In this video, I discuss five key new laws facing California employers:

  • California’s Supplemental Paid Sick Leave, which took effect in September 2020 (read more about AB 1867 here)
  • AB 685 requiring employers to provide notice of suspected or confirmed COVID-19 in the workplace, effective on January 1, 2021 (read more about AB 685 here)
  • SB 1159 – workers’ compensation presumption regarding COVID-19 in the workplace, which took effect on September 17, 2020,
  • SB 1383’s expansion of California Family Leave Rights Act (CFRA) leave to employers with 5 or more employees, effective January 1, 2021, and
  • SB 973’s requirement for employers to report pay data to the state of California starting in March 2021.

As we enter the holiday season, it is a good time to review employer’s obligations to accommodate requests for time off for holidays and best pay practices during the holiday season.  This Friday’s Five covers five reminders for employers about holiday leaves and pay:

1. California employers are not required to provide employees time off for holidays.

There is no requirement that California employers provide time off (except for religious accommodations – see below) for holidays. California’s DLSE’s website states the following:

Hours worked on holidays, Saturdays, and Sundays are treated like hours worked on any other day of the week. California law does not require that an employer provide its employees with paid holidays, that it closes its business on any holiday, or that employees be given the day off for any particular holiday.

2. California employers are not required to pay for time off for holidays, nor are they required to pay additional wages if employees work on holidays.

Likewise, there is no requirement that employers pay employees extra pay or “holiday pay” for work performed on holidays. Employers can voluntarily agree to pay employees extra pay for work that is required during holidays, but these terms would be governed by policy set forth by the employer. Therefore, employers are urged to make sure their holiday pay policies are clearly set forth.

California’s legislature has proposed bills that would require certain employers to pay employees double time for work done on Thanksgiving, but none of these bills have become law.  For example, the “Double Pay on the Holiday Act of 2016” proposed to require an employer to pay at least 2 times the regular rate of pay to employees at retail and grocery store establishments on Thanksgiving. None of these attempts by the legislature have been successful (yet) in requiring California employers to pay any extra “holiday pay.”

3. Employers must provide reasonable accommodations for employees who cannot work on certain holidays due to religious observances.

Employers need to be aware of any religious observances of their employees since employers need to provide reasonable accommodations for employees due to religious reasons. The analysis of reasonable accommodation is required is a case by case analysis based on the company’s type of business and the accommodation requested by the employee. If the employer’s operations require employees to work during normally recognized holidays, such as a restaurant, then this should be communicated to employees in the handbook or other policies and set the expectation that an essential function of the job requires work during normal holidays.

4. If an employer pays for time off during holidays, the employer does not have to allow employees to accrue holiday paid time off.

If an employee leaves employment before the holiday arrives, the employer is not required to pay the employee for the day off.  But the employer’s policy regarding holiday pay must clearly set forth that this benefit does not accrue to employees and that they must be employed during the specific holidays to receive the holiday pay.  Often employers also require that the employee works the days leading up to and following the holiday in order be eligible for the holiday pay.

5. If a pay day falls on certain holidays, and the employer is closed, the employer may process payroll on the next business day.

If an employer is closed on holidays listed in the California Government Code, then the employer may pay wages on the next business day.  The DLSE’s website explains this, and other considerations, for the timing requirements for payroll.  The holidays listed in the Government Code section 6700 are as follows:

  • Every Sunday
  • January 1 — New Year’s Day
  • Third Monday in January — Martin Luther King Jr. Day
  • February 12 — Lincoln’s Birthday
  • Third Monday in February — Washington’s Birthday
  • March 31 – Cesar Chaves Day
  • Last Monday in May — Memorial Day
  • July 4 — Independence Day
  • First Monday in September — Labor Day
  • September 9 – Admission Day
  • Fourth Friday in September – Native American Day
  • Second Monday in October — Columbus Day
  • November 11 — Veterans Day
  • Fourth Thursday in November — Thanksgiving Day
  • December 25 — Christmas
  • Other days appointed by the governor for a public fast, thanksgiving or holiday

As 2020 ends, this Friday’s Five focuses on five steps employers can take now to prepare for 2021:

1. Update employee handbooks to comply with SB 1383 – California Family Rights Act (CFRA) now applies to employers with 5 or more employees.

There has been overhaul of the California Family Rights Act (CFRA) which will have a monumental impact on many employers throughout the state. The new law requires employers with as few as five employees to provide up to 12 weeks of unpaid job protected leave during any 12-month period for certain covered reasons.  In addition, the definition of family members covered under the law has also been expanded so that it no longer just includes a spouse, a parent or a child, but employees can take leave to care for grandparents, grandchildren, siblings, or  domestic partners with a serious health condition.  Smaller employers will need to develop a CFRA policy to comply with the new requirements, and larger employers will need to update their leave policies to address the other changes (such as the expanded definition of family member, elimination of key employee provisions, among other changes).

2. Update employee handbooks to comply with AB 2017 – Kin Care leave under Labor Code section 233.

This new law provides that the designation of the sick leave taken under Labor Code section 233 is at the sole discretion of the employee.  Therefore, the employer may not designate sick leave as Kin Care leave by itself in order to quickly deplete the Kin Care leave available. Any Kin Care leave policies and related policies should be updated accordingly.

3. Update employee handbooks to comply with AB 2992 – leave policies for victim of domestic violence, sexual assault, or stalking.

AB 2992 expands the right to take time off work under Labor Code section 230.  The new law permits employees to take time off if they are victims “of a crime that caused physical injury or that caused mental injury and a threat of physical injury” or for anyone “whose immediate family member is deceased as the direct result of a crime.”  Employers must update any relevant crime victim leave policies to comply with the new requirements.

4. Exempt employees – review salary requirements.

Employers need to review the base salary for all exempt employees to ensure the employees meet the salary required to be exempt.  To be exempt from the requirement of having to pay overtime to the employee, the employee must perform specified duties in a particular manner and be paid “a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.” (Lab. Code, § 515, subd. (a).)  For more information about the salary basis test for exempt employees, see my previous article here.

With the increase in the state minimum wage on January 1, 2021, the equivalent of two times the minimum wage of $13 per hour for small employers (25 employees or less) equals $54,080 per year, and two times the minimum of $14 per hour for large employers (26 employees or more) equals $58,240 per year to qualify for the white collar exemptions.

It is important to note that the salary basis test is set according to the California state minimum wage, not the applicable minimum wage that may apply in the various local city and counties in California.

5. Update severance agreements to ensure they comply with AB 749 and AB 2143.

AB 749 prohibits and invalidates any provisions in settlement agreements entered into on or after January 1, 2020 that prevent workers from obtaining future employment with the settling employer or its affiliated companies under certain circumstances.  AB 2143, passed in 2020, provides an exception to this ban, if the employer documented in good fair, prior to a claim, that a person engaged in sexual harassment, sexual assault, or criminal conduct.

Employers only have to read the following paragraph from JoeBiden.com to get an overall sense of what employment legal changes are likely under a potential Biden administration:

Yet employers steal about $15 billion a year from working people just by paying workers less than the minimum wage. On top of that, workers experience huge losses in salary caused by other forms of wage theft, like employers not paying overtime, forcing off-the-clock work, and misclassifying workers. At the same time, these companies are raking in billions of dollars in profits and paying CEOs tens and hundreds of millions of dollars.

Here are five employment proposals that would dramatically change the legal landscape facing employers across the country that would likely be enacted under a Biden administration:

1. Implement a $15 per hour national minimum wage

Biden will raise the federal minimum wage to $15 per hour and likely eliminate the tip credit.

2. Ban mandatory individual arbitration agreements

JoeBiden.com sets forth that “Biden will enact legislation to ban employers from requiring their employees to agree to mandatory individual arbitration and forcing employees to relinquish their right to class action lawsuits or collective litigation.”

Similar attempts to prohibit arbitration agreements have occurred in California.  In October 2019, Governor Newsom signed AB 51, which attempted to make it an unlawful employment practice for an employer to require employees or applicants to “waive any right, forum, or procedure for a violation of” the California Fair Employment and Housing Act (FEHA) or the Labor Code. In other words, employers could no longer force employees to sign arbitration agreements.  AB 51 was challenged in court by the U.S. Chamber of Commerce on the grounds that AB 51 was preempted by the Federal Arbitration Act.  In the case, Chamber of Commerce of the USA, et al. v. Becerra, et al., the judge issued a preliminary injunction blocking the state’s enforcement of AB 51, but the case is still being litigated in the Ninth Circuit.

More information about arbitration agreements can be found here.

3. Adopt the ABC test for independent contractors based on California’s model for the county

Biden promises that as president he would “work with Congress to establish a federal standard modeled on the ABC test for all labor, employment, and tax laws.”  The ABC test would be modeled after California’s ABC test set forth in AB 5, which was updated by AB 2257 in September 2020.  California’s ABC test makes it much more difficult for employers to classify workers as independent contractors.  As evident in the exclusions set forth in AB 2257, many industries and professionals in California have asked to be excluded from the ABC test, and ride-sharing companies, such as Uber and Lyft, are spending hundreds of millions of dollars to place Proposition 22 before the California voters this November to exempt the companies from the law.  Implementing the ABC test across the county would likely be a death blow to gig-economy companies, or at the minimum force the companies to dramatically change their business models.

4. Empower unions

A Biden administration would bring sweeping changes to the National Labor Relations Act (NLRA) and potentially would pass portions of the Protecting the Right to Organize Act (PRO Act).  He supports instituting financial penalties against companies that interfere with organizing efforts, which would include personal liability for company executives (and potential criminal liability for intentional conduct).  Biden also proposes banning state right-to-work laws and would require employees to pay union dues even if they are not part of a union.  Biden also wants to eliminate secret ballot voting for unions and would implement the “card check” process under which votes would be public.

5. Increase employment investigations

Biden would also increase employment oversight through various governmental agencies.  His administration would direct the Department of Labor to work with the National Labor Relations Board (NLRB), the Equal Employment Opportunity Commission, the Internal Revenue Service, the Justice Department, and state labor agencies to “aggressively pursue employers who violate labor laws.”  This initiative would also include an increase in the number of investigators in these federal agencies.

More information about Joe Biden’s employment initiatives can be found on his campaign website here: https://joebiden.com/empowerworkers/#

California passed sweeping legislation that imposes new reporting requirements in 2021 on employers regarding COVID-19 cases in the workplace.  The new law, AB 685, also provides California’s Division of Occupational Safety and Health (Cal-OSHA) expansive authority to close workplaces based on the threat of COVID-19.  Here are five issues California employers need to understand about the new requirements passed in AB 685:

1. AB 685 is effective of January 1, 2021

The Governor signed AB 685 on September 17, 2020.  It becomes effective on January 1, 2021, and expires on January 1, 2023.

2. Employer notice requirements for COVID-19 in the workplace

AB 685 also adds Labor Code section 6409.6 which requires employers to report certain instances of COVID-19 in the workplace.  The new law requires employers who receive a notice of potential exposure to COVID-19 to provide a written notice to other employees within one day of notice of potential exposure:

  • Provide a written notice to all employees and employers of subcontracted employees who were on the premises at the same time as the “qualifying individual” within the “infectious period” that they may have been exposed to COVID-19. “Infectious period” is not formally defined by the statute, but rather refers to the to the definition provided by the State Department of Public Health.  “Qualifying individual” is defined as any person who (1) has a laboratory-confirmed case of COVID-19 as defined by the State Department of Public Health, (2) a positive COVID-19 diagnosis from a license health care provider, (3) a COVID-19-related order to isolate provided by a public health official, or (4) died due to COVID-19, in the determination of a county public health department or “per inclusion in the COVID-19 statistics of a county.”
  • The notice must be in a form that is usually used to communicate with employees, and can be by personal delivery, email, or text message as long as the notice is reasonably believed to be received by the employee within one business day of delivery. The notice must be in both English and in the language understood by a majority of employees.
  • Provide employees who may have been exposed with information regarding COVID-19 related benefits available under federal, state, and local laws. This information would include workers compensation benefits, COVID-19-related leaves, company sick leave, state-mandated leave, supplemental sick leave, and antiretaliation and antidiscrimination protections.
  • Notify all employees of the disinfection and safety plan that the employer plans to implement and complete in accordance with the guidelines of the Centers for Disease Control.

Employers should start preparing a draft of this notice in order to be able to meet the one-day requirement to inform employees.  Employers are required under the new law to keep records of the written notices provided to employees for at least three years.

3. Employers must notify the local public health agency of “outbreaks”

If an employer has an “outbreak” in its workforce, within 48 hours it must notify the local public health agency in the jurisdiction of the worksite of the names, number, occupation and worksite of “qualifying individuals.” An “outbreak” for AB 685 is currently defined as: “[a]t least three probable or confirmed COVID-19 cases within a 14-day period in people who are epidemiologically-linked in the setting, are from different households, and are not identified as close contacts of each other in any other case investigation.” (see https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/COVID-19/OutbreakDefinitionandReportingGuidance.aspx).

Again, “qualifying individual” is defined as any person who (1) has a laboratory-confirmed case of COVID-19 as defined by the State Department of Public Health, (2) a positive COVID-19 diagnosis from a license health care provider, (3) a COVID-19-related order to isolate provided by a public health official, or (4) died due to COVID-19, in the determination of a county public health department or “per inclusion in the COVID-19 statistics of a county.”  The employer must also continue to inform the local health department of any subsequent laboratory-confirmed cases of COVID-19 at the worksite.

4. Grants Cal-OSHA authority to close workplaces that constitute an “imminent hazard to employees”

AB 685 amends Labor Code section 6325 to permit Cal-OSHA to close workplaces that “constitute an imminent hazard to employees” due to COVID-19.  The closure of a workplace must be limited to the immediate area that the “imminent hazard exists,” and Cal-OSHA cannot prohibit entry to any areas that are outside of the hazard area.  Cal-OSHA must post a notice in a conspicuous place at the place of employment making this determination.  Entry must still be permitted for eliminating the dangerous condition.  AB 685 removes some of the notice provisions that Cal-OSHA usually must comply with before making a determination that a work environment constitutes an imminent hazard when dealing with COVID-19, so employers must be prepared to act immediately if Cal-OSHA designates a worksite or portion of a worksite as a hazard area due to COVID-19.

5. Useful State of California issued guidance for employers for dealing with COVID-19 in the workplace

Due to popular demand, my firm is replying our webinar we conducted recently discussing key California employment laws passed in this legislative session.  Attorneys from the firm discuss 5 general areas of new legislation facing California employers:

    • Coronavirus Bills
    • Leaves of Absence Bills
    • Wage and Hour Bills
    • Harassment/Discrimination/Retaliation Bills
    • Minimum wage increases in 2021 on state and local levels

If you would like to learn more and dive deeper into the new bills (some of which took effect immediately upon the Governor’s signature), join us for our recorded webinar happening next Friday (October 16, 2020 at 11 a.m. PT).  These topics will be critical for California employers to understand when planning for 2021.  Registration is here.

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Governor Newsom had a September 30, 2020 deadline to approve or veto any new laws for 2021.  Today, our team from Zaller Law hosted a webinar covering the major employment laws approved by the Governor and what these new laws mean for employers.  We will be hosting another webinar soon discussing some of the laws in more detail, so be sure to subscribe for notifications.  This Friday’s Five covers five of the new laws with the most impact on employers for the remainder of 2020 and into 2021:

1. AB 1867 – California Supplemental Paid Sick Leave

My previous article on AB 1867 is here. On Wednesday, September 9, 2020, Governor Newsom signed AB 1867 into law providing supplemental paid leave for California employees and codified provisions of Executive Order N-51-20 that had already provided paid sick leave for “food sector workers.”  California employers must take time to review the new law to ensure compliance, even if they were covered under the prior Executive Order. The new law created obligations for employers to provide COVID-19 Supplemental Paid Sick Leave to non-food sector employees starting no later than September 19, 2020.

2. SB 1159 – Workers’ Compensation: COVID-19

  • Effective immediately! (Automatically repealed January 1, 2023)
  • Codifies Governor’s May 6, 2020, Executive Order N-62-20.
  • Applicable to employees who test positive during an “outbreak” at the employee’s “specific place of employment.”
  • Applicable to employers with five or more employees
  • Applies to all dates of injury on or after July 6, 2020
  • Employee may be awarded: Full hospital, surgical, and medical treatment; disability indemnity (only after exhausting any COVID-specific paid sick leave); and death benefits

Key Terms:

  • “Specific place of employment”: Building, store, facility, or agricultural field where an employee performs work at the employer’s direction. Does not include employee’s home.
  • “Outbreak”: Measured over 14 days at a specific place of employment
    • If 100 or fewer employees, four employees test positive .
    • If more than 100 employees, four percent of employees test positive.
    • If a public health department or OSHA orders SPE closed due to risk of infection with COVID-19.
  • “Test”: PCR Test or viral culture test of same or higher sensitivity/specificity. Does not include serological (antibody) test.

Presumption:

  • Employee’s COVID-19 illness or death is presumed to arise out of and in the course of the employment if employee tests positive within 14 days of performing labor or services at the place of employment.
  • Key limitation: during an outbreak.
  • Can be rebutted with evidence of employer safety measures and employee’s nonoccupational risks.

Employer Reporting Requirements:

  • Employer must report positive tests to claims administrator by email or fax within three business days, including:
  • Date of positive test (collection date)
  • Address of employee’s specific place of employment
  • Highest number of employees at SPE in 45-day preceding last day worked
  • Do not identify employee unless employee asserts work-related infection
  • Duty to report arises if employer knew or should have known of positive tests
  • Civil penalty up to $10,000 or failing to report information or intentionally submitting false or misleading information
  • Employers have until October 19 to report any positive tests occurring between July 6, 2020, and September 16, 2020

3. SB 1383 – California Family Leave Rights Act (CFRA) Expansion

  • Effective January 1, 2021
  • SB 1383 significantly expands CFRA, by extending its applicability to employers with 5 or more employees, compared to 50 or more employees currently.
  • The new law expands the family members whom an employee can take leave to include care of grandparents, grandchildren, siblings, domestic partners with a serious health condition, in addition to existing leave to care for a parent or spouse.
  • This law will have a monumental impact on small employers and will impact large employers who are already subject to CFRA.

Major Changes In The New CFRA Provisions Include:

  1. Changes the threshold requirement to employers with 5 or more employees across the entire State.
  2. Expands the definition of family member to include care for an adult child over 18 years of age, the child of a domestic partner and a grandparent, grandchild and sibling.
  3. Requires an employer of both parents of a child to grant up to 12 weeks of leave for each parent for birth, adoption, or foster care placement of a child.
  4. Eliminates the “key employee” provision under the current CFRA provisions.

Eligibility for CFRA Leave:

Employee must have worked for the employer for at least 12 months and worked at least 1,250 hours in the 12-month period prior to taking CFRA leave.

Amount of Leave:

Up to 12 weeks of unpaid leave in each 12-month period. Leave can be used in increments. This 12-week leave is in addition to other leaves mandated under California law, like Pregnancy Disability Leave, Workers Compensation, and California Paid Leave.

What The New CFRA Leave Requires:

  • The unpaid leave can be taken because of the employee’s own serious health condition, or to care for specified family members medical conditions or to care for a child.
  • The employee shall continue to receive health insurance benefits at the same level as if the employee had been continuously employed during the CFRA leave.
  • Employers must reinstate an employee on leave to the same job or comparable job to the extent that the employee would have remained in that position if they had been continuously employed during the CFRA leave.

Impacts Larger Employers Covered Under the Current Law:

  • Additional covered family members and expanded reasons for leave.
  • Threshold requirements of employing 50 or more employees within a 75-mile radius is stricken, so that larger employers with small worksites will be required to grant CFRA leave.
  • In some cases, CFRA may no longer be concurrent with leave taken under the FMLA, so there is the potential the employee qualifies for leave under both state and federal law.

4. AB 1947 – Employment Violation Complaints

  • Existing law prohibits discrimination or retaliation against employees who complains about labor code violations or other violations of law.
  • AB 1947 amends existing law to provide a longer time for employees to report complaints to DLSE extended from 6 months to one year.
  • Allows employee to recover attorney’s fees in court action alleging retaliation.

5. SB 973 – Employers Annual Report Pay Data

  • On or before March 31, 2021, and on or before March 31 each subsequent year, private employers with 100 or more employees and who are required to file an annual Employer Information Report (EEO-1) under federal law, must submit pay data report to the Department of Fair Employment and Housing (DFEH).
  • Reinstates by CA collection of “Component 2”-type pay data by race and gender that was halted on the federal level in the EEO-1.
  • Information required to be reported includes:
    1. number of employees by race, ethnicity, and sex across 10 categories of jobs,
    2. the number of employees by race, ethnicity, and sex whose annual earning fall within each of the pay bands used by the US Bureau of Labor Statistics in the Occupational Employment Statistics survey.

The City of San Diego announced on September 28, 2020, that the City’s minimum wage will increase to $14 per hour on January 1, 2021.  This in an increase from the minimum wage of $13 per hour applicable in 2020.  The City of San Diego’s Earned Sick Leave and Minimum Wage Ordinance,  San Diego Municipal Code (SDMC) Chapter 3, Article 9, Division 1 became effective on July 11, 2016.  The City’s law applies to employees who perform at least two (2) hours of work in one or more calendar weeks of the year within the geographic boundaries of San Diego.  The City has directed employers to the  Council District or the interactive geographic boundaries map to assist in determining if they are located within the City.  If a work location is not within the geographic boundaries of the City of San Diego, but within the County of San Diego, the California State minimum wage and earned sick leave laws apply.