2020 has been a challenging year for employers of all sizes and across all industries.  Throughout the year, new laws and orders regarding COVID-19 emerged regularly, leaving employers to process the information and comply immediately, with little or no notice.  Some of the novel requirements imposed due to COVID were temporary, while others will continue into next year.

Further, changes to employment law did not stop with COVID; several profoundly impactful developments in employment law occurred this year unrelated to the pandemic.  Business owners will need to familiarize themselves and adapt in preparation for the New Year.

This Newsletter will provide a summary of the most significant developments in employment law over the past year, COVID-related and otherwise.  We urge you to familiarize yourself with the changes in order to be as prepared as possible for 2021.  You will also need to update your handbooks to reflect the changes and new laws.


New IIPP Requirements

Cal/OSHA has instituted new guidelines regarding an employer’s Injury and Illness Prevention Program (IIPP).  The requirement for employers to establish an IIPP to protect employees from workplace hazards, including infectious diseases, existed prior to COVID.  However, now that COVID likely constitutes a workplace hazard for nearly all employees, employers are required implement a specific COVID-19 Exposure Prevention, Preparedness, and Response Plan as part of their IIPP.

The plan should include information about the disease and how it is transmitted, cleaning and disinfecting procedures, and basic infection prevention measures such a social distancing, use of personal protective equipment, and frequent and thorough hand washing.

We recommend that our clients work with us to adopt a COVID-19 Exposure Prevention, Preparedness, and Response Plan that is consistent with the guidance and appropriately tailored to your individual business.

Federal COVID Response

By now you are all likely familiar with the Families First Coronavirus Response Act (FFCRA), which created new categories of protected, paid leave for employees who needed time off for certain COVID-related reasons.  The FFCRA is set to expire on December 31, 2020, but it remains possible that Congress could choose to extend it into the New Year.  We will be monitoring the situation closely and will continue to update our clients.

Notice of Potential COVID Exposure in the Workplace

In September, California implemented a new law providing a specific procedure for an employer who learns of a potential COVID exposure among its employees.

If an employer receives notice of potential exposure to COVID among its employees, the employer must take the following steps within one business day of receiving notice:

  • Provide written notice to all employees, and the employers of subcontracted employees, who were on the premises at the same worksite as the potentially infected individual within the infectious period informing them that they may have been exposed to COVID.
  • Provide all employees who may have been exposed with information on COVID-related benefits to which the employee may be entitled under applicable federal, state, or local laws.
  • Notify all employees, and the employers of subcontracted employees about the disinfection and safety plan that the employer plans to implement and complete per CDC guidelines.

Employers may not require employees to disclose medical information unless otherwise required by law, nor disclose the employee’s protected health information, and may not retaliate against a worker for disclosing a positive COVID test, or diagnosis or order to quarantine or isolate.

We recommend that our clients have a template for providing this notice at the ready, so that they are able to act quickly in the event it becomes necessary.  We are happy to help draft such a template if you would like.

Reporting a COVID “Outbreak”

If the exposure involves a high enough number of cases to be considered an “outbreak,” the employer is subject to further requirements.

Within 48 hours of notification of the outbreak, the employer must notify its local public health agency (i.e. the public health agency for the jurisdiction where the worksite is located) of the names, number, occupation, and worksite of employees who are a “qualifying individual.” An employer that has an outbreak must continue to give notice to the local health department of any subsequent laboratory-confirmed cases of COVID at the worksite.

A “qualifying individual” is a person with a laboratory-confirmed case of COVID, a positive COVID diagnosis from a licensed health care provider, a COVID-related order to isolate provided by a public health official, or who has died due to COVID.

For the purposes of this reporting requirement, an “outbreak” is defined by the California Department of Public Health as three or more cases identified at a worksite within two weeks, among workers who live in different households.

Workers’ Compensation Expansion

California has also expanded access to workers’ compensation related to COVID.  Also ratified in September, the new law applies retroactively back to July 5, 2020.

The law establishes a presumption of compensability for employees who contract COVID from any employer that experiences an “outbreak” of COVID cases at a particular work location.  It is important to note that for the purposes of this new law regarding workers’ compensation, an outbreak is defined differently than for the reporting requirements described in the previous section.  Here, an outbreak is defined as follows:

  • Employers with 5-100 employees: 4 or more employees who worked at a specific work location contracted the disease within a 14-day period.
  • Employers with over 100 employees: 4% or more of the employees who worked at a specific work location contracted the disease within a 14-day period.

This presumption may be rebutted by evidence of measures in place to prevent transmission of COVID and evidence of an employee’s nonoccupational exposure to COVID.

An employer with knowledge of an employee testing positive must report the following to its claims administrator within 30 business days of the effective date of the new law:

  • The date that the employee tested positive (date of the test, not of receiving the result).
  • The address or addresses of the employee’s place of employment during the 14-day period prior to the positive test.
  • The highest number of employees who reported to work at the employee’s specific place of employment in the 45 days prior to the last day the employee worked at each specific place of employment.

An employer who intentionally submits false or misleading information, or fails to submit required information, is subject to a civil penalty of up to $10,000.

The presumptions provided by the bill will sunset on January 1, 2023.

 Supplemental Paid Sick Leave for Large Employers

California has required employers with at least 500 employees nationwide to provide supplemental paid sick leave (SPSL) to employees who perform work outside of their homes.

Covered employers must provide up to 80 hours of SPSL to an eligible employee, depending on the employee’s regular work schedules.  Employees are entitled to SPSL if:

  • The employee is subject to a federal, state or local quarantine or isolation order;
  • The employee is advised by a health care provider to self-quarantine or self-isolate
  • The employee is prohibited from working by the hiring entity due to health concerns related to the possible transmission of COVID

If these requirements sound familiar, it is because the language of this law closely traces the language of the FFCRA.


More Changes for Independent Contractors

The ongoing transformation of California’s independent contractor law continued with the passage of AB2257, which will make it easier for certain workers, notably freelancers, to be classified as independent contractors rather than employees.

Last year, the California legislature passed AB5, which established the “ABC Test” for classifying workers as either independent contractors or employees.  The ABC Test, which went into effect at the start of 2020, constituted a complete overhaul of the prior law, and many independent contractors were reclassified as employees.

The change had the positive effect of allowing former contractors to qualify for benefits like health insurance and protections such as worker’s compensation, but also had the negative effect of making it very difficult for business owners to hire independent contractors, causing many workers to lose their jobs because business owners could not afford to bring them on as employees.

AB2257 seeks to reduce this negative effect by creating more exemptions to the ABC   Test.  Under the new law, the following professions, among others, are now exempt:

  • Photographers, photojournalists, videographers, and digital media aggregators
  • Freelance writers, translators, editors, illustrators, and cartoonists
  • Musicians and music industry professionals including recording artists, record producers, musical engineers and mixers, vocalists, and independent radio promoters
  • Advisors, producers, narrators and cartographers for a journal, book, periodical, or other educational or academic publication
  • Insurance underwriters, real estate appraisers, and home inspectors

Subject to certain conditions, these workers will be classified based on the “Borello Test,” which was used prior to the passing of AB5 and establishment of the ABC Test.  Under the Borello test, it is much easier for worker to qualify as an independent contractor rather than an employee.

The Borello Test, also called the “Right to Control” test, bases the employee/independent contractor determination on the extent to which the hiring entity exercises control over the worker and the work to be performed.  If the hiring entity has a high level of control over the manner and means of the work, then the worker is an employee, and not an independent contractor. The Borello Test weights eleven factors, none of which is a single deciding factor:

  1. Whether the person performing work is engaged in an occupation or business that is distinct from that of the company;
  2. Whether the work is part of the company’s regular business;
  3. Whether the company or the worker supplies the equipment, tools, and the place for the person doing the work;
  4. The worker’s financial investment in the equipment or materials required to perform the work;
  5. The skill required in the particular occupation;
  6. The kind of occupation, with reference to whether, in the locality, the work is usually done under the company’s direction or by a specialist without supervision;
  7. The worker’s opportunity for profit or loss depending on his or her own managerial skill (a potential for profit does not include bonuses);
  8. How long the services are to be performed;
  9. The degree of permanence of the working relationship;
  10. The payment method, whether by time or by the job; and
  11. Whether the parties believe they are creating an employer/employee relationship.

The passing of AB2257 is good news for business owners and freelancers who have struggled to meet their hiring needs or to find work under the highly restrictive ABC Test.

Dramatic Expansion of CFRA

One of the biggest changes to employment law in 2021 concerns the California Family Rights Act (CFRA), with which larger employers are likely already familiar.  The CFRA provides unpaid leave of absence rights to employees for certain reasons to related to the employee’s health and/or family members.

Currently, the CFRA applies only to employers with 50 of more employees.  However, effective January 1, 2021, CFRA application will expand dramatically to cover employers with 5 or more employees.  This change will make millions of additional small business workers eligible for CFRA leave (up to 12 weeks in a 12-month period) for reasons specified in the law.

In addition to the expansion of covered employers, the new law updated certain key definitions and added categories of family members that may trigger CFRA rights.  The CFRA now covers domestic partners, grandparents, grandchildren, siblings, and parents-in-law, and expands the definition of “child” to include the child of a domestic partner.

Another important change: the law now requires an employer that employs both parents of a child grant up to 12 weeks of leave for each parent for reasons related to their child.  Previously, parents working for the same employer could only take a combined 12 weeks.

Lastly, the updated CFRA now requires employers to provide leave related to the active duty of an employee’s spouse, domestic partner, child, or parent in the United States military.

If you are employer with 5 to 49 employees, you will be subject to the CFRA for the first time beginning next year.  We urge you to familiarize yourself with details of the law and update your employee handbooks.  If you employ 50 or more people and are already covered by CFRA, you should nonetheless update your handbooks to account for the other changes.

Paid Family Leave Benefits for Military Families

The existing Paid Family Leave program (PFL) provides wage replacement benefits for employees who take time off to care for a seriously ill family member or bond with a new child, and beginning January 1, 2021, to take time off to participate in a “qualifying exigency” related to the active duty or call to active duty of the employee’s close family member in the U.S. military.

A new law passed in 2020 expands the definition of a family member for the purposes of military family leave, complementing the expanded definition under the new CFRA.  Under the current law, which was passed in 2018 but has not yet gone into effect, only an employee’s spouse, domestic partner, parent or child could qualify them for military family leave.  Beginning next year, qualifying family members will include grandparents, grandchildren and siblings.

New Pay Data Reporting Requirement

California has instituted a new reporting requirement for larger employers.  The new law requires that on or before March 31, 2021, and on or before March 31 every year thereafter, an employer of 100 or more employees must submit a “pay data report” to the DFEH with certain specified wage information.  The required data includes pay information with respect to sex, race and ethnicity.

This is a substantial reporting requirement for covered employers, and DFEH has published an FAQ on its website to help ease the burden.  However, important questions remain unresolved and we expect additional guidance is forthcoming from DFEH.  If you employ 100 or more people, we recommend carefully reviewing the existing FAQ for now.  We will continue to update our clients as DFEH makes more information available.

No-Rehire Provisions

Under prior law, no-rehire provisions in settlement agreements for employment-related disputes were generally prohibited.  The new law creates an exception permitting no-rehire provisions if the aggrieved party has engaged in criminal conduct.  It also clarifies that an employee must have filed its claim in good faith in order to meet the definition of an “aggrieved party” under the law.

Extended Statute of Limitations for Labor Code Complaints

A simple but consequential new law has extended the statute of limitations for a Labor Code complaint from six months after the occurrence of the alleged violation to one year.

New Requirements for Statements of Information

As you know, business entities such as corporations and limited liability companies are required to file a periodic Statement of Information with the Secretary of State.  Under a new law, Statements of Information must now include, in addition to already-required information, a statement indicating whether any officer or director of a corporation, or member or manager of an LLC, has an outstanding final judgment against them for a Labor Code Violation.

Bostock v. Clayton County, Georgia

In a landmark decision, the Supreme Court of the United States ruled on June 15, 2020 that the federal Civil Rights Act of 1964 prohibits discrimination based on an individual’s sexual orientation and/or transgender status.  California already provided these protections at the state level, so the decision will not affect many California businesses.  However, if you have employees in other states that may not have previously afforded these protections to the LGBT community, we recommend you review your policies to ensure you are in compliance.

Increased Minimum Wage

On January 1, 2021, the state minimum wage will increase to $14.00 per hour for employers with 26 or more employers, and $13.00 per hour for employers with 25 or fewer employees.

The minimum wage increase affects not only hourly employees but also exempt, salaried employees.  Beginning in 2021, exempt employees must receive a minimum annual salary of $58,240 for employers with more than 26 employees, and $54,080 for employers with 25 or fewer employees.

Businesses with employees working in Los Angeles County should keep in mind that as of July 1, 2020, the minimum wage for employees working there increased to $15.00 per hour for employers with 26 or more employees, and $14.25 per hour for employers with 25 or fewer employees.  The same rates apply in nearby cities including Malibu, Santa Monica, and Pasadena.

Changes to CCPA

With the passage of Proposition 24, Californians have voted to significantly expand the California Consumer Privacy Act , including provisions allowing consumers to direct businesses to not share their personal information, eliminating the time period in which businesses can cure violations before being penalized, and creating the Privacy Protection Agency to enforce the state’s consumer data privacy laws. The state has extended the deadline for employer compliance with respect to employees, but compliance with respect to customers is required immediately.

Because of a certain data points collection measure, CCPA applies to more businesses that many people realize.  We recommend that clients work with us to determine whether they are subject to CCPA, what they must do if they are, and what to start doing now to prepare for CCPA’s eventual application to employees.

Kin Care

California has made a subtle change to the purposes for which an employee may use paid sick leave.  Current law requires that an employer providing sick leave allow an employee to use at least half of the employee’s accrued and available sick leave to attend to the illness of a family member (often referred to as “kin care”). The new law amends kin care to provide that the designation of the sick leave is at the “sole discretion” of the employee.  Employers are not required to provide any additional paid time off as a result, but must allow the employee to designate which type of sick leave the employee is using.

Expansion of Crime Victim Leave

Existing law provides the victims of violent crimes and families of homicide victims with certain protected, unpaid leave.  These laws have been amended to afford such employees time to recover without fear of job loss and to take longer leaves of absence. The prohibition of discharging, discriminating, or retaliating against employees who are victims of domestic violence, sexual assault, or stalking has been expanded to include employees who are victims of other crime or abuse causing physical jury, or causing mental injury and a threat of physical injury.  The new law further includes a person whose immediate family member is deceased as the direct result of a crime.

Lastly, employers with 25 or more employees are now prohibited from discharging, discriminating, or retaliating against an employee who is a victim, as defined, if such employee takes time off to seek medical attention for injuries caused by crime or abuse, to obtain services from prescribed entities as a result of the crime or abuse, to obtain psychological counseling or mental health services related to an experience of crime or abuse, or to participate in safety planning and take other actions to increase safety from future crime or abuse.

We hope that you have found this update informative and feel better prepared for 2021.  As always, please do not hesitate to reach out with questions about any of the above.  We are more than happy to assist with navigating the infection control measures recommended by the CDC and California Department of Health and Human Services for businesses, as well as updating handbooks and any other compliance goals.  Best of luck in the New Year.