EAC Update: 2022 New California Laws for Employers

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EAC Update


2022 Legal Update for California Employers

By: R. Craig Scott

Scott & Whitehead


January 20, 2022


Legislative UpdatesThe following is a summary of the primary State legislative actions impacting California employers, each of which took effect January 1, 2022 except as otherwise stated. Please note, these descriptions are summaries only, and are not intended to provide a complete description of each new law. Please contact our office if you have any questions.

AB 1506, AB 1561: Extends Certain Exemptions from “ABC Test” for Independent Contractors. 

Now, two previously granted exemptions to the AB 5 “ABC Test” are extended:

  • AB 1506: Exemption for newspaper distributors extended to January 1, 2025;
  • AB 1561: Exemption for licensed manicurists extended to January 1, 2025.

Employers must remember that having an exception to the ABC test is not the last word. To be properly classified as an independent contractor under California law, the longstanding criteria under the Borello Test must still be met in order to qualify as an independent contractor, including for the work relationships where exemptions have just been extended.

AB 701: Warehouse Distribution Centers, Employee Quotas amending section 138.7 of the Labor Code. 

Employers with more than 100 employees, at a single California warehouse distribution center, or 1,000 or more employees at multiple centers in the State, are required to provide each nonexempt employee with a written description of any applicable quota. 

A quota is a work standard an employee is assigned to perform at a specified speed, or to perform a certain number of tasks, or to produce a certain amount of material, within a defined period, and where failure may lead the employee to suffer an adverse employment action. 

Employers are prohibited from requiring quotas to be met, or adverse employment actions to be taken, as to any quota that has not been disclosed, or that interferes with meal or rest periods, or use of bathroom facilities, or health and safety laws.

AB 1003: Wage Theft; Grand Theft (adding section 487m to the Penal Code). 

The intentional theft of wages, including gratuities, in an amount greater than $950 from any one employee is punishable as grand theft.

AB 1084: Gender Neutral Retail Departments (amending sections 55.7 and 55.8 of the Civil Code).

A retail department store, located in California, that has 500 or more employees across all of its California retail department store locations, and that sells childcare items or toys shall maintain a gender neutral section.

In that area, a reasonable selection of the items and toys shall be displayed, regardless of whether they have been traditionally marketed for girls or for boys. 

Failure to comply may result in a civil penalty of $250 for a first violation or $500 for a subsequent violation. 

SB 657: Workplace Posters (adding section 1207 to the Labor Code). 

Where an employer is required to physically post Labor Code notices, an employer may also distribute that information to employees by email with the documents attached. The employer remains obligated to physically display the required posting at the office. Remote workers should be instructed to post the notices.

SB 62: Garment Manufacturing (amending sections 1174.1, 2670, 2671, 2673, 2673.1 and 2675.5 of the Labor Code, and adding section 2673.2 to the Labor Code). 

A “brand guarantor” is a person contracting for the performance of garment manufacturing. A garment manufacturer, contractor or brand guarantor shares joint and several liability for the full amount of unpaid minimum, regular, overtime and other premium wages due to any and all employees who performed manufacturing operations. 

Also, an employee engaged in garment manufacture shall not be paid by the piece or unit, or by the piece rate. Employees shall be paid at an hourly rate not less than the applicable minimum wage.

SB 646: Exception to PAGA for Janitorial Employees (add and repeal section 2699.8 of the Labor Code). 

The Legislature has amended PAGA to exempt some janitorial employees. Specified janitorial employees, who work under certain collective bargaining agreements, are covered. They will no longer be able to bring civil actions under PAGA. Effective September 27, 2021, this section of the Labor Code becomes ineffective as of the earlier date on which the collective bargaining agreement expires, or July 1, 2028.

AB 1033: California Family Rights Act (amending sections 12945.2 and 12945.21 of the Government Code). 

The California Family Rights Act defines family care and medical leave to include care for a parent. Care for a parent-in-law is now included, as well. 

A small employer family leave mediation pilot program, for employers with between five and 19 employees, has been instituted by the Department of Fair Employment and Housing. When an employee requests an immediate right to sue, alleging a violation of family care and medical leave provisions, the employee is required to mediate prior to filing a civil action, if mediation is requested by the employer or the employee. 

SB 639: Minimum Wages, Persons with Disabilities (amending Labor Code section 1191; amending and repealing Labor Code section 1191.5). 

Existing law permits the Industrial Welfare Commission to issue an employee, who is mentally or physically disabled, a special license authorizing the employment of the licensee, for a period not to exceed one year, at a wage less than the minimum wage. 

The new law prohibits new special licenses from being issued after January 1, 2022. The law permits a license to only be renewed for existing license holders who meet requisite benchmarks. 

SB 93: Rehiring and retention of workers displaced by COVID19 (adding and repealing section 2810.8 of the Labor Code). 

This new law, until December 31, 2024, requires an employer, as defined, to offer its laidoff employees specified information about job positions that become available for which the laidoff employees are qualified, and to offer positions to those laidoff employees based on a preference system, in accordance with specified timelines and procedures. The law defines the term “laidoff employee” to mean any employee who was employed by the employer for six months or more in the 12 months preceding January 1, 2020, and whose most recent separation from active service was due to a reason related to the COVID19 pandemic, including a public health directive, government shutdown order, lack of business, a reduction in force, or other economic, nondisciplinary reason related to the COVID19 pandemic. The law requires an employer to keep records for three years, including records of communications regarding the offers. The law requires an employer that declines to recall a laidoff employee on the grounds of lack of qualifications, and instead hires someone other than a laidoff employee, to provide the laidoff employee a written notice within 30 days including specified reasons for the decision and other information on those hired. 

SB 331: “Silence No More” Act (amending section 1001 of the Code of Civil Procedure). 

For agreements entered into on or after January 1, 2022, the following applies:

  1. Settlement agreements cannot prevent the disclosure of information related to any form of workplace discrimination, not just discrimination based on sex (as present law dictates).
     
  2. An employee cannot be prohibited from discussing conduct he/she has reason to believe is unlawful.
     
  3. A non-disparagement provision must include this language:

    “Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.”
     
  4. An employee being offered a separation agreement must be advised that he/she has the right to consult an attorney, with at least five (5) business days to do so. 

Reminders


California Hourly Minimum Wage and Exempt Salary Minimum: In accordance with the scheduled increases, effective as of January 1, 2022, the state minimum wage will move up $1.00 per hour, to $14.00 per hour, for employers with 25 or fewer employees. The new minimum wage will be $15.00 per hour for employers with 26 or more employees. For employers with 25 or fewer employees, the new minimum wage raises the minimum salary required to qualify for exempt status to $1,120 per week, $4,853.33 per month, or $58,240 per year. For employers with 26 or more employees, the new minimum wage raises the minimum salary required to qualify for exempt status to $1,200 per week, $5,200 per month or $62,400 per year. 

Local ordinances, such as those that apply to employees who are in at least 16 California cities, including San Francisco, Los Angeles and Santa Monica, mandate a higher minimum wage with scheduled changes as of July 1, 2022. Please note, the minimum salary requirement for exempt status does not change based on local ordinances.

IRS Standard Mileage Rate: Each year, the IRS adjusts the IRS Standard Mileage Rate for business travel. For 2022, the rate is 58.5 cents per mile. Reimbursement at the IRS Standard Mileage Rate is presumed by law to constitute payment in full for the business use of an employee’s personal vehicle (including fuel, insurance, maintenance, repairs, etc.). Therefore, employers are advised to always reimburse employees at this rate (or more, but not less) for all business-related mileage driven in the employee’s personal vehicle. 

Computer Software Professionals Minimum Pay for Overtime Exemption: Effective January 1, 2022, the minimum pay rate for exemption from overtime for certain categories of computer software professionals will increase to $50.00, up from $47.48 per hour, or to $104,149.81 per year. 

Licensed Physicians and Surgeons Minimum Pay for Overtime Exemption: Effective January 1, 2022, the minimum pay rate for exemption from overtime for licensed physicians and surgeons will increase to $91.07 per hour.

Sexual Harassment Prevention Training: All employers of five or more employees must provide one hour of sexual harassment and abusive conduct prevention training to nonmanagerial employees and two hours of sexual harassment and abusive conduct prevention training to managerial employees once every two years. The deadline by which to initially comply was January 1, 2021. Employers who failed to timely comply should now provide the required training. 

Arbitration Agreements: Employers and employees may elect to resolve their disputes by arbitration. The law surrounding the construction and use of arbitration agreements changes constantly. To keep up with changes in laws and court decisions, prudent employers have their arbitration agreements reviewed and updated regularly.


Reprinted with permission from Scott and Whitehead. 

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This bulletin is provided as a service to our clients and other friends to highlight current developments in the law. It is not intended to provide a legal opinion or specific legal advice. Should issues arise involving these, or other matters, please contact the EAC Office at (714) 794-4253.  


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