New California Employment Laws for 2020

2020 is upon us, and with it, a slew of new employment laws that are now in effect. Read on for a description of 13 key employment laws every employer operating in California should know about going into 2020. For more information on these laws and advice regarding best practices, check out our California Employment Law Update Seminars taking place at our San Francisco office on January 9, 2020 and Silicon Valley office on January 22, 2020.

2020 Laws Enacted Related to the #MeToo Movement

• Three-Year Deadline to File Complaints with the DFEH
  • AB 9: Government Code §§ 12960, 12965 (amended)
  • Previously an employee alleging harassment, discrimination, or other claim under California’s Fair Employment and Housing Act (“FEHA”) had one year from the alleged act to file a complaint with the Department of Fair Employment and Housing (“DFEH”), and then one year from receipt of a Right to Sue Notice to file a lawsuit.
  • Starting January 1, 2020, California employees will now have three years (rather than one) to file a charge alleging discrimination, harassment and retaliation. The bill clarifies that a complainant meets the deadline for filing an administrative complaint with DFEH so long as he or she files an intake form with the department within three years, and the operative date of the verified complaint relates back to the filing of the intake form. The bill does not, however, revive claims that have already lapsed under current law.
  • With AB 9, it could take four years or more from the time the intake form is filed before the potential lawsuit is filed.

• New Restrictions on No-Rehire Provisions in Settlement Agreements
  • AB 749: Code of Civil Procedure § 1002.5 (added)
  • As of January 1, 2020, agreements to settle employment disputes may not contain provisions prohibiting, preventing, or otherwise restricting an “aggrieved person” from obtaining future employment with that employer, or any parent company, subsidiary, division, affiliate, or contractor of the employer. Any such provision contained in a settlement agreement created on or January 1, 2020 will be void. This law does not void the entire agreement if a no-hire provision is present.
  • The law defines an “aggrieved person” as anyone who has filed a claim against his/her employer in court, before an administrative agency, in an alternative dispute resolution forum, or through the employer’s internal complaint process. Thus, this limitation on re-hire provisions does not apply to standard severance or separation agreements offered to workers at termination if the company is not resolving a specific claim filed by the employee.

• Non-Supervisory Employee Sexual Harassment Training

• • AB 778: Government Code § 12950.1 (amended)
  • Amended § 12950.1, which already took effect, gives employers with 5 or more employees until January 1, 2021 to comply with new anti-harassment training requirements that previously applied only to employers with 50 or more employees. By that date, supervisory employees must receive at least two hours of anti-harassment training and non-supervisory employees must receive one hour of training. Employees must also receive “refresher” training every two years thereafter. New employees and current employees who become supervisors must receive the required training within six months of assuming a new or supervisory position. The new law also specified that employees who received the required training during 2019 do not need “refresher” training until two years later.

2020 Laws Enacted Related to Arbitration

• Prohibition on Mandatory Employee Arbitration Agreements
  • AB 51: Government Code § 12953 (added), Labor Code § 432.6 (added)
  • As of January 1, 2020, employers are prohibited from requiring employees or applicants to waive a right, forum, or procedure for a violation of the California Fair Employment and Housing Act (FEHA) or the Labor Code as a condition of employment, continued employment, or the receipt of any employment-related benefit. Requiring employees to “opt out” of a waiver or take any affirmative action to preserve their rights is deemed a condition of employment, and thus these types of agreements are also prohibited. AB 51 also prohibits employers from threatening, retaliating or discriminating against, or terminating employees or applicants because they refused to waive any right, forum, or procedure.
  • In addition to injunctive relief and any other remedies available, AB 51 authorizes reasonable attorney’s fees to a prevailing plaintiff enforcing their rights under the Labor Code
  • Note that the new law does not apply to post-dispute settlement agreements or negotiated severance agreements.
  • Additionally, mandatory waivers entered into prior to January 1, 2020 are not affected by the new law.
  • AB 51 was recently enjoined by a federal court. Last month, a coalition of business groups led by the U.S. Chamber of Commerce filed a lawsuit seeking to enjoin AB 51 on the grounds that it is preempted by the Federal Arbitration Act. Chamber of Commerce of the United States et al. v. Becerra et al., No. 2:19-cv-02456 (E.D. Cal.). On December 30, 2019, a federal court granted plaintiffs’ request for a Temporary Restraining Order. This decision effectively prevents California from enforcing AB 51 until plaintiffs’ motion for preliminary injunction is decided, which the court is scheduled to hear on January 10, 2020.

• New Consequences for Failing to Timely Pay Arbitration Costs and Fees
  • SB 707: Code of Civil Procedure §§ 1280, 1281.96 (amended); id. §§ 1281.97, 1281.98, 1281.99 (added)
  • Starting January 1, 2020, employers enforcing employment-related arbitration agreements must pay the fees or costs required to initiate and/or continue an arbitration proceeding within 30 days after the due date. Failure to timely pay constitutes a material breach of the arbitration agreement and a waiver of the right to compel arbitration. In that case, the employee may either compel arbitration or withdraw the claims from arbitration and proceed in court.

2020 Laws Enacted Related to Independent Contractors

• Codifying the ABC Test for Classification of Independent Contractors
  • AB 5: Labor Code § 3351 (amended), § 2750.3 (added); Unemployment Insurance Code §§ 606.5, 621 (amended)
  • Effective January 1, 2020, AB 5 creates new laws that apply the rigid ABC test for independent contractor classification to all claims under the California Labor Code, Unemployment Insurance Code, and wage orders of the Industrial Welfare Commission, with limited exemptions for certain occupations and industries. Under this test, a worker is an employee—rather than an independent contractor—unless the hiring entity can prove all of the following: (A) the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract and in fact; (B) the worker performs work that is outside the usual course of the hiring entity’s business; and (C) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
  • It also empowers the Attorney General and city attorneys of cities with populations greater than 750,000 to seek injunctive relief to prevent the continued misclassification of workers. Further, the new law increases the risk and potential liability for independent contractor misclassification, ranging from civil penalties to both personal and criminal liability.
  • AB 5 exempts several occupations and industries from the ABC test if the hiring entity can prove the specific requirements for exemption outlined in the statute. If the hiring entity satisfies these requirements, then the Borello test applies. The Borello test focuses primarily on whether the alleged employer controls or has the right to control the manner and means of the work.
  • For additional information on AB 5, check out our Employment Law Blog post on AB 5 here.

2020 Laws Enacted Related to Employee Data Privacy

• Exemptions to the California Consumer Privacy Act for Employees
  • AB 375 (2018): Civil Code §§ 1798.100 et seq.
  • AB 25 (2019): Civil Code §§ 1798.130, 1798.145 (amended)
  • The California Consumer Privacy Act of 2018 (“CCPA”) goes into effect on January 1, 2020. As relevant to employers, the CCPA as originally drafted did not specify whether the new requirements regarding “consumer data” also applied to the data companies collect on their employees. AB 25, passed in 2019, amends the CCPA to limit how the new requirements apply to employee data collected and used solely within the context of an individual’s role as an employee, for the period of January 1, 2020 through December 31, 2020. For additional information on the employee exemptions to the CCPA check out our Trust Anchor Blog post on CCPA Amendments, including AB 25, here. Also, for detailed information on the CCPA generally, and to navigate how the CCPA may affect your company, check out our CCPA Readiness Assessment Tool.

2020 Laws Enacted Related to Leave

• Organ Donation Leave of Absence
  • AB 1223: Education Code §§ 89519.5 and 92611.5 (amended); Government Code § 19991.11 (amended); Insurance Code §§ 10110.8 and 10233.8 (added); Labor Code § 1510 (amended)
  • Effective January 1, 2020, in addition to the 30 days of existing paid leave to donate an organ, employers must also provide an employee with up to 30 business days of unpaid leave in a one-year period.
• Paid Family Leave Expansion
  • SB 83: amends numerous provisions of the Government Code, Labor Code and Unemployment Insurance Code
  • Effective July 1, 2020, SB 83 extends Paid Family Leave benefits from six weeks to eight weeks (which may be claimed within a 12-month period). As a reminder, employees may apply for PFL benefits when taking time off work to (a) care for a seriously ill child, spouse, parent, grandparent, grandchild, sibling or domestic partner, or (b) bond with a minor child within one year of birth, adoption or foster placement.

Other 2020 Laws Enacted and Legal Changes Companies Care About

• Employees May Directly Recover Civil Penalties for Unpaid Wages
  • AB 673: Labor Code § 210 (amended)
  • Effective January 1, 2020, an employee may now directly recover from his or her employer a penalty owed for failure to pay wages as a statutory penalty through a hearing under Labor Code Section 98 (a “Berman Hearing”).
  • Previously only the Labor Commissioner—not the employee—could recover this statutory penalty through a Berman Hearing or by issuing a citation. Further, under existing law, the only way for an employee to directly seek penalties for failure to pay wages was under PAGA. Now, employees are given a second option—a Berman Hearing.
  • The new law removes the Labor Commissioner’s ability to recover unpaid wages through an independent civil action and transfers that option directly to the employee.
  • It also clarifies that an employee may recover the statutory penalty through a Berman Hearing or enforce a civil penalty through PAGA, but not both.
• Reporting Occupational Injuries and Illnesses
  • AB 1804: Labor Code § 6409.1 (amended)
  • Prior to 2015, Labor Code § 6409.1(b) required employers to file a report of serious injury or death by “telephone or telegraph.” In 2014, AB 326 (Chapter 91, Statutes of 2014) modernized the language of § 6409.1(b) to allow employers to report by telephone or email. However, according to the author of AB 1804, receiving emailed reports of serious injuries and deaths has proved problematic for Cal/OSHA because, unlike telephone reporting, it allows for incomplete accident reports.
  • AB 1804 removes an employer’s ability to report by email to Cal/OSHA when a serious occupational injury, illness, or death occurs. Instead, the bill requires that the report be made through an online mechanism established by Cal/OSHA for that purpose.
  • The bill further specifies that until Cal/OSHA makes such an online mechanism available, employers are still permitted to make the report by email. Therefore, employers do not have to make any changes to their current reporting method until Cal/OSHA makes its online system available.
• New Requirements for Lactation Accommodations
  • SB 142: Labor Code §§ 1030, 1031, 1033 (amended); id. § 1034 (added)
  • In 2018, the Legislature enacted a new law that requires employers to “make reasonable efforts” to provide an employee who wishes to express milk in private with an area that is not a bathroom and is in close proximity to their workspace. It allows employers, under certain circumstances, to provide a more temporary lactation location due to operational, financial, or space limitations.
  • Effective January 1, 2020, an employer has an affirmative obligation to provide a lactation room or location for its employees who wish to express milk. In other words, “reasonable efforts” to provide such an area are no longer sufficient. In addition to providing a lactation room or location that is not a bathroom and is in close proximity to the employee’s work area, as a result of the new law the lactation room or location must also: (1) be shielded from view, and free from intrusion; (2) be safe, clean, and free of hazardous materials; (3) contain a surface to place a breast pump and personal items; (4) contain a place to sit; and (5) have access to electricity or alternative devices. If these requirements are met, the lactation area may be the place where the employee works. The employer must also provide access to a sink with running water and a refrigerator or cooling device to store milk.
  • If an employer in a multitenant building or multiemployer worksite cannot provide a lactation location within its own workspace, it may provide a lactation location that is shared among multiple employers within the building or worksite. If a subcontractor provides a written request that its employee seeks a lactation accommodation, an employer or general contractor coordinating a multiemployer worksite must provide (or arrange for) a lactation space within two business days. If an employer has fewer than 50 employees and demonstrates that providing a lactation room or location (other than a bathroom) would impose an undue hardship, it must still make reasonable efforts to provide employees with a private lactation location.
  • The denial of reasonable break time or adequate space to express milk will be treated as a violation of Labor Code section 226.7. Any aggrieved employee may file a complaint with the Labor Commissioner. Employers are prohibited from discharging, discriminating, or retaliating against an employee for exercising their right to lactation accommodations.
  • Finally, employers are now required to develop and implement a lactation accommodation policy that includes information about the employee’s right to request accommodations, the process for making requests, the employer’s obligation to respond to requests, and the employee’s right to file a complaint for violation of their right to accommodation. This lactation accommodation policy must be distributed to new employees upon hiring and to employees who make an inquiry about or request parental leave.
• Hairstyle Discrimination (CROWN Act)
  • SB 188: Government Code § 12926 (amended)
  • Effective January 1, 2020, the “CROWN” Act amends the definition of “race” under FEHA to include “traits historically associated with race,” such as “hair texture and protective hairstyles,” including, “braids, locks, and twists.” Discrimination on the basis of hairstyles may now be considered race discrimination.