Making Your List and Checking It Twice – Here Comes 2021

As we celebrate this holiday season, we gladly say good-bye to 2020 and eagerly look forward to 2021. But, before you turn your back on 2020, make sure you have made your list of employment-related changes, because there are a number of new laws California employers need to be aware of before ringing in the new year. Below is a brief summary of the significant new laws to add to your list. Unless otherwise stated, these new laws are effective January 1, 2021.

Leaves of Absence

• • California Family Rights Act (SB 1383) – Expanded to Smaller Employers: One of the most significant changes in 2021 is the expansion of the California Family Rights Act (CFRA) to small businesses. Previously the CFRA required employers with 50 or more employees to provide up to 12 weeks of unpaid job-protected leave during a 12-month period for qualifying reasons. Now, it applies to employers with just five or more employees. This expansion eliminates the New Parental Leave Act (NPLA) enacted in 2018, which will be subsumed within the amended CFRA, as well as the worksite headcount mileage requirement. This sweeping amendment to the CFRA will have an enormous impact on small businesses, who have never had to comply with family medical leave laws and who are already struggling with the numerous COVID-19 requirements. However, there is a small carve out for businesses with 5-19 employees, who may request mediation through the Department of Fair Employment and Housing (DFEH) if they are hit with any CFRA claims (pursuant to AB 1867).

  Larger employers must also beware. Beyond including smaller businesses, the amended CFRA also expands its definition of “family members” to include grandchildren, grandparents and siblings. This impacts additional coverages that may not be covered under the federal counterpart (the Family and Medical Leave Act (FMLA)). This effectively means that the new CFRA and FMLA are not synchronized and a qualifying leave may not run concurrently, potentially requiring an employer to provide 12 weeks of leave under the CFRA followed by an additional 12 weeks of leave under the FMLA for a total of 24 weeks of leave. This, of course, could also be stacked with other leaves of absences available to eligible employees – for example, under the Pregnancy Disability Leave (PDL) law and Paid Sick Leave (PSL) laws, which also require job-protection during leaves of absence.

  All employers should visit and revise their medical leave policies accordingly. Smaller employers will have to now add the new CFRA. Mid-size employers will have to eliminate their NPLA policy and add the new CFRA. Larger employers with combined CFRA/FMLA leaves should now separate out the two leaves, as they are now unsynchronized and will no longer run concurrently in many cases.

  • Victims of Crime Leave Expanded (AB 2992) – Protecting Victims of Crime: The amendment expands the employment protections to employees taking time off as a result of certain crimes and abuse by redefining the terms “victim” and “crime.” The definition of “victim” is expanded to not only include a victim of stalking, domestic violence or sexual assault, but now includes a victim of any crime that caused either physical injury or mental injury with the threat of physical injury. A “crime” now covers any crime or public offense, regardless of whether any person is convicted, prosecuted or arrested for the crime. The amendment also allows employees to submit a written statement signed by the employee certifying that the absence was for an authorized purpose as an accepted form of documentation and certification.

  • Paid Sick Leave Designation (AB 2017): Employee’s Right – This new law provides employees with the sole discretion to designate days absent from work as paid sick leave and to be taken from their paid sick leave balances.

  Wage and Hour

  • Reporting Pay Data (SB 973) – Required for Larger Employers: Employers with 100 or more employees, who are already required to file an annual Employer Information Report (EEO-1) under federal law, must now also submit pay data reports to the Department of Fair Employment and Housing (DFEH) containing information about employees’ race, ethnicity, sex and gender in various job categories by March 31, 2021, and on that date every year thereafter. We expect more information on this from the DFEH in the coming months and ahead of the deadline. However, if you fall under this requirement, we recommend that you start gathering this information and preparing the report now since it will require a lot of time and energy to comply with the new requirement.

  • Independent Contractors (AB 2257) – Expanded Exemptions: The ABC independent contractor test became the default test earlier this year and contained a number of exemptions to its application. AB 2257 went into effect on September 4, 2020, expanding and clarifying exemptions to the ABC test. However, even if you fall within an ABC test exemption, you must still apply the multi-factor Borello test to determine whether you have properly classified someone as an independent contractor. We recommend that you print out the exemptions and keep them handy as you revisit your employee classifications and service provider agreements. 

  • Wage and Hour Arbitration (SB 1384) – Labor Commissioner’s Role: The Labor Commissioner will now be able to represent claimants in proceedings to appeal a wage claim award and/or represent a claimant in a court-ordered arbitration to determine a claim when claimants are financially unable to represent themselves or afford counsel.

  • Wage and Hour Liability (AB 3075) – Successor Liability: Successor employers may be liable for a predecessor’s unpaid wage judgments. AB 3075 also requires that corporations provide the state information regarding violations of wage orders or the Labor Code by January 1, 2022.

  Workplace Safety

  • COVID-19 Workplace Safety Law (AB 685) – Report and Notify: In an effort to curb the spread of COVID-19 through our workplaces, this law imposes onerous notice and reporting requirements on employers. Under the new law, employers will have to give notice of COVID-19 exposure to employees and other individuals, maintain records and documents pertaining to such exposure and cases, report COVID-19 outbreaks to health departments, and inform employees of its policies and procedures for disinfecting exposed areas, among other requirements. This law will be in effect for two years – until January 1, 2023.

  • COVID-19 and Workers’ Compensation (SB 1159) – Workplace Presumption: Employers with five or more employees who know or reasonably should know that an employee tests positive for COVID-19 must now inform their workers’ compensation carrier within three business days. The law also creates a rebuttable outbreak presumption when: employers with 100 or less employees at a worksite have four employees test positive for COVID-19 within two weeks; employers with more than 100 employees at a worksite have four (4) percent of the employees test positive for COVID-19 within two weeks; or have a workplace closure directed by public health authorities. Please note that the Workers’ Compensation “outbreak” definition is different from the way it is defined by AB 685. SB 1159 also has its own reporting requirements for workplace COVID-19 infections. This law is already in effect and will be for two years until January 1, 2023.

  Anti-Discrimination

  • Discrimination, Harassment and Retaliation Protections (AB 1947) – Extended Filing Time: Employees are now provided with up to one year to file a harassment and/or discrimination claim enforceable by the Labor Commissioner with the Department of Fair Employment and Housing (DFEH). This is doubled from the previous six-month filing requirement.

  • Corporate Board of Directors (AB 979) – Required Diversification: As a follow-up to 2018’s SB 826 requiring publicly held companies with principal executive offices in California to have a minimum number of female directors, AB 979 now requires the addition of a minimum of one director from an unrepresented community by the end of 2021. An individual from an underrepresented community is one who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian or Alaska Native, gay, lesbian, bisexual or transgender. By the end of 2022, qualifying companies with five to nine corporate directors must have at least two directors from underrepresented communities, and qualifying companies with 10 or more directors must have at least three directors from underrepresented communities. The California Secretary of State is required to file a report by March 1, 2022, identifying the qualifying public companies and stating their compliance status. There are also steep monetary fines imposed for non-compliance.

  Employee Protections

  • • California Consumer Privacy Act (CCPA) (AB 1281) – Compliance Extension for Protecting Employee Data: The CCPA went into effect earlier this year and grants rights to consumers regarding their personal information, including what information is collected, notice for the collection of such data, the right to request deletion of certain data and the right to restrict the sale of personal information. Under the CCPA, covered employers are those (a) with gross revenue exceeding $25 million, (b) where at least 50% of its annual revenue is from selling consumers’ personal information, or (c) who handle the personal information of more than 50,000 consumers, households or devices for commercial purposes. While the CCPA’s broad scope reaches employment data (i.e., human resources information), this bill provides covered employers an additional one-year extension to January 1, 2022 for general compliance. However, covered employers must still provide a “notice at collection” of personal employee information. 

  In addition, however, during the elections last month, Californians voted to approve a ballot measure that creates the California Privacy Rights and Enforcement Act of 2020 (CPRA). The CPRA expands the CCPA’s requirements by imposing privacy policy requirements, and individual rights and vendor management requirements, with no exemptions for human resource individuals and employee information. Thus, the CPRA will eliminate the CCPA’s employment exemptions and be effective the following year on January 1, 2023.

  • Mandated Child Abuse Reporting (AB 1963) – Protection of Minors: This law makes certain human resources employees and supervisors of minors mandated reporters of child abuse and neglect. It requires employers to provide training to mandated reporters about how to identify such cases.