The 2019 legislative cycle produced a number of game-changing laws for California employers. Perhaps the most notable and controversial was Assembly Bill 5 (“AB 5”) regarding independent contractors vs. employee categorizations. AB 5 has been extensively covered elsewhere, so rather than diving deeply into the history and substance of the new law, we instead focus on other new employment legislation and how it affects California’s employers and employees.
Challenges to AB 5
In Jan. 2020, a Los Angeles County Superior Court judge ruled that AB 5 does not apply to the thousands of independent truck drivers in the state because the statute is preempted by federal law. It is also anticipated that there will be many more lawsuits challenging the application of AB 5, and numerous industry groups are advocating additional exemptions to the controversial legislation. Uber, Lyft and DoorDash have invested a combined $90 million into a political committee to craft, qualify and promote a 2020 statewide ballot measure that would seek to preserve the status quo for their business models.
Although the future of AB 5 remains uncertain, it is the current reality for employers throughout the state. The statute empowers the attorney general, city attorneys in large cities, and local prosecutors to sue companies for violations of the Labor Code, the Unemployment Insurance Code, and/or the wage orders of the Industrial Welfare Commission. The city attorneys of both San Francisco and Los Angeles appear ready to act upon this.
Assembly Bill 673 amends Labor Code section 210. This new law entitles an employee to recover $100 if an employer fails to pay wages on time while the employee is still employed, and a $200 penalty for each subsequent late payment or willful or intentional violation. The employer must also pay an additional 25 percent of the amount unlawfully withheld. Civil penalties were previously enforceable only through an action by the Labor Commissioner. Employee recovery is limited to statutory penalties or civil penalties under the Private Attorney’s General Act (“PAGA”), but not both.
Senate Bill 688 permits the Labor Commissioner to issue citations where the employer has contractually promised to pay more than minimum wage but has failed to pay the promised wage. Previously, the Labor Commissioner could only enforce actions for violations alleging unpaid minimum wages.
Claims of Harassment or Discrimination
Assembly Bill 9 extends the filing period for Fair Employment and Housing Act (“FEHA”) complaints from one to three years. However, it does not revive statutes of limitations that have already lapsed. The one-year statute of limitation to file complaints after obtaining the right-to-sue letter remains. Although plaintiffs’ attorneys are celebrating the additional time to file claims of harassment or discrimination, defense attorneys are concerned about the repercussions of delayed claims on witness availability and memory.
Senate Bill 188, also known as the CROWN Act (Creating a Respectful and Open World for Natural Hair) prohibits discrimination based upon hairstyle. It adds the following to FEHA definitions: “Race is inclusive of traits historically associated with race, including, but not limited to hair texture and protective hairstyles.” “Protective hairstyles” includes, but is not limited to such hairstyles as braid, locks and twists.
Assembly Bill 749 prohibits “no rehire” clauses in settlement agreements entered into on or after Jan. 1. A “no rehire” clause is “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, or any parent company, subsidiary, division, affiliate, or contractor of the employer.” There are two exceptions, however. The prohibition on “no rehire” clauses does not preclude the parties from agreeing to “end a current employment relationship,” such as in a severance or separation agreement; and it does not apply if the employer has made a good faith determination that the settling party engaged in sexual harassment or sexual assault in the workplace.
Senate Bill 778 extends the deadline for compliance with Sexual Harassment Training to Jan. 1, 2021 (extension from prior deadline of Jan. 1, 2020). Employers with five or more employees must now provide sexual harassment training and education to all employees by the extended deadline.
Senate Bill 530 strengthens sexual harassment training requirements in the construction industry; and Senate Bill 547 strengthens sexual harassment training requirements in the janitorial industry.
Assembly Bill 242 requires implicit bias training for all attorneys and authorizes the Judicial Council to develop training on implicit bias, and requires all court staff, who interact with the public, to complete two hours of any training developed by the Judicial Council every two years.
Senate Bill 142 addresses lactation accommodations and specifies that a designated lactation room must be safe, have a surface to place a pump, include a place to sit, have access to electricity, be close to employee’s work area, shielded from view, and free from intrusion. The employer must provide access to running water and a refrigerator and develop a lactation accommodation policy. Small employers (<50 EEs) may apply for an exemption from the Labor Commissioner. The bill also prohibits retaliation for exercising the right to lactation accommodation and authorizes a $100 civil penalty for EACH DAY an employee is denied break time or adequate space.
Assembly Bill 51 prevents employers from making arbitration agreements a mandatory condition of employment. Specifically, this statute amends Labor Code section 432.6 and makes it unlawful for an employer to: (1) require an applicant or employee to waive any right, forum or procedure under the Labor Code and FEHA; (2) retaliate against an employee or applicant for refusing to consent to a “waiver;” (3) require a waiver as a condition of employment. The bill also provides injunctive relief and “any other remedies available,” PLUS attorney’s fees. However, this law does not apply to settlement or severance agreements, is not retroactive and is already being contested in the courts. In fact, a federal judge has enjoined the State from enforcing this law pending further briefing. Who knows what the fate of this law will be by the time this article is published?
Senate Bill 707 enhances penalties for failure to pay arbitration claims. As a matter of public policy, employers are required to pay for the cost of arbitration if they require it as a condition of employment. This law penalizes employers for failing to pay arbitration fees within 30 days of due date by considering this delay a material breach of the arbitration agreement. If the breach occurs prior to initiation of the arbitration, an employee may proceed to court or compel the arbitration to go forward. If the breach occurs during pendency of the arbitration, an employee may start over in court, get a court order compelling the employer to pay, the employee can pay employer’s fees and recover the costs at the end, or the arbitration company can pursue a collection action against the employer for failure to pay.
This law goes even one step further and requires the court to impose monetary sanctions on the employer for breaching the duty to pay for the arbitration. Sanctions include reasonable expenses, attorney’s fees and costs resulting from the breach. The court may award additional sanctions (up to terminating sanctions), unless the employer acted with substantial justification or sanctions would be unjust.
Assembly Bill 1223 extends the amount of leave an organ donor may take. Currently, private employers with fifteen or more employees must provide employees 30 days of paid leave in a one-year period when an employee participates in an organ donation. Employers are also required to provide bone marrow donors five days of paid leave. Effective Jan. 1, employers must provide a maximum of an additional 30 business days of unpaid leave. The employee is required to provide written verification of their participation in either organ donation or bone marrow donation, which must include verbiage that the procedure is medically necessary.
Assembly Bill 1124 recognizes the sad reality that wildfires have become an inescapable part of life in California. This statute requires employers to make respirators available to outdoor workers on any day the outdoor worker could reasonably be expected to be exposed to harmful levels of smoke from wildfires.