As we begin March, there are many developments for California employers on the legal front. Here are five issues that should catch employer’s attention this week (and will likely have impacts on California employers for the rest of the year):
1. Does California’s Private Attorneys General Act (PAGA) Survive 2022?
PAGA was designed by the California Legislature offer financial incentives to private individuals to enforce state labor laws by recovering certain civil penalties. Aggrieved employees can seek recovery of civil penalties for Labor Code violations they suffered, in addition to penalties for all Labor Code violations by the employer in a representative action, as long as the employee suffered by at least one violation. 75% of the collected penalties must be distributed to the Labor and Workforce Development Agency, and the remaining 25% is to be distributed among the employees affected by the violations, and a prevailing plaintiff is entitled to their fees and costs. PAGA claims are representative actions, which are distinct from class actions.
On one front, PAGA is being challenged in the courts. On December 15, 2021, the U.S. Supreme Court granted certiorari in Viking River Cruises, Inc. v. Moriana. At issue in this case is whether a California employer may enter into an arbitration agreement with an employee whereby the employee agrees to only bring his or her individual claims in an arbitration proceeding and not bring any class or representative claim under PAGA. If the U.S. Supreme Court holds that employees may waive the ability to bring PAGA claims in arbitration agreements, it would deal a large blow to PAGA. Such a ruling would prohibit many PAGA cases where the employee entered into an arbitration agreement with the employer waiving the ability to bring PAGA representative claims. Oral argument is set for March 30, 2022, and a decision is expected in summer of 2022. More information about Viking River Cruises and PAGA can be read here.
On the other front, PAGA is being challenged by the voters of California. California Fair Pay and Employer Accountability Act seeks to replace PAGA. The initiative is at the stage of gathering enough signatures in order to be placed on the November 2022 ballot. If passed, the initiative would provide employees with 100% of the penalties collected, instead of only 25% that is currently provided to the employees, prohibit attorneys’ fees from being awarded in these cases, and double the penalties against employers who willfully violate the law. More information about the initiative can be found at Californians for Fair Pay and Accountability here.
2. Face Mask Requirements Lifted in Los Angeles
Today, March 4, 2022, the County of Los Angeles lifted requirements for people to wear face masks indoors within the County. The new order states that masks are strongly recommended, but not required, for all persons, regardless of vaccine status, in indoor public settings and businesses. Masks are continued to be required for indoor settings with higher risks for transmission, such as: Public Transit, Transportation Hubs, All Healthcare Settings, including Long Term Care and Adult and Senior Care Facilities, Correctional Facilities and Detention Centers, Homeless Shelters, and Emergency Shelters.
3. City of Los Angeles Still Requiring Proof of Vaccination Status
Despite the State and many local cities relaxing the COVID-19 protocols, under SafePassLA, City of Los Angeles still requires patrons of certain locations to demonstrate proof of vaccination before entering indoor spaces and large outdoor event within the City of Los Angeles.
4. California Labor Commissioner Cites Resort in Rancho Palos Verdes for $3.3 million for violating COVID-19 right to recall law.
Terranea Resort was cited for violating California’s “Right to Recall” law for failing to offer 53 employees positions once the resort re-opened after the pandemic.
Labor Code section 2810.8 requires employers in the hospitality industry and building services to offer employees their positions back if they were separated from employment as a result of the COVID-19 pandemic. The law applies to hotels and private clubs with 50 or more guest rooms, public and private event centers, airport hospitality operations and service providers. It became effective on April 16, 2021 and does not expire until December 31, 2024. More information about Labor Code section 2810.8 can be found at the DIR’s website here.
5. California’s Pay Data Reporting Deadline of April 1 Quickly Approaching
California employers of 100 or more employees must report pay and hours-worked data by establishment, job category, sex, race, and ethnicity to the Department of Fair Employment and Housing (DFEH) annually. Employers are required to report this data to the DFEH by April 1, 2022. As a reminder, SB 973, passed in September 2020 that created a new obligation for California employers to annually submit pay data report to the DFEH. The DFEH published a frequently asked questions page clarifying some questions and providing resources on how to prepare and report this data. Our prior article covering which employers must comply with the reporting requirements is found here.