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California Employers’ To-Do List Grows With New Worker Laws

Dec. 21, 2020, 9:01 AM

California Gov. Gavin Newsom (D) closed this most recent legislative season by signing dozens of new bills into law that affect California employers. Though some were emergency bills and took effect upon signing, the remainder take effect on Jan. 1, 2021.

The laws are wide-ranging, encompassing topics from pandemic-related measures, to the first board of directors’ diversity mandate of its kind in the U.S. Below is an overview of new requirements that employers should be aware of in a several key areas—workplace safety and Covid-19, worker classification, and diversity and fair pay.

Workplace Safety and Covid-19

  • Cal/OSHA Covid-19 Emergency Temporary Standards (8 CCR §§ 3205-3205.4): Cal/OSHA emergency temporary standards on Covid-19 infection prevention were approved and became effective on Nov. 30, 2020, requiring most employers to implement a written Covid-19 prevention program, meet certain testing and reporting requirements when there are Covid-19 outbreaks in the workplace, and implement Covid-19 prevention measures in employer-provided housing and transportation.
  • Employer Covid-19 Reporting Obligations (AB 685; Lab. Code §§ 6325, 6432, 6409.6): Beginning Jan. 1, California employers will be required to provide detailed notices to employees concerning any Covid-19 workplace exposure, and notice to local public health departments of a “Covid-19 outbreak.”
  • Covid-19 Workers’ Compensation Presumption (SB 1159; Lab. Code §§ 77.8, 3212.86, 3212.87, 3212.88): Effective Sept. 17, 2020, this emergency legislation renews and codifies an executive order establishing a presumption that an employee who tests positive for Covid-19 contracted it at the workplace and requires employers to report positive cases to workers’ compensation claim administrators.
  • OSHA Covid-19 Awareness (AB 2043; Lab. Code § 6725): Though this law has no requirements for employers, it is notable because it provides important information to employers. AB 2043 requires Cal-OSHA to 1) disseminate information on best practices for Covid-19 infection prevention in English and Spanish; and 2) work with other organizations to conduct a statewide outreach campaign that includes education on Covid-19 employment benefits. This law takes effect Jan. 1.

Worker Classification

  • AB 5 and the “ABC Test” (AB 2257; Lab. Code §§ 2775-85): As of Sept. 4, exemptions to AB 5’s coverage expanded, widening the range of occupations that are subject to an earlier standard for determining employment status.
  • Professional Exemption: Educational Employees (AB 736; Lab. Code § 515.7): This law, which took effect Sept. 9, expands the professional exemption in Wage Order Nos. 4-2001 and 5-2001 to include part-time or “adjunct” faculty at private, nonprofit colleges and universities in California.

Diversity and Fair Pay

  • Pay Data Reporting (SB 973; Gov. Code §§12930, 12999): Employers with 100 or more employees must provide pay data information by race, ethnicity and sex to the Department of Fair Employment and Housing by March 31, 2021, and annually thereafter.
  • Diversity on Boards of Directors (AB 979; Corp. Code §§ 301.3, 301.4, 2115.6): Publicly held corporations headquartered in California will be required to include at least one person from an underrepresented community on their boards by the end of next year, with additional appointments required in future years. This law takes effect Jan. 1.

Key Takeaways and Action Items

Employers should take the following steps to ensure they comply with new laws, both the emergency measures that took effect upon signing and those taking effect in January:

  • Evaluate employee handbooks and policies for compliance with new laws.
  • Prepare forms or templates for quick use for new laws that require notice. For example, AB 685 requires California employers to provide detailed notices to employees concerning any Covid-19 workplace exposure, and to local public health departments of a Covid-19 outbreak. Having templates ready for use and modification will help employers provide the required notice swiftly and easily.
  • Get a head start on requirements that may take substantial time and resources for the company to finalize. For example, for pay data reporting (SB 973), evaluate the need for additional systems to track and maintain the required information; compile payroll, hours, job category, and demographic information. Also, partner with counsel to conduct an audit, identifying any potential unexplained wage disparity, and evaluate the need to include “clarifying remarks” in the report.
  • Similarly, for the diversity mandate on boards of directors (AB 979), companies should review their roster of board members to determine whether the board reflects the minimum number of underrepresented community members. If not, companies should lay the groundwork for compliance. This could include asking current board members or other trusted stakeholders for recommendations for new board members who are members of underrepresented communities, and could be valued additions to the board.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

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Author Information

Susan Eandi is a partner in Baker McKenzie’s Palo Alto office. She is head of the global employment and labor law practice group for North America and chair of the California labor and employment practice group.

Billie D. Wenter is a partner in Baker McKenzie’s San Francisco office. Her practice includes all aspects of employment compliance and litigation under federal, state and local laws and regulations.

Autumn Sharp is a knowledge lawyer at Baker McKenzie.