2021 Employment Law Update - Public/Non-Profit Employers
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Meyers Nave invites you to view our Employment Law Update webinar. Among other topics, we will discuss: COVID-19 Health and Safety Issues: COVID-19 notification requirements (AB 685), new Cal/OSHA regulations, workers’ comp changes (SB 1159), and vaccines in the workplace (Law360 recently reported that “in-house legal professionals overwhelmingly cite employment liability as the biggest legal risk they're facing related to the global health crisis, with many readying themselves for employment litigation they believe is in the pipeline.”) Equity in the Workplace: new pay data reporting requirements (SB 973), new FEHA regulations, and diversity training Compensation and Wage and Hour: amendments to the AB 5 independent contractor law (AB 2257 and Prop. 22), Right of Recall ordinances, and new wage and hour developments Leave, Benefits and Accommodations: expanded leave (SB 1383, AB 2017) and COVID-19 leave (AB 1867)
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2021 Employment Law Update - Public/Non-Profit Employers
- 1. 2021 Employment Law Update Private/Non-Profit Employers January 2021
- 2. 2 Presenters Gorev Ahuja Associate (510) 808-2000 gahuja@meyersnave.com Angelica M. Pe Benito Associate (510) 808-2000 apebenito@meyersnave.com Arlene R. Yang Principal (619) 330-1729 ayang@meyersnave.com
- 3. 3 Agenda 1. COVID-19 Health and Safety 2. Equity in the Workplace 3. Compensation and Wage & Hour 4. Leaves, Benefits, and Accommodation 5. Questions 3
- 4. COVID-19 Health and Safety
- 5. 5 AB 685 - Notice to Employees of Potential COVID-19 Exposure • Notice Requirements: Written Within 1 day To employees, subcontracted employees, union rep. Must include information about COVID-19 related benefits Must include disinfection and safety plan • Recordkeeping – preserve copy of notices for 3 years • “Outbreak” – notify local public health agency within 48 hours 5
- 6. 6 AB 685 - Notice to Employees of Potential COVID-19 Exposure Employer Takeaways 6
- 7. 7 SB 1159 – Workers’ Compensation COVID-19 Presumption • March 19 - July 5, 2020 – Disputable presumption on-the-job injury for all mandatory on-site workers • July 6, 2020 - January 1, 2023 – Disputable presumption for (1) first responders and health care workers and (2) employees working where there has been an “outbreak” • Outbreak – 4 + tests if ≤ 100 employees, or – 4% at location if >100 employees, or – ordered closed due to risk of infection • Mandatory Reporting to work comp. claims administrator within 3 business days 7
- 8. 8 SB 1159 – Workers’ Compensation COVID-19 Presumption • Investigate quickly • Decide whether to accept or reject the claim – 30 days for first responders, health care workers – 45 days for an outbreak • Work with carrier to ensure provide workers’ compensation claim forms and other necessary information to employees Employer Takeaways 8
- 9. 9 New Cal/OSHA Emergency Temporary COVID-19 Standards • Effective Nov. 30, 2020 for 180 days (May 29, 2021) unless renewed (up to 2 times), withdrawn, or replaced • Written, detailed COVID-19 Prevention Plan, including: – Communicating system – ID and evaluation of hazards – Investigation and response to cases – Correcting hazards – Return to work criteria – Recording requirement – Testing and notification 9
- 10. 10 New Cal/OSHA Emergency Standards Exclusions: • Workplace with 1 employee and no contact with others • Working from home • Subject to Cal/OSHA’s Aerosol Transmissible Diseases standard 10
- 11. 11 New Cal/OSHA Emergency Standards Review COVID-19 prevention plans Ensure compliance with emergency standards Main Requirement: Employers must prepare, implement, and maintain a written COVID-19 Prevention Program 11
- 12. 12 Trends in COVID-19 Litigation Expected wave of new employment litigation 1. Wrongful Terminations 2. Employee Fears over Workplace Safety 3. Paid Sick Leave and FMLA Violations 4. Failure to Accommodate Disabilities 12
- 13. 13 Trends in COVID-19 Litigation Employer Takeaways Arbitration agreements Update handbook Ensure compliance with laws – especially wage and hour laws 13
- 14. Equity in the Workplace: Anti-Discrimination, Anti-Harassment, Anti-Retaliation
- 15. 15 Diversity, Equity, and Inclusion 15 Continuing Focus in 2021 Not just bare minimum to avoid legal liability Change culture and practices within the organization Recruiting, retention, pay practices, promotion
- 16. 16 SB 973 – Employers Annual Pay Data Reporting Requirements Despite equal pay laws, pay gaps by gender and race exist. – New annual pay data report to California DFEH, similar to federal EEO-1 – Private employers with 100 or more employees – March 31, 2021 deadline – Pay and hours worked by job category, sex, race, ethnicity – Format for reporting not yet available 16
- 17. 17 SB 973 – Employers Annual Pay Data Reporting Requirements Opportunity to determine if inequities exist in pay practices before complaints or litigation Report due 3/21/2021 based on 2020 pay data Evaluate readiness for compliance Determine how to adjust systems and practices to ensure data available in DFEH required format, if needed 17
- 18. 18 AB 979 – Diversity Quotas for Corporate Boards AB 979 expands 2018’s AB 873, which mandated women on boards • December 31, 2021 – Publicly-held corporations headquartered in California must include directors from “underrepresented communities.” • “underrepresented community” – “individual who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native,” or LGBTQ • Number required depends on the size of the board • Corporations may increase number of directors on boards 18
- 19. 19 AB 979 – Diversity Quotas for Corporate Boards Publicly held employers should diversify board of directors and/or add more directors to diversify their board of directors. Non-complaint companies risk fines of $100,000 to $300,000. Similar legislative developments are likely in other states. Employer Takeaways 19
- 20. 20 Pre–Employment Inquiries Regarding Religious Creed, Disability, and Medical Conditions • New California regulations • Forbids pre-employment inquiries regarding scheduling information • To ascertain an applicant’s religious creed, disability, or medical condition Scheduling inquiries must clearly communicate the applicant does not have to disclose scheduling restrictions based on legally protected grounds. 20
- 21. 21 Pre–Employment Inquiries Regarding Religious Creed, Disability, and Medical Conditions – Review employment applications and interview process to avoid prohibited questions. – Approved language: » “Other than time off for reasons related to your religion, a disability, or a medical condition, are there any days or times when you are unavailable to work?” » “Other than time off for reasons related to your religion, a disability, or a medical condition, are you available to work the proposed schedule?” Employer Takeaways 21
- 22. 22 EEOC COVID-19 Vaccine Guidance - Hypothetical Company A has decided to implement a mandated COVID-19 vaccination requirement. In order to make the process as convenient as possible for its employees, Company A hires a third-party contractor to administer the COVID-19 vaccines to its employees. Which of the following pre-vaccinations screening questions would NOT trigger the ADA’s restrictions on disability-related inquiries (i.e. inquiry must be job- related and consistent with business necessity)?
- 23. 23 EEOC COVID-19 Vaccine Guidance • December 16, 2020 - new guidance • Employers may require employees to have COVID-19 vaccination. • What if employee refuses? – If disability or sincerely held religious belief – Individualized analysis that the unvaccinated employee would pose direct threat due to significant risk of substantial harm to the health and safety of others that cannot be eliminated or reduced by reasonable accommodation • Automatic termination is not permitted. • Accommodation may be possible – remote work 22
- 24. 24 EEOC COVID-19 Vaccine Guidance • Will your company require employees to provide proof of COVID-19 vaccination? – Identify reasons why policy is necessary • Plan to engage in the interactive process • Individualized assessment Employer Takeaways 23
- 25. Compensation and Wage & Hour
- 26. 26 Independent Contractors - AB 5, AB 2257, Prop 22 AB 5 – effective January 1, 2020 • Expanded California Supreme Court’s decision in Dynamex and the “ABC test” AB 2257 – effective September 4, 2020 • Added some exemptions Proposition 22 – approved Nov. 3, 2020 • Excludes app-based drivers from AB 5 • Provides limited benefits 25
- 27. 27 Independent Contractors - AB 5, AB 2257, Prop 22 More occupations qualify for the “professional services exemption” • Expands criteria under which referral agencies and service providers providing services to clients through referral agencies are exempt. • Creates new exemptions – For the entertainment industry, primarily in the music industry. – For B2B relationships between 2 individuals acting as sole proprietors or business entities for single-engagement event in the same location no more than 1/week. • Makes it easier to satisfy the “business service provider” exemption or “B2B exemption.” 26
- 28. 28 Step 1: Check the ABC Test A worker is an employee, unless the employer shows all 3 conditions. 1. Free from control and direction of the hiring entity in connection with the performance of the services, both under contract and in fact; 2. Performs work that is outside the hiring entity’s usual course of business; and 3. Customarily engaged in an independently established trade, occupation, or business. 27
- 29. 29 Step 2: Check for Exemptions to ABC Test Bona Fide Business-to-Business Contracting Relationship Referral Agency NEW Contracts for Professional Services Certain other professions, including insurance agents, real estate brokers, etc. Certain relationships between 2 individuals NEW Music industry exemptions NEW 28
- 30. 30 Independent Contractors - AB 5, AB 2257, Prop 22 Review independent contractor relationships. Reassess whether the independent contractor may qualify as an employee. Employees are entitled to: − Minimum wage − Rest breaks − Overtime pay − Unemployment and disability insurance − Mandatory leaves of absence − Workers’ compensation − And are protected by anti-discrimination, retaliation laws Employer Takeaways 29
- 31. 31 AB 2143 – “No re-hire” Clauses in Settlement Agreements AB 749 (starting 2020) Prohibits “no-rehire” clauses in settlement agreements for employment disputes, unless good faith determination that the aggrieved person engaged in sexual harassment or sexual assault 1.Permits no re-hire clauses if employee engaged in criminal conduct. 2.Before the claim or litigation, employer must document conduct to prevent bad faith after-the-fact determination of misconduct. 3.Aggrieved person must file claim or complaint in good faith - to prevent unfounded complaint to avoid a no re-hire clause. AB 2143 cleanup bill (effective Jan. 1, 2021) 30
- 32. 32 AB 2143 – Settlement Agreements in Employment Disputes Do not include “no-rehire” clauses in settlement agreements in employment disputes. Employers are not required to retain or rehire an unfit employee. “No-rehire” clauses are still permitted if the employee has not made a complaint through the company’s internal complaint process, to an administrative agency, in arbitration, or court. Employer Takeaways 31
- 33. 33 Minimum Wage - Hypothetical Company B is a California business with 30 employees. The city that Company B is located in has posted its own minimum wage, which is $16/hour. The federal minimum wage is still $7.25/hour. On January 1, 2021, which minimum wage requirement is Company B required to comply with?
- 34. 34 Minimum Wage Increase/Increase in Salary for Exempt Employees • Effective January 1, 2021 • California minimum wage increases • 25 employees or less increase to $13/hr • 26 or more employees increase to $14/hr • Also affects minimum salary requirements for exempt employees to qualify for the white collar exemptions • 25 employees or less = $54,080/yr • 26 employees or more = $58,240/yr Localities may impose minimum wages San Diego $14/hr for all employees 32
- 35. 35 Minimum Wage Increase/Increase in Salary for Exempt Employees Update minimum wages and minimum wage postings. Ensure exempt employees’ salaries satisfy the minimum salary requirements. Part-time exempt employees must be paid at least $54,080/year (or $58,240 for > 25) Employer Takeaways 33
- 36. 36 Right of Recall and Worker Retention Ordinances • Right of recall ordinances mandate employers offer laid-off employees written offers of employment that become available. • Work retention ordinances limit ability to change employees after the transfer of a business. • Generally limited to commercial property, hotel, and event center employers. Los Angeles also includes airport employers. New ordinances from City and County of Los Angeles, Oakland, San Francisco, San Diego – each with different coverage and requirements. 34
- 37. 37 Right of Recall and Worker Retention Ordinances Before planning terminations Employer Takeaways Determine if any new local ordinances apply. 35
- 38. 38 Minimum Compensatory Time Frlekin v. Apple, Inc., 973 F.3d 947 (9th Cir. 2020), 8 Cal.5th 1038 (2020) California wage order requires Apple to pay retail workers for time spent waiting for bag checks. Decision is retroactive. Rationale: • Searches were required, • Significant degree of control, • Enforced through the threat of discipline, and • Imposed primarily for Apple's benefit. 36
- 39. 39 Frlekin v. Apple - Minimum Compensatory Time • Determine if employees have unpaid activities related to work. − Temperature checks, donning or doffing non-generic protective gear, etc. • Ensure payment of every minute worked by employees. • Establish policies and training that off-the-clock work is prohibited. Employer Takeaways 37
- 40. Leaves, Benefits & Accommodation
- 41. 41 SB 1383 – Expansion of CA Family Rights Act and New Parent Leave Act Previously: • CFRA provided unpaid protected family and medical leave if 50+ employees within 75-mile radius of worksite • NPLA provided “baby bonding” leave if 20+ employees within 75-mile radius To small employers with 5 or more employees. 39 SB 1383 Expands
- 42. 42 SB 1383 – Expansion of CA Family Rights Act and New Parent Leave Act • 12 workweeks of unpaid protected leave during 12-month period to bond with new child or care for themselves or a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner. • Employee must have at least 1,250 hours of service during the previous 12-month period • Larger employers are affected – 75-mile radius requirement eliminated. • Employer of both parents of a child to grant leave to each employee. • Definition of “family member” expanded to include grandparent, grandchild, and sibling. 40
- 43. 43 SB 1383 – Expansion of CA Family Rights Act and New Parent Leave Act Update Employee Handbooks, forms, and policies Smaller employers need to immediately develop policies and procedures to implement and administer new leave requirements. Employer Takeaways 41
- 44. 44 Families First Coronavirus Response Act Extended March 2020 - Dec. 31, 2020 • Federal FFCRA provided paid sick leave for employees unable to work because required to quarantine or care for children when school or child care provider was closed. • Paid for by employers, reimbursed by payroll tax credit. Extended to March 31, 2021 • December 21, 2020 - Pandemic relief bill, Consolidated Appropriations Act, 2021. • Paid leave no longer mandated. • Payroll tax credits until March 31, 2021, if voluntarily continues to provide paid leave. • If employees already exhausted paid leave in 2020, no additional leave. 42
- 45. 45 Families First Coronavirus Response Act Extended • Determine whether extending FFCRA. • Communicate changes in policy to employees. • FMLA unpaid leave requirements continue. • Under the ADA, leave as a reasonable accommodations may be required for COVID-19 “long haulers,” or others, even if FMLA leave is exhausted or not available. Employer Takeaways 43
- 46. 46 Employer Reimbursement for Telework Expenses California Labor Code § 2802 • Private employers required to reimburse California employees for “all necessary business expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.” – Prevent employers from passing operating expenses to employees – Only requires reimbursement for “necessary” and “reasonable” costs – Can include cell phones, internet and other electronics for work 44
- 47. 47 Employer Reimbursement for Telework Expenses • Employers are encouraged to draft a reimbursement policy that will: – Manage expectations about which business related expenses may be reimbursed. – Establish procedures employees must follow to be reimbursed. 45 Employer Takeaways
- 48. 48 AB 1867 – COVID-19 Supplemental Paid Sick Leave • AB 1867 intended to close a loophole – FFCRA did not require employers with 500 or more employees to provided COVID-19 paid sick leave. – These requirements were in place only between September 19, 2020 and December 31, 2020. • AB 1867 establishes small employer mediation pilot program – Small employers with between 5 and 19 employees – To resolve claims of family leave violation of CFRA 46
- 49. 49 AB 1867 – COVID-19 Supplemental Paid Sick Leave • No additional leave is required in 2021 because: – Law expired on December 31, 2020 – FFCRA no longer requires paid leave Employer Takeaways 47
- 50. 50 Looking ahead to 2021: Biden Administration Expect pendulum to swing to employee-friendly shift over time. 1. NLRB: Republican majority until at least August 21, 2021. Possible changes to joint employer status and right to organize. 2. EEOC: Republican majority until July 2022. 3. Executive Orders: EO 13950 “Combating Race and Sex Stereotyping” 4. OSHA: More stringent standards to prevent COVID in the workplace 5. Wage and Hour: Possible changes to FLSA joint employer standard 6. Democratic Senate 48
- 51. Questions
Editor's Notes
- Summary: AB 685 requires an employer who receives a notice of potential exposure to COVID-19, the employer must within one day provide written notice to all employees and subcontracted employees, who were on the premises at the same worksite within the “infectious period” and the employees’ exclusive representative. The notice must contain information about what COVID-19 related benefits the employee is entitled to under federal, state, and local laws, and the employer’s disinfection and safety plan. Employers are required to keep a copy of all notices provided to employees for three years. Under the new law, if the employer is notified of a number of COVID-19 cases that meet the definition of a COVID-19 outbreak as defined by the State Department of Public Health, the employer has 48 hours to notify the local public health agency.
- Takeaway for Employers: Since employers only have one day to notify employees, employers should have a prepared email or letter with the required information to send to relevant employees, subcontracted employees, and exclusive representatives, if and when an employee tests positive for COVID-19. Employers should ensure that all email addresses and contact information is correct. Employers should also determine how to report an outbreak to the local public health agency.
- Summary: On September 17, 2020, California Governor Gavin Newsom signed SB 1159 into law, which is effective immediately for all employers. The law does several things: (1) it creates a disputable presumption for all mandatory on-site workers for workers’ compensation for confirmed COVID-19 cases between March 19, 2020, and July 5, 2020; (2) it creates a “disputable presumption” for workers’ compensation for certain essential employees and employees working at places of employment with 5 or more employees where there has been an “outbreak,” who suffer illness or death from COVID-19 on or after July 6, 2020, through January 1, 2023, that such illness or death arose out of and in the course and scope of employment; (3) it creates reporting requirements for employers to claims administrators. The employer shall report the following to its worker’s compensation claims administrator within three business days: 1) An employee has tested positive; 2) The date that the employee tests positive (the date the specimen was collected for testing); 3) The specific address or addresses of the employee’s place of employment during the 14-day period preceding the positive test; and 4) The highest number of employees who reported to work in the 45-day period preceding the last day the employee worked at the place of employment. This law codified and expands some of the presumptions that Governor Newsom had previously issued through a May 6, 2020 executive order. https://www.dir.ca.gov/dwc/Covid-19/FAQ-SB-1159.html Takeaway For Employers: a. Be alert to whether an “outbreak” has occurred – - 4 positive tests if 100 employees or fewer, - 4% at the place of employment if more than 100 employees, or - if the employment was ordered to close due to a risk of infection. b. Employers who want to dispute the claim must act quickly to investigate and deny the claim. The employer has 30 days investigate and decide whether to accept or reject the claim for first responders and health care workers, and 45 days where there has been an outbreak. Any employer who is aware of an employee testing positive on or after July 6, 2020, and prior to the September 17, 2020 (effective date of this section), must report all of the above information their claims administrator, in writing via electronic mail or facsimile. This should have occurred within 30 business days of the effective date of SB 1159. Employers should also work closely with their claims administrator to make sure they are providing all applicable information to employees, including, but not limited to, workers' compensation claim forms.
- Takeaway For Employers: Any employer who is aware of an employee testing positive on or after July 6, 2020, and prior to the September 17, 2020 (effective date of this section), must report all of the above information their claims administrator, in writing via electronic mail or facsimile. This should have occurred within 30 business days of the effective date of SB 1159. Employers should also work closely with their claims administrator to make sure they are providing all applicable information to employees, including, but not limited to, workers' compensation claim forms.
- The California Occupational Safety and Health Standards Board (Cal/OSHA) unanimously adopted emergency temporary standards to protect workers from workplace hazards related to COVID-19. The new regulations went into effect on November 30, 2020 and apply to all employees and places of employment, with the following exceptions: 1) Workplaces where there is only one employee who does not have contact with other persons; 2) Employees working from home; 3) Employees when covered by Cal/OSHA’s Aerosol Transmissible Diseases standard. Under the new regulations, employers must establish, implement, and maintain an effective written COVID-19 Prevention Plan that protects employees and addresses the following: 1) Accessibility of COVID-19 Prevention Plan; 2) System for communicating information to employees regarding COVID-19 prevention procedures; 3) Identification and evaluation of hazards; 4) Investigating and responding to cases in the workplace; 5) Correcting COVID-19 hazards; 6) Physical distancing; 7) Face coverings; 8) Adopting site-specific strategies; 9) Removal of COVID-19 exposed workers and COVID-19 positive workers from the workplace; 9) Return to work criteria for COVID-19 cases; 10) Return to work criteria for exposed employees; 11) Recording requirements; 12) Requirements for testing and notifying public health departments. Pursuant to the state’s emergency rulemaking process, the emergency standards will remain in effect for 180 days unless renewed (up to 2 times), withdrawn or replaced by a permanent standard
- The California Occupational Safety and Health Standards Board (Cal/OSHA) unanimously adopted emergency temporary standards to protect workers from workplace hazards related to COVID-19. The new regulations went into effect on November 30, 2020 and apply to all employees and places of employment, with the following exceptions: 1) Workplaces where there is only one employee who does not have contact with other persons; 2) Employees working from home; 3) Employees when covered by Cal/OSHA’s Aerosol Transmissible Diseases standard. Under the new regulations, employers must establish, implement, and maintain an effective written COVID-19 Prevention Plan that protects employees and addresses the following: 1) Accessibility of COVID-19 Prevention Plan; 2) System for communicating information to employees regarding COVID-19 prevention procedures; 3) Identification and evaluation of hazards; 4) Investigating and responding to cases in the workplace; 5) Correcting COVID-19 hazards; 6) Physical distancing; 7) Face coverings; 8) Adopting site-specific strategies; 9) Removal of COVID-19 exposed workers and COVID-19 positive workers from the workplace; 9) Return to work criteria for COVID-19 cases; 10) Return to work criteria for exposed employees; 11) Recording requirements; 12) Requirements for testing and notifying public health departments. Pursuant to the state’s emergency rulemaking process, the emergency standards will remain in effect for 180 days unless renewed (up to 2 times), withdrawn or replaced by a permanent standard
- Employers should review their COVID-19 prevention plans and ensure that they are in compliance with the emergency standards. The main requirement of the emergency standards is that employers must prepare, implement, and maintain a written COVID-19 Prevention Program.
- Wrongful Terminations: The actions consist of almost all varieties of wrongful termination actions. Often, the actions are being filed on behalf of former employees who lost their jobs through pandemic-related furloughs or reductions in force (RIFs) Employers need to develop and utilize a written scheme of lawful, objective, neutral criteria for selecting who to include in any furlough or Reduction in Force. Analyze in advance of the personnel actions whether the furlough or RIF will have a disproportionate impact on employees with any particular protected characteristic, e.g., age, ethnicity, gender, etc. Employee Fear Over Workplace Safety: This litigation involves actions that allege employers failed to adequately protect employees from on-the-job coronavirus transmission. The lawsuits allege, secondly, that when employees raised concerns, they were fired. Employers should identify for employees at least a few different people in positions of authority in the organization to whom they may take concerns regarding COVID-19 safety issues. Also employers should provide a means for employees to report concerns anonymously. Employers should extend a little extra compassion as we are all experiencing an unparalleled level of stress attributable to pandemic fatigue, widespread job losses, the onset of a recession, political divisiveness, racial tensions and other factors. Being sensitive and providing some leeway at this time will likely be helpful in long run for employers. Paid Sick Leave and FMLA Leave Violations: Employees are regularly filing actions alleging that employers wrongfully failed to honor requests by employees impacted by COVID-19 for paid sick leave or family medical leave. The lawsuits allege employers denied Emergency Paid Sick Leave or Expanded Family Medical Leave in violation of the Families First Coronavirus Response Act (FFCRA), standard paid sick leave under state and local laws and standard FMLA leave or similar leave afforded under state laws, such as the California Family Rights Act. Employers should be knowledgeable about paid sick leaves and leave rules under the FFCRA and in their local jurisdiction and ensure that the supervisors, managers and HR staff who receive or decide requests for paid sick leave or leave are trained, including on the most recent developments. Failure to Accommodate Disabilities: Employees with disabilities making them more vulnerable to contracting COVID-19 are also suing based on claims that their employers refused to extend accommodations the plaintiffs needed to perform their work safely. The most frequently requested accommodation is working from home. Employers should engage in a genuine, thoughtful interactive process with the employee requesting accommodation and assess how and which accommodations work both parties.
- Wrongful Terminations: The actions consist of almost all varieties of wrongful termination actions. Often, the actions are being filed on behalf of former employees who lost their jobs through pandemic-related furloughs or reductions in force (RIFs) Employers need to develop and utilize a written scheme of lawful, objective, neutral criteria for selecting who to include in any furlough or Reduction in Force. Analyze in advance of the personnel actions whether the furlough or RIF will have a disproportionate impact on employees with any particular protected characteristic, e.g., age, ethnicity, gender, etc. Employee Fear Over Workplace Safety: This litigation involves actions that allege employers failed to adequately protect employees from on-the-job coronavirus transmission. The lawsuits allege, secondly, that when employees raised concerns, they were fired. Employers should identify for employees at least a few different people in positions of authority in the organization to whom they may take concerns regarding COVID-19 safety issues. Also employers should provide a means for employees to report concerns anonymously. Employers should extend a little extra compassion as we are all experiencing an unparalleled level of stress attributable to pandemic fatigue, widespread job losses, the onset of a recession, political divisiveness, racial tensions and other factors. Being sensitive and providing some leeway at this time will likely be helpful in long run for employers. Paid Sick Leave and FMLA Leave Violations: Employees are regularly filing actions alleging that employers wrongfully failed to honor requests by employees impacted by COVID-19 for paid sick leave or family medical leave. The lawsuits allege employers denied Emergency Paid Sick Leave or Expanded Family Medical Leave in violation of the Families First Coronavirus Response Act (FFCRA), standard paid sick leave under state and local laws and standard FMLA leave or similar leave afforded under state laws, such as the California Family Rights Act. Employers should be knowledgeable about paid sick leaves and leave rules under the FFCRA and in their local jurisdiction and ensure that the supervisors, managers and HR staff who receive or decide requests for paid sick leave or leave are trained, including on the most recent developments. Failure to Accommodate Disabilities: Employees with disabilities making them more vulnerable to contracting COVID-19 are also suing based on claims that their employers refused to extend accommodations the plaintiffs needed to perform their work safely. The most frequently requested accommodation is working from home. Employers should engage in a genuine, thoughtful interactive process with the employee requesting accommodation and assess how and which accommodations work both parties.
- Following the tumultuous demonstrations for Black Lives Matter in 2020, many organizations focused inward to consider diversity, equity, and inclusion within their own organizations. Many employers are continuing to focus on these issues in 2021. Diversity, equity, and inclusion is not just a matter of doing the bare minimum to avoid legal liability. Many organizations are working to change the policies and practices within their organization and also shift the culture within the organization. Actions may include: Compiling diversity and inclusion metrics, such as whether executive leadership reflect the diversity of the lower level employees, or whether the company’s gender and racial makeup reflect the communities it serves. These numbers can help a company identify weaknesses and track progress over time. Review (possibly with assistance from outside counsel) practices and policies to ensure that they are non-discriminatory and anti-racist. One practice gaining popularity in the legal profession is the Mansfield Rule, in which employers commit that when choosing leadership and governance positions, at least 30% of candidates will be women, people of color, LGBTQ+, or persons with disabilities. Data show that having a large percentage of diverse candidates increases the odds that a diverse candidate will be hired. Training, such as implicit bias training and bystander intervention training to help to stop incivility before it escalates into harassment. Retaining outside counsel to conduct a privileged pay audit to uncover pay inequities attributable to race or gender. Studies have shown that diverse workplaces are more profitable. A 2015 study by McKinsey showed a “diversity dividend.” Companies in the top quarter for racial and ethnic diversity are 35% more likely to financially outperform the national industry median. And when senior management is racially and ethnically diverse, the diversity dividend is even more pronounced.
- Under the new law, on or before March 31, 2021, and each year thereafter (on the same 3/31 date), private employers with 100 or more employees, are required to submit a pay data report to the California Department of Fair Employment and Housing (DFEH) that includes the number of employees by race, ethnicity, and sex
- Takeaway for Employers: The pay data report due on 3/21/2021 will be based on 2020 pay data, so employers should begin to evaluate their readiness for compliance as soon as possible (e.g. employers should begin process of determining how to adjust their systems and practices to ensure that the data will be available in the format mandated by the DFEH, if needed).
- AB 979, which requires publicly held corporations headquartered in California to diversify their boards of directors with directors from “underrepresented communities” by December 31, 2021. AB 979 defines “director from an underrepresented community” as “an individual who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender.” Corporations may increase the number of directors on their boards to comply with these requirements.
- Takeaway for Employers: Publicly held employers should diversify their board of directors and/or add more directors to diversify their board of directors.
- The California Code of Regulations were amended to specify what pre-employment practices constitute discrimination on the basis of age, disability, medical condition, and religious discrimination. The regulations forbid employers from making pre-employment inquiries regarding scheduling information to ascertain an applicant’s religious creed, disability, or medical condition. Any scheduling inquiry must clearly communicate that the applicant does not have to disclose scheduling restrictions based on legally protected grounds.
- Takeaway for Employers: Employers should be cognizant about any interview questions regarding schedule restrictions.
- Governor Newsom signed California Assembly Bill 5 (AB 5) into law – codifying and expanding the California Supreme Court’s decision in the Dynamex case and the "ABC test" for determining if a worker may be classified as an independent contractor, instead of an employee. Under the “ABC” test, to prove that a worker is properly classified as an independent contractor as opposed to an employee, the putative employer must establish all three of the following elements: The worker is free from the employer’s control and direction in connection with the performance of the work, both under the contract and in fact. The worker performs work that is outside the usual course of the employer’s business. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
- AB 2257 expands the list of occupations that qualify for the “professional services exemption” (PSE). The law also expands criteria under which referral agencies and service providers providing services to clients through referral agencies are exempt. AB 2257 creates several exemptions for the entertainment industry, primarily in the music industry. The law also creates an exemption for business-to-business relationships between two individuals acting as sole proprietors or business entities for a single-engagement event in the same location no more than once a week. AB 2257 makes it easier to satisfy the “business service provider” exemption or “B2B exemption.”
- The purpose of the organization is to teach art to students. She’s a teaching artists. So, in this example, the teaching artist position fails the ABC Test. It doesn’t matter that the position is only temporary.
- Takeaway for Employers: Employers should conduct a comprehensive review of all workers currently classified as independent contractors to see if that classification still fits – especially with regard to workers in the categories identified above, and review business-to-business and referral agency relationships in accordance with these new requirements.
- AB 749 (effective January 1, 2020) prohibited settlement agreements from containing a provision that restricts an employee from obtaining future employment with the employer (frequently referred to as a “no re-hire” clause) if that employee has filed a claim or civil action against the employer. However, AB 749 provided an exception to this restriction on no re-hire clauses in settlement agreements where the employer made a good faith determination that the aggrieved person engaged in sexual harassment or sexual assault. AB 2143 (which goes into effect on January 1, 2021) makes several clarifying changes to this law as follows: 1) Expands the sexual harassment/sexual assault exception to also allow no re-hire clauses in situations where the employer determined the employee engaged in any criminal conduct. 2) Requires that the good faith determination of sexual harassment, sexual assault, or any criminal conduct be made and documented before the aggrieved person filed the claim or civil action against the employer, thus preventing employers from operating in bad faith from making an after-the-fact determination of such misconduct. 3) The law now also requires that the aggrieved person files their claim or complaint against the employer in good faith, thus, avoiding the potential for an employee filing an unfounded complaint just to invoke the protections of this law and avoid a no re-hire clause.
- Takeaway for Employers: Employers are reminded to consider this law, as amended, in drafting settlement agreements in employment disputes. Employers also should remember that nothing in the statute requires an employer to either retain or rehire an unfit employee (even if the reason for the unfitness has nothing to do with sexual harassment, sexual assault, or criminal conduct.) It just limits employers’ ability to include a no-rehire provision in a settlement agreement of an employment dispute.
- Effective January 1, 2021, the minimum wage for California employers with 25 employees or less will increase to $13 per hour, and for employers with 26 or more employees, the minimum wage will increase to $14 per hour. Employers must remember this increase also affects minimum salary requirements for exempt employees. With the increase in 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. Keep in mind that locality’s may impose their own minimum wages, for example, San Diego’s is rising to $14 per hour for all employees.
- Takeaway for Employees: Employers must also ensure their minimum wages and minimum wage postings are updated appropriately to reflect state and local increases.
- Right to Recall ordinances mandate that employers offer laid-off employees in writing by mail, email, and text message all job positions that become available after the employees has been laid off. Currently there is no statewide law, but four major cities (Los Angeles, Oakland, San Francisco, and San Diego) have passed their own right of recall and retention ordinances each with its own coverage and requirements. San Diego’s ordinance, for example, is limited to commercial property, hotel, and event center employers. Los Angeles is limited to these industries, plus airport employers.
- Takeaway for Employers: Employers in these localities should review the local ordinances if they are considering a layoff.
- The U.S. Court of Appeals for the Ninth Circuit ruled that Apple must pay retail workers for the time they spend waiting for their bags to be checked. The Ninth Circuit affirmed the California Supreme Court decision that time that Apple employees waiting to get their bag checks was compensable because exit searches were required, involved a significant degree of control, are enforced through the threat of discipline, and were imposed primarily for Apple's benefit.
- Takeaway for Employers: Any employers that do not pay employees for time spent on security checks should evaluate their policies under these factors and should understand that you could be facing liability for past actions. Employers should also note that this case extends well beyond just bag checks. It provides a key for evaluation of compensable time under California law generally. Although many activities may remain unpaid under the guidance of this decision, employers in California should nonetheless identify and evaluate any and all unpaid activities of their employees that could have any arguable relationship to their work.
- SB 1383 expands the California Family Rights Act (“CFRA”) and the New Parent Leave Act (“NPLA”) to make it an unlawful employment practice for any employer with five or more employees to refuse to grant a request by an employee to take up to 12 workweeks of unpaid protected leave during any 12-month period to bond with a new child of the employee or to care for themselves or a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner. The law also eliminates the 75-mile radius for purposes of counting employees (but keeps the requirement that to be eligible for leave the employee must have at least 1,250 hours of service with the employer during the previous 12-month period). Previously, the CFRA and NPLA applied only to employers with 50 or 20 employees (respectively) within a 75-mile radius. In addition, the law requires an employer that employs both parents of a child to grant leave to each employee. Furthermore, starting January 1, 2021, "family member" under the CFRA will expand to include grandparent, grandchild, and sibling. It currently only includes the employee's parent, child, spouse or domestic partner.
- SB 1383 expands the California Family Rights Act (“CFRA”) and the New Parent Leave Act (“NPLA”) to make it an unlawful employment practice for any employer with five or more employees to refuse to grant a request by an employee to take up to 12 workweeks of unpaid protected leave during any 12-month period to bond with a new child of the employee or to care for themselves or a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner. The law also eliminates the 75-mile radius for purposes of counting employees (but keeps the requirement that to be eligible for leave the employee must have at least 1,250 hours of service with the employer during the previous 12-month period). Previously, the CFRA and NPLA applied only to employers with 50 or 20 employees (respectively) within a 75-mile radius. In addition, the law requires an employer that employs both parents of a child to grant leave to each employee. Furthermore, starting January 1, 2021, "family member" under the CFRA will expand to include grandparent, grandchild, and sibling. It currently only includes the employee's parent, child, spouse or domestic partner.
- Takeaway for Employers: Employers should update forms, documents, policies, and Employee Handbooks to account for the changes to the CFRA. This may mean creation of these policies for smaller employers, or editing for larger employers to account for the expanded definition of "family members," elimination of the “75-mile radius.” Smaller employers who were previously were not covered by the CFRA need to immediately begin the process of preparing to develop policies and procedures to begin implementing and administering these new leave requirements.
- Summary: California Labor Code § 2802 requires private employers to reimburse California employees for “all necessary business expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.” Its purpose is to prevent employers from passing their operating expenses to their employees. However, Section 2802 only requires reimbursement for “necessary” and “reasonable” costs incurred by the employee as a condition of continued employment. What constitutes “necessary and reasonable” will depend on multiple factors, including the employee’s job responsibilities the employee’s performance expectations while working remotely, and the actual costs incurred by the employee. For example to the extent these employees are using their cell phones, internet and other electronics for work, they are doing so to perform their jobs. Therefore, the reasonable expenses associated with the use and maintenance of such equipment must be reimbursed. Takeaway for Employers: Employers are encouraged to draft a reimbursement policy that will manage expectations about which business related expenses may be reimbursed and establish procedures employees must follow to be reimbursement. Public Employers: The issue of whether Labor Code section 2802 applies to public agencies is unsettled. Section 2802 does not expressly state that it applies to public entities, and California courts have held that public entities are not subject to general Labor Code provisions unless expressly included. To date, there are no published court decisions that specifically address whether public agencies are required to reimburse employees for work-related use of the internet or cell phones or furniture. There is one case (In re Acknowledgement Cases, 239 Cal. App. 4th 1498) where the Court possibly suggested that Labor Code section 2802 may apply to public entities. Although unclear, the safest and conservative option would be to provide reasonable reimbursements if the employer is requiring the employees to work from home.
- Takeaway for Employers: Employers are encouraged to draft a reimbursement policy that will manage expectations about which business related expenses may be reimbursed and establish procedures employees must follow to be reimbursement.
- AB 1867 established supplemental COVID-19 paid sick leave for private employers with 500 or more employees anywhere in the nation, as well as public and private employers of first responders and health care employees who opted out of the leave under the federal law. This portion of AB 1867 was intended to fill a void not addressed by the federal Families First Coronavirus Response Act ("FFCRA"). If the employer already has provided employees with paid sick time off for the same COVID-19-related reasons, then the employer may already be in compliance. This law expires on December 31, 2020.
- Takeaway for Employers: Employers who exempted “emergency responders” and “healthcare providers” should immediately to ensure their policies and payroll procedures are compliant with AB 1867. Furthermore, employees with more than 500 employees should update their policies. These employees should review the FAQs on the Department of Industrial Relations website regarding AB 1867 and post the correct notice for Supplemental Paid Sick Leave. The notices are on the Department of Industrial Relations website as well. (https://www.dir.ca.gov/dlse/COVID-19-Non-Food-Sector-Employees-poster.pdf)
- AB-2992 amends Labor Code sections 230 and 230.1 to provide the victims of violent crimes and families of homicide victims (1) time to recover without fear of job loss and (2) expanded unpaid leave. The bill expands the prohibition of discharging, discriminating, or retaliating against employees for taking time off who are victims of domestic violence, sexual assault, or stalking to include “or other crime or abuse” “that caused physical injury or that caused mental injury and a threat of physical injury” and “a person whose immediate family member is deceased as the direct result of the crime.”