March 2021 California HR Legal Updates

California Cities Continue Introducing Hero Pay Ordinances

Update Applicable to:
Large retail employers operating in Pomona or Santa Ana.

What happened?
Cities across California continue to pass ordinances requiring large retail and grocery stores to provide a paid premium to their employees, as they work through the pandemic.

The ordinance requires that employers notify covered workers in writing about their rights. The notice must include information regarding (a) the right to premium pay guaranteed by the ordinance; (b) the right to be protected from retaliation; and (c) the right to bring a civil action for an employer’s violation of the ordinance. Employers must post the required notice in a location that employees use for breaks, as well as in an electronic format accessible to the covered workers via a smartphone application or an online web portal. Employers must provide the notice in English and any language known by the employers to be the covered workers’ primary language.

What are the details?
Pomona defines a covered employer as: “Retail establishments” that employ 300 or more employees nationwide and employ more than 10 employees per location in Pomona. Pomona. Additionally, “any grocery store, retail pharmacy or ‘big box retailer’ who employs 300 or more employees nationally and employs more than 10 employees per location in the City.” (Emphasis in original).

Santa Ana defines a covered employer as: grocery store or retail pharmacy “hiring entities” that employ more than 300 workers nationally and more than 15 employees per grocery store or pharmacy in the City of Santa Ana.

Both cities are requiring employers to pay the same premium to their employees. Each employee working in the applicable location will need to pay a premium of $4.00 an hour.

The ordinance includes provisions to protect workers. The protections bar employers from reducing employees’ hours, altering their employment status, or limiting their earning capacity in response to the passage of the ordinance.

Employers are required to keep records showing compliance with the ordinances for up to two years.

An article going more in-depth for the Santa Ana ordinance can be found here. The article for the City of Pomona can be found here.

What do employers need to do?
Large grocery store or retail employers should review the linked articles to review the needed changes that may be required of them in various locations.

_________________________________________________________________________________

New California COVID-19 Paid Sick Leave Requirements Update

The Labor Commissioner’s Office has made the required notice available online, here. Employers will need to post the notice in the workplace or distribute the notice via other means, like email, to any employees that are unlikely to see the notice in the workplace.

The original post regarding SB-95 can be found here.

March 2021: New California COVID-19 Paid Sick Leave Requirements (SB-95 Update)

New COVID-19 Paid Sick Leave

Update Applicable to:
All California employers with more than 25 employees.

What happened?
On March 19, 2021, SB-95 was signed by Governor Newsom and has an effective date of March 29, 2021.

What are the details?
SB-95 acts as a revamp to the previously provided COVID-19-related paid sick leave that California mandated for employers. This time around there are several expansions to the requirements, and even more employers will be required to provide this leave. The bill also applies retroactively, back to January 1, 2021. The act will expire on September 30, 2021.

Covered Employers
The bill impacts employers with more than 25 employees.

Covered Employees
Any employee that is unable to work remotely or telework.  However, the legislation does add a provision for in-home supportive services, meaning that they will now be included in the coverage of the legislation.

Qualified Reasons
Covered employees will be able to utilize the COVID-19-related paid sick leave for the following reasons:

  • The covered employee or provider “is subject to a quarantine or isolation period related to COVID-19” as defined by an order or guidelines of the California Department of Public Health, the U.S. Centers for Disease Control and Prevention, “or a local health officer who has jurisdiction over the workplace.”
  • A health care provider has advised the covered employee or provider to self-quarantine because of COVID-19–related concerns.
  • The covered employee or provider “is attending an appointment to receive” a COVID-19 vaccine.
  • The covered employee or provider “is experiencing symptoms related to a COVID-19 vaccine that prevent the employee from being able to work or telework.”
  • The covered employee or provider is experiencing COVID-19 symptoms and is seeking a medical diagnosis.
  • “The covered employee is caring for a family member … who is subject to an order or guidelines described” in qualifying reason (1), or who a health care provider has advised to self-quarantine, as described in qualifying reason (2), SB-95 defines family members to include the employee’s spouse, registered domestic partner, parent (including parents-in-law), child (regardless of age or dependency), grandparent, grandchild, and sibling.
  • The covered employee or provider “is caring for a child … whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19 on the premises.”

Entitlement Amount
Full-time employees will generally receive 80 hours of paid sick leave in most cases, and part-time workers will receive an average of their last two week’s hours worked. Workers are entitled to the 80 hours if the company considers the employee to be full-time, or if the employee works at least 40 hours per week in the two previous weeks before the usage of their paid sick leave. Part-time employees will have their leave entitlement calculated based on the following:

  1. “If the covered employee has a normal weekly schedule, the total number of hours the covered employee is normally scheduled to work for the employer over two weeks.”
  2. “If the covered employee works a variable number of hours, 14 times the average number of hours the covered employee worked each day for the employer in the six months preceding the date the covered employee took COVID-19 supplemental paid sick leave. If the covered employee has worked for the employer over fewer than six months but more than 14 days, this calculation shall instead be made over the entire period the covered employee has worked for the employer.”
  3. “If the covered employee works a variable number of hours and has worked for the employer for14 days or fewer, the total number of hours the covered employee has worked for that employer.”

Retroactive Leave Provision
SB-95’s retroactive provision allows employees to replace hours they had used since January 1, 2021, of paid leave, and instead to use the COVID-19 related paid sick leave. This allows employees to regain the hours of paid leave they may have used in the past, by instead reducing their amount of COVID-19-related paid sick leave. The retroactive provision may only apply for the qualifying leave reasons that are listed above. Once an employee makes an oral or written request for such, the employer must make this payment on or before the payday for the next full pay period after the employee makes the oral or written request. The employee’s wage statement must separately show and list the payment and reflect the hours available, rate of pay, and corresponding COVID-19-related paid sick leave balance after this type of request.

Leave Credit
Employers who were still offering Families First Coronavirus Response Act (FFCRA) leave after December 31, 2020, may credit the amount of FFCRA paid sick leave used by employees against the required hours to be provided by this legislation. These credits only apply for FFCRA usage that took place after December 31, 2020.

Pay Calculation and Cap
SB-95 requires employers to calculate their nonexempt employees pay when using the paid sick leave to be the higher of the following four calculations:

  1. The employee’s “regular rate of pay for the workweek in which” COVID-19 SPSL was taken, regardless of whether the employee worked overtime in that workweek;”
  2. “The covered employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment;”
  3. The California minimum wage; or
  4. The local minimum wage.

The bill requires employers to pay their exempt employees the same as they would for the usage of other paid leaves the employer offers. Employee pay for usage of COVID-19 related paid sick leave is capped at $511 per day and $5,110 in the aggregate for each covered employee.

Usage of Other Paid Leave
Employers may not force employees to use their other forms of paid leave they might have banked before their usage of the COVID-19-related paid sick leave. However, employers may require employees to use their COVID-19-related paid sick leave before utilizing the exclusionary pay required by the California Division of Occupational Safety and Health’s, or Cal/OSHA’s, COVID-19 Emergency Temporary Standard (ETS).

Wage Statement Requirement
Wage statements have not changed since the requirements from last year. Employers must show the balance of available COVID-19-related paid sick leave on the employee’s wage statement as a distinct line item. It must be separated from other forms of paid sick leave the employee may have. The wage statement requirement becomes effective the first full pay period after the statute’s effective date.

Notice Requirement
Finally, the bill will include a posting and notice requirement. Employers will need to post a notice of the COVID-19-related paid sick leave in a conspicuous place in the workplace. The model notice will be provided by the labor commissioner within seven days of the statute’s enactment. If the covered employees are not likely to see the notice in the workplace, the employer may satisfy the notice requirement by distributing the notice through electronic means, such as email.

Applicable Links
The full legislation of SB-95 can be found here.

Articles summarizing the bill can be found here and here.

A nearly identical bill is making its way through the California legislature and may pass as well, this one under the name AB-84. It contains the same requirements as SB-95, but as of March 19, 2021, the bill has only just finished review by a committee. AB-84 can be read and tracked here.

What do employers need to do?
Covered California Employers should review the above information and update their workplace practices to reflect the requirements. Training for management staff may be needed to ensure employees are not accidentally denied a leave they are entitled to. Employers should keep a watch on the Labor Commissioner’s website to ensure they receive the required notice as soon as possible. The required posting may be placed online at this address.

_________________________________________________________________________________

Update

The Labor Commissioner’s Office has made the required notice available online, here. Employers will need to post the notice in the workplace or distribute the notice via other means, like email, to any employees that are unlikely to see the notice in the workplace

March 2021: San Francisco Passes New COVID-19 Related Ordinance

Update Applicable to:
All employers with employees within the city of San Francisco.

What happened?
The San Francisco Board of Supervisors passed the COVID-19 Related Employment Protections Ordinance on January 26, 2021.

What are the details?
Effective March 7, 2021, the COVID-19 Related Employment Protections Ordinance prohibits employment discrimination based on COVID-19 status.

Employers may not fire, threaten to fire, suspend, discipline, or in any other manner take adverse action against an employee who is absent or unable to work, or who requests time off from work, because the employee tested positive for COVID-19 or is isolating or quarantining due to COVID-19 symptoms or exposure.

Further, employers may not rescind an offer to employ or contract with an applicant or decide not to employ or contract with an applicant, who has tested positive for COVID-19 or is isolating or quarantining due to COVID-19 symptoms or exposure.

The ordinance is in effect until March 6, 2023.

The ordinance and poster can be found here.

What do employers need to do?
Employers with worksite locations inside San Francisco must display this notice at every job site within the city. Employers should make attempts to distribute the poster using any reasonable means, including emails, or other electronic means like posting to their internal web-based or app-based platforms. Employers should provide the notice in any language spoken by at least 5% of the employees who are at the workplace or job site.

February 2021 California HR Legal Updates

Ninth Circuit Decision Impacts Employers Expense Reimbursement Procedures

Update Applicable to:
All California employers.

What happened?
The Ninth Circuit Court of Appeals held that an employer’s per diem expense reimbursement payments functioned as compensation for work rather than business expense reimbursements. As a result, the employer was required to factor those per diem payments into employees’ “regular rate of pay.” An employee’s regular rate of pay is used to calculate overtime under the Fair Labor Standards Act (FLSA) and California Labor Code. It is also used to calculate double-time, sick leave, and reporting time pay in California.

What are the details?
The following breakdown of the applicable court case and what it may mean for employers is provided by the California Labor and Employment Law Blog.

The Case: Clarke v. AMN Services

AMN is a healthcare staffing company that places hourly-paid clinicians on short-term assignments. Each week AMN paid traveling clinicians a per diem amount to reimburse them for the cost of meals, incidentals, and housing while working over 50 miles away from their homes. AMN did not report these payments as wages and classified them as tax-exempt.

AMN used a number of factors to calculate the per diem payment, including the extent to which clinicians worked their scheduled shifts. Notably, under the per diem policy, the payments could decrease if clinicians worked less than their scheduled shifts, and work hours in excess of those scheduled could be “banked” and used to “offset” missed or incomplete shifts. Additionally, AMN provided “local” clinicians per diem payments under the same policy, but such payments were reported as taxable wages.

The Ninth Circuit determined that these characteristics indicate that the per diem payments to traveling clinicians functioned as compensation for hours worked, and not expense reimbursements. The court relied heavily on AMN’s decision to pay both local and traveling clinicians under the same per diem policy but treat payments to local clinicians as wages. The Court also noted that “AMN offers no explanation for why ‘banked hours’ should effect” per diem payments, and found “the only reason to consider ‘banked hours’ in calculating” per diems is to compensate clinicians for hours worked.”

“Many California employers implement a business expense reimbursement policy aiming to fully reimburse employees for all expenses they incur, while (1) minimizing administrative burdens and expenses, and/or (2) avoiding the creation of preferential work assignments and a perverse incentive for employees to “incur” expenses.

The process of submitting, reviewing and processing expense reimbursements is cumbersome. It also can be a liability minefield. Generally, an employer must reimburse an employee when it knows or had reason to know the employee incurred a necessary business expense. Thus, employers may be obligated to reimburse employees even if they do not actually request reimbursement. This issue leads some employers to adopt a flat-sum reimbursement policy in which the amounts paid are at least partially fixed, such as AMN’s per diem policy. And they often issue these payments automatically, without obtaining documentation of the expenses from employees. This issue is especially important during the COVID-19 pandemic because California employers often use fixed expense reimbursement amounts for computer and other expenses for remote workers.

The Clarke decision should concern any employer with a business expense policy that includes such flat-sum or automatic reimbursement payments. Significant liability can arise if reimbursement payments, in whole or in part, are deemed to function as wages that must be factored into the regular rate of pay. And, of course, plaintiffs arguing such payments were actually “wages” may then also claim they were not properly reimbursed for their business expenses. Employers should carefully review any flat-sum or automatic reimbursement policies and procedures to ensure that they do not present any of the dangers illustrated in the Clarke decision.”

What do employers need to do?
Employers utilizing per diem reimbursement procedures should review the facts of the case and update their workplace policies if there seem to be too many similarities. Clients may need to consult their employment attorney if they have questions.

 ________________________________________________________________________________

Various “Hero” Hazard Pay Ordinances Adopted Around the State

Update Applicable to:
Large California grocery store employers with employees located in Long Beach, Santa Monica, Los Angeles, or Oakland.

What happened?
Several cities and counties have passed ordinances requiring specific employers to pay hazard pay to their employees while they work during the COVID-19 pandemic.

What are the details?
Currently, three main cities in California have passed some sort of ordinance related to “hero” or hazard pay for these employees, while one, Santa Monica, is still tentative. The impacted employers vary from each ordinance but generally speaking, they all impact large grocery store operators in the state. 

Included below are summaries of who each of these ordinances apply to with a link to an article covering the ordinance.

Long Beach’s Ordinance applies to “grocery stores” with more than 300 grocery workers nationally and more than 15 employees per grocery store within the city of Long Beach.

Los Angeles’ Ordinance (the ordinance has passed as of early February 2021) applies to large publicly traded employers, or employers that have at least 300 employees nationwide and more than 10 employees per store in the unincorporated areas of Los Angeles County.

Oakland’s Ordinance applies to employers that operate large grocery stores in Oakland. Specifically, a “covered employer” is one who employs 500 or more employees nationwide, or is a franchise associated with a franchisor or a network of franchises with franchisees that employ more than 500 employees in the aggregate, regardless of where those employees are employed.

Santa Monica is still tentative, and is still waiting “for county supervisors to finalize their own ordinance.” However, it should be expected in the near future.

What do employers need to do?
Large grocery store employers should review the linked articles to review the necessary changes that may be required of them in various locations.

_________________________________________________________________________________

COVID-19 Sick Leave Programs Extended

Update Applicable to:
Most Sonoma County, San Francisco, and City of Los Angeles employers.

What happened?
Employers in these three jurisdictions will need to continue to provide their existing COVID-19-related paid sick leaves that are required of them due to local ordinances. Each order has been extended for varying amounts of time with slight alterations, like no longer being applicable for non-profit companies, and extending the COVID-19 sick pay hours bank without refreshing it.

An article that does a great job of summarizing the changes and duration of the increases in each area can be found here.

What do employers need to do?
Employers in these areas should read the linked article above and possibly train their management staff on the changes if needed.

January 2021 California HR Legal Updates

DFEH Releases Family and Medical Leave Tool Kit

Update Applicable to:
All California employers with five or more employees.

What happened?
The Department of Fair Employment and Housing (DFEH), the administrative agency charged with enforcing the California Family Rights Act (CFRA), has released new documentation for Family and Medical Leave that reflects the expansion of CFRA which went into effect on January1, 2021.

What are the details?
These new documents include the required poster for employers for both Family and Medical Leave as well as for Pregnancy Disability Leave. Employers should be sure to update their posters and new hire and leave packets to include the revised information, in addition to relevant company policies and procedures pertaining to leave.

All the documents mentioned above can be found on this webpage.

What do employers need to do?
California employers may bookmark the webpage in case they ever are to need these resources or would like to double check facts against the state provided fact sheets.

_________________________________________________________________________________

 City of San Jose Extends and Expands Its Supplemental Paid Sick Leave

Update Applicable to:
California employers with employees located in San Jose or working a majority of their time in San Jose.

What happened?
The City of San Jose recently passed an ordinance extending its supplemental paid sick leave ordinance until June 30, 2021 and expanding it to apply to all employers with employees working in San Jose.

What are the details? 
When it was first passed, San Jose’s supplemental paid sick leave ordinance was set to expire on December 31, 2020. In late 2020, the City committed to extending the ordinance into 2021 but waited to see if the Emergency Paid Sick Leave (EPSL) provided under the Families First Coronavirus Response Act (FFCRA) would be extended before taking action. When the federal government did not extend the FFCRA, the City of San Jose passed a revised ordinance that extends the City’s supplemental sick leave until June 30, 2021. The ordinance is retroactive to January 1, 2021.

San Jose’s original ordinance was designed to provide sick leave to employees who did not receive EPSL under the FFCRA; thus, it only applied to employers with 500 or more employees. Because the FFRCA was not extended into 2021, the City of San Jose decided to expand its ordinance to apply to all employers with employees in the City of San Jose, regardless of the size of the employer. That means that San Jose’s supplemental paid sick leave is now available to all employees working in the city.

The reasons to use the supplemental paid sick leave have not been altered. In addition, the city has decided not to grant additional time to employees who may have already exhausted their 80 hours of supplemental paid sick leave.

The revised ordinance can be found here.

What do employers need to do?
San Jose employers should review the above information and update their workplace policies to reflect the changes.

January 2021: Cal/OSHA Updates FAQs for COVID-19 Emergency Temporary Standards

Update Applicable to:
Most California employers. Excluded are workplaces with one employee, workplaces that are now working remote, and employees who are covered by the Aerosol Transmissible Diseases regulation.

What happened?
California Occupational Safety and Health (Cal/OSHA) further updated its COVID-19 Emergency Temporary Standards Frequently Asked Questions in an attempt to provide more clarification and answer questions the agency has received about the COVID-19 Emergency Temporary Standard (ETS) that went into effect November 30, 2020.

What are the details?
The new questions touch on the following subject:

  • Exclusion Pay and Benefits
  • Testing
  • Exposed Workplace/Outbreaks
  • Return-to-Work Criteria
  • Possible Critical Infrastructure Waivers
  • Enforcement
  • Physical Distancing
  • Vaccines

The full FAQ can be found here.

Specifically, the new questions and answers are listed at the bottom of the webpage under the “FAQ Revision and Updates” header.

What do employers need to do?
An employer with questions regarding the COVID-19 Emergency Temporary Standards should review the FAQ to see if they have addressed their concern.

December 2020: California Small Business Tax Credit Enrollment Now Open

What happened?
Senate Bill 1447 was enacted on September 9, 2020, and allows a small business hiring credit against California state income taxes or sales and use taxes to certain California qualified small business employers that receive a tentative credit reservation.

What are the details?
Starting December 1, 2020, the California Department of Tax and Fee Administration (CDTFA) will begin accepting applications for tentative small business hiring credit reservation amounts through an online reservation system. The credit reservations will be allocated to qualified small business employers on a first-come, first-served basis. The reservation system will be available from December 1, 2020 at 8:00 a.m., through January 15, 2021. Please note, this credit only applies to California small businesses that meet the following qualifications:

  • Employed 100 or fewer employees as of December 31, 2019, and
  • Suffered a 50 percent decrease or more in income tax gross receipts (generally, all income less returns and allowances), when comparing second quarter 2020 to second quarter 2019.

Small businesses may receive up to $100,000 in tax credits. An employer can be eligible for up to $1,000 for each net increase in qualified employees. This is calculated by subtracting the average monthly fulltime equivalent qualified employees employed during the three-month period (April 1, 2020 through June 30, 2020) from the average monthly full-time equivalent qualified employees employed during the five-month period (July 1, 2020 through November 30, 2020).

The CDTFA website hosts all the information available about this tax credit and has the link to the web portal where small businesses may apply. It can be found here.

Note: This is separate from the $500 million small business stimulus package that Governor Newsom has mentioned recently. The Office of the Small Business Advocate is still working out the details. A communication will be sent out separately about that stimulus package once more is known.

What do employers need to do?
Employers should review the information on the website and contact their HR representatives if they have any questions.

November 2020 California HR Legal Updates

Prop 22 Passes Grants Special Rules for Gig Workers

What happened?
The Uber and Lyft backed Proposition 22 has passed in the 2020 election.

What are the details?
Proposition 22 creates an exemption to AB 5, a worker classification law using the Dynamex court case’s ABC test to classify all workers. Many exemptions have applied to AB 5 since its passage, but gig workers had notably excluded.  Gig economy companies, like Uber and Lyft, spent vast sums of money to promote the passage of Proposition 22, to continue their current business model in California, spending upwards of $225 million in promotional costs.

The proposition creates a new exception to AB 5 by declaring app-based drivers be classified as independent contractors rather than employees. In addition, it will require drivers be paid no less than 120% of the minimum wage for the time they are engaged, as well as payment per mile. Additionally, network companies are required to provide healthcare subsidies and insurance coverage to drivers, develop anti-harassment policies, provide drivers with mandatory safety training, and conduct criminal background checks on network drivers.

Law firms, namely Littler Mendelson P.C., have noted that the passage of Proposition 22 may lead to other states or the federal government to have new conversations about the independent contractor status.

An article further explaining the impact of Proposition 22 can be found here.

You can read the full text of Proposition 22 here.

What do employers need to do?
Gig economy employers operating in California should review the conditions outlined in Proposition 22 to take advantage of the new exemption created for their workers.

_________________________________________________________________________________

Cal/OSHA Approves Emergency COVID-19 Standard

What happened?
On November 19, 2020, the California OSHA Standards Board adopted an emergency standard related to COVID-19 prevention in the workplace, imposing significant requirements on state employers.

What are the details?
The new standards can be in full effect as soon as November 29, 2020.

The new emergency standard will touch on nine new requirements for employers.

  1. A written COVID-19 prevention program
  2. A notice of protentional COVID-19 exposure and cases
  3. Physical distancing
  4. Face coverings and personal protective equipment
  5. Exclusion of COVID-19 cases – and possible new paid time off requirement
  6. General testing requirements
  7. Return-to-work criteria
  8. Workplace outbreaks
  9. Employer-provided housing and transportation

An article going in-depth on each of these requirements can be found here.

An additional article going over this information from a different approach can be found here.

What do employers need to do?
California employers should review the articles linked above and update their workplace policies to reflect the new requirements that will be expected of them.

_________________________________________________________________________________

The CDPH Provides Guidance on AB 685

What happened?
The California Department of Public Health (CDPH) has issued two new pieces of guidance regarding AB 685.

What are the details?
Effective January 1, 2021, AB 685 will create new reporting requirements related to COVID-19 for employers. AB 685’s reporting requirements rely on technical jargon unfamiliar to the majority of employers. In response, the CDPH has issued two resources to clarify what the meaning of some terms contained in AB 685 will mean, and other questions in a Frequently Asked Questions (FAQ) style.

The first resource defines terms used in AB 685. Terms include COVID-19 outbreak, infectious period, and laboratory-confirmed case of COVID-19.

The second resource addresses issues employers have about AB 685 in the form of a FAQ. These questions include:

  • “Who qualifies as a COVID-19 case?”
  • “What information am I required to give workers?”
  • “What does AB 685 authorize Cal/OSHA to do?”

The first resource, containing useful definitions, can be found here.

The second resource, the FAQ piece, can be found here.

A summation article reviewing the aforementioned resources can be found here.

What do employers need to do?
Employers should review the resources while creating workplace policies to ensure compliance with AB 685.

_________________________________________________________________________________

DWC Announces 2021 Temporary Total Disability Rates

What happened?
The California Division of Workers’ Compensation (DWC) announced that the minimum and maximum temporary total disability (TTD) rates would increase on January 1, 2021.

What are the details?
The new rates for TTD are as follows:

This increase is required by California Labor Code section 4453(a)(10), which mandates a parallel TTD rate increase alongside any increase in the State Average Weekly Wage.

The announcement from the DWC can be found here.

An article providing some additional information can be found here.

What do employers need to do?
As the TTD is unique to each state, employers will not need to take any action regarding this update.

_________________________________________________________________________________

San Francisco Passes Tax on Highly Compensated CEOs

What happened?
The voters of San Francisco have passed Proposition L, a tax that will affect companies who compensate their Principal Executive Officer(s) at a rate greater than 100 to 1 when compared to the median compensation paid to the business’ employees based in San Francisco.

What are the details?
The tax will be administered through payroll expenses. Specifically, “for businesses other than an administrative office, the tax rates would be a percentage of gross receipts attributable to the City and, depending on the executive pay ratio, would range from 0.1% to 0.6%.  For businesses engaged in business as an administrative office, the tax rates would be a percentage payroll expense attributable to the City and, depending on its executive pay ratio, would range from 0.4% to 2.4%.”

The full text of Proposition L can be found here.

An article summarizing this Proposition can be found here.

What do employers need to do?
Businesses based in and operating within the city of San Francisco should consult with their payroll technician if they fit the tax’s criteria to determine their next steps.

 ________________________________________________________________________________

SB 973 Reporting Requirement Guidance Published

What happened?
The California Department of Fair Employment and Housing (DFEH) has released guidance on the reporting requirements created by SB 973.

What are the details?
Following SB 973 employers will need to provide a pay data report to the DFEH, every year. For 2021, the report will be required by March 31, 2021. For now, the DFEH has only addressed the introduction section, which answers broad questions regarding the reporting requirements, and the filing requirements section, further outlining the filing process.

The DFEH plans to answer additional questions. Employers with questions regarding SB 973 are welcome to submit inquires to paydata.reporting@Dfeh.ca.gov.

The guidance can be found here.

What do employers need to do?
Employers with questions regarding the required pay data reports should review the guidance available.

_________________________________________________________________________________

SB 778 Training Deadline Approaching

What happened?
The training required by SB 778 needs to be administered before January 1, 2021, for employers to stay in compliance.

What are the details?
SB 778 requires employers with five or more employees to provide sexual harassment training to all supervisory employees for two hours, and at least one hour for all other employees. The deadline of January 1, 2021 has not been postponed due to the pandemic.

The DFEH has provided an online platform offering this training to employers, free of cost. The website can provide supervisory and nonsupervisory training. The training can be found here.

What do employers need to do?
Employers who have five or more employees and have not yet administered the required training should being the steps needed to satisfy the requirement, either through the free resource linked above or through their training program.

October 2020 California HR Legal Updates

Attorney General Proposes Third Set of Modifications to CCPA Regulations

What happened?
On October 12, 2020, the California Attorney General proposed a third set of modifications to the California Consumer Privacy Act (CCPA) regulations.

What are the details?
The new regulations will impact three major areas of the existing regulations.

  1. Offline Notices of Opt-Out Rights

Currently, Section 999.306 requires businesses that sell personal information to provide a notice of consumer’s rights to opt out. They provide for online notices and even require businesses that do not operate a website to provide an alternative documented method to inform consumers of the right to opt out. The proposed rules would include more specific instructions and examples. Specifically, it requires companies that collect personal information offline (think paper forms), to also provide the notice in an offline fashion.

  1. Consumer Methods for Requesting Opt-Out

The proposed regulations would insert a new subsection (h) to Section 999.315. This subsection would require the business’s methods for submitting opt-out requests to be easy to execute and require minimal steps, which cannot be so complicated as to subvert or impair a consumer opt-out attempt.

  1. Authorized Agent Requests

Previously, Section 999.326 allowed agents to opt-out in place of a consumer if they met the following criteria:

  • The consumer provides signed authorization permitting the agent to do so;
  • The agent verifies their own identity with the business; and/or
  • Directly confirm with the business that they provided the authorized agent permission to submit the request.

The new rules will add that the business may require the authorized agent to provide proof that the consumer gave the agent signed permission to submit the request. The new rules also allow the business to require the consumer to do either of the following:

  • Verify their own identity directly with the business; or
  • Directly confirm with the business that they provided the authorized agent permission to submit the request.

More information may be found on the proposed rules here.

The red lined version of the rule changes can be found here.

What do employers need to do?
Employers that make annual revenues over $25 million should keep an eye on the changing rules of the CCPA as they will impact their business operations daily. If needed, clients should consult their employment attorneys on possible changes that may be needed in the workplace. 

_________________________________________________________________________________

California Enacts Law Requiring Compensation Data Collection

What happened?
On September 30, 2020, Governor Newsom signed into law SB-973.

What are the details?
SB-973 creates a new, yet familiar, requirement for employers to report pay data to the Department of Fair Employment and Housing (DFEH). Specifically, the pay data report must include a breakdown of employees by race, ethnicity, and sex in 10 broadly defined job categories. The report must further include a breakdown of employee compensation in one of 11 pay bands used by the United States Bureau of Labor Statistics in its Occupational Employee Survey, ranging from a low “less than $19,293” to a high of “more than $208,000.” Employers will still use Form W-2 income for this report. The report will also need to include total hours worked by each employee within a given pay band during the reporting year.

Employers may feel a sense of déjà vu reading these requirements. The EEOC required a similar report in 2019 but quickly discontinued the requirement as the cost of collection was too high relative to the utility provided by the data.

The full text of SB-973 can be found here.

An article summarizing the SB can be found here.

What do employers need to do?
Employers should ensure their payroll information is up to date and that they are able to collect the relevant data about their workforce.

_________________________________________________________________________________

Department of Fair Employment and Housing Provides New Fair Chance Act FAQ and Regulations

What happened?
The DEFH has published a new FAQ about the Fair Chance Act. Additionally, new regulations have been created by the DFEH Council that impact criminal background checks.

What are the details?
The regulations added to the Fair Chance Act expand the definition of “applicant” to include individuals who are conditionally offered employment but begin working while an employer undertakes a post-offer consideration of the individual’s criminal history. The regulation explicitly states that “an employer cannot evade the requirements” of the Fair Chance Act or the regulation by treating an individual as having lost their status as an “applicant” by allowing them to begin working before the employer has completed its post-offer review of the applicant’s criminal history.

The regulations include other changes including:

  • expanding the scope of the Fair Chance Act by requiring that labor contractors and union hiring halls comply with the regulations when selecting workers for inclusion in pool or availability lists;
  • requiring client employers to comply with the regulations when selecting workers supplied by labor contractors and union hiring halls; and
  • specifying that while employers must not consider an applicant’s referral to or participation in a diversion program when making hiring decisions, employers may consider the programs as evidence of rehabilitation or mitigating circumstances after a conditional offer of employment has been made if offered as such by an applicant.

The new FAQ can be found here.

What do employers need to do?
Employers should review the FAQ and update their existing background check policies if needed.

_________________________________________________________________________________

California Department of Industrial Relations Increases Computer Professional and Licensed Physician/Surgeon Exemption Compensation Rate

What happened?
On October 16, 2020, the Department of Industrial Relations (DIR) announced the new compensation rate that computer professionals and licensed physician/surgeons must be paid in order to meet exemption status.

What are the details?
The DIR announced the new rate in a memo, stating that effective January 1, 2021, employers must pay their California computer professional employees a salary of at least $98,907.70 annually ($8,242.32 monthly) or an hourly wage of $47.48 every hour worked in order to maintain exemption status. Licensed physicians and surgeons must be paid a minimum of $86.49 to maintain exemption status. 

The announcement for computer professionals can be found here.

The announcement for licensed physicians and surgeons can be found here.

What do employers need to do?
Employers should connect with their payroll contact to ensure this increase in wage requirement is handled come January 2021. 

_________________________________________________________________________________

Cal/OSHA Upcoming Proposal Increases Employee Responsibility

What happened?
On September 17, 2020, the Cal/OSHA Board approved a petition to draft and submit for review a new COVID-19 emergency workplace safety standard.

What are the details?
The standard would protect California workers not covered by the Aerosol Transmissible Disease standards from exposure to COVID-19.

The standard would create new workplace safety regulations including:

  • Establishing a framework parallel to Cal/OSHA’s Injury Illness Prevention Program (IIPP), which requires a written employee protection plan.
  • Create a procedure to identify and evaluate COVID-19 hazards and exposure risks, as well as procedures to control the hazard of exposure.
  • Create procedures to respond to employees exposed to or diagnosed with COVID-19 and employees with COVID-19 symptoms.
  • Establish a job hazard analysis to track modes of COVID-19 workplace transmission and adopt preventive measures to minimize risk.

These proposed changes will be considered at the November 19, 2020 Cal/OSHA Board meeting.

What do employers need to do?
Employers should be aware of these changes and prepare to possibly change their workplace IIPPs should these changes be approved.

_________________________________________________________________________________

San Francisco Introduces New Requirements for Tourist Hotels

What happened?
On October 9, 2020, San Francisco passed Ordinance No. 208-20. This Ordinance creates new requirements for “Tourist Hotels” regarding cleaning and disease prevention standards and practices.

What are the details?
The Ordinance is effective November 8, 2020. A “Tourist Hotel” is defined as “any building or set of buildings containing six or more guest rooms or suites intended for commercial tourist use by providing accommodations to transient guests for a nightly (or longer) basis.” The Ordinance includes many cleaning requirements for these hotels to abide by, including:

  • Providing handwashing stations on every floor except in the case of housekeeping employees authorized to wash their hands in guest rooms;
  • Disinfecting porous and non-porous surfaces using the appropriate disinfectant; and
  • Installation of hand sanitizer dispensers at main entrances and exits used by employees and guests, and at other open high-contact public areas.

Hotels will need to provide new PPE to employees including masks, gloves, and face coverings. Additionally, hotel workers may reserve the right to refuse to work if they reasonable believe the work or working conditions pose a personal health risk to themselves or others because of a failure to comply with the ordinance.

An article providing a more comprehensive list of what is required of tourist hotels can be found here.

What do employers need to do?
Employers with tourist hotels in San Francisco should update their workplace policies and should begin looking at purchasing needed PPE, as soon as possible.

_________________________________________________________________________________

CDPH Issues New Guidance on COVID-19 Outbreak Reporting

What happened?
On October 16, 2020, the California Department of Public Health (CDPH) issued two pieces of guidance on COVID-19 reporting requirements.

What are the details?
The two pieces of guidance include information on how employers should be reporting outbreaks to local public health agencies right now. These requirements are very similar to AB 685, which was passed recently, but is effective on January 1, 2021. 

The first piece of guidance covers AB 685 and provides definitions that were previously ambiguous. The guidance does the following:

  • Clarifies that an “outbreak” is three cases within two weeks among workers, which resolves an ambiguity about potential exposures caused by sick customers visiting a retail space.
  • Clarifies that a “lab confirmed test” must be a test for live virus, not antibodies, which both the business community and Senator Pan had pushed for.

The second piece of guidance provides a loose discussion of AB 685. Notably, regarding when employers must report an “outbreak,” it states that employers are already required to report outbreaks pursuant to a third guidance document, which the CDPH amended the day after AB 685 passed but the CDPH did not publicize it at the time. Meaning that while AB 685 may not be officially effective until January 1, 2021, certain reporting aspects of it may be enforceable now.

An article covering AB 685 can be found here.

An article covering the new CDPH guidance can be found here.     

The first document providing guidance can be found here.

The second document providing guidance can be found here.

The third document providing guidance that is referenced by the CDHP can be found here.

What do employers need to do?
Employers should update their reporting practices to reflect the new expectations that the CDPH has created.

_________________________________________________________________________________

Uber and Lyft Ordered to Reclassify California Drivers

What happened?
On October 23, 2020, the California state appeals court affirmed a lower court’s ruling that Lyft and Uber must reclassify California drivers as employees.

What are the details?
In an ongoing legal battle, rideshare companies Uber and Lyft, have been ordered by a state appeals court to comply with a previous ruling. Uber and Lyft have been fighting to have their rideshare workers be considered independent contractors since the passing of AB5. Taking effect on January 1, 2020, AB5 has created a new set of rules that determine whether a worker is an employee or independent contractor. While many exceptions have been made to AB5, rideshare drivers have been left out so far. Outside of the now lost legal battle, Uber and Lyft have been trying to move around the courts and instead have supported a proposition to get their workers exempted from AB5. Proposition 22 will allow rideshare companies to exempt their drivers, specifically drivers who (a) provide delivery services on an on-demand basis through a business’s online-enabled application or (b) use a personal vehicle to provide pre-arranged transportation services for compensation via a business’s online-enabled application, from AB5.

Proposition 22 can be read here.

What do employers need to do?
Rideshare companies in California should keep a close eye on Proposition 22, as it may determine the trend for future exemptions for companies who operate on similar models.

October 2020: New Reporting Responsibility for Employers with Minor Employees

What happened?
On September 29, 2020, Governor Newsom passed AB 1963.

What are the details?
AB 1963 adds a human resource employee of a business with five or more employees that employs minors to the list of individuals who are mandated reporters. The bill also adds, for the purposes of reporting sexual abuse, an adult whose duties require direct contact with and supervision of minors in the performance of the minors’ duties in the workplace of a business with five or more employees to the list of individuals who are mandated reporters. The bill requires those employers to provide their employees who are mandated reporters with training on identification and reporting of child abuse and neglect. By imposing the reporting requirements on a new class of persons, for whom failure to report specified conduct is a crime, this bill would impose a state-mandated local program.

The full text of AB 1963 can be found here.

An article summarizing the bill can be found here.

What do employers need to do?
Employers with five or more employees employing minors should look to train either their human resource employees or the direct supervisor of the minor employees on the content discussed in this law.