Hunton Employment & Labor Perspectives

California law requires employers to provide employees written wage statements listing gross and net wages earned, hourly pay rates, hours worked, and other employment-related information. (Lab. Code, § 226.) If a claimant demonstrates that an employer has failed to comply with this requirement, the claimant is entitled to an injunction compelling compliance and an award of costs and reasonable attorney’s fees. (Id., subd. (h).)

California lawmakers are considering passing a bill that would give employees the “right to disconnect” by ignoring after-hours calls, emails, and other communications from their employers.  The bill, AB 2751, introduced by Assemblyman Matt Haney (D-San Francisco), would add a Section 1198.2 to the Labor Code that would effectively prevent employers from contacting employees outside of working hours, with limited exceptions.

On February 15, 2024, California lawmakers introduced the bill AB 2930.  AB 2930 seeks to regulate use of artificial intelligence (“AI”) in various industries to combat “algorithmic discrimination.”  The proposed bill defines “algorithmic discrimination” as a “condition in which an automated decision tool contributes to unjustified differential treatment or impacts disfavoring people” based on various protected characteristics including actual or perceived race, color, ethnicity, sex, national origin, disability, and veteran status. 

The legal path between employee arbitration agreements under the Federal Arbitration Act (“FAA”) and representative claims under the California Private Attorney General Act (“PAGA”) has been anything but smooth. A new (albeit unpublished and uncitable) case, Piran v. Yamaha Motor Corp., et al., No. G062198, 2024 WL 484845 (Cal. Ct. App. Feb. 8, 2024)(unpub.) (“Yamaha”), helps to illustrate the challenges and unanswered questions lingering in the wake of this rapidly-developing area of law.

California law requires employers with at least 100 employees and at least one California employee, to annually report pay, demographic, and other workforce data to the Civil Rights Department (“CRD”). This reporting is required under Government Code section 12999, and is part of the State’s efforts to promote equal pay. 

Starting January 1, 2024, eligible California employees are entitled to protected leave following a reproductive loss.  This law, California Senate Bill 848, codified at California Government Code section 12945.6, builds on California’s 2023 bereavement leave law, which provided five days of unpaid bereavement leave to eligible employees following the death of a covered family member.

On September 30, 2023, California Governor Gavin Newsom signed Senate Bill 553 creating new workplace violence prevention standards in California. The law consists of the first general industry workplace violence prevention requirement in the United States.  Under the law—specifically Labor Code Section 6401.9, this law amends California’s Code of Civil Procedure (“CCP”) to change the process by which employers may petition for temporary restraining orders (“TROs”) on behalf of employees.  CCP Section 527.8 previously allowed employers to petition for a ...

California employers must revamp their sick leave policies ahead of the New Year.  On October 4, 2023, Governor Newsom signed SB 616 into law, thereby amending the Healthy Workplaces, Healthy Families Act of 2014.  The new law goes into effect January 1, 2024.

On August 29, 2023, the California Court of Appeal issued a new opinion that, once again, changes how parties litigate and settle claims brought under California’s Private Attorneys’ General Act (“PAGA”).  See Robert Lacour v. Marshalls of California, LLC, et al., 94 Cal.App.5th 1172, 313 Cal.Rptr.3d 77.

Courts have repeatedly upheld California’s “strong public policy” prohibiting agreements that restrain individuals from “engaging in a lawful profession, trade, or business of any kind.”  Indeed, under Section 16600 of the California Business and Professions Code, these agreements—generally referred to as noncompete agreements—are generally void.  California now seeks to enshrine additional laws strengthening its prohibition on noncompete agreements.

California employers: take notice.  On July 24, 2023, the Office of Administrative Law approved changes to the Fair Employment and Housing Act (FEHA) regulations governing how California employers can use and consider criminal history in employment decisions.  These new changes, modifying Cal. Code Regs. Tit. 2, § 11017.1, go into effect on October 1, 2023.

Since the United States Supreme Court issued its decision in Viking River Cruises, Inc. v. Moriana in June 2022, trial courts in California have grappled with how to address the non-individual portion of a plaintiff’s PAGA claim that remains in court when a plaintiff’s individual PAGA claim is compelled to arbitration.[1]  Most trial courts have found it appropriate to stay the non-individual portion of the PAGA claim until the arbitration’s conclusion because that outcome would determine whether the employee retains standing to proceed in court.  On July 17, 2023, in the highly anticipated decision of Adolph v. Uber Technologies, the California Supreme Court addressed several questions in the post-Viking River landscape, including the propriety of staying non-individual PAGA claims pending the completion of arbitration. 

On May 31, 2023, the California Senate passed Senate Bill (“SB”) 553 creating new workplace violence prevention standards in California.  Under the Bill, employers are mandated to develop and maintain written prevention plans tailored to their specific workplaces.  The Bill is next set to go through policy committees in the State Assembly.  If approved by the Assembly and signed into law by the governor, the measure would likely go into effect next year.  However, several policymakers have expressed concern regarding the effect of the Bill as written; thus, it is far from assured that the legislation will be approved without changes.

On March 31, 2023, Los Angeles County’s COVID-19 emergency proclamation and orders that have been in place since March 2020, will officially end.  The Los Angeles County Board of Supervisors made this unanimous decision on February 28, 2023, in light of the recent progress in the COVID-19 pandemic.  The official end of Los Angeles County’s COVID-19 emergency will directly impact the status of employee COVID-19 Supplemental Paid Sick Leave and Paid Vaccine Leave, both of which expire on April 14, 2023.

California’s new bereavement leave law, which became effective beginning January 1, 2023, requires most employers to allow their employees to take up to five days of leave upon the death of certain family members.  Although previous bills providing for bereavement leave had been stymied by vetoes, Governor Gavin Newsom signed the new legislation—Assembly Bill (“AB”) 1949—into law as an “important step” to ensure that low-wage workers “can access the time off they’ve earned while still providing for their family.”  The new law makes California one of the few states requiring employers to provide bereavement leave.

Last week, the Ninth Circuit issued a decision holding that California employers can require employees to enter into mandatory arbitration agreements as a condition of their employment.  In the decision, Chamber of Commerce v. Bonta, No. 20-15291 (9th Cir., Feb. 15 2023), a three-judge panel reversed the Ninth Circuit’s own prior decision and found that Assembly Bill 51 (AB 51), which sought to impose criminal and civil penalties on employers who require employees to enter into such agreements, is preempted by federal law.

As we reported in September, effective January 1, 2023, employers face a host of pay disclosure and recordkeeping obligations.  The DLSE, the agency in charge of implementing the new law (codified at California Labor Code section 432.3), recently published guidance on the parameters of the new law.

In January 2021, the Ninth Circuit upheld a 2018 ruling by the Federal Motor Carrier Safety Administration (“FMCSA”), which found that federal law preempts California state meal and rest break laws as applied to drivers of property-carrying commercial motor vehicles.  A few months later, the United States Supreme Court denied a petition challenging the Ninth Circuit’s decision.  We previously wrote about the Ninth Circuit’s ruling, and the Supreme Court’s denial, in a post that you can read here.

The New Year usually means new laws for California employers.  This year, a new privacy law goes into effect with new mandates for employers to ensure that workers have more control over the collection and use of their personal information.

Come January 1, 2023, companies that employ California residents need to make sure they have taken the required steps to comply with the California Privacy Rights Act (“CPRA”), which amends the landmark California Consumer Privacy Act (“CCPA”) by expanding its protections to employees, job applicants, and independent contractors.

On September 18, 2022, California Governor Gavin Newsom signed into law Assembly Bill (“AB”) 2188, which prohibits employer discrimination based on employees’ use of cannabis off the job and away from the workplace.  While recreational use of cannabis, or marijuana, has been legal in California since 2016, the new law goes farther in specifically providing protections for employees who consume the substance.  AB 2188 makes California the most recent state to provide workplace protections for use of marijuana away from the workplace.  The bill will become effective beginning January 1, 2024.

On September 27, 2022, Governor Gavin Newsom signed Senate Bill 1162, which amends California Labor Code section 432.3, expanding employers’ pay disclosure and record keeping requirements in California.  

On June 8, 2022, the California Department of Public Health (CDPH) issued an Order with definitions for “close contact” and “infectious period” that conflict and abrogate the definitions for these terms within the California Division of Occupational Safety and Health’s (Cal/OSHA) current COVID-19 Emergency Temporary Standards (ETS).  Employers must comply with the new CDPH definitions, even where they differ from the text of the California ETS or federal Centers for Disease Control guidance.

San Francisco has significantly expanded its Family Friendly Workplace Ordinance to guarantee flexible or predictable work arrangements for employees with qualifying caregiver responsibilities when the employee provides notice of their preferred arrangement, unless the employer can demonstrate an undue hardship to the employer.

On June 15, 2022, the U.S. Supreme Court issued its decision on Viking River Cruises, Inc. v. Moriana (Case No. 20-1573) reversing the California Court of Appeal’s decision to affirm the denial of Viking’s motion to compel arbitration Moriana’s “individual” PAGA claim and to dismiss her other PAGA claims.

Assembly Bill 1651 or the Workplace Technology Accountability Act, a new bill proposed by California Assembly Member Ash Kalra, would regulate employers, and their vendors, regarding the use of employee data.  Under the bill, data is defined as “any information that identifies, relates to, describes, is reasonably capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular worker, regardless of how the information is collected, inferred, or obtained.”   Examples of data include personal identity information; biometric information; health, medical, lifestyle, and wellness information; any data related to workplace activities; and online information.  The bill confers certain data rights on employees, including the right to access and correct their data.

Assembly Bill 2932, a new bill proposed by California Assembly Members Evan Low and Cristina Garcia, would amend Section 510 of the California Labor Code to change the workweek from the standard 40-hour workweek to a 32-hour workweek for companies with more than 500 employees.

On October 4, 2021, the United States Supreme Court denied certiorari on a petition challenging the Ninth Circuit’s ruling that California’s strict meal and rest period rules do not apply to commercial truck drivers engaged in interstate commerce.  The Court’s denial of the petition leaves in place a decision that came as a welcome sigh of relief for employers in the trucking industry.

Over the course of the pandemic, California employers have contended with rapidly changing rules on workplace safety. Mask requirements in the workplace have been an especially evolving area, where the rules have not only varied between the federal, state, and local jurisdictions, but were often inconsistent across different state agencies. California has now taken steps, however, to align the state’s new mask mandates for the public as well as in the workplace.

The California Supreme Court has clarified that state whistleblower retaliation claims should not be evaluated under the McDonnell Douglas test, but rather under the test adopted by the California legislature in 2003, thus clarifying decades of confusion among the courts.

On February 9, 2022, California Governor Gavin Newsom signed into law Senate Bill 114, which reestablishes the state’s COVID-19 supplemental paid sick leave requirements. Employers will not be able to simply dust off their 2021 policies and reimplement them, however, because the 2022 law contains some important changes from prior laws.

SB 606, which took effect January 1, 2022, greatly increases the California Division of Occupational Safety and Health’s (“Cal/OSHA’s”) enforcement powers by creating two new violation categories – “enterprise wide” and “egregious” violations.

On December 27, 2021, the Center for Disease Control and Prevention (CDC) updated their isolation and quarantine recommendations for the general public, including more limited time periods for quarantine and isolation periods.  On December 30, 2021, the California Department of Public Health (CDPH) released updated guidance to conform to the new CDC guidelines but added additional requirements, including testing to exit isolation or quarantine after the fifth day (which the CDC now acknowledges is the “best approach” but does not require as part of its formal guidance).  Notably, the new guidance also introduces a distinction between boosted and non-boosted individuals for the first time.  The key requirements and takeaways from this new guidance are detailed below.

The United States Supreme Court has agreed to take a closer look at the enforceability of arbitration agreements that bar representative claims brought under PAGA, a California law that allows individual employees to police labor code violations.

A critical ruling in the world of franchising, in Haitayan v. 7-Eleven, Inc., 2021 WL 4078727 (C.D. Cal. Sept. 8, 2021), the U.S. District Court for the Central District of California applied the so-called Borello test to find that franchisees were independent contractors, instead of employees, for purposes of their claims for unpaid business expense reimbursements under California’s Labor Code section 2802.

Governor Newsom has signed SB 331 (the “Silenced No More Act”) into law.  As discussed in our prior blog post, SB 331 will expand the existing restrictions on the confidentiality provisions recently put into place by SB 820 (which restricts the usage of confidentiality provisions in agreements related to sexual assault, harassment, or harassment) to also restrict the usage of confidentiality provisions related to all claims of harassment, discrimination, or retaliation under the FEHA.

In a huge win for California employers, the California Court of Appeals recently confirmed that courts have discretion to strike claims for penalties under the Private Attorneys General Act of 2004 (“PAGA”) if the claims will be unmanageable at trial.  This decision will help employers defeat—or significantly pare down—the broad and unwieldy claims for PAGA penalties that have become popular with the plaintiffs’ bar.

Employers operating in California often ask employees to agree to arbitrate employment-related disputes as a term and condition of employment.  In its recent Chamber of Commerce v. Bonta decision, the Ninth Circuit took a significant step toward prohibiting such mandatory employment arbitration agreements.  However, the combination of a 2-1 panel decision (authored by a visiting judge from the Tenth Circuit), a scathing dissenting opinion, and a holding that splits with decisions from the First and Fourth Circuits all but ensures more litigation.  As a result, the case is far from over, so while employers eventually may have to consider changing their arbitration agreement practices, they very likely have some time to let the dust settle before doing so.

Last month, a judge out of the Alameda County Superior Court ruled California’s Proposition 22 unconstitutional, constituting a significant legal obstacle to this young statute.

Proposition 22 (formally the Protect App-Based Drivers and Services Act, Bus. & Prof. Code, §§ 7448, et seq.) was a ballot initiative passed by a majority of California voters in the November 2020 election, which primarily aimed to classify application-based transportation and delivery companies’ drivers as independent contractors rather than employees. Proposition 22 arose in response to Assembly Bill 5, 2019 legislation codifying the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court, which created a new “ABC” test for determining whether workers are properly classified as independent contractors. (More information on AB 5 can be found in this previous Hunton Employment & Labor Perspectives post.)

California already has prohibitions on including non-disclosure provisions in certain settlement agreements related to sexual harassment.  Now California seeks to expand these prohibitions by enacting the Proposed California SB-331 (“Silenced No More Act”).  The new Act aims to prohibit provisions within any agreement that prevent or restrict the disclosure of factual information of claims related to harassment, discrimination, and retaliation.  The proposed bill recently passed senate and assembly, and if approved by governor, will become effective January 1, 2022.

Governor Gavin Newsom and the California Department of Public Health (“CDPH”) recently issued new public health requirements in response to the increasing number of hospitalizations and ICU patients in California caused by the highly contagious COVID-19 Delta variant.

Over the past six months, the California Supreme Court as well as the State’s appellate courts have published a number of important decisions in the area of California labor and employment law. The California Supreme Court’s decisions published earlier this year in Donohue v. AMN Services, LLC (2021) 11 Cal.5th 58 and Vazquez v. Jan-Pro Franchising International, Inc. (2021) 10 Cal.5th 944 were previously covered in Hunton Labor & Employment perspectives. (See Link 1 & Link 2 [discussing the Ninth Circuit’s earlier 2019 decision].)

Beginning June 15, 2021, Governor Newsom moved forward with his plan to lift public health restrictions on businesses, including capacity limitations, physical distancing, and face coverings.  In response, Cal/OSHA also has issued new workplace standards for COVID-19 prevention.

While California inches closer to the state’s June 15 target to lift restrictions and reopen the economy, California employers will have to wait for guidance from CalOSHA on the standards that will govern COVID-19 workplace safety.  For now, CalOSHA’s Emergency Temporary Standards released in November 2020 will remain in place and employers will need to continue to be mindful of these more restrictive guidelines, despite loosening of other state restrictions.

In an April 28, 2021 decision, the Ninth Circuit determined that the application of California’s ABC test (also known as AB-5) to motor carriers is not preempted by the Federal Aviation Administration Authorization Act of 1994 (“F4A”). The ABC test is a judicially-created independent contractor test that was ultimately codified via AB-5. For a more in-depth discussion of AB 5, visit our previous blog post here.

On April 16, 2021, Governor Newsom approved S.B. 93, a statewide COVID right-to-recall law that faltered on its first attempt last October.  In the interim, a number of counties and cities (including the Cities of Los Angeles, Oakland, San Francisco, San Diego, and Pasadena, and Los Angeles County) passed almost identical measures, which will remain in effect to the extent they are more generous than the state law.

Like the local ordinances, the state law is time-limited and directed to the industries with workforces most decimated by COVID: hotels, event centers, private clubs, airport hospitality operations, airport service providers and janitorial, maintenance and security services for commercial buildings. Through December 31, 2024, employers in those industries are required to notify those laid off because of COVID about newly-available positions, and offer them to the laid-off employees based on a qualification-based preference system. Post-layoff changes in ownership, the form of the organization, or the location of the business will not excuse an employer from these recall protocols, as long as the business conducts the same or substantially similar operations as it did before the pandemic.

Employers with more than 25 employees must provide COVID-19 supplemental paid sick leave to their California employees under a recent law signed by the Governor.  This new law is broader than California’s prior COVID-19 paid sick leave law and, unlike the prior law, also covers employees who telework. The new sick leave entitlement is retroactive to January 1, 2021 and extends until September 30, 2021.

Who Must Provide Supplemental Paid Sick Leave?

SB 95 covers all employers with more than 25 employees. California’s prior COVID-19 sick leave law (Assembly Bill 1867) expired on December 31, 2020, and applied only to private businesses with 500 or more employees.

Closures of schools and day care centers during the COVID-19 pandemic have put heightened focus on the child care challenges faced by working parents.  The California legislature is aiming to address these challenges by introducing a bill that, if passed, would require employers to provide subsidized backup child care benefits to employees. While this may help working parents, it also would place additional burdens on employers, many of whom are already over-taxed by the increased costs and depressed revenues caused by the pandemic.

Many employers use rounding methods to adjust the hours that an employee works to the nearest time increment, such as every five or ten minutes.  The California Supreme Court has ruled, however, that this rounding practice is impermissible at the meal period.  Equally as troubling for employers, the Court also held that time records showing a noncompliant meal period raise a “rebuttable presumption” of meal period violations.

Please join Hunton Andrews Kurth LLP for a complimentary webinar:

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Since the outset of the COVID-19 pandemic, the employment law landscape has continued to change at a rapid pace.  This includes recent changes to federal, state, and local leave requirements for COVID-19 related sick leave.

Under the Families First Coronavirus Response Act (FFCRA), employers with fewer than 500 employees were required to provide paid sick leave and expanded family and medical leave effective April 1, 2020.  The FFCRA leave requirements expired on December 31, 2020.

In California, the requirement to provide statewide supplemental paid sick leave for COVID-19 related reasons also expired on December 31, 2020.  However, many localities continue to maintain COVID-19 sick leave requirements.  These local laws were enacted to cover employers with 500 or more employees that were not required to provide paid sick leave benefits under the FFCRA and to provide up to 80 hours of sick leave for covered employees.

With little forewarning to the regulated community, the California Division of Occupational Safety and Health (“Cal/OSHA”) passed a sweeping new standard requiring employers in the state to implement prescribed COVID-19 protections. On November 19, Cal/OSHA voted unanimously to pass the “Emergency COVID-19 Prevention Regulations” (the “Standard”) and on November 30, the Standard went into effect. As covered in our previous updates, the Standard obligates employers to, among other things, write and implement a COVID-19 Prevention Program, engage in contact tracing following any positive case that involved potential workplace exposure, require physical distancing and mask wearing and improve ventilation, and to report all “outbreaks” to the public health department.

California employers now have some guidance from the state in implementing the new “Emergency COVID-19 Prevention Regulations” (“CA ETS”) that went into effect on November 30.

Employers were given no lead-time to comply with these stringent new rules by the California Occupational Safety and Health Standards Board (“Cal/OSHA”).  The CA ETS does contain obligations that employers already have in place, which are largely consistent with Centers for Disease Control and Prevention (“CDC”) guidance. But, as explained in an earlier update, the regulations also include significant onerous new obligations.  Faced with the threat of civil penalties, employers will now need to implement costly new prevention measures at a time when the pandemic is already putting a huge strain on the economy and businesses in particular. These new measures may ultimately put some employers out of business.

The California Occupational Safety and Health Standards Board (“Cal/OSHA”) voted on November 19 to implement a stringent new standard for employers to follow when implementing COVID-19 protections in the state.

The state’s rulemaking agency for workplace safety voted unanimously (6 to 0) to pass the “Emergency COVID-19 Prevention Regulations” (the “Standard”), which is expected to go into effect within 10 days (assuming the State’s Office of Administrative Law adopts Cal/OSHA’s regulation).

Imagine this: you are an employer in California, and you recently hired a new employee.  You ran your own background check, which did not turn up any criminal convictions.  However, the employee’s job duties include submitting online applications to a government agency, which requires the employee to complete a Live Scan background check with the Department of Justice.  The Live Scan reveals that the employee has a past criminal conviction that will prevent her from submitting the applications.  You terminate the employee, and she tells you the conviction was judicially dismissed.  What do you do?

California has enacted a number of new laws (some of these have been covered in more detail on this blog and are linked below). The following are the most significant changes that California employers can expect as we move into the new year:

In response to the ongoing spread of COVID-19 in California, Governor Gavin Newsom signed AB 685.  In short, AB 685 imposes uniform notice requirements on California employers dealing with a potential COVID-19 exposure or outbreak, requires employers to maintain records of COVID-19 notices, and empowers the Division of Occupational Health and Safety (“Cal OSHA”) to close down worksites where the risk of exposure to COVID-19 constitutes an imminent hazard to employees.

A bill recently signed into law in California will require private employers to submit annual “pay data reports” to the Department of Fair Employment and Housing (“DFEH”) beginning in March 2021. The California law implements a previously announced program rolled back by the Trump administration to expand federal reporting requirements to include employee pay data by race, gender, and ethnicity.

Beginning in January, an expanded California leave law will require employers with as few as five employees to provide up to 12 weeks of unpaid medical and family leave each year.  For larger employers also covered by the FMLA, the California leave may be in addition to the 12 weeks of leave that employers already must provide under federal law, for a potential total of up to six-months of leave.

California Governor Gavin Newsom recently signed legislation, AB 2257, that provides a carve out to the state’s independent contractor law. Under Assembly Bill 5, all independent contractors are presumed to be employees unless the hiring business can meet the stringent requirements (known as the ABC test) that are set forth in the California Supreme Court’s Dynamex decision. AB 5 also provided for certain exemptions for certain categories of workers. For a more in depth discussion of AB 5, visit our previous blog post here.

Three bills currently pending in the California legislature aim to codify presumptions for workers compensation purposes about the work-relatedness of COVID-19. Governor Newsom first addressed this issue in his May 6, 2020 Executive Order No. N-62-20 (“EO 62-20”), which expired on July 5, 2020.  That Executive Order created a rebuttable presumption that any “COVID-19-related illness” arose out of and in the course of the employment for workers compensation purposes, as long as the positive test or diagnosis came within fourteen days of the employee having worked, at an employer’s direction, in a workplace that was not the employee’s home or residence. The “COVID-19-related illness” (which term was undefined) must have been diagnosed by a licensed California physician, and confirmed by testing within thirty days of the diagnosis. EO 62-20 was not limited to first responders, health care workers or other essential workers, but applied broadly to all employees in the state. The broad scope of EO 62-20 may have been justified by its timing; it issued during a “shelter at home” period when it was easier to identify the dates of outside-the-home work.

HuntonAK employment partner, Roland Juarez, was recently named to the Daily Journal’s Top Labor & Employment Lawyers. This annual list recognizes California’s top attorneys who have made significant contributions to their field of practice.

Roland also has been named to Los Angeles Business Journal’s list of 2020 Leaders of Influence: Top Litigators & Trial Lawyers for the second year in a row.

With more than 300 nominations this year, Roland was selected as one of 50 litigators chosen by LABJ. The list recognizes “attorneys who go to the proverbial mat to fight for their ...

Employee commute time in California generally is not compensable as “time worked” unless the employee is subject to the employer’s control and unable to use that time for his or her own purposes.  But is an employee subject to the employer’s control if she is required to carry her employer’s equipment and tools in her personal vehicle?  According to a California Court of Appeal, the answer could depend on the size of the vehicle.

Due to the novel coronavirus (COVID-19), many San Francisco businesses have closed in order to contain the spread of the pandemic, resulting in declining revenues and widespread business interruption.  These economic conditions have led to employee layoffs across San Francisco.  As San Francisco employers work to restore their business operations in the wake of COVID-19, they should be aware of new rules that may affect how they rebuild their workforce.

Los Angeles Mayor Gil Garcetti signed into law two new ordinances that affect certain employers in the following commercial sectors: airport businesses, commercial property businesses, event center businesses, and hotel businesses.  These ordinances give recall rights and impose obligations on employers upon a change in ownership.

City of LA’s first ordinance, known as the Right of Recall, requires covered employers to offer laid off workers new positions that become available.  The second ordinance, known as the Worker Retention Ordinance, requires covered employers of a business that has had a change in ownership to rehire workers who were employed by the prior business employer.

The California Court of Appeals for the Second District evaluated the validity of unlimited vacation policies in a recent decision. Unlimited vacation policies operate how one might expect: instead of having a specific number of hours vest that the employee can use to take paid time off, an unlimited policy provides that the employee can take as much vacation per year as they would like to subject to company approval. In California, when vacation vests, it is treated as wages at termination and must be paid out. Since unlimited vacation does not vest, there is no payment due at termination.

Los Angeles (LA) Mayor Eric Garcetti has issued an emergency order modifying the City’s recently passed COVID-19 supplemental paid sick leave requirements.  The prior ordinance, adopted on March 27, 2020, by the LA City Council, had required LA employers with 500 + employees nationally, to provide up to 80 hours of supplemental paid sick leave.  In a nod to the instrumental role employers will play in the City’s revival in the aftermath of the coronavirus crisis, Mayor Garcetti modified the paid leave requirements in a number of key ways.

We previously wrote about the San Diego County face-covering mandate. On April 7, 2020, the City of Los Angeles joined San Diego County and issued an Order (the “Order”) that requires certain workers to wear cloth face coverings. Notably, the Order is more expansive than San Diego County’s face-covering mandate because it covers workers in more occupations, applies to customers and visitors of certain businesses, provides face-covering maintenance requirements, and requires certain employers to furnish face coverings and other sanitary products.

The California Public Health Department issued Guidance recommending that all Californians wear cloth face coverings when in public for essential activities.  San Diego County took that guidance one step further, however, and issued an addendum to its public health order, requiring that certain employees wear cloth face coverings.  The San Diego order also requires covered businesses to follow new posting guidelines, and recommends that all San Diegans heed California’s Statewide Face Coverings Guidance.

Yesterday, Governor Newsom issued an Executive Order mandating that all California residents remain at home, except those needed to maintain continuity of operations of the federal critical infrastructure sectors.  The Order is open ended and will continue to be in place until the Governor orders otherwise.

What does this mean for California businesses?

In response to the COVID-19 pandemic and in an effort to prevent the spread of the virus, many employers are grappling with the need to immediately shut down operations.  This raises the question whether employers must pay out all wages (including paid time off) when employees are temporarily laid off or furloughed. In California, they might.

No doubt recognizing the unprecedented impact on business, Governor Gavin Newsom issued an Executive Order suspending the notice requirements under the California Worker Adjustment and Retraining Notification Act (WARN Act), Cal. Lab. Code §§ 1401(a), 1402, 1403. The Executive Order suspends existing law that could have otherwise required employers to provide 60 days’ notice before instituting mass layoffs, relocations, or terminations, and could potentially have imposed steep penalties on employers who failed to do so.  Certain notice obligations remain, however, under the Executive Order.

On Thursday, the California Supreme Court ruled that employees must be paid for time spent undergoing security checks before leaving work.

Earlier today, Eastern District of California Judge Kimberly Mueller granted a preliminary injunction, prohibiting the state of California from enforcing AB 51, which sought to prohibit companies in California from requiring arbitration agreements as a condition of employment.

AB 51 originally was set to go into effect on January 1, 2020, but the Court granted a motion for temporary restraining order brought by a coalition of business groups, that temporarily prohibited the law’s enforcement through January 31, 2020.  In the interim, the Court considered more fulsome ...

California’s law against arbitration remains in doubt after Eastern District Judge Kimberly Mueller extended the TRO issued on December 31, prohibiting the state of California from enforcing the law against agreements covered by the Federal Arbitration Act.  That law, known as AB 51, seeks to prohibit companies in California from requiring arbitration agreements as a condition of employment.

The California Department of Fair Employment and Housing (“DFEH”) recently updated its Sexual Harassment Prevention Training FAQ guidance to address some of the questions surrounding SB 1343, which requires employers with five or more employees to provide classroom or “other interactive training” for all California employees (not just supervisors) every two years. SB 1343 was initially set to go into effect on January 1, 2020. But in 2019, Governor Newsom signed two amendments to SB 1343 that push the effective date out to January 1, 2021. The deadline to comply with SB 1343 does not change the obligation of an employer with 50 or more employees to train new supervisory employees within six months of their promotion or hire.

Earlier today, District Judge Kimberly J. Mueller of the United States District Court for the Eastern District of California, granted a temporary restraining order that temporarily prohibits the state of California from enforcing AB 51, a law that would prohibit companies in California from requiring arbitration agreements as a condition of employment.

You can read more about AB51 here and here.

A recent California appellate court decision has held that a banquet hall’s “mandatory service charge” could, under the right circumstances, be a “gratuity” that must be paid to employees under California Labor Code § 351. In O’Grady v. Merchant Exchange Productions, the defendant-employer added on a percentage service charge for all banquet contracts for food and beverages. Some, but not all, of the service charge was distributed to managers who did not serve food or beverages at the banquet. Plaintiff brought a putative class action alleging that the defendant’s practice of distributing the service charge proceeds to non-managerial banquet staff violated California Labor Code § 351, which states that gratuities are the sole property of the employees, and the employer (including managers) may not take any portion of the gratuity. The trial court held as a matter of law that a service charge cannot be a tip or gratuity under § 351 and dismissed the case.

On December 6, 2019, a coalition of both national and state business organizations and trade associations filed a Complaint in the U.S. District Court for the Eastern District of California.  The lawsuit seeks both a preliminary and permanent injunction against implementation and enforcement of the recently enacted California law that makes it unlawful for California employers to require employees to sign arbitration agreements, under certain circumstances.

California Labor Code §2802 requires employers to reimburse employees for all “necessary expenditures” incurred by an employee in the discharge of his or her duties. Business travel expenses fall into this category, as do uniforms, and even the portion of personal cell phone costs that can be attributed to business use. Thus, theme-based businesses that clothe employees in specialized uniforms or costumes (like the sailor outfits in Season 3 of Stranger Things) must provide those specialized outfits or reimburse employees for the expenses incurred in buying and maintaining them.

Earlier this year, we wrote about a proposed bill in California, AB 51, which would prevent employers from requiring their employees to bring all employment-related claims, including discrimination, harassment, retaliation, and wage and hour claims, in arbitration instead of state or federal court.  Earlier this month, Governor Newsom signed AB 51 into law.

This month, California Governor Gavin Newsom signed several employment-related bills into law. The laws go into effect January 1, 2020, and include an extension to the deadline to file certain state discrimination claims and address harassment training and prevention, as well as mandatory arbitration agreements.

Yesterday, the California Supreme Court issued its highly-anticipated decision in ZB, N.A. v. Superior Court bringing some welcomed good news for California employers.   The case concerned an action brought under the Private Attorneys General Act, wherein the representative employee was seeking, among other things, lost wages under Labor Code Section 558.  The question presented was whether the employee’s claim for lost wages under Labor Code Section 558 could be broken off and sent to arbitration on an individual basis, while the remainder of the PAGA action for civil penalties proceeded in court.  As discussed in a previous post, California courts were split on this issue.

The arbitrability of wage-and-hour actions brought under the California Private Attorneys General Act (PAGA) is an increasingly important issue due to the growth of PAGA-only actions in California.   In that regard, a split has emerged among courts regarding the arbitrability of PAGA claims for unpaid wages under Labor Code Section 558.

As California braces for wildfire season, the California Division of Occupational Safety and Health (“CalOSHA”) approved an emergency regulation on July 30, 2019, that requires California employers to monitor air quality for particle pollution, and reduce workers exposure to the potential harmful pollutants from wildfire smoke.

What Is Particle Pollution or Particle Matter?

The Air Quality Index (“AQI”) is calculated for four major air pollutants regulated by the Clean Air Act: ground level ozone, particle pollution, carbon monoxide and sulfur dioxide. The new regulation is aimed at protecting workers from certain particle pollution, also called particulate matter or PM. There are two types of PM – fine particles (2.5 micrometers or less in diameter, referred to as PM2.5) and course particles (particles between 2.5 and 10 micrometers in diameter, referred to as PM10). The new regulation is directed only at the fine particles, or PM2.5, which are produced from all types of combustion, including wildfires. 

The California Labor Code requires employers to reimburse employees for certain expenses, but it’s not always clear which expenses should be reimbursed by the employer, and which expenses should be borne by employees.  Here’s a list of Five Things to Remember About Employee Reimbursements to help California employers navigate this area of the law.

The California Department of Fair Employment and Housing (“DFEH”) just last month filed an enforcement action in Los Angeles Superior Court against Riot Games, Inc. (“Riot Games”) to compel compliance with its ongoing investigation into allegations of gender discrimination, sexual harassment, sexual assault, and retaliation.  While the identified claims are broad, the primary thrust appears to be the contention that female employees at Riot Games are paid less than their male counterparts.

California employment laws are constantly evolving, making it a challenge for companies doing business in the Golden State to keep up with recent developments and remain compliant. View this complimentary video where Hunton Andrews Kurth partners Emily Burkhardt Vicente and Amber Rogers discuss “Five Recent Developments in California Employment Law You May Have Missed.”

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Claims under California’s Private Attorneys General Act (PAGA) are recently much in vogue.  With the proliferation of arbitration agreements and class action waivers, plaintiffs’ attorneys all over California been using PAGA claims – which cannot be waived in an arbitration agreement – as a preferred vehicle to pursue representative wage-and-hour lawsuits against employers.

While there are many unresolved issues relating to the litigation of PAGA lawsuits, California courts are making clear that a PAGA lawsuit will fail if the plaintiff does not send a compliant pre-filing notice to the Labor and Workforce Development Agency (LWDA) prior to the elapse of the statute’s 1-year limitations period.

In a recent decision, the California Supreme Court refused to overturn an arbitrator’s award, despite finding the award was incorrect.  Specifically, the Court held that an arbitrator should have considered evidence of a rejected section 998 settlement offer and changed its cost award, even after issuing a final arbitration decision.  However, the Supreme Court determined a trial court does not have authority to correct this error. The ruling emphasized the broad scope of an arbitrator’s powers and narrow scope of judicial review when the parties choose arbitration.

Heimlich v. Shivji involved a dispute over legal fees between an inventor and his attorney.  The representation agreement contained an arbitration clause and during arbitration each party asserted claims for money owed.  

On May 2, 2019, the Ninth Circuit ruled in Vazquez v. Jan-Pro Franchising International, holding that the new independent contractor test established by the California Supreme Court in its 2018 decision in Dynamex v. Superior Court applies retroactively to franchisors. As a result of this decision, employers and franchisors who have classified workers as independent contractors may see an increase in wage and hour class actions alleging that the workers are or have been misclassified. Additionally, the decision has serious implications for any California companies that operate under a franchise business model.

In a positive development for employers, the California Court of Appeals affirmed summary judgment for an employer in a class action alleging willful violations of the Federal Fair Credit Reporting Act (“FCRA” or “Act”).  In Culberson v. Walt Disney Parks and Resorts, the plaintiffs alleged Disney willfully violated two provisions of the FCRA: (1) plaintiffs alleged Disney’s disclosures letting job applicants know they may be subject to a consumer report were not contained in a standalone document; and (2) plaintiffs alleged Disney rejected some applicants based on information in their consumer reports without first providing the notice required by the FCRA.  In affirming summary judgment, the court concluded that it need not decide whether Disney violated the FCRA, because the court found that any such violation was not willful. 

Each year, the California Chamber of Commerce (“Chamber”) identifies proposed state legislation that the Chamber believes “will decimate economic and job growth in California.”  The Chamber refers to these bills as “Job Killers.” In March, the Chamber identified the first two Job Killers of 2019: AB 51 and SB 1. Both bills would negatively impact retailers in California. You can view the Chamber’s Job Killer site here.

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California has long been considered one of the most – if not the most – protective states of employee rights.  This continues to ring true, as the legislature has proposed another law aimed at prohibiting employers from requiring employees to sign mandatory arbitration agreements as a condition of employment.   In essence, Assembly Bill 51 (AB 51), would prevent employers from requiring their employees to bring all employment related claims, including discrimination, harassment, retaliation, and wage and hour claims, in arbitration instead of state or federal court.

In a recent case, Correia v. NB Baker Electric, Inc., the California Court of Appeal held that employers cannot require employees to arbitrate their representative claims under the California Private Attorney General Act of 2004 (“PAGA”), Labor Code § 2699 et seq., without the State’s consent.

In Correia, two former employees sued their employer, NB Baker Electric, Inc. (“Baker”), alleging wage and hour violations and seeking civil penalties under PAGA. Baker petitioned the trial court for arbitration pursuant to the parties’ arbitration agreement, which provided that arbitration would be the exclusive forum for any dispute and which prohibited employees from bringing “any class action or representative action” in any forum.

Our California labor and employment team has been nominated by Benchmark Litigation as a California – Labor & Employment Litigation Firm of the Year, and Partner Roland Juarez  has been nominated as a California – Labor & Employment Litigation Attorney of the Year.

If your background check forms include too much information about rights under state law, or even grammatical errors, you might be in trouble according to the Ninth Circuit.  In Gilberg v. California Check Cashing Stores, the appeals court recently ruled against an employer for using background check disclosure forms that violate both the federal Fair Credit Reporting Act (FCRA), and California’s Investigative Consumer Reporting Agencies Act (ICRAA).

As we discussed in a previous post , the courts, the Congress, and the Department of Justice (the “DoJ”) continue to grapple with the scope of Title III of the Americans with Disabilities Act (the “ADA”) as it relates to the accessibility of private businesses’ websites for disabled people.  A decision by one state trial court in California seems to adopt a more strict reading of the definition of “public accommodation” than previous cases in California and in the Ninth Circuit Court of Appeals (which includes the federal courts in California) on the subject, which further demonstrates the difficulty that many courts, including this one, are having with these ADA website accessibility cases.

The California Second Appellate District has held that retail employees who were required to “call in” two hours before their scheduled shift to find out if they actually needed to report to work were entitled to reporting time pay. The Court held that California retail employees do not need to physically appear at the workplace in order to “report for work,” and be entitled to reporting time pay, under the Industrial Welfare Commission (“IWC”) Wage Order 7.  Given the robust dissent and sweeping change this decision could bring about, this is a case to watch as it may find its way to the California Supreme Court.

What are newly elected Governor Gavin Newsom’s views on #MeToo legislation, and how do they compare to those of his predecessor, Jerry Brown?  We may soon have answers to these questions thanks to a pair of bills introduced by Assemblywoman Lorena Gonzalez (D-San Diego), which reintroduce harassment-related proposals vetoed by Governor Brown.