The new year always bring a host of new laws. In this survey article, we highlight (1) state minimum wage increases, (2) legislative updates impacting equal employment opportunity laws, (3) COVID-19-related laws, and (4) the CalSavers Retirement Savings Program.
State Minimum Wage Increase: Effective January 1, 2022, California’s minimum wage increases to $14 per hour for employers of 25 or fewer employees and $15 per hour for employers of 26 or more employees. Please note that many cities and counties have their own local minimum wage laws that require higher hourly rates, for example, effective July 1, 2021, San Francisco’s Minimum Wage Ordinance is currently $16.32 per hour.
With the resulting state minimum wages increases, this also means that California employers should assess the salaries paid to their exempt employees. Generally, exempt employees must earn a minimum monthly salary of no less than two times the state minimum wage for full-time employment (2 x state minimum wage x 2,080 hours). Lab. Code Sect. 515(a). Of course, the “salary” test is just one of the components of properly classifying employees as “exempt” with the critical and more ambiguous test being whether the worker spends for than half their time performing exempt “duties.”
Equal Employment Opportunity
Litigation Settlement Agreements and Severance/Separation Agreements Relating to Employment: Effective January 1, 2022, SB 331 amended California Code of Procedure Section 1001 and Government Code Section 12964.5 to prohibit confidentiality and nondisparagement agreements that would prevent the disclosure of any type of workplace harassment, discrimination, or retaliation (that is, claims based on any protected characteristic under the Fair Employment and Housing Act). Additionally, if an employee is required to sign a severance agreement that contains confidentiality/nondisparagement provisions, the agreement needs to include the following language: “Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.” Gov’t Code Sect. 12964.5(b)(1)(B).
Also, effective 1, 2022, SB 331 (adding Gov’t Code Sect. 12964.5(b)(4)) requires all employees—even those under 40 years of age—be provided at least five days to consider a severance agreement and be advised that they have the right to consult an attorney regarding the agreement. The employee may sign the agreement before the end of the five-day review period “so long as the employee’s decision to accept such shortening of time is knowing and voluntary and is not induced by the employer through fraud, misrepresentation, or a threat to withdraw or alter the offer prior to the expiration of the reasonable time period, or by providing different terms to employees who sign such an agreement prior to the expiration of such time period.” Employers are advised to update any template or model severance agreements which may have been used in the past for employees under age 40 to ensure inclusion of the new five-days review period disclosure.
Maintaining Personnel Records for Four Years: SB 807 requires employers to retain personnel records for applicants and employees for four years from the date the records were created, or the date employment action was taken. Gov’t Code Sect. 12946(a).
If the employer has notice of a verified California Department of Fair Employment and Housing (“DFEH”) complaint, the employer must preserve all records and files until (1) the time period for filing a civil action has expired or (2) the first date after the DFEH complaint “been fully and finally disposed of and all administrative proceedings, civil actions, appeals, or related proceedings have terminated.” Gov’t Code Sect. 12946(b).
Poster – Electronic Posting: SB 657 (adding Labor Code Sect. 1207) allows employers to provide employees via email those workplace postings that would normally be physically posted in the workplace. Please note, though, that SB 657 does not obviate the employer’s obligation under California or federal law to physically post required posters in the workplace.
Minor Expansion to CFRA: As background, effective January 1, 2021, California employers with five or more employees found themselves being subject to the California Family Rights Act (“CFRA”). CFRA provides eligible employees with up to 12 weeks of unpaid, job-protected leave to care for their own serious health condition or a family member with a serious health condition, or to bond with a new child.
The California Legislature, through AB 1033, made minor amendments to CFRA. AB 1033 expanded the definition of “family member” to include “parents-in-law.” Additional changes to CFRA include the following procedural aspects of CFRA’s pilot mediation program for small employers (5 to 19 employees): requiring the DFEH to notify an employee in writing of the requirement for mediation under the DFEH’s small employer mediation program prior to filing a civil action if either the employer or employee request mediation, requiring the employee to contact the DFEH’s dispute resolution division to indicate whether they are requesting mediation, among other procedural measures designed to facilitate a mediated resolution.
COVID-19: As we are entering a little more than two years since the beginning of the pandemic, there is still no shortage of COVID-19-related legislation. The following are two significant developments.
Employer COVID-19 Notice Requirements: As background, Labor Code Sect. 6409.6 requires employers to provide notice within one business day to all employees who were “on the premises at the same worksite as the qualifying individual within the infectious period.” A “qualifying individual” means one who has a laboratory-confirmed case of COVID-19, has a positive COVID-19 diagnosis from a health care provider, is subject to a COVID-19-related public health order, or died due to COVID-19.
AB 654, which took effect on October 5, 2021, modified and updated Labor Code Sect. 6409.6. The following are some highlights:
- “Close Contact”: In addition to the above requirement concerning employees in the same worksite during the infectious period, employers must provide notice within one business day to employees who had “close contact with [a] qualifying individual[].” “Close contact” means “being within six feet of a COVID-19 case for a cumulative total of 15 minutes or greater in any 24-hour period within or overlapping with the high-risk exposure period as defined by this section. This definition applies regardless of the use of face coverings.” Sect. 6409.6(a)(2), (d)(1).
- Required Information: Employer must provide all employees who “were on the premises at the same worksite as the qualifying individual within the infectious period” “with information regarding COVID-19-related benefits to which the employee may be entitled under applicable federal, state, or local laws, including, but not limited to, workers’ compensation, and options for exposed employees, including COVID-19-related leave, company sick leave, state-mandated leave, supplemental sick leave, or negotiated leave provisions, as well as antiretaliation and antidiscrimination protections of the employee.” Sect. 6409.6(a)(3).
- Note:
- The statute defines “infectious period” to mean “the time a qualifying individual is infectious, as defined by the State Department of Public Health.” Prior guidance of the State Department of Public Heath stated the infectious period “begins 2 days” (a) before the employee develops symptoms or (b) the specimen of the first positive COVID-19 test was collected. See https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/COVID-19/Employer-Guidance-on-AB-685-Definitions.aspx#.
- The statute also excludes remote workers from the definition of “worksite.”
2022 COVID-19 Supplemental Sick Leave (Employers with 26 or More Employees): As many will recall from last year, California enacted a COVID-19 Supplemental Paid Sick Leave law (SB 95, which expired September 30, 2021) requiring employers with 26 or more employees to provide up to 80 hours of COVID-19 supplemental paid sick leave (“CSPLS”). With the expiration of SB 95 and the ongoing pandemic, there has been a movement to expand CSPLS.
On February 9, 2022, California Governor Gavin Newsom signed Senate Bill 114 (“SB 114”) into law, which adds Sections 248.6 and 248.7 to the California Labor Code. SB 114 provides beginning January 1, 2022 (retroactive) until September 30, 2022, CSPLS for employees working for employers with 26 or more employees. (Legislative Note: you may have heard about an AB 84; AB 84 is virtually identical, but Governor Newsom signed SB 114 rather than 84, so SB 114 is the relevant law).
Unlike SB 95, SB 114 provides CSPSL in two 40-hour buckets:
- COVID-19 Qualifying Reasons: employees who are unable to work or telework due to certain reasons related to COVID-19:
- Vaccine-Related: the employee is attending a COVID-19 vaccine or vaccine booster appointment for themselves or a family member; or is experiencing symptoms, or caring for a family member experiencing symptoms, related to a COVID-19 vaccine or vaccine booster;
- Caring for Oneself: the employee is subject to a public health quarantine order, isolating or quarantining as advised by a health care provider, or experiencing COVID-19 symptoms and seeking a medical diagnosis;
- Caring for a Family Member: the employee is caring for a family member who is subject to a public health quarantine order or is isolating or quarantining as advised by a health care provider or is caring for a child whose school or daycare is closed or unavailable due to reasons related to COVID-19 on the premises. Lab. Code Sect. 248.6(b)(1)(A)–(G).
Note: For each vaccine or booster, the employer may limit the total CSPSL to 3 days or 24 hours unless the employee provides a healthcare provider verification.
- Positive COVID-19 Test Result: The employee, or a family member for whom the covered employee is providing care, tests positive for COVID-19. Lab. Code Sect. 248.6(b)(2)(D).
The California Department of Industrial Relations has issued the following required poster regarding CSPLS: https://www.dir.ca.gov/dlse/COVID19resources/2022-COVID-19-SPSL-Poster.pdf. Also, the Department’s CSPLS Frequently Asked Questions can be found here: https://www.dir.ca.gov/dlse/COVID19Resources/2022-SPSL-FAQs.html.
CalSavers Retirement Savings Program: In an effort to help California’s workers start saving for retirement, the State of California enacted the CalSavers Retirement Savings Program (“CalSavers”). CalSavers requires employers who do not sponsor a retirement plan to participate in CalSavers, which is an automatic enrollment Roth (post-tax) individual retirement account (“IRA”) with no employer fees or fiduciary liability and is overseen by the CalSavers Retirement Savings Board. While CalSavers is not new, the new part is that employers with five or more employees must register with (“CalSavers”) or report that they are exempt from CalSavers by June 30, 2022.
Once an employer is registered with CalSavers, its workers are automatically enrolled in CalSavers, but workers can change how they participate in CalSavers, for example, change the contribution amount to an amount different than the default 5% payroll deduction, change investment options, or opt-out or opt-back into the program. For more information regarding CalSavers for both employers and workers, please see https://www.calsavers.com/.
This article is not an exhaustive list of the recent legislation, rules, and regulations affecting California employers. Nonetheless, the overview should prompt employers to make sure that they are aware of key legislation and review and update their employee handbooks, severance and nondisclosure agreements, and other policies for compliance-related purposes.
Scherer Smith & Kenny LLP remains available to guide you through these and other nuances in California’s dynamic and ever-changing employment law arena. For additional information, please contact Denis Kenny at dsk@sfcounsel.com, Ryan Stahl at rws@sfcounsel.com, or John Lough, Jr. at jbl@sfcounsel.com.
Written by John Lough, Jr.