2022 Employment Law Update – Top Ten Changes

Fri, 01/07/22

Happy New Year!

While we are still trying to build back from crazy 2020, let us start this new year off on the right foot. It is time to dust off the employee handbook, review your policies and procedures, and make sure they comply with all the new laws, regulations, and interpretations that have either already gone into effect or will in early 2022.

Below, we have identified our “top 10” changes. Please keep in mind there were hundreds of laws, regulations, and changes implemented at the local, state, and federal levels throughout 2021. So, if you need a handbook/COVID-19 policy review or have any questions, please call. 1. California and Local Minimum Wage Raised – In addition to the gradual increase to minimum wage that has been in effect under California law, several Sonoma County cities have increased minimum wage beyond that required by the state. Below is a table that describes the state and local city requirements:

LocalityEffective DateEmployers With 26 Or More EmployeesEmployers With Less Than 26 Employees
Santa Rosa1/1/2022$15.85Same

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 ($62,400 for large employers and $58,240 for small employers).  Please note that many other cities and counties in California have passed higher minimum wage requirements, including 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. COVID-19 Related Changes – Most of 2021 was spent scrambling to keep up with laws, regulations, and best practices concerning COVID-19 as announced at the federal, state, and local levels of government. As of this writing, there are several COVID-19 related changes to be aware of:

  • Cal/OSHA Emergency Regulations – The Emergency Temporary Standards (ETS) adopted by Cal/OSHA in 2020, and revised again in December 2021, remain in effect. The guidelines (1) mandate notice to all potentially exposed employees within one (1) day of the learning of the exposure, (2) dictate when employees are required to be excluded from work due to an exposure, (3) create standards for cleaning and social distancing and other mitigation steps.  California employers are not directly subject to federal OSHA ETS, but Cal/OSHA will be required to adopt guidelines at least as effective as the federal OSHA ETS (discussed below) very soon after the recent updates take effect unless the federal OSHA ETS is struck down by the U.S. Supreme Court. These regulations remain unsettled but employers must follow the current Cal/OSHA ETS standards until and if they are updated to conform to the federal OSHA ETS. Please see our separate post about the Cal/OSHA ETS and Federal OSHA ETS here https://cmprlaw.com/how-to-handle-the-everchanging-osha-covid-rules/.
  • Federal OSHA Emergency Regulations – Following the announcement of President Biden’s mandatory COVID vaccine policy on September 9, 2021, the federal OSHA acted to implement the policy by issuing sweeping regulations requiring COVID-19 vaccines or testing for all employers of 100 or more employees. The regulations have been challenged in court and will be considered by the U.S. Supreme Court on January 7, 2022, with a decision to come thereafter.  For now, California employers will have to carefully follow the everchanging legal landscape on this subject and be prepared to implement a mandatory vaccine or testing policy if needed.
  • Indoor Mask Mandates – California has mandated face coverings for all people in indoor settings (whether vaccinated or not) from December 15, 2021, to January 15, 2022.  Sonoma County was exempted from this mandate, but announced on December 30, 2021, that it would cease relying on the exemption and follow the State’s mandate. 

Action: Ensure you are familiar with the Cal/OSHA requirements for excluding employees from the workplace, pay for time off related to COVID-19, and keep an eye out for changes in early 2022. If you are considering adopting a mandatory vaccination policy, contact us to discuss best practices and navigating religious and medical exemptions. Ensure all current policies are in writing and communicated to your employees. 3. Right to Disclose Unlawful Conduct – Statute currently prohibits Settlement Agreement terms (settling a filed civil or administrative action) to restrict the releasing employee from reporting factual allegations of sexual harassment, assault, or discrimination.  Employees are also entitled to disclose facts related to “unlawful acts in the workplace.”  SB 331 permits current and former employees to disclose facts relating to any discrimination, harassment or retaliation in violation of the Fair Employment and Housing Act. Employers may not prohibit a current or former employee from disclosing facts alleging unlawful acts in the workplace, including any type of harassment, discrimination or retaliation, whether the employer has paid them a settlement or not.  Employees must also be given at least five (5) days to review release agreements and consult an attorney if they choose. 

Action: Review and update your Confidentiality/Non-Disclosure/Proprietary Information Agreements for current employees, and your Release Agreements for current and former employees.  Non-disparagement, confidentiality agreements or any agreement relating to an employee’s separation from employment must say the following “Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.” 4. Continued Evolution of Independent Contractor Exemptions – Continuing to chip away at the general applicability of the ABC test, AB 1506 and 1561 exempt newspaper distributors and carriers, manicurists, and construction trucking subcontractors for another three years.  It also creates an exemption for claims adjusters.  

Action: Audit your independent contractor agreements to make certain that existing independent contractor relationships (1) meet one of the dozens of exemptions to the ABC test, (2) are in writing, and (3) meet the multi-factor test under Borello. 5. Contractor Liability for Subcontractor Conduct – Labor Code § 218.7 currently allows direct contractors to be liable for wages owed by subcontractors to the subcontractors’ employees. SB 727 will expand the liability of direct contractors to be held liable for penalties, liquidated damages and interest owed by a subcontractor to their employees in certain circumstances. One example is if the contractor had direct knowledge of the subcontractor’s failure to pay wages or other benefits.

Action: See 7 below. 6. Wage Theft is Grand Theft – Existing law makes wage and gratuity theft a misdemeanor. This law will bring the concept of grand theft to the act of intentional theft of wages or gratuities.  Any intentional theft of wages or gratuities in an amount greater than $950 from one employee, or $2,350 from two or more employees in a 12-month period is punishable as either a misdemeanor or felony.  This statute protects independent contractors as well as employees. “Wage theft” is defined as the intentional deprivation of wages, gratuities, benefits, or other compensation with the knowledge that the wages are due and owing to the employee or contractor. 

Action: See 7 below. 7. Property Liens Against Employers – In addition to judgment liens, the Labor Commissioner will also now have the power to create and enforce liens on real property of the employer and individual owners/managing agents of the employer, to secure amounts due to the Commissioner after a final citation or decision. 

Action: We highly recommend having an audit to ensure you are paying employees properly and recording their meal and rest periods properly.  California’s extensive penalties and attorneys’ fees provisions make compliance something every employer must take seriously. 8. Written Production Quota Requirements for Distribution Centers – Employers of 100 or more California employees in a single site, or 1000 or more California employees in multiple sites, must now provide written notice to employees of any production quotas.  The timeframe for quotas must not prevent employees from taking meal or rest periods or using the bathroom. Time spent complying with health and safety codes is considered productive time. 

Action: If you have a production quota requirement, consider whether you may be defined as a distribution center, and then issue the required notices. 9. Employers Must Pay Arbitration Fees Within 30 Days – All mandatory arbitration agreements applicable to California employees must require the employer to pay for all fees of the arbitrator, outside of the initial filing fee. If an employer fails to pay the fee, the failure to pay can be considered a waiver of the right to enforce arbitration. SB 762 provides that arbitration providers must now issue invoices to all parties with notice of the penalties of non-payment, and permit delays in payment only upon the agreement of all parties. 

Action: If you have an arbitration agreement, make sure you are aware of the deadlines to submit fees.  Also, mandatory arbitration agreements are now made illegal by a 2020 law that recently withstood scrutiny by the 9th Circuit, see discussion below under Key Cases “ Chamber of Commerce v. Bonta”.  10. California Family Rights Act (CFRA) Close Family Member Definition and Mediation Program Expanded – 2021 saw a dramatic expansion of the CFRA to employers of five (5) or more employees. This law allows eligible employees to take up to 12 weeks of unpaid job-protected leave to care for themselves or their “close” family member.  AB 1033 adds “parent-in-law” to the definition of close family member. This bill also creates better processes to ensure its mediation program for small employers is enforced. Employers with 5-19 employees are permitted to insist on mediation before an employee may file a civil lawsuit for violating their CFRA rights.  

Action: If you are updating your handbook this year, add “parent-in-law” to the definition of close family member in the CFRA policy and remember that the mediation program is available should an employee make a claim.  If you have not updated your handbook for 2021 and you have under 50 employees, you very likely need significant additions regarding CFRA leave rights.

Key Cases From 2021 – As usual, there were dozens of employment law cases decided this year that impacted employers. We would like to call your attention to three of these cases below.

Ferra v. Loews Hollywood Hotel, LLC (2021) 11 Cal.5th 858 – This case declared that employees are entitled to be paid meal and rest period premiums at their “regular rate of pay” just as how overtime wages are paid. 

Action: Ensure you are properly paying employees the “regular rate of pay” for overtime, as well as meal and rest period premiums. If you have never considered whether you are doing it right, please give us a call.

Johnson v. Maxim Healthcare Services, Inc. (2021) 66 Cal.App.5th 478 – The Court of Appeal in this case declared that the statute of limitations did not bar an employee in a Private Attorney General Act (PAGA) claim from representing other employees who had a claim within the statute of limitations, although her right to receive any compensation as one of the aggrieved employees had expired.

Action: PAGA cases allow employees to bring essentially a class action lawsuit without satisfying the very high standards that actual class action lawsuits must adhere to.  PAGA claims are on the rise in our area and pose extremely high damage exposure to employers. Conducting an audit of your pay practices is the best way to avoid a PAGA claim.

Chamber of Commerce v. Bonta (9th Cir. 2021) 13 F.4th 766 – Labor Code § 432.6 prohibits mandatory arbitration agreements as a condition of employment.  Before this law went into effect, several groups sued to throw out the law because it violates the Federal Arbitration Act (FAA). The 9th Circuit ruled that the law can mandate that Arbitration Agreements be consensual rather than mandatory but struck down the enforcement mechanism for employers who seek to enforce mandatory arbitration agreements. 

Action: The lack of an enforcement mechanism and the potential for the decision to be appealed means the legal status of mandatory arbitration agreements entered into on or after January 1, 2020, remain in flux through 2021 and into 2022. If you are considering adopting a mandatory arbitration agreement now, it might be prudent to hold off.Have a great 2022, and please contact Arif Virji, Samantha Pungprakearti or Justin Hein for help with your labor and employment law needs at Carle, Mackie, Power & Ross LLP, 707-526-4200, or email at avirji@cmprlaw.comspungprakearti@cmprlaw.comjhein@cmprlaw.com.

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