Hunton Employment & Labor Perspectives

With the new year comes newly-enacted laws in California. Governor Gavin Newsom signed several new laws during the last legislative session, which went into effect January 1, 2020. Is your company ready for these changes?

• Minimum Wage Increased: Minimum wage increased to $13.00 per hour for California employers with 26 or more employees and to $12.00 per hour for California employers with 25 or fewer employees.
• New Harassment Training Requirements: Under SB 778, employers with five or more employees have until January 1, 2021 to comply with the statutory requirements under SB 1343 regarding bi-annual sexual harassment prevention training. Employers must provide two hours of sexual harassment prevention training to supervisors and one hour of sexual harassment prevention training to other employees.
• Hairstyles Protected Under FEHA: Under SB 188 (the CROWN Act), “protective hairstyles” such as braids, locks, and twists, are now included within FEHA’s protection against race discrimination, particularly if they are historically associated with race.
• Lactation Accommodation Requirements Expanded: Under SB 142, employers with 50 or more employees are required to provide a lactation room or other location for expressing breast milk that (1) is safe, clean, and free of hazardous materials; (2) has a surface to place a breast pump and personal items; (3) has a place to sit; and (4) provides access to electricity or alternative devices, including, but not limited to, extension cords or charging stations, needed to operate an electric or battery-powered breast pump. Employers are also required to provide access to a sink with running water and a refrigerator suitable for storing milk close to the employees’ workspace. If a refrigerator cannot be provided, employers are permitted to provide another cooling device suitable for storing milk. Employers with fewer than 50 employees may be granted an exemption if they are able to show that they would suffer an undue hardship.
• No-Rehire Provisions in Settlement Agreements Prohibited: Under AB 749, settlement agreements can no longer prohibit employees from being re-hired with the employer, unless certain narrow exceptions are met.
• FEHA Statute of Limitations Extended to 3 Years: Under AB 9, the statute of limitations for employees to file claims with the Department of Fair Employment and Housing (DFEH) for violations of the Family Employment and Housing Act was extended from one to three years. In line with this, employers should revisit their document retention policies.
• New Independent Contractor Test Codified: Under AB 5, the “ABC Test” set forth in Dynamex Operations West, Inc. v. Superior Court of Los Angeles was codified. In Dynamex, the California Supreme Court announced a new test for determining whether workers are properly classified as independent contractors. Under the test, employees must meet all three of the following requirements to be classified as independent contractors: (1) the worker is free from the control and direction of the hiring entities’ business in connection with the performance of the work, both under the contract for the performance of such work and in fact; (2) the worker performs work that is outside the usual course of the hiring entity’s business; and (3) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity. Numerous challenges to this law are pending and working their way through the courts.
• Employers Waive Right to Compel Arbitration If Fees Not Timely Paid: Under SB 707, employers with arbitration agreements must pay the costs and fees associated with arbitration of employment claims within 30 days of the due date. A failure to do so constitutes a “material breach” and waives the employer’s right to compel arbitration.

Employees May Sue For Late Payment of Wages Penalties: Under AB 673, employees now have a private right of action to recover civil penalties for unpaid wages.  These penalties previously were only recoverable by the Labor Commissioner. Penalties under AB 673 include initial fines of $100 for each failure to pay each employee and fines of $200 and 25% of the amount unlawfully withheld for each subsequent violation or any willful or intentional violation. Nevertheless, employees may not seek penalties under both AB 673 and the Private Attorney General Act (PAGA) for the same violation.