A to Z of What California Employers Need to Know for 2021

Alerts / January 4, 2021

With the new year comes new laws that affect California employers. The following are the A to Z of changes in the law that may affect your business in 2021.

Attorneys Fees for Whistleblower Retaliation and Extended Filing Period for DLSE Claim (AB 1947)

This new legislation expressly authorizes a court to award reasonable attorneys fees to a plaintiff who prevails in a “whistleblower” action under Labor Code Section 1102.5. The new legislation also lengthens the period of time in which employees can file complaints with the California Division of Labor Standards Enforcement (DLSE). An employee who believes he/she has been discharged or otherwise discriminated against in violation of any law enforced by the Labor Commissioner now has one year to file a DLSE complaint.

Best Practice Is To Wash Your Hands (AB 1867)

Thanks to AB 1867, employees working in any food facility (as defined by the Health and Safety Code) must be permitted to wash their hands every 30 minutes and additionally as needed.

COVID-19 Workplace Exposure Reporting (AB 685)

AB 685 imposes new reporting requirements and allows the state to track COVID-19 cases in the workplace more closely. Effective January 1, 2021, employers are required to notify their employees, employees of subcontracted workers and union representatives of suspected and diagnosed cases of COVID-19. Within one business day of a “potential exposure” based on a positive confirmed case of COVID-19 in the workplace, the employer must provide written notice to employees (and subcontracted employees who were on the work site and may have been exposed) and employee representatives of their exposure. Employers must also provide written notice regarding COVID-19-related benefits that employees may receive, including workers’ compensation benefits, COVID-19 leave, paid sick leave, and the company’s anti-discrimination, anti-harassment and anti-retaliation policies. Employers must also provide notice to employees regarding the company’s disinfection protocols and safety plan to eliminate any further exposures, per Centers for Disease Control and Prevention guidelines.

If there is an “outbreak” of COVID-19 cases at the same work site within a 14-day period, the employer must also report the outbreak to the local health department within 48 hours. See the California Department of Public Health’s current definition of an outbreak here.

Diversity in Corporate Boards (AB 979)

Similar to SB 826, which required gender diversity on boards, on January 1, 2021, AB 979 will require that a publicly traded corporation with a principal executive office in California appoint members of “underrepresented communities” to the Board of Directors 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.”

Expansion of Paid Family Leave (AB 2399)

Currently, the Paid Family Leave program provides wage replacement benefits for workers who take time off work to care for a seriously ill family member or to bond with a minor child within one year of birth or placement. Effective January 1, 2021, the Paid Family Leave program will be expanded to provide wage replacement benefits to workers who take time off to participate in a qualifying exigency related to the covered active duty or call to covered active duty of the worker’s spouse, domestic partner, child or parent in the Armed Forces of the United States.

Farmworker COVID-19 Relief Package (AB 2043 and 2165)

Under AB 2043, Cal/OSHA is required to disseminate to agricultural employers and employees information, both in English and Spanish, on the best practices to prevent COVID-19 infections. This law became effective immediately when signed on September 20, 2020, and remains in effect until the end of the state of emergency.

Effective January 1, 2021, AB 2165 expands the availability of electronic filing to all state trial courts, as access to courthouses is a problem in many farmworker and other rural communities.

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Hospital PPE Stockpile Requirement (AB 2537)

AB 2537 requires acute care hospitals to supply personal protective equipment (PPE) to employees who provide direct patient care and to ensure that employees use PPE. Beginning April 1, 2021, acute care hospitals must maintain a three-month supply of PPE and provide an inventory of PPE to the Division of Occupational Safety and Health upon request.

Independent Contractor Law Gains New and Expanded Exemptions (AB 2257)

AB 5 adopted the ABC test from the Dynamex v. Superior Court case as a way to determine whether workers are properly classified as employees or independent contractors. Under this test, workers in California are presumed to be employees under these laws unless the business benefiting from the worker’s services can prove all three parts of the ABC test.

The ABC test for independent contractor classification remains the law; however, AB 2257 substantially expanded the universe of available exemptions from this test. Effective immediately, the bill makes it easier for entertainers, freelance writers and photographers, and digital content aggregators to maintain independent contractor status. The bill does not provide relief from the ABC test for most large businesses. For further guidance on independent contractor classification, check out The Playbook developed by our Contingent Workforce team.

Joint Employer Liability

Joint employer liability can arise in many different contexts, such as when using staffing agencies, management companies or even in a franchise context. Know the laws that affect you as an employer, and contact us if you have questions or other concerns.

Kin Care and Sick Leave (AB 2017)

AB 2017 amends Labor Code Section 233, which permitted employees to use half of their annual accrual of sick leave to care for a family member, to give employees the sole discretion to designate leave taken to care for a family member as sick leave.

Local Right-of-Recall Ordinances

On September 30, 2020, Governor Gavin Newsom vetoed AB 3216, which would have established statewide recall rights and rights of retention for laid-off employees. Although the statewide right of recall was vetoed, local right-of-recall ordinances persist in Los Angeles, Oakland, San Diego and Pasadena, each of which has their own coverage and requirements.

The city of Los Angeles’ right-of-recall and right-of-retention ordinance only applies to airport employers, commercial property employers, event center employers and hotel employers. Under the Los Angeles ordinance, covered employers must offer positions that become available on or after June 14, 2020, to qualified employees who were laid off on or after March 4, 2020.

Similarly, Oakland’s and San Diego’s ordinances are limited to industries related to the hospitality industry, including event center employers and hotel employers. Under the Oakland ordinance, a covered employer must offer, in writing, eligible laid-off employees any job positions that become available after the effective date of the ordinance that the employee is qualified for with the employer. Under the San Diego ordinance, a covered employer must offer positions that become available on or after September 8, 2020, to qualified employees who were laid off on or after March 4, 2020. San Diego’s ordinance is set to expire in March 2021.

Pasadena’s ordinance applies to hotel employers, including any restaurant employer leasing a location on hotel premises that contain 50 or more guest rooms or earned gross receipts in 2019 exceeding $5 million. Workers who were laid off for a nondisciplinary reason on or after March 4, 2020, have priority in being offered their position back if it becomes available. This ordinance will expire 12 months after expiration of the city manager’s declaration of emergency related to COVID-19.

Minimum Wage Increases

As of January 1, 2021, California’s minimum wage increases to $14 per hour for employers with 26 or more employees and $13 per hour for employers with 25 or fewer employees. While some local minimum wages increased in mid-2020, many local minimum wages may also increase at the start of the year. Check your local rules for minimum wage requirements, and take note that this increase also affects minimum salary requirements for exempt employees.

No-Rehire Provisions in Settlement Agreements Allowed (AB 2143)

Existing law prohibits “no rehire” provisions in settlement agreements under California Code of Civil Procedure Section 1002.5. AB 2143 amends this law to permit no-rehire provisions in settlement agreements when the “aggrieved person” did not bring the claim in good faith. The bill also clarifies that the current no-rehire exception for sexual harassment and sexual assault claims requires that the employer made a documented and good-faith determination that the individual engaged in sexual harassment or sexual assault before the aggrieved person filed a claim. AB 2143 also expands the sexual harassment/sexual assault exception to allow no-rehire provisions in situations where the employer determined the employee engaged in any criminal conduct.

On-Call Rest Breaks for Security Guards and Petroleum Facility Safety-Sensitive Employees (AB 1512 and AB 2479)

AB 1512 allows employers to require that security guards who are covered by collective bargaining agreements and paid at least one dollar more than minimum wage remain on premises and on call during rest breaks.

Similarly, AB 2479 allows employers to require that petroleum facility employees in safety-sensitive positions covered by collective bargaining agreements and paid at least 30 percent more than the state minimum wage remain on premises and on call during rest breaks.

Personal Information of Employees Under the CCPA

The California Consumer Privacy Act (CCPA), enacted last year, prohibits certain businesses and employers from collecting an employee’s or a consumer’s personal information unless they provide employees and consumers with a pre-collection notice informing them of the categories of personal information to be collected and the purposes for which the categories will be used. For more details, review our Data Counsel blog post regarding the CCPA.

The CCPA temporarily exempted employee personal information from most (but not all) of the act’s protections, and this exemption was set to expire at the end of 2020. In November of this year, however, California voters approved ballot Proposition 24, known as the California Privacy Rights Act of 2020. Proposition 24 extended the exemption for employee information to January 1, 2023.


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Reporting Pay Data Annually to the DFEH (SB 973)

SB 973 expands the reporting requirements for employer Information Reports (EEO-1). Private employers with 100 or more employees and that are required to file an annual EEO-1 under federal law are required to submit payroll data to the Department of Fair Employment & Housing (DFEH). The pay data report must contain information about employees’ race, ethnicity and gender in various job categories. The pay data report is due on or before March 31, 2021.

Small Businesses Now Covered by Expanded CFRA (SB 1383)

The California Family Rights Act (CFRA) currently makes it an unlawful employment practice for any employer with 50 or more employees who work within 75 miles of the work site to refuse to grant a request by an eligible employee (i.e., worked 1,250 hours during the previous 12 months) 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, a child, a parent or a spouse.

Effective January 1, 2021, the CFRA will apply to all employers with five or more employees. SB 1383 also expands the definition of “family care and medical leave” to now include grandparents, grandchildren and siblings. Under the amended law, an employer who employs both parents of a child now must also grant CFRA leave to each employee for that child’s health condition, birth or placement. Finally, the newly signed legislation makes it an unlawful employment practice for any employer to refuse to grant a request by an employee to take up to 12 workweeks of unpaid protected leave during any 12-month period due to a qualifying exigency related to the covered active duty or call to covered active duty of an employee’s spouse, domestic partner, child or parent in the armed forces of the United States. For more information, see our blog post here.

Training Expenses of Healthcare Workers Are Reimbursable (AB 2588)

Existing law requires an employer to indemnify its employees for all necessary expenditures or losses incurred by an employee in direct consequence of the discharge of the employee’s duties or of the employee’s obedience to the employer’s directions, even though unlawful, unless the employee, at the time of obeying the directions, believed them to be unlawful.

AB 2588 added Section 2802.1 to the California Labor Code. Under this new law, acute care hospitals are required to reimburse certain training expenses of employees and job applicants. Reimbursable training includes “residencies, orientations, or competency validations necessary for direct patient care employment.”

Unemployment Insurance Work Sharing Program (AB 1731)

California’s optional Work Sharing program allows employers to save on payroll costs during economic downturns – but still avoid layoffs – by submitting to the Employment Development Department (EDD) a plan that must meet certain requirements. These plans generally allow employers, in exchange for avoiding layoffs, to reduce hours and allow workers to retain health coverage (if applicable) and access to unemployment insurance benefits to supplement decreased wages.

AB 1731 streamlines the approval process through a range of measures, including providing for automatic one-year approval of all applications from September 2020 until September 2023.

Victims of Crime or Abuse Receive Expanded Protections (AB 2992)

AB 2992 amends California Labor Code sections 230 and 230.1 and prohibits an employer from “discharging, or discriminating or retaliating against, an employee who is a victim of crime or abuse[,] for taking time off from work to obtain or attempt to obtain relief.” AB 2992 expands existing law providing protected leave for employees who are victims of domestic violence, sexual assault or stalking to include leave for victims of other crimes or offenses “that caused physical injury or that caused mental injury and a threat of physical injury.” The new legislation also provides protected leave for an employee “whose immediate family member is deceased as a direct result of a crime” and expands the types of documentation for leave eligibility that an employee may provide to verify that a crime or abuse occurred. The expanded provisions become effective on January 1, 2021.

Workers’ Compensation Disputable Presumption (SB 1159)

On September 17, 2020, Governor Newsom signed SB 1159 into law, which became effective immediately for all employers. SB 1159 states that a “disputable presumption” exists for an employee who suffers illness or death resulting from COVID-19 on or after July 6, 2020, through January 1, 2023. The workers’ compensation presumption is that the illness or death related to COVID-19 is an occupational injury such that the employee is therefore entitled to benefits.

The employer may dispute the presumption with evidence that it had measures in place to reduce potential transmission of COVID-19 in the employee’s place of employment and/or evidence of the employee’s nonoccupational risks of COVID-19 infection.

Xtra Hours?

Be sure to review your overtime calculations to ensure you are paying employees correctly.

Youth Workers Are Protected by Additional Mandated Reporters (AB 1963)

The California Child Abuse and Neglect Reporting Law, adopted in 1980, requires that certain “mandated reporters” make formal reports of suspected child abuse to law enforcement authorities. With the newly signed AB 1963, a human resource employee and an adult whose duties require direct contact with and supervision of minors in the performance of the minors’ duties are deemed to be mandated reporters. Employers must provide their employees who are mandated reporters with training on identification and reporting of child abuse and neglect. This legislation, which applies to businesses with five or more employees, takes effect on January 1, 2021.

Zzzz … Don’t Go to Sleep Before You’ve Reviewed Your Practices and Policies!

For further information or questions about the information contained in this alert, please contact the authors or the Los Angeles attorneys of BakerHostetler’s Labor and Employment Group.

Authorship Credit: Jennifer Delarosa and Sabrina Shadi

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