California Employment Law Update

Labor & Employment Workforce Watch
February 2021

While California employers have had to vigorously monitor employment law changes relating to the COVID-19 pandemic, California Governor Gavin Newsom also signed several additional employment laws, which are not related to the pandemic.

State minimum wage increased. The state minimum wage is now $13/hour for employers with 25 or fewer employees and $14/hour for employers with 26 or more employees. This increase may affect whether certain employees are exempt from overtime compensation, one requirement of which is that the employee is paid a monthly salary equivalent to no less than two times the state minimum wage.

AB 2017 amends kin care law to provide that designation of sick leave is at employee’s sole discretion. California’s kin care law requires employers to permit employees to use at least half of their accrued and available sick leave to care for a family member. Now only an employee can designate his or her leave as kin care leave whereas previously an employer could also designate leave as kin care.

AB 1512 creates exception to meal and rest break law for security officers. Employers may now require a security officer, who is covered by a valid collective bargaining agreement, to remain on the premises and on call during rest periods. If the rest period is interrupted, the officer can take a subsequent, uninterrupted rest period. If the officer is unable to take a 10-minute rest period for every four hours worked, the officer must be paid for one additional hour at his or her regular hourly rate.

AB 2992 broadens leave for victims of domestic violence, sexual assault, or stalking. Employees now may take time off if they are victims “of a crime that caused physical injury or that caused mental injury and a threat of physical injury” or if an “immediate family member is deceased as the direct result of a crime.”

AB 1963 designates certain human resources professionals and front-line supervisors as mandated child abuse reporters. For companies that have five or more employees and employ minors, the law now requires that employers provide employees who are mandated reporters with training on identification and reporting of child abuse and neglect.

AB 2143 clarifies restrictions on “no-rehire” provisions in settlement agreements. AB 749 previously prohibited “no-hire” provisions in settlement agreements with one exception—if the employer determined in good faith that the employee engaged in sexual harassment or sexual assault. AB 2143 broadens this exception to include “any criminal conduct.” For the exception to apply, an employer must document a good faith determination prior to an employee’s assertion of the settled claim. The employee also must have filed the claim in good faith for the restriction on “no-hire” provisions to apply.

AB 1947 extends time for filing complaints with Division of Labor Standards Enforcement. Employees now have one year (rather than 6 months) to file a complaint. AB 1947 also authorizes an award of reasonable attorneys’ fees to prevailing plaintiffs.

SB 1384 provides Labor Commissioner will represent certain financially disabled persons when wage claims are referred to arbitration. The Labor Commissioner will be involved when an informal investigation shows a disabled person’s claims have merit. SB 1384 also requires a petition to compel arbitration for such a claim under section 98, 98.1, or 92 to be served on the Labor Commissioner.

SB 973 introduces new pay data reporting requirements. Employers with 100 or more employees who are required to file an annual Employer Information Report pursuant to federal law now are required to file a pay data report to the Department of Fair Employment and Housing, which includes the number of its employees by race, ethnicity, and gender; job categories; and pay band data. The Report must be submitted by March 31, 2021, and annually thereafter.

AB 3075 expands information that must be filed with Secretary of State. As of January 1, 2022, employers must report whether any officer or any director or, for a limited liability company, any member or any manager, has an outstanding final judgment issued by the Division of Labor Standards Enforcement or a court for violation of any wage order or provision of the Labor Code. AB 3075 also introduces successor liability for wage and hour judgments.

AB 979 requires corporations to enhance board diversity efforts. A publicly held domestic or foreign corporation with its principal executive office in California must have at least one director from an underrepresented community by the end of 2021. By the end of 2022, corporations with four to nine directors must have at least two such directors and corporations with nine or more directors must have at least three. A “Director 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, or who self-identifies as gay, lesbian, bisexual, or transgender.”

AB 2257 modifies test for determining classification as independent contractor rather than an employee. You can read more about this development in the Locke Lord article, AB2257: Not Much Better Than AB5 for Most Industries in California Using Independent Contractors.

SB 1383 expands Family Rights Act and New Parent Leave Act. You can read more about this new law in the Locke Lord article, California’s Expanded Family and Medical Leave Act Imposes Additional Employer Obligations.