Every New Year seems to bring with it many new legal obligations for California employers, and this year is no exception. It is accordingly time for California employers to review their policies and practices to ensure compliance with the new laws that go into effect January 1, 2021. Below is a summary of some of the most notable of these new laws. 


SB 1383: Expansion of California Family Rights Act (CFRA)

SB 1383 repeals the California New Parent Leave Act (“NPLA”) and the California Family Rights Act (“CFRA”), and in their place implements the new California Family Rights Act (the “new CFRA”). The new CFRA expands coverage to apply to all employers with 5 or more employees, a significant expansion from the previous requirement of 50 or more employees.

The law expands the definition of “family member” to include domestic partners, grandparents, grandchildren, adult children, and siblings, a definition that will allow employees to take leave for reasons beyond that which is covered under the federal Family and Medical Leave Act (FMLA). As a result, employees may be entitled to up to 24 workweeks of unpaid protected leave for those leaves that do not run concurrently with the FMLA.

The new CFRA also allows for protected leave due to a qualifying exigency related to covered active duty of an employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States.

Additionally, an employer who employs both parents of a child must now grant up to 12 weeks of leave to each employee, whereas the old CFRA allowed an employer to limit leave to 12 weeks of combined baby bonding when both parents are employees.
 
Employers should familiarize themselves with the details of the new CFRA and revise their existing leave related policies and practices accordingly. Employers with New Parent Leave policies should remove them from their handbooks and replace them with a new CFRA policy.


AB 685: COVID-19 Notice and Reporting Obligations

AB 685, which adds section 6409.6 to the Labor Code, requires employers, within one business day, to provide written notice of a potential COVID-19 workplace exposure to their employees and employers of subcontractors who have been at the employer’s worksite at the same time as a “qualifying individual.”

A “qualifying individual” means any person who:

  1. has a laboratory-confirmed case of COVID-19,
  2. has a positive COVID-19 diagnosis from a licensed health care provider,
  3. is subject to a COVID-19-related order to isolate provided by a public health official, or
  4. has died due to COVID-19, as determined by a county public health department. 

The written notice must, among other things, provide employees who may have been exposed to COVID-19 with information about COVID-19 related benefits to which they may be entitled under federal, state, and local laws, and describe the disinfection and safety measures that the employer plans to take at the worksite in response to the potential exposure.
 
AB 685 also imposes strict reporting obligations on employers in the event of a COVID-19 “outbreak,” which is defined as three or more laboratory confirmed cases of COVID-19 among employees who live in different households within a two-week period. Specifically, in the event of a COVID-19 outbreak, the employer must, within 48 hours, notify the local public health agency of the names, number, occupation, and worksite of employees who meet the definition of a “qualifying individual.”

The obligations imposed by AB 685 are in addition to Cal/OSHA’s COVID-19 Emergency Temporary Standards, which can be reviewed here.
 
Employers should consider preparing a draft notice so that they are able to comply with the one-day notice requirement in the event of a COVID-19 workplace exposure.


SB 973: Pay Data Reporting to the California DFEH

SB 973 requires private employers with 100 or more employees, to submit a pay data report to the California Department of Fair Employment and Housing (“DFEH”) for the prior year by March 31, 2021, and annually thereafter.

This annual report must include a breakdown of employees by race, ethnicity, and sex in each of the following categories: executive or senior level officials and managers, first or mid-level officials and managers, professionals, technicians, sales workers, administrative support workers, craft workers, operatives, laborers and helpers, and service workers.

Note: AB 973 does not specify whether an employer must have 100 or more employees in California, or if the employer must provide information for all employees or only those in California.


AB 2143: Amendment to Prohibition Against No-Rehire Provisions in Settlement Agreements

Last year, California enacted Code of Civil Procedure section 1002.5 which generally prohibits “no-rehire” provisions in settlement agreements. AB 2143 modifies last year’s ban on “no-rehire” provisions such that, as of January 1, 2021, employers may use no-hire provisions in settlement agreements if they made a “good faith determination” that the employee engaged in sexual harassment, assault, or criminal conduct before the employee filed the complaint.

That said, because the new law does not specifically define what constitutes a “good faith determination,” employers must still be careful when using “no-rehire” provisions in their settlement agreements.

Personnel responsible for overseeing settlement negotiations should be apprised of this new law and take care not to use such language in any settlement agreement except as permitted under this new law.


AB 2257: Independent Contractors – Additional Exemptions

AB 2257 amends AB 5, the law used in California to determine whether a worker is properly classified as an employee or independent contractor. AB 2257 creates dozens of exemptions to the “ABC Test” and revises other existing exemptions. Although this new law does not change the basic framework for determining a worker’s proper classification, it does provide some clarity to the existing provisions, and expands the laundry list of exemptions to the ABC Test such that there are now more than 100 exemptions, all of which come with their own level of risk in their application.
 
Employers should continue using caution when classifying a worker as an independent contractor, and should consult with legal counsel before making any final decisions in this regard.


AB 2992: Expanded Protections for Victims of Crime or Abuse

Current law (Labor Code sections 230 – 230.1) prohibits employers from discharging, discriminating, or retaliating against employees who are the victims of domestic violence, sexual assault or stalking for missing work in order to seek judicial relief to help ensure the health, safety, or welfare of the victim or his or her child. SB 2992 expands these laws to apply to employees who are victims of a crime or abuse.
 
Employers should revise their policies regarding leaves for victims of domestic violence, sexual assault and stalking to include victims of crime or abuse.


AB 2017: Kin Care

Existing law, Labor Code section 233, requires an employer to allow an employee to use half of their paid sick leave to attend to the illness of a family member (“kin care”). AB 2017 amends Labor Code section 233 to provide that the designation of the sick leave as kin care, or not, is at the “sole discretion” of the employee.
 
Paid sick leave policies should be updated to reflect that the designation of sick leave to attend to the illness of a family member shall be made at the sole discretion of the employee.


AB 1947: Expansion of Statute of Limitations for Complaints to DLSE

AB 1947 extends the time within which employees may file a complaint with the Division of Labor Standards Enforcement (“DLSE”) for claims that they have been discharged or otherwise discriminated against in violation of Labor Code provisions enforced by the Labor Commissioner. Employees now have one year, as opposed to six months, to file a claim with the Labor Commissioner.

AB 1947 also authorizes a court to award reasonable attorney’s fees to successful whistleblowers.


AB 3364: Prohibition of Discrimination Based on Veteran and Military Status

AB 3364 clarifies existing provisions of the Fair Employment and Housing Act (“FEHA”) that prohibits discrimination in employment on the basis of “military and veteran status.” The new law makes clear that these prohibitions apply to employees or applicants in a “veteran or military status.”
 
Employers should revise their existing policies to address this clarification.


AB 2399: Expansion of Paid Family Leave to Include Employees who are Participating in a Qualifying Exigency

Existing law provides Paid Family Leave (PFL) benefits to workers who need to take time off to care for a seriously ill family member or bond with a new child entering their life either by birth, adoption, or foster care placement. Beginning January 1, 2021, PFL will expand to add a new type of claim for workers who need time off work to participate in a “qualifying exigency” related to the covered active duty or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the Armed Forces of the United States. PFL may be taken by an employee for a variety of qualifying exigencies related to a military member, including but not limited to, attendance at official ceremonies, programs or events, making financial and legal arrangements, arranging for alternative childcare, and addressing issues that arise from the death of the spouse, domestic partner, child, or parent in the Armed Forces of the United States while on covered active duty status.
 
Employers should update their Paid Family Leave policies to reflect this additional basis for PFL benefits. Employers should revise their existing policies to address this clarification.


AB 1963: Mandated Child Abuse Reporting

AB 1963 adds human resources employees, who work for businesses that employ minors and have more than 5 employees, to the list of mandated child abuse reporters. The law defines “human resources employee” as an employee who is designated by the employer to accept complaints of misconduct.

Employers must provide their employees who are mandated reporters with training on identification and reporting of child abuse and neglect. This training requirement may be satisfied by completing the general online training for mandated reporters offered by the Office of Child Abuse Prevention in the state Department of Social Services.
 
Employers that employ minors and have 5 or more employees must take steps to provide mandated reporter training to their human resources personnel.


Software Employee Overtime Exemption

Effective January 1, 2021, employers must now pay computer professional employees a salary of at least $98,907.70 annually ($8,242.32 monthly) or an hourly rate of at least $47.48 for each hour worked in order for such employees to maintain their overtime exemption.


Minimum Wage Increase

Effective January 1, 2021, the California state minimum wage will increase to $14.00 per hour for employers with 26 or more employees and $13.00 per hour for employers with 25 or fewer employees.
 
Note: Certain California cities have enacted minimum wage ordinances that exceed the state minimum wage. For example, in the City of Los Angeles, the minimum wage is $15.00 per hour for employers with 26 or more employees and $14.25 per hour for employers with 25 or fewer employees. And, effective July 1, 2021, the minimum wage in the City of Los Angeles will be $15.00 per hour for all employees, regardless of the number of employees employed by the employer.
 
Because of the state’s minimum wage increase, there is also a corresponding increase in the minimum salary that must be paid to an employee exempt under the administrative, executive, and professional overtime exemptions. In California, exempt employees must receive a salary of at least twice the state minimum wage for a 40-hour workweek.

Accordingly, starting January 1, 2021, exempt employees must receive a minimum annual salary of $58,240 for employers with 26 or more employees, and $54,080 for employers with 25 or fewer employees.

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