LEAVE OF ABSENCE
AB 125: COVID-19 Supplemental Paid Sick Leave
California extended COVID-19 Supplemental Paid Sick Leave (SPSL) through December 31, 2022, but has not extended it beyond that date.
AB 1041: Employment Leave
This bill expands the class of people for whom an employee may take protected leave. Under the existing California Family Rights Act (CFRA) it is an unlawful employment practice for a California public employer or a private employer with 5 or more employees to refuse to grant a request from an employee who meets specified CFRA requirements. Employees who qualify for CFRA leave may take up to a total of 12 work weeks in any 12-month period for family care and medical leave. This bill now includes within the family care protection a person designated by the employee. This bill would define “designated person” to mean any individual related by blood, or whose association with the employee is the equivalent of a family relationship. The bill would authorize an employer to limit an employee to one designated person per 12-month period.
Additionally, the definition of the term “family member” under the Healthy Workplaces, Healthy Families Act of 2014, would expand to include a person identified by the employee at the time the employee requests paid sick days. Existing law generally entitles a California employee that works for the same employer for 30 or more days within a year to paid sick days, including use of paid sick days for diagnosis, care, or treatment, etc. of an employee or an employee’s family member.
AB 1949: Funeral or Bereavement Leave
AB 1949 amends the CFRA and provides eligible employees with up to 5 days of unpaid leave (subject to an employee’s ability to use available paid time off) related to the death of a family member. Family member includes a spouse or a child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law (family member as defined under the CFRA). To be eligible, employees must have been employed for at least 30 days.
Under this bill, bereavement leave need not be taken in consecutive days, but must be completed within three months of the date of death of the family member. Further, within 30 days of the first day of the leave, the employer may request that the employee provide documentation of the death of the family member. “Documentation” includes, but is not limited to, a death certificate, a published obituary or written verification of death, burial, or memorial services from a mortuary, funeral home, burial society, crematorium, religious institution or governmental agency. The employer must maintain the confidentiality of any employee requesting bereavement leave and any documentation the employee provides must be maintained as confidential. Any documentation shall not be disclosed except to internal personnel or counsel, as necessary, or as required by law.
In addition, to the extent an employer has an existing bereavement policy, the bereavement leave must be taken pursuant to the employer’s existing bereavement leave policy. If the employer does not have an existing bereavement leave policy, the bereavement leave may be unpaid; but the employee may use vacation, personal leave, accrued and available sick leave or compensatory time off that is otherwise available to the employee.
If the employer’s existing leave policy provides for less than five days of paid bereavement leave, the employee is entitled to no less than a total of five days of bereavement leave, consisting of the number of days of paid leave under the employer’s existing policy, and the remainder of days of leave may be unpaid. However, the employee may use vacation, personal leave, accrued and available sick leave, or compensatory time off that is otherwise available to the employee.
This bill also provides that an employee’s right to bereavement leave is to be construed as separate and distinct from any other right employees have under the CFRA. Finally, the bill exempts employees subject to a collective bargaining agreement if certain conditions are met. This bill amends Government Code Sections 12945.21 and 19859.3 and adds Section 12945.7.
WAGE & HOUR
SB 1162: The Pay Transparency for Pay Equity Act
Senate Bill (SB) 1162 requires a private employer that has 100 or more employees to submit a pay data report to the Civil Rights Department within the Business, Consumer Services, and Housing Agency (Department). The law revises the timeframe in which a private employer is required to submit this information, requiring that it be provided on or before the second Wednesday of May 2023, and for each year thereafter on or before the second Wednesday of May. This bill would also require a private employer that has 100 or more employees hired through labor contractors, as defined, to submit a separate pay data report to the Department for those employees in accordance with the above timeframe. Prior law required employers with multiple establishments to submit a report for each establishment and a consolidated report that included all employees. This law deletes the provision requiring employers with multiple establishments to submit a consolidated report.
The new law requires the pay data reports to include the median and mean hourly rate for each combination of race, ethnicity, and sex within each job category. The law deletes the provision authorizing an employer to submit an EEO-1 in lieu of a pay data report. The law permits a court to impose a civil penalty, not to exceed $100 per employee, upon any employer who fails to file the required report and a penalty, not to exceed $200 per employee, upon any employer for a subsequent violation. The penalties are deposited in the Civil Rights Enforcement and Litigation Fund.
Also, the new law requires an employer, upon employee request, to provide a pay scale for the position in which an employee is currently employed. Additionally, an employer with 15 or more employees is required to include the pay scale in any job posting and to maintain records of job title and wage rate history for each employee within a specific timeframe. Employers who have 15 or more employees and who engage a third-party to announce, post, publish, or otherwise make a job posting must provide pay scale to the third-party to include in the job posting. If an employer fails to keep record, a rebuttable presumption in favor of the employee’s claim is established.
Camp v. Home Depot U.S.A., Inc., Case No. H049033, 2022 WL 13874360 (2022) - Rounding Time Entries
Delmer Camp v. Home Depot U.S.A. Inc. (Camp) held that an employer must pay an employee for “all time worked,” if an employer can and has captured the exact amount of time an employee worked in a shift. In this case, Plaintiff brought a claim for unpaid wages due to Home Depot’s quarter-hour time rounding policy, therefore Plaintiff was not paid for all the time he worked according to Home Depot’s own timekeeping records. Home Depot’s calculation via its electronic timekeeping system, which rounded time such that when counting in a quarter hour increment if the time was seven minutes or less it would round down.
Regardless of the small discrepancies of time in regards to rounding, an employer must provide pay to an employee with pay for all of the time worked if the employer can and has captured the exact amount of time worked, and employee worked within a given shift. Although rounding is permitted via federal regulation, California protects employees against discrepancies within the rounding procedures and provides employees with greater protection. If the time is recorded and accounted for, an employer may still use “nearest-tenth” rounding policies that is fair and neutral on its face and does not result in a failure to properly compensate employees for the time worked overtime.
Naranjo v. Spectrum Security Services, Inc., 13 Cal.5th 93 (2022) - Penalties for Meal and Rest Break Violations
The California Supreme Court clarified in Naranjo v. Spectrum Security Services, Inc. that meal and rest break violations trigger waiting time and wage statement penalties. This case highlights the importance of compliant break policies, as the derivative penalties under Labor Code sections 203 and 226 can be significantly higher than the penalties for the actual meal and rest break violations. The Court concluded that premium pay for missed meal and rest periods constitutes “wages” that must be reported on statutorily required wage statements during employment and paid within statutory deadlines when an employee leaves the job. The Court held that the extra pay is designed to compensate for the unlawful deprivation of a break and is also the compensation for the work the employee performed during the break period.
ARBITRATION
Viking River Cruises, Inc. v. Moriana, 142 S. Ct. 1906 (2022) – PAGA/Arbitration
The California Supreme Court held in Viking River Cruises, Inc. v. Moriana (Viking River) that employers can compel arbitration of an employee’s individual claims brought under the Private Attorneys General Act (PAGA). Before the Viking River decision, employers could not compel PAGA claims into arbitration. The Court also held that compelling an employee’s individual claims into arbitration would deprive that employee of standing to bring a representative claim (i.e., a claim on behalf of other workers) under PAGA.
The Court reversed the California Second District Court of Appeal's judgment and remanded the case for further proceedings, holding that the Federal Arbitration Act (FAA) pre-empts Iskanian v. CLS Transportation Los Angeles, LLC because it precludes division of PAGA lawsuits into individual and non-individual claims through an arbitration agreement.
On August 22, 2022, the high court denied the request for rehearing and issued a final judgment, leaving intact the Court’s analysis of the severability language in Viking River’s arbitration agreement, as well as the Court’s analysis of statutory standing under PAGA.
Gallo v. Wood Ranch USA, Inc., 81 Cal. App. 5th 621 (2022) – Payment of Arbitration Fee
Recent developments highlight the requirement to pay arbitration fees in a timely manner. SB 762, which amended Code of Civil Procedure sections 1281.97 and 1281.98 and added section 1657.1 to the Civil Code, became law in 2022 and required payment of arbitration fees “upon receipt,” with failure to pay resulting in a waiver of the right to compel arbitration. In Gallo v. Wood Ranch USA, Inc., the court held that this requirement is not pre-empted by the FAA. Further, these sections in this case do not interfere with the FAA’s first goal of honoring the parties’ intent. Moreover, applying these sections, in this case, does not interfere with the FAA’s second goal of safeguarding arbitration as an expedited and cost-efficient vehicle for resolving disputes.
Mendoza v. Trans Valley Transport, 75 Cal. App. 5th 748 (2022) – Executed Agreement
Mendoza v. Trans Valley Transport underscores the importance of having a standalone arbitration agreement signed by both the employer and employee. In this wage and hours class action, there was consideration whether an arbitration provision in an employee handbook, coupled with acknowledgement forms the class representative signed, created a legally binding agreement to arbitrate the claims presented. In Mendoza, the court refused to find an enforceable agreement to arbitrate where the agreement merely appeared in a handbook, even though the employee had signed a handbook acknowledgement.
DRUG & ALCOHOL TESTING
AB 2188: Discrimination in Employment: Use of Cannabis
This bill makes it unlawful for an employer to discriminate against a person in hiring, termination, or any term or condition of employment, or penalty, if the discrimination is based upon the person’s use of cannabis off the job and away from the workplace. Existing law under the California Fair Employment and Housing Act (FEHA) protects and safeguards certain rights and opportunity of all persons to seek, obtain, and hold employment without discrimination, except as for pre-employment drug screening, as specified, or upon an employer-required drug screening test that has found a person to have non-psychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids.
This bill would specify that the bill does not pre-empt state or federal laws requiring applicants or employees to be tested for controlled substances as condition for employment, receiving federal funding or federal licensing-related benefits, or entering a federal contract.
BACKGROUND CHECKS
Fair Credit and Reporting Act & Investigative Consumer Reporting Agency Act
There are two primary laws that protect employees during the employment screening process. First, at the state level there is the Investigative Consumer Reporting Agency Act (ICRAA) codified as California Civil Code sections 1786.10 to 1786.40. Second, at the federal level there is the Fair Credit and Reporting Act (FCRA) codified as 15 U.S.C. § 1681. ICRAA is a more restrictive law and supersedes the FCRA in any provision that conflicts.
Finally, there are specific provisions regarding fair hiring practices to provide a second chance to those with a criminal arrest or conviction records (also known as the Fair Chance Act or “Ban the Box” Law). This is codified in Government Code section 12952 and California Labor Code section 432.7, both of which restrict employers from asking about conviction history prior to making a job offer and employment decisions.
Under ICRAA applicants and employees have the rights under the FCRA, plus additional rights and protections.
CALIFORNIA PRIVACY RIGHTS ACT
The California Privacy Rights and Enforcement Act (CPRA), which amends the prior California Consumer Privacy Act (CCPA), takes effect on January 1, 2023. Unless the legislature or Governor Newsom acts prior to January 1, 2023, the CPRA eliminates employer exemptions in the CCPA applicable to employee and applicant data and expands on several areas of the CCPA. The CPRA creates several privacy-related obligations for employers, including: (1) notifying applicants, employees, and contractors about the categories of personal information that is or may be collected by the employer, and describing the purpose(s) for the collection and disclosure of such information, and providing information regarding the sharing and retention of personal information; (2) employees’ rights to access or restrict the use or disclosure of certain categories of personal information; (3) employees’ rights to correct or delete personal information (subject to statutory exemptions that may apply); and (4) employees’ rights to request the personal information that has been collected about them during the preceding 12 months.
The CPRA also establishes a new agency, the California Privacy Protection Agency, which is responsible for implementing and enforcing the law, including issuing potential fines of $2,500 per violation and $7,500 per intentional violation. Although the CPRA takes effect January 1, 2023, any personal information about employees collected by employers dating back to January 1, 2022, will be subject to compliance with the CPRA.
For additional guidance on any of these changes, please reach out to the attorneys at Palmer Kazanjian Wohl Hodson, LLP.