2020 has ushered in new laws for California employers. Employers should be aware of these laws and revise their policies, handbooks and practices in order to ensure that they are complying with California law.
California’s Minimum Wages and Exempt Salary Thresholds Increase in 2020
Beginning January 1, 2020, for employers with 26 employees or more, the minimum wage will increase from $12 per hour to $13 per hour, and the exempt annual salary threshold will increase from $49,920 to $54,080.
For employers with 25 employees or less, the minimum wage will increase from $11 per hour to $12, and the exempt annual salary threshold will increase from $45,760 to $49,920.
Paid Family Leave Benefits Extended From 6 to 8 Weeks
Starting on July 1, 2020, Paid Family Leave benefits will be eight weeks for purposes of caring for a “seriously ill family member” or to bond with a minor child within one year of birth or placement.
Codification of Strict ABC Test for Independent Contractors
As discussed in previous alerts, in Dynamex Operations West, Inc. v. Superior Court of Los Angeles (Dynamex), 4 Cal. 5th 903 (2018) the California Supreme Court adopted the ABC test for an employee versus independent contractor classification. In order to enshrine this law, the California legislator passed the newly created Section 2750.3 of the Labor Code which codified the ABC test. After much lobbying from interest groups, this new section also created several exemptions for certain occupations, including:
- Doctors (physicians, surgeons, dentists, podiatrists, veterinarians, psychologists)
- Professionals (lawyers, architects, engineers)
- Professional services (marketing, human resources administrator, travel agents, graphic designers, grant writers, fine artist)
- Financial services (accountants, securities broker-dealers, investment advisors)
- Insurance brokers
- Real estate agents
- Direct sales (if compensation is based on actual sales and not wholesale purchases or referrals)
- Builders and contractors
- Freelance writers and photographers (if contributes no more than 35 submissions to an outlet in a year)
- Hair stylists and barbers (if licensed and if can set own rates and schedule)
- Estheticians, electrologists, and manicurists (if licensed)
- Tutors (that teach their own curriculum, and that are not public school tutors)
- Commercial fishermen
- AAA-affiliated tow truck drivers
The exemptions are not true carve-outs – an individual whose work meets the exemption requirements is not automatically an independent contractor. Rather, an individual whose work meets the exemptions means that the ABC test does not apply, but the hiring party must still be able to demonstrate that contractor status is appropriate under California’s prior test for independent contractor status (i.e. the Borello test).
Harassment-Prevention Training Compliance Deadline Extended to Jan. 1, 2021
SB 1343, which as passed in the 2017-2018 legislative session, extended harassment prevention training requirements to small employers and to nonsupervisory employees. More specifically, the bill required that by Jan. 1, 2020, employers with five or more employees provide at least two hours of sexual harassment prevention training to supervisory employees, and at least one hour of sexual harassment prevention training to nonsupervisory employees within six months of their assumption of a position.
SB 778 extends this compliance date to Jan. 1, 2021. The bill makes clear that an employer who has provided this training in 2019 is not required to provide it again until two years thereafter.
Employer Notices Regarding Flexible Spending Accounts
In a response to concerns that employees are forfeiting funds not spent by year’s end for flexible spending accounts, California now request that an employer notify employees participating in a flexible spending account of any deadlines to withdraw funds before the plan year ends. Employers must provide this notice by two different forms, one of which may be electronic, and may consist of the following means: (1) email, (2) telephone, (3) text message, (4) postal mail, or (5) in person notification.
Expanded Lactation Accommodation Requirements
California law now requires that all employers provide an employee a break to express breast milk for the employee’s infant child each time they need to express milk. The breaks may run concurrently with any break already provided to the employee, but any such breaks that do not run concurrently with another break may be unpaid. To accommodate such breaks, employers must provide the employee with a clean and safe room or other location to express milk in private that is close to the employee’s work area. The room or location must satisfy certain conditions, including 1) contain a surface to place a breast pump and personal items; 2) contain a place to sit; and 3) have access to electricity or another device that enables the use of an electric or battery-powered breast pump. The room cannot be a bathroom. In addition, employers must provide access to a sink with running water and a refrigerator suitable for storing milk (or, if a refrigerator cannot be provided, some other suitable cooling device) that is close to the employee’s workspace.
Failure to comply with the new Labor Code requirements constitutes a violation of Labor Code Section 226.7, which requires the employer to pay the employee one additional hour of pay at the employee’s regular rate of pay for each workday that an accommodating break period is not provided. In addition, an employee may file a complaint under Labor Code Section 98 for employer violations of the new Labor Code requirements. Employers are prohibited from discharging or in any way retaliating against an employee for exercising or attempting to exercise rights under the new Labor Code requirements. If the Labor Commissioner determines that a violation of the requirements has occurred, the Labor Commissioner may impose a penalty of $100 for each day an employee is denied reasonable break time or an adequate space to express milk.
Finally, employers must also develop and implement a policy regarding lactation accommodation that includes, in part, 1) a statement about the employee’s right to request lactation accommodation and the process to make such a request, and 2) a statement about the employee’s right to file a complaint with the Labor Commissioner for any violation of such right. The policy must be provided in the employee handbook or set of policies the employer provides to employees.
Employers with fewer than 50 employees may qualify for an exemption if it can demonstrate that complying with the requirement would impose an undue hardship, but the employer must still make reasonable efforts to provide employees with a room or other location to express milk in private.
Employment-Related Gun Restraining Orders
Starting on September 1, 2020, employers or co-workers who have regularly interacted with the subject for one year and who have the employer’s approval to petition the court for a general gun violence restraining order (GRVO), a one-year GVRO, or a renewal of GVRO. The party seeking the GVRO must present evidence showing that the subject poses a significant danger, that the GVRO is necessary to prevent personal injury, and that less restrictive alternatives are insufficient.
Precluding Employer Voter Intimidation
Employers cannot require or request that an employee bring their vote by mail ballot to work or cast their vote by mail ballot at work. The Secretary of State or any public prosecutor with jurisdiction may seek civil fines up to $10,000 per violation against any employer who violates these protections.
Mandatory Arbitration Limited for FEHA and Labor Code Claims
Section 432.6 of the Labor Code now prohibits employers from requiring applicants or employees from waiving any rights, forums or procedures for alleged violations of the FEHA or Labor Code, as a condition of employment, continued employment or the receipt of any employment-related benefit. This new law applies to agreements entered into or extended on or after January 1, 2020 but does not apply to post-dispute settlement agreements or negotiated severance agreements. There is a coalition of businesses challenging this law in federal court. But for now, the law applies in California.
Statute of Limitations for Filing Complaint with the DFEH Extended from One Year to Three Years
Under prior law, an employee had one year to file a complaint with the Department of Fair Employment and Housing (DFEH) for certain alleged violations, such as discrimination, harassment and retailing. This new law extends the timeframe for a person claiming to be aggrieved by an unlawful practice under FEHA to file complaint within three years from the date upon which the alleged unlawful conduct occurred.
Restrictions on the Use of “No-Rehire” and “No Future Employment” Clauses in Settlement Agreements
California law now provides that settlement agreements resolving employment disputes “shall not contain a provision prohibiting, preventing, or otherwise restricting a settling party that is an aggrieved person from obtaining future employment with the employer against which the aggrieved person has filed a claim[.]” Any provision of a covered agreement entered into after Jan. 1, 2020, which violates this new law is void as a matter of law and void as against public policy. The section does not preclude the employer and employee from entering into an agreement that ends the employment relationship. Also, an employer may restrict future employment opportunities or rehire eligibility with the employer when the employer has made a good-faith determination that the aggrieved employee engaged in sexual harassment or sexual assault. Finally, nothing in the section requires an employer to employ or rehire a person if there is a legitimate non-discriminatory or non-retaliatory reason for terminating the employment relationship or refusing to rehire the person.
If you have any questions regarding these new California employment laws, please contact Elizabeth Fritzinger. Berry & Fritzinger can help your business understand and comply with California’s employment laws.