With a Democratic supermajority in the California legislature and a Democratic governor (who survived a recall election), 2021 brings another slew of employment law bills that expand employee protections.

DISCRIMINATION AND HARASSMENT

SB 331 – “Silenced No More” Act – Non-Disclosure Agreements

The most important bill from this legislative session is SB 331, also known as the Silenced No More Act. SB 331 expands the protections created in 2018 by the Stand Together Against Non-Disclosures (STAND) Act (SB-820) and omnibus sexual harassment bill SB 1300. Those bills targeted attempts by employers to silence employees who have been sexually harassed or subjected to discrimination or retaliation based on sex. SB 331 ensure that these same protections apply to all employees subjected to discrimination, harassment and retaliation. It expands protections to claims based on all protected categories covered by the Fair Employment and Housing Act (FEHA), including race, religion, disability, age, veteran status, etc.

The STAND Act added Code of Civil Procedure Section 1001. Section 1001 prohibits confidentiality provisions in settlement agreements involving civil or administrative actions that state a cause of action for: sexual assault; workplace harassment or discrimination based on sex; failure to prevent workplace harassment or discrimination based on sex; sexual harassment in a business, service, or professional relationship; and sex discrimination, harassment, or retaliation by the owner of a housing accommodation.

SB 331 amends C.C.P. § 1001 to expand the prohibition on non-disclosure agreements to encompass claims of discrimination, harassment, or retaliation based on any protected category covered by the FEHA (not just those based on sex). This expanded prohibition applies to agreements entered into on or after January 1, 2022. SB 331 clarifies that C.C.P. § 1001 prohibits provisions that prevent or restrict the disclosure of such information.

SB 1300 had added Government Code § 12964.5, which made it unlawful for an employer, in exchange for a raise or bonus, or as a condition of employment or continuing employment, to: (1) require employees to sign a release of claim or right under the FEHA, or (2) to require employees to sign a nondisparagement agreement that gags employees from disclosing information about sexual harassment and other unlawful acts.

SB 331 amends Government Code § 12964.5 as follows:

• It prohibits nondisparagement agreements or other documents to the extent that they have the purpose or effect of denying the employee the right to disclose information about unlawful acts in the workplace.
• It prohibits employers from including in separation agreements any provisions that prohibit the disclosure of information about unlawful acts in the workplace—defined to include harassment, discrimination, or any other conduct that the employee has reasonable cause to believe is unlawful.
• It requires nondisparagement provisions or other contractual provisions that restrict an employee’s ability to disclose information related to conditions in the workplace to include, in substantial form, the following language: “Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.”

An employer offering an employee a separation agreement must notify the employee that they have a right to consult counsel regarding the agreement and must be given at least five business days to do so.

Section 12964.5 as amended does not prohibit the inclusion of a general release or waiver of claims in an employee separation agreement. Nor does it preclude confidentiality with respect to the amount paid in a severance agreement. In addition, it remains inapplicable to negotiated settlements to resolve claims filed in court, before an administrative agency, in an alternative dispute resolution forum, or through an employer’s internal complaint process.

AB 1033 – Care for Parent-in-Law Added to CFRA/Small Employer Mediation Pilot Program Procedures

Last year, the California Family Rights Act (CFRA) was dramatically expanded by SB 1383. SB 1383 did two main things: (1) It expanded CFRA coverage to all employers with five or more employees, down from 50; and (2) it allowed for CFRA leave to be used to provide care for grandparents, grandchildren, siblings, domestic partners, adult children, and children of domestic partners. Inadvertently, parents-in-law were omitted from the list of family members for whom CFRA leave could be taken to provide care. AB 1033 fixes that oversight by including “parent-in-law” in the definition of “parent” under the CFRA.

AB 1033 also amends the provisions governing the small employer family leave mediation pilot program, which applies to employers with five to 19 employees, to add further procedural requirements:

• When an employee requests an immediate right to sue alleging a violation of the CFRA, the Department of Fair Employment and Housing (DFEH) must notify the employee in writing of the requirement for mediation prior to filing a civil action if mediation is requested by either party. In addition, before filing a civil action, an employee must contact the Department’s dispute resolution division and indicate whether they are requesting mediation.
• The DFEH, upon notifying the dispute resolution division regarding the intent to pursue legal action for an employer’s violation of the family and medical leave provisions, must notify all named respondents in writing of the alleged violation and the requirement for mediation if either party requests it.
• If neither party requests mediation within 30 days of receiving the notification, the DFEH must terminate its activity.
• If either party requests mediation within 30 days, the DFEH must initiate mediation within 60 days of receiving the request or all parties’ receipt of the notification, whichever is later. The mediator must notify the employee no later than 7 days before the mediation dates of their right to request certain labor-related information and to help facilitate other reasonable requests for information.

Under Section 12945.21, an employee who worked for a small employer covered by these provisions is prohibited from pursuing a civil action unless the mediation is not initiated by the DFEH within the mandated time period, is complete, or is deemed unsuccessful. AB 1033 tolls the statute of limitations for the employee’s claim from the date when the employee contacts the dispute resolution division until mediation is complete or deemed unsuccessful.

SB 807 – Procedural Changes to DFEH Enforcement of Civil Rights

SB 807 makes a number of procedural changes to DFEH enforcement of the FEHA. Among other things, SB 807:

• Tolls the deadline to file a civil action pursuant to the FEHA while a mandatory or voluntary dispute resolution is pending.
• Provides that a civil action brought by DFEH based on class or group allegations may be brought in any county in the state.
• Requires the DFEH, for group or class complaints, to issue a right-to-sue notice upon the completion of its investigation and no later than 2 years after the filing of the complaint.
• Tolls the statute of limitations (including retroactively but not to revive lapsed claims) for filing civil actions for certain violations under investigation by DFEH until either the DFEH files a civil action or 1 year after the DFEH issues written notice that it has closed its investigation concluding it will not file a civil action.
• Authorizes DFEH complaints to be served electronically as well as through other manners specified in the Code of Civil Procedure.
• Makes several changes related to DFEH’s power to petition superior courts to compel compliance with its investigations.

SB 807 also expands employer record retention requirements from 2 years to 4 years, requires an employer or other covered entity to maintain and preserve employment records even longer upon notice that a verified complaint has been filed, and eliminates the State Personnel Board’s record retention exemption.

SB 352 – Military Sexual Harassment

SB 352 addresses sexual harassment in the California military. Among other things, it amends the Military and Veterans Code to establish that sexual harassment by a member of the active militia serving state duty is an offense that is punishable by military proceedings or a court-martial, in addition to being subject to civil prosecution. It clarifies that members of the California militia on active duty can be held liable for sexual assault, sexual harassment, or other acts done outside of the performance of their military duty. The bill also expands the existing reporting requirements on sexual harassment against service members and requires releasing certain statistical data on the Military Department’s website.

AB 1407 – Implicit Bias Training Requirement for Nurses

AB 1407 mandates that all approved nursing schools and programs include an implicit bias training as a requirement for graduation. The bill also requires newly licensed nurses to complete a continuing education course on implicit bias and requires hospitals to implement evidence-based implicit bias programs as part of their training for new hires and graduates.

WAGE-AND-HOUR LAWS

AB 1003 – Wage Theft as Grand Theft

AB 1003 makes wage theft punishable as grand theft. It creates Penal Code § 487m, which provides that the intentional deprivation of wages, including gratuities, amounting to more than $950 from any single employee or independent contractor or $2,350 total from two or more employees or independent contractors within a 12-month period may be prosecuted as grand theft, punishable as either a misdemeanor or felony. AB 1003 specifically authorizes wages, gratuities, benefits, or other compensation that are the subject of a prosecution under its provisions to be recovered as restitution. The law specifically applies to wage theft from both employees and independent contractors.

AB 286 – Tips on Food Delivery Platforms

The pandemic has decimated the restaurant industry, which was already operating on razor-thin margins. It has also led to a steep rise in restaurants orders through food delivery platforms, which charge hefty commissions and have opaque fees. AB 286 seeks to protect restaurants and restaurant workers. Among other things, it makes it unlawful for a food delivery platform to retain any amounts designated as a tip or gratuity. It requires that these platforms pay all tips on delivery orders to the person delivering the food and all tips for pickup orders to the restaurant. AB 286 also prohibits food delivery platforms from charging customers a price higher than that posted on the food delivery platform’s website by the food facility at the time of the order, and requires that the food delivery platform disclose to the customer and the food facility an accurate, clearly identified, itemized cost breakdown of each transaction.

SB 62 – Garment Worker Protection Act

SB 62 is a comprehensive bill directed at the garment industry in California, which is rife with employee exploitation, including violations of wage-and-hour laws and health and safety standards. Garment workers, who are often paid “piece rate” compensation (according to the piece or units produced), earn an average of $5.15 per hour, a fraction of the minimum wage. Many lost their jobs as a result of the pandemic, and those still working often do so in unsafe conditions that violate pandemic-related safety standards.

SB 62 bans “piece rate” compensation for garment workers, requires that they be paid at least the minimum wage, and imposes a $200 fine per employee against any garment manufacturer or contractor (payable to the employee) for each pay period in which an employee is paid by piece rate.

The bill makes garment manufacturers, contractors, and “brand guarantors” who contract for garment manufacturing jointly and severally liable with any manufacturer and contractor for the full amount of unpaid wages and other compensation, including interest, civil penalties, and attorney’s fees, due to any employee engaged in garment manufacturing.

SB 62 creates a rebuttable presumption that the brand guarantor or garment manufacturer is liable with the contractor for any amounts due to the employee where the employee files a claim with the Labor Commission for unpaid wages and provides labels or other credible information identifying the guarantor or manufacturer.

The bill authorizes the Labor Commissioner to enforce these provisions by issuing a stop order or citation.

SB 62 also expands industry recordkeeping obligations, requiring every employer engaged in the business of garment manufacturing and brand guarantors to keep all contracts, invoices, purchase orders, work orders, style or cut sheets, and any other documentation relating to garment manufacturing performance for four years.

SB 639 – Minimum Wage Protections for Workers with Disabilities

SB 639 provides for a phased end to the subminimum wage certificate program, which authorizes employers to pay individuals with disabilities less than minimum wage.

According to the bill analysis of SB 639, the program allowing certain disabled workers to be paid below minimum wage was originally intended to create opportunities for veterans with disabilities in industrial settings where their productivity may have been lower than that of their able-bodied coworkers. The program came into wider use in the 1950 with sheltered workshops, which were seen as a way for people with disabilities to gain skills and avoid being institutionalized. These programs are now viewed as outdated and potentially exploitative.

SB 639 directs the Industrial Welfare Commission to stop issuing new special licenses authorizing employees with disabilities to be paid less than minimum wage and restrict the renewal of existing licenses. It directs the State Council on Developmental Disabilities, in consultation with stakeholders and relevant state agencies, to develop by January 1, 2023 a multiyear phaseout plan for ending the subminimum wage and applying the minimum wage to individuals with disabilities by January 1, 2025. It will invalidate the state law provisions allowing a lower minimum wage for employees with disabilities as of January 1, 2025 or when the phaseout plan is complete.

AB 1561 – Worker Classification Exemptions

Two years on, the lobbying continues and AB 5 continues to be refined. AB 1561 further addresses occupations that are exempt from the “ABC test” for determining whether workers are employees or independent contractors for the purpose of various labor laws. The proper classification for these exempt relationships is instead evaluated using the multifactor test set forth in the case of S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341. AB 1561:

• Extends the exemption for licensed manicurists to January 1, 2025;
• Extends the exemption for certain individuals performing work pursuant to a subcontract in the construction and construction trucking services industries to work performed before January 1, 2025;
• Exempts the relationship between a data aggregator and “research subject”;
• Expands an exemption for certain workers in the insurance industry to include individuals who provide claims adjusting or third-party administration;
• With respect to the exemption for manufactured housing salespersons, provides that the statutorily imposed duties of a manufactured housing dealer are not factors to be considered under the Borello test.

AB 1506 – Worker Status Exemption Extension – Newspaper Distributors & Carriers

AB 1506 extends the “ABC test” exemption for newspaper distributors and carriers through January 1, 2025.

SB 646 – Janitorial Worker PAGA Exemption

SB 646 reflects a trend toward labor unions being willing to give up the protections of the Labor Code Private Attorneys General Act of 2004 (PAGA) in exchange for workplace unionization. SB 646 provides that PAGA does not apply to janitorial employees who are: (1) represented by a labor organization that has represented janitors before January 1, 2021, and (2) employed by a janitorial contractor who registered as a property service employer in 2020. The exemption for these janitorial employees applies only to work performed under a valid collective bargaining agreement in effect before July 1, 2028 that contains certain provisions, including the requirement that it offer wages that are at least 30% above the state minimum wage. Note that SB 646 defines “janitorial employee” narrowly and specifically excludes certain types of janitorial workers.

COVID-RELATED PROTECTIONS

SB 93 – Rehiring and Retention for Workers Displaced by COVID-19

SB 93, through newly added Labor Code § 2810.8, requires employers in certain industries, including hotels, airport service providers, and event centers, to provide former employees laid off as the result of the COVID-19 pandemic with information about job positions that become available for which they are eligible, and to offer positions to laid-off employees based on a preference system. It further requires that an employer that declines to recall a laid-off employee based on lack of qualifications and hires someone else for the position must provide the laid-off employee with a written notice within 30 days detailing the specific reasons for the decision, as well as other information.

SB 93 prohibits employers from taking any adverse action against laid-off employees for seeking to enforce their rights under these provisions.

It establishes enforcement mechanisms, including permitting an employee to file a complaint with the Division of Labor Standards Enforcement for relief including hiring and reinstatement, awarding of back pay, and civil penalties.  It also requires an employer to keep certain records regarding laid-off employees, including records of communications regarding offers of employment for at least 3 years. SB 93 allocates $6,000,000 to the Labor Commissioner to implement and enforce the provisions of Section 2810.8 related to rehiring and retaining displaced workers.

This law is effective immediately and is in place until December 31, 2024.

SB 95 – COVID-19 Supplemental Paid Sick Leave

SB 95 provided COVID-19 supplemental paid sick leave (SPSL) for covered employees who were unable to work due to reasons related to COVID-19, including due to quarantine requirements. SB 95 was signed into law on March 19, 2021, applied retroactively to January 1, 2021, and the SPSL provisions applied until September 30, 2021.

AB 654 – COVID-19 Exposure, Notification

AB 654 builds upon and clarifies 2020’s AB 685, which set forth COVID-19 exposure reporting guidelines and obligations. AB 654 strengthens and clarifies employer obligations including with respect to reporting, to the written COVID-19 exposure notifications required, and to cleaning/disinfection protocols. Among other things, it adjusts the reporting time frame from 48 hours to 48 hours or one business day, whichever is later. It specifies that existing COVID-19 reporting requirements do not apply to certain facilities, including certain health and care facilities. AB 654 adds a sunset date of January 1, 2023 to the COVID-19 exposure notice provisions. It further adds renewable natural gas to the list of critical government functions that Cal/OSHA is not allowed to interrupt (by prohibiting operations, processes, or entry into) when there may be a risk of COVID-19 exposure. AB 654 included an urgency clause and was effective immediately.

HEALTH AND SAFETY PROTECTIONS

AB 701 – Warehouse Distribution Center Quotas

With the rise in online shopping, next-day delivery, and just-in-time logistics, warehouses and distribution centers have become high-pressure environments where employees are subject to quotas. These quotas can lead to compromised safety and increases in workplace accidents.  AB 701 regulates the use of employee quotas in warehouse distribution centers. Among other things, it:

• Requires covered employers to provide each employee, upon hire or within 30 days of the effective date of the law, with a written description of any quota to which the employee is subject, including the number of tasks performed or materials to be produced or handled, the time period, and any potential adverse employment action resulting from not meeting the quota;
• Prohibits quotas that interfere with meal or rest periods, use of bathroom facilities, or health and safety laws;
• Prohibits employers from taking adverse action against an employee for failing to meet a quota that has not been disclosed or that violates these provisions;
• Provides that employees’ actions to comply with health and safety laws or standards must be considered productive time for the purposes of any quotas or monitoring system;
• Provides that any current or former employee who believes that meeting a quota caused a violation of their right to meal or rest period or required them to violate any occupational health and safety law or standard has a right to request a written description of each quota to which they are subject and a copy of the most recent 90 days of the employee’s data;
• Creates a rebuttable presumption of unlawful retaliation if an employer takes any adverse action against an employee within 90 days of the employee requesting information or complaining about a quota.

AB 701 authorizes current or former employees to bring an action for injunctive relief to obtain compliance with these requirements and, where successful, allows for the recovery of costs and reasonable attorneys’ fees.  It directs the Labor Commissioner to enforce these provisions by undertaking coordinated and strategic enforcement efforts with other agencies.

SB 362 – Quotas for Chain Pharmacies

SB 362 also takes aim at workplace quotas, here in pharmacy settings. The Legislature made findings that quotas in pharmacies–which are largely profit-driven–lead to high-stress work environments, dispensing errors, and risks to public health. SB 632 adds Section 4113.7 to the Business and Professions Code, which bans chain community pharmacies from establishing any quotas applicable to the duties of pharmacists or pharmacy technicians, and Section 4317, which allows the California State Board of Pharmacy to take an enforcement again against a chain community pharmacy that violations Section 4113.7.

SB 606 – Cal/OSHA Enforcement – Workplace Health and Safety

SB 606 creates two new categories of workplace health and safety violations and expands Cal/OSHA’s enforcement powers:

• “Enterprise-wide” violations: SB 606 establishes a rebuttable presumption that a safety violation by an employer with multiple worksites is enterprise-wide where either: (1) the employer has a written policy or procedure that violates certain workplace safety laws, or (2) Cal/OSHA has evidence of a pattern or practice of the same violation by that employer occurring at more than one worksite. If the employer fails to rebut this presumption, Cal/OSHA is authorized to issue an enterprise-wide citation requiring enterprise-wide abatement, subject to certain procedures. SB 606 provides that an enterprise-wide violation is subject to the same penalty provision as willful or repeated violations.
• “Egregious” violations: SB 606 requires Cal/OSHA to issue citations for “egregious violations” of health or safety rules and provides that each instance of an employee exposed to such violation will be considered a separate violation for purposes of assessing fines and penalties.

SB 606 expands Cal/OSHA’s power to issue and enforce subpoenas during its investigations. It also authorizes Cal/OSHA to seek an injunction in certain circumstances to halt work operations until corrective action occurs and expands the grounds upon which a court may grant a temporary restraining order.

SB 321 – Domestic Service Employees Health & Safety Advisory Committee

Household domestic workers face significant health risks, including exposure to chemicals, infectious diseases, and workplace harassment and abuse. Yet they lack many of the safety protections that other workers have. SB 321 requires the Chief of the Division of Occupational Safety and Health (Cal/OSHA) to convene an advisory committee to make recommendations to the Department of Industrial Relations or the Legislature to protect the health and safety of household domestic workers and develop voluntary health and safety guidelines for the purposes of educating household domestic service employees and employers. The bill requires that the advisory committee be comprised of between 13-18 people and include representatives from certain groups, including safety experts, industry advocates, and domestic work employees and employers from various backgrounds. The committee will prepare a report, which Cal/OSHA will post on its website and submit to the Legislature by January 1, 2023.

AB 73 – Wildfire Smoke & Agricultural Workers

AB 73 adds wildfire smoke events to the category of health emergencies for which the California Department of Public Health must take certain actions, including maintaining a personal protective equipment (PPE) stockpile and developing guidelines for ensuring distribution to essential workers. The bill adds agricultural workers to the definition of essential workers. AB 73 also requires the Personal Protective Equipment Advisory Committee to include a representative of a labor organization representing agricultural workers and a representative of an organization that represents agricultural employers.

OTHER

SB 762 – Arbitration Costs

SB 762 builds on the protections of 2019’s SB 707, the Forced Arbitration Accountability Act. SB 707 addressed the abusive tactic by employers of forcing employees to arbitrate their legal claims and then suspending the process by refusing to pay arbitration fees. Among other things, SB 707 provided that if an employer failed to pay required arbitration fees within 30 days of the due date, they would be found in material breach of the arbitration provision. The employee could then choose how to proceed, including by opting to withdraw the claims from arbitration and proceeding in court. However, SB 707 did not require arbitration service providers to send timely invoices, did not prevent them from moving those deadlines, and did not require them to notify the employee-claimant about the employer’s missed payment deadline.

SB 762 provides that after an employee or consumer meets the filing requirements necessary to initiate arbitration, the arbitration provider must immediately provide all parties with an invoice for the total amount of fees and costs required before arbitration can begin. These invoices are treated as due upon receipt unless the arbitration agreement expressly provides otherwise.

SB 657 – Electronic Workplace Postings

SB 657 provides that information that employers are required to post at the workplace may also be provided to employees by email. This does not alter the employer’s obligation to physically display the required posting. As such, it does not appear to change the law. As introduced, electronic distribution was intended to serve as an alternative to the physical posting of information for remote workers, but this was later amended before passage.

* * *

Written by Ramit Mizrahi, Esq. and Amanda Johnson, Esq.

Photo credit: “The Legislative Office Building, Sacramento” by Tony Webster is licensed under CC BY-SA 2.0