Alerts

Out with Some Old and in with a Whole Lotta New: Governor Newsom Signs New Laws That Expand Workplace Protections for California Employees in 2022 and Beyond

Alerts / October 4, 2022

Following the end of the 2022 California legislative session, a slew of new bills was dropped on California Governor Gavin Newsom’s desk with a deadline of Sept. 30 for him to either sign or veto the legislation. Newsom has since signed multiple bills into law that establish new and expand old workplace protections for employees. Here are the most notable new laws and developments of which California employers should be aware.

Extended COVID-19 Supplemental Paid Sick Leave (AB 152)

During the COVID-19 pandemic, employers saw California adopt a series of statewide requirements for them to provide COVID-19 Supplemental Paid Sick Leave (SPSL) to employees who test positive for or are otherwise impacted by COVID-19.

The current iteration of the SPSL requirement was set to expire on Sept. 30, 2022. However, a last-minute proposal (AB 152) – which the governor signed into law on Sept. 29 – extends that requirement until the end of this year. Importantly, AB 152 does not entitle employees to a new bank of SPSL. Rather, it will merely extend the existing entitlement through Dec. 31, 2022. Additionally, the qualifying reasons for use of SPSL remain the same.

AB 152 makes a few small changes to the SPSL law – including an employer-friendly change related to testing. Under the new law, if an employee tests positive and submits to a diagnostic test within five days of that result that is again positive, the employer may then require the employee to submit to a second diagnostic test within no less than 24 hours. Additionally, employers do not have to provide additional SPSL to an employee who tests positive and refuses to provide documentation or submit to the aforementioned testing.

The extension of SPSL takes effect immediately.

Expanded Pay Data Reporting and New Pay Scale Disclosure Requirements (SB 1162)
  1. Pay Data Reporting Requirements

In 2020, California enacted a reporting obligation for private employers with 100 or more employees that file the federal annual Employer Information Report (EEO-1) to include employee pay data information in a report to the Civil Rights Department (CRD) (formerly the Department of Fair Employment and Housing). The 2020 law required employers to disclose headcount, pay and hours worked data for covered employees by race, ethnicity and sex in each specified job category.

Those requirements will continue under SB 1162 – but the new law also expands California’s existing pay data reporting requirements in a number of ways:

  • The law imposes a first-of-its-kind (at least in the United States) requirement that all employers with 100 or more employees report to the state “[w]ithin each job category, for each combination of race, ethnicity, and sex, the median and mean hourly rate.”
  • It also requires employers that retain 100 or more workers through labor contractors to submit a separate report with data regarding pay, hours worked, race/ethnicity and gender for those workers.
  • Employers with at least 100 employees are required to submit these pay reports regardless of whether they are required to file an EEO-1 report, and they may no longer submit an EEO-1 report in lieu of the state-mandated report.
  • The filing date is pushed from March to the second Wednesday in May of each year.

Under SB 1162, the CRD may ask a court to impose a civil penalty of up to $100 per employee on any employer who fails to file the required reports. For any subsequent failures, the CRD may request a civil penalty of up to $200 per employee.

Pay data reports, including mean and median pay gap information, will be due starting May 10, 2023. Employers with multiple establishments must submit a separate report for each establishment.

  1. Pay Scale Disclosure Requirements

SB 1162 also imposes new pay transparency requirements on employers. Under the new law, employers with 15 or more employees are required to include in their job postings the salary or hourly wage range for a position, including in job postings published, announced, posted or otherwise made known by a third party. Additionally, the new law expands rights previously held only by job applicants to current employees by requiring all employers, regardless of size, to provide a pay scale for a current employee’s position to the employee upon their “reasonable request.”

Under SB 1162, employers are also required to maintain a record of each employee’s job title and wage history throughout the employment and three years after the employment ends. If an employer fails to keep records as required, SB 1162 creates a rebuttable presumption in favor of an employee’s claim that a violation of the disclosure requirements occurred.

Employees and applicants who are aggrieved by a violation of the new pay scale disclosure requirements may file a complaint with the Labor Commissioner pursuant to the California Labor Code Private Attorneys General Act (PAGA) or a civil action for injunctive relief or other relief as the court deems appropriate. The bill provides for civil penalties of no less than $100 and no more than $10,000 per violation. For an initial violation, no penalty will be assessed if the employer can demonstrate that all job postings for open positions have been updated to include the pay scale as required.

SB 1162’s pay scale disclosure requirements are effective Jan. 1, 2023.

Protection for Off-the-Clock Cannabis Use (AB 2188)

Pursuant to AB 2188, employers are now prohibited from discriminating against a person in hiring, termination, or any term or condition of employment for (1) using cannabis off the job and away from the workplace or (2) taking an employer-required drug screening test that detects non-psychoactive cannabis metabolites in an employee’s hair or urine, blood or other bodily fluids. AB 2188 adds Section 12954 to the California Government Code.

AB 2188 specifically allows employers to prohibit employees from possessing, being impaired by or using marijuana while on the job and to make employment decisions based on “pre-employment drug screening conducted through methods that do not screen for non-psychoactive cannabis metabolites.” Moreover, the new law states that nothing in its language “affects the rights or obligations of an employer to maintain a drug- and alcohol-free workplace.” Accordingly, employers may still decline to hire an applicant based on a positive preemployment drug test, as long as the screening is scientifically valid and conducted through methods that do not screen for non-psychoactive cannabis metabolites.

AB 2188 does not preempt state or federal laws that require applicants or employees to undergo testing for controlled substances as a condition of employment, receipt of federal funding or related benefits, or entering a federal contract, and it exempts certain applicants and employees (such as workers in the building and construction trades or positions that require a federal background investigation or clearance).

The new law takes effect on Jan. 1, 2024.

Employees’ Rights in Emergency Conditions (SB 1044)

SB 1044 prohibits an employer, in the event of an “emergency condition,” from taking or threatening adverse action against any employee for refusing to report to, or leaving, a workplace within the affected area because the employee feels unsafe. SB 1044 also prohibits an employer from preventing an employee from accessing their mobile device or other communications device for seeking emergency assistance, assessing the safety of the situation, or communicating with a person to confirm their safety.

An “emergency condition” means the existence of either of the following: (1) conditions of disaster or extreme peril to the safety of persons or property at the workplace or worksite caused by natural forces or a criminal act; or (2) an order to evacuate a workplace, a worksite, a worker’s home, or the school of a worker’s child due to natural disaster or a criminal act. Notably, an emergency condition does not include a health pandemic.

An employee is required to notify the employer of the emergency condition requiring the employee to leave or refuse to report to the workplace or worksite prior to leaving or refusing to report. An employee’s belief that the workplace is unsafe is reasonable if a person under similar circumstances would conclude there is a real danger of death or serious injury if that person enters or remains on the premises. The existence of any health and safety regulations specific to the emergency condition and an employer’s compliance or noncompliance with those regulations is a relevant factor if this information is known to the employee at the time of the emergency condition or the employee received training on the health and safety regulations mandated by law specific to the emergency condition.

SB 1044’s provisions are not intended to apply when emergency conditions that pose an imminent and ongoing risk of harm to the workplace, the worksite, the worker or the worker’s home have ceased. Additionally, SB 1044 does not apply to certain categories of employees, including first responders and disaster service workers.

Employees are expressly permitted under SB 1044 to pursue civil penalties pursuant to PAGA for violations thereof. The new law takes effect on Jan. 1, 2023.

Mass Layoff, Relocation or Termination of Call Center Employees (AB 1601)

Federal and California laws already require a 60-day notice before a mass layoff or relocation. However, AB 1601 adds notice requirements concerning a mass layoff, relocation or termination affecting call center employees to Cal/WARN.

AB 1601 applies to employers who are defined as covered establishments under Cal/WARN, which includes an industrial or commercial facility that employs, or has employed within the preceding 12 months, 75 or more persons who operate a call center.

The new law specifically prohibits a call center employer from ordering a relocation of its call center or one or more of its facilities or operating units within a call center constituting 30 percent of the workforce, unless notice of the relocation is provided at least 60 days prior to the relocation to the affected employees and the Employment Development Department (EDD), local workforce investment board, and the chief elected official of each city and county government within which the termination, relocation or mass layoff occurs. Under the new law, “‘[r]elocation of a call center’ includes when the employer intends to move its call center, or one or more facilities or operating units within a call center … to a foreign country.”

Under AB 1601, the EDD is required to compile and publish semiannually, on its internet website, a list of call center employers that provided notice as prescribed by the new law. The new law also requires the EDD and local workforce development boards to provide workforce services to call center employers and their call center employees who are laid off as a result of the relocation of a call center.

Employers on the EDD’s list, or who should be on the list but failed to provide notice, would be ineligible to be awarded or to have renewed state grants or state-guaranteed loans for five years after the date the list is published. Such employers would also be ineligible to claim tax credits for five taxable years as of the date the list is published unless ineligibility is waived by the Labor Commissioner for specified reasons.

A violation of the new law’s notice requirements will be enforced through Cal/WARN’s provisions and remedies.

In addition, AB 1601 amends the Labor Code to authorize the Labor Commissioner to enforce Cal/WARN notice requirements concerning a mass layoff, relocation or termination of employees, including call center employees. The Labor Commissioner now has the authority to investigate an alleged violation, order appropriate temporary relief to mitigate a violation pending completion of a full investigation or hearing, and issue a citation in accordance with certain procedures. Existing law already authorizes the Labor Commissioner, in any investigation or proceeding under provisions governing the relocation, termination or mass layoff of employees, to examine the books and records of an employer.

The new law takes effect on Jan. 1, 2023.

Mandated Bereavement Leave (AB 1949)

AB 1949 prohibits employers from denying a request from an employee with at least 30 days of active service to take up to five days of bereavement leave upon the death of a covered family member, which includes a spouse, child, parent, sibling, grandparent, grandchild, domestic partner or parent-in-law.

The days of bereavement leave would not need to be taken consecutively but must be completed within three months of the date of death of the family member. If an employer does not have a paid bereavement leave policy, the leave may be unpaid, except that an employee must be allowed to use compensatory time off that is otherwise available, such as vacation, personal leave, or accrued and available sick leave.

Employers are permitted to require documentation of the family member’s death in the form of a death certificate, a published obituary, or a written verification of death, burial or memorial services from a mortuary, funeral home, burial society, crematorium, religious institution or governmental agency. AB 1949 prohibits discrimination, interference or retaliation relating to an employee’s exercise of bereavement leave.

The new law takes effect on Jan. 1, 2023.

CFRA and PSL Leave to Care for “Designated Persons” (AB 1041)

The California Family Rights Act (CFRA) was dramatically expanded in recent years – and AB 1041 expands it even further. AB 1041 permits employees to take job-protected leave to care for a “designated person,” which may include non-family members. A “designated person” means any individual related by blood or whose association with the employee is the “equivalent of a family relationship,” including a domestic partner.

An employer may limit an employee to one designated person per 12-month period and may require the employee to substitute during this period any of the employee’s accrued vacation leave or other accrued time off or any other paid or unpaid time off negotiated with the employer.

AB 1041 amends both Section 12945.2 of the California Government Code and Section 245.5 of the California Labor Code. As such, the bill also expands the definition of the term “family member” under California’s paid sick leave (PSL) law to include a designated person.

The new law takes effect on Jan. 1, 2023.

Fast-Food Worker Protections (AB 257)

The Fast Food Accountability and Standards Recovery Act (FAST Recovery Act) creates a 10-person Fast Food Sector Council (Council) within the Department of Industrial Relations (DIR) tasked with creating a bill of rights for fast-food workers. Members of the Council will include fast-food workers; their advocates, franchisees and franchisors; and representatives from the Governor’s Office of Business and Economic Development and the DIR, each serving four-year terms. The Council will be empowered to establish sector-wide minimum standards on wages, subject to restrictions on the amount it may establish for minimum wage; working hours; and other working conditions for covered fast-food workers. However, it may not promulgate regulations requiring predictable scheduling, amend current statutes or create new paid time off benefits.

In addition, the new law includes anti-retaliation measures prohibiting fast-food restaurant operators from discharging, discriminating or retaliating against employees who make complaints or disclose information regarding employee or public health or safety; refuse to perform work because they had reasonable cause to believe that the practices or premises of the restaurant would violate worker or public health and safety laws; or institute, testify or participate in proceedings related to public health or safety, including any Council proceedings or meetings.

The FAST Recovery Act will take effect on Jan. 1, 2023.

Prior Exemption to the CCPA for Employee Personal Information Sunsets This Year

It is also important to note what didn’t happen this legislative session: The exemption in the California Consumer Privacy Act (CCPA) for employee personal information was not extended.

The current CCPA requirements do not apply to personal information regarding employees, but that exemption expires at the end of this year. Despite efforts by the business community to extend or make permanent this exemption, the California State Legislature adjourned the 2022 legislative session without doing so.

Therefore, California employers should be prepared to comply with the full panoply of CCPA requirements with respect to employee data on Jan. 1, 2023. Read more on what employers can expect – and what they can do to get ready – here.

Other New Laws Relevant to Employers

In addition to the big-ticket items summarized above, Newsom also signed the following bills into law:

  • AB 551 extends a previously established disability retirement presumption that is applicable to the members of various public employee retirement systems who are employed in certain firefighter, public safety officer and healthcare job classifications, among others, who test positive for COVID-19. Existing law requires that if the member retires for disability due in whole or in part to a COVID-19-related illness that it be presumed that the disability arose out of, or in the course of, the member’s employment, unless rebutted. AB 551 extends this rebuttable presumption to Jan. 1, 2024.
  • AB 1751 extends a previous rebuttable presumption established for workers’ compensation purposes for COVID-19. Previous legislation established a rebuttable presumption that certain COVID-19 cases are work related under certain outbreak circumstances, and it required employers to provide information about COVID-19 cases to their workers’ compensation claims administrator. AB 1751 extends those requirements until Jan. 1, 2024, and extends coverage to certain state employees not previously covered.
  • AB 1851 expands the definition of “public works” to include hauling of materials used for paving, grading and filling onto a public works site if the individual driver’s work is integrated into the flow process of construction. Existing law (Lab. Code § 1720.3) includes in the definition of “public works” under certain circumstances the hauling of refuse from a public works site to an outside disposal location.
  • AB 2001 authorizes a licensee under the California Financial Law (CFL) to designate an employee, when acting within the scope of employment, to perform work on the licensee’s behalf at a remote location, as defined, if the licensee takes certain actions, including that the licensee prohibits a consumer’s personal information from being physically stored at a remote location except for storage on an encrypted device or encrypted media. Currently, the CFL prohibits a finance lender, broker, mortgage loan originator or program administrator licensee from transacting the business licensed or making a loan or administering a Property Assessed Clean Energy (PACE) program provided for by the CFL at another place of business than that named in the license. With the passage of AB 2001, CFL licensees can now authorize employees to work remotely.
  • AB 2068 expands employers’ existing obligation to post citations, orders and special orders issued by California’s Division of Occupational Safety and Health by now requiring that such notices be provided in any language spoken by at least 5 percent of the workers at the place of employment, including temporary workers of a temporary employment agency or staffing agency working at the place of employment.
  • AB 2183 establishes alternative processes to secret ballot elections that make it easier for agricultural employees to unionize. Under AB 2183, starting Jan. 1, 2023 (and within the 30-day period before Jan. 1 of each year thereafter), an agricultural employer would have to decide whether to agree to a labor peace compact that would prohibit the employer from making statements against the union or conducting captive audience meetings with employees. If the employer agrees to a labor peace compact, employees will be able to vote in union elections by mail-in ballot rather than in person at an election site. However, if the employer does not agree to sign a labor peace compact, then employees could select a union via card check without an election – i.e., by submission of a petition to the Agricultural Labor Relations Board alleging that a majority of the employees in the bargaining unit wish to be unionized. Proof of majority support must be shown through authorization cards, petition, or other appropriate proof of majority support of the currently employed employees. AB 2183’s provisions will remain in effect until Jan. 1, 2028.
  • AB 2693 extends the statutory COVID-19 notice requirements until Jan. 1, 2024. Previously, these notice requirements required employers to provide notice to employees and others who may have been exposed to COVID-19 in the workplace. In lieu of individual notice, AB 2693 would require employers to post a notice in the workplace for 15 days when there has been a COVID-19 exposure. Alternatively, an employer can provide individual notices in the same manner as previously required.
  • AB 2955 extends the statutory independent contractor exemption enacted as part of AB 5 for commercial fishers working on an American vessel until Jan. 1, 2026.
  • SB 189 changes the name of the Department of Fair Employment and Housing to the Civil Rights Department, which will operate under the direction of an executive officer known as the Director of Civil Rights. The new law also changes the name of the Fair Employment and Housing Council to the Civil Rights Council and makes other conforming and non-substantive changes.
  • SB 951 extends increased wage replacement rates for State Disability Insurance and Paid Family Leave that were set to sunset at the end of this year. Under the legislation’s phased increase in benefits, by 2025, workers earning less than the state’s average wage could receive up to 90 percent of their regular wages while taking leave.
  • SB 1334 extends meal and rest period requirements to employees who are directly employed by specified public sector employers and provide direct patient care or support direct patient care in a general acute care hospital, clinic, or public health setting.
  • SB 1477 amends the rule specifying the maximum weekly wage garnishment allowed by law. The new law sets the maximum rate of weekly garnishment to be the lesser of two amounts: 20 percent of the individual’s disposable earnings for a week, or 40 percent of the amount by which the individual’s disposable earnings exceed 48 times the state minimum hourly wage. The law also increases the multipliers used to determine the maximum amount of earnings subject to levy for any pay period other than a weekly pay period. The existing provisions will expire when the new law becomes effective on Sept. 1, 2023.

For more information about these new laws and developments, or other California employment law questions, please contact BakerHostetler’s Labor and Employment Group lawyers or your BakerHostetler contact.

Baker & Hostetler LLP publications are intended to inform our clients and other friends of the firm about current legal developments of general interest. They should not be construed as legal advice, and readers should not act upon the information contained in these publications without professional counsel. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you written information about our qualifications and experience.

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