In preparation for 2022, California employers have an abundance of new laws with which to comply. Below are the highlights curated by our Employment Law Group.
SB 331: The “Silenced No More” Bill, Prohibits Confidentiality of Alleged Unlawful Acts in NDAs and Settlement Agreements
SB 331, which takes effect January 1, 2022, restricts the ability of employers to impose confidentiality about unlawful acts in the workplace on its employees in settlement agreements and non-disclosure agreements.
1. Employers cannot require confidentiality in settlement agreements resolving any type of workplace harassment or discrimination claims filed in court or with an administrative agency.
SB 331 expands upon the 2019 law that prohibits provisions in settlement agreements or non-disclosure agreements (NDAs) that prevent the disclosure of factual information relating to civil or administrative complaints of sexual assault, sexual harassment, harassment or discrimination based on sex, and any related retaliation. The expanded prohibition taking effect in 2022 will apply to any workplace harassment or discrimination claims related to any protected characteristic, not just those based on sex. This includes acts based on race, religion, color, national origin, ancestry, disability, medical condition, familial status, sex, gender, gender identity, gender expression, sexual orientation, age, and other protected characteristics under California’s Fair Employment and Housing Act (FEHA). Practically, this means that employers cannot require an employee to keep confidential factual information about any harassment, discrimination, or related retaliation alleged in a civil lawsuit or administrative charge. However, such settlement agreements may still maintain the confidentiality of the amount paid in settlement of the claim, and the parties may still agree to confidentiality in settlements of threatened claims that have not been filed in court or with an administrative agency, subject to the conditions discussed below.
2. There are new requirements for NDAs and other agreements that would have the effect of restricting disclosure of information related to workplace conditions.
SB 331 further expands upon FEHA’s prohibition by requiring that employers include in any agreements (including NDAs, non-disparagement agreements, separation agreements not involving resolution of civil claims filed in court or with an administrative agency, and other agreements required in exchange for a raise, bonus, employment or continued employment) that could otherwise preclude an employee from disclosing information about unlawful acts in the workplace, including sexual harassment, a disclaimer that enables them to disclose information about such acts. To satisfy this, such agreements must now specifically include the following disclaimer: “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.”
Furthermore, in any such agreement that is a separation agreement that is not made to resolve previously filed civil actions or administrative charges (for example, severance agreements offered upon termination of employment in exchange for a release of claims), such an agreement must now include a notice about the employee’s right to consult an attorney regarding the agreement and also provide “reasonable time,” which is defined as at least five business days, for an employee to consult with an attorney before accepting the agreement. While an employee may sign the agreement in acceptance before five business days, the acceptance must be “knowing and voluntary” and not induced by the employer’s “fraud, misrepresentation, or threat to withdraw or alter the offer.”
Any provisions that violate the requirements and prohibitions set forth above are void and unenforceable.
The changes enacted by SB 331 are not intended to deny employers the right to protect their trade secrets, proprietary information, or other confidential information that does not involve unlawful acts in the workplace. Nor are they intended to deny employers the use of general releases or waivers of all claims in an agreement related to an employee’s separation from employment, provided that the release or waiver is otherwise lawful and valid and complies with these new provisions.
Employer Vaccination Mandates
OSHA’s Vaccine Mandate for Large Employers
In September 2021, President Biden signed several orders requiring that federal employees, federal contractors, and most healthcare workers across the country be vaccinated against COVID-19. He also instructed OSHA to develop an emergency temporary standard (ETS) directing private employers with 100 or more employees to implement COVID-19 vaccine mandates, or to require weekly testing for their unvaccinated employees. OSHA’s ETS is currently stayed by a federal court order while the Sixth Circuit Court of Appeals determines its legality. Therefore, at the time of publication of this article, there is not a legal requirement that private employers institute a vaccination mandate.
Despite the current stay of the ETS, private employers may elect to adopt vaccination requirements. If an employer does so, it must be prepared to address requests for exemption and reasonable accommodations.
Vaccine Mandate for Federal Contractors
In September, President Biden issued Executive Order 14042, which required federal contractors and subcontractors to have full vaccination by January 18, 2022. On October 1, 2021, the Federal Acquisition Regulatory Council (“FAR Council”) issued the draft FAR deviation clause, FAR 52.223-99, Ensuring Adequate COVID-19 Safety Protocols for Federal Contractors.
On December 7, 2021, a federal court in Georgia issued a countrywide stay of the vaccine mandate for federal contractors and subcontractors.
While the government will not enforce the FAR deviation clause incorporated into federal contracts and subcontracts while this plays out in the courts, employers may still choose to adopt voluntary vaccine mandates for employees in states such as California where it is permitted, subject to certain accommodation requirements as discussed in the following section. Furthermore, some contractors could choose to enforce provisions that they negotiated with subcontractors.
Despite the injunction, contractors and subcontractors that have accepted the FAR deviation clause may remain subject to the requirements regarding masking and social distancing in the workplace.
Accommodations to Vaccination Requirements
Any employer who implements a vaccination requirement will be required to provide reasonable accommodations to individuals with medical or religious reasons precluding them from receiving the COVID-19 vaccine. Both California and federal law require that employers engage in the interactive process and provide accommodations when it does not pose an undue hardship on the employer.
Employers need to carefully review any requests for exemption from a vaccine requirement. A request for exemption due to personal preference or a general distrust of the vaccine is not a legally protected reason for exemption. However, with respect to religious or medical accommodations from the exemption, employees do not need to use any particular language when requesting an accommodation or exemption.
A general outline of the steps for determining whether an accommodation is required is set forth below, but employers should be aware that it can be a complicated process and the details are well beyond the scope of this list or this article.
- Receive the request for an exemption. This can be in the form of a specific request by the employee, or the employer becoming aware through other circumstances of a possible need for accommodation. The legally protected bases for an accommodation from the vaccine mandate are either medical or religious. There is no magic language required to trigger the employee’s right to the interactive process and potential reasonable accommodation.
- For a medical accommodation, determine whether the employee has a disability under the California Fair Employment and Housing Act (FEHA) and the Americans with Disabilities Act (ADA). For a religious accommodation, determine whether the employee has a sincerely held religious belief.
- Determine if the accommodation the employee seeks, or possible alternatives, pose a direct threat to the health and safety of others, or create an “undue hardship” for the employer.
- Notify the employee of the employer’s determination, including of what accommodation, if any, will be provided. Maintain records related to the request, determination, and notification to the employee.
- Periodically review and modify the accommodation as appropriate as circumstances change.
California requires that an employer engage in this analysis in a manner that is timely, in good faith, and interactive with the employee. The process requires an individualized assessment of the job and the medical or religious circumstances that are the basis of the request for accommodation.
Recent Federal Guidance on Religious Objections to a Vaccine Mandate
At the end of October, the EEOC issued technical guidance regarding religious objections to employer COVID-19 vaccine requirements. (The EEOC has not issued specific guidance on medical/disability objections to employer COVID-19 vaccine requirements.)
To help employers with determining whether the employee seeking an accommodation has a sincerely held religious belief (step 2 in the list above), the EEOC states that employers should “assume” that a request for religious accommodation is based on a sincerely held religious belief. However, if an employer has an objective basis for questioning either the religious nature or the sincerity of a particular belief, the employer may make a “limited factual inquiry” and seek “additional supporting information.”
As the EEOC explained, the definition of “religion” under Title VII (the law which provides for this protection), protects even “nontraditional religious beliefs that may be unfamiliar to employers.” While employers cannot assume that a request is invalid because it is based on nontraditional religious beliefs, an employee may be asked to explain the religious nature of their belief. The EEOC specifically noted that social, political, or economic views, or personal preferences are not protected bases on which employees can object to the mandate.
With respect to the sincerity of the employee’s belief in their stated religious basis for exemption, the EEOC explained that it is “largely a matter of individual credibility.” Factors determining credibility include:
- Whether the employee has acted in a manner inconsistent with the professed belief;
- Whether the accommodation sought is a particularly desirable benefit that is likely to be sought for nonreligious reasons; and/or
- Whether the timing of the request renders it suspect; and whether the employer otherwise has reason to believe the accommodation is not sought for religious reasons.
However, the EEOC cautioned that an individual’s degree of adherence to stated beliefs may change over time, so an employer should not assume the employee is insincere just because the employee’s practice has deviated over time or deviates from commonly followed tenets of the religion.
Recent Federal Guidance on Undue Hardship
In the same technical guidance discussed above, the EEOC stated that the determination of whether a particular proposed accommodation (e.g., an exemption from the vaccine mandate) imposes an undue hardship on the employer, depends on the specific factual context.
The EEOC provided the following examples of things to consider when determining whether an exemption would impair workplace safety:
- The type of workplace;
- The nature of the employee’s duties;
- The number of employees who are fully vaccinated;
- How many employees and nonemployees physically enter the workplace;
- The number of employees who will in fact need a particular accommodation; and
- Current CDC recommendations.
The EEOC cautioned that employers should not make a mere assumption that there is an undue hardship because granting one request for accommodation may result in many more employees who may seek a religious accommodation. But, employers may consider the cumulative cost or burden of granting accommodations.
Employers are not obligated to grant an employee’s preferred accommodation if there are other options that are also effective at eliminating the religious conflict and do not cause an undue hardship.
The obligation to provide reasonable accommodations is continuing and must take into account changing circumstances. Employees’ religious beliefs and practices may change over time; so too may an employer’s circumstances as to what may constitute an undue hardship.
California’s 2022 COVID-19 Legislation
AB 654: Clarification of Employers’ Notification, Benefits and Disinfecting Requirements after COVID-19 Exposure in the Workplace
AB 654, which became effective on October 5, 2021, is a clarification to last year’s COVID-19 notice and reporting bill (AB 685). We previously summarized AB 685’s requirements here, and except as stated below, those requirements are still in place.
AB 654 clarifies the inconsistencies within AB 685 about to whom notice of potential exposure, benefits and disinfecting information should be given. AB 685 stated that employers were required to give the notice of potential exposure to all employees and employers of subcontracted employees “who were on the premises at the same worksite as the qualifying individual within the infection period,” but, for the information on COVID-19-related benefits, the law required employers to provide notice to “all employees who may have been exposed.” For information on disinfection and safety, the law was even broader, requiring notice to “all employees and the employer of subcontracted workers.” These different phrases suggested employers had to potentially send different information to different groups of employees. AB 654 cleans up the statute to state that notice on all three topics (exposure, benefits and disinfection and safety) is required to be provided to all employees who were “on the premises at the same worksite as the qualifying individual within the infectious period.”
To determine the “infectious period,” AB 685 incorporated the State Department of Public Health’s definition, which distinguishes between symptomatic and asymptomatic qualifying individuals. For symptomatic individuals, the infectious period begins two days before they first develop symptoms and ends when the following criteria are met:
- 10 days have passed since symptoms first appeared, AND
- At least 24 hours have passed with no fever (without use of fever-reducing medications), AND
- Other symptoms have improved.
For asymptomatic individuals who test positive, the infectious period begins two days before the specimen for their first positive COVID-19 test was collected and ends 10 days after the specimen for their first positive COVID-19 test was collected.
AB 654 also revises the timeframe in which employers must provide notice of a COVID-19 outbreak to local public health agencies—changing it from simply 48 hours, to “within 48 hours or one business day, whichever is later.” It also specifically exempts certain health facilities from this reporting requirement, because those facilities already report outbreaks under other legal obligations.
SB 336: Increased Access to COVID-19 Related Guidance from State and Local Health Agencies
In order to address the frustrations surrounding access to COVID-19-related guidance from state and local health agencies, SB 336 requires that when the California Department of Public Health (CDPH) or a local health officer issues an order or mandatory COVID-19-related guidance, they must publish the order or guidance on their website along with the date that it takes effect. The CDPH or local health officer must also create an opportunity to sign up for an email distribution list to receive updates on the order or guidance.
SB 657: Option to Electronically Deliver State-Required Posters in Addition to Physically Posting
SB 657 adds Labor Code section 1207, which states that in any instance in which an employer is required to physically post information, an employer “may also distribute that information to employees by email with the document or documents attached.” This is in addition to, and does not alter, the employer’s obligation to physically display the required posting.
CAL/OSHA Revises Temporary COVID-19 Prevention Standards to End Distinction for Vaccinated Workers
Effective January 14, 2022, the California Occupational Safety and Health Standards Board has extended the state’s coronavirus pandemic regulations for at least three months and has further revised its temporary rules to require that both vaccinated and unvaccinated employees stay home from work for 14 days if they come in “close contact” with someone infected with the COVID-19 virus even if they test negative.
“Close contact” means being within six feet of a COVID-19 case for a cumulative total of 15 minutes or greater in any 24-hour period within or overlapping with the “high-risk exposure period” defined by this section. This definition applies regardless of the use of face coverings.
However, employees who have had close contact may not have to be excluded from the workplace for that entire time if they wear masks, stay 6 feet (1.8 meters) from others for two weeks, and get a COVID-19 test 3-5 days after the close contact.
The revised temporary rules indicate that persons who had a close contact may return to work as follows:
- Persons who had a close contact but never developed any COVID-19 symptoms may return to work after 14 days have passed since the last know close contact unless one of the exceptions below applies:
- 10 days have passed since the last known close contact and the person wears a face covering and maintain six feet of distance from others while at the workplace, for 14 days following the last date of close contact; or
- 7 days have passed since the last known close contact; the person tested negative for COVID-19 using a polymerase change reactions (PCR) COVID-19 test with the specimen taken day 5 or later after the last known close contact; and the person wears a face covering and maintain six feet of distance from others while at the workplace, for 14 days following the last date of close contact.
- Persons who had a close contact and developed any COVID-19 symptom cannot return to work until all of the following conditions are met:
- At least 24 hours have passed since a fever of 100.4 degrees Fahrenheit or higher has resolved without the use of fever-reducing medications; and
- COVID-19 symptoms have improved; and
- At least 10 days have passed since COVID-19 symptoms first appeared.
Assembly Bill 1033: Expansion of the California Family Rights Act (Again)
California Family Rights Act (“CFRA”) provides protected unpaid leave of up to 12 weeks for: baby bonding; the employee’s own serious health condition; the serious health condition of an employee’s family member; and, a qualifying exigency related to the covered active duty or call to covered active duty of an employee’s spouse, domestic partner, child, or parent. Eligible employees must have worked for at least 12 months and at least 1,250 hours in that time.
Last year, legislation significantly expanded CFRA’s reach to cover employers with five or more employees (previously, it had only applied to employers with 50 or more employees). It also provided employees leave to care for additional family members, including a grandparent, grandchild, and sibling. In addition, in an apparent attempt to alleviate the newly increased risk of litigation to small businesses, California implemented a mediation pilot program for small employers (5-19 employees) for alleged violations of CFRA.
AB 1033, which will take effect on January 1, 2022, again expands the protections that CFRA extends to California employees, as set forth below.
Changes to CFRA Effective January 1, 2022
AB 1033 amends CFRA’s definition of “parent” to include “parent-in-law,” expanding the categories of family members for whom an employee can take CFRA leave to include the parent of the employee’s spouse or domestic partner.
It also modifies and streamlines the DFEH’s pilot program for mediating disputes between employees and small employers (5-19 employees) arising from alleged violations of CFRA. The pilot program allows either the employer or the employee to request mediation after DFEH issues a right-to-sue notice.
Specifically, the pilot mediation program will operate as follows:
- When an employee requests an immediate right-to-sue letter from DFEH for an alleged violation of CFRA, the DFEH must notify the employee of the requirement for mediation prior to filing a civil action, if mediation is requested by the employer or employee.
- Prior to filing an action in court, an employee must contact DFEH’s dispute resolution division and indicate whether he or she will request mediation.
- DFEH must notify all named respondents of the alleged violation and the requirement for mediation, if mediation is requested by either party.
- If a small employer defendant to a court action or arbitration did not receive notice of the mediation program as a result of the employee’s failure to contact the department’s alternative dispute resolution division prior to filing a civil action, the employer may request a stay the court action or arbitration until mediation is complete or unsuccessful.
New Law Targeting Garment Manufacturers and Warehouse Distribution Centers
SB 62: Garment Worker Protection Act
Effective January 1, 2022, SB 62 amends the California Labor Code to clarify that any person contracting for garment manufacturing is a guarantor for the unpaid wages and overtime of the workers making the garments, regardless of how many layers of contracting the person or entity may use. This prevents a company from escaping liability by contracting with another company who in turn hires a subcontractor to perform manufacturing operations.
This new law means that clothing brands and holding companies may be jointly liable for wage and hour law violations occurring down the supply chain. This law is far-reaching, affecting companies that do not know that the violations occurred, or even that the particular subcontractor where the violations occurred was part of the supply chain.
SB 62 also amends the California Labor Code to prohibit, with certain delineated exceptions, employers from paying employees in garment manufacturing by the piece rate. This is meant to address the Legislature’s concerns of unsafe working conditions that may result from paying per garment, given that this may encourage employees to work as quickly as possible in a workday without regard to taking breaks and workplace safety. However, it does not prohibit employers from offering production-based incentive bonuses (but, if used, should be carefully structured in consultation with employment counsel).
AB 701: Restrictions on Employee Production Quotas in Warehouse Distribution Centers
Effective January 1, 2022, AB 701 amends the Labor Code to require warehouse and distribution centers to provide employees with written information regarding productivity quotas. It further provides that an employee cannot be required to meet a quota that prevents compliance with meal and rest periods, use of restroom facilities, or compliance with occupational health and safety laws. This law was meant to address the Legislature’s concerns that same and next-day consumer package delivery, as well as advances in technology used for tracking employee productivity, have led to work quotas for warehouse and distribution center employees that allegedly do not allow workers to comply with safety guidelines and result in them not receiving the full benefit of wage and hour laws. Although targeted at large employers such as Amazon, AB 701 affects all businesses that employ 100 or more employees at a single distribution center or 1,000 or more total warehouse employees in California.
New Year, New Wage Increases: Employers Must Comply with Annual Minimum Wage / Exempt Salary Increases Under California Law
California State Increases
With the new year, the California minimum wage will increase again. Effective January 1, 2022, employers with 25 or fewer employees must increase the minimum hourly wage to $14.00 (increased from $13.00 per hour), while employers with 26 or more employees must pay a minimum wage of $15.00 per hour (increased from $14.00 per hour).
The minimum wage is further scheduled to increase once more for small employers (25 or fewer employees) on January 1, 2023, when they catch up to the $15.00 per hour minimum already in effect for larger employers.
New Exempt Employee Minimum Salary Requirements Tied to State Minimum Wage Increases
Employers should also remember that the state minimum wage affects the minimum salary for many exempt employees under California law. To satisfy the administrative, executive, and professional exemptions, California employers must pay exempt employees a salary that is at least twice the state minimum wage as summarized below. As of January 1, 2022, employers with 25 or fewer employees will be required to pay exempt employees at least $1,120 per week/$58,240 annually (increased from $1,040 per week/$54,080 annually), while employers with 26 or more employees will be required to pay exempt employees at least $1,200 week/$62,400 annually (increased from $1,120 per week/$58,240 annually).
Employees Who Receive Minimum Salaries Will Not Be Exempt Unless They Also Satisfy the Exempt Duties Test
In addition to being paid the increased salary, California employees must also satisfy the duties test to be classified as exempt. Determining whether the duties test is satisfied is a highly technical, fact-intensive exercise that requires a case-by-case analysis of how an employee actually spends the majority of his or her time. Although the duties portion of the test is beyond the scope of this client alert, the most common exemptions in both California and under federal law are the executive, administrative, and professional exemptions. The actual duties tests for each of these exemptions are quite lengthy, and the following brief summaries should not be relied upon by the reader to determine if employees meet the duties test; rather, they provide a simplified explanation of these three exemptions:
- Executive Exemption: Employees who are primarily (i.e., spend more than half their working time) engaged in managing at least one recognized department or subdivision of a business, supervise two or more employees, and have the authority to make significant personnel decisions.
- Administrative Exemption: Employees who are primarily (i.e., spend more than half their working time) engaged in performing non-manual work and non-routine clerical duties relating directly to the business policies or general business operations of the employer.
- Professional Exemption: Employees who are licensed or certified by the State of California and are primarily engaged in the practice of one or more of the following recognized professions: law, medicine, dentistry, optometry, architecture, engineering, teaching or accounting. The professional exemption also includes employees primarily engaged in an occupation commonly recognized as “learned” or “artistic.”
New Minimum Salary for Exempt Computer Professionals
The minimum salary required for exempt California computer professionals will increase by 5.3% over the 2021 rates based on an annual adjustment for inflation determined by the California Department of Industrial Relations. Effective January 1, 2022, employers must pay their exempt California computer professional employees a salary of at least $104,149.81 annually ($8,679.16 monthly) or an hourly wage of $50.00 per hour. (Note, the option to pay exempt computer professionals on an hourly basis differs from the administrative, executive and professional exemptions which require a weekly or annual salary. California’s required pay for computer professionals also far surpasses the federal requirements for this exemption.) In California, computer professionals must also satisfy their own duties test under California Labor Code Section 515.5.
City of Los Angeles and Unincorporated Areas of Los Angeles County Minimum Wage Increases
Unlike the California state minimum wage increases that occur at the beginning of each calendar year, Los Angeles city and county minimum wages go into effect on July 1. On July 1, 2021, small employers (25 or fewer employees) were required to raise their wages for employees working in the City of Los Angeles and the Unincorporated Areas of Los Angeles County to $15.00 per hour (an increase from $14.25 per hour), catching up with large employers who reached the $15.00 per hour threshold a year earlier.
This increase also affects Nonprofit employers with 26 or more employees who qualified for the deferral rate schedule for employers with 25 or fewer employees.
A number of other cities will increase their minimum wages as of January 1, 2022, including but not limited to Belmont*, Cupertino*, Daly City, El Cerrito*, Los Altos*, Mountainview*, Oakland*, Palo Alto*, Petaluma*, Redwood City*, Richmond*, San Mateo*, San Diego, San Jose*, Santa Clara*, Sonoma, Sunnyvale*.
Furthermore, a number of other cities increased their minimum wages as of July 1, 2021, including but not limited to Alameda, Berkeley*, Emeryville*, Fremont, Malibu, Pasadena, City and County of San Francisco*, and Santa Monica.
Asterisks (*) denote increases that are tied to the Regional Consumer Price Index.