New Slew of California Employment and Labor Laws Signed Into Law

During the recent legislative session ended September 30, 2022, California Governor Gavin Newsom signed into law several bills expanding workplace protections for California employees that will have an impact on most employers with employees in the State. All in all, 35 labor and employment related bills made it to the Governor’s desk this year and all but two of these were signed into law.

Summary of significant legislation

The following briefly summarizes certain significant laws enacted. These are generally scheduled to take effect January 1, 2023, unless where otherwise noted.

Leave Permitted to Care for Designated Person

AB 1041 amends the California Family Rights Act to permit an employee to take job-protected leave to care for a designated person”, defined as an individual related by blood or whose association with the employee is the “equivalent of a family relationship”.

Salary and Wage Transparency

 SB 1162 amends current law to require employers with at least 100 employees to report certain specific pay data about their employees to the Department of Civil Rights (formerly known as the Department of Fair Employment and Housing); revises the deadline required to submit the information until the second Wednesday of May every year; and requires employers with at least 15 or more employees to provide the pay scale for a position on job applications and postings, and upon request, for the position, an individual is currently employed in.

Increase in SDI and Paid Family Leave Benefits

SB 951 extends existing wage replacement rates for the State Disability Insurance (SDI) and Paid Family Leave programs until January 1, 2025. For claims commencing on or after January 1, 2025, SB 951 revises the formulas under both programs to provide an increased wage replacement rate ranging from 70 percent to 90 percent, depending on the employee’s wages. In addition, effective January 1, 2024, it repeals the current contribution wage ceiling, thus, making all wages subject to the SDI contribution rate.

 Pandemic Related Legislation:

• Extension of California Supplemental Paid Sick Leave. AB 152 extends California’s current Supplemental Paid Sick Leave law for an additional three months, until the end of 2022, and enacts a $50,000 grant program to assist covered small businesses in covering the costs of the law in 2022.
• COVID-19 Workers’ Compensation Presumption for Critical Workers. AB 1751 extends the current presumption for one additional year, until January 1, 2024.
• COVID-19 Notices Re: Exposure. AB 2693 extends the statutory notice requirements enacted by AB 685 for another year, until January 1, 2024. Employers may comply by providing postings in lieu of individual notices.

Bereavement Leave

AB 1949 requires California employers with 5 or more employees to provide up to 5 days of bereavement leave upon the death of a family member.

Employment Discrimination – Cannabis

AB 2188 prohibits adverse action if an employee uses cannabis off-the-job and away from the workplace, or if cannabis metabolites are found as a result of a drug screening test.

Prohibition Against Employee Retaliation in Emergencies

SB 1044 makes it unlawful for employers to take or threaten adverse action against an employee for refusing to report to work, or by leaving a workplace because of a reasonable belief that the workplace is unsafe.

Establishment of Fast Food Sector Council

The Fast Food Accountability and Standards Recovery Act (AB 257) is a first of its kind in the country, and creates a 10-member unelected body to establish industry-wide standards on wages, working hours, and other working conditions that will be applied across the board to the entire fast food industry.

Card Check Process for Agricultural Employees

Under AB 2183, if an agricultural employer agrees to sign a “labor peace compact”, prohibiting them from making statements against unions in an organizing campaign and conducting captive audience meetings with employees, employees will vote for union membership via a mail-in ballot process (currently a secret ballot election process is used). However, if the employer chooses not to sign the compact, employees will now be able to select a union via “card check” without an election.

California Consumer Privacy Act Exemption for Employee Personal Information Not Extended

What is interesting to note is that the current exemption in the California Consumer Privacy Act (CCPA) to exclude employee personal information (and a related exemption for business-to-business data) was not extended during this year’s legislative session, and will expire at year-end. Thus, employers subject to the CCPA must be prepared to comply with the many data privacy obligations relating to employment and job applicant data beginning on January 1, 2023.

As a brief review, the CCPA was signed into law and became effective January 1, 2020. At the time of its passage in 2018, it was considered the strongest consumer protection law in the country. Moreover, under the law, employees are included in the definition of “consumers”. As such, the CCPA applies to employment related personal information maintained by an employer with respect to its employees in California (for example, job applicant, beneficiary and emergency contact information).

Note that the CCPA doesn’t apply to data that is already protected by HIPAA.

Subsequently, in November 2020, California voters passed a ballot initiative “The California Privacy Rights Act (CPRA)” that amended the CCPA and strengthened the law even further. It gave businesses until January 1, 2023, to bring themselves into compliance with all of the CPRA amendments. Furthermore, the California Legislature previously amended the CCPA to include a one-year moratorium for the application of most CCPA requirements for employee personal information, that was ultimately extended through the end of 2022. However, as noted above, this exemption has not been extended in this year’s legislative session.

 The Baldwin Regulatory Compliance Collaborative

This Legislative Update was prepared by the Baldwin Regulatory Compliance Collaborative (the “BRCC”), a partnership of compliance professionals offering client support and compliance solutions for the benefit of the Baldwin Risk Partners organization, which includes: Jason Sheffield, BRP National Director of Compliance; Richard Asensio, Burnham Benefits Insurance Services; Nicole L. Fender, the Capital Group; Bill Freeman, AHT Insurance; Stephanie Hall, RBA/TBA; Caitlin Hillenbrand, AHT Insurance; Paul Van Brunt, Baldwin Krystyn Sherman Partners (BKS); and Natashia Wright, Insgroup.

ADDITIONAL INFORMATION

For additional information regarding this year’s legislative developments, please refer to a Fisher Phillips in-depth analysis of the most significant legislation signed into law here.

For assistance with respect to complying with California’s privacy rights law, please refer to the accompanying article by Fisher Phillips here, in which the firm announced the launching of its CCPA Resource Center to assist employers in complying  with the California consumer privacy law. Additional resources are available on the state website here, including 13 enforcement case examples here, evidencing instances of non-compliance and remedial action taken by businesses to bring themselves into compliance.

For questions regarding this Legislative Update or any other related compliance issues, please contact your Burnham Benefits Consultant or Burnham Benefits at 949‐833‐2983 or inquiries@burnhambenefits.com.

This Legislative Update was prepared by the Baldwin Regulatory Compliance Collaborative (the “BRCC”), a partnership of compliance professionals offering client support and compliance solutions for the benefit of the Baldwin Risk Partners organization, which includes: Jason Sheffield, BRP National Director of Compliance; Richard Asensio, Burnham Benefits Insurance Services; Nicole L. Fender, the Capital Group; Bill Freeman, AHT Insurance; Stephanie Hall, RBA/TBA; Caitlin Hillenbrand, AHT Insurance; Paul Van Brunt, Baldwin Krystyn Sherman Partners (BKS); and Natashia Wright, Insgroup.

Burnham Benefits and the BRCC do not engage in the practice of law and this publication should not be construed as the providing of legal advice or a legal opinion of any kind. The consulting advice we provide is intended solely to assist in assessing its compliance with applicable federal and state law requirements, and is based on our interpretation of federal guidance in effect as of the date of this publication. To the best of our knowledge, the information provided herein, and assumptions relied on, are reasonable and accurate as of the date of this publication. Furthermore, to ensure compliance with IRS Circular 230, any tax advice contained in this publication is not intended to be used, and cannot be used, for purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another person any tax-related matter.