Authored by Sara Mostafa
The following article regards certain significant new California employment laws that will take effect January 1, 2022. We advise you to review the contours of these laws carefully and alter your policies accordingly. We are available to assist you with updating your policies and employee handbooks and in connection with any questions or concerns.
Expansion of Coverage and Mediation Requirements in the California Family Rights Act (AB 1033)
The California Family Rights Act (CFRA) requires employers with five (5) or more employees to provide up to 12 weeks of leave in a 12-month period to employees who have worked for at least a year. Reasons for the leave include bonding with newborns and adopted or foster children, caring for family members with serious health conditions, and caring for one’s own serious health condition.
The new law also clarifies requirements for mediation of disputed CFRA claims involving small employers, defined as those with five (5) to 19 employees. If an employee of a small employer files a CFRA claim with the California Department of Fair Employment and Housing (DFEH) and requests a right to sue, the DFEH will notify the employee of the requirement to mediate if requested by any party prior to filing a lawsuit. The employee must then contact the DFEH’s dispute resolution division, which will notify the employer of the right to request mediation before a lawsuit is filed.
If the employer does not receive the required notification because the employee failed to contact the dispute resolution division before suing, the employer may get a stay of the lawsuit until the mediation is complete or deemed unsuccessful. The statute of limitations is tolled during the pendency of a mediation.
Non-Disclosure and Non-Disparagement Provisions in Settlement, Separation, and Asset Protection Agreements (SB 331)
While California law already prohibits the use of confidentiality provisions in settlement agreements involving claims of sexual assault, sexual harassment, and sex discrimination, effective January 1, 2022, the restrictions will be expanded as follows:
- Confidentiality provisions in settlement agreements involving claims of any prohibited workplace harassment, discrimination, or retaliation for reporting the same are prohibited.
- Confidentiality and non-disparagement provisions in separation agreements and asset protection/trade secret agreements cannot contain provisions that have the purpose or effect of restricting discussion or disclosure of information about harassment, discrimination, or other perceived forms of unlawful conduct in the workplace, and must include specific wording to that effect.
- Employers are prohibited from requiring employees to prospectively release claims or rights under the Fair Employment and Housing Act.
Obligation to Notify Public Health Agencies of a COVID-19 Outbreak
Employers are required to notify local public health agencies of a COVID-19 outbreak, defined in a non-healthcare workplace as three or more COVID-19 cases among workers at the same worksite within a 14-day period, within 48 hours or one business day, whichever is later.
Wage Theft Potentially a Felony (AB 1003)
It constitutes a felony if an employer, with intention, wrongfully fails to pay wages, including tips, in an amount greater than $950 from one employee, or $2,350 in the aggregate from two or more employees, within a 12-month period. Independent contractors are considered employees for purposes of this law, and entities that hire independent contractors are considered employers.
Employers Compelled to Cooperate With DFEH Civil Rights Investigations (SB 807)
The California Department of Fair Employment and Housing (DFEH) now has the power to compel employer cooperation with investigations of discrimination complaints. Under the new law, if a superior court denies a DFEH petition to compel employer compliance with an investigation, the denial will be subject to immediate, mandatory review by the appellate court.
In addition, the law stops the clock on deadlines for employees to sue while the agency is conducting investigations or attempting mediation. Once an employee files a complaint with the DFEH, the deadline for an employee to sue will be tolled until either the DFEH files a lawsuit or one year after the department closes its investigation without filing a lawsuit. While the law will apply retroactively to claims, it will not revive ones that have already lapsed due to deadlines.
Additionally, employers are now required to maintain employment records for four years after an employee separates from employment, instead of the previous two.
Electronic Transmission of Workplace Notices Authorized (SB 657)
Under the new law, any notice that must be posted in the California workplace may also be sent to employees as an attachment to an email. However, employers are still obligated to physically post notices in the workplace.
Workplace Safety Enhanced at Employers With Multiple Worksites (SB 606)
If an employer with multiple worksites is found by the CA Division of Occupational Safety and Health (Cal/OSHA) to have a “pattern or practice” of a safety violation at more than one worksite, there is a rebuttable presumption that the same violation exists at all of the employer’s worksites. The same presumption will be created if the employer has a written policy or procedure that violates a Cal/OSHA safety regulation. If the employer does not rebut the presumption, Cal/OSHA has the power to issue an enterprise-wide citation requiring enterprise-wide abatement.
Expanded Exceptions to Independent Contractor AB5 Test
Exemptions to the independent contractor law commonly known as “AB5” or the “ABC test” have been expanded as follows:
- The exemptions for licensed manicurists and licensed subcontractors are extended to 2025;
- Data aggregators and research subjects no longer need to be compensated to be exempt;
- Certain claims adjusters and third-party administrators in the insurance and financial services industries are now exempt; and
- The exemption for manufactured housing salespersons is clarified.
Production Quotas in Large Warehouses
Employers that operate large warehouses are required to disclose production quotas to workers and are prohibited from disciplining workers for missing quotas as a result of health- or safety-related breaks.
Minimum Wage and Salary Increase
Effective January 1, 2022, California’s minimum wage will increase to $14.00 per hour for employers having 25 or fewer employees and $15.00 per hour for employers with 26 or more employees. The 2022 minimum salary threshold that must be paid to an exempt employee will be $1,120 per week ($58,240 per year) for smaller employers, and $1,200 per week ($62,400 per year) for larger employers.
