-related reasons until December 31, 2025. AB 858 extends operation of these provisions to January 1, 2027, and allows DLSE enforcement of violations occurring before December 31, 2026 to be enforced after the revised sunset date.

This bill amends Section 2810.8 of the Labor Code.

AB 774 – Wage Garnishment

AB 774 requires employers to provide a levying officer with additional information in the employer’s return under the Wage Garnishment Law.

This bill amends, in relevant part, Code of Civil Procedure sections 706.021-022, 706.105, 706.126.

SB 294 – The Workplace Know Your Rights Act

SB 294 establishes the “Workplace Know Your Rights Act” under which an employer will be required to provide a stand alone written notice to each current employee as well as employees upon hire with certain workers’ rights, including workers’ compensation, immigration agency inspections, and law enforcement actions at the workplace. This obligation commences on or before February 1, 2026, and continues annually thereafter. The bill requires the Labor Commissioner to develop a template notice that must be available on or before January 1, 2026, and updated annually. The bill also requires, subject to an employee’s request, that the employer notify the employee’s designated emergency contact if the employee is arrested or detained at work. The bill carries an anti-retaliation provision and will be enforced by the Labor Commissioner with a penalty of $500 per employee per violation, except that the penalty for a violation of the emergency contact provision will be an amount up to $500 per employee for each day the violation occurs, up to a maximum of $10,00 per employee.

This bill adds Part 5.6 (commencing with Section 1550) to Division 2 of the Labor Code.

AB 1340 – Gig Workers

AB 1340 will allow transportation network company drivers to form, join, and participate in a union, collectively bargain as an industry-wide unit, and engage in concerted activities without impacting a drivers status as an independent contractor.

This bill adds Chapter 10.7 (commencing with Section 7470) to Division 3 of the Business and Professions Code, and adds Section 7927.710 to the Government Code.

SB 66 – Civil Discovery – Initial Disclosures

SB 66 removes the sunset date on the requirement in civil actions that initial disclosures be made within 60 days of a demand by any party.

This bill amends and repeals Section 2016.090 of the Code of Civil Procedure.

VETOED BILLS

SB 7 – Automated Decision Systems

The Governor vetoed SB 7 on October 13, citing various reasons including wanting to assess the efficacy of the forthcoming California Privacy Protection Agency regulations to address the concerns sought to be addressed by this bill. Read our summary of the AI employment discrimination regulations here. However, the Senate is reconsidering the Governor’s veto.

SB 7 would have required employers utilizing artificial intelligence (“AI”) “automated decision systems” (“ADS”) to make “employment-related decisions” to provide pre-use and post-use written notice of that use to all workers directly or indirectly affected by the ADS.

The pre-use notice for employment-related decisions, not including hiring, would have needed to be made (1) at least 30 days before an employer first deploys an ADS; (2) if an ADS is already in effect, by no later than April 1, 2026; and (3) within 30 days of hiring a new worker. A post-use notice issued after an employer has primarily relied on an ADS to make discipline, termination, or deactivation decisions would have needed to be made at the time the employer informs the employee of the decision, and allow employees to request a copy of the worker’s own data relied on in making such a decision. Employers would also have been required to notify a job applicant of the use of ADS in hiring decisions.

In addition to other prohibitions, employers would have been prohibited from relying solely on an ADS when making a discipline, termination or deactivation decision and are required to use a human reviewer to review the ADS output and other information relevant to the decision. The bill carries an anti-retaliation provision that would prohibit an employer from discharging or in any manner discriminating against any worker who asserts their rights under the bill. Under the bill, the Labor Commissioner would have had enforcement authority to issue citations and file civil actions against employers.  

This bill would have added Part 5.5.5 (commencing with Section 1520) to Division 2 of the Labor Code. 

SB 7 was the first significant employment-related bill to seek the Governor’s approval, with 2024 AI legislation also failing to make the cut, and a similar ADS bill, AB 1018, failing this legislative season. AB 1018 would have required employers to provide employees with disclosures regarding AI-driven decisions and to give employees a chance to appeal the decision. AB 2930 of 2024 also proposed regulating the use of ADS in employment practices, including pay, promotion, hiring, termination, and task allocation. At that time, we previewed an expectation of more action on this topic in years to come, as the Governor’s veto message on non-employment AI bill AB 1047 previewed. We similarly expect AI legislation in the employment space and beyond to continue.

AB 1326 – Right to Wear A Mask

AB 1326 would have provided individuals with the right to wear a medical grade mask in a public place to protect themselves or the public with regard to communicable disease, air quality, or other health factors. Employers would have been able to require workers in an employment setting to remove a health mask to perform their essential functions. Governor Newsom vetoed the bill as unnecessary and likely to cause confusion.

This bill would have added Chapter 26 (commencing with Section 28050) to Division 20 of the Health and Safety Code.

SB 1136 – Immigration and Work Authorization

SB 1136 would have required employers with greater than 25 employees to release an employee upon request for up to five unpaid working days in a 12-month period to attend appointments, interviews, or any other proceeding or meeting concerning the employee’s immigration status or a related matter. The bill would have required any employee whose employment is terminated due to an inability to provide documentation of proper work authorization to immediately be reinstated to their former classification without loss in seniority, subject to proper work authorization. An employer who is notified that an employee has been detained or incarcerated as a result of a pending immigration or deportation proceeding would have been required under the bill to place the employee on an unpaid leave of absence for a period not to exceed 12 months. The bill would have prohibited an employer from taking adverse action against an employee because of immigration status or national origin, or solely because the employee is subject to immigration or deportation proceedings.

This bill would have added and repealed Chapter 3.3 (commencing with Section 1019.6) of Part 3 of Division 2 of the Labor Code.

SB 703 – Ports: Truck Driver Independent Contractors

SB 703 would have required trucking companies and truck drivers not classified as employees by the company, to provide to the Port of Long Beach or Port of Los Angeles, certain information including the trucking company’s sworn affidavit that the company is withholding all required taxes from the wages of any driver who is considered an employee. The bill would have required the trucking company to update a port within 30 days of a change to its operation resulting in more than 50% of its employees being replaced by independent contractors and impose a $5,000 penalty for failure to do so. It would have imposed a $50,000 penalty for providing misleading information for purpose of representing compliance with the above requirements. Governor Newsom vetoed the bill because it “would significantly disrupt port operations by requiring these ports to collect and retain information on thousands of trucks each day.” The Senate is reconsidering the Governor’s veto.

This bill would have added Part 3 (commencing with Section 2000) to Division 6 of the Harbors and Navigation Code, and added Article 1.6 (commencing with Section 2790) to Chapter 2 of Division 3 of the Labor Code.

SB 355 – Notice Requirement for Judgment Debtor Employers

SB 355would have required that, within 60 days after a judgment is entered against an employer requiring payment to an employee or to the state, the employer inform the Labor Commissioner that: (1) the judgment is fully satisfied; (2) the bond required by subdivision Section 238(a) has been posted (if applicable); or (3) the judgment debtor has entered into an agreement for the judgment to be paid in installments. Failure to comply with these notice requirements would have resulted in a civil penalty of $2,500. The Governor vetoed this bill as “costly, duplicative, and unlikely to significantly improve collections of unpaid wages.”

This bill would have added Section 96.9 to the Labor Code.

Workplace Solutions

Tune in to our October 15, 2025 webinar in which we’ll explore the final slate of new laws. Please check back in with us here at Cal Peculiarities for regular check-ins on California policy and legislative updates.

Edited by: Catherine Feldman