Client Alert


New Employment Laws and Requirements for 2020

By Dwayne McKenzie, Cathy Moses, and Simmone Ashai

            In 2020, the need to react to the spread of the COVID-19 virus spurred the passage of several California laws relating to employee leave and employer notification requirements.  While these issues attracted great attention, the California Legislature also passed several important statutes affecting employers and employees more generally, including expanding coverage for family leave, lengthening the period of time in which to file certain claims against employers, and continuing exemptions under the California Consumer Privacy Act (CCPA).  The following is a summary of new laws passed this year.

New Obligations Relating to COVID-19

COVID-19 Notification Requirements (AB 685).  Under AB 685, a California employer who receives a notice of “potential exposure” to COVID-19 at a worksite is required to provide notice of that event to its employees and other affected parties. In order for the notification requirements to be triggered, an employer must receive (1) notification from a public health official or licensed medical worker that an employee was exposed to a “qualifying individual” at the worksite, (2) notification from an employee or their emergency contact that the person is a qualifying individual, (3) notification through the employer’s testing protocol that an individual at the worksite is a qualifying individual, or (4) notification from a subcontracted employer that a qualifying individual was on the worksite. 

Once the employer receives the notice of potential exposure, the employer must within one business day

  • Provide a written notice of possible exposure to COVID-19 to all employees, and the employers of subcontracted employees, who were on the premises at the same time as the qualifying individual within the infectious period;
  • Provide a written notice to the exclusive representative, if any, of employees;
  • Provide all employees who may have been exposed, and any exclusive representative, with information regarding COVID-19-related benefits to which the employees may be entitled under applicable federal, state, or local laws, including workers’ compensation and options for exposed employees; and
  • Notify all employees on the disinfection and safety plan that the employer plans to implement and complete per the guidelines of the Centers for Disease Control.

AB 685 also allows Cal/OSHA, the state program responsible for protecting worker safety, to close a worksite, or a specific area of a worksite, that exposes employees to an “imminent hazard” related to COVID-19.

AB 685 takes effect on January 1, 2021 and is set to expire on January 1, 2023.  Given the short time in which employers will need to issue notices under AB 685, employers should plan ahead and gather the information to be included in the notice, as well as ensure that employee contact information (including email and text addresses) are up to date.

COVID-19 Rebuttable Presumption (SB 1159).  On May 6, 2020, Governor Newsom signed an executive order, N-62-20, that created a rebuttable presumption that employees with COVID-19 symptoms contracted the disease at their workplace for purposes of workers’ compensation benefits.  The Order expired two months later, on July 5, 2020.

SB 1159 was signed by Governor Newsom, and became effective, on September 17, 2020.  SB 1159 codified Executive Order N-62-20 with respect to employees who reported to their workplaces between March 19 and July 5, 2020, and who tested positive for or were diagnosed with COVID-19 within the following 14 days during that time period.  The new law also extended the presumption beyond July 6, 2020, for firefighters, peace officers, fire and rescue coordinators, and certain kinds of health care and health facility workers. 

For all other employees, SB 1159 created an additional presumption that applies if the employee works for an employer with five or more employees and the employee tests positive for COVID-19 within 14 days after reporting to their place of employment during a COVID-19 “outbreak” at the employee’s workplace.  An “outbreak” exists if one of the following occurs within that 14 day period: (1) if the employee has 100 employees or fewer, four employees test positive; (2) if the employer has more than 100 employees, four percent of the number of employees who reported to a specific workplace test positive; or (3) a place of employment is ordered to close due to a risk of infection with COVID-19.

When an employer knows or reasonably should know that an employee has tested positive for COVID-19, the employer must report to their claims administrator in writing within three business days that an employee has tested positive; the date that the employee tested positive, which is the date that the specimen was collected for testing; the specific address or addresses of the employee’s place of employment during the 14 days preceding the date of the employee’s positive test; and the highest number of employees who reported to work at the employee’s workplace in the 45-day period preceding the last day the employee worked there.

Other New Employment Laws

Expansion of Family Leave (SB 1383).  SB 1383 significantly expands California Family Rights Act (CFRA) coverage beginning January 1, 2021. Currently, the CFRA applies to California employers with 50 or more employees working within a 75-mile radius of the same worksite and requires those employers to provide 12 workweeks of medical and family leave to their California employees for the following: (1) birth of a child, adoption of a child or placement of a foster child; (2) care of a spouse, parent or child with a serious health condition; or (3) recovery from an employee’s own serious health conditions.

SB 1383 extends the CFRA coverage requirement to small businesses – specifically, to any California business with 5 or more employees – and removes the requirement that employees must work within a 75-mile radius of the same worksite. Any California employee seeking CFRA leave must still have been employed with the business for at least 12 months and have worked at least 1,250 hours for the business in the prior 12 months. The new law also expands the coverage under the CFRA by: (1) extending the statutory definition of “child” to include adult children and children of a domestic partner; (2) permitting leave for the care of a grandparent, grandchild, or domestic partner who has a serious medical condition; and (3) permitting leave because of a “qualifying exigency” related to active military duty of an employee’s spouse, domestic partner, child, or parent in the United States armed forces. SB 1383 also removes two exemptions from the CFRA, allowing leave for “key employees” and for both parents where both are working for the same employer.

Exceptions to AB 5 (AB 2257).  AB 2257 revises Assembly Bill 5, which was passed last year and codified a strict “ABC” test to determine if a person was an independent contractor or an employee for purposes of protections under state employment laws. AB 5 outlined specific categories of workers exempt from application of the ABC test and who would have their employment status determined under the prior “Borello” test.  After AB 5 became effective, numerous industries continued to seek additional exemptions.

In response, AB 2257 retains the strict ABC test but clarifies and expands its exemptions. Some newly exempt professions include real estate appraisers, home inspectors, insurance underwriters, photographers, videographers, freelance writers and copy editors, content aggregators, certain musicians and performance artists, and those providing professional consulting services. A previously narrow exemption from AB 5 for business-to-business relationships has also been significantly broadened in AB 2257.  In addition, California voters passed Proposition 22, which exempted app-based rideshare and delivery drivers from AB 5 and AB 2257, allowing them to be treated as independent contractors.  However, for the vast majority of California employers, continued attention will be needed to avoid potential liability for misclassification of employees as independent contractors.

Employer Pay Data Requirement (SB 973). SB 973 is meant to gather information for the state to address gender and racial pay disparities, and requires certain private California employers – those with 100 or more employees and who are required to file an annual Employer Information Report (EEO-1) under federal law – to annually file an equal pay report to the Department of Fair Employment and Housing (DFEH), by March 31st each year. The report must include: (1) the number of employees by race, ethnicity, and sex in each of various job categories; (2) the number of employees by race, ethnicity, and sex, whose annual earnings fall within each of the pay bands used by the United States Bureau of Labor Statistics in the Occupational Employment Statistics survey; (3) the total number of hours worked by each employee counted in each pay band during the reporting year; and (4) the employer’s North American Industry Classification System (NAICS) code. The first report, covering 2020 data, must be submitted by March 31, 2021.

Employment Violation Complaints – Limitations (AB 1947).  Currently, the statute of limitations for employees to file a complaint for wrongful termination or discrimination with California’s Division of Labor Standards Enforcement (DSLE) is six months after an alleged violation. Assembly Bill (AB) 1947, which goes into effect January 1, 2021, doubles that statute of limitations period from six months to one year after the alleged violation. It also authorizes courts to award reasonable attorneys’ fees to an employee who brings a successful claim for a violation of Labor Code section 1102.5, which, among other things, prohibits retaliation against employees who report or testify to employer violations or noncompliance with local, state, or federal regulations.

Board of Director Representation (AB 979).  AB 979 requires that publicly held corporations whose principal executive offices are located in California must have a minimum of one director from an underrepresented community on its board.  This requirement must be met by December 31, 2021. 

Then, by the end of 2022, if a corporation has nine or more directors, it must have at least three directors from underrepresented communities. If it has four directors but fewer than nine, it must have at least two directors from underrepresented communities. Boards of four and fewer directors must have at least one director from an underrepresented community by the end of 2022.

A director from an underrepresented community means 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.

Extension of CCPA Exemptions for Employers (AB 1281).  The California Consumer Privacy Act (CCPA) provides broad rights to “consumers” (including employees) regarding their personal information held by a business or employer.  While the CCPA became effective January 1, 2020, some provisions were subject to delayed enactment. 

AB 1281 ensures that certain exceptions for employers under the CCPA that were set to expire on January 1, 2021, will be extended through January 1, 2022.  Under AB 1281, the partial employee exemption will continue to exist and apply to information collected by a business about a person in the course of acting as a job applicant, employee, or owner, director, officer, medical staff member, or contractor of a business.  The exemption also applies to personal information used for emergency contact purposes.  Employers are still obligated to implement and maintain reasonable security procedures and practices, including providing employees notice of collected information. 

AB 1281 also extends the business-to-business exemption, which holds that businesses are not required to provide certain notices or extend certain consumer rights to their business contacts.  The exemption applies to information reflecting a verbal or written communication or a transaction between the business and an employee of another organization where the communication occurs in the context of the business conducting due diligence on the other organization, or the business is providing or receiving a product or service to or from the other organization.

The continued exemption for employers will provide them much needed time to prepare to comply fully with the CCPA, particularly given that employers have focused on responding to the COVID-19 pandemic in 2020.  However, given current and future obligations under the CCPA, employers’ human resources personnel should evaluate their obligations now to ensure compliance.    

Cox, Castle & Nicholson LLP is a full service law firm offering comprehensive legal services to the business community and specialized services for the real estate and construction industries.  Reproduction is prohibited without written permission from the publisher.  The publisher is not engaged in rendering legal, investment, business or insurance counseling through this publication.  No statement is to be construed as legal, investment, business or insurance advice.

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