California Legislative Replace: Home Of Origin Deadline Unplugs Employment Payments – Employment and HR

Seyfarth Synopsis: While the Buggles
took creative liberties when they claimed that  Video Killed The Radio Star, the
House of Origin deadline axed a number of employment-related bills.
California legislators began this legislative session at the apex
of the pandemic, introducing a flurry of COVID-19-related bills,
many of which failed to survive the June 4, 2021 deadline to pass
out of the bill’s House of Origin. Most remaining bills will
increase employer obligations if enacted, while many
employer-friendly proposals fell by the wayside.

Friday, June 4, marked the first major deadline of the 2021
legislative year—for bills to pass out of their House of
Origin—and also marked the end of the road for many
employment-related bills. The surviving Senate Bills will now wind
their way through the committee and floor vote process in the
Assembly, and vice-versa. Many of these measures will continue to
undergo significant amendment, and not all will make it through the
legislative process. Stay tuned for more in-depth analyses of the
proposed bills as the session continues.

School House Rock: No Longer “Just a Bill”

COVID-19 Supplemental Paid Sick Leave:  SB 95 was a budget trailer bill that—effective immediately
upon its signing on April 16, and retroactive to January 1,
2021—extended COVID-19 supplemental paid sick leave (SPSL) to
September 30, 2021 for employers with over 25 employers. The new
law provides an annual allotment of up to 80 hours of available
SPSL, covers persons who telework, and extends SPSL entitlements to
reasons related to vaccinations and family care. See our in-depth
analysis of the measure here.

Rehiring and Retention of Displaced Hospitality
Workers: As we detailed here, SB 93 requires certain hospitality
employers—hotels, private clubs, event centers, and airport
hospitality services—and successor employers, to offer
preferential hiring to employees laid off because of the pandemic.
The bill carried an urgency clause, making it effective the same
date the Governor signed it, April 16, 2021.

Stayin’ Alive/Break On Through to The Other Side

The bills below have officially broken through to the other
legislative house, and are thus stayin’ alive for the time
being.

A. Leave

Family Member Definition Expansion:  AB 1041 would expand the definition of
“family member” for purposes of the Healthy Workplaces, Healthy Families Act of
2014 (CA PSL) in Labor Code Section 245.5 to add
“designated person,” defined as “a person identified
by the employee at the time the employee requests paid sick
days.” The bill would similarly amend the California Family
Rights Act (CFRA), Gov’t Code § 12945.2, to add
“designated person,” defined as “a person identified
by the employee at the time the employee requests family care and
medical leave,” as a person for whom an employee may take
leave for family care and medical leave, similar to many existing
municipal paid sick leave laws. Both laws would allow an employer
to limit an employee to one designated person per 12-month
period.

Paid Family Leave Weekly Benefit Increase: AB 123 would revise the formula for
determining benefits available pursuant to the family temporary
disability insurance program, for periods of disability commencing
after January 1, 2022, by redefining the weekly benefit amount to
be equal to 90% of the wages paid to an individual for employment
by employers during the quarter of the individual’s disability
base period in which these wages were highest, divided by 13, but
not exceeding the maximum workers’ compensation temporary
disability indemnity weekly benefit amount established by the
Department of Industrial Relations.

B. DFEH

Small Employer Family Leave Mediation Pilot Program and CFRA
Parent-in-Law Care Leave: AB 1033 would require the Department of
Fair Employment and Housing (DFEH) to notify an employee who
requests an immediate right-to-sue letter alleging CFRA violations
of the requirement for mediation prior to the employee filing a
civil action. The bill would toll the statute of limitations
applicable to the employee’s claim from the date the employee
contacts the DFEH’s dispute resolution division regarding the
intent to pursue a legal action until the mediation is complete or
deemed unsuccessful. The bill would allow employers of between 5
and 19 employees who do not receive the required modification as a
result of the employee’s failure to contact the DFEH’s
alternate dispute resolution (ADR) division, to stay the civil
action pending completion of ADR. The measure would also expand
CFRA to include leave to care for a parent-in-law within the
definition of family care and medical leave.

C. Workplace Safety

Safety Citations and Retaliation Prohibitions: SB 606 would require that Cal/OSHA issue
a citation to an egregious employer (defined as an employer
that intentionally made no reasonable effort to eliminate a
known violation) for each willful violation, and each employee
exposed to that violation would be considered a separate violation
for purposes of the issuance of fines and penalties. The bill has
already been amended to remove a rebuttable
presumption of retaliation if an employer takes adverse action
against an employee within 90 days of the employee doing certain
things, such as disclosing a positive test or diagnosis of a
communicable disease, requesting testing as a result of exposure,
or reporting a possible violation of an OSHA standard.

For more information on the saga of Cal/OSHA’s changes to
its own emergency temporary standard, see our blog here.

Warehouse Distribution Centers Quota
Disclosures: AB 701 would require that employers
provide nonexempt employees who work at a warehouse distribution
center a written description of each quota the employee must meet,
including the quantified number of tasks to be performed and
materials to be produced or handled. The bill would prohibit an
employer from requiring employees to meet a quota that causes them
to miss a meal or rest period, and employers must provide employees
a copy of the most recent three weeks of the employee’s own
personal work speed data. When complaint alleging violations of
this provision is filed, the Labor Commissioner must provide a
written notice of the right to report violations, anti-retaliation
measures for reporting unsafe workplace conditions or participating
in an investigation by an enforcement agency. The bill would also
authorize a current or former employee to sue for injunctive
relief, costs, and reasonable attorney’s fees in that
action.

D. Wage and Hour

Expansion of Garment Manufacturing Definition:  As
summarized here,  SB 62 would potentially expose persons or
entities contracting for the performance of garment manufacturing
to joint and several liability with any manufacturer and contractor
for the full amount of any unpaid wages, any other compensation,
damages, liquidated damages, attorney’s fees, civil penalties,
and any other penalties to any and all employees who performed
garment manufacturing operations for any violation. The measure
would also eliminate piece rate compensation in the garment
industry. This measure almost precisely replicates SB 1399, which did not quite make it to the
Governor’s desk in 2020, likely as a result of timing and other
priorities.

Wage Theft: AB 1003 would amend the Penal Code to
make an employer’s intentional theft of wages, payments, or
gratuities over $950 punishable as grand theft. The bill would
apply to employees and independent contractors.

Wage Withholdings: SB 505 would provide that, prior to
garnishing public employees’ wages when the employer is
required or empowered to do so by state or federal law, employers
must make a good faith effort to consult with an employee to obtain
a written authorization to resolve monetary obligations before
employing third-party collection services or commencing a civil
action. Where a written authorization provides for a withholding or
diversion of an employee’s wages, the bill would prohibit the
amount withheld or diverted from exceeding 5% of the employee’s
monthly gross wages.

E. Civil Procedure

Court Changes: SB 241, the “2021 California Court
Efficiency Act,” was originally a spot bill aimed to enact
legislation that would streamline discovery processes to reduce
costs to the courts and litigants. This would have been a welcome
change to litigators and businesses alike. However, the measure was
significantly amended, and now would authorize an entity that is
not a shorthand reporting corporation to engage in specified acts
relating to shorthand reporting if the entity is approved for
registration by the Court Reporters Board of California. The bill
would also require courts to electronically serve documents on a
party that has agreed or consented to accept electronic service. It
would also authorize, until January 1, 2024, a witness in a
proceeding to appear and give testimony by remote electronic means
that provide a live audiovisual connection to the court, if the
parties stipulate to this manner of appearance.

Another Potential Restriction on Settlement
Agreements: SB 331, the “Silenced No More
Act,” would amend Section 12964.5 of the Government Code
(enacted by SB 1300 of 2018) so that employers
implementing non-disparagement agreements as a condition of
employment (or in a separation agreement) would need to carve out
an employee’s ability to discuss conduct the employee has
reason to believe is unlawful. The bill would also amend Section 1001 of the Code of Civil
Procedure (enacted by SB 820 of 2018) to extend the prohibition
on confidentiality provisions in settlement agreements to all forms
of workplace discrimination—not just discrimination based on
sex. This bill would build upon CCP Section 1002.5 (enacted by AB 749 of 2019 and amended by AB 2143  in 2020) by expanding the
prohibition to include acts of workplace harassment or
discrimination regardless of sex.

F. Labor

Unionization Process for Agricultural
Employees: AB 616 essentially eliminates secret
ballot union elections by permitting a labor organization to be
certified as the exclusive bargaining representative of a
bargaining unit through a representation ballot card election where
at least 50 percent of the employer’s workforce votes in favor
of unionization. Even more concerning, the bill would create a
presumption of retaliation—that can be rebutted only by
clear, convincing, and overwhelming evidence—whenever an
employer disciplines, suspends, demotes, lays off, or terminates a
worker during a labor organization’s representation ballot card
campaign.

G. Miscellaneous

Gender Neutral Retail Departments:  AB 1084 would require a retail department
store with 500 or more employees that sells childcare items,
children’s clothing, or toys, to maintain a gender-neutral
section in which a reasonable selection of the items, articles, and
toys for children that it sells shall be displayed, regardless of
whether they have been traditionally marketed for either girls or
for boys. The requirements of this bill would be enforced by the
State of California through the Attorney General, a district
attorney or city attorney, in any court of competent jurisdiction
and provides for recovery of attorneys’ fees. Failure to comply
with the measure’s requirements would be penalized by a civil
penalty, not to exceed $250 for a first violation, and $500 for a
subsequent violation.

Displaced Janitor and Hotel Worker Opportunity
Act:  AB 1074 was the original version of the
measure requiring rehiring and retention of displaced hospitality
workers, which eventually passed as SB 93, as noted above. After
the passage of SB 93, AB 1074 was amended to simply rename the
“Displaced Janitor Opportunity Act” the “Displaced
Janitor And Hotel Worker Opportunity Act” and to extend the
provisions of the Act to hotel workers. The bill would also
redefine “awarding authority” under the act to include
any person that awards or otherwise enters into contracts for hotel
services including guest service, food and beverage, or cleaning
performed within the state.

Required Disclosures to Temporary Agricultural
Workers:  AB 857  would prohibit employers from
retaliating against an H-2A employee for raising questions that
relate to employment, housing, or working conditions. and would
require an employer to provide an H-2A employee on the day the
employee begins work in the state a written notice in Spanish and,
if requested by the employee, in English, containing specified
information relative to an H-2A employees’ rights pursuant to
federal and state law. It would also require an employer to provide
compensation for travel time at the regular rate of pay to or from
employer provided housing (with certain exemptions for employees
covered by CBAs).

Large Group Health Insurance: SB 255 would authorize an association of
employers to offer a large group health care service plan contract
or large group health insurance policy consistent with ERISA if
certain requirements are met, including that the association is
headquartered in California, has continuously been a Multi-Employer
Welfare Arrangement under ERISA (MEWA) since before March 23, 2010, and that
the large group health care service plan contract or large group
health insurance policy have provided a specified level of coverage
since January 1, 2019.

“End of the Road” for These Bills

Like the crooners from Boyz II Men in this famous ditty, the bills below have come to the end of
the metaphorical road. But while these measures failed to make it
past the deadline, employers should be prepared for similar
measures to be re-introduced at a later date because, as the song
lyrics go, it is possible the California Legislature just
“can’t let go.”

A. A Sigh of Relief

Bereavement Leave Act of 2021: AB 95 would have required employers with
25 or more employees to grant unpaid bereavement leaves of up to
ten business days, and would have required employers with fewer
than 25 employees to grant unpaid bereavement leaves of up to three
business days. Leave entitlement would be triggered by the death of
a spouse, child, parent, sibling, grandparent, grandchild, or
domestic partner.

Employment Discrimination:  AB 1119 would have added “family
responsibilities”—defined as the obligations of an
employee to provide ongoing care for a minor child or a care
recipient—to the list of FEHA-protected characteristics for
which employers must engage in the interactive process and provide
reasonable accommodation to an applicant or employee.

Paid Sick Leave Accrual and Use: AB 995 would have modified the
employer’s alternate sick leave accrual method to require that
an employee have no less than 40 hours of accrued sick leave or
paid time off by the 200th calendar day of employment or each
calendar year, or in each 12-month period. The bill would have
raised the employer’s authorized limitation on the
employee’s use of carryover sick leave to 40 hours or 5
days.

Worker Metrics Program:  AB 1192,  referred to by the California
Chamber of Commerce as the “Public Shaming of Employers” bill, would
have required annual reporting of wage and hour data and employee
benefits for an employer’s entire United States workforce that
would have been published on the Labor and Workforce Development
Agency’s website.

Employer Provided Backup Childcare Benefit: AB 1179 would have required employers of
1,000 or more employees to provide employees, on or after January
1, 2022, with up to 60 hours of paid backup childcare benefits.

COVID-19 Hazard Pay for Healthcare Workers:  AB 650 would have required all private
healthcare providers to pay mandatory bonuses through the end of
2022 to all workers, including employees of contractors. The bill
did not provide any credit for any other bonuses, pay increases, or
other benefits employers provided during the pandemic.

Fast Food Council / Franchisor Joint Liability: AB 257 would have established the Fast
Food Sector Council, responsible for creating a fast food workers
bill of rights, including wages, working conditions, etc. This
onerous bill would have required franchisors to insure franchisee
compliance with a variety of employment, worker, and public health
and safety laws and orders, including those related to unfair
business practices, general liability, employment discrimination,
the California Retail Food Code, a range of labor regulations, and
emergency orders. The measure would have established joint and
several liability for franchisee non-compliance. The bill would
have nullified any potential work around by prohibiting any waiver
or indemnity provisions. Finally, while the bill would have been
mostly enforced through the DLSE, ominously, it would have also
given franchisee employees a private right of action for
retaliation against franchisors.

Paid Family Leave Expansion Where Child Deceased In
Childbirth:  AB 867 would have expanded eligibility
for benefits under the Paid Family Leave program to include leave
for a parent who was pregnant with a child, if the child dies
unexpectedly during childbirth at 37 weeks or more of
pregnancy.

Political Affiliation Protection: SB 238 would have added political
affiliation as a protected characteristic under the FEHA.

Cannabis Screening: AB 1256 would have prohibited employers
from discriminating against a person in hiring, termination, or any
term or condition of employment because a drug screening test
detected tetrahydrocannabinol (THC) in their urine. (This bill
would have exempted employers required to drug test based on
federal law or regulations, those that would lose monetary or
licensing benefits for failing to drug test, and building and
construction employers.)

Workplace Diversity:  AB 1122 was a spot bill that would have
encouraged employers to develop and implement personnel policies
that incorporate workforce diversity. The measure was sponsored by
the California Employers Association.

B. That Would Have Been Helpful

Limitations to PAGA:  AB 385 sought to ease the litigation risk
of the pandemic on employers by prohibiting employees from
maintaining an action under PAGA for violations of the Labor Code
arising between March 4, 2020, and the state of emergency
termination date. AB 530 would have required an
“aggrieved employee” to inform the employer which
specific violations of the Labor Code are being alleged under each
subdivision of PAGA and to inform the employer if statutory
right-to-cure provisions apply.

Independent Contractors:  Three bills have been
introduced thus far in the continued attempt to reform AB 5,
including AB 231, which would make permanent the
exemption from the ABC test for licensed manicurists, by providing
that they be indefinitely governed by the
multifactor Borello  test instead of the ABC
Test. AB 612 would create a new exemption from
the ABC test for a bona fide business-to-business arrangement that
involves a voluntary deposit, to be made available to entities that
utilize their own employees to produce, locate, or procure tangible
personal property, which it owns, leases, or otherwise has the
lawful right to possess. And, as expected, the least likely to gain
traction, AB 25 would have replaced the ABC test
with the multifactor Borello test.

Documenting COVID-19 Tests:  AB 757 would have authorized a private
employer to request prescribed documentation of a positive COVID-19
test or diagnosis if (1) an employee reports that the employee is
unable to work due to a positive for COVID-19 test result and (2)
the employer determines that an employee may be subject to a 14-day
exclusion from the workplace as required under certain law or
regulations.

Wage Records Inspection: AB 436  would have amended Labor Code
§ 226(b) to harmonize the time frame to respond to requests
pursuant to Labor Code § 226(b) with requests for personnel
records pursuant to Labor Code § 1198.5 by allowing the former
records to be produced within the same time frame as the latter
(i.e., 30 days).

Telecommuting Employees:  AB 513 was a welcome bill to employers
that would have authorized employees working from home to receive
legally required notices and postings electronically and sign
certain documents electronically, and would deem that the final
wages due to an employee working from home are paid on the date
that the paycheck is mailed to the employee.

Telework Flexibility Act: AB 1028 would have authorized
telecommuting employees to waive overtime up to 10 hours of work
per day, and waive split shift premiums if the employee requests an
employee-selected remote work flexible schedule, and it would
permit an employee to choose when to take any meal or rest period
during the workday. The bill also would have prohibited an employee
from recovering PAGA penalties meal and rest break violations if
the employee engaged in remote work. Similarly, AB 55 was introduced as a spot bill with
its stated purpose of affording certain rights and benefits to
telecommuting employees, but it was not amended.

Workplace Flexibility Act of 2021: AB 230 would have permitted an
individual, nonexempt employee to request an employee-selected
flexible work schedule, allowing for workdays of up to 10 hours per
day within a 40-hour workweek, where the employee would not be
entitled to overtime compensation for those additional daily
hours.

C. COVID-19 Bills That Were Stopped In Their
Tracks

COVID-19 Contact Tracing and Safety Policies:  SB 46 would have required employers to
develop and implement contact tracing and safety policies for their
employees, including requiring notice to the employer when an
employee receives a positive COVID-19 test.

COVID-19 Income Tax Credits:  AB 62 would have allowed a credit against
corporate taxes in an amount equal to the total amount paid or
incurred to comply with COVID-19 restrictions.

COVID-19 Rent Relief:  AB 255 was earmarked to provide
commercial rent relief protections for small businesses affected by
the COVID-19 pandemic.

Keep California Working Act: SB 74—introduced on a bipartisan basis
by Senators Caballero (D-Salinas) and Borgeas
(R-Fresno)—would have appropriated $2.6 billion for grants to
small businesses and nonprofit entities that meet specified
criteria, including that the entity had experienced economic
hardship resulting from the COVID-19 pandemic.

Pandemics Priority for Medical Treatment: AB 93 would have prioritized workers in
the food supply industry, such as field workers and grocery
workers, for rapid testing and vaccination programs in response to
pandemics, including COVID-19.

D. Unemployment / Workers’ Comp. Bills That
Didn’t Make the Cut

Enhancing Unemployment Convenience: AB 274 would have revised the definition
of prepaid card by requiring cards to be chip-enabled. AB 24 would have required the
unemployment development department (EDD) to provide a claimant
with a notification of the computation used to determine their
benefits. And AB 8 would have permitted the rightful
recipient of unemployment compensation benefits to elect whether
the benefits payments are directly deposited into a qualifying
account or applied to a prepaid debit card.

Preventing Unemployment Fraud:  AB 23  would have required the
unemployment development department to cross-check all claimant
information with state and county correctional facility inmate data
in an effort to detect fraudulent applications. The bill was borne
from California coming to grips with its fraudulent
unemployment insurance payments of almost $1 billion to state
prisoners after Congress passed the CARES Act.

COVID-19 Temporary Benefits: AB 19 would have required the EDD to
provide, until July 1, 2022, and following the termination of
unemployment assistance programs created by the CARES Act, benefits
equivalent to the terminated federal or state supplemental
unemployment compensation payments for the remainder of the
duration of time the individual is unemployed due to the COVID-19
pandemic. Unemployment benefits provided under this legislation
would not be charged against the reserve account of any
employer.

Advisory Committee on Unemployment Insurance:  AB 42 was a spot bill set up to establish
an advisory committee to advise the EDD on matters within the
department’s jurisdiction, including, but not limited to,
unemployment insurance.

Hospital Employee Injuries:  SB 213 would define “injury”
for a hospital employee to include infectious diseases, cancer,
musculoskeletal injuries, post-traumatic stress disorder, and
respiratory diseases. The bill would have, for purposes of
workers’ compensation, created rebuttable presumptions that
injuries in a hospital employee who provides direct patient care in
an acute care hospital arose out of and in the course of the
employment.

Workplace Solutions

Thankfully, many of the most concerning bills introduced were
unable to survive beyond the House of Origin deadline. Aside from
the sudden retroactive passage of SPSL and immediately effective
Right to Recall laws, the remaining bills are not yet set in stone.
The legislative session is still in its infancy, and each
measure—apart from, perhaps, SB 62—will almost
certainly be amended. We’ll keep you updated here at Cal Peculiarities, and you can also check out
our Policy Matters podcast and newsletter for regular check-ins on
California (and national) policy and legislative updates as
well.

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