California Employer Update 2020

New Year — New Laws! Each new year brings a bundle of new laws, and this year was particularly eventful in the employment law arena. Below we summarize some of the key new laws that will impact California employers in 2020.  

Arbitration

Arbitration Agreements as a Condition of Employment (AB 51). The new law prohibits employers from requiring any applicant for employment or any employee to waive any right, forum, or procedure under the California Fair Employment and Housing Act (FEHA) or the Labor Code as a condition of employment, continued employment, or the receipt of any employment-related benefit. In other words, employers cannot make mandatory arbitration of FEHA and Labor Code claims a condition of employment. Further, the new law indicates that if an agreement requires employees to “opt out” of a waiver or take any affirmative action to preserve their rights, the agreement is deemed a condition of employment and violative the new law. Finally, the new law authorizes injunctive relief and attorney’s fees to any plaintiff who proves a violation, including any threatened or actual retaliation against an individual who refuses to consent to the forbidden requirements.

What Should Employers Do? Employers should review their current arbitration agreement and associated procedures to ensure they are compliant with the new law. Also, after January 1, 2020, employers cannot refuse to hire, terminate, or take any other adverse action against employees for choosing not to sign an arbitration agreement.

Fees and Costs for Arbitration in Employment (SB 707). Previous legislation required employers to pay the cost of arbitration under employment-related arbitration agreements. This new law requires that an employer pay the fees and costs of an arbitration service provider, as required under state or federal law or the applicable arbitration agreement, before an arbitration may proceed, and to timely pay any additional fees and costs of an arbitration service provider that may arise during the pendency of an arbitration proceeding. If the employer fails to pay such fees and costs within thirty (30) days after they are due, then the employer is in material breach of the applicable employment-related arbitration agreement and waives its right to compel arbitration. This means that the employee may then proceed in court or compel arbitration in which the employer will be required to pay reasonable attorney’s fees, in addition to the fees and costs for the arbitration. What’s more, the new law requires the court or arbitrator to impose monetary sanctions on an employer who breaches an arbitration agreement and authorizes the imposition of additional sanctions. Finally, the new law requires a private arbitration company to collect and report certain aggregate demographic data related to all arbitrators.

What Should Employers Do? Timely pay your arbitration fees! Employers should be mindful of what fees are due and when, then pay them on time.

Harassment, Discrimination, and Retaliation

Statute of Limitations to File with DFEH Tripled (AB 9). An employee must file an administrative charge with the Department of Fair Employment and Housing (DFEH) and obtain a right to sue before the employee may file a lawsuit based on the Fair Employment and Housing Act (FEHA). The new law extends the time for an employee to file an administrative complaint of discrimination, harassment, or retaliation with the DFEH from one (1) year to three (3) years. An employee still has one (1) year from receipt of the DFEH right to sue letter to file a lawsuit. The new law will not revive an employee’s claim that expired before January 1, 2020.

What Should Employers Do?  Employers should revisit their records retention policy to ensure they maintain employment records for the entirety of employment plus at least four years. This includes not only personnel files and payroll records, but also internal complaints and investigations.

Protection for Hairstyles through an Expanded Definition of Race (SB 188). The new law amends the definition of “race” to be inclusive of traits historically associated with race, including, but not limited to, hair texture and protective hairstyles. The new law defines “protective hairstyles” to include, but not be limited to, such hairstyles as braids, locks, and twists. The law is aimed at curbing discrimination in employment based on traits historically associated with race and results in expanded protection for employees under FEHA.

What Should Employers Do? Employers should ensure their dress codes and grooming policies do not prohibit natural hair, including afros, braids, twists, and locks. Further, employers should ensure their managers are aware of this expanded definition of race and are trained not to discriminate against employees based on their protected hairstyles.  

Privacy

Data Disclosures to Employee (AB 25). This new law amends California Consumer Privacy Act (CCPA), but only a limited portion of the CCPA applies in the employment context. Under the new law, beginning January 1, 2020 employers must inform their workforce members of the categories of personal information they collect and the purposes for which the information shall be used/disclosed. This notice to workforce members must be provided “at or before the point of collection.” In addition, employers must provide a new notice when previously collected personal information is used for a previously undisclosed purpose. This new law also creates a private right of action in the event of a data breach resulting from failure to implement reasonable security measures. Specifically, the CCPA enables a Workforce Member to file an individual lawsuit or a class action lawsuit to recover their actual damages or penalties between $100 and $750 per consumer per data breach incident, whichever is greater.

What Should Employers Do? Employers must take reasonable steps to protect all personal information they collect. Employers should audit all current electronic and physical security measures to ensure protection of all personal information that is collected. If needed, employers should implement new reasonable security measures to safeguard the personal information. Employers should conduct an audit to identify all categories of information they collect on applicants and employees. Employers should also update policies, handbooks, website, application and onboarding documents, etc. to identify all categories of personal information they collect and the ways in which the information will be used. Finally, employers should prepare a customized notice for applicants, employees, and independent contractors that identifies all categories of personal information the employers collect and the ways in which tit will be used. Employers should note that additional requirements under the CCPA will become applicable to employers in January 1, 2021.

Leaves of Absence and Workplace Accommodation

Paid Family Leave Increases Two Weeks (SB 83). The new law makes changes to the calculation methods under California’s Paid Family Leave (PFL) program and increases the maximum wage replacement benefits time-period from six (6) to eight (8) weeks, beginning July 1, 2020.

What Should Employers Do? Employers should review handbooks and as well as policies and notices addressing PFL benefits to ensure they reflect this change.

Organ Donor Protection (AB 1223). Current law requires employers to permit an employee to take a leave of absence with pay, not exceeding thirty (30) business days in a one-year period, for the purpose of organ donation. The new law requires employers to grant an employee an additional unpaid leave of absence, not exceeding thirty (30) business days in a one-year period, for the purpose of organ donation. Thus, employers will need to provide employees up to sixty (60) days of leave for the purpose of organ donation.

What Should Employers Do? Employers should review handbooks and leave-related policies and notices to include this expanded organ donation leave time.

Additional Accommodations for Lactating Mothers (SB 142).  The new law builds on the prior law that required employers to provide a room or location, other than a bathroom, in close proximity to the employee’s work area, to express breast milk. Under the new law, the lactation room must be: safe, clean and free of toxic or hazardous materials, contain a surface to place a breast pump and other personal items, contain a place to sit, and have access to electricity. Further, the employer must provide access to a sink with running water and a refrigerator (or other device suitable for storing breast milk), in close proximity to the employee’s workspace. This does not have to be within the lactation room.

Additionally, employers are required to provide a reasonable amount of break time (running concurrent with other break time) to accommodate an employee desiring to express breast milk each time the employee needs to express breast milk. The new law deems denial of reasonable break time or adequate space to express milk, a failure to provide a rest period in accordance with state law, which presumably would provide the employees the ability to seek penalties for such violation(s). Further, employers are required to create and implement a lactation accommodation policy and publish the policy in the employee handbook and provide the policy to any employee who asks about or requests parental leave.

The new law allows employers with fewer than fifty (50) employees to seek an exemption from the requirements of these provisions if the employer demonstrates that the requirement poses an undue hardship by causing the employer significant difficulty or expense. However, the new law requires an employer who obtains an exemption to make a reasonable effort to provide a place for an employee to express milk in private.

What Should Employers Do? Employers should review their current lactation room(s) to ensure they meet the minimum requirements and make modifications as needed. Further, employers should review their lactation policies and procedures to ensure compliance with the expanded legal requirements under the new law.

Wage and Hour

Appeal and Enforcement of Labor Commissioner Citations (SB 229). Currently, the Labor Commissioner issues citations for workplace retaliation and discrimination. The new law details the appeals process for the citations and the process for enforcement. Specifically, the new law states that once a citation becomes final, the employer must transmit within thirty (30) days both the amount cited and a certification of compliance with any other remedies ordered. The new law also clarifies that if, following an informal hearing on the citation, the Labor Commissioner issues an order concerning an amount due, that amount must be paid within forty-five (45) days of the mailing date of the written decision. Alternatively, if the employer does not request a hearing within thirty (30) days, the citation becomes final. Ten (10) days after the citation becomes final, the Labor Commissioner applies for entry of judgment within the appropriate superior court. If an employer wants to appeal the judgment through a writ of mandate, it must first post a bond with the Labor Commissioner equal to the total amount of any penalties, lost wages and interest thereon, liquidated damages, and any other monetary relief that is due and owing as determined by the Labor Commissioner.

What Should Employers Do?  First, comply with the Labor Code to avoid citations from the Labor Commissioner. If violations occur and the Labor Commissioner issues a citation, employers should be mindful of the appeal timeframe and/or timely comply with the citation (pay fine and or make requested changes).

Penalties for Late Wages (AB 673). Existing law assesses penalties against an employer for failure to pay wages on regular pay days. The new law expands employees’ options for how to collect those penalties. Under the new law, employees who do not receive timely payment of their wages can file a private action to recover statutory penalties against the employer in a hearing before the Labor Commissioner or seek to enforce civil penalties under PAGA. Aggrieved employees may not pursue both remedies for the same violation(s). 

What Should Employers Do?  Timely pay your employees. If your employees are not timely paid, you can be exposed to claims for penalties from the Labor Commissioner or superior court under PAGA.  

Enforcement of Contract Wages (SB 688). Under current law, the Labor Commissioner has authority to investigate and cite an employer for failure to pay the applicable minimum wage. The new law expands this to permit the Labor Commissioner to issue citations and recover amounts owed by an employer who paid less than the wages earned by an employee under a contractual arrangement, even if the wages paid exceed the minimum wage requirements.

What Should Employers Do?  Employers should pay their workers in accordance with the applicable minimum wage and their contractual agreements. 

Minimum Wage Increase. While this is not a new law, under prior legislation, effective January 1, 2020, the California minimum wage will increase to $12.00 per hour for employers with 25 or fewer employees and to $13.00 per hour for employers with 26 or more employees. In addition, beginning January 1, 2020, the minimum annual salary that must be paid to any exempt employee under the executive, administrative, or professional exemptions will be $49,920 for employers with 25 or fewer employees and $54,080 for employers with 26 or more employees.

What Should Employers Do?  Employers should ensure all of their employees’ pay rates meet or exceed the above minimums and provide their employees with written notice of any change in their pay.

Miscellaneous 

No Rehire Provisions in Settlement Agreements (AB 749). This new law prohibits “no rehire” provisions in settlement agreements entered into on or after January 1, 2020. The law does include exceptions, for example, where the employer has made a good faith determination that the individual engaged in sexual harassment or assault. Further, the law does not require an employer to rehire an individual if there is a legitimate non-discriminatory or non-retaliatory reason for terminating the employment relationship or refusing to rehire the person.

What Should Employers Do? Employers should review their settlement agreements after January 1, 2020 to ensure that they do not include an illegal “no rehire” provision. 

Notices Regarding Flexible Spending Accounts (AB 1554). This new law requires employers to notify employees who participate in flexible spending accounts of any deadline to withdraw funds before the plan year’s end in two (2) of the five (5) prescribed forms, which may include email, telephone, text message, postal mail and in-person notification.  

What Should Employers Do? Employers should keep records of employees who have Flexible Spending Accounts and provide the dual notice before the plan’s year end. 

Workplace Training and Safety

Sexual Harassment Training Deadline Extended (SB 778). The new law extends the deadline from January 1, 2020 to January 1, 2021, for employers with five (5) or more employees to provide sexual harassment training once a year. The prior law required at least two hours of classroom or other “effective interactive training and education” regarding sexual harassment prevention to all supervisory employees; and at least one (1) hour of classroom or other “effective interactive training and education” regarding sexual harassment prevention to all nonsupervisory employees.

The new law clarifies, however, that an employer who provided sexual harassment training in 2019 does not need to provide sexual harassment training again until 2021 (and then every two (2) years thereafter). Further, this law does not change the existing requirements for sexual harassment training for employers with fifty (50) or more employees.

What Should Employers Do? Employers with fifty (50) or more employees must comply with the expanded standards for sexual harassment training as required by 2018’s SB 1343. Employers with five (5) or more employees should make arrangements to provide its employees with the legally required sexual harassment training so that it is compliant by January 1, 2021.

Training for Special Categories of Workers (SB 530). The new law extends the deadline from January 1, 2020 to January 1, 2021, for employers to provide sexual harassment training to seasonal and temporary workers, which must be provided to such workers within thirty (30) days or one hundred (100) hours of employment. Further, this new law requires the Division of Labor Standards and Enforcement to develop training standard recommendations to be used by employers in the construction industry. The new law also requires harassment training for trades apprenticeship programs for journey-level workers. Finally, the new law clarifies how employers in the construction industry with workers under a multi-employer collective bargaining agreement can satisfy the legal training requirements.

What Should Employers Do? Employers with seasonal and temporary workers, and those in the construction industry should make arrangements to provide their employees with the legally required sexual harassment training by January 1, 2021.

Valley Fever Training (AB 203). The new law requires construction industry employers working in counties where Valley Fever is highly endemic to provide annual awareness training on the fungal infection and before an employee begins work that is “reasonably anticipated” to expose the employee to the fungus. The training is required during the year following the first year that the county is listed as highly endemic.

What Should Employers Do? Construction industry employers should determine if they have workers in counties where Valley Fever is highly endemic[1] and if they do, they need to provide this training. Further, construction industry employers should continue to monitor the applicable lists and location of its employees so that they can comply the following year if needed.

OSHA Reporting Obligations (AB 1804 and 1805). The new law changes the definitions of “serious injury or illness” and “serious exposure” to align with the federal Occupational Safety and Health Administration (OSHA) standards. The new law removes the requirement of inpatient hospitalization for more than twenty-four (24) hours for reasons other than medical observation or tests to qualify as a “serious injury or illness” (which must be reported to Cal OSHA). The new law also explicitly identifies the loss of an eye and amputation as a serious injury that must be reported. Additionally, the new law updates the definition of “serious exposure” to mean exposure to a hazardous substance that has a “realistic possibility” of death or serious physical harm (rather than requiring “substantial probability” of death/serious harm).

Further, the new law requires that employers report any serious occupational injury, illness or death to Cal OSHA through an online platform to be created by Cal OSHA. Until such platform is available, employers may continue making these reports by telephone or email.

What Should Employers Do? Employers should familiarize their managers with the new definitions and understand the changes in what needs to be reported and how it needs to be reported.  

Gun Violence Restraining Orders (AB 61). This new law expands existing California law permitting family members and law enforcement officers to petition courts to issue a “gun violence restraining order” prohibiting an individual from having in their custody or control, owning, purchasing, possessing or receiving, or attempting to purchase or receive, a firearm or ammunition. Under the expansion, employers and co-workers (with employer approval) who regularly interact with a person (in addition to teachers of a secondary or postsecondary school, with school administration approval) may file a petition for a gun violence restraining order. The issuance of a restraining order is contingent upon showing subject of the petition poses a significant danger, in the near future, of causing personal injury to the subject of the petition or another by having in their custody or control, owning, purchasing, possessing, or receiving a firearm and an ex parte gun violence restraining order is necessary to prevent personal injury to the subject of the petition or another because less restrictive alternatives either have been tried and found to be ineffective, or are inadequate or inappropriate for the circumstances of the subject of the petition.

What Should Employers Do? Employers should consider this new law’s impact on workplace violence prevention and update its response policies and strategies to include this restraining order.  

For more information on these new laws, how they affect your workplace, suggested policy revisions, or other employment issues, please contact Jennifer Branch (jbranch@albblaw.com) at Lagasse Branch Bell + Kinkead LLP, 4365 Executive Drive, Suite 950, San Diego, California, 92121; (858-345-5080.

[1] For 2019, the following counties are considered “highly endemic” (i.e., the annual incidence rate of Valley Fever is greater than 20 cases per 100,000 persons per year): Almeda, Contra Costa, Fresno, Kern, Kings, Long Beach, Los Angeles, Madera, Merced, Monterey, Orange, Riverside, Sacramento, San Bernardino, San Diego, San Francisco, San Juaquin, San Luis Obispo, San Mateo Santa Barbara, Santa Clara, Santa Cruz, Solano, Stanislaus, Tulare, and Ventura. https://www.cdph.ca.gov/Programs/CID/DCDC/CDPH%20Document%20Library/CocciinCAProvisionalMonthlyReport.pdf Future years’ reports will be posted at: https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/Coccidioidomycosis.aspx