California Governor signed 870 bills into law for 2020, some have a significant impact on California employment law and many others amount to lesser changes but employers still need to be aware of laws that impact their employees to minimize risk of a violation.
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2020 California Employment Law Updates are grouped into categories (click the link to jump to section)
- Employee Classification, Wages and Withholdings
- Penalties for Non-Payment of Wages
- Discrimination, Harassment and Retaliation Protections
- California Consumer Protections and Privacy
- Leaves of Absence and Benefits
Employee Classification, Wages and Withholdings
Federal Law Updates
New Minimum Salary for Exempt Employees
Starting January 1, 2020, most employees who are classified as exempt under the executive, administrative, professional, and computer employee exemptions will need to be paid at least $684 per week or $35,568 per year. See our full report in the News Desk of the HR Support Center for more information.
Minimum Wage Increase for Federal Contractors
On January 1, 2020, the minimum wage for employees doing work on or in connection with federal contracts will increase to $10.80 per hour. The minimum wage for covered tipped employees will increase to $7.55 per hour.
New W-4
In the new year, employers will need to provide the redesigned Form W-4 to new employees and current employees who want to change their withholdings. Employees who have submitted Form W-4 in any year before 2020 are not required to submit a new form merely because of the redesign. Employers should continue to compute withholding based on the information from the employee’s most recently submitted Form W-4.
The new form can be downloaded here - be sure to follow the download instructions.
For more information, visit I-9 Central or watch videos or a Form I-9 webinar, presented by USCIS.
We recommend that employers do not provide tax advice to employees, but instead direct them to the IRS’ Tax Withholding Estimator or their tax professional for guidance on completing the W-4.
Reminder: If your state has its own W-4, continue to offer the most current version to employees for voluntary completion to ensure accurate state tax withholding.
California Law Updates
Employee Classification (AB 5)
One of the most significant and widely publicized bills to emerge from this year’s Legislature was AB 5, which codifies and expands the “ABC test” that’s used to distinguish employees from independent contractors under the Industrial Welfare Commission (IWC) Wage Orders. The ABC test was established by the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles, 4 Cal. 5th 903 (2018) (Dynamex). expands its application to the Labor and Unemployment Insurance Codes.
Resources: Webinar - Independent Contractors: Avoiding Misclassification (Recorded October 23 2019)
Penalties for Non-Payment of Wages
Failure to Pay Wages Penalty (AB 673)
Current law imposes, independent from other penalties, a civil penalty on employers who fail to pay wages as provided in certain sections of the Labor Code. The Labor Commissioner may recover these penalties, which amount to $100 for the initial violation and $200 plus 25 percent of the amount unlawfully withheld for subsequent violations.
AB 673 gives employees the ability to bring a private action to either:
- Recover statutory penalties against the employer in a hearing before the Labor Commissioner; or
- Seek to enforce civil penalties under the Private Attorneys General Act.
They may not do both.
Labor Commissioner’s authority to pursue wage claims expanded (SB 688)
SB 688 expands the Labor Commissioner’s authority regarding citations for wage violations. Current law allows the Labor Commissioner to issue a citation and recover penalties, restitution of wages and liquidated damages from employers who pay employees less than the minimum wage. SB 688 expands that authority, authorizing the Labor Commissioner to issue citations and recover amounts owed by an employer who has paid less than the wages set by contract, even if it was more than minimum wage.
Discrimination, Harassment and Retaliation Protections
California’s Legislature is still working toward increasing employee protections for 2020; it extended the amount of time a harassment or discrimination victim has to file a complaint.
Statute of Limitations (AB 9)
Under current law, individuals have one year to file a complaint with the Department of Fair Employment and Housing (DFEH) for purported FEHA violations, such as discrimination, harassment and retaliation. Failure to comply with this administrative requirement means an individual cannot pursue FEHA claims in court. AB 9 extends the statute of limitations to three years. Given this extension, it will become especially important for employers to keep detailed, accurate and contemporaneous employment records.
Harassment Prevention Training (SB 778)
In August, SB 778 was passed and went into effect, clearing up remaining issues from SB 1343, 2018’s bill that made significant changes to California’s harassment prevention training requirements. The bill increases the number of employers who must provide training to their employees with a training deadline of January 1, 2020.
SB 778 pushed the original harassment training deadline back one year. Employers with five or more employees must provide one hour of sexual harassment prevention training to nonsupervisory employees and two hours of such training to supervisors by January 1, 2021.
Employers who provided harassment training to employees in 2019 aren’t required to provide it again until two years from the time the employee was trained. Employers who provided training in 2018 must provide training in 2020 to maintain the two-year cycle and comply with the new deadline.
Employers who trained employees in 2017 under the prior training law should provide training in 2019 in order to maintain their two-year training cycle.
Resources: Webinar: Preparing for 2020 Anti-Harassment Training Requirements, Recorded November 21
Retaliation, Whistleblower Protection (AB 333)
Under existing whistleblower protection law, employers can neither prevent an employee from nor retaliate against an employee for providing information or testimony to a public body that’s conducting an investigation — as long as the employee reasonably believes the information discloses a violation of the law.
AB 333 adds a section to the Welfare and Institutions Code that grants whistleblower employment protections specifically to a county’s “patients’ rights advocates” who provide patient services at county mental health centers.
Current law prohibits discriminating or retaliating against a patient or employee because that person presented a grievance or complaint, or participated in an investigation or administrative proceeding related to a health facility’s care, services or condition. SB 322 expands those protections, providing an employee with the right to discuss possible regulatory violations or patient safety concerns with the California Department of Public Health (CDPH) inspector privately during a CDPH investigation.
Lactation Accommodations Expanded (SB 142)
Time and a private non-bathroom space for employees to express milk were already required by state and federal law, but the new state law explicitly requires that the lactation room meet the following requirements:
- Be safe, clean, and free of hazards
- Have a place to sit and a surface to place a breast pump and personal items
- Have access to electricity or charging devices suitable for an electric or battery-powered breast pump
The employer must also provide access to a sink with running water and suitable refrigeration close to the employee’s workspace. If a multipurpose room is the designated lactation space, use for lactation must be prioritized over all other uses, when needed for lactation.
Employers are required to make a policy and include it in the employee handbook or other set of policies that are distributed to employees. The policy should include the following:
- A statement about an employee’s right to request lactation accommodation;
- The process by which an employee should make the request;
- The employer’s obligation to respond to the request, either by providing the time and space or responding in writing that they cannot; and
- A statement about an employee’s right to file a complaint with the Labor Commissioner for violation of a right created by the law.
As with most laws that extend rights to employees, any adverse employment action or retaliation because an employee asked for, used, or complained about their rights (or denial of rights) is prohibited.
Employers with fewer than 50 employees may be exempt from a provision of this law if it would cause an undue hardship (significant difficulty or expense) but will be expected to make reasonable efforts to comply with as much of the law as possible.
California Consumer Protections and Privacy
California Consumer Privacy Act (AB 25)
The 2018 California Consumer Privacy Act (CCPA) changed the consumer data collection rules, allowing consumers to know about and request deletion of data that businesses collect about them, among other things. The CCPA’s broad language, however, arguably encompasses employees and job applicants, which means employees, upon request, could potentially have information from their personnel files deleted under the CCPA.
Enter AB 25, which exempts from the CCPA employee data, i.e., information collected and used within the context of a person’s employment or application for employment. This exemption is good for only one year. Importantly, employers subject to the CCPA must still comply with the act’s requirement to disclose, at or before the time of collection, the categories of personal information collected about an applicant or employee and the purposes for which the information will be used. Employers should consult with legal counsel on how to amend employee privacy notices or otherwise comply with their obligations under the act.
Leaves of Absence and Benefits
Organ Donation (AB 1223)
AB 1223, changes the entitlement of the organ donation leave law. Private employers are required to provide a maximum of 30 paid days PLUS 30 unpaid days that an organ donor may take. Employees are still required to provide their employers with written verification of their participation in either organ donation or bone marrow donation. The verification also must include that the procedure is medically necessary. We recommend employers update this policy during their next handbook review and ensure that managers are aware of the change in the meantime.
Domestic Partnership (SB 30)
SB 30 changes how California law defines “domestic partnership.” Under current law, a domestic partnership could be entered into only by either two adults of the same sex, or two adults of the opposite sex who were over the age of 62. SB 30 removes those requirements, allowing any two adults over the age of 18 to enter into a domestic partnership.
Paid Family Leave (SB 83)
Beginning July 1, 2020, the maximum duration of Paid Family Leave (PFL) benefits individuals may receive from California’s State Disability Insurance (SDI) program will be extended from six to eight weeks, per SB 83. The PFL program provides partial wage replacement benefits to employees who are absent from work to care for a seriously ill family member or to bond with a minor child within one year of birth or placement of the child via foster care or adoption.
Current law requires state agencies to provide written materials in non-English languages under certain conditions, or to provide other assistance (e.g., translation guides) in completing English forms and questionnaires. AB 406 requires that, beginning January 1, 2025, the Employment Development Department distribute its application for paid family leave in English and in all non-English languages spoken by a substantial number of non-English-speaking applicants, as defined.
Flexible Spending Accounts (AB 1554)
Current law requires an employer to notify employees of certain employment and benefit information. AB 1554 requires an employer to notify employees who participate in flexible spending accounts of any deadline to withdraw funds before the plan year’s end in two different ways, which may include email, telephone, text message, postal mail and in-person notification.
Unemployment Insurance (SB 271)
California provides unemployment compensation to individuals who meet certain eligibility requirements, and SB 271 makes it easier for motion picture production workers to access such benefits. The bill allows temporary or transitory employment performed outside the state to count toward unemployment eligibility requirements as long as the motion picture worker is a California resident, is hired and dispatched from the state, and intends to return to the state to seek re-employment when the out-of-state work is finished.
Agreements (AB 51)
The governor signed several bills affecting agreements between employers and employees, particularly arbitration agreements. First, AB 51 effectively bans mandatory arbitration agreements entered into between employers and employees. The bill specifically prohibits an employer from requiring an applicant or employee to waive any right, forum or procedure for any employer violations of the FEHA and the Labor Code. The Legislature was clear this was intended to target arbitration agreements, in which employers and employees generally agree to resolve employment disputes outside of court. The bill also prohibits retaliation and discrimination against an applicant or employee who refuses to enter such agreements.
The bill would not apply to any arbitration agreements entered into prior to January 1, 2020, but employers may wish to seek legal counsel on how to proceed with amending such agreements in the new year. Another bill targeting arbitration, SB 707, provides consumers or employees remedies if the drafting party (the business or employer) breaches an arbitration agreement. The bill states that if the employer doesn’t pay the costs associated with beginning or continuing arbitration within 30 days after they are due, then the employer is in material breach of agreement, in default of arbitration and waives its right to compel arbitration.
This summary digest of new California employment laws is intended for market awareness only. It is not exhaustive and it is not to be used for legal advice or counsel. Please access any number of public resources available to monitor changes in employment law that may affect your organization or consult with a labor law attorney for compliance questions.
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