Many of the new laws are significant departures from earlier legislation and may impact your daily business dealings in meaningful ways. Unless otherwise stated, the new laws discussed below are effective as of January 1, 2021.

Please consult with counsel before taking any actions based on the information contained within this article. Note this article does not include every new employment law for 2021. Should you have any questions regarding any of the laws listed below, please contact us.

2021 highlights

• Providing notices to employees when there is exposure of COVID-19 in the workplace, and to local public health agencies of COVID-19 “outbreaks” in the workplace;
• Creating a rebuttable presumption, for purposes of receiving workers’ compensation benefits, for employees who contracted COVID-19 while at work;
• Expanding the coverage of the California Family Rights Act (“CFRA”) leave to employees at businesses with 5 or more employees; and
• Requiring certain private employers to submit annually a data report of specified wage information to the Department of Fair Employment and Housing (“DFEH”).

Employers With 100 or More Employees Are Required to Report Pay Data to the DFEH (SB-973)

SB-973 requires, on or before March 31, 2021, and on or before March 31st each year thereafter—a private employer that (1) has 100 or more employees; and (2) is required to file an annual Employer Information Report (EEO-1) under federal law must submit a pay data report to the DFEH that contains specified wage information. For employers covered under this new law, the pay data report must include the number of employees by race, ethnicity, and sex in each of the following job categories when applicable:

1. Executive or senior-level officials and managers;
2. First or mid-level officials and managers;
3. Professionals;
4. Technicians;
5. Sales workers;
6. Administrative support workers;
7. Craft workers;
8. Operatives;
9. Laborers and helpers;
10. and Service workers

Employers must also report the number of employees by race, ethnicity, and sex whose annual earnings fall within each of the pay bands (i.e., pay ranges) used by the U.S. Bureau of Labor Statistics in the Occupational Employment Statistics survey. Employers must also report the total number of hours worked by each employee in each pay band.

If the DFEH does not receive the required report from an employer, SB 973 further authorizes the DFEH to seek an order requiring an employer to comply and recover any costs associated with seeking compliance.

Employers Must Update Their Statement of Information to Disclose Final Judgments Regarding Violation of Wage Order (AB-3075)

Starting January 1, 2022, AB-3075 will require corporations or limited liability company to file its statement of information to disclose whether any officer or director (or for an LLC, any member or manager) has an outstanding final judgment for the violation of any wage order or provision of the Labor Code issued by the Division of Labor Standards Enforcement (“DLSE”) or a court of law, for which no appeal is pending.

Whistleblower Retaliation Prohibited Under The Consumer Financial Protection Law (AB-1864)

AB-1864 enacts the California Consumer Financial Protection Law. The California Department of Business Oversight will be renamed to Department of Financial Protection and Innovation (“DFPI”). The law expands California’s authority to target unfair, deceptive, and abusive acts practiced by financial service providers.

In addition to the prohibitions contained in Section 1102.5 of the Labor Code in relation to whistleblower retaliation, the new law prohibits any adverse action against employees who have either (1) filed or instituted, or caused to be filed or instituted, any proceeding under any consumer financial law; or (2) objecting to or refusing to participate in any activity, policy, practice, or assigned task if the employee reasonably believes such conduct is in violation of any law, rule, order, standard, or prohibition subject to the jurisdiction of the DFPI.

No-Rehire Provisions (AB-2143)

AB 2143 amends Code of Civil Procedure section 1002.5, which currently prohibits the use of no-rehire clauses in settlement agreements of employment-related disputes, except if the employer has made a good faith determination that the employee engaged in sexual harassment/assault. The amended law adds another exception: to permit a no-rehire provision if the employee engaged in “any criminal conduct.” For the sexual harassment/sexual assault/criminal conduct exception to apply, however, an employer must provide sufficient documentation of the conduct before the employee files a claim against the employer.

AB 2143 also helps clarify that an employee must have filed his or her claim against the employer in good faith to be considered an “aggrieved party” who is entitled to the protections of the statute’s restriction against no-rehire provisions in a settlement agreement.

Labor Commissioner’s Ability to Represent Financially Disabled Persons in Connection With Arbitration (SB-1384)

SB-1384 extends the Labor Commissioner’s authority to represent a claimant who cannot afford counsel in arbitration or in a proceeding to determine whether an arbitration agreement is enforceable. The employer must serve a petition to compel arbitration pursuant to specified statutes on the Labor Commissioner.

Employee’s Sole Discretion to Use Kin Care Leave (AB-2017)

Current law requires an employer that provides sick leave for employees to use the employee’s accrued and available sick leave entitlement to attend to the illness of a family member (“kin care”). AB-2017 amends the kin care law to provide that the designation of the sick leave is at the “sole discretion” of the employee. AB 2017 does not require employers to provide any additional paid time off, but clarifies who designates which type of sick leave is used when an employee takes a sick day.

Expansion of California Family Rights Act (“CFRA”) (SB-1383)

The CFRA now applies to more employers. SB-1383 expands the protections under the CFRA to make it an unlawful employment practice for any employer with 5 or more employees to refuse to grant a request by an employee to take up to 12 workweeks of unpaid job-protected leave during any 12-month period to bond with a new child of the employee or to care for themselves or a qualified family member. The definition of “family member” has expanded, which means qualified employees are entitled to care for a wider range of family members. The law also eliminates the requirement that employees work within a 75-mile radius of the worksite to be eligible for leave (but keeps the requirement that to be eligible, the employee must have worked at least 1,250 hours with the employer during the previous 12-month period).

This new law creates an issue for employers with employees who want to use job-protected leave under both CFRA and Family Medical Leave Act (“FMLA”). Leave under CFRA and federal FMLA tends to run concurrently, meaning an employee is generally only eligible for a total of 12 weeks of unpaid leave. Now, the definition of “family member” under the CFRA is wider in scope than the definition of “family member” under FMLA—meaning if an employee takes care of a “family member” with a serious health condition only under CFRA and uses the 12-week leave under CFRA, the employee might still be eligible for another full 12 weeks under FMLA depending on who that family member is.

Furthermore, the New Parent Leave Act child bonding protections are part of the CFRA and was repealed on January 1, 2021. The definition of “child” has been expanded to cover all adult children and children of a domestic partner.

Expansion of Paid Family Leave for Employees Participating in a Qualifying Exigency (AB-2399)

AB-2399 allows employees to use CFRA leave to take time off to care for a family member with a serious health condition or because of a qualifying exigency related to the employee’s call to active duty or the call to active duty for certain family members in the Armed Forces. To complement the expansion of protections under the CFRA, AB 2399adds qualifying exigency leave as a reason for receiving wage replacement benefits from the California Paid Family Leave Program (employees are currently eligible to receive wage replacements benefits if they were on an approved leave to care for a grandparent, grandchild or sibling).

Additional Protected Time Off for Domestic Violence, Sexual Assault, or Stalking Victims (AB-2992)

AB-2992 now provides the victims of violent crimes and families of homicide victims (1) time to recover without fear of job loss and (2) expanded unpaid leave. AB 2992 also expands the prohibition of discharging, discriminating, or retaliating against employees for taking time off who are victims of domestic violence, sexual assault, or stalking to include “or other crime or abuse” “that caused physical injury or that caused mental injury and a threat of physical injury” and “a person whose immediate family member is deceased as the direct result of the crime.” In addition, the bill prohibits employers with 25 or more employees from discharging, discriminating, or retaliating against an employee who is a “victim,” as defined, for taking off work to seek medical attention for injuries caused by crime or abuse, to obtain services from prescribed entities as a result of the crime or abuse, to obtain psychological counseling or mental health services related to an experience of crime or abuse, or to participate in safety planning and take other actions to increase safety from future crime or abuse.

Health Care Employers Required to Provide And Maintain Personal Protective Equipment For Their Employees (AB-2537)

AB-2537 would require public and private employers of workers in a general acute care hospital, as defined in subdivision (a) of Section 1250 of the Health and Safety Code, to supply employees who provide direct patient care or provide services that directly support personal care with personal protective equipment (“PPE”). A covered employer must ensure that the employees use the PPE supplied to them. Covered employers must further establish and implement effective written procedures for periodically determining the quantity and types of equipment used in its normal consumption.

By January 15, 2021, a general acute care hospital should’ve prepared a report to the Department of Industrial Relations, under penalty of perjury, its highest 7-day consecutive daily average consumption of PPE during the 2019 calendar year. General acute care hospitals under the jurisdiction of the State Department of State Hospitals are exempt from this requirement.

Starting April 1, 2021, a covered employer must maintain a supply of specified equipment in an amount equal to 3 months of normal consumption. An employer must provide an inventory of its stockpile and a copy of its written procedures upon the Division of Occupational Safety and Health’s request. Otherwise, failure to comply may subject the employer to civil penalties of up to $25,000 per violation to maintain the required stockpile, except in certain circumstances.

Health Care Employers Required to Reimburse Certain Employees For Costs of Educational Program or Training (AB-2588)

AB-2588 requires employers to reimburse employees providing direct patient care or an applicant for direct patient care employment for the costs of any employer-provided or employer-required educational program or training. An employer or any person acting on behalf of the employer is further prohibited from retaliating against an applicant or employee for refusing to enter into an agreement that violates these provisions.

Employers Required To Provide Notice to Employees and Local Health Departments About COVID-19 in Workplace (AB-685)

AB 685 imposes new reporting requirements on employers in relation to positive COVID-19 cases in the worksite. This law also gives California’s Division of Occupational Safety and Health (“OSHA”) broad authority to close workplaces that expose employees to an imminent hazard related to COVID-19. AB 685 expires on January 1, 2023. Employers are required to provide certain workforce notifications within 1 business day of receiving a “notice of potential exposure.” “Notice of potential exposure” means any of the following:

1. “Notification to the employer or representative from a public health official or licensed medical provider that an employee was exposed to a qualifying individual at the worksite.”
2. “Notification to the employer or representative from an employee, or their emergency contact, that the employee is a qualifying individual.”
3. “Notification through the testing protocol of the employer that the employee is a qualifying individual.”
4. “Notification to an employer or representative from a subcontracted employer that a qualifying individual was on the worksite of the employer receiving notification.”

The employer must take all of the following actions within 1 business day of the “notice of potential exposure”:

1. Provide a written notice to all employees, and the employers of subcontracted employees, who were on the premises at the same worksite as the qualifying individual within the infectious period that they may have been exposed to COVID-19 in a manner the employer normally uses to communicate employment-related information. This means the notice should be hand delivered, or sent via email or text, so long as the notice can reasonably be anticipated to be received by the recipient within 1 business day of sending.
2. Provide a written notice to the exclusive representative, such as a union representative, if any.
3. Provide all employees who were subject to exposure and the exclusive representative, if any, with information regarding COVID-19-related benefits to which the employee may be entitled under applicable federal, state, or local laws.
4. Notify all employees, and the employers of subcontracted employees and the exclusive representative, if any, about the disinfection and safety plan that the employer plans to implement and complete per the federal Centers for Disease Control guidelines.

AB 685 requires that if an employer or its representative is notified of the number of cases that meet the definition of a COVID-19 “outbreak”, as defined by the State Department of Public Health (“CDPH”), within 48 hours, the employer must notify the local public health agency of the names, number, occupation, and worksite of employees who meet the definition in subdivision (d) of a qualifying individual. “Outbreak” is defined as “three or more laboratory-confirmed cases of COVID-19 among employees who live in different households within a two-week period.” An employer that has an outbreak must continue to give notice to the local health department of any subsequent laboratory-confirmed cases of COVID-19 at the worksite. “Worksite” means the “building, store, facility, agricultural field, or other location where a worker worked during the infectious period. It does not apply to buildings, floors, or other locations of the employer that a qualified individual did not enter. In a multiworksite environment, the employer need only notify employees who were at the same worksite as the qualified individual.” “Worksite” does not include a “health facility,” as defined in Health and Safety Code section 1250.

California Consumer Privacy Act (“CCPA”) Exemption Extended for Employment Related Information (AB-1281)

Current law exempts employers until January 1, 2021 from abiding by the CCPA with respect to information collected “by a business about a natural person in the course of the natural person acting as a job applicant to, an employee of, owner of, director of, officer of, medical staff member of, or contractor of that business.” AB-1281 now grants another one-year extension to January 1, 2022. Thus, as long as the covered business collects data of its employees, contractors, and job applicants for purposes solely within the employment context, it does not have to respond to requests to know or delete from applicants, employees or contractors upon request.

However, a job applicant, employee, owner, director, officer, medical staff member, or a contractor of the covered business must still receive a CCPA privacy notice at or before the point of collection that describes the categories of personal information collected and the purposes for which that personal information will be used.

Statute of Limitations Extended to 1 Year For Complaints to Labor Commissioner (AB-1947)

AB-1947 extends the time period to file a complaint with the DLSE to 1 year. Current law provides that a person who believes that he or she has been discharged or otherwise discriminated against in violation of any law under the jurisdiction of the Labor Commissioner must file a complaint within 6 months after the violation occurred.

Family Leave Mediation Pilot Program Available to Employers With Between 5 And 19 Employees (AB-1867)

AB-1867 introduces the DFEH pilot program, which would authorize a small employer or its employee to request all parties to participate in mediation through the DFEH’s dispute resolution division within a specified timeframe, after notice. An employee is prohibited from pursuing civil action until mediation is complete. When DFEH receives a request to participate in the program, the statute of limitations to file suit for the employee is tolled until mediation is complete and the parties do not settle. This program would be repealed on January 1, 2024.

Workers’ Compensation Presumption Expanded For COVID-19 Illness Claims (SB-1159)

SB-1159 creates a rebuttable presumption that certain employees who tested positive for COVID-19 while at work, which an employer may dispute with evidence such as evidence of: (1) measures in place to reduce potential transmission of COVID-19 in the employee’s place of employment; and/or (2) the employee’s non-occupational risks of COVID-19 infection.

This rebuttable presumption is extended to firefighters, peace officers, fire and rescue coordinators, and certain kinds of health care and health facility workers, including in-home supportive services providers who provide services outside their own home. For all other employees, the rebuttable presumption is applied only if the employee works for an employer with 5 or more employees and the employee tests positive for COVID-19 within 14 days after reporting to his or her place of employment during a COVID-19 “outbreak” at the employee’s specific workplace. An “outbreak” exists if (1) the employer has 100 employees or fewer at a specific place of employment, 4 employees test positive for COVID-19; (2) the employer has more than 100 employees at a specific place of employment, 4 percent of the number of employees who reported to the specific place of employment test positive for COVID-19; or (3) a specific place of employment is ordered to close by a local public health department, the State Department of Public Health, the Division of Occupational Safety and Health, or a school superintendent due to a risk of infection with COVID-19.

Additionally, the law imposes reporting requirements on employers for purposes of the outbreak. When an employer knows or reasonably should know that an employee has tested positive for COVID-19, the employer must report certain information to its claims administrator. Employers may be subject to civil penalties of up to $10,000 for violating these reporting requirements.

SB 1159 took effect immediately upon signing on July 5, 2020 and will remain in effect through January 1, 2023.

Clarification of Certain Classifications of Independent Contractors (AB-2257)

AB 5 effectively codified the Dynamex decision, creating an “ABC” three-pronged test to determine if a person providing services is an independent contractor or an employee. Effective immediately, AB 2257 amends AB 5 to revise and add exceptions to the “ABC Test” used to determine whether a worker is properly classified as an employee or independent contractor.

New exceptions have been added for workers who create, market, promote, or distribute sound recordings or musical compositions, and for certain single-engagement live musical performances. Other additions include workers who provide underwriting inspections and other services for the insurance industry, a manufactured housing salesperson, people engaged by an international exchange visitor program, consulting services, animal services, and competition judges with specialized skills.

AB 2257 also creates exceptions for licensed landscape architects, specialized performers teaching master classes, registered professional foresters, real estate appraisers and home inspectors, and feedback aggregators. AB-2257 revises the conditions under the business-to-business exemption, and the criteria for the referral agency exemption. An exemption for business-to-business relationships between two or more sole proprietors has also been created.

All of these exemptions and revisions are subject to specific requirements. And, as before, if an exemption applies, the worker must still satisfy the multi-factor Borello test to be properly classified as an independent contractor.

Professional Exemption Expanded to Certain Educational Employees (AB-736)

AB-736 expands the professional exemption set forth in Wage Orders Nos. 4-2001 and 5-2001 of the Industrial Welfare Commission to include part-time or “adjunct” faculty at private, nonprofit colleges and universities in California. Covered employees are exempt from the wage and hour provisions of those Wage Orders, as well as specified provisions of the Labor Code, if the employees satisfy a two-part “duties” and “salary” test.

While the “duties” test remain unchanged, an employee can meet the “salary” test if the employee is paid either a monthly salary of two times the state minimum wage for full-time employment or is paid by the course or laboratory taught, provided that the employee’s compensation meets specific requirements contained in the statute.

Increased State Minimum Wage

Finally, the state minimum wage goes up to $14 an hour for employers with 26 employees or more ($13 an hour for employers with 25 employees or less).

This article is provided for informational purposes only. This article is intended to notify our clients and friends of changes and updates to the law and provide general information. It is not intended, nor should it be used, as legal advice, and it does not create an attorney-client relationship between the author, Wanger Jones Helsley PC, and the reader.