Governor Newson signed a slew of employment related bills over the last few weeks. In this issue of Compliance Matters we provide a brief summary on many of them. In the coming weeks we will be dedicating several issues of Compliance Matters to provide more detail and clarity on some of the more complex and relevant laws listed below:
AB 9: Statute of Limitations for DFEH Complaints Extended
AB 9 amends the state's job bias statute, the Fair Employment and Housing Act ("FEHA"), to extend the statute of limitations from one year to three years. It also specifies that filing an intake form with the Department of Fair Employment and Housing ("DFEH") qualifies as filing a complaint with the DFEH for purposes of the statute of limitations. The bill becomes effective on January 1, 2020, and it specifies that it “shall not be interpreted to revive lapsed claims,” which would apply to claims based on alleged unlawful acts which occurred more than one year prior to the effective date, i.e., claims for which the prior one-year statute of limitations has already lapsed when the new law becomes effective. However, what is not entirely clear is the effect of the amendment on cases based on events
than a year prior to the effective date,
, based on events during 2019. AB 9 is silent as to whether claims based on alleged violations in 2019 will be subject to the one-year statute of limitations which was in effect at the time of the violation or the subject to the new three-year limitations period. However, the Senate Judiciary Committee's analysis of bill suggest that the new three-year statute will apply. It states that the general rule under California Supreme Court precedents is that an increased statute of limitations period ordinarily applies prospectively to govern cases that are pending when, or instituted after, the enactment takes effect, and that therefore the new law will "automatically extend the time to file for incidents that occurred before the effective date of the change in the law, but for which the limitations period had not yet expired on the date of the enactment.”
AB 51: Mandatory Arbitration Agreements
provides that an employer can no longer require an employee or applicant to sign an agreement to arbitrate claims for violations of the FEHA or the Labor Code. This bill presents a major change to the employment landscape. Virtually all California statutory claims brought by employees arise under the FEHA or the Labor Code. Under this new law, after December 31, 2019, an employer cannot condition employment or continued employment on agreeing to arbitrate these claims, or exchange employment-related benefits for such an agreement. The bill specifically states that arbitration agreements that require an employee to opt out of an arbitration program, or take any affirmative action in order to not be held to have agreed to arbitrate, are also now prohibited. The prohibits threatening, retaliating against, discriminating against or terminating an employee for refusing to consent to arbitration, provides that attorney’s fees may be awarded to a plaintiff enforcing their rights under this section, and makes violation of the bill a misdemeanor. AB 51 will likely be challenged, as preempted under the Federal Arbitration Act. However, this challenge will take some time, leaving uncertainty in its wake until it is resolved.
AB 170: Another Exemption for AB 5
directly relates to AB 5, which codified the new independent contractor test as we previously reported
AB 5 contains a number of exemptions. This new law adds one more exemption for a newspaper
working under contract with a newspaper publisher and a newspaper carrier working under contract, either with a newspaper publisher or newspaper distributor. The exemption for these individuals will expire January 1, 2021.
AB 547: Janitorial Industry
A.B. 547, known as the “Janitor Survivor Empowerment Act” intensifies registration, and training requirements on the janitorial industry. The new law requires that janitorial services companies now use a “qualified training organization” from a list of “qualified training organizations” that provide “peer trainers” for employers to use in the training of nonsupervisory employees. The new law goes into detail about who will come up with the list, what minimally qualifies an organization to be designated a qualified training organization, what training and experience the peer trainers will need, and how the organizations are to be paid. This new law requires the employer to pay the qualified organization $65 per participant, unless an alternative payment has been agreed to pursuant to a collective bargaining agreement. This new law imposes additional registration obligations on janitorial companies and provide for heavier fines for violations.
AB 673: Expansion of Labor Code Penalties
AB 673 expands Section 210 of the Labor Code that provides for an entirely independent penalty for the late payment of wages. Section 210, as amended, now authorizes an employee to pursue a private right of action to recover penalties for the late payment of wages through the Private Attorneys General Act (PAGA), and removes the authority for the Labor Commissioner to recover civil penalties in an independent civil action. The penalty under
Section 210 is (1) for an initial violation, $100 for each failure to pay each employee, and (2) for each subsequent violation, or any willful or intentional violation, $200 for each failure to pay each employee, plus 25% of the amount unlawfully withheld. An employee is only entitled to recover
the penalties provided for in Section 210
to enforce a penalty under PAGA,
but not both
, for the same violation. An employee could still be entitled to other penalties under the Labor Code for late payment of wages (like waiting time penalties).
AB 749: Settlement Agreements
This new law
prohibits employment dispute settlement agreements from containing provisions that prohibit, prevent, or otherwise restrict an employee claimant from obtaining future employment with the defendant employer, employer’s parent company, subsidiary, division, affiliate, or contractor of the employer. This means settlement agreements could not contain a "no rehire" provision. This prohibition applies to any settlement agreement related to an employee claim against an employer in court, before an administrative agency, in an alternative dispute resolution forum, or through an employer’s internal complaint process. An employer may still lawfully prohibit or restrict an employee from obtaining future employment with the settling employer if the employer has made a good-faith determination that the employee engaged in sexual harassment or sexual assault. Any provision in a settlement agreement entered into on or after January 1, 2020 that violates this prohibition shall be deemed void as a matter of law and against public policy.
AB 1291: Cannabis Licensing
AB 1291 amends Section 26051.5 of the Business and Professions Code, relating to Cannabis licensing. Previously, an "applicant" with 20 or more employees needed to provide a statement that it would enter into or has already entered into a labor peace agreement. The new law requires such statement to be notarized. Additionally, AB 1291 states that an "applicant" with
20 employees that has not entered into a labor peace agreement must provide a notarized statement as part of its application indicating that it will enter into and abide by the terms of a labor peace agreement within 60 days of employing its 20th employee.
An "applicant" is defined as an owner applying for a state license to sell recreational cannabis. A "labor peace agreement" is defined as an agreement between a licensee or applicant and a bona fide labor organization that prohibits labor organizations from engaging in picketing, work stoppages, boycotts, and any other economic interference with the business. In return, the licensee or applicant agrees not to disrupt efforts by the union to communicate with, and attempt to organize and represent, its employees and to provide the union with access to its employees.
SB 142: Lactation
SB 142 enacts some significant new requirements related to lactation rooms. Currently, employers are required to make reasonable efforts to provide employees with the use of a room or location other than a bathroom in close proximity to the employee’s work area, for the employee to express breast milk in private. The new law repeats that a lactation room shall not be a bathroom, and shall be in close proximity to the employee’s work area. However, it adds the requirement that the room must be shielded from view and free from intrusion while the employee is lactating. SB 142 also provides that an employer shall provide access to a sink with running water and a refrigerator suitable for storing milk (or another cooling device) in close proximity to the employee’s workplace. The new law also provides that a lactation room must (1) be safe, clean, and free of hazardous materials, as defined; (2) contain a surface to place a breast pump and personal items; (3) contain a place to sit; and have 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. The new law contains a number of exceptions from these requirements and mandates that the employer develop a policy regarding lactation accommodation, containing certain elements.
SB 271: Expansion of disability insurance and family leave benefits
SB 271 expands state disability insurance and family leave benefits for film and TV workers whose jobs here take them out of state. Currently, employees are eligible for the payment of unemployment compensation benefits if they are unemployed through no fault of their own. The new law amends the definition of "employment" for motion picture production workers. SB 271 provides that when the employee's service is not localized in the state but some of the service is performed in the state, then the worker’s entire service qualifies as employment if their residence is in the state. SB 271 provides that service performed by a motion picture production worker outside the state will be considered temporary or transitory for the purposes described above if the worker is (1) a resident of the state, (2) is hired and dispatched from the state, and (3) intends to return to the state to seek reemployment at the conclusion of the assignment outside the state.
SB 671: Print Shoot Employees
Current state law generally requires that if an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately. Employees engaged in the production or broadcasting of motion pictures are entitled to receive payment of wages earned and unpaid at the time of the termination by the next regular payday. This bill establishes similar specific provisions for a print shoot employee.
Specifically, a print shoot employee is entitled to receive payment of the wages earned and unpaid at the time of termination by the next regular payday. A "print shoot employee” is defined as "an individual hired for a period of limited duration to render services relating to or supporting a still image shoot, including film or digital photography, for use in print, digital, or internet media." This would include hiring a model for a photo shoot and would now permit the employer to pay the model on the next regular pay date following completion of the shoot. Payment shall be deemed to have been made on the date that the employee’s wages are mailed to the employee or made available to the employee at the location specified by the employer, whichever is earlier. Further, the willful refusal to pay wages due and payable after demand is made, or falsely denying indebtedness for an employee’s wages with prescribed intent is currently a crime. Accordingly, the bill imposes a state-mandated local program in light of the fact that the violation of these new wage payment provisions would be a crime. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
SB 688: Failure to pay wages: penalties
Current law under California Labor Code Section 1197.1 provides that an employer or other person acting individually or as an officer, agent, or employee of another person who pays or causes to be paid to any employee a wage less than minimum wage or by order of the commission, shall be subject to a civil penalty, restitution of wages, liquidated damages, and waiting time penalties. Section 1197.1 also provides that the Labor Commissioner can issue a citation to the person who paid or caused to be paid a wage less than the minimum wage. Section 1197.1 has been amended to authorize the Labor Commissioner to issue a citation to recover restitution of the amounts owed to the employee that has paid a wage less than the wage set
in excess of minimum wage.
Further, Section 1197.1 requires an employer seeking to file a writ of mandate with the court contesting an assessment of a civil penalty by the Labor Commissioner to post an undertaking in a specified amount. Section 1197.1 has been amended to read that some or all of the undertaking may be forfeited
to the Labor Commissioner for appropriate distribution
(no longer the affected employee) if the employer does not pay the court’s judgment regarding wages or damages owed within 10 days of the entry of the judgment.
SB 707: Enforcement of Arbitration Agreements
This new law imposes penalties on employers that do not timely pay fees relating to arbitration of employment disputes. Specifically, under SB 707, if an employer fails to pay the required fees to initiate arbitration within 30 days of its due date, the employer will be deemed to have materially breached the arbitration agreement. The employee then has the option to either withdraw from arbitration and file their claims in court, or compel arbitration under the agreement. Likewise, if an employer fails to pay the required fees during the arbitration proceedings within 30 days of their due date, it will be found in material breach of the arbitration agreement. Under the new law, should this occur, the employee then has the options to, withdraw the claims from arbitration and proceed in court; continue in arbitration provided the arbitration company agrees to continue administering the arbitration; go to court to compel the employer to pay arbitration fees under the contract; or pay the unpaid fees and recover such fees from the employer at the end of the proceedings. Lastly, in an effort to increase diversity in arbitration, the new law would require arbitration companies to begin reporting certain demographic data.
SB 778: Harassment Training
As we previously reported
amended the compliance deadline for harassment training. Specifically, the amendment states that for non-supervisory employees, employers have until January 1, 2021 to provide the mandatory training to employees and must provide that training once every two years thereafter. Additionally, it also states that employers who have already completed their training in 2019 need not conduct additional training before January 2021, but instead, complete it by their respective two-year deadlines (i.e. by the end of 2021). Similarly, employers who have conducted training in 2018 must conduct their training before their two-year mark in 2020 (and every two years thereafter). For employers that employ seasonal, temporary, or other employees that are hired to work for less than six months, beginning January 1, 2020, they are required to provide training within 30 calendar days after the hire date or within 100 hours worked, whichever occurs first.
If you have any questions about the matters discussed in this issue of Compliance Matters, please call your firm contact at 818-508-3700 or visit us online at www.brgslaw.com
Richard S. Rosenberg
Katherine A. Hren
Ballard Rosenberg Golper & Savitt, LLP