By Stephen T. Lanctot and Tom Lin
As with every new year, California rolled out new laws affecting the workplace beginning January 1, 2022. Below is a summary of some of the most relevant changes that may affect your business. As always, please reach out to any of our labor and employment attorneys at Coblentz if you have any questions or concerns about new legislation or amendments to existing laws.
California’s Minimum Wage Increase – SB 3: Effective January 1, 2022, California’s state minimum wage will increase to $15 per hour for employers with more than 25 employees, and it will increase to $14 per hour for employers with 25 or fewer employees. As a result, the minimum monthly salary for California exempt-status employees will increase to $5,200 per month, or $62,400 annual salary (which is equal to twice the minimum wage based on a
40-hour workweek). Note, however, that many cities and counties in California have their own minimum-wage requirements, but the minimum salary threshold is based on California law.
Expansion of California Family Rights Act (CFRA) – AB 1033: The CFRA requires employers with five or more employees to provided up to 12 weeks of leave in a 12-month period for an employee to attend to his or her own serious medical condition or to care for a family member with a serious medical condition. This bill expands the list of covered family members to include parents-in-law. Additionally the bill clarifies the requirements for the mediation of claims alleging a violation of a job protected leave by employers of five to 19 employees.
Non-Disparagement And Non-Disclosure Provisions in Settlement And Separation Agreements (“Silenced No More Act”) – SB 331: This bill amends Code of Civil Procedure § 1001 to prohibit non-disclosure provisions in settlement agreements involving any form of prohibited workplace discrimination, harassment, or retaliation under the Fair Employment and Housing Act. This requirement is in addition to Section 1001’s existing prohibition of any settlement agreements that prevent the disclosure of information pertaining to a civil or administrative claim related to sexual assault, harassment, or other sex-based workplace discrimination or retaliation.
The bill also amends Government Code § 12964.5 to limit the use of non-disparagement or other contractual provisions in employment agreements, including separation agreements, even if no civil action or complaint is filed. Any non-disparagement agreement or other contractual provision that restricts an employee’s ability to disclose information related to conditions in the workplace must include: “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.” Additionally, employers, under Section 12964.5, must include written notification of the employee’s right—even if they are above the age of 40—to consult counsel and a consideration period no fewer than five business days in separation agreements. The changes offered by SB 331 are not retroactive; instead, they apply to agreements entered into after January 1, 2022.
Arbitration Invoice Payment Requirements – SB 762: This bill amends Code of Civil Procedure §§ 1281.97 and 1281.98 to require that all arbitrator invoices are due upon receipt, if the parties’ arbitration agreement is silent on the number of days the parties have to pay the arbitrator’s fees. Under the amended sections, any extensions for invoice payments must be agreed upon by all parties to the arbitration.
Personnel Records Retention – SB 807: This bill extends the current personnel records retention requirement from two to four years from the date of creation, date of termination, or date of non-hire for an applicant. If a complaint has been filed with the Department of Fair Employment and Housing (DFEH), then the employer must retain the at-issue personnel records until the employer is notified that the action has been fully resolved or the first date after the statute of limitations for filing a civil action (or related appeal) has expired. SB 807 makes several procedure modifications to the DFEH’s enforcement rules, such as authorizing the use of electronic service of administrative complaints, extending the time for the DFEH to complete its investigation of group or class discrimination claims to two years before issuing a right-to-sue letter, and permitting group or class discrimination claims to be filed in any county within California.
Criminalization of Wage Theft – AB 1003: This bill creates Penal Code § 487m and makes the intentional theft of wages, including gratuities, in an amount greater than $950 from any one employee, or $2,350 in the aggregate from two or more employees, by an employer in any consecutive 12-month period punishable as grand theft and imprisonment for up to 3 years. Because this bill includes independent contractors within the meaning of employee, the misclassification of a service provider bears significantly greater risk.
Food Delivery Platforms And Workers’ Tips – AB 286: Beginning January 1, 2022, this bill will make it unlawful, among other things, for a food delivery platform to retain any portion of tips or gratuities paid from the customer to the delivery worker.
Owners of Real Property Subject to Liens for Wage Violations – SB 572: This bill will add Section 90.8 to the Labor Code to permit the Labor Commissioner to create and implement a lien on real property to recover amount due wage-and-hour violations stemming from final citations, findings, or administrative decisions. Preexisting law permitted the Labor Commissioner to obtain a lien on real property to only recover amounts due under final court orders.
Garment Workers Excluded from Piece-Rate Pay – SB 62: Beginning January 1, 2022, employers may no longer pay their employees who are engaged in garment manufacturing by the piece. Rather, employers must pay garment workers at least the minimum wage for all hours worked. This bill also expands wage-and-hour violation liability to “brand guarantors,” which is defined as any person contracting for the performance of garment manufacturing. SB 62’s expansion could hold clothing brands liable for violations that take place in manufacturing facilities by their vendors, in essence creating a joint-employer relationship.
Unionized-Janitorial Private Attorneys General Act (PAGA) Exemption – SB 646: This bill enacts Labor Code § 2699.8 to create an exemption that precludes janitorial employees covered by a collective bargaining agreement from bringing a representative action under PAGA. In order for the exemption to apply, the CBA must (1) provide total hourly compensation; (2) prohibit the Labor Code violations that are actionable and offer a collective grievance procedure with binding arbitration to address such Labor Code violations on a representative basis; (3) expressly and unambiguously waive PAGA claims; and (4) allow the arbitrator to award remedies under the Labor Code, except for penalties payable to the Labor & Workforce Development Agency (LWDA). The janitorial employer must inform the LWDA of such a CBA within 60 days of the enactment of this statute.
Electronic Transmission of Workplace Notices – SB 657: As remote working becomes more prevalent, the myriad of mandated state and federal workplace notice postings (e.g., Wage Orders, payday schedules, whistleblower rights, etc.) may now also be delivered to employees as an attachment to an email. Employers must still continue to adhere to their obligations to post such notices physically.
Recall Obligations for COVID-19 Layoffs – SB 93: While not new to 2022, this bill went into effect on April 16, 2021 and expires on December 31, 2024. It requires certain employers to rehire employees who were laid off due to COVID-19 if they worked at least six months prior to their layoff. Employers under SB 93 include the following employers: (1) hotels with 50 or more guest rooms; (2) private clubs with 50 guest rooms for overnight lodging; (3) event centers with 50,000 square feet or 1,000 seats; (4) airport hospitality operations and service providers; and (5) office services, e.g., janitorial and security services. Reopened positions must be offered to laid-off employees within 5 business days of the opening.
CAL-OSHA Presumption Creation – SB 606: This bill creates a rebuttable presumption that a workplace safety violation committed by an employer with multiple worksites is enterprise-wide if the employer has a written policy or procedure that violates certain health and safety regulations, or Cal-OSHA finds evidence of a pattern or practice of safety violations at more than one of the employer’s worksites. Additionally, the bill adds a definition of “egregious violation” which carries added penalties and expands Cal-OSHA’s enforcement power to issue and enforce a subpoena if an employer fails to promptly provide requested information.
Warehouse Distribution Employees – AB 701: Under newly-enacted Labor Code §§ 2100–2112, employers with 100 or more employees at a single warehouse distribution center or 1,000 or more employees at one or more warehouse distribution centers in California are required to provide nonexempt employees, either upon hire or within 30 days of this new law’s enactment, with a written description of each quota they are subject to (e.g., quantified number of tasks to be performed or materials to be handled) within a defined period of time and any potential adverse employment action that may result from failure to meet the quota. This bill prohibits adverse employment actions against employees who fail to meet their quota if the quota was not properly disclosed to the employee. AB 701 prohibits quotas that prevent an employee from taking his or her meal or rest breaks, use of restrooms, or that interfere with compliance with California’s occupational health and safety laws.
Independent Contractor Exemptions Expanded – AB 1561: This bill offers several changes. First, it extends the expiration date for the statutory exemptions granted to licensed manicurists and construction trucking subcontractors in AB 5 from January 1, 2022 to January 1, 2025. Second, the bill also extends the exemption for newspaper publishers and distributors through January 1, 2025. Third, the bill clarifies that Labor Code § 2782 does not apply to the relationship between a data aggregator and a research subject, and it removes the requirement that research subjects are to be paid minimum wage for the research task that they have willingly engaged. Fourth, Labor Code § 2783 is amended to expand exemptions for individuals who provide claims adjusting or third-party administration for insurance or financial service industries.
