California’s pay data reporting portal will open on February 1, 2024, and employers will be required to report on three new data points.

Since 2020, California has mandated that employers with at least 100 employees submit a pay data report to the state Civil Rights Department (CRD) as part of its efforts to advance fair pay. The reporting requires annual submissions detailing pay and hours worked for employees in California, or who are a part of a California establishment, categorized by establishment, job category, race/ethnicity, and sex.

In 2022, the reporting requirements expanded to require reporting on both “payroll employees” (workers on an employer’s payroll) and “labor contractor employees” (workers not on an employer’s payroll who are engaged in the employer’s usual course of business). That amendment also established potential penalties of $100 per employee for employers who fail to comply (or $200 per person for repeat failures).

In January 2024, California again updated its pay data reporting website for the 2024 reporting cycle.

Below are the key updates:

  1. Reporting Portal Opening: The portal in which employers must submit their pay data reports will open on February 1, 2024.
  2. Submission Deadline: The deadline to submit payroll and labor contractor employee reports is May 8, 2024.
  3. New Templates Released: Updated Microsoft Excel templates for this year’s reporting are designed to help employers compile and submit the necessary information.
  4. FAQs Update Pending: The FAQs currently reflect the 2022 reporting period (submitted in 2023) and have not been updated for this cycle. Thus, further guidance for this year may still be released to address any changes or provide additional clarifications.

This year’s payroll employee template introduces three new required data points for each group of employees by establishment, job category, race/ethnicity, sex, and pay band:

  1. The number of employees in the group that work onsite;
  2. The number of employees in the group that work remotely from California; and
  3. The number of employees in the work that work remotely outside of California.

The new labor contractor employee template requires the same data points for each labor contractor, establishment, job category, race/ethnicity, and sex employee group.

Employers should act promptly to prepare their data and use the CRD’s new tools and resources.

If you have questions about California’s pay data reporting requirements or need assistance with this submission, contact a Jackson Lewis attorney to discuss.

Unless exempt, California employers are required to post their annual summary of work-related injuries and illnesses, in a visible and easily accessible area at every worksite from February 1st through April 30th. Cal/OSHA’s Form 300A must be used for this posting.

Employers can find an overview regarding completing both the log (Form 300) and the annual summary (Form 300A) on Cal/OSHA’s Recordkeeping Overview page.

Cal/OSHA requires employers to record work-related fatalities, injuries, and illnesses. To be recordable under Cal/OSHA’s regulations, an injury or illness must be work-related and result in one of the following:

  • Death;
  • Days away from work;
  • Restricted work or transfer to another job;
  • Medical treatment beyond first aid;
  • Loss of consciousness; or
  • A significant injury or illness diagnosed by a physician or other licensed health care professional.

While the COVID-19 emergency in California has concluded for workplace health and safety requirements, any work-related COVID-19 fatality or illness that falls under the above criteria must be recorded on an employer’s Form 300, 300A, and 301, or equivalent forms.

Certain employers are required to annually electronically submit Form 300A data to Cal/OSHA by March 2nd. Covered employers are those that meet one of the following requirements:

  • Has 250 or more employees, unless specifically exempted by section 14300.2 of title 8 of the California Code of Regulations; or
  • Has 20 to 249 employees in the specified industries listed including Agriculture, Manufacturing, and Grocery Stores. For a full list of covered industries, employers can review Appendix H.

Information on how to make the electronic submission is available on the federal OSHA’s Injury Tracking Application website.

If you have questions about preparing your annual summary or need assistance with compliance, please reach out to the Jackson Lewis attorney with whom you often work or any member of our Workplace Safety and Health Team.

On January 18, 2024, the California Supreme Court issued its opinion in Estrada v. Royalty Carpet Mills. In the Estrada decision, the California Supreme Court resolved a split of authority on the issue of whether trial courts have discretion to strike or narrow a Private Attorneys General Act (PAGA) claim based upon manageability grounds.

The Supreme Court held trial courts lack inherent authority to strike PAGA claims on manageability grounds. In reaching that conclusion, the Court emphasized that trial courts do not generally possess a broad inherent authority to dismiss claims and examined the statutory and procedural differences between class actions and PAGA claims.

In the underlying case, plaintiffs brought PAGA and class claims primarily based on purported meal and rest period violations. The trial court dismissed the PAGA claim as “unmanageable” due to the number of individualized issues.

The Court of Appeal subsequently found courts do not have the discretion to strike a PAGA claim based on manageability, disagreeing with the prior California Court of Appeal decision from another district, holding that trial courts do have inherent authority to narrow or strike PAGA claims on manageability grounds. The Estrada Court of Appeal held striking a PAGA claim as unmanageable would interfere with PAGA’s purpose as a law enforcement mechanism by placing an extra hurdle on PAGA plaintiffs that would not be placed on the State.

The California Supreme Court Estrada decision resolves the split of authority regarding a trial court’s authority to dismiss PAGA claims as unmanageable. Agreeing with the Estrada Court of Appeal, the Court concluded that there was no basis for providing trial courts the authority to strike PAGA claims due to manageability issues. Moreover, the Court rejected the idea that class action manageability requirements could be grafted onto PAGA claims, reiterating that an employee seeking civil penalties under PAGA need not satisfy class action requirements.

Despite holding that PAGA claims could not be stricken as unmanageable, the Court noted trial courts have numerous tools other than striking a claim that can be used to manage complex cases, including PAGA claims. This decision does not preclude trial courts from limiting the types of evidence a plaintiff may present or using other tools to assure that a PAGA claim is effectively tried. The Court noted that trial courts may issue substantive rulings, including demurrers, motions for summary judgment, judgment notwithstanding the verdict, and potentially others under the Code of Civil Procedure to effectively adjudicate overbroad or unspecific claims on which a plaintiff is unable to prove liability as to all or most employees. As such, the Court left “undisturbed various case management tools designed to ensure that [PAGA] cases are efficiently, fairly, and effectively tried.”

If you have questions about the Estrada decision or related issues regarding PAGA, contact a Jackson Lewis attorney to discuss.

California’s Fair Chance Act also known as the “Ban the Box” law took effect in January 2018. It generally prohibits employers with five or more employees from asking about your conviction history before making you a job offer. In 2021, California’s Civil Rights Department (formerly the Department of Fair Employment and Housing) announced new efforts to identify and correct violations of the Fair Chance Act. Since then, the Civil Rights Department has stepped up enforcement of the statute. As such, it is vital for covered employers to understand the requirements under the law.

Covered Employers

Public and private employers with five or more employees are covered by the law. This includes union hiring halls, labor contractors, temporary employment agencies, and client employers.

Requesting Background Checks

Covered employers may not ask applicants about their criminal history until after a conditional offer is extended. However, even after a conditional offer, employers may not ask about or consider information about the following:

  • An arrest that did not result in a conviction.
  • Referral to or participation in a pretrial or posttrial diversion program.
  • Convictions that have been sealed, dismissed, expunged, or statutorily eradicated.

Steps for Rescinding a Job Offer

Under the law covered employers must take specific steps if they want to rescind a conditional job offer based on an applicant’s criminal history.

  1. Conduct an individualized assessment.
  2. Provide notification in writing that the applicant’s criminal history disqualifies the applicant from the position. The notice must also provide the conviction(s) that disqualify the applicant.
  3. Provide a copy of the conviction history report to the applicant.
  4. Provide the applicant 5 business days to respond to the preliminary decision to rescind.
  5. Consider any response from the applicant.
  6. Provide final notice in writing about disqualification.

The Civil Rights Department has sample forms available on its website.

If you need assistance with compliance with the Fair Chance Act, contact a Jackson Lewis attorney to discuss.

In light of California’s $37.86 billion budget shortfall, it is being reported that Governor Newsom is seeking changes to the California Healthcare Worker Minimum Wage law including the delay of the initial compliance date of June 1, 2024. It is not clear yet what the changes will be to the new law nor how far out the delayed implementation will be.

In the Governor’s proposed budget released on January 10, 2024, there is a request to make changes to the Healthcare Minimum Wage law so that the Governor, legislators, and key stakeholders can work through the proposed changes to the law. The proposal is found in the Governor’s Budget Summary on page 109.

On October 13, 2023, Governor Newsom signed Senate Bill (SB) 525, which enacts a multi-tiered statewide minimum wage schedule for healthcare workers employed by certain covered healthcare facilities. The new law established 5 different minimum wage schedules depending upon the nature of the employer.

Jackson Lewis will continue to track information regarding the changes to SB 525, if you have questions about SB 525 or related issues contact a Jackson Lewis attorney to discuss.

Government Code section 12850 and related regulations require all California employers to display the “California Law Prohibits Workplace Discrimination and Harassment” poster in a conspicuous place where employees gather. The Civil Rights Department published an updated version of this poster that includes information about protections for employees taking bereavement leave or leave for reproductive loss.It also contains information about prohibitions against discrimination based on an applicant’s use of cannabis outside of the workplace.

If 10% or more of an employer’s workforce at any facility or establishment speaks a language other than English, the employer must also display this poster in that language (or languages).  The updated “California Law Prohibits Workplace Discrimination and Harassment” poster and other postings required by the Civil Rights Department are available on their website, including translated versions.

If you have questions about compliance with California employee notice requirements or related issues, contact a Jackson Lewis attorney to discuss.

In 2019, California passed Assembly Bill (AB) 547, which requires janitorial employers to provide in-person training in preventing sexual violence and harassment at least once every two years. However, due to concerns about safety during the COVID-19 pandemic, the implementation of these training requirements was paused. The Division of Labor Standards Enforcement (DLSE) announced recently that employers must now commence with the training in light of the end of the COVID-19 public health emergency.

Covered Employers

Under AB 547, covered employers include any person or entity that employs at least one covered worker or otherwise engages by contract, subcontract, or franchise agreement for the provision of janitorial services by one or more covered workers. The term “employer” includes the term “covered successor employer,” but does not include an entity that is the recipient of the janitorial services.

Covered Worker

The legislation defines a covered worker as a janitor, including any individual predominantly working, whether as an employee, independent contractor, or franchisee, as a janitor, as that term is defined in the Service Contract Act Directory of Occupations (SCADO) maintained by the United States Department of Labor.

Housekeeping staff and workers who specialize in window washing, cleaning machinery, and who receive additional compensation for maintaining sterile facilities or equipment are also excluded from the SCADO definition of a janitor.

AB 547 specifically exempts from its definition of a “covered worker” any individual whose work duties are predominantly the final cleanup of debris, grounds, and buildings near the completion of a construction, alteration, demolition, installation, or repair work project.

Harassment Prevention Training

The harassment prevention training requirements under AB 547 are similar to those already required of all employers with 5 or more employees in the State of California.  However, unlike the state requirement, all employees (both supervisory and nonsupervisory) are required to have at least two hours of training.

In addition, covered employers must ensure they use content developed by the Labor Occupational Health Program (LOHP) under the direction of the Department of Industrial Relations. The training content is available on the DLSE website.

In addition, the training shall include identification of local, state, and national resources for victims of sexual violence and harassment, including hotlines and helplines for survivors, community-based resources such as rape crisis centers, counseling services, and mental health support, and agencies or organizations to whom they may report sexual violence and harassment.

Qualified Organizations and Peer Trainers

AB 547 further requires employers to use a qualified organization and peer trainers to provide harassment prevention training. The DLSE maintains a list of qualified organizations. If there are no qualified peer trainers available in a specific county to provide the training because no qualified organization was included on the Labor Commissioner’s website, or none of the qualified trainers are available to meet an employer’s training needs, the employer may use a trainer as prescribed by the Civil Rights Department to fulfill their obligations under Labor Code section 1429.5. The prescribed trainer must provide in-person training and use the LOHP training materials.

If you have questions about compliance with the sexual violence and harassment prevention training for janitorial service providers or related issues, contact a Jackson Lewis attorney to discuss.

On January 9, 2024, the California Department of Public Health (CDPH) updated its COVID-19 isolation recommendations to move away from 5 days of isolation and instead focus on clinical symptoms to determine when to end isolation. The guidance now states that those who test positive for COVID-19 should isolate until they have not had a fever for 24 hours without using fever-reducing medication AND other COVID-19 symptoms are mild and improving. If an individual tests positive but has no symptoms there is no recommendation to isolate but should still, follow recommendations regarding masking.

These recommendations are important for the application of the Cal/OSHA COVID-19 Prevention Non-Emergency Regulations which remain in effect until 2025 and incorporate the CDPH’s definitions of infectious period and its guidance for isolation into the regulations.

If you have questions about COVID-19 Workplace Safety or related issues, contact a Jackson Lewis attorney to discuss.

The California Employment Development Department (EDD) has released the 2024 Voluntary Plan Employee Contribution and Benefit Rate.

Employers with employees located in California are generally required to withhold and send state disability contributions to the EDD.

Of note, Senate Bill (SB) 951, which was signed in 2022, eliminated the Maximum Contribution and Taxable Wage Ceiling effective January 1, 2024.  These concepts can be disregarded by employers, subject to future legislation.

The 2024 rates are as follows:

“Employee Contribution Rate”1.1%
“Maximum Weekly Benefit Amount” (WBA)$1,620.00
“Maximum Benefit Amount” (WBA X 52 weeks)$84,240.00
“Assessment Rate” (this figure is the product obtained by multiplying the worker contribution rate by 14% or 1.1 X 14%)0.154%

The Employee Contribution Rate is the percentage withheld from the wages of employees who are covered by the Disability Insurance (DI) and Paid Family Leave (PFL) programs.

The contribution rate is relevant to employers who must comply with San Francisco’s Paid Parental Leave Ordinance (PPLO).  The city of San Francisco requires most employers with twenty or more employees worldwide to supplement PFL benefits received by employees to bond with a new child. 

During the PFL leave period, the PPLO supplemental compensation provided by an employer, added to the PFL wage replacement benefit received from the EDD, must equal 100% of the employee’s gross weekly wage, subject to a cap. For 2024, the PPLO cap remains $2,700 per week, as it was the year prior. The San Francisco Office of Labor Standards Enforcement has a calculator on its website to assist employers in determining how much supplemental compensation they must pay to eligible employees per week.

The Assessment Rate is relevant to employers that maintain a state-approved voluntary plan (VP), which is a disability insurance plan that an employer can offer to its California employees as a legal alternative to mandatory DI and PFL. The Assessment Rate is the amount that an employer pays to the EDD as an administrative expense for maintaining a voluntary plan.

Jackson Lewis continually monitors governmental changes affecting California employers. If you have questions regarding Paid Family Leave, the Paid Parental Leave Ordinance or other wage replacement requirements contact a Jackson Lewis attorney to discuss.

The California Supreme Court issued several important decisions in 2023 about issues such as COVID-19 take-home exposure and arbitrating Private Attorney General Act (PAGA) claims.

Employers should continue to be aware of several cases pending before the state’s high court. Here are the highlights and what these cases could mean for California employers.

PAGA & Arbitration

Estrada v. Royalty Carpet Mills

Do California courts have discretion to strike or narrow a Private Attorneys General Act (PAGA) claim that is unmanageable?

In Estrada, there were a number of individualized issues and the court dismissed the plaintiff’s PAGA claims for meal and rest period violations as unmanageable. On appeal, the Court of Appeal held that California courts do not have discretion to strike PAGA claims that are unmanageable. Specifically, it held that such discretion would place an extra burden on PAGA plaintiffs that the state need not satisfy, interfering with the purposes of PAGA.

The Court of Appeal in Estrada ruled opposite another district in the California Court of Appeal, which held that trial courts do have inherent authority to strike or narrow unmanageable PAGA claims. The California Supreme Court will now remedy the split between districts and, if it reverses Estrada, employers will have a powerful new tool in PAGA actions.

Quach v. California Commerce Club, Inc.

Must a party opposing a motion to compel arbitration show prejudice to establish that the party who filed the motion to compel waived its right to arbitrate?

In Quach, the defendant waited 13 months into discovery before filing a motion to compel arbitration. Quach argued that the Commerce Club had waived its right to arbitrate by waiting 13 months to move to compel arbitration. Quach further claimed that Commerce Club’s delay forced him to expend time and money preparing for litigation, causing him prejudice.

The trial court agreed, finding Commerce Club had waived the right to arbitrate by propounding a “large amount of written discovery,” taking Quach’s deposition, and expending “significant time meeting and conferring.”

The Court of Appeal disagreed with the trial court, following California Supreme Court precedent that participation in litigation alone cannot support a finding of waiver and that fees and costs incurred in litigation alone will not establish prejudice on the part of the party resisting arbitration.

Meanwhile, the United States Supreme Court has held, in Morgan v. Sundance, Inc., that a party is not required to show prejudice to establish an opposing party’s waiver of its right to arbitrate. The California Supreme Court will provide clarity and may reduce the expense of litigating motions to compel arbitration.

Ramirez v. Charter Communications, Inc.

Is it permissible for an arbitration agreement to allocate interim fees for a motion to compel arbitration to the prevailing party?

Here, Ramirez and Charter Communications, Inc. (Charter) were parties to an arbitration agreement. Charter fired Ramirez and Ramirez sued, alleging claims under the Fair Employment and Housing Act. Charter moved to compel arbitration. The trial court denied Charter’s motion, finding the arbitration agreement substantively unconscionable because it provided for interim fees to be awarded to the prevailing party on a motion to compel arbitration.

The Court of Appeal affirmed the trial court’s order denying the motion to compel arbitration as unconscionable due to the provision at issue, declining Charter’s request to sever that provision and compel arbitration under the remaining agreement.

The California Supreme Court will consider whether parties can agree to arbitration agreements that include interim fee-shifting provisions in favor of a party prevailing on a motion to compel arbitration. Moreover, it will consider whether such a provision is so unconscionable that it invalidates the entire agreement or whether courts may sever those provisions.

Employers should pay close attention to this case, as well as the courts’ recent attitudes towards arbitration agreements. Specifically, if the Court upholds the Court of Appeal’s order, employers may need to remove interim fee-shifting provisions. Regardless of the outcome, employers should review their arbitration agreements to ensure that courts would not interpret their terms as unfairly one-sided and that their agreements contain legally compliant severability clauses.

Fuentes v. Empire Nissan, Inc.

Where an arbitration agreement is fair in substance, is it nevertheless unenforceable for unconscionability where it is a one-page form with tiny, seemingly blurred print, largely unreadable, and presented on a take-it-or-leave-it basis?

Here, the trial court held the arbitration agreement procedurally unconscionable. The Court of Appeal reversed, holding that the substance of the arbitration agreements was fair and there was therefore no reason to invalidate the agreements for unconscionability.

The result of this case will shape the future of employment arbitration agreement enforceability which has been changing dramatically in recent years.

Zhang v. Superior Court

If a party moves to compel arbitration in a non-California forum pursuant to a forum-selection clause and seeks to stay related California litigation under Section 1281.4, can the opposing party preempt the court’s “competent jurisdiction” requiring a stay of the California litigation by merely invoking Labor Code, section 925? Moreover, can a party to an arbitration agreement circumvent the arbitration agreement’s delegation of all issues to an arbitrator by invoking Labor Code, section 925?

Plaintiff Zhang is a former Dentons law firm partner who worked in California. After Dentons removed him from the partnership for diverting money owed to the firm, they initiated arbitration in New York pursuant to a signed arbitration agreement. Zhang then filed suit in California, arguing that he was an employee and that Labor Code, section 925, preempted arbitration in New York. Dentons sought a stay under Section 1281.4. The trial court granted Denton’s motion for a stay. After the Court of Appeal denied Zhang’s petition for a writ and the Supreme Court ordered the Court of Appeal to review, it denied Zhang’s petition on the merits.

This case is crucial for employers because it may affect who can benefit from the Labor Code, section 925, and therefore preempt forum-selection clauses.

Discrimination, Harassment & Retaliation

Bailey v. San Francisco District Attorney’s Office, et al.

Is summary judgment appropriate for the employer on discrimination, harassment, and derivative claims where a non-supervisor used a highly offensive racial slur on one occasion?

The trial court awarded summary judgment to the employer. The Court of Appeal affirmed summary judgment. Now, in a rare less-than-unanimous vote, the California Supreme Court granted review. This case may affect the standards for hostile work environment claims and the level of severity an employee must show to establish a hostile work environment. Employers should continue to be proactive in training employees to avoid the appearance of impropriety in the work environment.

Wage and Hour

Huerta v. CSI Electrical Contractors, Inc.

The U.S. Court of Appeals for the 9th Circuit certified three questions in this case to the California Supreme Court:

(1) Is time spent on an employer’s premises in a personal vehicle, waiting to scan an identification badge, having security guards peer into the vehicle, and exiting a security gate compensable as “hours worked” under California Industrial Welfare Commission Wage Order 16?

(2) Is time spent on the employer’s premises in a personal vehicle driving between the security gate and the employee parking lots, while subject to certain rules from the employer, compensable as “hours worked” or as “employer-mandated travel” under Wage Order 16?

(3) Is time spent on the employer’s premises, when workers are prohibited from leaving by the fact of the location but not required to engage in employer-mandated activities, compensable as “hours worked” within the meaning of Wage Order 16 or Labor Code, section 1194 when the relevant collective bargaining agreement designated that time as an unpaid “meal period”?

In the underlying case, employees commuted to a remote work site to build solar panels. Once they left the highway, they had to drive forty minutes to the muster point, sometimes at a speed as slow as five miles an hour to minimize the disturbance of endangered kit fox species in the area.  Sometimes they had to wait outside the gate off the highway while a biologist cleared the road. Employees were also required to stop at a security gate (the location of which moved during the project) for identification.  Due to the times employees came and left, the lines at the security gate could be five to twenty minutes long.

This case will provide further guidance for what counts as hours worked under California law. The case will also provide guidance on the CBA exception for meal periods contained in Wage Order 16.

Iloff v. LaPaille

For an employer to establish its “good faith” defense to liquidated damages, must it demonstrate that it took affirmative steps to ascertain whether its pay practices complied with the Labor Code and Industrial Welfare Commission Wage Orders? May a wage claimant prosecute a paid sick leave claim in a de novo wage claim trial conducted pursuant to Labor Code section 98.2?

In this case, the plaintiffs filed wage claims with the Division of Labor Standards Enforcement (DLSE) against defendants Cynthia LaPaille and Bridgeville Properties, Inc. (BPI) for unpaid wages in violation of the Labor Code. The plaintiffs received a favorable order from the Labor Commissioner, and BPI appealed to the superior court. In the subsequent superior court action, the plaintiffs were represented by the Labor Commissioner’s office.

Following a de novo trial on the wage claims, the court found that plaintiffs were entitled to unpaid wages and certain penalties but rejected the plaintiffs’ unfair competition law claims under Business and Professions Code § 17200 (the UCL). The court declined to award the plaintiffs liquidated damages, penalties for violations of sick leave notice requirements, and did not impose personal liability on BPI’s CEO, Cynthia LaPaille.

The issues here are the Court of Appeal’s holdings that liquidated damages were not appropriate for failure to pay minimum wages under Labor Code, section 1194.2(a), and that plaintiffs do not have private rights of action for sick leave penalties.

Section 1194.2(a) allows courts to reduce or eliminate liquidated damages where an employer can show that it acted in “good faith” with “reasonable grounds” for believing it did not violate the law. Here, because the plaintiffs initiated the idea of working in exchange for rent, rather than wages, as an independent contractor, and the unsettled status of the law on this subject at the time, the trial court acted within its discretion in finding the defendants acted in good faith.

Moreover, sick leave penalties require independent actions by the Labor Commissioner or Attorney General’s office. Even though the plaintiffs were represented by the Labor Commissioner in their superior court action, this did not suffice to permit their pursuit of sick leave penalties.

Separately, and not at issue with the Supreme Court, the Court of Appeal held that LaPaille may be held personally liable due to her managerial role with BPI under Labor Code § 558.1(a), which expressly permits personal liability for individuals “acting on behalf of an employer.” It further held that the trial court had discretion as to whether equitable relief for unfair business practices would be in the interest of justice, even where Labor Code violations exist. Because the parties appeared to lack understanding as to the plaintiff’s entitlement to wages for the services they performed for BPI, the Court of Appeal found the trial court properly exercised its discretion in denying equitable relief.

Employers should watch this matter for not only how it may affect potential damages in wage and hour litigation for seemingly innocent violations, but also the effect it could have on appeals from Labor Commissioner decisions.

Jackson Lewis continues to track California case law affecting employers. If you have questions about any of the cases pending before the California Supreme Court or related issues, contact a Jackson Lewis attorney to discuss.