California Legislature Advances Numerous Labor and Employment Bills

Despite all that is going on in the world, the California legislature has been busy this year. Below is a summary of the major employment law bills that are working their way through the state Assembly and Senate.

The deadline for the bills to pass in the state Assembly and Senate is August 31, 2020. Once both houses approve legislation, the governor has until September 30, 2020, to sign or veto the measures.

Bereavement Leave

While many employers voluntarily offer bereavement leave to employees, such time off is not mandatory in the state of California. Assembly Bill (AB) 2999 would require employers to provide up to 10 business days of unpaid bereavement leave. As proposed, the leave would not need to be taken consecutively, but must be taken within three months of the death of a spouse, child, parent, sibling, grandparent, grandchild, or domestic partner. The bill would extend leave rights to all employees, as there are no accrual requirements. Employees would be allowed to use accrued vacation or paid time off (PTO). Under the bill, employers may request documentation regarding the death of the family member. Businesses with fewer than 25 employees would be required to provide only three days of unpaid leave.

The bill would not apply to employees covered by a valid collective bargaining agreement if the agreement already provides (a) bereavement leave; (b) terms for the wages, hours of work, and working conditions of employee members; (c) premium wage rates for overtime worked; and (d) base pay of not less than 30 percent more than the state minimum wage.

AB 2999 also provides that any employee who is discharged, disciplined, or discriminated against for exercising his or her right to bereavement leave may file a complaint with the California Department of Industrial Relations’s Division of Labor Standards Enforcement (DLSE), or file a civil action against the employer for reinstatement, actual damages, and attorneys’ fees.

Status: The bill has passed in the Assembly and is currently pending in the Senate.

Expansion of CFRA Leave and Sick Pay

Two bills are pending in the legislature seeking to amend the California Family Rights Act (CFRA), which is similar in many ways to the federal Family and Medical Leave Act (FMLA). The second bill also proposes to expand sick pay.

Senate Bill (SB) 1383 seeks to expand CFRA leave to small employers with five or more employees—so essentially to most California employers, large and small. Currently, the CFRA applies to employers with 50 or more employees, although a parental leave component of the law (referred to as the New Parent Leave Act) applies to employers with between 20 and 49 employees. The bill would also eliminate the provision granting a total of 12 weeks to spouses who work at same company, and instead entitle both spouses to the full 12 weeks of leave.

SB 1383 also expands the CFRA to cover leave to care for domestic partners, grandparents, grandchildren, siblings, and parents-in-law. Under the bill, the definition of “child” would include the child of a domestic partner.

In addition, the bill proposes to add military exigency leave “related to the covered active duty or call to active duty of an employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States.” The qualifying exigencies include responsibilities such as arranging for or providing childcare; enrolling a child in a school or day care facility; attending meetings with school officials; making legal or financial arrangements; seeking military benefits; attending counseling; accompanying the family member while he or she “is on short-term, temporary, rest and recuperation leave”; attending military ceremonies or events; and addressing issues related to the death of the family member. The proposed coverage is similar to leave currently provided under the FMLA.

In the midst of a pandemic, this bill is likely to pass in some form, and small employers may face significant challenges. Many small businesses lack the resources and personnel to study the dozens of pages of regulations on CFRA leave, track and document the leave, complete the medical certification process, and otherwise administer the leave process. Also, while larger businesses may hire temporary employees to fill positions while an employee is out on leave, smaller businesses may be more susceptible to the premium rates, costly training, and high turnover associated with such replacement employees.

Status: SB 1383 passed in the Senate and is currently pending in the Assembly.

AB 3216 proposes to add a complicated new section to the California Labor Code, which would require employers operating hotels, event centers, airport hospitality operations or the provision of building service to office, retail or other commercial buildings to extend offers of reinstatement to certain laid off employees who lose their jobs during a declared state of emergency. The bill would require such businesses to “offer its laid-off employees specified information about job positions that become available for which the laid-off employees are qualified, and to offer positions to those laid-off employees based on a preference system.” Under the bill, in the event of a transfer in ownership, an incumbent employer would be required “within 15 days after the execution of a transfer document, to provide to the successor employer specified information pertaining to eligible employees and to require the successor employer to maintain and hire from a preferential hiring list for a specified time period.”

Status: AB 3216 passed in Assembly and is pending in the Senate.

Crime Victim Rights

AB 2992 proposes to expand the rights of employees who are crime victims to take time off from work. Currently, Labor Code section 230 allows an employee to take unscheduled time off from work, if the employee provides written documentation of the need for leave in the form of a police report, court order, or medical note. The bill proposes to allow the time off where the employee provides his or her own written statement certifying the basis for the absence.

Status: The bill passed in the Assembly and is pending in the Senate.

Independent Contractors

California passed AB 5 into law last year, imposing a number of restrictions on independent contractor relationships.

AB 1850 proposes to amend the Labor Code as it relates to independent contractors. Currently, “[e]xisting exemptions include a bona fide business-to-business contracting relationship, as defined, under the specified conditions.” This business-to-business exemption “does not apply to an individual worker, as opposed to a business entity, who performs labor or services for a contracting business.” AB 1850 “would delete that individual worker provision.”

The proposed amendment also seeks to refine the definition, and scope of the exemption, for referral agencies that connect clients with specific listed service providers.

The bill also proposes to expand the list of exempted professions. Under the current law, “exemptions include persons providing professional services under specified circumstances, including services provided by still photographers, photojournalists, freelance writers, editors, and newspaper cartoonists who do not license or provide, as applicable, content submissions more than 35 times annually to a putative employer.” AB 1850 “would additionally exempt professional services of a specialized performer hired by a performing arts company or organization to teach a master class, as defined, for no more than one week, and an appraiser.” The bill also proposes to modify the scope of the exemption for still photographers, photojournalists, videographers, photo editors, freelance writers, editors, and similar occupations. Primarily, this change would allow independent contractor status provided that the individual “is not replacing an employee performing the same work at the same volume.” The bill also proposes to add a few additional categories of exempt professions, including those in music production and competition judges, and certain insurance industry roles.

Status: AB 1850 passed in the Assembly and is pending in the Senate.

AB 2257 also proposes to amend AB 5 by adding or expanding the exemptions for “certain occupations in connection with creating, marketing, promoting, or distributing sound recordings or musical compositions.” The bill exempts “a musician or musical group for the purpose of a single-engagement live performance event,” unless one of three specified conditions applies.

Status: AB 2257 also is pending in the Senate.

Employer Mandate to Report Pay Equity Data

SB 973 would require California employers with 100 or more employees, and that are currently required to report EEO-1 data to the U.S. Equal Employment Opportunity Commission, to annually report pay data to the California Department of Fair Employment and Housing beginning on March 31, 2021. The report would break pay data into 10 defined job categories and require an accounting of all employees by race, ethnicity, and sex.

Status: The bill passed in the Senate and is pending in the Assembly.

Notices to Non-Exempt Workers

SB 1102 would amend Labor Code section 2810.5 (also referred to as the Wage Theft Protection Act) to require employers to provide written notice to all employees upon hire of the existence of any federal or state declared disaster, if declared within the past 30 days and applicable in the county where the worker is employed.

The bill would also require the same information to be given to immigrant agricultural workers (H-2A workers). Under the bill, employers of immigrant agricultural workers would be required to provide specified night work equipment, including reflective garments and headlamps, as well as information regarding certain facilities and on-site hazards.

Status: The bill passed in the Senate and is pending in the Assembly.

Expansion of Local Enforcement

AB 3075 proposes to expand the right of local state and county authorities to create and enforce labor laws. Currently, California law permits local governments to enforce their own wage and hour laws that are “more stringent than” state standards. The bill would provide that nothing in the statutory provisions precludes a local jurisdiction from enforcing local labor standards and would expressly authorize local jurisdictions to enforce local standards relating to the payment of wages that are more stringent than state standards.” The proposed law would also require an incorporator of any new corporation to sign a verification that they do not have any unpaid judgments for wage liability.

The bill also seeks to expand successor liability for outstanding labor law judgments pending against a predecessor business at the time of acquisition. While such liability currently exists in limited circumstances applicable to property services employers, the proposed law would expand this type of liability to all employers, where the successor employer uses substantially the same facilities or workforce to offer substantially similar services as the predecessor employer.

Status: The bill passed in the Assembly and is pending in the Senate.

Subjecting Household Employers to Cal/OSHA Rules

Workplace safety laws enforced by the California Division of Occupational Safety and Health (also referred to as Cal/OSHA) do not currently apply to household domestic services. SB 1257 proposes to extend coverage to certain types of household domestic services and in-home childcare services funded by the state In-Home Supportive Services program beginning on July 1, 2022.

Status: The bill passed in the Senate and is pending in the Assembly.

Garment Worker Rights

Traditionally, some garment workers have been paid by the number of garments sewn, rather than by the hour. SB 1399 proposes to prohibit piece rate pay for employees engaged in the performance of garment manufacturing. In addition, the bill would allow workers who have suffered wage violations to sue not only their employer (i.e., the garment manufacturer), but also any retailers that contracted with the manufacturer.

Status: The bill passed in the Senate and is pending in the Assembly.

Rest Breaks for Security Guards

Based on recent case law, security guards do not receive a proper rest break when they are required to take a break on premises or while required to monitor a communication device such as a radio. AB 1512 proposes to create an exception to this rule if the security guards are covered by a collective bargaining agreement (i.e., they are unionized). Under the exception, “if a security officer’s rest period is interrupted, the security officer shall be permitted to restart the rest period anew as soon as practicable.” If the security officer is not permitted to take an uninterrupted rest period, the employer must pay the security officer “one additional hour of pay at the employee’s regular base hourly rate of compensation.”

Status: The bill passed in the Assembly and is pending in the Senate.

Limitations on Management of Warehouse and Distribution Center Employees

AB 3056 would provide protections for certain warehouse and distribution center employees. Under the bill, employers would be prohibited from “imposing a quota upon an employee under which reasonable amounts of time that the employee spends on any of the specified activities is counted toward the time required for completing the quota, or results in the employee having less time to complete the quota.”

Status: The bill passed in the Assembly and is pending in the Senate.

Doubling the Time for Employees to File DLSE Complaints

AB 1947 seeks to expand DLSE enforcement under Labor Code section 98.7 by doubling the period of time individuals have to file complaints with the DLSE.

AB 1947 would provide that employees will have one year from the date on which they are “discharged or otherwise discriminated against in violation of any law under the jurisdiction of the Labor Commissioner” to file a complaint with the DLSE. The bill thus extends the time in which employees can bring such charges from six months to one year.

The bill also seeks to amend Labor Code section 1102.5, which prohibits retaliation against employees who report employer violations or noncompliance with local, state, or federal statutes or regulations. AB 1947 would amend Labor Code section 1102.5 to authorize courts to award reasonable attorneys’ fees to a plaintiff who brings a successful action for a violation of these provisions. There is no similar benefit for employers if they successfully defend such an action. The bill thus provides an enhanced financial incentive for employees to file civil claims under Labor Code section 1102.5 against employers instead of using the DLSE investigation process.

Status: The bill passed in the Assembly and is pending in the Senate.

Conclusion

With only about four weeks left in the current legislative session, it remains to be seen which bills will end up on the governor’s desk. Ogletree Deakins will continue to monitor the progress of the legislation and post updates on the blog as additional information becomes available.