As California proceeds through the stages of reopening businesses in the wake of the COVID19 pandemic, the California state legislature is considering various bills to lighten the load for employers as they attempt to recover from the various degrees of business closures. One such bill is Assembly Bill 2457. Though the bill was introduced in February 2020, subsequent amendments were made to address the impact of the COVID19 pandemic and provide partial relief to employers by limiting audits and penalties against businesses that may have misclassified workers as independent contractors.

First, the bill seeks to prohibit an employer from being subject to a fine or penalty for a violation of the Labor Code, Unemployment Insurance Code, or Industrial Welfare Commission (IWC) Wage Orders when an applicant applies for unemployment insurance benefits and has acted as an independent contractor in the previous five years.

Second, the bill would amend the Labor Code Private Attorneys General Act of 2004 (PAGA), which authorizes an aggrieved employee to bring a civil action to recover civil penalties on his or her own behalf and other current or former employees that would otherwise be assessed and collected by the California Labor & Workforce Development Agency. If passed, the PAGA would not apply to an allegedly misclassified employee according to an IWC Wage Order if the employee: (1) has filed for unemployment insurance benefits and (2) the employee’s previous employer hired the employee as an independent contractor before January 1, 2020.

Finally, the California Unemployment Fund as administered by the Employment Development Department (EDD) has established procedures for the filing, determination, and payment of benefit claims. The EDD is also empowered to audit claims, as specified by law. Proposed Assembly Bill 2457 provides that an audit triggered under the federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) does not authorize the EDD or Labor Commissioner, with respect to a claim for unemployment insurance, to audit a previous determination of worker classification if the applicant designated themselves as an independent contractor or as self-employed during the past five years.

The proposed Assembly Bill 2457 would repeal all three provisions on January 1, 2026.

Other bills currently pending before the California state legislature seek to limit the application of the Labor Code to independent contractors, in relation to the current COVID19 outbreak and otherwise.

Jackson Lewis is monitoring pending legislation pertaining to COVID19 and independent contractors. If you have questions regarding these issues, please reach out to a Jackson Lewis attorney to discuss.

On May 4th, Governor Newsom issued a new executive order allowing for limited reopening of certain businesses. This initial allowance for re-opening was part of the State’s larger staged plan referred to as the “Resilience Roadmap.” The Governor’s plan identified that the State was in the early part of Stage 2 but set out guidance for counties to seek variances based on criteria set by the California Department of Public Health.

The State’s roadmap indicated that in the early phase of Stage 2, retail (curbside and delivery only), related logistics and manufacturing, office workplaces (where teleworking was not feasible), limited personal services, outdoor museums, childcare, and essential businesses can open with modifications, could open if the counties could meet certain variances.

In conjunction with the State’s roadmap, several counties developed their own reopening roadmaps, including Orange County. Orange County’s guidance, as such, stated that in early Stage 2 the following businesses could open: curb-side retail, manufacturers, and logistics.  It noted that the “Expanded Stage 2 with Attestation” (and specifically noted that none of these were open in Orange County until there was further guidance on facility adaptations from the Governor), included office-based businesses, and noted that telework remains strongly encouraged.

Subsequently, the Governor retracted on some of the requirements of counties, and, as such, allowed the state to progress to a more thorough Stage 2, including the opening of office-based businesses.

At that point in time, Orange County’s roadmap was more stringent than California’s guidance, as it stated that, among others, an office-based business could only open in “Expanded Stage 2 with Attestation,” not in “Early Stage 2 Opening.”

However, the County identified this conflict and, over the weekend, issued new guidance confirming office-based businesses may reopen in the County, where telework is not possible, following applicable guidelines. Office-based businesses will still need to comply with both county and state guidance for reopening.

The State has mandated that all facilities who reopen must:

  1. Perform a detailed risk assessment and implement a site-specific protection plan
  2. Train employees on how to limit the spread of COVID-19, including how to screen themselves for symptoms and stay home if they have them
  3. Implement individual control measures and screenings
  4. Implement disinfecting protocols
  5. Implement physical distancing guidelines

Jackson Lewis is monitoring state and local guidance and can assist in developing return to work policies and protocols for businesses. Contact a Jackson Lewis attorney if you would like to discuss your business’s return to work plans.

On January 31, 2020, a U.S. District Court preliminarily enjoined the enforcement of Assembly Bill 51 (AB 51) against arbitration agreements governed by the Federal Arbitration Act (FAA).  As enacted, AB 51 would prohibit employers from conditioning employment (including continued employment) or employment-related benefits on an individual signing a mandatory arbitration agreement for disputes arising under the California Fair Employment and Housing Act or the California Labor Code. The State of California (“the State”) appealed the District Court’s decision to the Ninth Circuit Court of Appeals.

On May 18, 2020, the State filed a 66-page opening brief with the Ninth Circuit. The State raises four main arguments, with the thrust being that the District Court erred when it concluded that AB 51 was likely preempted by the FAA.

The State sets forth several arguments regarding why FAA preemption does not apply, with an emphasis on the argument that the AB 51 does not implicate the FAA because the FAA applies to arbitration agreements whereas AB 51 applies to employer policies and practices, particularly practices relating to “forc[ing] workers into waivers as a condition of employment . . .” In other words, the State attempts to draw a distinction between regulating agreements and regulating conduct.

The U.S. Chamber of Commerce is slated to file its Answering Brief on June 17, 2020.

Jackson Lewis will continue to monitor the litigation involving AB 51 and related issues pertaining to arbitration agreements. If you have questions about arbitration agreements or related information, reach out to a Jackson Lewis attorney.

On May 20, 2020, San Diego County was approved for a state variance to move forward and allow additional businesses to reopen. Under the variance, restaurants will be permitted to have customers dine-in, and retail establishments will be permitted to have customers in-store with certain restrictions. San Diego is one of the first larger counties in California to be granted such a variance.

To ensure compliance with state requirements, San Diego businesses need to complete the county’s Safe Reopening Plan. Businesses that have been operating for pickup and delivery will need to update their plans. San Diego has also issued guidance for restaurants regarding dine-in operations.

San Diego County had previously issued a Safe Reopening Plan for retail businesses.  The COVID-19 Safe Onsite Dining Plan for Restaurants and Restaurant Operating Protocol are similar; however, contain restaurant-specific guidelines.

The Dining Plan and Restaurant Operating Protocol include five (5) major measures for dine-in restaurants: employee health, social distancing, measures to increase sanitation and disinfection, education for the dining public, and recommended additional measures.  Except for the last one, all measures are mandatory, so restaurants should thoroughly review both the Dining Plan and the Restaurant Operating Protocol.

All businesses that plan to reopen should review the state checklist for their industry. Moreover, all facilities that are reopening are required by the state to perform a detailed risk assessment and implement a site-specific protection plan. These plans must include the implementation of employee screenings, disinfecting protocols, and physical distancing policies. Businesses are also required to train employees on how to limit the spread of COVID-19, including how to screen themselves and stay home if the employee has symptoms.

Jackson Lewis is monitoring state and local guidance and can assist in developing return to work policies and protocols for businesses. Contact a Jackson Lewis attorney if you would like to discuss your business’s return to work plans.

Following in the footsteps of the cities of Los Angeles, Los Angeles County, San Francisco, and San Jose, the City of Oakland adopted a new supplemental emergency sick leave ordinance on May 18, 2020.  The ordinance takes effect immediately and is intended to apply to employers who are not covered by the Families First Coronavirus Response Act (“FFCRA”).

The ordinance requires employers to provide 80 hours of Emergency Sick Leave (“ESL”) to full-time employees.  Part-time employees must be provided an amount of ESL equal to the average number of hours they work in a two-week period.

Employers do not have to provide the ESL if:

  1. The employer had less than 50 employees  February 3, 2020, through March 4, 2020. However, some janitorial and franchisee employers are covered even if they had less than 50 employees during that time frame.
  2. The employer, after February 3, 2020, provided employees with the ability to accrue at least 160 hours of paid personal time but only if the employee has immediate access to at least 80 hours of that leave. If the employee’s balance under that personal plan is less than 80 hours, the employer must provide additional personal time sufficient to bring the employee’s balance to 80 hours.
  3. The employer immediately allows employees to use 80 hours of paid personal time off for the same reasons as ESL can be used where the employer was not obligated to provide that personal time by a collective bargaining agreement, contract, or policy.

Employees may use ESL for the following reasons when the employee is unable to work or telework:

  1. The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  3. The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
  4. The employee is caring for an individual who is subject to a federal, state, or local quarantine or isolation order or has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  5. The employee is caring for the employee’s child because the child’s school or place of care has closed due to COVID-19 precautions;
  6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

In addition, ESL may be used when the employee:

  1. Is at least 65 years old;
  2. Has a health condition such as heart disease, asthma, lung disease, diabetes, kidney disease, or weakened immune system;
  3. Has any condition identified by an Alameda County, California or federal public health official as putting the public at heightened risk of serious illness or death if exposed to COVID-19; or
  4. Has any condition certified by a healthcare professional as putting the employee at a heightened risk of serious illness or death if exposed to COVID-19.

Like FFCRA and similar ordinances, payment for leave is capped at a maximum of $511 per day, or $5,110 in total.

Upon the City publishing an ESL notice, employers are required to post the notice, make it available on an intranet, or otherwise provide it to all employees.

In an unusual twist, the ordinance also requires employees who are laid off to be paid for their unused  Paid Sick Leave upon termination.

The ordinance expires on December 31, 2020, unless extended.

Jackson Lewis’ Coronavirus Task Force is actively monitoring the developing situation surrounding the complexities of COVID-19.

Under the California Workers’ Compensation Act (“the Act”), employers must carry workers’ compensation insurance for employee injuries or illnesses which “arise out of and in the course of” employment. The Act, first passed in 1911 and amended over the years by the Legislature, provides a comprehensive system for administering claims, including the provision of disability benefits and the payment for associated medical expenses for work-related injuries.

Now comes the COVID-19 pandemic and a panoply of emergency orders by governors across the country. On May 6, 2020, Governor Newsom signed Executive Order #N-62-20 which creates a presumption that any COVID-19-related illness of an employee shall be presumed to arise out of and in the course of the employment for purposes of awarding workers’ compensation benefits if certain conditions are met.

Those conditions include the following:

  1. The employee tested positive for or was diagnosed with COVID19 within 14 days after a day that the employee performed labor or services at the employee’s place of employment at the employer’s direction;
  2. The day referenced in subparagraph (a) on which the employee performed labor or services at the employee’s place of employment at the employer’s direction was on or after March 19, 2020;
  3. The employee’s place of employment referenced in subparagraphs (a) and (b) was not the employee’s home or residence; and
  4. Where subparagraph (a) is satisfied through a diagnosis of COVID-19, the diagnosis was done by a physician who holds a physician and surgeon license issued by the California Medical Board, and that diagnosis is confirmed by further testing within 30 days of the date of the diagnosis.

Thus, the Governor has taken the extraordinary step of presuming a workplace injury without specific evidence of job-causation.  While the scope and legality of the new Executive Order may be subject to challenge, it is incumbent upon the California employer to review and enforce workplace safety, in all areas, and to specifically protect against the risk of employee exposure to a communicable disease, thereby avoiding added liability and costs associated with job illness or injury claims.

Jackson Lewis’ Coronavirus Task Force will continue to monitor changes in the law pertaining to COVID-19. Please contact a team member or the Jackson Lewis attorney with whom you regularly work if you have questions or need assistance.

On April 19, 2020, Judge James V. Selna of the United States District Court, Central District of California, granted a motion to declare pro se plaintiff Peter Strojnik, Sr. a vexatious litigant, requiring him to obtain the permission of the Court before filing any future accessibility lawsuits with the District Court. Federal courts by statute have the discretion to enjoin vexatious litigants. See All Writs Act, 28 U.S.C. §1651(a). Defense attorneys and hotel owners and operators, especially in California, are very familiar with Mr. Strojnik as he has filed hundreds of nearly identical lawsuits and claims against hotels in the last few years as a pro se plaintiff after his license to practice law was suspended for unethical conduct.

Please find the full article on the Jackson Lewis Disability, Leave & Health Management Blog.

Whether the Establishment and Free Exercise Clauses prevent civil courts from adjudicating employment discrimination claims brought by employees against their religious employer, where the employee carried out important religious functions, is the question presented in two consolidated cases before the U.S. Supreme Court: Our Lady of Guadalupe School v. Morrissey-Berru, No. 19-267, and St. James School v. Biel, No. 19-348.

Please find the full article on the Jackson Lewis Publications Page.

The City of Los Angeles has enacted two Ordinances requiring fair employment practices in response to job and economic insecurity due to COVID-19 related shelter in place orders.  The Ordinances, which go into effect on June 14, 2020, apply to four categories of businesses and employers which the City found have been especially impacted by the COVID-19 pandemic:

  1. Airport: defined by the Ordinances as a business or employer that provides any service at the City of Los Angeles Department of Airports and each airport it operates in the City, or provides any service to any business or employer servicing the Airport, and is required to comply with the Los Angeles Living Wage Ordinance. Airlines and businesses or employers that are parties to an agreement with the Airport that contains a worker retention or rehire agreement are not covered by the Ordinances.
  1. Commercial Property: defined by the Ordinances as an owner, operator, manager, or lessee (including a contractor, subcontractor, or sublessee) of a non-residential property in the City that employs 25 or more janitorial, maintenance, or security service workers. Only the janitorial, maintenance, and security service workers who perform work for a Commercial Property business or employer are covered by the Ordinances.
  1. Event Center: defined by the Ordinances an owner, operator, or manager of a publicly or privately-owned structure in the City of more than 50,000 square feet or with a seating capacity of 1,000 seats or more that is used for public performances, sporting events, business meetings, or similar events. An “Event Center Business” includes, but is not limited to, concert halls, stadiums, sports arenas, racetracks, coliseums, and convention centers.
  1. Hotel: defined by the Ordinances as an owner, operator or manager of a residential building in the City designated or used for public lodging or other related service for the public and either contains 50 or more guestrooms or has earned gross receipts in 2019 exceeding $5 million. This category includes the owner, operator, manager, or lessee of any restaurant physically located on hotel premises.

Under the Worker Retention Ordinance, when a covered business experiences a Change in Control as defined by the Ordinance, covered employees are given preference in hiring by the successor business employer for a period of 6 months and must be retained for at least 90 days, unless there is cause for termination (which the Ordinance does not define).

The Right of Recall Ordinance requires a covered employer to offer positions that become available on or after the June 14, 2020 effective date to qualified employees who were laid off on or after March 4, 2020. A laid-off employee is deemed qualified and must be offered a position – in the order of priority below – if the employee:

  1. Held the same or similar position at the same location when the employee was laid off; or
  1. Is or can be qualified for the position with the same training that would be provided to a new worker hired into the position.

If more than one laid-off employee is entitled to preference for a position, the employer must offer the position to the laid-off employee with the greatest length of service in the position and then to the laid-off employee with the greatest length of service with the employer at the employment site.

Under both Ordinances, a collective bargaining agreement in place as of the June 14, 2020 effective date that contains a worker retention provision, or a right of recall provision will supersede.

Other than in connection with a collective bargaining agreement, no waiver of the right of retention or the right of recall will be enforceable.

Notably, both Ordinances provide for a private right of action in state courts for any violations of the Ordinances, following notice and a 15-day cure period.  Available remedies include hiring and reinstatement rights, lost income and benefits, reasonable attorneys’ fees and costs, and under the Right of Recall Ordinance, punitive damages.

The full text of the Worker Retention Ordinance can be found here and the Right of Recall Ordinance here.

Jackson Lewis’ Coronavirus Task Force will continue to monitor these ordinances and other emergency regulations pertaining to COVID-19. Please contact a team member or the Jackson Lewis attorney with whom you regularly work if you have questions or need assistance.

California Governor Gavin Newsom has announced a plan to allow the limited reopening of some businesses beyond those in the category of essential critical infrastructure. This limited reopening is part of the “Resilience Roadmap” for California, the multi-phase plan to modify the statewide stay-at-home Order, originally issued on March 19, 2020, in response to the COVID-19 pandemic.

On May 4, 2020, the Governor issued an executive order directing Californians to continue to obey state public health directives. It also indicated the state was moving toward Stage Two, which would allow the reopening of “lower-risk businesses and spaces.”

Please find the full article on the Jackson Lewis Publications Page.