2021 Brought More Regulations for California Employers

2021 was another important year for California employers.  From decisions by the California Supreme Court regarding employees’ rights to premium pay for missed meal and rest breaks, to legislation expanding the scope of protected leave for California employees, to new laws dealing with the ongoing pandemic, 2021 had something to offer for everyone.  This blog discusses some of the new laws and challenges to being an employer in the Golden State.

  • Pursuant to previously enacted laws, on January 1, 2022, California’s annual minimum wage increased to $15 per hour ($14 per hour for employers with 25 or fewer employees). This increase also raises the threshold salary for exempt employees to $62,400 per year (for employers with 26 or more employees) and to $58,240 per year (for employers with 25 or fewer employees).
  • Assembly Bill (“AB”) 51, passed in 2019, prohibits employers from requiring employees to execute arbitration agreements as a condition of employment. While the enforcement of this was enjoined on December 30, 2019, that injunction was lifted by the Ninth Circuit on September 15, 2021.  As such, this law is currently in place.
  • Cal-OSHA has once again updated its Emergency Temporary Standards relating to COVID-19. The key portions of this update (1) expands the definition of “testing” to include home tests under certain circumstances, (2) clarifies what types of “face coverings” are sufficient, (3) expands the definition of “fully vaccinated,” and (4) clarifies the definition of “worksite.”  These updated standards, however, maintain the requirement for employers to establish a Written COVID-19 Prevention Program, provide training and instruction to employees regarding COVID-19, provide notice to employees in the event of a workplace COVID-19 related event, and provide pay to employees excluded from work due to COVID-19.  Please note that these updated standards do not include any mandatory vaccination requirements.
  • AB 1003 adds Section 487m to the California Penal Code. This new section provides that the intentional theft of wages in an amount greater than $950 from any one employee or $2,350 in the aggregate from more than one employee may be punishable as grand theft.  This bill defines “wage theft” to be the knowing and intentional deprivation of wages and includes benefits owed to employees and payments owed to independent contractors.
  • Speaking of independent contractors, the California legislature continues to include more exceptions in AB 5. As a reminder, an “exception” for the purposes of AB 5 does not mean that the worker is automatically classified as an independent contractor; rather, it means that the classification will be pursuant to the rules in existence before AB 5 and Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903. Among other things, AB 1561 (2021) extends the “exception” to January 1, 2025 for certain newspaper carriers and licensed manicurists and amends the “data aggregator” exception.
  • AB 701 applies to employers with 100 or more employees at a single warehouse distribution center OR 1,000 or more employees at multiple warehouse distribution centers throughout California. This law requires covered employers to provide nonexempt employees a written description of any work-related quotas applicable to the employee within 30 days of hire.  It also provides that any such quotas cannot prevent compliance with meal and rest period laws, use of bathroom facilities, or occupational health and safety laws.
  • Back in 2020, California passed a law significantly expanding the California Family Rights Act. While that law included a definition of “parent-in-law,” it failed to specifically include “parent-in-law” as a covered “family member.”  AB 1033 corrects that omission.
  • Senate Bill (“SB”) 331 expands upon existing law that precludes settlement agreement provisions requiring confidentially and non-disclosure relating to claims of workplace harassment or discrimination based on sex. Specifically, SB 331 expands that prohibition to include any discrimination, harassment, or retaliation claims brought under the Fair Employment and Housing Act (“FEHA”), not just those based on sex.  SB 331 also provides that to the extent an employer enters into an agreement with a current or former employee that contains broad non-disclosure or non-disparagement requirements regarding workplace conditions, that such agreement also explicitly contains exceptions pertaining to reporting unlawful acts in the workplace. SB 331 also requires separation agreements to provide: (1) notice about an employee’s right to consult an attorney, and (2) reasonable time (at least five business days) for the consultation with an attorney.
  • SB 807 extends an employer’s record keeping requirements from two to four years. This change was made to coincide with California’s recent extension of the statute of limitations from one year to three years for claims made under FEHA.
  • SB 657 authorizes employers to provide required workplace postings to employees electronically. Employers, however, must still maintain hard copy postings in the workplace.
  • AB 654 clarifies an employer’s obligation to provide notice to its employees regarding COVID-19 exposures in the workplace.
  • Previously, California law made direct contractors for construction projects jointly and severally liable for a subcontractor’s failure to pay wages or fringe benefits. SB 727 expands that joint liability to include penalties and liquidated damages under certain circumstances.

As always, California employers should review their policies and practices to ensure that they are in compliance with new laws.  Any failure to do so heightens the risk of financial exposure (and general unease).  As always, we will provide updates throughout the year on important developments in these and other aspects of California’s employment laws.

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