THIS POST HAS BEEN UPDATED WITH THE GOVERNOR’S ACTION ON EACH BILL DISCUSSED.
Anticipation mounts as we watch for California Governor Gavin Newsom’s action on bills of immediate importance to employers. The Governor has until September 30, 2020 to sign or veto the following bills of concern:
SB 1383 – Historic Extensions of California Family Rights Act Obligations
UPDATE! Governor Newsom signed SB 1383 on September 17, 2020. See my post here for a comprehensive discussion of the bill and its consequences. The new provisions become effective January 1, 2021.
If signed by the Governor, this bill will extend the California Family Rights Act (CFRA) to include private sector employers of five or more employees. Currently, private employers are subject to CFRA only if they employ 50 or more employees. If enacted, the measure will impose the often involved obligations and corresponding risk of liability on countless small employers throughout the state. CFRA requires employers to provide up to 12 workweeks of unpaid leave each 12-month period for family and medical leave.
The bill, if approved by the Governor, will also expand CFRA by permitting employees to take leave to care for the serious health condition of the employee’s grandparent, grandchild, sibling or domestic partner. Presently, other than leave to care for the employee’s own health condition, CFRA entitles employees to take such leave to care for only the employee’s child, parent or spouse. Thus, if the measure is enacted, California employers large and small will be required to provide job-protected CFRA leave in circumstances not previously encompassed by CFRA.
Importantly, the federal corollary to CFRA, the Family Medical Leave Act (FMLA), does not require employers to grant leave to care for an employee’s grandparent, grandchild, sibling or domestic partner. Upon SB 1383 becoming law, if it does, employers will be confronted with employees seeking CFRA leave to care for, say, a grandparent, and later in the same 12-month period seeking FMLA leave to care for the employee’s child, parent or spouse. In such circumstances, a question will arise as to whether the employee is entitled to a total of 24 weeks of leave in a single 12-month period, that is, 12 weeks under CFRA and an additional 12 weeks under the FMLA.
The Governor has advocated for expanding obligations and rights under CFRA in respects similar to what would be accomplished by SB 1383. The Governor is generally expected to sign SB 1383, in which case the amendments to CFRA set out in the bill will go into effect on January 1, 2021.
AB 3216 – New Union-like Recall and Retention Obligations
UPDATE! Governor Newsom VETOED AB 3216 on September 30, 2020. His veto message is here.
The bill would obligate subject employers, before being able to lawfully hire other applicants, to offer to recall former employees who were laid off in relation to a state of emergency declared by the Governor (emergencies not limited to COVID-19). The bill takes on perhaps unanticipated significance now, as tragic fires decimate immense swaths of California, leaving businesses in ruin.
The employers subject to the bill are hotels, private clubs, event centers, airport hospitality operations, airport service providers and enterprises providing janitorial, building maintenance or security services to office, retail or other commercial buildings.
The employees owed recall rights under the bill are (1) those who were laid off due to a governmental shut down or other order; and, (2) those who lost their jobs for economic reasons related to a state of emergency. Covered employers would be required to offer former employees information on available positions whenever the available position is “the same or similar” to the position the former employee held or the former employee would be qualified for the open position “with the same training that would be provided to a new employee hired into that position.” The measure would obligate employers to hire qualified former employees, where available, in order of seniority and in preference over other applicants.
The bill also addresses a second circumstance: rights of former employees laid off in relation to a state of emergency and, particularly, where the former employer was sold, the assets were sold, the form of organization of the business changed (e.g., from LLC to corporation) or the employer relocated the former employee’s worksite. In those instances, the successor employer would be required to hire from among the former employer’s laid off employees for six months after the successor employer opens for business. Moreover, the successor employer would be required to retain each former employee hired for 90 days. During the 90-day “transition period,” such employees would not be subject to discharge without cause.
AB 3216 is similar to ordinances enacted by Los Angeles, Long Beach, San Francisco and other local jurisdictions. The impact of the bill, if signed by the Governor, though, would be more dramatic as the bill would impose its obligations on the covered employers throughout California.
Governor Newsom has not taken a public stand on the bill. If signed by the Governor, the bill, which would enact Labor Code section 2810.8, would go into effect on January 1, 2021.
SB 973 – New Pay Data Reporting to the DFEH
UPDATE! Governor Newsom signed SB 973 on September 30, 2020. The requirements become effective January 1, 2021.
The measure would require subject employers to file a report annually with the California Department of Fair Employment and Housing (DFEH) providing information on the number of employees by race, ethnicity and sex in each of 10 broad exempt and non-exempt position categories. Private sector employers having 100 or more employees and which are required to file an annual Employer Information Report (EEO-1) under federal law would be subject to SB 973.
The bill would require employers to file their first reports no later than March 31, 2021. Annual reports would then be required to be filed no later than March 31 of each year.
Importantly, the bill would require the DFEH to provide employers’ reports to the California Labor Commissioner’s Division of Labor Standards Enforcement (DLSE) on request, presumably for use in DLSE investigations and enforcement actions.
The bill raises the specter of public access to employers’ reports, including, potentially by plaintiff’s attorneys. In that regard, the bill provides that the DFEH and DLSE shall not make public information from employer reports that identifies any particular employee, at least until after either agency undertakes an investigation or enforcement proceeding and then only to the extent necessary. The bill also provides that such individually identifiable information shall not be disclosed pursuant to a request under the California Public Records Act. By its express terms, the bill does not appear to otherwise bar public disclosure of the reports or their contents.
Importantly, the bill would empower the DFEH to enforce California’s Equal Pay Act, in addition to the Labor Commissioner’s current enforcement authority.
Under the measure, employers with multiple “establishments” in the state would be required to submit a report for each location and a consolidated report that includes all employees. The bill defines “establishment” as “an economic unit producing goods or services.” Given this provision, the bill would impose a double layer of burden and expense on retail, manufacturing, hospitality, service and other types of businesses with multiple manufacturing, sales, service or production sites in the state.
Where an employer’s EEO-1 for a particular reporting year contains the same or substantially similar data as required under the bill, an employer would be allowed to submit its EEO-1 in compliance with the bill.
The Governor’s position on SB 973 is not publicly known. However, should the Governor sign off on the bill, it may likely equip state enforcement agencies and others with potentially potent data for use against employers, regardless of the misimpression such data may often give.
If signed by the Governor, the bill will become effective January 1, 2021, amending Government Code section 12930 and enacting new Government Code section 12999.
SB 1159 – Workers Compensation Claims for COVID-19: Presumptions against Employers
UPDATE! Governor Newsom signed SB 1159 on September 17, 2020. The four new statutes — Labor Code sections 77.8, 3212.86, 3212.87 and 3212.88 — go into effect immediately as urgency legislation. See my post here for a robust explanation of the new provisions.
The measure would include illness, injury or death due to COVID-19 as “injury” under the state’s Workers Compensation Act. The bill would create a disputable presumption that the injury arose in the course of the claimant’s employment and is compensable under the Act. Further, the bill would strengthen another presumption available under the Act, providing that, where it is not disputed within 30 or 45 days after being made, a workers compensation claim for a COVID-19 injury would be presumptively compensable, as opposed to the usual 90-day period for such presumption.
Due to its scope and the fact that, if signed by the Governor, the measure would be statutory in nature, the bill is of greater consequence than a similar Executive Order signed by Governor Newsom on May 6, 2020, namely, Executive Order N-62-20.
The bill would add four sections to the Labor Code, each of which would be repealed effective January 1, 2023 by their terms.
The bill would become effective immediately as urgency legislation, upon being signed by the Governor.
AB 685 – Potential Exposure to COVID-19 in the Workplace: New Employer Obligations
UPDATE! Governor Newsom signed AB 685 on September 17, 2020. See my post here for a thorough explanation of the legislation. The provisions become effective on January 1, 2021.
Under the measure, in the event an employer receives notice of potential exposure of an employee to COVID-19, the employer would be required to take all of the following actions within one business day:
— Give written notice to all employees who were at the worksite of the potentially exposed person within the infectious period that they may have been exposed to COVID-19;
— Give written notice of the potential exposure to the union representative, if any, of the employees described above;
— Give all employees who may have been exposed and their union representatives, if any, information regarding applicable COVID-19-related benefits under federal, state or local law; options for exposed employees, including types of available leave; and protections for employees against retaliation and discrimination; and,
— Notify all employees and their union representatives, if any, of the disinfection and safety plan the employer will implement and complete pursuant to Centers for Disease Control guidelines.
The notice obligations above would be triggered when the employer receives notice from the employer’s own testing protocols, a public health official, a medical care provider, an employee or a subcontracted employer that a COVID-19-infected person, a person subject to an isolation order or a person who then died due to COVID-19 was at the worksite.
The bill includes a provision that would make unlawful retaliation against an employee for disclosing a positive COVID-19 test or diagnosis or order to quarantine or isolate.
Finally, the bill would empower the California Division of Occupational Safety and Health to shut down an employer’s operation and bar entry into the workplace.
By their terms, several provisions of the bill, if enacted, would be automatically repealed effective January 1, 2023.
The Governor has expressed support for the bill. The bill will go into effect on January 1, 2021 if, as may be expected, the Governor signs it.
AB 1066 – Unemployment Insurance Benefits
UPDATE! Governor Newsom VETOED AB 1066 on September 24, 2020.
The bill provides that where employers fail to provide requested information or documents to the Employment Development Department within 10 days, a presumption will arise that the claimant is entitled to the maximum benefits available.
We will Update You!
Our California labor and employment team will continue to monitor Governor Newsom’s action on these bills and other developments in this, the cutting-edge state for employment law, and keep you updated.