California Legislative Update: What’s Left To Affect You? | Seyfarth Shaw LLP - JDSupra

2022-06-16 19:13:02 By : Mr. XiaoHui Zhang

Seyfarth Synopsis: Headlining the employment-related bills that passed the May 27, 2022, House of Origin Deadline is AB 85, which extended COVID-19 Supplemental Paid Sick Leave to September of this year, as well as bills related to accommodations, leaves, retaliation, and workers’ compensation.

On the deadline for bill introduction, back in February, California legislators introduced 611 bills between the two houses, bringing the total number of bills introduced in 2022 to 2,020—1,361 Assembly Bills (“AB”) and 659 Senate Bills (“SB”) 458 of those bills were spot bills, while 181 were intent bills (explanation here). A significant portion of the bills introduced occupy the labor and employment space.

While many measures that would have caused headaches for employers failed to meet the House of Origin deadline, the most concerning provisions remain on a path to Governor Newsom’s desk. Below, we summarize the most significant bills that met the House of Origin deadline and remain in play for California employers.

The bills will now make their way through the committee process in either the Senate or Assembly (depending on which Chamber introduced the measure). Many of these measures will undergo significant amendment, or be completely gutted and amended to look nothing like their genesis. Some will make it through the legislative process, and some will not. Stay tuned for more in-depth analyses of the proposed bills of most interest to employers as the session continues.

COVID-19 Continues to Occupy Legislative Focus

COVID-19 Supplemental Paid Sick Leave (Again): AB 84  

While the California legislature was unable to, or uninterested in, passing a broad vaccination mandate, intense negotiations between the Newsom administration and the business community yielded a whole new tranche of up to 80-hours of mandatory paid sick leave for a variety of COVID-19-related reasons that went into effect on February 19, 2022, and was made retroactive to cover time off taken after January 1, 2022. Despite lobbying efforts by the business community, employers cannot require that this leave be exhausted before using leave available under the Cal/OSHA ETS.

In this iteration of the SPSL, which we blogged about in detail here, there are two buckets of leave available, each up to 40 hours. For the “first bucket,” the qualifying reasons for an employee to be eligible for paid leave are nearly the same as for the 2021 iteration, SB 95, but AB 84 adds leave in order to attend a vaccination appointment for a family member, or to care for a family member experiencing COVID-19 symptoms. Unlike the 2021 COVID-19 SPSL law, AB 84 provides that an employer may limit the total vaccination-related leave to 3 days or 24 hours unless the employee provides verification from a health care provider that they or their family member is continuing to experience symptoms related to a COVID-19 vaccine or booster.

Qualifying reasons for the “second bucket” of up to 40 hours include where the covered employee or a family member tests positive for COVID-19, and employers are allowed to require proof of the positive test. The employer has no obligation to provide the second bucket of leave if the employee does not have proof of the positive test for themselves or their family member.

The rate of pay required for non-exempt employees is the regular rate during the pay period the leave is taken if the employer uses the workweek method, or alternatively the employer can use a 90-day lookback for determining the average regular rate, that is generally the same as with the normal state paid sick leave law (unless the employer has any flat-sum bonuses involved, in which case the employer will need to use the Alvarado-method of calculating the regular rate, as detailed here). The new law provides for the same pay caps as in previous iterations of supplemental sick leave ($511 per day max). Additional FAQs on this new law are available here.

The 2022 COVID-19 SPSL law sunsets on September 30, 2022.

COVID-19 Workers’ Compensation for Critical Workers: AB 1751

This bill extends the current rebuttable presumption (which we previously blogged about here) that specified injuries resulting from COVID-19 were sustained in the course of employment to January 1, 2025. The measure provides that if an employee has paid sick leave benefits specifically available for COVID-19, those benefits must be exhausted before any temporary disability benefits or benefits under the workers’ compensation system become due.

This measure applies only to the following employees: (1) Active firefighting members, whether volunteers, partly paid, or fully paid, (2) Peace officers who are primarily engaged in active law enforcement activities, as defined by the Penal Code, and (3) Rescue services coordinators who work for the Office of Emergency Services.

Fast Food Accountability and Standards Recovery Act (or FAST Recovery Act): AB 257

This bill, initially introduced in January of 2021—the first year of the regular session—has been carried over.  It has already passed the lower chamber, and is onto the Senate Judiciary Committee for additional consideration. The bill would establish the Fast Food Sector Council, responsible for creating a fast food workers bill of rights, which would address issues related to wages, working conditions, etc. This onerous bill would require franchisors to ensure franchisee compliance with a variety of employment, worker, public health and safety laws, including those related to unfair business practices, general liability, employment discrimination, the California Retail Food Code, a range of labor regulations, and emergency orders.

The bill also would establish joint and several liability for franchisee non-compliance. The bill would nullify any potential work around by prohibiting any waiver or indemnity provisions. Finally, while the bill would, for the most part, be enforced through the DLSE, ominously, it would afford franchisee employees a private right of action for retaliation against franchisors.

Franchise Sales, Renewals, and Discrimination: AB 676

This is a bill intended to fill some ambiguities that arose after the enactment of AB 525 (Holden), which purportedly offered relief to franchisees. This measure would prohibit discrimination against franchisees, in much the same way that FEHA currently prohibits discrimination against employees. Specifically, the bill would prohibit a franchisor from failing or refusing to grant a franchise, or failing or refusing to provide financial assistance, to a franchisee or prospective franchisee that has been granted or provided to other similarly situated franchisees or prospective franchisees based solely on any characteristic of the franchisee or prospective franchisee, or any characteristic of the composition of the neighborhood or geographic area where the franchise is located or the proposed franchise would be located if that characteristic is protected by the Unruh Civil Rights Act. This would confer protected status based on sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status.

The bill proposes a number of modest reforms, such as clarifying the accounting and payment processes that are applicable when a franchise relationship ends, and clarifying that a franchisee cannot be forced to waive various rights under the law either in a franchise agreement or as a condition of receiving emergency financial assistance. Additionally, the bill provides that the Commissioner of the Department of Financial Protection and Innovation may summarily revoke a franchise seller’s registration if the Commissioner finds: (a) there has been a failure to comply with any of the provisions of this law; (b) an offer or sale of the franchise would constitute misrepresentation, fraud, or deceit of the purchasers; (c) an applicant has failed to comply with any rule or order of the commissioner; or, (d) any person identified in the application or any officer or director of the franchisor creates an unreasonable risk to the prospective franchisee.

Reporting and Publicizing Salaries and Wages: SB 1162

The California Chamber of Commerce has listed this measure as a “job killer.”

This bill expands upon SB 973 from 2020 (Jackson)—summarized in detail by Seyfarth—which required that employers with 100 or more employees provide the Department of Fair Employment and Housing (“DFEH”) with specified EEO-1 pay data. This measure would expand that requirement to include an employer that has 100 or more employees including those hired through labor contractors.

One of the biggest saving graces to SB 973 for the business community was that the pay data employers were forced to turn over was for the DFEH only, and was not to be made public. Indeed, the measure specifically exempted such data from coverage under the California Public Records Act and considers confidential any individually identifiable information disclosed to the DFEH under these provisions. SB 1162 would make all of that data public.

The bill additionally would require that all employers provide, in a job posting for an open position, the pay scale for that position, and must provide to an employee the pay scale for the position a person is currently employed in, upon request. The measure would permit an aggrieved worker to file a written complaint with the Labor Commissioner within one year after the date the worker learned of the failure to comply with the above requirements and levies a fine of between $100 and $10,000 per violation.

The Senate Committee on Appropriations held a hearing and passed the measure out of committee on May 19, 2022, with amendments to (1) delay publication of DFEH reports by 1 year, (2) exempt businesses with less than 15 employees, and (3) remove Section 3, which required posting all available internal jobs.

This bill would amend the California Family Rights Act (“CFRA”) to prohibit an employer from denying a request from an employee with at least 30 days of active service to take up to five days of bereavement leave upon the death of a family member, defined as spouse or a child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law. While the days of bereavement leave need not be taken consecutively, the allotted leave must be completed within three months of the date of death of the family member. If the employer does not have a paid bereavement policy, the leave would be unpaid, except that an employee may use vacation, personal leave, accrued and available sick leave, or compensatory time off that is otherwise available to the employee.

The bill also would allow the employer to require documentation of the death of the family member, which can be in the form of a death certificate, a published obituary, or written verification of death, burial, or memorial services from a mortuary, funeral home, burial society, crematorium, religious institution, or governmental agency. The bill would prohibit retaliation for requesting bereavement leave.

The Chamber of Commerce has also labeled this measure a “job killer.” This bill would amend the FEHA by adding off-the-job cannabis use as one of the characteristics protected by the FEHA, which would greatly expand potential monetary exposure through litigation for California employers.

The bill would not prohibit a company from administering a drug test that detects the active presence of THC in an employee’s or prospective employee’s bodily fluids only. But, it would prohibit discrimination against an individual for a positive cannabis test, which the bill contends is unrelated to impairment on the job. The bill would also permit an employer to administer a performance-based impairment test, and terminate the employment of an employee who is determined to be impaired by cannabis on the property or premises of the place of employment.

This provision would not apply to employees in building or construction trades, and it would not preempt state or federal laws requiring employees to be tested for controlled substances.

State of Emergency and Emergency Conditions: SB 1044

This bill provides that, in the event of a natural disaster, emergency condition, or state of emergency, an employer may not: (1) take or threaten adverse action against an employee for refusing to report to or leaving a workplace because they feel unsafe; or (2) prevent an employee from accessing their mobile device for use for emergency purposes. While the definition of a State of Emergency is pretty apparent, the existence of an “emergency condition” is less clear. The bill defines “emergency condition” as either: (1)  conditions of disaster or extreme peril to the safety of persons or property at the workplace caused by natural forces or a criminal act; or (2) an order to evacuate a workplace, a worker’s home, or the school of a worker’s child due to natural disaster or a criminal act.

Recent amendments require the employee to notify the employer of the state of emergency or emergency condition before benefiting from the bill’s provisions, and narrow the definition of state of emergency to require that the emergency poses an imminent and ongoing risk of harm to the worker, the worker’s home, or the worker’s workplace. Regardless, though, the bill would still allow employees to leave work, or refuse to come to work, if the employee subjectively feels unsafe.

Notably, the bill would exclude a health pandemic from a covered state of emergency. It also would exclude from its coverage any employees who are first responders, disaster service workers, healthcare or patient care workers, utility and roadside assistance workers, as well as a number of other categories of essential personnel.

An employer who disciplines an employee for leaving the workplace during an emergency, or prevents any employee from accessing the employee’s mobile device, could be subject to a private lawsuit and penalties under the Private Attorneys General Act (PAGA). A recent amendment, however, added a right to cure for employers, in keeping with worker safety concerns.

This bill entitles a labor organization to access an employer’s employee list from the Agricultural Labor Relations Board upon providing written notice to the appropriate regional office of the Board that it intends to organize the agricultural employees of the same employer, accompanied by proof of service of the notice upon the employer. The bill attempts to limit the reach of this provision by providing that an employer need not provide more than one employee list within a 30-day period.

As an alternative procedure to the polling place election process set forth in Section 1156.3 of the Labor Code, the bill would permit a labor organization to be certified as the exclusive bargaining representative of a bargaining unit through a representation ballot card election, which permits a bargaining unit to summarily select a labor organization as its representative for collective bargaining purposes without holding a polling place election. The measure sets forth all the various requirements for a labor organization that applies to represent a particular bargaining unit. The Board must certify the labor organization as the exclusive bargaining representative if the board determines that the labor organization has submitted the required number of representation ballot cards and the cards meet specified criteria.

This bill would amend Section 201 of the Labor Code to reduce the amount of time to pay final wages from 72 to 48 hours in the event of a layoff of seasonal employees employed in the curing, canning, or drying of any variety of perishable fruit, fish, or vegetables.

This two-year measure has already passed the Senate and is on to the Assembly, but no action has been taken on this measure since June 17, 2021. This bill would provide that, prior to garnishing a public employees’ wages when the employer is required or empowered to do so by state or federal law, employers must make a good faith effort to consult with an employee to obtain a written authorization to resolve monetary obligations before employing third-party collection services. Where a written authorization provides for a withholding or diversion of an employee’s wages, the bill would prohibit the amount withheld or diverted from exceeding 5% of the employee’s monthly gross wages.

Meal and Rest Periods for Public Hospital Employees: SB 1334

This measure would extend to employees of specified public sector employers who provide direct patient care or support direct patient care in a general acute care hospital, clinic, or public health setting the same statutorily required meal and rest break afforded to employees in the private sector. That is, these employees would be statutorily entitled to one unpaid 30-minute meal period on shifts over 5 hours and a second unpaid 30-minute meal period on shifts over 10 hours, as well as one 10-minute paid rest period for every 4 hours worked or major fraction thereof. The same premium pay of one hour of pay at the employee’s regular rate of compensation for each workday that a meal or rest period that is not provided would also be required. Workers covered by a CBA would be exempted.

Private employers across California have long dealt with these kinds of claims in the class and PAGA context—be wary public sector employers!

A Slew of Workers’ Compensation Bills

This bill has three main thrusts: (1) reducing the time period for an employer to reject liability for an injury from 90 days to 45 days; (2) for certain first responders, increases the penalty to five times the amount of the delayed benefits, but not to exceed $100,000, when liability is unreasonably rejected by an employer; and (3) doubles the duration of temporary disability for cancer presumption claims for those same first responders. The Workers’ Compensation Appeals Board would have exclusive jurisdiction to determine whether the rejection of liability is reasonable. As expected, this measure is supported by labor and opposed by the business community.

This bill, or the Medical Provider Network Transparency Act of 2022, as introduced would have solely authorized an employee alleging an on-the-job injury to request the medical provider network name and identification number. The measure underwent a significant gut and amend in the Senate Committee on Labor, Public Employment and Retirement on May 23, 2020.

As amended, for purposes of the workers’ compensation system, this bill would provide that if an independent bill review organization—existing law permits a medical provider to request an independent bill review for disputes relating to the amount of payment and authorizes the imposition of fees for this purpose—finds that an employer owes the medical provider, the bill would require the independent bill review organization to bill the employer for the additional review fees. If the employer is found to not owe the medical provider, the bill would require the independent bill review organization to bill the provider for the additional review fees. Employers would be required to pay any additional amounts found owed within 30 days of the final determination.

The bill would extend until January 1, 2024, a current law that permits employers to commence a program under which disability payments are deposited in a prepaid card account.

Would require a “client employer” that is subject to Industrial Wage Commission (IWC) Orders Nos. 1 or 7—manufacturing and mercantile industries—to procure independently of any labor contractor, a valid workers’ compensation insurance policy for any contracted workers providing labor within its usual course of business. A “client employer” is defined as a business entity, regardless of its form, that obtains or is provided workers to perform labor within its usual course of business from a labor contractor. The stated intent of this legislation is to ensure that all contracted workers of labor contractors performing labor within a client employer’s usual course of business are covered by a valid workers’ compensation insurance policy.

This measure was inspired by a recent string of workers’ compensation fraud by operators of staffing agencies (also known as labor contractors) who are providing services to employers. According to the author, “AB 2614 will close a loophole in state law that allows companies with poor worker safety records to utilize staffing companies to avoid paying the financial costs associated with the companies’ safety records.”

This is a two-year bill that has already passed the Senate and is now being held by the Assembly. The California Chamber of Commerce has tagged this bill as a “job killer.” This measure would build upon SB 1159, which Seyfarth summarized here, which created two presumptions: one that is specific to frontline workers (peace officers, firefighters, healthcare providers, homecare workers and IHSS workers), and a general presumption for employees who contract COVID-19 in the midst of a workplace outbreak. Of import to SB 213 is the former, which applied to health care workers.

This bill would create rebuttable presumptions within the workers’ compensation system that specified infectious diseases such as COVID-19, cancer, musculoskeletal injury, post-traumatic stress disorder, or respiratory disease are occupational injuries for a direct patient care workers employed in an acute care hospital. This presumption would be extended following termination of employment for a period of three months for each full year of employment, not to exceed 60 months. SB 213 also removes the sunset date of the presumption for COVID-19 for direct care workers in an acute care hospital by including the presumption in a different code section.

This bill would require an employer of employees in a call center that intends to relocate from this state to notify the Labor Commissioner at least 120 days before the relocation. The bill would authorize the Labor Commissioner to impose a civil penalty of up to $10,000 for every day that an employer fails to provide this notice. The Labor Commissioner would be required compile a list of employers that provide the requisite notice and employers appearing on the list would be ineligible to be awarded or have renewed state grants or state-guaranteed loans for 5 years after the date that the list is published, and those companies would be ineligible to claim tax credits for 5 taxable years beginning on and after the date that the list is published. Private entities that have contracted with the state for call center services as of January 1, 2023, must ensure that a certain percentage of services are performed in California.

This bill was inspired by the California Court of Appeal decision in All of Us or None of Us. v. Hamrick, which held that an individual’s date of birth and driver’s license number could not be used as data identifying a criminal defendant in public records. This caused courts around the state to redact birth dates and driver’s license numbers from their indexes, making routine background checks much more difficult. This bill would require publicly accessible electronic indexes of defendants in criminal cases to permit searches and filtering of results based on a defendant’s driver’s license number or date of birth.

Extending Statute of Limitations: AB 2777

The concerning measure would amend the Code of Civil Procedure to permit a putative plaintiff, from January 1, 2023, to December 31, 2023, to press a cause of action in court based on sexual assault or “other inappropriate conduct,” regardless of whether that claim would be barred by the applicable statute of limitations, so long as the actions occurred on or after January 1, 2009. Essentially, this would mean that a putative plaintiff may bring one of a number of vaguely-defined claims, regardless of how stale those claims are, from January 1, 2023, to December 31, 2023. This is despite the fact that AB 1619 (Berman – 2018), already provides for a lengthy ten-year statute of limitations for claims relating to a sexual assault.

Moreover, claims that would be brought under this bill can be “revived” during the free for all period include all claims seeking more than two hundred fifty thousand dollars ($250,000) in damages “arising out of a sexual assault or other inappropriate contact, communication, or activity of a sexual nature that would otherwise be barred before January 1, 2023,” but the statute does not endeavor to define what constitutes “activity of a sexual nature.”

An aggrieved employee or former employee can only bring suit against an employer—essentially defined as sole proprietorship, partnership, limited liability company, corporation, association, or other legal entity—where the putative plaintiff alleges that the employer engaged in a cover up or attempted a cover up of a previous instance or allegations of sexual assault or other inappropriate conduct, communication, or activity of a sexual nature.

The measure does try to place some guard-rails, but not enough, on the strikingly broad provisions summarized above—AB 2777 requires an attorney to provide a certification to the court after filing a complaint that: (1) they believe a cover-up or attempted cover-up took place; (2) that they had the victim interviewed by a mental health practitioner, who finds a “reasonable basis to believe” that “sexual assault or other inappropriate conduct, communication, or activity” took place; and (3) that the attorney believes the case is worth filing.

Two Concerning Measures Didn’t Hurdle the January Deadline

The bills below were placed on the inactive file in the summer of 2021. Those measures faced a January 31 deadline to come off the file, but the Legislature declined. As such, those measure are now dead, but it is highly likely that the substance of AB 995 comes back in another legislative form in the future.

This bill would have placed new onerous administrative burdens on employers by requiring them to publish extensive, private salary and benefit information on the Labor and Workforce Development Agency’s (“LWDA”) website. Public disclosure of completely lawful policies and conduct could give the false impression of wage disparity where none may exist and subject employers to frivolous litigation and settlement demands.

This bill would have imposed new costs and leave requirements on employers of all sizes, by expanding the number of paid sick days employers are required to provide, which is in addition to all of the recently enacted leave mandates (COVID-19 sick leave, Cal/OSHA emergency paid time off, CFRA leave, workers’ compensation, etc.) that small employers throughout the state are already struggling with to implement and comply.

Gone But Not Forgotten: Bills That Failed House of Origin Deadline

The bills below are officially dead for failure to pass before the House of Origin Deadline, but many of the measures can be introduced in a new form in the next session.

This bill would have added section 12940.4 to the Government Code to require each person who is an employee or independent contractor, and who is eligible to receive the COVID-19 vaccine, to show proof to the employer that the person has been vaccinated against COVID-19. By January 1, 2023, each employer in the state would have been required to affirm that each employee or independent contractor complied with these provisions, and the bill would require the employer to affirm that each new employee or independent contractor is in compliance at the time of hiring or contracting with that person.

This bill would have enacted the Workplace Flexibility Act of 2022, which would have permitted a nonexempt employee to request an employee-selected flexible work schedule providing for workdays up to 10 hours per day within a 40-hour workweek, and would allow an employer to implement this schedule without the obligation to pay overtime compensation for hours over 8 in a workday.

Altering the Workweek, Hours and Overtime: AB 2932

This bill would have drastically altered the current 40-hours a week, 8-hours a day working paradigm we have followed in this country for decades. Instead of the current requirement that employers pay time and a half for any work above 40 hours, this bill would have required time and a half for work in excess of only 32 hours a week, and would have prohibited an employer from reducing an employee’s overall previous compensation as a result of this reduced hourly workweek requirement.

This bill would have, beginning September 1, 2023, required a private entity in possession of biometric information—fingerprints, retina, or iris images, among others—to develop and make available to the public a written policy establishing a retention schedule and guidelines for permanently destroying the biometric information in its possession. Private entities would be prohibited from disclosing biometric information unless certain criteria are met, including where the disclosure completes a financial transaction requested or authorized by the subject of the biometric information, and from conditioning the provision of a service on the collection, use, disclosure, transfer, sale, or processing of biometric information. Perhaps the most worrisome aspect of this measure was that it would have authorized a private right of action against a private entity for violation of the measure.

This bill would have required employers with 1,000 or more employees in California to submit various statistics regarding those employees to the LWDA. The LWDA would then use that information to rank employers that would qualify as an employer eligible to be certified as a high-road employer, which comes with certain benefits such as procurement contracts, tax benefits, and workforce development funding. The statute did not define “high-road” employer, but rather directed the LWDA to “develop criteria and a scoring methodology” to determine what qualifies as high-road employers.

The bill would have required employers to divulge an abundance of wage and hour data, including number of workers in the U.S., median pay for all workers in the U.S., and percentage of full-time workers earning above the U.S. living wage, amongst other disclosures. Additionally, this measure would have required the agency to “publish on its internet website all worker-related statistics submitted by all employers.”

A repeat of AB 1119 from last year, and labeled a job killer by the California Chamber of Commerce, this bill would have added “family responsibilities”—defined as the obligations of an employee to provide ongoing care for a minor child or a care recipient—to the list of FEHA-protected characteristics for which employers must engage in the interactive process and provide reasonable accommodation to an applicant or employee.

This bill would have increased the payment of disability benefits under the workers’ compensation system by the percentage of disparity in earnings between genders and would have applied prospectively to injuries occurring on or after January 1, 2023. More specifically, after determining the base amount a worker is owed, this bill would have directed the workers’ compensation administrator to add to that amount by the percentage of disparity in earnings between genders as reported by the applicant’s employer in its pay data report to the DFEH.

Licensed Manicurists – Independent Contractor Classification: AB 1818

This measure would have made permanent the exception to the ABC test for the determination of worker classification for licensed manicurists. Whether a licensed manicurist is an independent contractor or employee would have been governed by the standard established in S.G. Borello & Sons, Inc. v. Department of Industrial Relations.

Some may recall AB 1385 from last year, which dealt with workers in the music and television industries. Assemblymember Ash Kalra took on a similar bill this year but it failed the House of Origin deadline. Specifically, this bill would have prohibited a contract for the exclusive personal services of a musician or actor from containing a term that includes option periods which extend more than six months (for a musician) or twelve months (for an actor) after the earlier of: (a) the satisfaction of the delivery obligation for a contract period by the musician or actor or (b) the initial commercial release of the applicable music product or the actor’s commencement of performance.

AB 2014 was a spot bill with the stated intent of amending the Labor Code as it relates to Worker’ Compensation coverage for injuries caused by the opioid crisis.

While there are some small glimmers of hope, and indeed some measures that would ease administrative burdens on employers, many of the bills that remain are worrisome for the business community. While employers should prepare for the passage of each of the measures above, the legislative session is still in its infancy, and those bill will almost certainly see significant amendments. We’ll keep you updated here at Cal Peculiarities, and you can also check out our Policy Matters podcast and newsletter for regular check-ins on California (and national) policy and legislative updates as well.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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