Authored by Mark Lobb
As we approach the last quarter of 2022, there are many new laws which businesses owners should be aware of to avoid possible lawsuits or fines. Below are ten pending bills or laws for consideration:
- Pay Data Reporting:
On September 27, 2022, Governor Newsom signed into law Senate Bill 1162. This Bill significantly expands employers pay data reporting requirements and wage range disclosure obligations. The law has a January 1, 2023, effective date.
The law will require the following:- Employers with fifteen or more employees will be required to disclose pay scale in job postings.
- Employers will be required to provide the pay scale to current employees upon request.
- Employers with one hundred or more employees will be required to report to the state “within each job category, for each combination of race, ethnicity, and sex, the median and mean hourly rate;”
- Employers that retain one hundred or more workers through labor contractors will be required to submit a pay data report covering those workers.
- Employers will be required to maintain a record of each employee’s job title and wage history during employment and for three years thereafter.
- Employers with multiple establishments, will be required to prepare a separate pay data report for each establishment, doing away with the current requirement of a consolidated report.
Courts will be able to impose civil penalties “not to exceed one hundred dollars per employee upon any employer who fails to file the required report and not to exceed two hundred dollars per employee upon any employer for a subsequent failure to file the required report.” - Employers with fifteen or more employees will be required to disclose pay scale in job postings.
- Pay Data Reporting:
- Mandatory Arbitration Agreements:
It is imperative all employers have mandatory arbitration agreements signed by employees. There is an art to the language which should be in the arbitration agreements so having an employment lawyer draft or approve the language is imperative.
A Ninth Circuit Court of Appeals panel is reviewing whether an employer can require an employee to sign an arbitration agreement as a condition of employment pursuant to Assembly Bill 51 (“AB 51”). AB 51 specifically prohibits employers from requiring employees to sign an arbitration agreement as a condition of employment. The Ninth Circuit previously stayed enforcement of portions of AB 51 and is now considering whether the Federal Arbitration Act (“FAA”) preempts AB 51 in its entirety following the U.S. Supreme Court’s recent decision in Viking River Cruises, Inc. v. Moriana. The Supreme Court in Viking River Cruises held that California law precluding the division of PAGA actions into individual and non-individual claims through an agreement to arbitrate was preempted by the FAA.
AB 51 applies to all arbitration agreements entered into or modified on or after January 1, 2020, the date the law became effective. Under AB 51, it is unlawful for employers to require employees or applicants to sign an agreement to arbitrate claims under the California Fair Employment and Housing Act or the Labor Code as a condition of employment, continued employment, or receipt of employment-related benefits. AB 51 subjects an employer to civil and criminal penalties.
It is uncertain when the final decision will come down from the Ninth Circuit. Employers must determine whether to make mandatory arbitration agreements discretionary with employees.
- Mandatory Arbitration Agreements:
- Employee Cannabis Use and Screening:
On September 18, 2022, Governor Newsom signed California Assembly Bill (AB) 2188 into law. The law will be effective on January 1, 2024. This law makes it unlawful for an employer to discriminate against a person in hiring and termination, or any term or condition of employment based upon the following:- a person’s use of cannabis off the job and away from the workplace, except for preemployment drug screenings, or
- an employer-required drug screening test that has found the person to have non-psychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids.
Employers can refuse to hire an applicant based on a scientifically valid pre-employment drug screening conducted through methods that do not screen for non-psychoactive cannabis metabolites. The alternative tests include impairment tests (tests which measure a person against their own baseline performance), and tests which identify the presence of tetrahydrocannabinol (THC) in an individual’s bodily fluids.
The bill does not:- Permit an employee to possess, be impaired, or use cannabis on the job.
- It does not affect the rights or obligations of an employer to maintain a drug and alcohol-free workplace.
- The bill does not preempt state or federal laws requiring applicants or employees to be tested for controlled substances as a condition of employment, receiving federal funding or federal licensing-related benefits, or entering into a federal contract.
- The bill exempts certain applicants and employees including employees in the building and construction trades, and employees in positions requiring a federal background investigation or clearance.
- Employee Cannabis Use and Screening:
- $25.00 Hamburgers and Burritos:
Although this new law directly concerns the food retail industry, it affects all of us who like to eat. On September 5, 2022, California Governor Gavin Newsom signed A.B. 257 which is titled the Fast Food Accountability Recovery Act (“FAST Recovery Act”). Strongly supported by unions, the law will impact more than 500,000 fast food workers in California, their employers, and all consumers.
The law establishes a ten-member Fast Food Council (the “Council”) to be composed of:- One representative of the DIR.
- One representative of the Governor’s Office of Business and Economic Development.
- Two representatives as advocates for fast food restaurant employees.
- Two representatives of fast-food restaurant employees.
- Two representatives of fast-food restaurant franchisors.
- Two representatives of fast-food restaurant franchisees.
The Council can establish minimum standards on wages, working hours, and other working conditions. The explanation for the extension of these broad powers to the Council is to ensure and maintain the health, safety, and welfare of fast-food restaurant workers and to enhance the workers living standards.
On January 1, 2023, the Council can raise the hourly minimum wage for fast food workers to as much as $22 an hour. This wage is almost 50 percent higher than the state minimum wage. On January 1, 2024, and annually thereafter, the minimum wage may increase by the lesser of 3.5 percent or the rate of change in the U.S. Consumer Price Index.
The state of California has essentially taken over the fast-food industry. Governor Newsom will appoint the representatives of state agencies, fast food restaurant employees, fast food restaurant franchisors, and franchisees. The speaker of the state Assembly and the state Senate Rules Committee will each appoint one representative as advocates for fast food restaurant employees.
The law is directed at “Fast food chains.” “Fast food chain” is defined as follows:- A set of fast-food restaurants consisting of 100 or more establishments nationally that share a common brand, or are characterized by standardized options for décor, marketing, products, and services.
“Fast food restaurant” means any establishment in the state that is part of a fast-food chain and that in its regular business operations, primarily provides food or beverages in the following manner:- For immediate consumption either on or off the premises.
- To customers who order or select items and pay before eating.
- With items prepared in advance, including items that may be prepared in bulk and kept hot, or with items prepared or heated quickly.
- With limited or no table service. Table service does not include orders placed by a customer on an electronic device.
This law will affect all restaurants however, because restaurants not subject to the law will have to raise wages and other benefits to stay competitive for workers.
The law also states that a fast food restaurant operator may not discharge or in any manner discriminate or retaliate against any employee for any of the following reasons:- Making a complaint to the media, the legislature, a watchdog or community-based organization, or governmental agency about working conditions.
- Participating in a Council or local fast food council proceeding; and
- Refusing to perform work in a fast-food restaurant because the employee had reasonable cause to believe that the practices or premises of the restaurant would violate worker or public health and safety laws.
Any employee of a fast-food restaurant operator discharged or otherwise discriminated or retaliated against in violation of the law shall have a right of action for reinstatement, treble damages for lost wages and benefits, and attorney’s fees. There is a rebuttable presumption of unlawful discrimination or retaliation if a fast-food operator takes adverse action against one of its employees within 90 days following the date when the operator had knowledge of the employee’s protected activity.
Business groups have proposed a ballot measure to undo the law. The law will inflate prices, create new avenues for employee lawsuits against restaurant owners, and drive restaurant owners to focus on automation, thus eliminating jobs.
As 2022 comes to a close, there are many other new laws which will be passed to be effective in 2023. L&P will provide as many updates as possible to keep employers ready to be compliant in the new year.
