Seyfarth Synopsis: Headlining the number of employment-related bills California legislators introduced by the February 19th deadline are those that would extend COVID-19 Supplemental Paid Sick Leave and provide other leaves and accommodations.

After last year’s pandemic-caused truncation of the 2020 legislative session—in which the governor signed only 372 new laws, the fewest since 1967—many expected the introduction of a large number of bills. Yet “only” 1,560 bills were introduced in the Assembly this year, the lowest number in six years—though there is no shortage of labor and employment-related bills.

Below, we summarize the most significant labor and employment bills introduced, which help mark the legislative playing field for California employers this year. The bills will now make their way through the committee process. Many of these measures will undergo significant amendment. Some will make it through the legislative process and some will not. Stay tuned for more in-depth analyses of the proposed bills as the session continues.

Top COVID-19-Related Bills

Headlining our bill count this year are two bills designed to accomplish something employers have anxiously wondered about since the prior COVID-19 Supplemental Paid Sick Leave law (AB 1867 in 2020, which we summarized here) expired at the end of 2020.

COVID-19 Supplemental Paid Sick Leave: AB 84 & SB 95 are parallel budget trailer bills that would, effective immediately upon the Governor’s signature, extend the expiration date for COVID-19 supplemental paid sick leave (SPSL) for food sector workers (EO N-51-20), and other covered workers, to September 20, 2021, or any expiration of any federal extension of the EPSLA, and make the provisions retroactive to January 1, 2021. The bills would provide an annual allotment of up to 80 hours of available SPSL until the eventual expiration date. The bills would expand SPSL beyond people who leave their home to perform work to also include persons who telework. The bills would also extend SPSL entitlements to reasons related to vaccinations, and similar to the now-expired FFCRA, it would expand coverage to those seeking medical diagnosis for COVID-19 symptoms, and caring for individuals who are quarantining or seeking medical diagnosis or whose school or place of care is closed due to COVID-19. For non-food sector SPSL, the bill would also remove the 500-employee qualification for an entity to be subject to the law, add public employers generally to its application, and make other changes. For those of you anxiously tracking the progress of these bills, they are likely to be heard in the respective Budget Committees on March 8.

Rehiring and Retention of Displaced Workers: AB 1074, bringing back AB 3216 (2020) (which Governor Newsom vetoed), would require certain employers to offer preferential recall to employees who were laid off because of the pandemic. If an employer hires someone other than a laid-off employee, it must notify the employee within 30 days, providing specified reasons for the decision and information on those hired. The bill would additionally expand 2020’s Displaced Janitor Opportunity Act to hotel services employers, requiring successor contractors or subcontractors to retain employees for 60 days after transition, and continued employment for satisfactory performance.

COVID-19 Contact Tracing and Safety Policies: SB 46 would require employers to develop and implement contact tracing and safety policies for their employees, including requiring notice to the employer when an employee receives a positive COVID-19 test.

Pandemics Priority for Medical Treatment: AB 93 would prioritize workers in the food supply industry, such as field workers and grocery workers, for rapid testing and vaccination programs in response to pandemics, including COVID-19.

COVID-19 Rent Relief: AB 255 is earmarked to provide commercial rent relief protections for small businesses affected by the COVID-19 pandemic.

Spot Bills: Bills introduced without substance but to hold a “spot” into which amendments will later be made include AB 257, which creates a FAST Recovery Act to address the COVID-19 pandemic’s effect on the fast food industry. AB 757 would authorize a private employer to request prescribed documentation of a positive COVID-19 test or diagnosis if (1) an employee reports that the employee is unable to work due to a positive for COVID-19 test result and (2) the employer determines that an employee may be subject to a 14-day exclusion from the workplace as required under certain law or regulations. Employers must continue to comply with existing privacy protections when requesting documentation.

Discrimination and Retaliation Prevention

Political Affiliation Protection: SB 238 would add political affiliation as a protected characteristic under the FEHA.

Employment Discrimination: AB 1119 would expand FEHA-protected characteristics to include “family responsibilities,” defined as the obligations of an employee to provide direct and ongoing care for a minor child or a care recipient, and add it as a basis for which employers must engage in the interactive process and provide reasonable accommodation to an applicant or employee.

Cannabis Screening: Answering that question, “When will California ever get around to protecting marijuana users from employment discrimination?,” AB 1256 would prohibit employers from discriminating against a person in hiring, termination, or any term or condition of employment because a drug screening test has found the person to have tetrahydrocannabinol (THC) in their urine. (This bill would exempt employers required to drug test based on federal law or regulations, those that would lose monetary or licensing benefits for failing to drug test, and building and construction employers.)

Required Disclosures to Temporary Agricultural Workers: AB 857 would prohibit employers from retaliating against an H-2A employee for raising questions that relate to employment, housing, or working conditions. and would require an employer to provide an H-2A employee on the day the employee begins work in the state a written notice in Spanish and, if requested by the employee, in English, containing specified information relative to an H-2A employee’s rights pursuant to federal and state law. It would also require an employer to provide compensation for travel time at their regular rate of pay to or from employer provided housing to the worksite, as well as other requirements (with certain exemptions for employees covered by CBAs).

More Spot Bills: AB 1122 would encourage employers to develop and implement personnel policies that incorporate workforce diversity. AB 316 is aimed to achieve pay equity in state employment across gender, racial, ethnic, and under-represented groups.

Leaves

Bereavement Leave Act of 2021: AB 95 would require employers with 25 or more employees to grant employees unpaid bereavement leaves of up to ten business days, and would require employers with fewer than 25 employees to grant unpaid bereavement leaves of up to three business days. Leave entitlement would be triggered by the death of a spouse, child, parent, sibling, grandparent, grandchild, or domestic partner.

Employer Provided Backup Childcare Benefit: AB 1179 would require employers of 1,000 or more employees to provide employees, on or after January 1, 2022, with up to 60 hours of paid backup childcare benefits, to be accrued and used as provided. Accrued paid childcare shall carry over to the following year of employment. But, employers could limit use of the accrued paid backup childcare benefits to 60 hours during each year of employment.

Paid Sick Leave Accrual and Use: AB 995 would modify the employer’s alternate sick leave accrual method to require that an employee have no less than 40 hours of accrued sick leave or paid time off by the 200th calendar day of employment or each calendar year, or in each 12-month period. The bill would raise the employer’s authorized limitation on the employee’s use of carryover sick leave to 40 hours or 5 days.

Family Member Definition Expansion: AB 1041 would expand the definition of the term “family member” under the Healthy Workplaces, Healthy Families Act of 2014 (CA PSL) to include individuals related by blood or whose close association with the employee is the equivalent of a family relationship. The bill, in its current form, does not define how “close” an association must be to be considered the “equivalent of a family relationship.” The bill would also expand the universe of employees eligible to take CFRA leave, or Paid Family Leave (PFL) to care for to individual to include such a “close association.”

Paid Family Leave Weekly Benefit Increase: AB 123 would revise the formula for determining benefits available pursuant to the family temporary disability insurance program, for periods of disability commencing after January 1, 2022, by redefining the weekly benefit amount to be equal to 90% of the wages paid to an individual for employment by employers during the quarter of the individual’s disability base period in which these wages were highest, divided by 13, but not exceeding the maximum workers’ compensation temporary disability indemnity weekly benefit amount established by the Department of Industrial Relations.

Paid Family Leave Expansion Where Child Deceased In Childbirth: AB 867 would expand eligibility for benefits under the Paid Family Leave program by to include leave for a parent who was pregnant with a child, if the child dies unexpectedly during childbirth at 37 weeks or more of pregnancy.

Small Employer Family Leave Mediation Pilot Program: AB 1033 is a re-run bill that would attempt again to establish pilot program for a small employer family leave mediation. The measure would also expand CFRA to include leave to care for a parent-in-law within the definition of family care and medical leave and make numerous other changes.

Wage and Hour

Telecommuting Employees: AB 513 is a welcome bill to employers that would authorize employees working from home to receive legally required notices and postings electronically and sign certain documents electronically, and would deem that the final wages due to an employee working from home are paid on the date that the paycheck is mailed to the employee.

Telework Flexibility Act: AB 1028 would authorize telecommuting employees to waive overtime up to 10 hours of work per day, and waive split shift premiums if the employee requests an employee-selected remote work flexible schedule, and it would permit an employee to choose when to take any meal or rest period during the workday. Similarly, watch for when substance is amended into spot bill AB 55 toward its stated purpose of affording certain rights and benefits to telecommuting employees.

Workplace Flexibility Act of 2021: AB 230, would permit an individual nonexempt employee to request an employee-selected flexible work schedule, allowing for workdays of up to 10 hours per day within a 40-hour workweek, where the employee would not be entitled to overtime compensation for those additional daily hours.

Wage Records Inspection: AB 436 would amend Labor Code § 226(b) to harmonize the time frame to respond to requests pursuant to Labor Code § 226(b) with requests for personnel records pursuant to Labor Code § 1198.5 by allowing the former records to be produced within the same time frame as the latter (i.e., 30 days).

Wage Theft: AB 1003 would amend the Penal Code to make punishable as grand theft an employer’s intentional theft of wages in an amount greater than $950, in aggregate (involving one or more employees).

Wage Withholdings: SB 505 would provide that, prior to garnishing wages when the employer is required or empowered to do so by state or federal law, employers must make a good faith effort to consult with an employee to obtain a written authorization to resolve a monetary obligations before employing third-party collection services or commencing a civil action. Where a written authorization provides for a withholding or diversion of an employee’s wages, the amount withheld or diverted shall not exceed 5% of the employee’s monthly gross wages.

Expansion of Garment Manufacturing Definition: SB 62 would potentially expose persons or entities contracting for the performance of garment manufacturing to joint and several liability with any manufacturer and contractor for the full amount of any unpaid wages, any other compensation, damages, liquidated damages, attorney’s fees, civil penalties, and any other penalties to any and all employees who performed garment manufacturing operations for any violation. The measure would also eliminate piece rate compensation in the garment industry. This measure almost precisely replicates SB 1399, which did not quite make it to the Governor’s desk in 2020, likely simply a result of timing and other priorities in 2020.

Warehouse Distribution Centers Quota Disclosures: AB 701 would require that employers provide nonexempt employees who work at a warehouse distribution center a written description of each quota the employee must meet, including the quantified number of tasks to be performed, or materials to be produced or handled, within the defined time period, as well as notice that failure to meet the quota could result in adverse employment action, and would prohibit an adverse action against an employee for failure to meet any quota that has not been disclosed.

Limitations to PAGA: AB 385 aims to ease the litigation risk of the pandemic on employers by prohibiting employees from maintaining an action under PAGA for violations of the Labor Code arising between March 4, 2020, and the state of emergency termination date. AB 530 would require the “aggrieved employee” to inform the employer which specific violations of the Labor Code are being alleged under each subdivision of PAGA and to inform the employer if statutory right-to-cure provisions apply.

Independent Contractors: Three bills have been introduced thus far in the continued attempt to reform AB 5, including AB 231, which would make permanent the exemption from the ABC test for licensed manicurists, by providing that they be indefinitely governed by the multifactor Borello test instead of the ABC Test. AB 612 would create a new exemption from the ABC test for a bona fide business-to-business arrangement that involves a voluntary deposit, to be made available to entities that utilize their own employees to produce, locate, or procure tangible personal property, which it owns, leases, or otherwise has the lawful right to possess. And, least likely to gain traction, AB 25 would replace the ABC test with the multifactor Borello test.

Settlement Agreements

Another year, another potential restriction on settlement agreements. SB 331, the “Silenced No More Act,” would amend Section 12964.5 of the Government Code (enacted by SB 1300 of 2018) to prohibit employers from including in separation agreements any provision that might deny the employee the right to disclose information about unlawful acts in the workplace. The bill would also amend Section 1001 of the Code of Civil Procedure (enacted by SB 820 of 2018) to extend the prohibition on confidentiality provisions in settlement agreements to all forms of workplace discrimination—not just discrimination based on sex. This bill would build upon CCP Section 1002.5 (enacted by AB 749 of 2019 and amended by AB 2143 in 2020).

Cal/OSHA

Safety Citations and Retaliation Prohibitions: SB 606 would require that Cal/OSHA issue a citation to an egregious employer (defined as an employer that intentionally made no reasonable effort to eliminate a known violation) for each willful violation, and each employee exposed to that violation would be considered a separate violation for purposes of the issuance of fines and penalties. It also establishes a rebuttable presumption of retaliation if an employer takes adverse action against an employee within 90 days of the employee doing certain things, such as disclosing a positive test or diagnosis of a communicable disease, requesting testing as a result of exposure, or reporting a possible violation of an OSHA standard.

COVID-19 Income Tax Credits: AB 62 would allow a credit against corporate taxes beginning January 1, 2021, in an amount equal to the total amount paid or incurred to comply with the regulations adopted by the Cal OSH Standards Board on November 19, 2020, relating to COVID-19 prevention.

Employee Benefits

Large Group Health Insurance: SB 255 would authorize an association of employers to offer a large group health care service plan contract or large group health insurance policy consistent with ERISA if certain requirements are met, including that the large group health care service plan contract or large group health insurance policy has been in continuous existence since January 1, 2014.

Workers’ Compensation & Unemployment

Also borne out of the pandemic was a clear need to update California Workers’ Compensation and Unemployment Insurance rules, leading to a number of new bill proposals.

Hospital Employee Injuries: SB 213 would define “injury” for a hospital employee to include infectious diseases, cancer, musculoskeletal injuries, post-traumatic stress disorder, and respiratory diseases. The bill would, for purposes of workers’ compensation, create rebuttable presumptions that these injuries that develop or manifest in a hospital employee who provides direct patient care in an acute care hospital arose out of and in the course of the employment.

Civil Litigation

Streamlining Discovery: SB 241 is a spot bill aimed to enact legislation that would streamline discovery processes to reduce costs to the courts and litigants. A welcome change to litigators and businesses alike.

Workplace Solutions

While there are some small glimmers of hope, many introduced bills are worrisome for the business community. While employers should prepare for the passage of SPSL retroactive to January 1, 2021, it is not yet time to fret about the rest—the legislative session is in its infancy, and each measure—apart from, perhaps, SB 62—will almost certainly be amended. We’ll keep you updated here at Cal Peculiarities, and you can also check out our Policy Matters podcast and newsletter for regular check-ins on California (and national) policy and legislative updates as well.