New Laws Affect California Employers in 2021

by Michael Goldfarb, Employment Attorney and President of Guardian HR 

California employers need to be aware of new laws that will affect their workforce. These new laws include everything from increased state and local minimum wage rates, to COVID-19 notice obligations, to expanded leave-of-absence rights. The COVID-19 pandemic has brought about significant legal changes for California employers in 2020, which will continue into 2021. 

Webinar

Learn about 2021 laws and requirements affecting employers big and small.  
Tuesday, February 9 
9:00AM PST
Register

California Law Cheat Sheet

To help you stay on top of these changes, Guardian HR is providing this California law cheat sheet.
 
 AB 685 – Notice to Affected Employees About COVID-19 in the Workplace
When an employee contracts the virus, the employer must take steps including notifying affected employees within 1 business day of becoming aware of a potential exposure. Actions/Notices include:

• Determine who was at the worksite during the infectious period (including third parties)
• The infectious period is a minimum of 48 hours before the individual developed symptoms
• The worksite is limited to the same building or location where the individual was present
• A written notice must be issued to potentially exposed employees
• The notice must be sent out within 1 business day of the employer becoming aware of potential exposure (maintain notice for 3 years)

A COVID-19 breakout is when 3 or more employees who are not from the same household but are at the same worksite, test positive within a 14-day period.

• The time frame to notify the local health department is 48 hours

SB 1159 – COVID-19 Worker’s Comp
 Any eligible employee (EE) may file a Worker’s Comp claim for COVID-19 with causation to be determined in due course. However, SB 1159 creates a new presumption of compensability for two classes of EEs:

• First responders and healthcare workers (LC §3212.87) who test positive for COVID-19 within 14 days of a workday occurring at a worksite that is not their home.
• Employees whose employers have five or more employees, and who test positive for COVID-19 during an outbreak at their specific workplace. An outbreak exists if one of the following occurs at a place of employment within 14 days: 
• 4 employees test positive and the employer has 100 employees or fewer 
• 4% of employees who reported to the specific place of employment test positive if the employer has more than 100 employees 
• The State Department of Public Health, the Division of Occupational Safety and Health, a school superintendent, or a local public health department order a place of employment to close due to a risk of infection of COVID-19.  

Notice under SB 1159 - Employers with more than 5 employees must notify their claims administrators within 3 business days when they know that an employee has tested positive or reasonably should know that an employee has tested positive.

AB 2257 – Independent Contractor Law
The new law modifies AB 5 regarding the definition of an employee versus an independent contractor:

• It modifies and clarifies the business-to-business, referral agency, and professional services exemptions set forth in AB 5. It also exempts additional occupations and business relationships.
• The B2B exemption now applies to a public agency or quasi-public corporation that has retained an independent contractor
• It creates an exemption from the ABC Test for individual businesspersons who contract with one another “for purposes of providing services at the location of a single-engagement event
• The professional Services exemption has been expanded

Prop 22 – Delivery Drivers
Prop 22 exempts third-party delivery platforms from reclassifying drivers as employees. App-based delivery drivers include those who provide on-demand delivery services through a business’s online-enabled application or platform or use a personal vehicle.
 
SB 1383 – California Family Rights Act (CFRA) Expanded to Smaller Employers

• Employers with 5 or more must comply with CFRA
• It eliminates the employee count within a 75-mile radius
• The law does not indicate whether employee counts are solely for those in California or whether they also include out-of-state workers.

AB 2143 – No Hire Provision in Settlement Agreements
Amends LC §1002.5 no-hire provisions in settlement agreements. Under existing California law, agreements to settle an employment dispute cannot contain provisions that restrict a settling party that is an aggrieved person from working for the employer. 
 
To meet the sexual harassment/assault exception, the employer must have made and documented a good faith determination before the employees filed the claim, that the employees engaged in sexual harassment or sexual assault.

AB 979 – Diversify Boards of Directors
The new law requires publicly held corporations headquartered in California to diversify their boards of directors with directors from “underrepresented communities” by December 31, 2021: 

• It applies to publicly held domestic or foreign corporations with principal executive offices in California
• It applies to individuals from these groups: Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, Alaska Native, Gay, Lesbian, and Bisexual or transgender
• By December 31, 2021, there must be at least one director from an underrepresented community
• By December 31, 2022, corporations with 5-8 directors must have at least two; and corporations with 9 or more directors must have at least 3
• Failing to do so could result in fines up to $100,000 for the first violation and it goes up from there

AB 1947 - Extends time to file complaints with the Division of Labor Standards Enforcement (DLSE) and addresses whistleblowers’ attorney fees 

AB 3075 - Expanded Successor Liability for Wage and Hour Judgments

• Defines who constitutes this type of successor business
• As of January 1, 2022, certain businesses must now certify in the Statement of Information, whether any officer, director, or member, or manager of an LLC has an outstanding final judgment in any court or issued by DLSE

SB 973 - New Pay Data Reporting
Employers with 100 or more employees who are required to file EEO-1, must collect and submit compensation data to the DFEH. The submission will resemble EE0-1 but will also include:

• The number of employees by race, ethnicity, and gender whose annual earnings fall within each pay band used by the U.S. Bureau of Labor Statistics in the Occupational Employment Statistics survey, which range from $19,239 to $208,000 based on W-2 wages
• The report must include a total number of hours worked by each employee in each pay band during the reporting year
• Employers with multiple establishments must submit a consolidated report for all employees and a separate report for each establishment

Disclaimer: This document is meant as an overview guide for employers and HR professionals regarding new California employment laws for 2021. It is not intended as legal advice and we recommend that anyone needing to comply with these laws consult with an attorney. This document is not intended to be a resource to rely upon for compliance purposes as it does not cover the entirety of provisions applicable to each new piece of legislation.