Partner, Carothers DiSante Freudenberger LLP

Although the pandemic has caused the shutdown of many businesses and has significantly curtailed life as we know it, it has not stopped the California legislature.  The legislature is considering a number of bills this term that bear on personnel policies, risk management, and employment litigation.  As is usually the case with the California legislature, most (if not all) of the bills that are advancing are harmful for employers, either because they create new or expanded burdens and/or because they increase the risk and exposure of employment litigation.  This is far from ideal, particularly at a time when most businesses are suffering economically from the pandemic-related shutdowns.  Here are some notable bills that are pending and have been passed by their house of origin:

SB 385 (Employer Headcount Tax):  This bill would impose a new “headcount” tax on private, for-profit businesses with more than 500 employees who perform any part of their duties within California, at the rate of $275 per employee.  (It’s a wonder that businesses are fleeing the state.)

AB 2999 (Bereavement Leave): This bill would require employers to provide up to 10 business days of unpaid bereavement leave to employees.

AB 3056 (Warehouse/Distribution Center Employees):  This bill would provide certain protections for warehouse and distribution center employees who have performance quotas (e.g. they are required to perform a specific number of tasks and/or produce a quantifiable amount of material within a defined amount of time).  Specifically, the bill would require employers to exclude reasonable amounts of time that an employee spends (1) accessing and using a restroom or hand-washing station, or accessing hydration; (2) taking rest, recovery, or meal breaks; and (3) documenting and reporting to the employer or a government agency a colorable claim of a Labor Code violation.  [#3 is plainly infeasible from a time-tracking perspective.]  Employers who violate this requirement would be exposed to a penalty of $250 per employee for an initial violation and $1000 per employee for a subsequent violation.

SB 973 (Pay Data Reporting):  Yes, we’ve seen this bill before.  It was not successfully passed in prior legislative terms, but the legislature has revived the effort.  This bill would require private employers with 100 or more employees to provide annual pay data to the California Department of Fair Employment and Housing detailing the number of employees holding certain categories of jobs by race, gender, and ethnicity, and to provide pay band data for these employees. The purpose of the reporting, which could be shared with the Labor Commissioner’s office, is to assist the state in identifying and accusing employers of pay discrimination.

AB 1066 (Unemployment Claims):  This bill would provide that if an employer fails to supply the EDD with requested records regarding an unemployment claim within 10 days, it shall be conclusively presumed that the claimant is entitled to the maximum amount of unemployment compensation benefits allowable.

SB 1383 (Expansion of CFRA):  This bill would greatly expand coverage of the California Family Rights Act (California’s version of the FMLA) to employers with 5 or more employees. (Currently, CFRA only applies to employers with 50 or more employees).  It would also eliminate the eligibility requirement that an employee work at a worksite where there are at least 50 employees (or 20 employees, in the case of parental leave) employed within a 75-mile radius.  If ultimately signed into law, this bill would require most employers within the state to provide up to 12 weeks of job-protected family and medical leave to employees in circumstances covered by CFRA.

AB 685 (COVID-19 Reporting):  This bill would require employers to take specified actions within 24 hours after the employer knows “or reasonably should have known” that an employee has been exposed to COVID-19.  The employer would be required to (1) notify all employees at the worksite where the exposure occurred that they may have been exposed; (2) notify the employees’ exclusive representative, if any; (3) notify all employees and the exclusive representative, if any, of paid and unpaid leave options available to the employees; (4) notify all employees and the exclusive representative, if any, of the employer’s cleaning and disinfecting plans for the worksite; and (5) notify Cal-OSHA, the California Department of Health, and the county health department of the number of employees by occupation with a positive COVID-19 test, diagnosis, order to quarantine, or death that “could be” COVID-related.

AB 3216 (Expansion of CFRA Leave for COVID Issues; Expanded Paid Leave; Recall Rights):  This bill would expand the circumstances under which eligible employees could take up to 12 weeks of CFRA leave to include qualifying exigencies related to the COVID-19 pandemic.  Under the bill, an employee who has been employed for at least 12 months, has worked at least 1250 hours, and who works at a worksite with at least 50 employees employed within a 75-mile radius could take CFRA leave because of the employee’s inability to work due to (1) being subject to a quarantine or isolation order, including a shelter at home order; (2) being advised by a health care provider to self-quarantine due to exposure to the disease; (3) experiencing symptoms of the disease; (4) being a member of a vulnerable population at high risk for serious illness from the disease; (5) living with or providing care to a family member who is a member of a vulnerable, high-risk population; and/or (6) the need to provide care to a child or family member whose school or place of care has been closed due to the pandemic.  In addition to expanding CFRA leave to cover pandemic-related issues, this bill would also expand employers’ requirement to provide paid sick leave to employees by providing that, in a public health emergency, employers shall provide each employee with at least 56 hours or 7 days of paid sick leave, which must be available for use immediately.  Finally, the bill would provide reinstatement rights to laid off workers by requiring that employers offer laid-off employees all job positions that become available for which the laid-off employee is qualified.

SB 1102 (New Hire Wage Notice; Notice for H-2A Farmworkers):  This bill would amend California’s Wage Theft Prevention Act Notice requirements (Labor Code 2810.5) to require employers to include information in their notices about any federal or state emergency or disaster declaration affecting the county or counties where the employee would work, if the declaration was issued within 30 days prior to the employee’s hire and  may affect the employee’s health and safety during employment.  The bill would also add Labor Code 2810.6 to create unique additional notice requirements for H-2A farmworkers.

SB 1399 (Garment Industry Employee Protections):  This bill would eliminate piece-rate compensation for garment manufacturing employees.  It would also create joint and several liability between different levels of garment industry contractors for wage and hour violations.

SB 729 (Food Sector Workers/COVID):  Similar to an Executive Order issued by Governor Newsom earlier this year, this bill would require employers of food sector industry workers to allow those employees to wash their hands every 30 minutes and additionally as needed.  It would also require these employers to provide supplemental paid sick leave for employees to use during the COVID-19 health emergency.

SB 275 (Healthcare Employers/PPE):  This bill would require healthcare employers to maintain a stockpile of unexpired personal protective equipment (PPE) for employees to use in the event of a declared state of emergency.  The stockpile would need to be sufficient to meet needs for 30, 60, or 90 days according to specified deadlines in the bill.  The bill would provide a penalty of $25,000 for non-compliance.

AB 196 (COVID-19/Workers’ Compensation):  Similar to, but more extreme than, the Governor’s recent Executive Order providing workers’ compensation coverage for COVID-19, this bill would create a conclusive presumption that a COVID illness contracted by an employee in an essential services industry arose during the course and scope of employment.  The presumption would extend to a period of 90 days post-termination of service, starting with the last day actually worked.  The bill excludes employees in certain occupations from this presumption, such as firefighters, peace officers, certain rescue personnel, and health care personnel providing direct care in acute care hospitals.  (However, these workers are covered by a different below, discussed below.)

AB 664 (COVID-19/Workers’ Compensation):  This bill would provide a conclusive presumption that any COVID-19 related “injury” sustained by firefighters, peace officers, certain rescue personnel, and health care personnel providing direct care in acute care hospitals was sustained in the course and scope of employment.  The term “injury” would include not only a diagnosis of COVID-19, but also exposure to COVID-19 and being required to quarantine as a result of that exposure. The bill would provide for certain compensation to these employees for their injuries, including compensation for the cost of temporary housing needed because of exposure to COVID-19 and the resulting need to quarantine away from those in the employee’s usual residence.

AB 2992 (Expanded Protections for Employee Leave for Domestic Violence, Sexual Assault, Stalking):  This bill would expand employment protections provided by Labor Code section 230 and 230.1, which provide that employees who are victims of sexual assault, domestic violence, or stalking may take leave for specified purposes, and which also prohibit discrimination or retaliation against employees for using such leave.  The bill would provide that employees may, but need not, provide a certification signed by a professional that certifies an employee’s absence was for a purpose covered by the statute.  Instead, an employee simply can provide a personal written statement stating that an absence was for a covered purpose.

AB 3075 (Articles of Incorporation/Successor Liability/Local Enforcement of State Wage Laws):  This bill would do a number of things.  First, it would require business entities’ articles of incorporation, which have to be filed with the Secretary of State, to include an attestation signed by the filers under penalty of perjury that the purpose of the corporation is lawful and that the filer is not an owner, director, officer, managing agent, or any other person acting on behalf of an employer that has an outstanding final judgment issued by the Division of Labor Standards Enforcement or a court of law and no appeal therefrom is pending, for violation of any wage order or provision of the Labor Code.  Second, the bill would provide that a successor employer is liable for wage and hour violations of a predecessor employer in specified circumstances showing the successor effectively is a continuation of the predecessor entity.  Third, the bill would amend the Labor Code to provide that local jurisdictions can enforce state labor standards requirements related to the payment of wages.

AB 1947 (Statute of Limitations/Fee-shifting):  This bill would extend the time for employees to file certain administrative claims of discrimination with the Labor Commissioner’s office (pursuant to Labor Code 98.7) from six months to one year.  The bill also would amend Labor Code section 1102.5 (which prohibits retaliation against employees for making certain complaints of unlawful activity) to specify that an employee who prevails on a retaliation claim is entitled to recover his/her attorney fees incurred in connection with the claim from the employer.  Of course, there is no reciprocal ability for a prevailing employer to recover its attorney fees.

SB 1384 (Arbitration of DLSE Claims):  This bill would authorize the Labor Commissioner to represent a claimant in arbitration where the claimant is financially unable to represent himself/herself, the court has ordered the claim to be resolved in arbitration in accordance with an arbitration agreement, and the Labor Commissioner has determined that the claim has merit.  The bill would also require any petition to compel arbitration to be served on the Labor Commissioner.

The full text of these bills (and detailed information on the bills’ progress) may be accessed on the California Legislative Information site here.  I will update you when I know which bills have successfully passed both houses of the legislature and will be presented to the Governor to sign or veto.  For those of you wondering, there were some helpful bills for employers (including bills to curtail PAGA litigation abuse and clarify/expand exceptions from the Dynamex independent contractor test for certain occupations, including business-to-business contracting relationships), but all of those bills (unsurprisingly) failed passage. 

About the Editor

Robin Largent has a regular presence in California state and federal courts and has been lead defense counsel and appellate counsel for large and small California employers in litigation (and arbitration) ranging from individual discrimination and harassment claims to complex wage and hour representative and class actions. She also leads the firm’s appellate practice, having substantial experience and success handling appeals, writ petitions, and amicus briefs in both state and federal court on issues such as class certification (particularly in the wage and hour arena), manageability and due process concerns associated with class action trials, exempt/non-exempt misclassification issues, meal and rest break compliance, trade secret/unfair competition matters, and the scope of federal court jurisdiction under the Class Action Fairness Act.
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