2020 Employment Law Update – Top Ten Changes

Sun, 01/05/20
By: Dawn Ross

1. California and Local Minimum Wage Raised – In addition to the gradual increase to minimum wage that has been in effect under state law, several Sonoma County cities have voted to increase minimum wage beyond that required by the state. Below is a table that describes the state and local city requirements:

   Locality	Effective date	Employers with 26 or more employees	Employers with less than 26 employees
   California	1/1/2020	$13.00	$12.00
   Santa Rosa	7/1/2020	$15.00 (25+ employees)	$14.00 (under 25)
   Petaluma	1/1/2020	$15.00	$14.00
   Sonoma	1/1/2020	$13.50	$12.50

   Action: Review your payroll to ensure all employees are being paid the new minimum wage, send written notice of the wage change to affected hourly employees, and be sure your salaried exempt employees are earning at least 2x California minimum wage ($54,080 for large employers and $49,920 for small employers). Please note that many other cities and counties in California have passed higher minimum wage requirements (Belmont, Berkeley, Cupertino, El Cerrito, Emeryville, Los Altos, Los Angeles City and County, Malibu, Mountain View, Novato, Oakland, Palo Alto, Pasadena, Redwood City, Richmond, San Diego, San Francisco, San Jose, San Leandro, San Mateo, Santa Clara, Santa Monica, South San Francisco, and Sunnyvale).

2. Independent Contractors – AB5 and the “ABC Test” – In 2018, the landmark case of Dynamex Operations West, Inc. established the ABC test to determine if a worker is properly classified as an independent contractor or if they should be deemed an employee (for purposes such as workers’ compensation coverage, minimum wage, meal and rest periods, etc.) The ABC test requires the company to prove: (A) the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact; (B) that the worker performs work that is outside the usual course of the hiring entity’s business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.” AB-5 codifies the ABC test but also creates several exceptions to this strict test. The exceptions include hair stylists, real estate licensees, subcontractors in the construction industry, insurance agents, securities brokers, certain direct sales employees, physicians, attorneys, and accountants. Anyone who falls into the exception will be subject to evaluation under the old, and more lenient, Borello test which considers many other factors. AB5 applies to claims covered by the Labor Code the Unemployment Insurance Code, and as of July 1, 2020, the Workers’ Compensation Code. It does not apply to claims under the Fair Employment and Housing Act. AB5 is being challenged by companies like Uber and Postmates as unconstitutional, and a temporary restraining order has been issued to carve out a temporary exception for the trucking industry, but for the rest of us it is still the current law. Action: Review anyone working for you as an independent contractor to ensure they either meet the ABC test or fall under the exceptions listed in the statute; otherwise hire them as employees.

3. Anti-Harassment Training Requirements – Deadline Extended – As of January 1, 2019, the Fair Employment and Housing Act was amended to greatly expand mandated training requirements. Employers with 5 or more employees must provide training to all employees (not just supervisors). This training consists of 2 hours for all supervisors, and 1 hour for non-supervisors, every two years and within six months of hire or promotion. It also includes temporary and seasonal employees (within 30 calendar days after hire, or within 100 hours worked if work is expected to be less than six months). The training deadline was extended from January 1, 2020 to January 1, 2021. Employers must keep records on attendance to demonstrate compliance. Action: Schedule harassment training before year-end for all employees, and add this to your new-hire checklist. CMPR’s Samantha Pungprakearti is available if you need in-house training.

4. Time to File FEHA Claim is Extended From 1 to 3 Years – Until now, employees who feel they have been harassed, discriminated against or retaliated against had one year to file a complaint with the Department of Fair Employment and Housing (“DFEH”). Now, that time has been expanded to three years. Once a complaint is filed, the employee can choose to have the DFEH investigate, or to request a right to sue letter and file an immediate civil action. This means that employers may now have to defend against civil claims for harassment, discrimination and/or retaliation that are filed four or more years after the acts occurred. Action: Employers need to be even more diligent about properly conducing and documenting investigations into workplace complaints and need to retain records for at least four years.

5. Arbitration Clauses Must Be Optional – Labor Code §432.6 prevents employers from forcing employees to agree to mandatory arbitration relating to disputes under the Fair Employment and Housing Act or the Labor Code (the two areas of law that are the most litigated in the employment context), and cannot retaliate against employees for refusing to sign. This law is being challenged as it appears to contradict federal law. However, unless/until it is struck down, it is an enforceable law. Action: Revise your arbitration clause/agreement to indicate that arbitration is “optional” and reform your practices so that employees who are presented with an arbitration agreement are not “forced” to sign them.

6. Collection and Reporting Re: Consumer Information – Civil Code §1798.100 et seq. Businesses with $25 million or more in gross income are required to provide consumers with methods to request what personal information is being collected, how it is sold or shared with others and to request the company to cease such practices. Employees are considered consumers under this new law but for 2020, employers must only provide employees, upon request, with the categories of personal information collected. By 2021, employees will have full access to all the same information as other consumers. Action: Develop two avenues for consumers/employees to request this information (including a toll-free number and portal online) and develop strategies for responding to requests.

7. No More No-Rehire Provisions – Code of Civil Procedure §1002.5 prohibits settlement/severance agreements from including provisions that prevent an employee from applying for rehire. Employers will remain free to not hire an employee based on legitimate, non-discriminatory/retaliatory reasons. Action: Delete this provision from any severance offer/release agreements you use.

8. Lactation Accommodation – Labor Code §1031 et seq. Employers must provide employees who need time to express breastmilk with a private location close to their work area, which has a surface to place a pump and personal items, a source of electricity, and a place to sit. The employer must also provide access to a sink with running water and a refrigerator or other cooling device if a refrigerator is not available. Also, employers must implement a policy that describes the rights of an employee who must use this time, including the referral to the Labor Commissioner if the employee feels her rights have been violated. Violation of the lactation accommodation requirements now carry a fine of $100 per violation. Action: Edit your handbook to include the updated language from this amendment and deliver a copy of the policy to every employee who requests information about parental leave.

9. Hairstyles and Other Race Related Traits Are Incorporated into the FEHA – Race discrimination under the FEHA is expanded to include traits historically associated with race, such as hair texture and protective hairstyles (e.g. “braids, dreadlocks and twists”). Action: Edit your handbook to include this language, check your dress code policies, and educate those who do hiring.

10. Gun Violence Restraining Orders – Penal Code §18100 et seq. has been expanded to allow employers to petition a court to issue a “gun violence restraining order” to prohibit an individual from having in their custody or control, owning, purchasing, possessing or receiving, or attempting to purchase or receive, a firearm or ammunition. An employer must first show a substantial likelihood of significant danger or harm to themselves or others. Action: If you have an employee who raises safety concerns, this is another tool to use to protect your workplace.

    Key Cases From 2019 – As usual, there were several employment law cases decided by our courts this year, but two California Court cases stand out: Hamilton et al. v. Wal-Mart Stores Inc. Hamilton is a class action case alleging meal and rest period violations. The trial court awarded $6 million in wages and penalties to the class. The takeaways were: (1) employers must relieve employees of all duty and relinquish any employer control over employees and how they spend their break time; (2) employers are not required to force employees to stop working during a break; and (3) if security checks (or similar) impede the employees’ ability to leave the premises for breaks, it will be considered a missed break subject to a one-hour penalty.

    In the second case, Gustavo Naranjo, et. al. v. Spectrum Security Services, Inc., the Second District Court of Appeal held that unpaid premium wages for meal and rest break violations do not trigger waiting time or wage statement penalties. This will greatly reduce employer financial exposure for meal and rest period violations, and will also reduce the likelihood of class action claims.

    Have a great 2020, and please contact Dawn Ross or Samantha Pungprakearti for help with your labor and employment law needs – dross@cmprlaw.com or spungprakearti@cmprlaw.com.