New Year, New California Employment Laws
Happy New Year!
Along with fireworks and resolutions and heightened expectations for the fresh twelve months that lie ahead, this is also the time of year when many new laws go into effect. The 2020 legislative session saw some of the biggest changes to employment law, especially surrounding COVID-19 and expanded leave rights for employees. A good number of laws went into effect immediately when they were signed by Governor Newsom in September (e.g., AB 2257, which I wrote about here), but some of the updates went into effect on January 1, 2021.
Senate Bill 1159[i] (SB 1159) – Worker’s Compensation Presumption
This bill was signed into law in September 2020 and went into effect upon signing. SB 1159, which was codified as Labor Code 3218.86-.88, includes parts of Governor Newsom’s Executive Order N-62-20[ii] and expands it to cover COVID-19 workers’ compensation claims arising after July 5, 2020. This law is twofold: it establishes a disputable presumption of compensability for employees who test positive for COVID-19 and creates a reporting requirement for employers regarding employees who test positive for COVID-19.
SB 1159 creates a “disputable presumption that the [COVID-19 infection] injury arose out of and in the course of employment and is compensable.” This is accomplished through the addition of COVID-19 language (“illness or death resulting from the 2019 novel Coronavirus disease (COVID-19) under specified circumstances”) to the definition of ‘injury’ under workers’ compensation claims. There are two separate presumptions: one for first responders[iii] and the other for all other[iv] occupations.
For claims in occupations other than first-responders to fall under this disputable presumption, (a) the employer must have five or more employees; (b) the employee must test positive within 14 days after performing labor or services at the place of employment (this does not include the employee’s home or residence unless the employee provides home health care services); (c) the date of performing that labor or service was after July 6, 2020; and (d) the positive test occurred during an outbreak at that specific place of employment. The law defines an ‘outbreak’ as one of the following occurring during a 14 day period: (i) an employer with 100 employees or less at one location has 4 employees test positive for COVID-19, (ii) an employer with more than 100 employees at one location has 4 percent of employees test positive for COVID-19, or (iii) a specific place of employment is ordered closed by local officials due to risk of COVID-19 infection.
To dispute a workers’ compensation claim that arises out of this presumption, an employer may offer evidence of “measures in place to reduce potential transmission of COVID-19” and “of an employee’s nonoccupational risks of COVID-19 transmission.”[v] The employer has 45 days to reject the claim, but may only use evidence discovered subsequent to this 45-day period.[vi]
The second part of SB 1159 is a reporting requirement[vii] for any employees who test positive for COVID-19. Within 3 business days, the employer must send to their claims administrator: (1) the employee who tested positive; (2) the date they tested positive; (3) the employee’s specific place of employment address; and (4) the highest number of employees who reported to work at that specific place of employment for the 45 days prior to the last day that employee, who tested positive, reported for work at that location. Failure to submit the information carries a civil penalty of up to $10,000.
These changes are effective through January 1, 2023 unless amended or extended prior to that expiration date.
Assembly Bill 685 (AB 685) – COVID-19 Notification Requirements/Imminent Hazard to Employees
AB 685 was also signed into law in September 2020; it amended certain parts of the Labor Code and also added new sections to it. Newly added Labor Code 6409.6 requires employers to (1) provide notice[viii] to their employees of potential COVID-19 exposure and (2) report a COVID-19 outbreak to local public health agencies.[ix] Both of these notice actions must be taken with one business day of the employer receiving notice of potential COVID-19 exposure.
For employees, subcontracted employees and/or the exclusive representative of employees, the employer must: (i) provide a written notice to all who were on the premises at the same worksite that they may have been exposed to COVID-19; (ii) provide all employees who may have been exposed with information regarding COVID-19 related federal, state, or local benefits they may be entitled to; notify all employees, subcontracted employees and/or exclusive representative of employees of the disinfection and safety plan the employer will implement and complete per CDC guidelines.
For local public health agencies, the employer must provide: (i) employees’ names; (ii) employees’ phone numbers; (iii) employees’ occupation; (iv) worksite of employees with potential exposure; (v) the worksite’s business address; and (vi) the worksite’s NAICS code.
For both notification types, the employer is required to maintain records of these notifications for at least three years.[x]
Amended Labor Code section 6325(b) gives the Division of Occupational Safety and Health (OSHA) authority to determine if a workplace’s conditions exposes workers to the risk of COVID-19 infection and thereby constitutes an imminent hazard to employees. If so, OSHA effectively has the power to prohibit entry to or job performance at that workplace until that workplace is made safe and safeguards are put into place.
Lastly, Labor Code section 6432 was amended to remove OSHA’s requirement that it issue a citation for a ‘serious violation’ due to COVID-19. A ‘serious violation’ exists if “the division [OSHA] demonstrates that there is a realistic possibility that death or serious harm could result from the actual hazard created by the violation.”[xi] Previously, OSHA was required to send a precitation form to the employer and allow the employer to submit a rebuttal at a hearing; this amendment exempts OSHA from that requirement in regards to COVID-19.
These changes are effective through January 1, 2023 unless amended or extended prior to that expiration date.
Senate Bill 1383 (SB 1383) – California Family Rights Act (CFRA) Expanded
Effective as of January 1, 2021, SB 1383 amended Government Code section 12945.2, more commonly known as CFRA, to apply to employers with 5 or more employees (as opposed to 50 or more, which was the threshold prior to this amendment) and removes the 75-mile radius determination for covered employees. Employers who meet this definition are required to provide employees with up to 12 weeks of unpaid leave and also a guarantee of continued employment upon the termination of the leave.
Previously, an employer was allowed to refuse CFRA requests for employees if they employed less than 50 people within 75 miles of the worksite where they were employed. Now, that distance threshold has been eliminated and it is unclear at this time whether CFRA applies only to California employees or also includes employees outside of the state.
For employers who now meet this newly expanded application, CFRA allows employees to take up to 12 weeks in any 12-month period for ‘family care and medical leave,’ which is defined as “(i) the birth of a child or the placement of a child with the employee in connection with the adoption or foster care of the child by employee[xii]; (ii) to care for a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner who has a serious health condition; (iii) because of an employee’s own serious health condition that makes the employee unable to perform the functions of the position of that employee…; and (iv) because of a qualifying exigency related to the covered active duty or call to cover active duty of an employee’s spouse, domestic partners, child or parent in the Armed Forces of the United States[.]”
It is important to note that an employer who falls under CFRA may not fall under the federal Family and Medical Leave Act (FMLA).[xiii] CFRA’s applicability is much broader than the FMLA and covers more types of family members. As such, this may mean that employees are able to take up to 24 weeks of combined leave depending on the reason for the leave. This expansion is a huge change for smaller companies who will be subject to/need to comply with CFRA for the first time in 2021.
Other Honorable Mentions
I’ve gone into detail for the three above because they are doozies, but here are a few that also deserve a quick nod:
Assembly Bill 979 (AB 979) – AB 979 creates a diversity requirement for all corporate boards located in California to have a minimum of one director from an underrepresented community on its board by the close of 2021. In 2022, that number is scaled up, depending on the size of the board: for those with under 4, the number remains the same; for those with more than 4 but less than 9, there must be two directors from underrepresented communities; and for those with 9 or more directors, the board must have at least three directors from underrepresented communities. Failure to comply and timely file board information carries a fine of $100,000 for the first violation and a fine of $300,000 for subsequent violations.
Proposition 22 – AB 2257 amended 2019’s AB 5; however, the voters of California have spoken and passed Prop 22, which carved out an independent contractor exception for app-based drivers. There are specific wage and labor policies that were written into Prop 22’s language, but essentially their drivers are not subject to the full breadth of California’s employment laws or the protections that go with them (e.g., workers’ compensation insurance, etc.). [**As of 1/12/2021, there is a pending lawsuit to overturn Prop 22…so, we’ll see if this section will need to be amended in the upcoming months!**]
Runners Up – Other updates that may affect some but not all performing arts businesses: SB 973 (Pay Data Report Requirement); AB 2017 (Sick Leave Update); AB 2399 (Paid Family Leave/Qualifying Exigency); AB 2992 (Leave Time for Domestic Violence, Sexual Assault or Stalking); AB 2143 (Update to Settlement Agreements); AB 1867 (Small Employer Family Mediation Pilot Program; Sanitation Standards for Retail Food Facilities; Supplemental Paid Sick Leave for Food Sector Workers and Certain Workers).
Make sure you have a notification process in place for both employees and local public health agencies in case of a COVID-19 infection or outbreak. Know who your local public health agencies are: they could be county health departments or even city health departments.[xiv]
If CFRA is new to your organization, become familiar with it as soon as possible and consider what changes (if any) you’ll need to make to employee handbooks and internal processes.
Make sure you have a filing system set up so you can keep record of any notices that you may have to send. Remember, these new/amended laws are in effect until at least January 1, 2023 and require that notifications be kept for 3 years. So, if an incident occurs on December 31, 2022, organizations will need to hang on to this information through December 31, 2025 (!).
Last Points (For Real This Time)
·California’s minimum wage increased this year, which also means that the base pay for salaried employees increased. Make sure to check your local minimum wages as most, if not all, of them have increased (some won’t increase until this summer), and the local minimum wages are higher than the state-wide minimum.
There is an updated Employer’s Guide for 2021 from the EDD. It’s a fantastic resource for employers; it identifies your responsibilities and offers super helpful information on subjects like Unemployment Insurance and mandatory workplace notices.
Phew! I should have put a warning at the top of this to grab a snack before you started reading. Aside from apologizing for this tome disguised as a blog post, I do hope you found it informative. As employers you are required to know what changes are happening in the law and pivot your practices to meet them. Staying up-to-date on legislative changes is one way to understand your responsibilities and keep your business compliant with California law.
[i] See, https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200SB1159, https://www.dir.ca.gov/dwc/Covid-19/FAQ-SB-1159.html. [ii]See, Executive Order N-62-20, https://www.gov.ca.gov/wp-content/uploads/2020/05/5.6.20-EO-N-62-20-text.pdf. [iii] § 3212.87. [iv] § 3212.88. [v] § 3212.88(e)(2). [vi] § 3212.88(f). [vii] § 3212.88(i). [viii]§ 6409.6(a). [ix] § 6409.6(b). [x] 6409.6(k). [xi] § 6432(a). [xii] This is true for both parents of a child, even if they work for the same employer; they each are allowed up to 12 weeks of leave. [xiii]https://www.dol.gov/general/topic/benefits-leave/fmla. [xiv] https://www.cdph.ca.gov/pages/localhealthservicesandoffices.aspx.