Total Articles: 626
California Court of Appeal Addresses Whether There are Limits to Vacation Payout Requirement for "Unlimited" Vacation Policies
On April 1, 2020, a California Court of Appeal issued a long-awaited decision relating to the use of so-called “unlimited” vacation plans. In McPherson v. EF Intercultural Foundation, Inc., the court ultimately did not decide the viability of such plans under California law, but instead held California law requires payout of vacation to certain employees under the fact-specific issues in this case.1 With respect to the ability of California employers to offer “unlimited” vacation plans to employees without the potential need to pay out this time when an employee separates from employment, the court stated, "[w]e by no means hold that all unlimited paid time off policies give rise to an obligation to pay 'unused' vacation when an employee leaves."
Due to the ongoing impact of COVID-19 pandemic on California’s judicial branch, The Judicial Council of California met yesterday and issued emergency rules related to the COVID-19 Pandemic.
Unfortunately, given the fast spread of the disease, it is now not uncommon for employers to have at least one employee who has contracted COVID-19, forcing the employee to take extended time off from work. In many cases, these employees will not have enough paid time off available to keep them paid until they are able to return to work. In some workplaces, generous co-workers are willing to donate their paid time off to the sick employee, and employers are exploring ways to implement paid-time-off donation or leave-sharing policies. As with everything in California, paid-time-off donation and leave-sharing policies present challenges and, if not implemented correctly, could come back to haunt the employer and the employees.
New "Shelter in Place" Orders in the Bay Area Implement Additional Restrictions on Businesses and Residents
As you are all well aware, over the past several weeks counties throughout California have issued restrictive “shelter in place” orders (discussed in detail here and here).
San Diego County, California Updates Health Order: New Posting and Facial Covering Requirements for Essential Employers, and Warnings Regarding Increased Enforcement
Summary: On Thursday April 2, 2020, the County Health Office for San Diego County issued Addendum 1 to the County’s existing Order and Emergency Regulations. Effective at 12:00 am, April 4, 2020, employers in San Diego County who remain open in accordance with State and County Orders must adhere to strict requirements regarding face coverings for employees. Those employers also must complete and post their Social Distancing and Sanitation Protocol at or near the entrance of the facility where it is easily viewable to the public and employees no later than 12:00 am, April 7, 2020, and then adhere to that Protocol until further notice. In announcing Addendum 1, San Diego County officials stressed that law enforcement agencies have been instructed to strictly enforce the County’s Order and violators are subject to a misdemeanor citation with penalties up to $1,000 or 6 months in jail, and called upon the public to report businesses they see in violation.
On March 27, 2020, the LA City Council passed a new paid sick leave ordinance applicable to large employers (those with more than 500 employees nationally that are not covered by the new federal COVID-19 paid leave law, the FFCRA). The ordinance applies to employers with more than 500 employees nationally. Covered employees are those who have worked for the same employer from February 3 to March 4, 2020, and who perform any work in the City of Los Angeles. It applies to full time, part time, and temporary employees. The only employees who are exempted are health care providers (as defined by California Government Code section 12945.2) and first responders, which the ordinance defines to include peace officers, firefighters, paramedics, EMTs, public safety dispatchers or safety telecommunicators, emergency response communication employees, and rescue personnel.
Oakland County, Michigan Orders Employers of Critical Infrastructure Workers and Essential Employees to Implement Screening and Social Distancing Measures
Under Michigan’s Stay Home, Stay Safe Executive Order effective March 24, 2020, only essential businesses or operations that employ critical infrastructure workers are allowed to continue in-person operations.1 The Order, which remains in effect until April 13, 2020, also allows non-essential businesses to designate employees as essential if their in-person presence is “strictly necessary” to maintain the value of inventory and equipment, to care for animals, to ensure security, to process transactions, or to help other employees work remotely.
On March 27, 2020, the City Council passed an ordinance mandating employers with 500 or more employees nationally offer Supplemental Paid Sick Leave for various COVID-19 related reasons described below. The ordinance is awaiting Mayor Eric Garcetti’s review and anticipated approval.
California Issues New Guidance on Identifying the "Essential Critical Infrastructure Workforce" During the COVID-19 Pandemic Response
As discussed in our prior alert, on March 19, 2020, California’s Governor Gavin Newsom issued a state-wide "stay at home" order ("Executive Order") requiring many, if not most, California residents to remain home. In general, the Executive Order requires individuals to stay home with two exceptions: (1) to obtain food, prescriptions, and healthcare; and (2) to maintain the continuity of operations of certain "critical infrastructure sectors."
As California cases of COVID-19 began to rise in early March, several California administrative agencies released information on COVID-19 employment issues, such as administration of paid sick leave, disability benefits, and unemployment insurance. Yet, the Department of Fair Employment and Housing (DFEH)—the agency charged with enforcement of California’s Fair Employment and Housing Act (FEHA), which, among other things, prohibits discrimination, harassment, and retaliation in the workplace—remained silent.
On March 24, 2020, the San Francisco Office of Labor Standards Enforcement (OLSE, responsible for enforcing the City’s wage and other employment laws) issued new guidance regarding use of paid sick leave applicable to San Francisco employees for reasons relating to COVID-19, superseding the guidance published just one week prior on March 16, 2020.
As California employers continue to monitor COVID-19 developments and navigate workforce issues, they must remain mindful of the wage and hour issues that may arise. The following blog addresses some wage and hour issues that employers must not lose sight of during these tumultuous times.
Developments continue to occur rapidly with the Coronavirus impact. This weekend, California clarified the list of essential businesses that are exempt from its shelter-in-place order (while a handful of other states adopted their own shelter-in-place orders). The EEOC also issued some updated guidance for employers on how to respond to pandemic-related issues in the workplace. Meanwhile, the Secretary of Labor is working on (but still has not published) guidance on various unclear aspects of the recently passed Families First Coronavirus Response Act.
California Governor Issues Order Relaxing Notice Requirements Under Cal-WARN for Coronavirus-Related Layoffs
On March 18, 2020, California’s Governor issued an Executive Order, with immediate effect, to “suspend” the notice requirements of California’s WARN Act for employers faced with the sudden need to lay off employees as a result of the public health emergency surrounding Coronavirus. The California WARN Act (similar to the federal WARN Act) generally requires employers to provide 60 days’ advance notice of a plant closing or mass layoff to affected employees. This notice requirement is intended to give employees time, while still being paid, to plan for the change in their employment situation. The Cal-WARN Act’s only exception is for layoffs and closures caused by a physical calamity or act of war. The Act does not define the term “physical calamity,” leaving uncertainty as to whether the Coronavirus-related public health emergency qualifies. To ease the concerns of employers affected by closure requirements, Governor Newsom issued his executive order to make clear that employers are not required to strictly comply with the regular notice provisions of the Cal-WARN Act.
On March 19, California Governor Newson issued a historic Executive Order N-33-20 (the “Order”) impacting approximately 40 million California residents. The Order directs all individuals living in California to stay at home “except as needed to maintain continuity of operations of the federal critical infrastructure sectors” or to obtain essential needs, such as food, healthcare, or prescriptions.
Summary: On March 19, 2020, California Governor Gavin Newsom issued a state-wide “stay at home” order requiring California residents to remain at home, with two exceptions: (1) to obtain food, prescriptions, and healthcare; and (2) to maintain the continuity of operations of certain federal “critical infrastructure sectors.” The California Order is discussed below. Los Angeles County, San Diego County, Santa Cruz County, Monterey County, San Benito County, Napa County, Sacramento County, Placer County, and Yolo County have issued similar Orders, which are also discussed below.
On March 19, 2020, California Governor Gavin Newsom issued the historic Executive Order N-33-20 (“Order”), requiring all individuals living in California to stay at home “except as needed to maintain continuity of operations of the federal critical infrastructure sectors” or to obtain critical needs, such as food, healthcare, or prescriptions.
California Governor Temporarily Suspends WARN Act Notice Requirements For COVID-19 Related Business Circumstances
On March 17, 2020, California Governor Gavin Newsom issued Executive Order N-31-20 (the “Order”) as part of California’s response to the COVID-19 State of Emergency. The Order addressed two discrete issues: (1) exempting interstate motor carriers from certain state requirements to support emergency relief efforts; and (2) relieving employers of the 60-day notice requirement of the California Worker Adjustment and Retraining Notification (“Cal-WARN”) Act. For a detailed discussion of the interstate motor carrier portion of the Order, see here.
In light of the recent coronavirus pandemic, many businesses will inevitably be forced to reduce employees’ hours and thus their compensation. As a result, employees may be eligible to file for partial unemployment benefits. There are, however, a number of other potential options available to employees in the Golden State.
With an alarming number of American workers lacking adequate retirement savings, California and a handful of other states began implementing state-sponsored retirement savings programs.
In an effort to prevent the spread of COVID-19, seven Bay Area counties—Alameda, Contra Costa, Marin, San Francisco, San Mateo, Santa Clara, and Santa Cruz—issued “shelter in place” orders effective March 17 at 12:01 a.m. through April 7 at 11:59 a.m. Undoubtedly, these have a tremendous effect on employers.
As employers may be aware, six counties in the Bay Area (San Francisco, San Mateo, Santa Clara, Alameda, Marin, and Contra Costa) have issued extremely restrictive “Shelter in Place” orders, which place heavy restrictions on travel, activities, and business. In short, individuals are required to stay at home unless they leave for an approved reason, and non-essential businesses must cease most operations.
On March 16, 2019, six Bay Area counties issued Shelter-in-Place Orders (“the Orders”) limiting the operation and activities of residents and businesses in Alameda, Contra Costa, Marin, San Francisco, Santa Clara, and San Mateo Counties. The purpose of the Orders is to slow the spread of COVID-19.
Settlement or Dismissal of Individual Claims Does Not Preclude Assertion of PAGA Claims, California Supreme Court Holds
Noting the legal and conceptual differences between, as well as the penalties available in, a claim under the state’s Private Attorneys General Act (PAGA) and an employee’s individual suit for damages and statutory penalties, the California Supreme Court recently held that an employee may bring a PAGA claim even if the employee has settled or dismissed his or her individual claims. Kim v. Reins International California, Inc., 2020 Cal. LEXIS 1593 (Cal. Mar. 12, 2020).
California Supreme Court Holds Settlement of Individual Claims Does Not Strip an Employee of Standing Under the Private Attorneys General Act
The California Supreme Court has weighed in on who is an aggrieved employee under the Private Attorneys General Act (PAGA) in Kim v. Reins International California, Inc. The issue before the court was, does an employee bringing an action under PAGA lose standing to pursue representative claims as an “aggrieved employee” by settling and dismissing his or her individual claims against the employer?
Bruce Sarchet and Emily Patajo with Littler’s Workplace Policy Institute discuss proposed laws and regulations under consideration in California. The 2020 class of bills covers a lot of ground, from potential changes to the much-discussed worker classification test under AB 5, to antidiscrimination measures and leaves of absence amendments.
AB 5: The Aftermath of California’s Experiment to Eliminate Independent Contractors Offers a Cautionary Tale for Other States
Since its enactment last fall, California’s AB 5—legislation adopting the so-called “ABC test” for purposes of determining whether a worker is an independent contractor or statutory employee—has dominated not only the legal landscape in California, but also the broader discussion of what the shape of the U.S. workforce will look like as we enter the third decade of the 21st century. It has raised questions of the changing nature of work, so-called “gig” employment, the on-demand economy, and whether and to what extent government should put its thumb on the scale to favor more traditional models of employment over more innovative and flexible models.
As the confirmed cases of Coronavirus (COVID-19) rises in the U.S., more states are issuing directives regarding employee cost-sharing for screening and testing for the virus. Testing for COVID-19 is free if performed by the Centers for Disease Control and Prevention, however, the testing is expected to be offered more broadly by commercial labs. Read the California Workplace Law Blog here.
Confirmed Coronavirus (COVID-19) cases have risen swiftly in California and in response, administrative agencies have released guidance to employers regarding wage and hour issues and paid sick leave.
In this podcast, Karen Tynan and Jill Schubert cover the key provisions of California’s Pregnancy Disability Leave Law, including the interaction with other leave statutes, permissible uses for leave, common pitfalls for employers, best practices for documentation, and more.
Applying the Policy Behind AB 5, a San Diego Court Has Enjoined a Company from Failing to Comply with California Employment Law with Respect to its Classification of Individuals as Independent Contractors
While litigation over the controversial Assembly Bill 5 (AB 5) continues throughout the state, a San Diego Superior Court judge recently issued a preliminary injunction enjoining and restraining a company from failing “to comply with California employment law” regarding a category of individuals within the City of San Diego while the litigation is pending. This decision is noteworthy because it appears to require the company to immediately reclassify its independent contractors as employees, despite the fact the Court has not yet ruled on the merits of the City’s claim.
The much anticipated California Consumer Privacy Act (“CCPA”) is now in effect (as of January 1, 2020), and as we’ve recently reported, class action litigation under the CCPA has already begun.
Years after California legalized recreational use of cannabis, employers continue to struggle with determining their rights and liabilities regarding employees who engage in that activity.
The State of California has filed a notice of appeal of the district court’s decision granting a preliminary injunction enjoining the State from enforcing Assembly Bill 51 (AB 51) against employment arbitration agreements governed by the Federal Arbitration Act (FAA).
As the #metoo movement strengthened in 2018, the State of California worked quickly to enact legislation requiring harassment prevention training, not just for supervisors, but for all employees. At the same time, California attempted to address the unique issues facing hotel workers, particularly housekeeping staff, through legislation that would have required hotel employers to provide their employees with “panic buttons” – portable devices that employees can quickly and easily activate to summon help if they are harassed or threatened. However, that legislation failed to pass.
Recent Changes to the California Consumer Privacy Act (CCPA) May Require Employers to Revisit Their Privacy Notice as It Relates to Employees
Introduction: The California Consumer Privacy Act (CCPA), which took effect earlier this year, has left many employers in the Golden State scrambling to comply with privacy regulations concerning the collection and use of personal data relating to consumers. On February 10, 2020, the California Attorney General’s office released an updated version of its proposed regulations, which for the first time provided additional guidance on the notice obligations necessary in the employment context. The comment period for these proposed changes has been extended to February 25, 2020. This article addresses the recent changes incorporated into the CCPA as they concern employees.
In a unanimous decision, the California Supreme Court just held that the time spent by employees waiting for and undergoing security checks of bags and other personal items is compensable time under California law, even when the policy only applies to employees who choose to bring personal items to work. However, in a bit of good news for employers, the court left some wiggle room rather than craft a bright-line test by providing a multi-factor test as to whether “onsite employer-controlled activities” must be compensated as “hours worked.”
February is the month where romance blossoms – which means it is a great time for employers to review their policies regarding employee fraternization and intracompany relationships.
The Supreme Court of California recently agreed to review the California Court of Appeal’s decision in Ferra v. Loews Hollywood Hotel, LLC, 40 Cal. App. 5th 1239 (2019), as limited to the following question:
Assembly Bill 5 (“AB 5”), feared by some to be the death of independent contractor relationships in California, faces a growing number of lawsuits. Organizations representing three industries have filed lawsuits challenging the bill on constitutional grounds. In each lawsuit, the plaintiffs have sought a preliminary injunction to stay enforcement of the bill until the trial court makes a final decision. These efforts have met with mixed success.
California employers breathed a bit easier once a federal judge pressed the indefinite pause button on the newly enacted law aimed at preventing employers from utilizing mandatory arbitration agreements. Now, a few weeks later, U.S. District Court Judge Kimberly J. Mueller issued an order fully explaining her reasons for granting the preliminary injunction that blocked AB 51. The 36-page order, issued on February 7, said that that the law not only would have placed arbitration agreements on unequal footing with other contracts, but it would have interfered with the stated objectives of the Federal Arbitration Act (FAA).
As any employer with employees in California knows, there are some major differences between leaves of absence under federal law and under California law. In this podcast, Karen Tynan and Jill Schubert discuss the types of leaves afforded under California law and the similarities and differences with federal law, as well as best practices for recordkeeping and documentation.
On February 7, 2020, the U.S. District Court for the Eastern District of California issued an order supporting its injunction of Assembly Bill 51 (AB 51), an expansive anti-arbitration law enacted in October, which was scheduled to take effect on January 1, 2020.1 In its order, the court expressly noted that it was likely that opponents of the bill would succeed on their argument that AB 51 was invalid insofar as it is preempted by federal law.
Many businesses and their service providers have been awaiting final guidance from the California Attorney General concerning the California Consumer Privacy Act (CCPA).
Court Issues Written Order Preliminarily Enjoining Enforcement of California’s AB 51, Hints at Future Success
On January 31, 2020, the district court in Chamber of Commerce of the United States, et al. v. Becerra, et al., E.D. Cal. Case No. 2:19-cv-2456, granted the request for a preliminary injunction enjoining the State of California (the State) from enforcing Assembly Bill 51 (AB 51) against arbitration agreements governed by the Federal Arbitration Act (FAA). A week later, on February 7, 2020, the court issued its written order detailing the court’s reasoning for granting the preliminary injunction.
Not surprisingly, OTO, LLC, the employer in OTO, L.L.C. v. Kho, 8 Cal. 5th 111 (2019), on January 13, 2020, petitioned the U.S. Supreme Court to review a 2019 California Supreme Court decision not to enforce an arbitration agreement. Employers with California arbitration agreements should watch closely whether the U.S. Supreme Court takes the case and provides much-needed guidance.
As reported by Bloomberg Law, data breach class action litigation has begun under the California Consumer Privacy Act (CCPA). Filed in the Northern District of California, San Francisco Division, a putative class action lawsuit against Hanna Andersson, LLC and its ecommerce platform provider, Salesforce.com, alleges negligence and a failure to maintain reasonable safeguards, among other things, leading to a data breach. The complaint specifically seeks recovery under the CCPA – Cal. Civ. Code § 1798.100, et seq.
As California employers continue to grapple with recent legislation effective January 1, California Governor Gavin Newsom is releasing his plans for even more employment legislation. Along with the Governor’s proposed budget, the Governor has announced various “trailer bills.” Trailer bills are measures that accompany the annual state budget that theoretically are necessary to implement the budget. Yet they can also be an easy way for the Governor to get difficult legislation passed, as the trailer bills only require a simple majority to pass.
The California Division of Occupational Safety and Health (Cal/OSHA) has released Interim Guidance for Protecting Health Care Workers from Exposure to 2019 Novel Coronavirus (2019-nCoV). This guidance pertains to “health care facilities, laboratories, public health services, police services and other locations where employees are reasonably anticipated to be exposed to confirmed or suspected cases of aerosol transmissible diseases.” Employers that have operations in any of these areas may want to consult the Cal/OSHA website for more information about how to comply with the agency’s regulations.
As California employers know, the California legislature passed a new law in 2019 barring employers from requiring employees to enter into arbitration agreements that cover wage and hour claims and FEHA claims (discrimination, harassment, retaliation). That law was supposed to take effect January 1, 2020 and would have applied to arbitration agreements entered into after that date. Enter helpful litigation.
Court Grants Preliminary Injunction on Enforcement of California Ban on Employment Arbitration Agreements
The U.S. District Court for the Eastern District of California has granted a request for a preliminary injunction to prohibit the State of California from enforcing Assembly Bill 51 (AB 51) as to arbitration agreements governed by the Federal Arbitration Act (FAA). Chamber of Commerce of the United States, et al. v. Becerra, et al., No. 2:19-cv-2456 (E.D. Cal. Jan. 31, 2020). The court indicated that it will issue a detailed, written order explaining its reasoning “in the coming days.”
A California federal court has granted a preliminary injunction blocking enforcement of Assembly Bill 51, an expansive anti-arbitration law enacted in October and set to take effect on January 1, 2020. Under this law, employers in the Golden State would be unable to require applicants and employees from waiving any right, forum, or procedure established by the California Fair Employment and Housing Act and the Labor Code, effectively banning mandatory arbitration of employment disputes. Due to its particular placement in the Labor Code, violation of the law would constitute a misdemeanor.
With the California Consumer Privacy Act (CCPA) effective for nearly one month, businesses continue to grapple with the many components of this new privacy framework. A key component of the CCPA is granting consumers the right to request information about and to exercise some control over their personal information. Developing sufficient mechanisms to receive, process and respond to these requests is a central and complex area of compliance for businesses. One aspect of processing consumer requests requires verifying the identity of the individuals making the requests, and their authority to be making the request.
The California Court of Appeal, in its recent decision in Schmidt, et al. v. Superior Court, County of Ventura 2020 Cal. App. LEXIS 54 (January 22, 2020), affirmed the trial court’s ruling in favor of the employer, the Ventura County Superior Court.
Plaintiffs’ Bar Seeks to Expand Reach of California’s Dynamex Decision and ABC Test to Franchising, Joint Employment
The battle over the scope and applicability of the so-called “ABC test” in determining California employers’ potential liability under wage and hour and other state labor laws continues unabated. On January 21, 2020, plaintiffs in a case under review asked the Supreme Court of California to define the scope of the test broadly, and to apply it across a broader range of laws.
On Wednesday, January 15, 2020, the California Supreme Court agreed to review a second case raising questions as to the scope and retroactivity of its landmark 2018 Dynamex decision.
Employers Consent to Cal/OSHA Inspection Deemed Voluntary Despite a Cavalcade of California Officials Descending on the Workplace
Recently, the California Court of Appeal reviewed an appeal regarding citations issued against a sheet metal company, Nolte Sheet Metal in Nolte Sheet Metal, Inc. v. Occupational Safety and Health Appeals Board.
California’s Expanded Red Flag Law Empowers Employers to Seek Gun Violence Restraining Orders; Other States May Follow Suit
More states are enacting so-called “red flag laws,” which allow certain entities and/or individuals to obtain restraining orders to remove firearms from an individual deemed by the courts to be a threat to themselves or others. While the first red flag law went into effect decades ago—Connecticut enacted the first iteration of such a law in 1999—over the years, they have become both broader and more pervasive. As red flag laws proliferate, the role of employers in the application process for gun violence protection orders is likely to expand.
U.S. District Court Grants Preliminary Injunction Against Enforcement of AB 5: Truckers Can Keep Trucking as Independent Contractors in California
Earlier this week, the Southern District heard arguments regarding the grant of a preliminary injunction to prevent the enforcement of Assembly Bill 5 (“AB 5”) against motor carriers operating within California.
Temporary Restraining Order Remains In Place After Hearing on the California Trucking Association’s Request for Injunction
On the eve of the Assembly Bill 5 (“AB 5”) effective date, Judge Roger Benitez granted the California Trucking Association’s (“Association”) request for a Temporary Restraining Order to prevent enforcement of the law which the Association argued requires truckers to be classified as employees instead of independent contractors.
On January 13, 2020, U.S. District Court Judge Roger T. Benitez left in place a temporary restraining order (TRO) enjoining the enforcement of California’s Assembly Bill (AB) 5 as to motor carriers operating in California.
The U.S. District Court for the Eastern District of California heard oral argument on January 10, 2020, on whether to enter a preliminary injunction preventing the State of California from enforcing AB 51 while the court resolves the underlying challenge to the new law on the merits. Chamber of Commerce of the United States of America, et al. v. Becerra, No. 2:19-cv-02456-KJM-DB.
While the trucking industry waits for the federal court to hear arguments on the California Trucking Association’s request for an injunction against application of AB5, Judge William Highberger of the Los Angeles Superior Court ruled on January 8, 2020, that AB 5 runs afoul of the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”).
Court Hears Oral Argument on Challenges to AB 51, Orders Further Briefing, and Maintains Temporary Restraining Order
Earlier today, the U.S. District Court for the Eastern District of California heard oral arguments on whether the court should enter a preliminary injunction preventing the State of California (State) from enforcing AB 51 while the court resolves the underlying challenge to the new law on the merits.
California Supreme Court Hears Oral Argument on Whether a Settling Employee is an “Aggrieved Employee” for Purposes of Proceeding with a Claim under the Private Attorneys General Act
In Kim v. Reins International California, Inc. 18 Cal.App.5th 1052 (2017), the California Court of Appeal for the Second Appellate District held an employee-plaintiff that settled and dismissed his individual claims was no longer an “aggrieved employee” for purposes of standing to bring a claim for civil penalties under the Private Attorneys General Act (“PAGA”).
The California Trucking Association (“Association”) challenges Assembly Bill 5 (“AB 5”) by arguing the Federal Aviation Administration Authorization Act (“FAAAA”) of 1994 preempts state laws “relating to a price, route or service of any motor carrier”. After the California Supreme Court decided Dynamex Operations West, Inc. v. Superior Court (“Dynamex”) in 2018, Governor Newsom signed into law, California State Assembly Bill 5, which clarified the Dynamex independent contractor test and codified the test into law.
Under a California law that took effect on January 1, 2020, employers will have to provide extra notices to California employees enrolled in flexible spending accounts (FSAs) explaining the “use it or lose it” federal tax rules that apply to those FSAs.
Recently, the U.S. Federal Trade Commission issued an important opinion, concluding that Cambridge Analytica, LLC, the data analytics and consulting company, engaged in “deceptive practices to harvest personal information” of tens of millions social media users, by way of using their data from a company developed app, GSRapp, for voter profiling purposes without the users’ knowledge or consent. In addition, the FTC found that Cambridge Analytica engaged in deceptive practices connected to their EU-US Privacy Shield (“Privacy Shield”) framework participation.
Initiative to Overturn California Independent Contractor Law for App-Based Drivers, Deliverers Advances
On January 2, 2020, the Attorney General for the State of California released the title and summary of Initiative 19-0026—a proposed ballot measure that would overturn the state’s recently enacted independent contractor law, AB 5, with respect to app-based transportation providers and delivery drivers. Under California state law, the initiative’s sponsors may now begin collecting signatures to put the matter on the November 2020 ballot.
Welcome and thank you for your interest in the 2020: The Year Ahead for Employers and the California Year-End Summary.
California employers just received a last-minute reprieve from complying with a newly enacted law that aims to prevent them from utilizing mandatory arbitration agreements with their employees – at least for now. A federal court just this morning granted a temporary restraining order requested by a coalition of business groups that presses pause on the new law before it could take effect on January 1. But the battle is just beginning, so California employers will want to pay particular attention to upcoming developments to ensure they are in compliance with the current state of employment arbitration agreement law.
As 2019 winds down, employers operating in California will not want to forget that January 1, 2020, rings in several new California laws affecting the workplace. Here’s a New Year’s Eve countdown of 10 important new California employment laws taking effect in 2020 and actions employers can take before the ball falls in Times Square.
Some business leaders and HR professionals may be waking up this morning not realizing they must provide a “Notice at Collection” to some or all of their employees and applicants under the new California Consumer Privacy Act (CCPA).
The State of California has been temporarily enjoined from enforcing its prohibition on mandatory employment arbitration agreements under Assembly Bill 51. Chamber of Commerce of the United States, et al. v. Becerra, et al., No. 2:19-cv-2456 (E.D. Cal. Dec. 30, 2019). The motion for a preliminary injunction is set for a hearing on January 10, 2020.
A federal court in California has prevented, at least for now, an expansive anti-arbitration law from taking effect on January 1, 2020. Under Assembly Bill (AB) 51, enacted on October 10, 2019, employers cannot require applicants, employees, and potentially independent contractors in the Golden State to waive any right, forum, or procedure established by the California Fair Employment and Housing Act and the Labor Code. Earlier this month, a coalition of national and state trade associations filed suit to enjoin the law from taking effect.1 The court granted the plaintiffs’ motion for a temporary restraining order on December 30, 2019.
As 2019 comes to a close, here is a look ahead to some of the legislation going into effect on January 1, 2020, that affects employers in California.
Businesses subject to the California Consumer Privacy Act (“CCPA”) are working diligently to comply with the law’s numerous mandates, although final regulatory guidance has yet to be issued. Many of these businesses are learning that AB25, passed in October, requires employees, applicants, and certain other California residents to be provided a notice of collection at least for the next 12 months. These businesses need to think about what must be included in these notices.
It’s hard to understate the range of issues the California Consumer Privacy Act (the “CCPA”) raises for covered businesses and their service providers. One of those issues involves the meaning of “consumer.” If you have been following CCPA developments, you know that at least for the first 12 months the CCPA is effective, the new law will, to a limited extent, apply to personal information of certain employees, applicants, and contractors. See AB 25.
The U.S. Chamber of Commerce and other business organizations have filed suit in federal court against the State of California to have AB 51 declared preempted by the Federal Arbitration Act (FAA). Chamber of Commerce of the United States v. Becerra, No. 2:19-cv-2456 KJM DB. Alternatively, the lawsuit seeks a declaration that AB 51’s express FAA carve out provision, which protects arbitration agreements otherwise enforceable under the FAA, applies to both enforcement and formation of arbitration agreements.
California employers are not alone as they wrestle with AB 51’s January 1, 2020 new law on mandatory arbitration agreements. (For background on AB 51 see our article). On December 6, 2019, the U.S. Chamber of Commerce and other business organizations filed suit against the State of California to have AB 51 declared preempted by the Federal Arbitration Act (FAA). Alternatively, the lawsuit seeks a declaration that AB 51’s express FAA carve out provision, which protects arbitration agreements otherwise valid under the FAA, applies to both enforcement and formation. The case is filed in the Eastern District of California as Chamber of Commerce of the United States v. Becerra, Case No. 2:19-cv-2456 KJM DB.
California Employers Blog Business Groups Bring Legal Challenge to California’s Prohibition on Mandatory Arbitration Agreements
A coalition of business groups led by the U.S. Chamber of Commerce just filed a lawsuit against California Attorney General Xavier Becerra and other state officials seeking to block AB 51, a recently passed statute which will make it unlawful for California employers to require employees to sign arbitration agreements beginning January 1, 2020.
On Friday, December 6, 2019, a coalition of national and state trade associations filed suit in California federal court seeking to strike down the state’s recently enacted “anti-arbitration” law, A.B. 51.1 A.B. 51 effectively prohibits the formation and use of pre-dispute arbitration agreements in the employment setting. The California state legislature passed the bill earlier this year, and Governor Gavin Newsom (D) signed it into law on October 10, 2019. The law is scheduled to go into effect on January 1, 2020, but the business groups will be asking the court to issue a preliminary injunction preventing the law from taking effect.
The California Supreme Court announced that it would decide whether its April 30, 2018 landmark Dynamex decision is retroactive. The Supreme Court’s determination will have a significant impact on companies utilizing independent contractors in California.
California Attempts to Weed Out Unfair Labor Practices at the State Level by Enacting Union-Friendly Regulation on Employers in the Cannabis Industry
As the cannabis industry has rapidly progressed over the years, states such as New York, New Jersey and Illinois have begun to implement legislation that encourages employers to engage in labor peace agreements with unions. On October 12, 2019, California went even further than encouragement when Governor Gavin Newsom signed into law Assembly Bill 1291, which amended California’s Medicinal and Adult Use of Cannabis Regulation and Safety Act (MAUCRSA). Distinct from other state legislation, California’s new law mandates that employers with 20 or more employees maintain a labor peace agreement as a condition of obtaining a state cannabis license. For this reason, California’s new bill has raised constitutional concerns.
We’re now just a few weeks away from the nation’s most stringent independent contractor misclassification law taking effect in California. But if a group of truck drivers have their way, the law will stall out before it ever gets on the road. The California Trucking Association filed an amended lawsuit in federal court on November 12 asking the court to block the new statute from taking effect, claiming that it violates federal law and would harm over 70,000 independent truckers who have chosen to be independent workers. It appears to be the first legal challenge to California’s AB 5, and all eyes will be on this litigation over the next month.
On October 10, 2019, Governor Gavin Newsom signed AB 673 into law, expanding an employee’s right to collect penalties for an employer’s failure to timely pay wages.
In the wake of California’s enactment of Assembly Bill (AB) 5—legislation that threatens to reclassify 2 million California independent contractors as “employees” under California labor and employment laws—legal questions about the law’s application, scope, and future continue to dominate California’s legal landscape. Two recent developments highlight the scope of the issues that remain unresolved.
When California’s AB 5 was signed into law last month, a chorus of voices decried the fact that it could radically change the gig economy as we know it. Many contended that the average app-based driver enjoyed being an independent contractor and didn’t want to see changes to the law that would make it harder for them to be classified as such. This time next year, California voters may have a chance to give voice to those critics and scrap the ABC test when it comes to gig economy drivers.
The California wildfire smoke regulation, an emergency regulation that took effect on July 30, 2019, is scheduled to become permanent on January 28, 2020. In the wake of the wildfires that have emerged throughout California, employers may want to become familiar with the regulation’s requirements.
Businesses with operations in California have begun to identify options and implement strategies for compliance with Assembly Bill (AB) 5, which imposes the ABC test for identifying whether a worker is an independent contractor or an employee for not only employment law purposes, but also for state tax purposes beginning January 1, 2020.1
California recently enacted Assembly Bill (AB) 51, a law that attempts to ban certain mandatory employment arbitration agreements in the state. But what is the practical impact of AB 51 in light of its possible preemption by the Federal Arbitration Act (FAA) and other potential challenges to its limits on arbitration?
Answers to 10 Questions About California’s Ban on Mandatory Arbitration of Statutory Employment Claims
California is set to become the only state to outlaw predispute mandatory arbitration of statutory employment claims. On October 10, 2019, Governor Gavin Newsom signed California Assembly Bill (AB) 51, which prohibits employers from requiring employees to arbitrate claims arising under the California Fair Employment and Housing Act (FEHA) and related employment statutes. The Act, codified in Government Code Section 12953 and California Labor Code Section 432.6, is scheduled to take effect January 1, 2020. Here are 10 questions and answers regarding the new law.
Upending the longstanding practice of employers including no-rehire clauses in agreements resolving employment disputes, California Governor Gavin Newsom has signed a new law that will prohibit such provisions in employment settlement agreements. Assembly Bill 749 (AB 749) is another #MeToo-inspired bill, following last year’s wave of legislation surrounding prohibited harassment in the workplace. Under AB 749, with limited exception, all no-rehire provisions in employment settlement agreements entered into on or after January 1, 2020 in California will be void as a matter of law.
Beginning with plan years that end in 2020 California employers maintaining flexible spending accounts, or “FSAs,” will be required by a new amendment to the state’s Labor Code, enacted August 30, 2019, to notify the employee participants of any “deadline to withdraw funds before the end of the plan year.” FSAs are expense reimbursement plans that are part of an employer’s cafeteria plan under Section 125 of the Internal Revenue Code. They permit employee pre-tax salary contributions to go into an account from which the employee may be reimbursed during a plan year for expenses incurred for medical care, dependent care and/or adoption assistance.
On February 21, 2019, California Attorney General Xavier Becerra and Assemblymember Marc Levine (D-San Rafael) announced Assembly Bill 1130 which intended to strengthen and expand California’s existing data breach notification law. On September 11, 2019, the bill passed both houses of the legislature and was presented to Governor Gavin Newsom. Last Friday, October 11, 2019, the Governor signed AB 1130, together with 6 additional California Consumer Privacy Act of 2018 (“CCPA”) related bills into law.
First-year Governor Gavin Newsom signed some significant pieces of legislation in recent days that will impact employers across California – ranging from a ban on mandatory arbitration agreements, to a complete rewrite to the rules for the use of independent contractors, to a general prohibition on “no-rehire” clauses in settlement agreements. This legal alert highlights the top employment legislation signed into law, including several signed in the last few days leading up to yesterday’s deadline for bills to be signed or vetoed. It also includes links to much deeper dives into these specific measures. California employers will want to read each of these articles closely.
On October 11, 2019, Governor Gavin Newsom signed into law Assembly Bill (AB) 25, which amends the California Consumer Privacy Act of 2018 (CCPA). AB 25 seeks to ease the pain for employers struggling to comply with the CCPA, which goes into effect on January 1, 2020.
California Expands “Red Flag” Law To Permit Gun Violence Restraining Orders In Workplaces And Schools
Mass shootings have become a tragic reality in the United States. Recent years have witnessed a number of high-profile incidents at schools, workplaces, churches, and other public places. While the country remains deeply divided about the cause of such incidents and how to prevent them, there has been significant bipartisan discussion, at both the national and state levels, about so-called “red flag” laws as a potential tool to combat gun violence.
New California Law Mandates Enhanced Lactation Accommodations and Significant New Penalties for Employer Non-Compliance
A new California law, Senate Bill 142 (“SB 142”), effective January 1, 2020, expands on existing Labor Code requirements for employee lactation accommodations and provides significant new consequences to employers for non-compliance. Under pre-existing law (Cal. Labor Code 1030 et seq.), employers were required to make reasonable efforts to provide a private location, other than a bathroom, in close proximity to the employee’s work area, for employees to express milk in private and to provide reasonable break time to express milk.
Employment litigation settlement agreements often include a mutually negotiated “no-rehire” provision by which the departing employee agrees not to seek employment with the company in the future. A recently enacted California law will require companies to refrain from including such provisions in most instances.
Yesterday was the last day for Governor Newsom to sign or veto bills this legislative session. Governor Newsom signed almost every employment bill presented to him by the legislature, including some that had been vetoed in prior sessions by Governor Brown. This blog the list of notable new laws, which take effect January 1, 2020 (unless otherwise noted):
Lots of action for the California Consumer Privacy Act (CCPA) in the last few days! After much anticipation, on October 10th, 2019, California Attorney General Xavier Becerra (“the AG”) announced the Proposed Regulations for the CCPA. The next day, California Governor Gavin Newsom signed into law six amendments to the CCPA. Below is a summary of key aspects of the AG’s Proposed Regulations and the Governor signed amendments.
With the usual flurry of activity at the end of the legislative session, California has enacted a slew of bills with labor and employment ramifications.1 Closing out his first year in office, Governor Gavin Newsom signed more than 40 such bills on a wide variety of topics, ranging from antidiscrimination and workplace safety measures to the much-debated worker classification bill (AB 5) codifying the ABC test from last year’s Dynamex case.
Between pumpkin carving and cookie baking, Californians now have one more thing to add to their holiday to-do lists: reviewing their standard settlement agreements to remove any no-rehire provisions. California employers have until the end of the year to revise their agreements to comply with AB 749, the legislation signed into effect by Governor Gavin Newsom October 12. What do California employers need to know about this new law?
Governor Gavin Newsom just signed into law two amendments to the California Consumer Privacy Act (CCPA) that will have a direct impact on employers doing business in the state. The new amendments, signed on October 11, 2019 and taking effect on January 1, 2020, require covered businesses meeting a certain revenue threshold or other criteria to implement policies and procedures that provide consumers – which includes employees – certain privacy rights not previously available under existing law.
A new California law requires large insurers to report on the demographics of their governing boards and the amounts they spend with businesses owned by minorities, women, LGBT individuals, veterans, and disabled veterans. Under the new law, Senate Bill 534 (SB 534), reporting will be required on a biennial basis beginning on July 1, 2020.
Set to take effect January 1, 2020, the California Consumer Privacy Act (CCPA), considered one of the most expansive U.S. privacy laws to date, places limitations on the collection and sale of a consumer’s personal information and provides consumers certain rights with respect to their personal information.
Although California does not have a specific biometric privacy law like Illinois’s 2008 Biometric Information Privacy Act (BIPA) or its recently enacted 2019 Artificial Intelligence Video Interview Act (AIVIA), stay tuned for the impact of the California Consumer Privacy Act (CCPA), which goes into effect on January 1, 2020. The CCPA will directly affect how certain employers use biometric data in the workplace.
You’ve been waiting quite a long time for a critical ruling from the 9th Circuit Court of Appeals on the very fabric of the gig economy model – and you’re going to have wait even longer. The appeals court just announced late last week that the Lawson v. Grubhub case has been put on hold while it waits to hear from the California Supreme Court on whether the new ABC test should be applied retroactively to the case, or whether the appeal would apply the older flexible misclassification test that had been in place at the time the trial took place.
In response to the dangerous levels of air quality last fall after the wildfires in Northern and Southern California, the state Division of Occupational Safety and Health (Cal/OSHA) has enacted an emergency regulation addressing hazardous wildfire smoke exposure. In addition, at its last advisory committee meeting, Cal/OSHA discussed multiple possibilities for a permanent regulation. The agency expects to present a 2.0 version of the regulation, which would go into effect after the emergency regulation expires in January 2020, followed by a subsequent version to be released sometime in the future. Employers should stay up to date on these developments as Cal/OSHA’s requirements are becoming more stringent with each iteration.
California Governor Gavin Newsom has signed AB 5, and the new law will take effect January 2, 2020. As discussed in our September 13 Alert, AB 5 codifies the existing “ABC Test” that was set forth by the California Supreme Court last year in Dynamex Operations West, Inc. v. Superior Court of Los Angeles to evaluate independent contractors under California’s Wage Orders and applies that same test on a broader scale. The new law will drastically change the independent contractor/employee landscape in California.
The California Assembly has passed a bill that would expand the California Family Rights Acts to apply to flight crew employees. Assembly Bill 1748 (AB 1748) has passed through the assembly, and is awaiting the signature of Governor Gavin Newsom.
AB 1748, a California law affecting California Family Rights Act’s application to airline flight employees has been signed by the governor.
On September 18, 2019, California Governor Gavin Newsom signed Assembly Bill 5 (AB 5), a bill that will dramatically alter whether, and under what circumstances, businesses may classify workers as independent contractors rather than employees. Two recent developments may help clarify this expansive bill’s application and scope.
It’s been a long legislative year. And this being Governor Newsom’s first term in office, many observers have been anxiously awaiting to see what approach he takes when it comes to labor and employment legislation. Now all of the flurry of activity is behind us and hundreds of bills now sit his desk for either a signature or a veto.
With the future of the EEOC’s pay data collection efforts unclear, California’s effort to legislate its own race- and sex-based pay data reporting requirements likewise has stalled, for now.
For years now, state laws have required subject organizations to provide notification to affected data subjects and, in some instances, to state agencies, consumer reporting agencies, and the media, when they experience a “breach” of certain categories of information.
With his signature on AB 5 on September 18, 2019, California Governor Gavin Newsom has completed the year-long overhaul of the state’s independent contractor test. What was once governed by a balancing test that provided breathing room for businesses to deploy contractors with relative ease has now been transformed into a bright-line standard that will challenge businesses across the state when it comes to compliance. Companies will soon face an increased risk of misclassification claims from workers unless they take immediate steps to get in line with the new law.
On September 18, 2019, California Governor Gavin Newsom signed into law sweeping legislation—Assembly Bill 5 (A.B. 5)—that will dramatically reshape the contours of California’s workforce and economy, and potentially reclassify two million independent contractors—roughly 10% of the state’s workforce—as “employees” for purposes of state labor laws. Across the Golden State, employers must now examine their workplaces and determine whether and how to modify their business structure to account for these extensive changes.
On September 18, 2019, Governor Gavin Newsom signed Assembly bill (AB) 5, which codifies last year’s Supreme Court of California decision establishing a new test to determine whether a worker is an independent contractor or an employee. In addition to codifying the ABC test, AB 5 contains carve-outs for several industries and professions including professional services, doctors, lawyers, real estate, insurance, referral agencies, and others, which will be subject to the multi-factor Borello test (or similar tests if they meet the conditions of the carve-outs). Several industries including the gig economy and trucking did not receive express carve-outs.
On Wednesday, September 17, 2019, California’s Governor Gavin Newsom signed Assembly Bill (AB 5), limiting when businesses can classify employees as independent contractors. The new law goes into effect on January 1, 2020. For further information, please click this link.
Friday, September 13, 2019, was a lucky day for employers. Just hours before California’s 2019 legislative session ended, the California Assembly approved a bill (A.B. 25) that, if enacted, would substantially narrow the application of the California Consumer Privacy Act (“CCPA”) to employers. Understanding the contours of these limitations is critical for employers as they prepare to comply with the CCPA before it goes into effect on January 1, 2020.
California Legislative Update: Employment Bills That Passed the Legislature and Await Governor Approval
Friday was the last day for California’s legislature to pass bills and present them to the Governor for signature or veto. The legislature passed a number of employment-related bills this session. A couple of these bills have already been signed into law, but most await approval or veto by Governor Newsom, which will occur between now and October 13, 2019. This post reviews the list of noteworthy, and largely unfavorable, bills that were passed.
The California Consumer Privacy Act is almost here! The groundbreaking law takes effect January 1, 2020. Covered businesses and their service providers have already started preparing, as the CCPA continues to evolve since it was introduced. California’s legislative session ended on September 13th, with some final modifications to bills that would amend certain aspects of the CCPA. Unanimously approved in final form, they now move on to California Governor Gavin Newsom for consideration and final action on the CCPA.
The answer is not as much as you may think. Much of the recent media coverage of California’s Assembly Bill 5 (AB 5) suggests that the bill represents a sea change in California law with respect to the classification of independent contractors.
Executive Summary: After months of debate and negotiations, the California State Legislature passed the controversial AB 5 on Wednesday, September 11, 2019, bringing it one step closer to being law. If passed, the new law is expected to impact and clarify the use of independent contractors throughout the state. It is now on Governor Newsom’s desk. If signed, it will go into effect on January 1, 2020.
The California Assembly has passed a bill that would require workers to be classified as employees if the employer exerts control over how the workers perform their tasks or if their work is part of the employer’s regular business.
Putting an end to employees’ backdoor attempts to recover unpaid wages in Private Attorneys General Act-only actions under California Labor Code Section 558, the California Supreme Court has ruled against allowing such claims. ZB, N.A., et al. v. Superior Court, No. S246711 (Sept. 12, 2019).
This article is an update to prior publications from Littler’s Workplace Policy Institute regarding Assembly Bill 5 (AB 5), passed by the California legislature on September 11, 2019.
On September 11, 2019, the California Assembly passed a bill codifying last year’s Supreme Court of California decision establishing a new test to determine whether a worker is an independent contractor or an employee. The new three-factor test, known as the ABC test, determines whether a company “employs” a worker under the wage orders, which address certain requirements for minimum wage, overtime, and meal and rest periods, among others. Assembly Bill (AB) 5 “would state the intent of the Legislature to codify” that decision and “clarify its application” to apply to all provisions under the Labor Code, unless specifically exempted.
The California legislature today approved a controversial new law that will reshape the way businesses across the state classify workers. While supporters of the bill have emphasized its impact on independent contractors, the bill also severely impacts legal obligations governing businesses that hire other businesses. In short, the law will make it much more difficult for many companies to treat workers in California as independent contractors, and more difficult for businesses to hire smaller, entrepreneurial businesses.
School is back in session and employees may soon be asking for time off to attend school related activities involving their children and grandchildren. Employees in California who work at a worksite with 25 or more employees are eligible to take off up to 40 hours a year for child-related activities, including to be the classroom parent of the day, to chaperone a field trip, or to find a new school or day care center.
The California worker classification bill, Assembly Bill 5 (AB 5), advanced closer to passage just prior to the Labor Day weekend.
On Friday, August 30, 2019, the California State Senate Appropriations Committee approved controversial legislation—Assembly Bill 5 (A.B. 5)—that would potentially reclassify millions of independent contractors as “employees” under California state labor laws. The Committee’s approval moves the bill one step closer to a vote in the full senate, which is expected to approve the measure in the very near future. After months of not making his position on the bill clear, on September 2, 2019, California Governor Gavin Newsom (D) publicly announced his support for the measure in an op ed in the Sacramento Bee.
On August 30, 2019, the California Senate Appropriations Committee briefly considered AB 5, the legislature’s response to the California Supreme Court's 2018 opinion in Dynamex v. Superior Court (Dynamex). In Dynamex, the court changed the state’s longstanding law governing worker classification and exposed thousands of California businesses to potential retroactive liability
Despite having its anti-arbitration rulings reversed several times (and counting) by the United States Supreme Court, the California Supreme Court issued another questionable anti-arbitration decision today in Oto, LLC v. Kho, furthering the Golden State’s ongoing agenda to try to disallow these agreements in the employment setting. In today’s ruling, the Court reversed an order compelling arbitration of an employee’s administrative wage claim that had been filed with the Department of Labor Standards Enforcement (“DLSE”). The Court could not hold that such disputes are categorically exempt from arbitration (because the Court already had its hand slapped on this issue by the U.S. Supreme Court a few years ago), so the Court found another way to invalidate the agreement by holding that it was too procedurally unconscionable to be enforced. In layman’s terms, this basically means that the Court found that the manner in which the agreement was presented to the employee (the print was purportedly small and hard to read and the employee was not given sufficient time to review the agreement or ask questions) was unfair and deprived the employee of meaningful choice in signing the agreement.
As businesses prepare for the effective date of the California Consumer Privacy Act, many are conducting data mapping to identify the personal information they collect, who it belongs to, how they use it, with whom they share it and whether they sell or disclose it.
It is back to school time for school children, which means that parents are more likely to request time off to attend to child care or other school activities. And in California—parents have leave entitlements which employers should be mindful of.
California Employers Should Monitor These 10 Critical Bills as the Legislative Year Comes to a Close
As the 2019 legislative year is about to come to a close, there are a number of critical labor and employment proposals still making their way to Governor Newsom’s desk. With just four short weeks remaining for the Legislature to pass bills, there will be a flurry of activity as everyone watches to see which bills cross the finish line on or before the September 13 deadline.
As Bay Area employers are well aware, San Francisco has several local employment-related ordinances that provide additional benefits to individuals performing work within the geographical boundaries of the City. One such benefit is paid parental leave.
The California Consumer Privacy Act (CCPA), considered the most expansive U.S. privacy laws to date, is set to take effect January 1, 2020. In short, the CCPA places limitations on the collection and sale of a consumer’s personal information and provides consumers certain rights with respect to their personal information. Wondering whether they will have to comply, many organizations are asking if the law will apply to them, hoping that being too small, being located outside of California, or “only having employee information,” among other things, might cause them not to have to gear up for CCPA.
With the resumption of the current legislative session on August 12, 2019, the California Senate Appropriations Committee briefly considered Assembly Bill 5 (AB 5), the legislature’s purported solution to the California Supreme Court's opinion in Dynamex v. Superior Court (Dynamex). In Dynamex, the Supreme Court abruptly changed longstanding law governing worker classification, and exposed thousands of California businesses to potential retroactive liability.
Under current California law, an employer with an establishment in California must report a serious work-related injury, illness or death that occurs at the employer’s place of employment or in connection with their employment to the Division of Occupational Safety and Health by telephone or email within 8 hours after the employer knows or with diligent inquiry would have known of the death or serious injury or illness.
Assembly Bill (AB) 5, currently pending in the California legislature, would impose the “ABC” test on California businesses and workers, dramatically altering the legal standards applied in evaluating whether a worker is an employee or an independent contractor. If AB 5 is enacted in its current form, on January 1, 2020, approximately two million independent contractors in California could be considered employees under state law. The state’s workplace laws and regulations along with local city laws and rules will then apply to these newly classified workers, and give rise to potential back pay claims for misclassification. Employers will face very difficult choices, many of which are not appealing.
The Ninth Circuit recently dismissed California minimum wage and overtime claims in a class action brought by drilling platform worker, Brian Newton, against his former employer, Parker Drilling, following the United States Supreme Court’s decision in Parker Drilling Mgmt. Servs. v. Newton, 139 S. Ct. 1881 (2019).
In this podcast, Michael Lotito and Jim Paretti of Littler’s Workplace Policy Institute discuss pending California legislation – Assembly Bill 5 or “AB 5” – which is fast-tracking its way through the state legislature. The bill would codify portions of last year’s California Supreme Court decision in Dynamex v. The Superior Court of Los Angeles County, in which the court instituted the “ABC test” for determining whether a worker is an independent contractor under state law. The speakers explain how AB 5 – if enacted in its current form – could dramatically alter the legal landscape of California’s employment classification law.
On July 30, 2019, the California Division of Occupational Safety and Health (Cal/OSHA) announced that its “emergency regulation requiring employers to protect workers from hazards associated with wildfire smoke is now in effect, following its approval yesterday by the [California] Office of Administrative Law.”
California is expanding state benefits available to workers who lose wages while taking time off to care for a seriously ill family member or to bond with a new child. On June 27, 2019, Governor Gavin Newsom signed California’s 2019-20 state budget, which included an expansion of the state’s family temporary disability insurance program administered through the Employment Development Department (EDD). The benefit program is commonly referred to as “paid family leave” or PFL. Senate Bill (SB) 83 provides certain workers with up to eight weeks—up from six weeks—of PFL benefits. The extended maximum leave duration will go into effect on July 1, 2020.
Ninth Circuit Withdraws Opinion Regarding Retroactivity of Dynamex v. Superior Court, Will Certify the Question to the California Supreme Court
Employers in the Golden State are well aware that last year in Dynamex v. Superior Court the California Supreme Court adopted the ABC test for determining whether workers are employees or independent contractors. In the most recent development in the Dynamex saga, the court will now decide whether the new test should be given retroactive, or only prospective, application.
In May of this year, the Ninth Circuit issued a significant opinion in Vazquez v. Jan-Pro Franchising Int’l, holding that the California Supreme Court’s 2018 decision in Dynamex Operations West v. Superior Court applies retroactively. In Dynamex, of course, the California high Court created a brand new, and very narrow, test for determining when a worker properly may be classified as an independent contractor as opposed to an employee under state law. Because the test was new to California employers, it rather obviously would be unfair to hold an employer liable for not classifying workers according to that new test prior to the test’s existence. However, no published state court decision has been issued answering the question of whether the new test applies retroactively. Plaintiffs’ attorneys litigating claims against companies for independent contractor misclassification (using statute of limitations periods that go back 4 years, pre-dating the Dynamex decision) unsurprisingly argue that Dynamex applies retroactively. In May of this year, the Ninth Circuit agreed and held that the decision applies retroactively. The employer in that case, Jan-Pro franchising, responded by petitioning the Ninth Circuit for rehearing. Today, the Ninth Circuit granted that petition and issued an order withdrawing its original opinion and indicating that it would be certifying the question of retroactivity to the California Supreme Court.
In case you missed them, there have been some recent developments impacting EEO policies and practices and wage and hour practices. This post summarizes some notable developments.
With just a one-page, single-paragraph Order, the 9th Circuit Court of Appeals yesterday provided the faintest glimmer of hope for gig economy businesses everywhere – but especially for those in California. The federal appeals court withdrew its May 2 decision that had extended the Dynamex decision on a retroactive basis, meaning that the ABC test might not necessarily be as broadly applied as we recently thought.
Beginning on July 1, 2020, California will extend the maximum duration of Paid Family Leave (PFL) benefits from six weeks to eight weeks. Individuals may receive benefits from California’s state disability insurance (SDI) program:
California First State to Clarify Definition of Race Discrimination to Include Hair Style. Proactive California Employers Should Review Their Policies and Practices
In an important step for California, Governor Gavin Newsom signed SB 188 into law on July 3, 2019. SB 188 or also known as, the CROWN ACT, “Create a Respectful and Open Workplace for Natural Hair,” clarifies the definition of race for the workplace and educational institutions to include, but not limited to, hair texture and protective hairstyles, and defines protective hairstyles.
A controversial amendment to the California Home Care Services Protection Act (Home Care Act) requires the state Department of Social Services (DSS) to provide the names, phone numbers, and addresses of new or renewing registered home care aides (HCAs) to labor unions on request, unless the aides opt out.
A hot-button issue in California is whether an employer is required to pay for or reimburse an employee for shoes that are required as a condition of employment.
In 2018, the Supreme Court of California turned much of the established law regarding worker classification on its head with its decision in Dynamex Operations West Inc. v. Superior Court.1 Dynamex addressed a single, narrow question: whether certain workers were appropriately classified as independent contractors or were instead properly classified as employees for purposes of the state’s wage and hour laws. In the wake of Dynamex, however, some have urged courts to expand the scope of the case beyond the narrow confines of independent contractor/employee classification to instead broadly redefine the law of joint employment and vicarious liability generally. If courts take up this invitation, it may sound the death knell for the franchise model of business operation in California, imposing joint liability on franchisors with little to no control over the day-to-day activities of their franchisees or of those franchisees’ employees.
On July 10, 2019, the California Senate Labor, Public Employment, and Retirement Committee (Committee) advanced a proposed legislative response to the California Supreme Court's opinion in Dynamex v. Superior Court, which abruptly and drastically altered the legal landscape for independent contractor relationships. The Committee heard three hours of testimony and public comment, debated, and ultimately voted 4 to 11 to pass Assembly Bill 5 (AB 5) with the understanding that further amendment is still needed to address several critical issues.
Thanks to recent negotiations among state lawmakers, it appears that California employers may get a temporary reprieve on some of the more sweeping data privacy requirements that were set to take effect in just a few short months. However, the pending legislation that would provide the delay would not exempt employers from significant disclosure requirements that also comprise the California Consumer Privacy Act (CCPA) – meaning you should still be in the process of preparing for the new law at your workplace.
In the first episode of this multi-part series, Kevin Bland and Karen Tynan cover key information for employers about workplace safety in California. Topics include best practices when Cal/OSHA shows up for an inspection, handling employee interview and document requests, and avoiding common mistakes.
On July 3, California made history by enacting the Creating a Respectful and Open Workplace for Natural Hair (CROWN) Act, becoming the first state to ban discrimination on the basis of hairstyles associated with race. The CROWN Act adds hairstyles that are closely associated with race to the class of protected racial characteristics under state law. The measure was introduced as Senate Bill 188 on January 30, 2019, and steadily progressed through the California Legislature. The new law will take effect on January 1, 2020.
On July 9, 2019, the California Senate Judiciary Committee passed Assembly Bill 25 (AB 25), but only after certain changes were made to quell opposition to the bill by labor groups. The bill was originally drafted to exclude employees and job applicants from the definition of “consumer” under the California Consumer Privacy Act of 2018 (CCPA). With the changes adopted by the judiciary committee, AB 25 no longer seeks to exclude the employees and job applicants from the definition of consumer. Rather, the new version amends the CCPA in such a way that the net effect would be to limit the application of the CCPA on employment relationships but still require employers to tell employees what type of information they are collecting and the reasons for doing so.
California Wage/Hour Update (No. 3, July 2019)
The recent focus on the EEOC’s new Component 2 to its EEO-1 Report has been undeniable. It requires employers report on the race, ethnicity, sex, job type, pay, and hours worked data of its employees.
What’s Left of the De Minimis Doctrine in California? Ninth Circuit Court of Appeals May Soon Decide
Last year, the California Supreme Court held the federal “de minimis” doctrine does not apply to California state law claims for unpaid wages for off-the-clock work allegedly performed on a regularly occurring basis in store closing and related activities. Troester v. Starbucks Corp., 5 Cal. 5th 829.
On May 29, 2019, the California State Assembly passed Assembly Bill 25. The bill now moves to the state senate for a vote. If the state senate passes the bill, the California Consumer Privacy Act (CCPA) would be amended to specifically exclude job applicants, employees, agents, and contractors from the definition of “consumer,” thereby alleviating substantial obligations for employers whose only relationship to the new law were its employees.
On May 29, 2019, Assembly Bill No. 5 (AB 5) passed a California State Assembly floor vote and headed to the senate. The bill would codify the “ABC” test announced this past year by the Supreme Court of California.
The California State Senate and Assembly have been busy this year, moving a number of employment law bills through the legislative process. May 31, 2019, was the deadline for either the assembly or the senate to pass a bill and send it to the other house. A few employment-related bills failed to advance, but there are still a dozen major bills marching forward.
The California Senate Appropriations Committee recently blocked a bill that would expand a private right of action under the California Consumer Privacy Act (CCPA). As we reported, in late February, California Attorney General Xavier Becerra and Senator Hannah-Beth Jackson introduced Senate Bill 561, legislation intended to strengthen and clarify the CCPA. Then in April, the Senate Judiciary Committee referred the bill to the Senate Appropriations Committee by a vote of 6-2.
Will They or Won’t They: A Look at Some Significant Proposed California Legislation Relating to Leaves, Disability, and Other Protected Time Off
With May 31st 2019, marking the deadline for bills to be passed by their California house of origin, the following are some key pieces of employment legislation that may find their way to Governor Gavin Newsom’s desk in October. Here is a round-up of potential 2020 legislation worth watching:
Earlier this week, the California Assembly overwhelmingly passed AB5 – a measure that would codify the ABC test introduced to the state in last year’s Dynamex decision, and make life even more challenging for the average gig economy business. The best hope now is that the legislature wi1`1ll take business considerations into account during necessary compromise negotiations with the state Senate, and the bill will be modified from its present form to address some key issues…and perhaps exempt typical gig economy companies.
Dynamex Bites Back: Ninth Circuit Rules California's New Independent Contractor Standard Applies Retroactively
In April 2018, the California Supreme Court issued its landmark decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, making it much more difficult for businesses to classify workers as independent contractors in California through its adoption of the so-called ABC test. Under this expansive new standard, all workers in California are presumed to be employees subject to Industrial Welfare Commission Wage Orders unless the company can prove that the worker meets all three elements of the ABC test:
California keeps making privacy headlines for its trailblazing California Consumer Privacy Act (“CCPA”), set to take effect January 1, 2020, but there is another set of privacy bills making its way through the California state legislature, that, if passed, will provide consumers with further privacy protections.
After a one-day bench trial, a sales representative for a security company successfully established that his employer had failed to reimburse him for mileage expenses, using only his odometer reading as the basis to calculate the owed mileage. Plaintiff was a “High Volume Sales Representative,” meaning that he worked almost exclusively in the field making sales to new customers, canvassing neighborhoods, meeting with residential developers, and hosting promotion events.
The U.S. District Court for the Central District of California, applying de novo review due to California’s discretionary clause ban, ruled that an employee of Apple, Inc. was not entitled to long-term disability benefits because he did not satisfy the burden of proving that he was disabled. McCool v. Life Insurance Company of North America, et al., No. 17-cv-07766 (November 9, 2018).
Executive Summary: In 2018, the California Supreme Court adopted the “ABC test” for determining whether workers are independent contractors under California wage orders (the Dynamex decision). For a discussion of that decision, please see our May 3, 2018 Alert. The ABC test makes it more difficult in many cases for companies to classify a worker as an independent contractor than under the prior generally-applied common law test. As such, the adoption of the ABC test increases many California employers’ exposure for minimum wage, overtime, meal and rest periods, and other benefits owed to employees but not to independent contractors. On May 2, 2019, in Vasquez v. Jan-Pro Franchising International, Inc., the Ninth Circuit concluded that the ABC test should be applied retroactively to situations that arose before the Dynamex decision came out.
California employers were dealt another setback in the responding to claims of misclassification of independent contractor status for violations of the Industrial Welfare Commission Wage Order (“IWC Wage Orders”). Noting California’s “basic legal tradition” that “judicial decisions are given retroactive effect,” the U.S. Court of Appeals for the Ninth Circuit has held that the State’s recently-adopted “ABC” test, used in the employee-versus-independent contractor analysis in cases involving IWC Wage Orders, must be applied retroactively.
In Big Loss For Gig Companies, 9th Circuit Says Dynamex And ABC Test Should Be Applied Retroactively
There’s no way to sugarcoat this one. Today the 9th Circuit handed a big loss to gig economy companies by concluding that last year’s Dynamex decision from the California Supreme Court and its wide-reaching ABC test should be applied retroactively. That means that the ABC test – which makes it very difficult for gig economy businesses to properly classify their workers as independent contractors rather than employees – will be applied to federal cases when evaluating relationships that businesses thought were to be adjudged under a much more flexible standard.
Despite its name, the California Consumer Privacy Act, which goes into effect Jan. 1, 2020, potentially could impose substantial compliance burdens on and create significant class-action exposure for every employer that employs California residents and has more than $25 million in annual gross revenues.
The Labor Commissioner fined a Southern-California car wash for more than $2.36 million for alleged wage and hour violations. These fines included both civil penalties and wages owed to employees. This appears to be a continuation of the agency’s enforcement actions against commercial car washes from 2012 and 2015.
How will the California Consumer Protection Act (CCPA) apply to us? This is a question 0rganizations have asked since the CCPA was first proposed. There remains a number of important questions about the scope of the Golden State’s sweeping privacy law that still need to be answered.
A measure currently pending in the California Legislature, and garnering wide bipartisan support, would provide that prohibited employment discrimination based on race under the Fair Employment and Housing Act (FEHA) also includes discrimination based upon hair texture and hairstyles. If enacted into law, this bill will require California employers to re-evaluate workplace grooming standards applicable to their work sites in order to ensure compliance with the law.
As we reported, in late February, California Attorney General Xavier Becerra and Senator Hannah-Beth Jackson introduced Senate Bill 561, legislation intended to strengthen and clarify the California Consumer Privacy Act (CCPA).
On April 15, 2019, a California Court of Appeal affirmed summary judgment for the employer in an action alleging class-wide violations of the hyper-technical provisions of the federal Fair Credit Reporting Act (FCRA).1 Following just shortly after the Ninth Circuit’s pro-employee opinion in a similar case, Gilberg v. California Check Cashing Stores, the court’s opinion is a welcome development for embattled employers in California.2
As the January 1, 2020, effective date for the California Consumer Privacy Act (CCPA) draws closer, California lawmakers are still attempting to refine the law. In the latest proposed amendment, Assembly Bill 25, employees and job applicants are specifically excluded from the definition of “consumer” under the CCPA. The proposed amendment states the following:
In their bylined article for Beverage Master titled “Crafting Marijuana Policies? Managing Employees in the Wake of Legalized Marijuana,” San Diego Partner Amy L. Lessa and Associate Nicole E. Stenoish discuss how craft breweries can comply with conflicting state and federal laws on marijuana. Amy and Nicole explain that many employers are questioning whether to revise their workplace marijuana policies and practices, and they provide three key issues employers should keep in mind when determining the best marijuana policies for their workplace.
The federal appeals court that oversees cases arising from California recently handed down an opinion that helps provide guidance to those employers trying to comply with collective bargaining agreements while simultaneously being challenged to apply potentially inconsistent definitions in California’s overtime law.
California Senate Bill (SB) 188 seeks to provide a broader definition of “race” in California’s anti-discrimination law. The bill defines “race” as “inclusive of traits historically associated with race, including, but not limited to, hair texture and protective hairstyles.” The bill is expected to become law, and employers may want to plan accordingly.
California Supreme Court Holds Employees Cannot Sue Their Employers’ Payroll Companies for Wage Claims
On February 7, 2019, the Supreme Court of California issued its decision in Goonewardene v. ADP, LLC, holding that employees may not sue their employers’ payroll companies for wage claims in connection with their employment. The high court’s ruling reversed a lower court’s decision, which had opened the door for employees to bring breach of contract and tort claims for unpaid wages against their employers’ payroll companies.
On March 26, 2019, proposed Assembly Bill 5, which would codify the California Supreme Court’s controversial Dynamex decision, was amended to exempt certain types of licensed workers. Just as noteworthy as the types of workers identified as exempt from the standard are the types of employees who were not identified. For example, the exemption does not appear to cover trucking companies and gig economy transportation companies. If there are specific statutory exclusions, it will be difficult for courts to find exclusions in the common law.
On February 7, 2019, the California Supreme Court determined that an employee cannot sue a payroll company for breach of contract under the third party beneficiary doctrine, and that it is inappropriate to impose a tort duty of care upon a payroll company with regards to the obligations owed to an employee under the applicable labor statutes and wage orders.
Disability Discrimination and Reasonable Accommodation under California’s Fair Employment and Housing Act (FEHA) 
If your business has five or more employees, your business is one of the millions in California that has a duty to provide reasonable accommodations for its employees with known disabilities.
The California Consumer Privacy Act (CCPA), which goes into effect January 1, 2020, is considered the most expansive state privacy law in the United States. Organizations familiar with the European Union’s General Data Protection Regulation (GDPR), which became effective on May 25, 2018, certainly will understand CCPA’s implications. Perhaps the best known comprehensive privacy and security regime globally, GDPR solidified and expanded a prior set of guidelines/directives and granted individuals certain rights with respect to their personal data. The CCPA seems to have spurred a flood of similar legislative proposals on the state level.
Start Planning Your Workplace Sexual Harassment Trainings Early – The Ins and Outs of the Training Requirements Going into Place in 2020
California employment law is changing once again. By January 1, 2020, an employer having five or more employees will be required to provide at least one hour of sexual harassment training to all of its employees, once every two years. The training will be required to start within six months of the employee’s assumption of a position.
Bruce Sarchet and Corinn Jackson with Littler’s Workplace Policy Institute review the key labor and employment measures introduced this year in the California legislature. Lawmakers have filed bills on a wide range of topics, from independent contractor classification to hairstyle discrimination – and beyond! Bruce and Corinn break down the most significant pending bills, identifying practical ramifications for employers and offering insights into the legislative history and process.
California legislators continue to advocate new legislation expanding employer requirements to provide lactation accommodations for employees. California Senate Bill 142 (SB 142) would amend the California Labor Code and the Health and Safety Code to require additional lactation accommodations for employees.
By now, most employers should be aware of the California Healthy Workplaces, Healthy Family Act which went into effect in 2015. Under California law, all employers (with very few exceptions), must allow employees to use up to 3 days or 24 hours of paid sick leave in a 12-month period. However, what many employers do not know is that several cities within the State of California have their own paid sick leave requirements, many of them more stringent than those required under the state law.
California courts have been busy since the start of the new year issuing decisions that affect employers with California employees. Here’s an update on the most significant of these decisions and how they impact employers and their policies and practices.
February 22 was the last day to introduce new legislative proposals for the 2019 California legislative year. A whopping 2,576 bill were introduced before the deadline, making for an extremely busy legislative year ahead. Although new ideas can be added later through the “gut and amend” process, we now have a fairly clear sense of the labor and employment issues the California legislature will be confronting in 2019.
On February 25, 2019, California Attorney General Xavier Becerra and Senator Hannah-Beth Jackson introduced Senate Bill 561, legislation intended to strengthen and clarify the California Consumer Privacy Act (CCPA), which was enacted in June of 2018. If enacted, this would be the second amendment to the CCPA, following an earlier amendment in September of 2018 that Governor Jerry Brown signed into law Senate Bill 1121, which also clarified and strengthened the original version of the law.
California Assembly Bill 9 (AB 9), sponsored by Assembly Members Eloise Reyes, Laura Friedman, and Marie Waldron, would expand employee protections related to harassment and discrimination in the workplace.
What is CalSavers?
In a ruling that will have a significant impact on the retail and restaurant industries, among others in California, the California Court of Appeal ruled that a retail employer’s call-in scheduling policy—in which employees were required to call the employer in advance of a shift to find out if they needed to show up for work—triggered the reporting time pay obligation set forth in the California Industrial Welfare Commission’s (IWC) Wage Orders.
In Duffey v. Tender Heart Home Care Agency, LLC, the California Court of Appeal for the First District addressed whether an in-home caregiver was an independent contractor or employee. Reversing a trial court order dismissing the plaintiff’s overtime claim, the court of appeal concluded that an in-home caregiver may be an employee when the caregiver’s placement agency has control over the caregiver’s wages.
The International Brotherhood of Teamsters, Local 2785 has filed a petition for review to the Ninth Circuit Court of Appeals on the Federal Motor Carrier Safety Administration’s (FMCSA) determination that California’s meal and rest break rules are preempted as applied to drivers of commercial motor vehicles (CMVs) subject to the FMCSA’s hours-of-service (HOS) regulations. This primarily involves interstate truck drivers and some intrastate drivers who meet certain criteria under the HOS regulations who drive CMVs. The Teamsters are seeking to reverse the Agency’s administrative determination.
Happy Data Privacy Day from the Jackson Lewis Privacy, Data and Cybersecurity Team!
Data privacy and security regulation is growing rapidly around the world, including in the United States. In addition to strengthening the requirements to secure personal data, individuals are being given an increasing array of rights concerning the collection, use, disclosure, sale, and processing of their personal information.
In 2018, the California Supreme Court issued an opinion (Dynamex Operations West, Inc. v. Superior Court of Los Angeles County) establishing a new standard (“ABC test”) for determining whether an individual is an independent contractor or employee in the context of claims brought under the State’s Industrial Welfare Commission’s wage orders. The result is a broader definition of who qualifies as an employee for the purpose of a claim brought under a wage order.
A Roadmap for the Future of Work: California’s Little Hoover Commission Issues Report Highlighting the Importance of Building a "Human Infrastructure" to Ride Out the TIDE
The opportunities and challenges that artificial intelligence (AI) and automation are creating for the labor market are gaining increasing attention in both policy circles and society at large. The creation of the American Workforce Policy Advisory Board, whose members are expected to be announced early this year, is intended to “prepare Americans for the 21st century economy and the emerging industries of the future” in light of the rapid changes that “technology, automation, and artificial intelligence” are generating. These changes are expected to arrive soon. Kai-Fu Lee, a Chinese venture capitalist, recently predicted on 60 Minutes that AI could displace up to 40% of the world’s jobs within the next 15 years.
Two competing bills related to the classification of workers are in play in the California legislature.
Happy New Year! As we turn the calendar to 2019, employers across the country are taking stock of recently-enacted workplace regulations on a wide variety of topics.1
It’s a new year, and California SDI benefits will be increasing. The SDI withholding rate continues to be 1.0% of wages. But, the taxable wage limit will increase from $114,967 to $118,371.
In this podcast, Bruce Sarchet and Corinn Jackson, both with Littler’s Workplace Policy Institute, survey numerous wide-sweeping changes affecting California employers in 2019.
Developing a paid sick and safe time (PSST) policy that complies universally – or at the very least with two laws – has become increasingly challenging. Without fail, and despite some overlap, each new law seems to contain one provision that could interfere with the goal of establishing uniform practices.
What Happens If Landmark Appellate Court Decision Is Reviewed By State Supreme Court?
For decades, American employers have used the legally endorsed policy of rounding employees’ time to the nearest quarter hour. This has always been permissible, provided the policy was neutral in effect, meaning that on balance employees were not underpaid as a result. Back in the days not so long ago when payroll was calculated by scribes in green visors and sharp pencils, rounding made perfect sense, as trying to pay to the minute when someone on a 9:00 am – 5:00 pm shift clocks in a 8:57 am (so as not to violate the punctuality policy) and doesn’t leave their work station until 5:00 (again to not violate policy) and clocks out at 5:05, would have been far more cumbersome. So rounding to the nearest quarter hour was permitted, provided “it all comes out even in the wash” so as not to deprive employees, on balance, of time worked.
California Supreme Court Rebuffs Plaintiffs’ Attempt to Undo Their Agreements Waiving Second Meal Period
The California Supreme Court has upheld the ability of California health care workers who work more than twelve hours a day voluntarily to waive their second meal period, rebuffing plaintiffs’ argument that their voluntary waivers were unenforceable. (Gerard v. Orange Coast Memorial Medical Center (Dec. 10, 2018) Case No. S241655.)
In an important decision for employers in the healthcare industry, the California Supreme Court just approved the Industrial Welfare Commission’s long-standing exemption for health care workers in relation to second meal period waivers. The Gerard v. Orange Coast Memorial Medical Center case, released earlier today, had already been the subject of another decision from the California Supreme Court, and the California legislature even passed legislation in the middle of the case directly affecting the court’s decisions—which means this decision was a long timing coming for the California healthcare community.
December 3 was the first day of the new legislative session in California. It was a day of festivities and ceremony, as new members were sworn into office and Democrats had their first taste of the “super-duper majority” dominance in both houses of the legislature.
Lawsuit Filed Against California’s Attorney General Alleging the Private Attorney General Act (“PAGA”) is Unconstitutional
On November 28, 2018, the California Business & Industrial Alliance (an association that represents the interests of small and mid-sized businesses in California and which was formed for the specific purpose of accomplishing the appeal or reform of the Private Attorney General Act (“PAGA”)) filed a lawsuit against Xavier Becerra in his official capacity as the Attorney General for the State of California for injunctive and declaratory relief in the Orange County Superior Court.
Oakland, California Passes Ballot Measure Targeting Hotel Employers and Creating New Enforcement Mechanisms for Employment-Related Ordinances
Voters in Oakland, California recently approved ballot "Measure Z," titled the "Oakland Minimum Wage Charter Amendment." The measure imposes new minimum wages and employment standards for some hotel workers, authorizes the City to administratively enforce its employment standards through investigations and penalties, and will create a Department of Workplace and Employment Standards (DWES) to carry out such enforcement activities.
2019 is Coming: California Employers Need to Brace Themselves for the Flurry of New Laws Set to Take Effect January 1, 2019
California Governor Jerry Brown recently signed a slew of employment-related bills into law, many of which will take effect on January 1, 2019. These laws will have an immediate impact on the workplace and will require employers in the Golden State to revamp existing practices and procedures.
The Other Shoe Drops: Court of Appeal Decision Narrows Use of Employee Non-Solicitation Provisions in California
It is well-established that restrictive covenants are prohibited by statute in California. Since the decision by the California Supreme Court that partial restraints like customer non-solicitation clauses were void under Business and Professions Code Section 16600, the courts have been strictly interpreting any covenant that impinges on employment opportunities.
One of our firm’s most prolific writers and most astute analysts of all things related to workplace law in California, Ben Ebbink (Sacramento) wrote a recent post-election entry for the firm’s California Employers Blog entitled “What Will A Governor Newsom Mean For California Employers?” The entire post is worthy of your review, but two portions of his blog entry particular focus on the gig economy.
California Court Voids Nonsolicit Agreement, Defeats Trade Secret Claims and Awards Attorneys’ Fees to Defendants
A California Court of Appeal concluded that what appeared to be a standard nonsolicitation of employees provision was, in fact, an unenforceable noncompete that prevented its former employees from carrying out their chosen profession. The Court of Appeal in AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. upheld summary judgment in favor of employee defendants and their employer defeating an 11 count complaint that asserted claims of breach of contract, misappropriation of trade secrets, interference with prospective economic advantage, aiding and abetting misappropriation of trade secrets, and unfair business practices after four of AMN’s recruiters were hired by Aya and recruited other of AMN’s employees to work for Aya. In addition, the Court of Appeal upheld an injunction against the former employer from attempting to enforce such agreements in the future and awarded the defendants $190,000 in attorneys’ fees.
While much of the attention this midterm election has been focused on Congress and federal issues - the “blue wave” and a “referendum” on the Trump presidency - California employers know all too well that employment and labor policy is largely being driven at the state and local level. The split in Congress between the Republican-led Senate and the Democrat-controlled House means that we can expect continued gridlock and lack of significant federal legislation on employment issues.
Do New California Restrictions on Confidentiality Provisions Tie Employer Hands on Releases and Other Employee Contracts?
Bruce Sarchet and Corinn Jackson, with Littler’s Workplace Policy Institute, chat with Betsy Cammarata of the firm’s Knowledge Management team about major upcoming changes to California laws governing employee release and confidentiality agreements. Bruce and Corinn explore three new laws (AB 3109, SB 820, and SB 1300) that nullify certain common contractual terms. SB 820, for example, generally outlaws provisions in settlement agreements that would prevent the disclosure of facts related to claims of sexual harassment. Bruce and Corinn discuss steps that employers can take now to prepare for compliance with these laws by the January 1, 2019 effective date.
Under the Family Medical Leave Act, eligible employees are entitled to take time off for due to a “qualifying exigency” arising from the deployment of the employee’s spouse, parent, or child for active military duty to a foreign country. Examples of “qualifying exigencies” include attendance at military events, making childcare arrangements arising from a military member’s covered active duty, making or updated financial and legal arrangements to attend a military member’s absence on covered active duty, and accompanying the military member during a rest and recuperation leave during deployment.
Many businesses will temporarily increase staffing levels for the upcoming holiday season, during which an uptick in colds and other illnesses is common. Employers may be concerned that seasonal workers will be absent on multiple occasions during their brief period of employment. Below we briefly highlight some issues for employers to consider when managing seasonal employees and paid sick and safe time (PSST).
The #MeToo movement has sparked new legislation aimed at tackling the problem of sexual harassment, especially in the workplace. California Governor Jerry Brown has signed several of these bills into law, set to take effect on January 1, 2019. Employers should review their policies in preparation for the changes.
On September 27, 2018, California enacted Senate Bill 970 establishing a minimum threshold for human trafficking awareness training and education in the hospitality industry. Under the law, hotels and motels are required to provide 20 minutes of classroom or other interactive training regarding human trafficking awareness to each employee likely to interact or come into contact with victims of human trafficking. Employees required to receive training are those who have recurring interactions with the public, including those working in the reception area, performing housekeeping duties, helping customers move their belongings, and driving customers.
On the last day for Governor Brown to sign or veto bills this legislative session, here is the list of key employment-related bills that have been signed into law, along with a list of bills that were vetoed. All new laws take effect January 1, 2019 unless noted.
Employers looking for greater transparency on prescription drug pricing and pharmacy benefit manager (PBM) services will soon have a powerful new tool from an unlikely source: California lawmakers.
New CA Case Confirms: No Absolute Rule to Permit Leave to Amend to Substitute Class Representative If Named Plaintiff Is Found Inadequate
In Jones v. Farmers Ins. Exchange (2013) 221 Cal.App.4th 986 (“Jones”), the California Court of Appeal held that “[t]he lack of an adequate class representative … does not justify the denial of the certification motion. Instead, the trial court must allow Plaintiff[ an opportunity to amend [his] complaint to name a suitable class representative. [Citation & fn. omitted.] The court should then grant the certification motion if it approves a class representative.” Id. at 999.
The California Consumer Privacy Act (CCPA) is a new law that California Governor Jerry Brown signed on June 28, 2018, and will become effective on January 1, 2020. Amendments to the law are still being proposed, and the law will likely be amended and clarified. Here is what we know today.
Executive Summary: On September 30, 2018, California Governor Edmund J. Brown, Jr. signed into law eight new bills involving gender and sexual harassment training and related issues. The Governor also signed into law two bills amending California’s lactation accommodation requirements. These laws were submitted by the legislature on the heels of the #MeToo movement, and the majority of these new laws were largely written to address workplace issues with respect to sexual harassment in particular.
California requires an employer to provide employees who works more than five hours with a 30-minute uninterrupted, off-duty meal break (and another meal break if they work more than 10 hours). State law also requires an employer to provide employees with a 10-minute uninterrupted, off-duty break every four hours.1 Regulations issued by the U.S. Department of Transportation (DOT), on the other hand, require only that a commercial driver not drive more than eight hours without first taking a 30-minute, off-duty meal break.2
That’s a Wrap! Fisher Phillips Comprehensive Guide to New California Employment Laws Enacted by Governor Brown
This past Sunday (September 30) represented the deadline for Governor Brown’s final actions on legislative measures, and his final term as California’s governor will come to an end in a few short months.
New California Sexual Harassment Legislation Will Make It More Difficult for Employers to Resolve Claims
In the waning days of his final term of office and on the last possible day under the legislative calendar, on September 30, 2018, California Governor Jerry Brown signed a trio of bills into law that should have a dramatic effect on the ability of workers to bring claims for harassment and discrimination in the workplace. The new legislation makes it significantly more difficult for employers to resolve such claims, either by way of settlement or by motion for summary judgment, and it also attempts to increase education and training regarding harassment in California’s entertainment industry.
Once again, Governor Jerry Brown ends the legislative year by signing a flurry of employment-related legislation. This year, however, is Governor Brown’s last year to do so, and next year we will report about the employment-related legislation that the new governor (whoever that is) undoubtedly will have signed.
California Governor Jerry Brown recently signed Senate Bill 826 into law which requires publicly-held corporations with principal executive offices in California to have a certain number of females on their boards of directors.
Two new California laws seek to combat human trafficking through required training and mandatory notice postings. These steps are intended to provide education and resources for employees who believe they, or someone they know, are the victims of human trafficking. The new laws apply to various industries that may be particularly vulnerable to human trafficking.
Governor Brown has been busy in the last year of his term signing and vetoing many employment-related bills. We are pleased to report that he vetoed California Assembly Bill 3080 (AB 3080). AB 3080 sought to amend the California Fair Employment and Housing Act (FEHA) and the California Labor Code making it an unlawful employment practice to require an applicant, employee, or independent contractor to agree in any contract entered into, modified, or extended on or after January 1, 2019 to arbitrate claims arising under FEHA or the Labor Code. AB 3080, if signed into law, would have prohibited, penalized, and criminalized (under Labor Code § 433) most employment arbitration agreements in California.
Today was the last day for Governor Brown to sign or veto bills this legislative session. Below is the list of key employment-related bills that have been signed into law, along with a list of bills that were vetoed. All new laws take effect January 1, 2019 unless noted in the blog.
Wrapping up a whirlwind weekend, California Governor Jerry Brown just signed several pieces of legislation that will create new employer obligations in the areas of sexual harassment and gender discrimination. Specifically, you will no longer be able to enter into non-disclosure agreements involving claims of sexual assault, sexual harassment, or sex discrimination; will be required to significantly increase your sexual harassment prevention training initiatives; and will be restricted in your ability to enter into certain settlement agreements related to harassment and discrimination claims.
Appeasing The 3-Headed Monster For Incentive-Paid Employees
On September 23, 2018, Governor Jerry Brown signed into law SB-1121 amending certain provisions of the California Consumer Privacy Act of 2018 (CCPA) which was enacted in June of this year.
Am I My Brother’s Keeper? New California Law Says If You Do Business With a Port Trucking Company Then, “Yes You Are!”
On September 22, Governor Brown signed SB 1402, a bill that establishes joint and several liability for customers who contract with or use port drayage motor carriers who have unpaid wage, tax and workers’ compensation liability. SB 1402 is effective January 1, 2019.
Governor Signs Legislation to Provide Post-Augustus Rest Period Relief to Unionized Petroleum Facility Employees
On September 20, Governor Brown signed AB 2605, which provides that petroleum facility employees in safety-sensitive positions and are covered by a valid collective bargaining agreement are exempt from the requirement that employees be relieved of all duty during rest periods. The bill contained an urgency clause, which means it went into effect immediately upon signing.
CAFA Amount In Controversy Is Not Limited To Damages Incurred Prior To Removal And Includes Future Attorneys’ Fees Recoverable By Statute Or Contract
In Fritsch v. Swift Transp. Co. of Ariz., LLC, No. 18-55746 (Aug. 18, 2018), the Ninth Circuit clarified, in a unanimous published decision, that, where a party may recover its attorney’s fees by statute or contract, the Court must include future fees as well as those already incurred in assessing whether a case meets the amount-in-controversy threshold under the Class Action Fairness Act (“CAFA”).
An amendment to Section 1122 of the California Evidence Code on mediation confidentiality requires attorneys representing clients in connection with mediation to provide written disclosures to their clients about mediation confidentiality beginning January 1, 2019.
September 1, 2018 marked the last day for the California legislature to pass bills and forward them to Governor Jerry Brown (D) for his consideration. Governor Brown has until September 30 to sign, veto, or otherwise decline to act upon these bills. The bills that become law will take effect on January 1, 2019, unless otherwise specified in the text of the measure. As always, the long list of bills crossing the governor’s desk includes numerous labor and employment items that could impact the operations of private employers in the Golden State.
It’s been a long legislative year. But now all of the flurry of activity is behind us and hundreds of bills now wait on Governor Jerry Brown’s desk for either a signature or a veto.
How can a company manage its overtime policy in compliance with California law? A recent decision by a federal district court in California certified a class action involving claims of unpaid overtime, and the court’s reasoning shows what factors employers may want to consider—and to avoid—when designing an overtime policy. In Shaw v. AMN Healthcare, Inc., a putative class of traveling nurses (employed by a labor contractor, AMN Healthcare, Inc., that recruits and places traveling nurses at healthcare facilities nationwide) claimed that they were not paid for overtime when they worked at Kaiser hospitals in California. The court certified the class action, finding that the plaintiffs met the commonality and predominance requirements as to their overtime claims.
The #MeToo movement and the national focus on sexual harassment have sparked significant legislative activity at the state level designed to address these issues. Here in California, lawmakers introduced over two dozen bills to tackle such issues.
While businesses, chambers of commerce, local leaders, and others have put the full-court press on the California legislature to take action to somehow lessen the impact of the new ABC Test for determining misclassification in light of the state Supreme Court’s recent Dynamex decision, it appears there is no relief in sight. For the foreseeable future, California employers need to adjust to the new reality and assume things aren’t going to be changing.
In a case involving the potential overlap between the Investigative Consumer Reporting Agencies Act (ICRAA) and the Consumer Credit Reporting Agencies Act (CCRAA), the state’s high court ruled that employers must comply with the more restrictive of the two laws.
California’s pay equity law has been amended to clarify certain ambiguities regarding proper interview questions, disclosure of pay scales, and the application of the law to existing employees.
Bruce Sarchet and Corinn Jackson of Littler’s Workplace Policy Institute discuss recently-adopted amendments to the California salary history ban. Although the ban took effect this past January, the original statute left open numerous important questions. Bruce and Corinn review the new definitions included in the amendments, which clarify when employers must provide pay scale information to applicants and when the wage history of internal candidates may be considered. They also address how these amendments, effective January 1, 2019, fit in with the Golden State’s existing equal pay laws.
On August 13, 2018, the California Fourth District of Appeal held in Monster Energy Company v. Schechter that an attorney who signed his client’s settlement agreement under the phrase “approved as to form and content” was entitled to the granting of an anti-SLAPP motion in a case against him for breaching the confidentiality provision of the settlement, finding that he was not a party to that agreement.
On January 1, 2018, California’s salary history ban (A.B. 168) took effect. Under A.B. 168, California employers are prohibited from “seek[ing] salary history information” from an applicant.1 The statute also prohibits employers from relying on an applicant’s prior salary history “as a factor in determining whether to offer employment . . . or what salary to offer an applicant.”2 In short, employers cannot ask applicants what they made at their last job, and, if the information is involuntarily disclosed, cannot rely on this information—in any way—in determining the terms of an employment offer. On July 18, 2018, Governor Jerry Brown signed AB 2282, the Fair Pay Act Bill, which takes effect on January 1, 2019, and clarifies the application of California’s Equal Pay Act.
On July 1, 2018, the newly implemented Hotel Housekeeping Musculoskeletal Injury Prevention Program (MIPP) regulation took effect.1 This program requires all California hotel/motel employers to institute and maintain written policies and training practices regarding housekeeping-related workplace hazards. The new Cal-OSHA regulation, which is intended to prevent and reduce work-related injuries to housekeepers in the hospitality industry, specifically requires that the MIPP be part of the employers Injury Illness and Prevention Program (IIPP) and that it be in writing, readily accessible to employees during their shift, and include the following components
Today, the California Supreme Court issued its opinion in Troester v. Starbucks, refusing to hold that the well-established de minimis doctrine applies under California law. The de minimis doctrine is a principle of law that has long been endorsed and applied by both federal and California state courts (as well as California’s Division of Labor Standards Enforcement), holding that employers need not compensate employees for insignificant amounts of time spent performing work-related tasks off the clock where such time is administratively difficult to track. Today, the state’s high court held that, although the doctrine is widely accepted under the federal FLSA, California wage orders are more protective of employees and require payment for “all hours worked.” The Court held that the de minimis doctrine cannot be used to allow an employer to avoid paying for tasks that take, on average, 4-10 minutes at the end of an employee’s shift. However, the Court stated that is was not prepared to hold that the doctrine could never be applied under California law on potentially different facts involving smaller amounts of time spent off the clock and/or only sporadically.
You remember the game-changing, earth-shattering, monumental decision from the California Supreme Court a few months ago that fundamentally changes the test to determine whether your workers are independent contractors or employees, don’t you? For those who had put it out of their minds hoping it was all just a nightmare, here’s the quick summary: rather than applying a balancing test that took into a number of factors, the California Supreme Court said that hiring entities need to prove that all of their workers satisfy the “ABC test” in order to properly classify them as employees. The test appears notoriously difficult to overcome, especially because Prong B of the test requires you to prove that the worker is performing work outside the usual course of your business. We’ve written about this test extensively; you can read more about it here.
Federal Court Both Affirms and Invalidates Enforceability of California's Immigrant Worker Protection Act
Introduction: Last February, we provided an overview of California's Immigrant Worker Protection Act, AB 450. The law, which took effect on January 1, 2018, was a response to anticipated increases in federal immigration enforcement efforts under the Trump administration and was aimed at providing workers some protections from federal immigration enforcement actions in the workplace. AB 450 regulates three things: (1) the level of workplace access employers are permitted to give immigration enforcement officials, (2) notice to employees about immigration enforcement efforts, and (3) reverification of an employee’s employment eligibility.
New California Law Protects Victims, Witnesses, and Employers From Damages to Alleged Sexual Harassers’ Reputations
On July 9, 2018, California Governor Jerry Brown signed Assembly Bill 2770 (AB 2770) into law. The new statute amends California Civil Code Section 47, which designates certain communications as “privileged,” meaning that individuals cannot be liable for defamation (including libel and slander) based on those communications.
On July 4, 2018, Judge John Mendez of the United States District Court for the Eastern District of California preliminarily enjoined California from enforcing some provisions of Assembly Bill 450 (AB 450), known as the “Immigrant Worker Protection Act.” The judge did so in response to the federal Department of Justice’s (DOJ) challenge to AB 450, Senate Bill 54 (the California Sanctuary State Law), and Assembly Bill 103, which directs the state attorney general to review and report on detention facilities housing noncitizens within California for civil violations of federal immigration laws. The court did not sustain the DOJ’s challenges to the other two statutes.
A federal district judge in California issued a preliminary injunction preventing the State of California from enforcing certain provisions of Assembly Bill (AB) 450, a state statute that, among other things, prohibits private employers from cooperating with federal immigration enforcement agencies in the absence of a judicial warrant or a subpoena. The law, which is also known as the Immigrant Worker Protection Act, went into effect on January 1, 2018. The U.S. Department of Justice (DOJ) filed a lawsuit in March 2018, alleging that AB 450, and two other California immigration statutes, preempt federal law and interfere with the government’s ability to carry out its duties.
District Court Preliminarily Enjoins Some Components of California Sanctuary Laws Impacting Employers
On July 4, 2018, the U.S. Department of Justice obtained a partial victory in its challenge of California’s Immigrant Worker Protection Act ("Assembly Bill 450" or "AB 450") and other sanctuary laws when a California federal court held that certain provisions of AB 450 violated the Supremacy Clause of the Constitution.
A key issue for any business facing class action litigation in response to a data breach is whether the plaintiffs, particularly consumers, will have standing to sue. Standing to sue in a data breach class action suit, largely turns on whether plaintiffs establish that they have suffered an “injury-in-fact” resulting from the data breach. Plaintiffs in data breach class actions are often not able to demonstrate that they have suffered financial or other actual damages resulting from a breach of their personal information. Instead, plaintiffs will allege that a heightened “risk of future harm” such as identity theft or fraudulent charges is enough to establish an “injury-in-fact”.
Executive Summary: California has become the first state to introduce privacy protection for individuals’ personal data comparable to that provided under the European Union’s General Data Protection Regulation (GDPR). The California Consumer Privacy Act of 2018 (“CCPA” or “the Act”), which takes effect January 1, 2020, is a sweeping digital privacy law that creates new protections and rights for consumers’ personal data. The CCPA will grant California consumers the following rights: (1) to know what personal information is being collected about them; (2) to know whether their personal information is sold or disclosed and to whom; (3) to say no to the sale of personal information; (4) to access their personal information; and (5) to equal service and price, even if they exercise their privacy rights (e.g., businesses may presumably offer tiered pricing for goods and services, such as offering higher prices for increased privacy); and in addition, to hold companies liable for data breaches.
Unraveling The Newest Development In The Data Protection Juggernaut: What Does The "California Consumer Privacy Act of 2018" Mean For Employers?
By Philip L. Gordon and Andrew Gray on July 9, 2018 With the May 25, 2018 effective date of the European Union’s General Data Protection Regulation (GDPR) barely in the rear-view mirror, California’s Governor Jerry Brown, on June 28, 2018, signed into law the “California Consumer Privacy Act of 2018”1 (CCPA or “the Act”). The law flashed onto the scene after a concerned and wealthy California citizen funded, and obtained the approval of, a ballot initiative for a similar law to be placed on the November 2018 electoral ballot. The initiative’s backer used that approval as leverage in the waning days of June to force the California government to enact an alternative law in exchange for his withdrawal of the initiative from the November 2018 ballot before the June 30 publication deadline. The CCPA is aimed at granting individuals more control over their personal information and more insight into how businesses use and disclose their personal data.
Immigration has, and continues to be, a major flashpoint between California and the Trump administration. In 2017, the California legislature passed significant legislation (AB 450) impacting how California employers deal with federal immigration authorities. The Trump administration sued over these policies, putting California on a collision course with the federal government—with California employers stuck squarely in the middle.
Federal District Judge Puts On Hold Parts of AB 450 Which Prohibited Employers From Voluntarily Consenting To A Federal Immigration Agent’s Request To Enter Nonpublic Areas or For Voluntarily Providing Records
On July 4, 2018, Federal District Judge John A. Mendez granted a preliminarily injunction enjoining the State of California, Governor Brown, and Attorney General Becerra from enforcing parts of AB 450, the controversial new law that limited employer conduct when dealing with federal immigration enforcement. Specifically, the Judge stopped the enforcement of the California Government Code Sections 7285.1 and 7285.2 and California Labor Code Section 1019.2(a)&(b) as applied to private employers. The Judge upheld two other sanctuary state laws and part of AB 450. The Judge stated in his decision:
New ABC Test For Independent Contractors Sends California Employers Reeling
In recent years, medical marijuana has been used extensively and has gained acceptance amongst California residents. In keeping up with the trend, lawmakers recently introduced a bill that would amend California’s employment discrimination laws to impose liability on employers for alleged discrimination against medical marijuana users. Assembly Bill 2069 (AB 2069) was aimed at prohibiting employers from engaging in employment discrimination against a person on the basis of his or her status as a qualified patient or person with an identification card.
Robots, Automation and A.I., Oh My – California Proposes to Establish “Commission on the Future of Work”
The “future of work” is the topic du jour these days for pundits, academics, policy makers, employers and unions alike. Numerous conferences, white papers, academic studies, and media investigations have all explored this subject in recent years – the U.S. Department of Labor even held a symposium in 2016 on “the future of work.” Whether these concerns - what all of this technological advancement means for employment - are hype or reality remains to be seen. It appears certain that rapid technological advancements are transforming the workplace and the economy in innumerable ways.
California's Fair Employment and Housing Council Broadens the Definition of National Origin, Including Specific Provisions Relating to Language Restrictions and Employees' Immigration Status
The California Fair Employment and Housing Council published new regulations on May 17th relating to national origin discrimination. The regulations will take effect in just a few weeks, on July 1, 2018, and will be codified in the California Code of Regulations sections 11027 and 11028.
On July 1, 2018, new regulations from California’s Fair Employment and Housing Council (FEHC) that clarify protections from national origin discrimination will go into effect. The new regulations are extensive and include clarifications on the definitions of “national origin” and “national origin groups,” the permissible and prohibited types of employer policies governing language restrictions in the workplace, the permissible and prohibited inquiries regarding immigration status, and the permissible and prohibited types of height and weight requirements for work.
According to the California Division of Occupational Safety and Health (Cal/OSHA), even though California has not adopted its own state rule on the matter, California employers should submit their Form 300A data for 2017 using the federal Occupational Safety and Health Administration (OSHA) online portal by July 1, 2018. Entities that must submit information under the federal rules include “[e]stablishments with 250 or more employees that are currently required to keep OSHA injury and illness records, and establishments with 20-249 employees that are classified in certain industries with historically high rates of occupational injuries and illnesses.”
As we discussed in our last blog post, California employers received some rare good news in recent days. Bills to expand California’s paid sick leave requirement and to require employers to accommodate medical marijuana use both failed to advance and are dead for the year.
Since my last blog post about SB 1121, the California Senate voted to send SB 1121 to the state Assembly. The May 30 vote was very close, 22-13, only one above the 21-vote threshold for passing the bill and strictly along party lines. Twenty-two Democratic senators voted Yay, 13 Republican senators voted Nay, and four Democratic senators did not cast a vote.
In its May 24, 2018 opinion in the matter of Diaz v. Grill Concepts Services, Inc. (Case no. B280846, 2nd Dist.), the California Court of Appeal shed further light on the standard to impose so-called “waiting time penalties” on employers who neglect to pay wages due upon discharge or resignation. Diaz affirmed the maxim that “ignorance of the law is no excuse,” holding that an employer’s failure to investigate a change in the local wage scale constituted a “willful” failure to pay, exposing it to waiting time penalties under the Labor Code. Diaz also held that courts do not have discretion to relieve the employer from such penalties on equitable grounds.
First, The Good News: California Bills to Expand Paid Sick Days and Require Employers to Accommodate Medical Marijuana Fail to Advance
It’s not often that we get to report good news on this blog. But last week, two significant bills that would have imposed new requirements on California employers failed to advance past the Assembly Appropriations Committee.
SB 1121, which is making its way through the California Legislature, would allow businesses to be sued for data breaches even when no one was actually injured. This includes being sued for failing to implement and maintain reasonable security procedures as well as for failing to properly notify affected individuals of a breach of their personal information. Opponents of this bill are calling it a “job killer”.
Diverging from decades-old precedent, the California Supreme Court has broadened the definition of “employee” in the context of the State’s Industrial Work Commission (IWC) wage orders when undertaking the employee-versus-independent contractor analysis. Dynamex Operations West, Inc. v. Superior Court of Los Angeles County, 2018 Cal. LEXIS 3152 (Cal. Apr. 30, 2018).
Executive Summary: On April 30, 2018, in the landmark decision Dynamex Operations West, LLC v. Superior Court of California, the California Supreme Court established a new test for determining who qualifies as an independent contractor under California’s Wage Orders. Under the new test, known as the “ABC test,” workers will be considered employees who are “suffered or permitted to work” under the Wage Orders unless an employer can establish three factors:
Yesterday, the California Supreme Court issued its decision in Dynamex Operations West, Inc. v. Superior Court (Lee), adopting a very broad view of the workers who will be deemed “employees” as opposed to “independent contractors” for purposes of claims alleging violations of California’s Wage Orders. This is a surprising decision that magnifies the risk of classifying workers as independent contractors in California, and is likely to lead to increased claims (in an already litigious area) challenging such classifications in this state. This is particularly true because the Court’s decision makes it easier for plaintiffs to succeed in getting a class certified in an independent contractor misclassification case.
On Monday, April 30, 2018, the California Supreme Court issued a landmark decision establishing the presumption that a worker is an employee in that state unless the employer meets a three-prong “ABC” test. The Court’s ruling in Dynamex v. Superior Court is a shift from the more flexible multi-factor test California courts have used since 1989, and now imposes an affirmative burden on businesses to prove that workers are properly classified as independent contractors.
My colleague Ashton Riley described it as the “contractor apocalypse.” Yesterday the California Supreme Court issued its long-awaited decision in Dynamex Operations West, Inc. v. Superior Court, and, unfortunately, the wait wasn’t worth it. The state Supreme Court scrapped the flexible legal test used since 1989 to determine whether a worker was an independent contractor or employee and installed a rigid three-pronged test that will appear in the nightmares of your average gig economy business executives for the foreseeable future.
In a groundbreaking decision, the California Supreme Court adopted a new legal standard today that will make it much more difficult for businesses to classify workers as independent contractors, drastically changing the legal landscape across the state. The decision will directly affect the trucking and transportation industry because the workers involved in the case were delivery drivers, but also has the potential to affect nearly every other industry—including the emerging gig economy. Specifically, the court adopted a new standard for determining whether a company “employs” or is the “employer” for purposes of the California Wage Orders.
Bruce Sarchet and Corinn Jackson, both with Littler’s Workplace Policy Institute, discuss developments from the ongoing California state legislative session. Bruce and Corinn review key labor and employment measures under consideration in Sacramento, including a spate of bills aimed at curbing sexual harassment. They highlight numerous noteworthy measures on a range of topics, covering wage and hour proposals, potential updates to the Private Attorneys General Act, and assorted anti-discrimination bills.
The Sacramento County Board of Supervisors has approved an Ordinance requiring hotel and motel operators in Sacramento County to provide employees with a panic button or notification device that can be used to call for help when an employee reasonably believes sexual harassment activity is occurring in the employee’s presence. The panic button is designed to be used in emergency situations to summon hotel security or other appropriate staff to the employee’s location.
Fueled by the need of legislators to politicize the “me-too” movement, there has been a lot of media attention in recent months on proposed legislation in many states to limit arbitration and/or confidentiality of sexual harassment-related claims.
A decision out of the Northern District of California serves as a reminder that service industries need to carefully balance their commitment to client care with wage and hour obligations. A case manager at a large medical facility filed a class action claim under the California Private Attorneys General Act (“PAGA”) against the facility for multiple violations of federal and California law, including failure to pay overtime wages and failure to provide meal and rest breaks. The crux of her complaint was that she and other employees felt pressured to work off-the-clock in order to adequately tend to a larger number of patients after “cost-cutting measures” increased each employee’s workload.
Just three years after the enactment of California’s paid sick leave law under the Healthy Workplace Healthy Family Act of 2014 (AB 1522), a new bill has been introduced seeking to increase the amount of sick leave employers must provide employees under California law. The bill, AB 2841, was introduced on February 16, 2018, by Assemblywoman Lorena Gonzalez Fletcher. Assemblywoman Gonzalez Fletcher authored California’s existing paid sick leave law.
Proposed California Law Would Establish Portable Benefits For Gig Companies And Address Misclassification Issue
As we have previously discussed, one of the hottest gig economy issues to dominate political and public policy debate has been “portable” benefits – the concept that gig economy workers should have flexible, portable benefits that they can take with them from job to job. States and local governments are increasingly moving forward on their own with proposals to explore the provision of benefits to individual performing work in the gig economy. Most notable are proposals that have been set forth in the state legislatures in Washington, New York and New Jersey. The movement also got a boost in January when Uber and SEIU announced a joint call for the state of Washington to develop a portable benefits system that would cover gig economy workers.
In 2014, San Francisco enacted its ban-the-box law, which significantly restricted the ability of employers to inquire into, and use, criminal records for hiring and other employment purposes.1 This Fair Chance Ordinance (FCO) lists specific types of convictions and information that employers can never inquire into, including convictions more than seven years old. The FCO also bars employers from asking about an applicant’s conviction history (or requesting a background check) until after either (1) a live interview with the applicant, or (2) a conditional offer of employment made to the applicant. Moreover, if the employer intends to make an employment decision based on conviction history, the FCO requires the employer to first conduct an individualized assessment of whether the conviction is job-related.
As most employers in California know, meal and rest period litigation has been a hot area for more than a decade, troubling employers across all industries. This is largely because state law provides extremely rigid requirements for meal and rest periods—and extremely large financial damages for failure to comply. However, for those California employers with a unionized workforce, there could be a welcome reprieve available that you might not know about.
Southern District Court of California Affirms that Employees Are Not Entitled to Multi-Month, Indefinite Medical Leaves of Absences
California employers can breathe a sigh of relief in light of a recent decision from the Southern District Court of California. In Ruiz v. ParadigmWorks Group, Inc., the Court held that an employer is not required to extend an employee’s “multi-month” medical leave of absence where the employee is totally disabled and cannot provide a definite end date to her leave.
Beware the Bureau of Field Enforcement (BOFE) investigation in 2018. The California Labor Commissioner’s Office has ramped up investigations by its BOFE unit to enforce wage and hour compliance. The Bureau investigates complaints and takes enforcement actions that can include audits of a company’s payroll records and workers’ compensation insurance coverage, and the issuance of citations for violations of California Labor Code sections. From 2010 to 2016, the ratio of citations to inspections increased from 45 percent to 85 percent, and the assessed wages per inspection increased from around $2,400 to more than $15,000.
The ever-escalating dispute between the Trump Administration and the State of California over immigration policy is starting to resemble a Shakespearean drama.
In Hamid H. Khan v. Dunn-Edwards Corporation (January 4, 2018), the California Court of Appeal for the Second Appellate District held that the plaintiff failed to comply with required administrative procedures prior to bringing a claim under the California Private Attorneys General Act (“PAGA”) because he failed to provide sufficient notice to the California Labor and Workforce Development Agency (“LWDA”) and the employer that he sought to bring the PAGA claim on behalf of, not only himself, but on behalf of a group of “aggrieved employees.”
Recently, the California Fair Employment and Housing Council (FEHC) proposed new draft regulations to implement provisions of two key employment statutes enacted last year.
February 16 was the deadline to introduce new bills in the California Legislature. By that date, nearly 2,200 bills were introduced. While that may seem like a staggering amount of legislative proposals (especially for a legislative body with only 120 members), this number is consistent with the volume of bills that have been introduced in recent years.
In Lawson v. ZB, N.A. (2018) 18 Cal.App.5th 705, California’s Fourth District Court of Appeal recently ruled that the two elements comprising damages under Labor Code § 558 – (a) underpaid wages and (b) denominated assessments – are indivisible. Because a claim under Labor Code § 558 is indivisible and it is a civil penalty encompassed by the California Private Attorneys General Act (“PAGA”), the entire claim under Labor Code § 558 is not subject to any arbitration agreement between an employee and an employer, even if the employee waived his or her right to bring a class or representative claim against his or her employer.
Pending California Legislation Alert! Recently Introduced Bill Seeks to Protect Medicinal Marijuana Users from Employment Discrimination in California
Although both medicinal and now recreational consumption of marijuana have been legalized in California, this legalization did not impact an employer’s right to discipline or even terminate employees for marijuana use. That could change for medical marijuana users if a bill pending before the California legislature becomes law.
During the November 8, 2016 statewide general election, California voters enacted the Control, Regulate, and Tax Adult Use of Marijuana Act (AUMA). The AUMA authorizes licensed sellers to sell recreational use marijuana, or cannabis, per certain requirements and limitations. State authorities began issuing licenses to sell recreational use marijuana on January 1, 2018, and Californians over 21 years of age have been able to lawfully purchase recreational cannabis in California since that date.
The California Labor Commissioner’s Office has released a template notice form to help employers comply with the posting requirements under California Labor Code section 90.2(a)(1), also known as the Immigrant Worker Protection Act or AB 450, which requires employers in California to notify their workforces within 72 hours of any immigration law compliance inspection or audit initiated by federal agencies.
California’s public and private employers are prohibited from voluntarily consenting to a federal immigration enforcement agent’s request to enter nonpublic areas in the workplace or to voluntarily allow the agent access to employee records unless the agent provides a judicial warrant. Labor Code 90.2(a)(1).
Last year Governor Jerry Brown signed Assembly Bill 450 – the “Immigrant Worker Protection Act” – to prohibit employers from voluntarily consenting to federal immigration agency access to worksites without a judicial warrant, or to specified employee records without a subpoena. As we discussed recently, an uptick in federal immigration enforcement activity may force California employers to deal with the new law’s requirements sooner than anticipated.
California is a state of pioneers. It is in the vanguard of new legislation, often adopted later by other states. It is also known for its financial ventures into new technologies and research—ventures in amounts greater than the next 10 states combined. In 2018, California’s legal and investment landscapes will likely be blazing the same trail on issues of sexual harassment and gender inequality in the workplace.
Glimmers of Hope? Pair of Recent PAGA Cases Provide Rare Procedural Victories for California Employers
If you’re a California employer, perhaps no single law strikes fear into your heart quite as much as the Labor Code Private Attorneys General Act of 2004 (PAGA). PAGA allows individual “aggrieved employees” to bring representative actions on behalf of themselves and other aggrieved employees to recover civil penalties for Labor Code violations, sometimes extracting staggering amounts from employers. However, a pair of recent appellate court cases in California granted significant procedural “wins” to employers in PAGA cases. While these are limited victories, California employers should celebrate any good news on the PAGA front.
As discussed in our previous article, “California Governor Signs Law Banning Salary History Inquiries,” as of January 1, 2018, California employers are required to comply with California Labor Code Section 432.3, which prohibits employers from asking job applicants about their salary histories. Below are the answers to some common questions being raised by employers as they review their hiring practices.
The ICEman Cometh? Recent War of Words Puts California Employers in the Crosshairs of National Immigration Debate
Immigration has been a major flashpoint between California and the Trump Administration during the past year. In 2017, the California Legislature passed significant legislation impacting how California employers deal with federal immigration authorities. These actions appeared to put California on a collision course with the federal government, with California employers stuck squarely in the middle. A recent escalation in rhetoric between state and federal officials may portend that such a collision may be imminent.
The First Appellate District had a second occasion to rule upon class certification issues in the case of Duran v. U.S. Bank (“Duran II”), and again ruled that class treatment was improper because Plaintiffs failed to demonstrate that common issues predominated or that the case would be manageable as a class action, thereby affirming the trial court’s ruling denying class certification. CDF represented U.S. Bank during the entire pendency of this case, including this most recent appeal.
Reminder! California Employers Must Provide Notice of the Federal and California Earned Income Tax Credit
California employers should remember that they must revise their notice to employees regarding the federal Earned Income Tax Notice to include California’s version of it. Effective January 1, 2017, employers must revise their notice to employees regarding the earned income tax credit when issuing W-2 or 1099 forms.
Sexual Harassment Takes Center Stage – California Legislature Responds With Flurry of Proposed Bills
The California Legislature reconvened on January 3 to begin the second year of the 2017-18 legislative session. As anticipated, sexual harassment appears to be the “hot topic” for the Legislature this year, with nearly a half-dozen bills introduced to address this issue in the first two days of the legislative session alone.
A PAGA Case Cannot Stand Without Standing: Court of Appeal Affirms Trial Court’s Dismissal of PAGA Action After the Plaintiff Settles His Individual Labor Code Claims In Arbitration
In Kim v. Reins International California, Inc. (B278642, Cal. Ct. App., December 29, 2017), the State of California Court of Appeal for the Second Appellate District addressed for the first time the question of whether an employee-plaintiff, who had settled and dismissed his individual claims under the Labor Code against his employer, was able to maintain a representative action under the Labor Code Private Attorneys General Act (the “PAGA”) on behalf of other “aggrieved employees”. The Court held that because of the settlement and dismissal of his individual claims, the employee-plaintiff was no longer an “aggrieved employee” and therefore did not have standing to represent other “aggrieved employees” under the law.
In addition to fueling the filing of more sexual harassment lawsuits across the country, the recent sexual harassment scandals involving high-powered public figures have led to legislative efforts to prevent settlements of sexual harassment suits from being “confidential,” and to disallow individuals or entities from taking tax deductions for attorneys’ fees and/or settlements related to such claims. This will have the perhaps unintended consequence of hampering settlement of these cases and instead fueling continued costly litigation in courts whose dockets are already overburdened (particularly in California).
It’s a new year, and there is a lot of publicity about recreational marijuana now being legal in California. However, many people seem to have the mistaken belief that they cannot be fired or refused a job for smoking marijuana (since it’s legal and all). Wrong. It is important for both employers and employees to understand that the new law does not impact employers’ rights to maintain and enforce drug-free workplace policies and drug testing policies that make a positive test for marijuana a terminable offense (or a bar to hiring).
As discussed in a prior article, unsuccessful bills proposed in the California legislature in 2017 can carry over into the 2018 session. State lawmakers may revive measures that did not make it through both chambers of the legislature —or reintroduce bills that Governor Brown vetoed.
As any experienced class action litigator knows, the main issue driving the direction of a case is not always the merits of the claims themselves. Instead, the central question is often whether the claims can be certified as a class action; that is, whether the court will permit the plaintiff to represent other workers on the same claims. For example, while individual wage and hour claims can appear at first glance to be insignificant, they have proven to reach monumental proportions when certified as class claims.
Several of our clients have operations in California and their HR teams are often tasked with supporting facilities and employees that are based in California. Yet another important California difference is what employers must do, and must not do, when faced with a Federal immigration compliance inspection, and important considerations as to how the company currently maintains its Form I-9 records.
Soon after ringing in the New Year, California employers will need to spend the beginning of 2018 coming to grips with a significant new law that will require an immediate adjustment to immigration-related business practices. California Assembly Bill 450, also known as the Immigrant Worker Protection Act, will go into effect on January 1, 2018, bringing about strict new requirements for all employers in the state regarding the handling of a government audit or investigation of premises or employee records. The new law includes mandatory notice requirements and additional prohibitions against access to public workspaces that goes above and beyond what is required under federal law.
With the turn of the year comes a wave of new California disability and leave laws. Employers should review their existing policies and procedures to determine if they will be compliance with these new laws—many of which will go into effect on January 1:
Bruce Sarchet and Corinn Jackson, both with Littler’s Workplace Policy Institute, review the status of the California Private Attorney Generals Act, which authorizes employees to recover penalties for many Labor Code violations. They discuss how PAGA currently operates, explore open questions concerning the law, and summarize the recent employee-friendly Lopez v. Friant & Associates appellate court decision. Bruce and Corinn also look ahead, addressing possible legislative clarification of PAGA as well as ballot initiatives that might put PAGA amendments to a vote in 2018.
California employers have recently seen an increase in the number of citations issued by the California Division of Occupational Safety and Health (Cal/OSHA) for violations of a General Industry Safety Order requiring that employers’ first aid materials be approved by a consulting physician. Specifically, California Code of Regulations, Title 8, Section 3400 (c) states, in pertinent part, “There shall be adequate first-aid materials, approved by the consulting physician, readily available for employees on every job.” (Emphasis added.)
The California Division of Occupational Safety and Health (Cal/OSHA) recently posted an advisory notice regarding the wildfires that have been afflicting Southern California.
While parts of Northern California are still reeling from damaging wildfires there two months ago, multiple fires are currently threatening Santa Barbara/Ventura, Los Angeles and Northern San Diego Counties. Fueled by high winds, the Southern California blazes are far from being contained. Without a doubt, safety and security are the highest priorities at present as this dangerous situation unfolds.
Our California offices reported that local governments are provided N 95 dust masks to citizens because of the wild fires. Such masks may not actually help all users and the smoke and particulate may not exceed permissible levels. Nevertheless, these masks do often provide comfort when exposed to dusty conditions which are uncomfortable but do not present a hazard.
Effective January 1, 2018, Senate Bill 306 amends Labor Code § 98.7 and adds Labor Code §§ 98.74, 1102.61 and 1102.62 to provide the Division of Labor Standards Enforcement (“DLSE”) with expanded authority to enforce the retaliation provisions of the Labor Code. Specifically:
Under legislation recently signed by Governor Jerry Brown, beginning January 1, 2018, all California employers are required to display a workplace poster related to transgender rights. The legislation, Senate Bill 396, requires the poster to be posted “in a prominent and accessible location in the workplace.”
A new addition to California law changes the definition of commission pay for licensed employees of beauty salons and barber shops. Under the new law, certain common arrangements, such as agreements to pay stylists on a commission-only basis or on a minimum wage plus commissions basis, are no longer considered to be commission-based pay.
The grace period is over. Effective January 1, 2018, the City of Santa Monica’s minimum cap on accrued sick leave for eligible employees will increase from 40 to 72 hours for businesses with 26 or more employees. The accrual-cap for businesses with 25 or fewer employees will increase from 32 to 40 hours.
California Court Rules PAGA Plaintiffs Need Not Assert Injury, or Employer Knowledge, to Collect Penalties for Paystub Violations; Where Do Employers Go From Here?
A California Court of Appeal dealt another blow to employers in a recent ruling interpreting the state’s Private Attorneys General Act (PAGA). In Lopez v. Friant & Associates, the court considered the proof required for a PAGA plaintiff to succeed on a claim based on underlying violations of Labor Code section 226(a).1 In short, the court held that PAGA plaintiffs asserting such claims need not show that the violation caused “injury” or resulted from “knowing and intentional” conduct, as required for a penalty award under a related Labor Code provision.
Bruce Sarchet and Corinn Jackson, both with Littler’s Workplace Policy Institute, explore the nitty-gritty details of California’s new salary history inquiry ban. The new law – which takes effect January 1, 2018 – prohibits employers from relying on, or seeking out, pay history information about job applicants. Bruce and Corinn discuss the evolution of California’s salary history inquiry ban, the compliance challenges it creates, and how California employers can prepare for this sea-change in hiring practices.
Popular legislative proposals sometimes generate competition among legislators for who will be the first to introduce a bill on a given subject, or who will get credit for a bill’s final passage and enactment into law.
Effective January 1, 2018, new obligations will be imposed on California employers to shield their employees from immigration enforcement efforts in the workplace. Governor Jerry Brown signed AB 450 along with Senate Bill 54, a “sanctuary state” legislation that limits California state and local law enforcement agencies’ authority to hold, question, and transfer individuals at the request of federal immigration authorities.
In the days leading up the October 15 deadline, Governor Brown signed and vetoed a number of California labor and employment law bills that had recently passed by the September legislative deadline. Here is an overview on the newest laws and the bills that are gone for now.
On October 5, 2017, Governor Brown signed Assembly Bill (AB) 450, which will prohibit employers, under some circumstances, from providing consent to immigration agents to enter certain areas of the workplace. The law will go into effect on January 1, 2018.
As discussed in our prior article, Governor Jerry Brown recently signed several significant labor and employment measures into law in California, including a statewide ban-the-box provision1 and an expansion of parental leave requirements to smaller employers.2
High Alert for California Employers and Employers Nationwide for the Second Wave of FCRA Class Actions
The flurry of Fair Credit Reporting Act (“FCRA”) class actions against employers started in or about 2012 and was not limited to California.1 Many of those lawsuits resulted in significant payouts for violations of one or more of the FCRA’s no-harm, hyper-technical requirements. The U.S. Supreme Court’s most recent opinion on Article III standing and “concrete injury-in-fact” (Spokeo) has helped employers slow down, but not stop, the FCRA juggernaut.2 Employers across the U.S., and particularly in California, should remain vigilant about their compliance with the FCRA and related state laws.3 The dozens of class action filings in California make the threat even more acute in the Golden State.4
On October 5, 2017, California Governor Jerry Brown signed into law Assembly Bill 450 (“AB 450”), imposing new requirements for public and private employers regarding immigration worksite enforcement actions by Immigration and Customs Enforcement (“ICE”).1 Generally, unless otherwise required by federal law, AB 450 prohibits employers from consenting to ICE access to worksites and employee records in certain circumstances; requires employers to provide specified notices to current employees and any authorized representative regarding ICE inspection of employment records; and expressly prohibits employers from re-verifying a current employee’s employment eligibility when not otherwise required by federal law. This new law takes effect on January 1, 2018.