A new year means. . . . new employment compliance issues. Read on! And of course, do not hesitate to contact us with questions or for assistance. The best way to reach me is here: jdebacker@mstpartners.com

COVID-19

The laws, rules, regulations and standards about COVID-19 are a moving target. Here is what we know as of today.

The FFCRA, which included federal Paid Sick Leave and paid “E-FMLA”, expires December 31, 2020, as does the California version that required paid sick leave for larger employers. The new (December 21, 2020 December 27, 2020) stimulus package addresses FFCRA leave, but seems to say that as of January 1, employers are no longer required to provide FFCRA leave; if they do, they can continue to get a federal tax credit for leave through March 31, 2021. We’ll look to update this when we know more.

Cal/OSHA Emergency Standards

Cal/OSHA issued new Emergency Standards on November 30, 2020 that cover every employee in California, except those already covered by the Aerosol Transmissible Diseases standard, employees working from home, and single-employee employers who do not have contact with anyone.

The Emergency Standards require the following:

• If an employee must be excluded from the worksite for a COVID-19 related reason (having or having been exposed to COVID-19 at work), but is otherwise able and available to work, the employer must continue the employee’s earnings and benefits.
• If there has been a COVID-19 case at a workplace, the employer must offer COVID-19 testing at no cost to employees during their work hours to all employees who had potential exposure in the workplace.
• Notification to employees (and employers of subcontracted employees) of potential exposure. A new law that takes effect January 1 requires this notice to be in writing.
• Tracking of COVID-19 cases.
• Provide face coverings to all employees.
• Creating a written COVID-19 Prevention Program. A fill-in-the-blank template is available from the Department of Industrial Relations.
• Reporting of outbreaks to the local Public Health authority. The definition of “outbreak” varies across several laws. If an employer has more than two positive employees, the employer should see if the notification rule is triggered.
• For employers who provide housing and transportation to employees, there are special requirements to ensure appropriate social distancing.

Cal/OSHA Reporting Requirements and Enforcement

In addition to the Emergency Standards, a new law requires employers to notify in writing specified employees of their potential exposure to COVID-19 within one business day from the employer’s notice that an employee tested positive or was diagnosed with COVID-19, became subject to a COVID-19 isolation order or died due to COVID-19.  This notification must be provided to employees who were working at the same work site as the employee with COVID-19 during the infectious period. The notice must include information regarding workers’ compensation insurance, COVID-19-related paid time off, and state-mandated leave time. All employees and employees of subcontractors must be notified of the disinfection and safety plan. Employers must not identify the employee with COVID-19 by name. Employers must also notify the local public health agency within 48 hours if there is an outbreak. And, Cal/OSHA now has the authority to issue emergency shut down orders for an entire worksite if it deems that necessary.

Workers’ Compensation Insurance and COVID-19

In May 2020, Governor Newsom issued an Executive Order which created a rebuttable presumption that employees’ illnesses relating to COVID-19 were occupational injuries eligible for workers’ compensation insurance benefits if certain criteria were met. Now that Order is a law. To rebut the presumption that the employee’s COVID-19 illness is work-related, employers may present evidence demonstrating that the illness was not contracted at work as well as safety measures they have taken. Also, employees are required to exhaust their paid sick leave prior to being eligible for workers’ compensation temporary disability benefits. This law went into effect September 17, 2020.

Compensation

Wage orders

Every employer must post the most current Wage Order in the workplace, so please download the wage order for your business today and post it where employees can find it. The Wage Orders were revised for 2021! You can find the latest Wage Order for your business at www.dir.ca.gov

Minimum Wage

Effective January 1, 2021, California employers with at least 26 employees must pay minimum wage at the rate of $14.00 per hour. For employers with 25 or fewer employees, minimum wage will increase to $13.00 per hour.

Employers are generally subject to federal, state and local minimum wage laws and must follow the stricter standard; that is, the one that is the most beneficial to the employee.

Exempt employees

The minimum salary that must be paid to exempt employees in California corresponds to the state minimum wage. Exempt employees must earn at least twice the state’s minimum wage for full-time employment — $58,240 annually for employers with 26+ employees. For employers with 25 or fewer employees, the amount is $54,080. This minimum salary increases as minimum wage increases. As always, the “duties” tests must be satisfied for any employee classified as exempt. 

Overtime for the Computer Software Professional Exemption  

As of January 1, 2021, employers must pay their California computer professional employees a salary of at least $98,907.70 annually ($8,242.32 monthly) or an hourly wage of $47.48 every hour worked in order to remain exempt from paying such employees overtime compensation. The applicability of this exemption requires careful analysis to see if the worker is performing the necessary duties. This exemption is only from overtime; these employees must still be afforded the opportunity to take meal and rest breaks. 

Independent Contractors

Until about March 2020, all the talk was about AB 5, Dynamex and the ABC Test. While that talk has died down a bit, please note that if you have anyone performing services for you that isn’t paid as a W2 employee, you must carefully review that relationship.

Two laws modified AB 5 this year. The first came from the Legislature and seemed to be very dependent upon who had effective lobbyists in Sacramento. AB 2557 amended the law to revise and add exceptions to the “ABC Test” used to determine whether a worker is properly classified as an employee or independent contractor.

The new law removed the annual 35-submission limit for freelancer writers, editors, newspaper cartoonists, still photographers, and photojournalists, though a variety of other requirements still must be met. 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. The bill also creates exceptions for licensed landscape architects, some youth coaches, specialized performers teaching master classes, registered professional foresters, real estate appraisers and home inspectors, and feedback aggregators. The new law also changes the conditions under which business service providers providing services to another business are exempt, 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 in order to be properly classified as an independent contractor.

The second change came through the voting process.  Proposition 22 is a very limited exception to AB 5. The new law classifies drivers for app-based transportation and delivery companies as independent contractors, not employees, unless the company sets the workers’ hours, requires acceptance of specific ride and delivery requests, or restricts working for other companies.

Wage Claim Arbitration

If an employer asks a court to require arbitration of a wage claim, the Labor Commissioner may now provide legal representation to the claimant when asked and if the claimant is financially unable to afford representation. The Labor Commissioner must determine the claim has merit. The Labor Commissioner may oppose the petition to arbitrate and represent the claimant in the arbitration.

Extension of time to file a retaliation claim with the Labor Commissioner

A new law enlarges the time for employees to file complaints with the Labor Commissioner for claims that they were discriminated against or discharged in violation of Labor Code provisions enforced by the Labor Commissioner. The employee now has one year, instead of six months, to file a claim. This bill also amends Labor Code section 1102.5 to allow employees who prevail on a claim for certain types of retaliation to recover their attorneys’ fees.

Time Off / Leaves of Absence

California Family Rights Act (CFRA) covers employers of 5 or more employees

The CFRA and the federal FMLA have historically been viewed as “practically the same.” Then, in 2018, the CFRA was changed to require employers to provide new child bonding time to employees working for employers with 20 or more employees.

Starting January 1, 2021, the CFRA will cover employers with 5 or more employees. An eligible employee must be employed for 12 months and work 1,250 hours. There is no geographic limit, though, when counting the number of employees. The employees could be spread across the state and if they add up to 5, the law covers the employees.

The 12 weeks of unpaid time off can be taken to care for a family member with a serious health condition. The definition of family member is expanded to include grandparents, grandchildren, and siblings. The new law also provides up to 12 weeks of time off due to a military-related “qualifying exigency,” which has been covered by the FMLA for years. Employers can no longer limit leave to 12 weeks of combined baby-bonding leave when both parents are employees. And the ability to limit reinstatement for certain key employees has been eliminated. 

Kin Care

Under Labor Code 233, employees must be permitted to use at least half of their annual accrual of employer-provided sick leave for “kin care” (family) reasons. This bill amends the law to provide that it is up to the employee’s “sole discretion” to designate leave to use for this purpose. The new law does not require employers to provide any additional paid time off—it simply clarifies who designates which type of sick leave is used when an employee uses a sick day.

Protected Time Off for Domestic Violence, Sexual Assault, or Stalking Victims

Existing law protects some employees who are the victims of victims of domestic violence, sexual assault, or stalking, and the protections are expanded this year. Labor Code sections 230 and 230.1 are amended to provide the victims of violent crimes and families of homicide victims (1) time to recover without fear of job loss and (2) expanded unpaid leave. The new law expands the coverage to include victims of “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.”

Fair Employment

Pay Data Reporting Requirements 

Employers with 100 or more employees that are required to file the federal EEO-1 report must also submit a pay data report to the California Department of Fair Employment and Housing (DFEH) starting March 31, 2021. The report must include the race, ethnicity and gender of employees by job category within pay bands used by the United States Bureau of Labor Statistics in the Occupational Employment Statistics survey. The data will be provided according to a single pay period of the employer’s choice between October 1 and December 31 of the reporting year.

The DFEH will make these reports available to the Labor Commissioner upon request, although both agencies are required to keep the data confidential, except to carry out administrative enforcement or to respond to discovery in litigation. The reports will not be subject to the California Public Records Act.

Harassment Prevention Training

By January 1, 2021 employers with five or more employees are to provide two hours of harassment prevention training to supervisors and one hour of training for all nonsupervisory employees in California. Thereafter, this training must be provided every two years. New hires must receive this training within six months of hire or promotion to a supervisory position. A new rule from the Fair Employment and Housing Commission has clarified that the training can occur in increments – meaning a manager could do one hour each year, for example, so long as all the content is conveyed.