The California Legislature passed a number of laws that will impact California employers and their business operations in 2022. Below is a list of 17 of the key employment-related bills that have been signed into law by Governor Gavin Newsom.

1. AB 1003 – INTENTIONAL FAILURE TO PAY WAGES PUNISHABLE AS GRAND THEFT

Assembly Bill 1003, effective January 1, 2022, specifies that the intentional theft of wages in an amount above $950 from any single employee, or $2,350 in the aggregate from two or more employees, by an employer in any consecutive 12-month period may be punished as grand theft under state law. Grand theft may be either a misdemeanor or a felony, and carries potential time in the county jail of up to three years. The bill defines the phrase “theft of wages” as the “intentional deprivation of wages, gratuities, benefits, or other compensation by unlawful means and with the knowledge that the wages, gratuities, benefits, or other compensation is due to the employee.” Under this new provision of the Penal Code, the term “employee” includes an independent contractor. The term “employer” includes the hiring entity of an independent contractor.

2. SB 331 – EMPLOYMENT DISCRIMINATION SETTLEMENT AGREEMENTS

Existing law prohibits provisions within any settlement agreement that prevent or restrict the disclosure of factual information concerning claims relating to sexual harassment.

Senate Bill 331, effective January 1, 2022, expands those prohibitions. It prohibits provisions within any agreement that prevent or restrict the disclosure of factual information of claims related to harassment, discrimination, and retaliation. It prevents the use of non-disclosure provisions in any case involving employment discrimination of any type prohibited by the Fair Employment and Housing Act, not just sexual harassment. This would include allegations of discrimination on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or veteran or military status. The law does not prohibit parties from agreeing to keep confidential the amount paid in settlement of a claim.

SB 331 also prohibits an employer from requiring an employee to sign an agreement, or offering a raise or bonus to an employee for signing an agreement, that denies an employee the right to disclose information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that an employee believes to be unlawful. Such a provision may also not be included in a separation agreement.

3. AB 1033 – CFRA UPDATE

Existing law, the California Family Rights Act (CFRA), provides 12 workweeks of job-protected time off from work in any 12-month period if an employee needs the time off to bond with a new child, attend to their own serious medical needs, or care for a close relative with a serious medical condition.

Assembly Bill 1033, effective January 1, 2022, expands the definition of close relatives to include a parent-in-law.

4. SB 807 – MODIFICATIONS TO DFEH AUTHORITY AND PROCEDURES

Senate Bill 807, effective January 1, 2022, modifies the authority and procedures of the California Department of Fair Employment and Housing (“DFEH”).

Personnel records (for applicants and employees) must be retained for a minimum of four years. This time is extended if an employer has been notified a complaint has been filed with the DFEH, in which case personnel records must be retained until the employer has been notified that the action has been fully resolved, or the first date after the period for filing a civil action has expired.

SB 807 also tolls the statute of limitations for matters while they are pending before the DFEH. Specifically, it specifies that statute of limitations will be tolled until either the DFEH files a civil action or one year after the DFEH notifies the complainant it is closing its investigation. This tolling provision applies retroactively but does not revive already-lapsed claims.

5. AB 1506 AND AB 1561 – UPDATES TO INDEPENDENT CONTRACTOR CLASSIFICATION

Assembly Bill 1561 and 1506 each amend provisions of AB 2257, California’s law on the proper classification of independent contractors, and the application of the “ABC Test” pursuant to the state Supreme Court’s decision in the Dynamex case.

AB 1561 makes various changes to the exemptions from the ABC Test/Dynamex test for certain relationships. The bill extends the sunset date on the exemptions for licensed manicurists and for the relationship between contractors and subcontractors from January 1, 2022, until January 1, 2025. The bill also modifies the requirements for the exemption for the relationship between a data aggregator and an individual providing feedback to the data aggregator, and modifies the requirements for the Department of Insurance licensee exemption.

AB 1506 extends the sunset date on the existing exemption from the ABC Test/Dynamex test for newspaper distributors and carriers from January 1, 2022, until January 1, 2025.

6. SB 639 – SUB-MINIMUM WAGE FOR INDIVIDUALS WITH DISABILITIES

Existing law authorizes employers to pay less than minimum wage for employees with physical or mental disabilities under a subminimum wage certificate program.

Senate Bill 639 requires the development of a plan to phase out the use of this program. Under SB 639, the program will be phased out by January 1, 2025, and no new special licenses will be issued under the program after January 1, 2022. Existing license holders will be required to meet benchmarks provided for in the phaseout plan in order to be relicensed.

7. SB 93 – REHIRING OF CERTAIN EMPLOYEES WHO WERE LAID OFF

This new statute creates Labor Code Section 2810.8, which requires employers in certain industries to make written job offers to employees that were laid off due to COVID-19. Employees have five days to respond to the written job offer and if more than one responds, the employer must award the job based upon seniority. SB 93 applies to: hotels with 50 or more guest rooms; private clubs that operate a “building or complex of buildings containing at least 50 guest rooms” that they offer to members for overnight lodging; publicly or privately owned event centers; airport hospitality operations; airport service providers; and employers that provide “janitorial, building maintenance, or security services” to office, retail or other commercial buildings. The Department of Labor Standards and Enforcement will enforce the new law and may order reinstatement, front and back pay, and benefits, as well as impose penalties and liquidated damages. This law will expire December 31, 2024.

8. AB 701 – WAREHOUSE DISTRIBUTION CENTERS REQUIRED TO DISCLOSE QUOTAS TO NON-EXEMPT EMPLOYEES

Under this law, warehouse distribution centers must provide to each nonexempt employee, upon hire, or within 30 days of the effective date of this provision, a written description of each quota to which the employee is subject. This writing must include a quantified number of tasks to be performed, or materials to be produced or handled with a specific time period and what actions could be taken by the employer if the employee fails to meet the quota. Employees are excused from meeting the quota if doing so would require them from taking meal and rest periods, using bathroom facilities, or complying with health and safety laws. Employers are prohibited from taking adverse actions against an employee for not meeting a quota that was not disclosed to them or because the employee was taking their meal/rest period or complying with health and safety regulations. If an employee believes that meeting a quota caused a violation of their rights, they can request a written description of each quota that they were subject to and a copy of the most recent 90 days of their own work-speed data. A current or former employee may bring an action for injunctive relief, and if successful, recoup their costs and reasonable attorneys’ fees. The Labor Commissioner has the authority to enforce this law.

9. SB 62 – GARMENT MANUFACTURERS/BRAND GUARANTORS – PREVENTED FROM PAYING PIECE-RATES; RECORD-KEEPING REQUIREMENTS; AND LIABILITY

SB 62 creates joint and several liability for garment manufacturers and brand guarantors for the payment of wages to employees of their contractors. Garment manufacturers may not pay their workers piece-rates and are subject to a penalty of $200 payable to the employee for each employee when paid piece-rate. Records of all garment work must be kept for four years; existing law had required three years.

10. SB 727 – DIRECT CONTRACTORS LIABILITY IS EXPANDED TO INCLUDE DAMAGES AND PENALTIES

SB 727 concerns the liability of direct contractors for the erection, construction, alteration or repair of a building, structure, or other private work.

Existing law, Labor Code Section 218.7, allows direct contractors to require subcontractors to provide certain payroll records so that the direct contractor can evaluate the subcontractor’s compliance with wage and hour laws.

This bill amends Section 218.7 to specify that its provisions only apply to contracts entered into between January 1, 2018, and December 31, 2021.

The bill also adds Labor Code Section 218.8. This provides that for contracts entered into on or after January 1, 2022, direct contractors are liable for any debt owed to a wage claimant or third party on the wage claimant’s behalf that is incurred by a subcontractor acting under, by, or for the direct contractor. The direct contractor is specifically liable for any unpaid wage, fringe or benefit payment or contribution, penalties or liquidated damages (in certain circumstances) and interest owed by the subcontractor when labor has been performed. Direct contractors are not prohibited from establishing by contract any lawful remedies against a subcontractor that causes such liability. The DLSE is required to notify both the contractor and subcontractor on a private works project within 15 days of receiving a complaint of the failure of a subcontractor to pay the specified wage, fringe, or other benefit due to workers. The Labor Commissioner may enforce against a direct contractor through an administrative action or a civil action.

11. AB 1023 – LABOR COMMISSIONER MAY IMPOSE PENALTY ON A CONTRACTOR THAT FAILS TO FURNISH PAYROLL RECORDS ON A PUBLIC WORKS PROJECT

AB 1023 amends Section 1771.4 of the Labor Code to define what is meant by the furnishing of “monthly” records while work is performed on a construction project, to mean “every 30 days” and within 30 days of the last day that work was performed on the project. The bill also requires certain records be provided in electronic format to the DLSE. A contractor or subcontractor that fails to furnish these records related to employee payroll records will be subject to a fine of $100 for each day in which the party violated the Labor Code up to a total of $5,000 per project.

12. AB 1407 – HEALTH CARE EMPLOYERS

Under this new bill, an approved school of nursing is required to include direct participation of one hour of implicit bias training in order to graduate. Starting January 1, 2023, a licensee who is still within the first 2 years of holding their license must complete one hour of direct participation in the implicit bias course. the course must be offered by a continuing education provider that has been approved by the board. The bill further requires a hospital to implement an evidence-based implicit bias program as part of its graduate training program that hires and trains new nurses.

13. SB 270 – PUBLIC SECTOR EMPLOYERS

Existing law states that an employer must provide labor representatives with the names and home addresses of newly hired employees, as well as their job titles, departments, work locations, telephone numbers, and personal email addresses, within 30 days of hire or by the first pay period of the month following hire.

This new bill, which goes into effect on July 1, 2022, authorizes an exclusive representative to file a charge of an unfair labor practice with the board alleging a violation of these requirements only if specified conditions are met, including that the exclusive representative gives written notice of the alleged violation and that the public employer fails to cure the violation. The bill would limit a public employer’s opportunity to cure certain violations. Anyone in violation of the bill is subject to a penalty of up to $10,000, which gets deposited into the General Fund.

14. SB 321 – HOUSEHOLD DOMESTIC SERVICES

This bill calls for an advisory committee to come together for the purpose of creating voluntary guidance and then make recommendations to the DIR and Legislature on policies that the state can adopt to protect the health and safety of privately funded household domestic service employees. The committee must include a representative from several different groups, including domestic work employees who have worked as a housecleaner, a nanny, a caregiver, and a day laborer in a private home for at least 5 years, as well as domestic work employers who have employed a housecleaner, a nanny, a caregiver, and a day laborer in a private home for at least 5 years. Other people are mandated to be in the committee as well, including nonprofit organizations advocating on behalf of domestic work employees and experts in the prevention of work-related injuries and illnesses for their employees.

15. AB 73 – AGRICULTURAL EMPLOYERS

Existing law requires the Department of Public Health to establish guidelines for the procurement, management, and distribution of PPE that would be required for all health care workers and essential workers in the state during a 90-day pandemic or other health emergency.

This bill would specifically include wildfire smoke events among health emergencies for these purposes. The bill also includes agricultural workers in the definition of essential workers.

16. AB 570 – MEDICAL INSURANCE PLANS

Existing law authorizes an individual to add a dependent to their health insurance policy, including adding a dependent outside of an initial enrollment period, if certain criteria are met. “Dependent” is defined as the spouse, registered domestic partner, or child of an individual. Existing law establishes the Health Insurance Counseling and Advocacy Program (HICAP) in the California Department of Aging to provide Medicare beneficiaries and those imminently eligible for Medicare with counseling and advocacy regarding health care coverage options.

This bill requires an individual health insurance policy issued, amended, or renewed on or after January 1, 2023, that provides dependent coverage to make dependent coverage available to a qualified dependent parent or stepparent.

17. AB 1084 – GENDER NEUTRAL TOYS IN RETAIL STORES

Any retail store with 500 or more employees that sells childcare items or toys must now have a gender-neutral aisle.

VETO UPDATE

Governor Newsom did not sign a law requiring further supplemental paid sick leave for COVID-19 related illnesses. Some local ordinances are still in place, however, requiring supplemental paid sick leave. If you have questions about whether you are required to provide any supplemental paid sick leave, please contact us.

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