Despite the havoc COVID-19 has wreaked on our lives and productivity, the state of California has not slowed down its rate of adopting new employment laws. Indeed, Governor Newsom recently signed seventeen employment-related bills into law. All new laws will go into effect on January 1, 2021, unless otherwise noted. Below is a summary of the most relevant new laws impacting our California clients, as well as other important employment law updates for 2021.
Please contact Jen at jenv@soulelawfirm.com or 919.809.5866 if you have any questions or would like to have your CA Employee Handbook updated to comply with these new legal requirements.
COVID-19 Laws
- AB 1867 (COVID-19 Supplemental Paid Sick Leave): AB 1867 is effective immediately and requires employers with more than 500 employees to provide up to 80 hours of supplemental paid sick leave to employees to use for specified COVID purposes. It also applies to public and private employers of healthcare workers and first responders (regardless of the number of employees) who originally opted not to provide paid leave. Non-food sector employers must list the Supplemental Paid Sick Leave on employees’ pay stubs starting on the next full pay period after 09/19/20. Employers also must post the required poster.
- AB 685 (COVID-19 Reporting): Under this new law, employers who receive notice of a number of COVID-19 cases that meet the State Department of Public Health’s definition of a COVID-19 outbreak are required to provide specified disclosures to employees within one business day and notice to the State Department of Public Health within 48 hours.
- SB 1159 (COVID-19 Workers’ Compensation Coverage): This new law, which is effective immediately, applies to employers with five or more employees. The law creates a rebuttable presumption that certain categories of workers contracted COVID-19 at work if specified criteria are met. This law also creates new reporting obligations. Employers must report positive tests to their workers’ compensation claims administrator within 3 business days. Employers have until 10/19/20 to report any positive tests occurring between 07/06/2020 and 09/16/2020.
Leave Laws
- SB 1383 (Expansion of CFRA Leave): This law will have a monumental impact on small employers and impacts large employers who are already subject to the California Family Rights Act (CFRA). CFRA has historically applied to employers with 50 or more employees. However, this new law expands CFRA to employers with as few as five employees (or 20 employees for new parent leave). Covered employers are required to provide up to 12 weeks of unpaid leave to employees for eligible reasons, including serious health conditions of the employee or a family member and/or for baby bonding. This bill also expands the qualifying reasons for leave to include certain situations related to a family member being called to active duty. Additionally, where both employees work for the same employer, employers can no longer limit baby-bonding leave to 12-weeks of combined leave. Instead, both parents are now entitled to 12-weeks of leave. Lastly, SB 1383 eliminated the exception that allowed employers to deny reinstatement for certain key employees.
- AB 2992 (Victims’ Leave): Existing law provides certain rights to employees who are victims of domestic violence, sexual assault, and/or stalking, including the right to take leave. This new law expands coverage to employees who are victims of crime or abuse “that caused physical injury or that caused mental injury and a threat of physical injury” or whose immediate family member is deceased as the direct result of the crime.
- AB 2017 (Kin Care Leave): Current law allows employees to use at least half of their annual accrued sick leave for “kin care” (family member) reasons. To avoid employers mistakenly designating the use of sick days as kin care, AB 2017 provides employees with the “sole discretion” to designate what type of sick days they are taking.
Wage & Hour Laws
- 2021 CA Minimum Wage: For employers with 25 or fewer employees, the minimum wage is $13/hour. For employers with more than 25 employees, the minimum wage is $14/hour.
- Salary Threshold for Exempt Employees: Exempt employees must be paid salaries of $54,080 annually ($4,506.67/month) for employers with 25 or fewer employees and $58,240 annually ($4,853.33/month) for employers with more than 25 employees.
- AB 3075 (Wage Enforcement): Current law requires business entities to file a Statement of Information with the Secretary of State. Starting on 01/01/22 or when the Secretary of State certifies that it has implemented California Business Connect, whichever is earlier, companies are required to indicate whether any officer or director has an outstanding final judgment issued by the Division of Labor Standards Enforcement or a court for violation of a wage order or the Labor Code. This law also holds a successor employer liable for any judgment for wages, damages, and penalties owed to the former workforce pursuant to a final judgment.
Benefits Laws
- CalSavers Retirement Savings Program: Employers with 5 or more employees are required to register with the CalSavers program at employer.calsavers.com if they do not already offer a workplace retirement plan. The program allows employees to automatically contribute to an IRA and there is no fee for employers. The registration deadlines are September 30, 2020 for employers with more than 100 employees; June 30, 2020 for employers with more than 50 employees; and June 30, 2022 for employers with 5 or more employees.
Employee Claims
- AB 1947 (Extension of Time to File Labor Commission Complaints): AB 1947 extends the time for employees to file complaints with the Labor Commissioner. Employees now have 1 year instead of 6 months to file such claims. This law also allows employees who prevail on certain retaliation claims to recover attorneys’ fees.
- AB 2143 (Settlement Agreements): California law already generally prohibits employers from including a “no rehire” provision in settlement agreements that resolve employment claims. AB 2143 makes minor revisions to current law, such as including an exception if, before the employee raised the employment claim(s), the employer made and documented a good faith determination that the employee had engaged in sexual harassment, sexual assault, or criminal conduct.
- SB 1384 (Arbitration of Wage Claims): This new law allows the CA Labor Commissioner under specified circumstances to represent an employee who wants to oppose an employer’s petition to compel arbitration of wage claims, and/or in any arbitration hearing ordered for resolution of the claim.
Worker Classification Laws
- AB 2257 (Employees versus Independent Contractors): This new law expands the categories of exemptions from the “Dynamex” independent contractor classification test.
- As a reminder, earlier this year AB 5 (codified in Labor Code Section 2750.3) changed California’s test for determining whether a worker is an employee or independent contractor. Under the new “ABC Test”, a worker is an independent contractor only if all of the following 3 elements are satisfied: (1) the person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; (2) the person performs work that is outside the usual course of the hiring entity’s business; AND (3) the person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
Reporting Laws
- SB 973 (Annual Pay Data Report): On or before March 31st (starting in 2021), private employers with 100 or more employers and who are required to file an annual Employer Information Report (EEO-1) pursuant to federal law are now required to annually submit a pay data report to the CA Department of Fair Employment and Housing. The report must include information on the numbers of employees, by race, ethnicity, and gender, who are employed in specified job categories as well as pay band data for these employees.
Corporate Laws
- AB 979 (Membership of Boards of Directors): California law already requires boards of directors to have specified number(s) of female directors. This new law requires publicly held corporations whose principal executive office is in CA to have at least one director from an underrepresented community by December 31, 2021. By the end of 2022, corporations with more than 4 directors are required to have higher specified numbers of minority representation.