Confirmed Coronavirus (COVID-19) cases have risen swiftly in California and in response, administrative agencies have released guidance to employers regarding wage and hour issues and paid sick leave.

Late last, week, the Labor Commissioner’s office provided input on administering paid sick leave in light of coronavirus. The Labor Commissioner indicated that preventative care under paid sick leave would include self-quarantine as a result of potential exposure to COVID-19 if recommended by civil authorities or if the employee has traveled to a high-risk area. However, employers cannot require employees to use paid sick leave for quarantine purposes. The Labor Commissioner’s guidance can be found here.

At the same time, California’s Employee Development Department (EDD) announced support services to employers and employees affected by COVID-19. Employees who are sick or quarantined due to the virus may file for disability benefits. Employees who cannot work because they are caring for a family member who is sick or quarantined can seek paid family leave benefits. Moreover, employees can claim unemployment insurance benefits due to reduced hours or operations shut down related to the virus concerns.

Employers experiencing a slowdown in their businesses or services as a result of the coronavirus impact on the economy may apply for the UI Work Sharing Program as an alternative to layoffs. Employers experiencing a COVID-19-related hardship may request a 60-day extension from the EDD for filing state payroll reports and depositing state payroll taxes (without penalty or interest penalties).

If employers have questions regarding paid sick leave or other issues related to COVID-19, they should contact a Jackson Lewis attorney to discuss. To better support clients as they respond to this challenging public health issue, Jackson Lewis has established a dedicated “Coronavirus” team that is continually assessing risks, preparing employee communications, and providing practical advice on the workplace compliance issues flowing from coronavirus workplace concerns.

As the confirmed cases of Coronavirus (COVID-19) rises in the U.S., more states are issuing directives regarding employee cost-sharing for screening and testing for the virus. Testing for COVID-19 is free if performed by the Centers for Disease Control and Prevention, however, the testing is expected to be offered more broadly by commercial labs.

On March 5, Governor Newsom, of California, joined several other states, including New York, Maryland, and Washington in mandating that insured health plans regulated by the Department of Managed Health Care immediately reduce cost-sharing to zero for all medically necessary screening and testing for COVID-19.  Therefore, if a medical professional determines that such screening or testing is advisable, insured medical benefit plans subject to California law may not charge a co-pay or deductible services related with COVID-19, including testing, screening, emergency room visits, and doctor’s visits. Insurers also must ensure that the plan’s advice line/customer service representatives are adequately informed that the plan is waiving cost-sharing as described above and clearly communicate this to participants who contact the plan seeking medically necessary screening and testing for COVID-19. Governor Newsom said, “Californians shouldn’t have to fear a big medical bill just because they took a test for COVID-19.”

The state’s mandate for waiving cost-sharing has limits; the Governor’s order does not cover the treatment of COVID-19, such as hospital stays for more severe cases. This is because the requirements focus on diagnosis, not treatment of COVID-19.

The Governor’s order applies to insured benefits only and does not apply to self-insured plans. ERISA preempts the application of state law to self-funded plans. Cost-sharing requirements for self-funded plans may be banned by the federal government.  However, in the meantime, employers with self-funded plans may opt to mirror state law requirements by eliminating cost-sharing for COVID-19 testing, and many insurers are opting to voluntarily eliminate cost-sharing for COVID-19 testing nationwide.

If Human Resources or benefits stakeholders have questions on benefits, ERISA compliance or other issues related to COVID-19, they should contact a Jackson Lewis attorney to discuss. Jackson Lewis is continuing to monitor the situation to assist employers in handling this complicated situation.

Employers all over the State of California have been waiting earnestly for over two years for the California Supreme Court to issue its opinion in Kim v. Reins International California. A ruling that will decide whether a settling employee remains an aggrieved employee for purposes of the Private Attorneys General Act (PAGA). The wait is not over. In the meantime, the California legislature is considering whether to ease some of the burdens of PAGA for employers.

PAGA provides that, as an alternative to civil penalties being assessed and collected by the Labor and Workforce Development Agency (LWDA), civil penalties may be recovered through a civil action brought by an aggrieved employee on his or her behalf and on behalf of other aggrieved employees. (Labor Code section 2698, et seq.)

Among other Labor Code violations, PAGA authorizes an employer to “cure” specified violations of itemized wage statement requirements, within 33 days of the date of the notice from the aggrieved employee. (Labor Code sections 2699.3(c)(2)(A) and 2699.5.) A “cure,” in this context, signifies making the aggrieved employee whole and providing itemized wage statements for each pay period for the last three years.

However, Senate Bill 1129, seeks to expand the types of itemized wage statement violations that an employer could cure and would allow the employer 65 calendar days of the postmark date of the notice to cure the violation.

The current 33-day period to cure period is only permitted for two types of wage statement violations:

  1. failure to include either the start and end date of the pay period pursuant, and
  2. failure to provide the name and address of the legal employing entity.

The current cure period of 33 days hardly allows enough time for most employers to actually cure even these two violations. A corrected and “fully compliant” wage statement must be provided to every employee for every pay period going back three years from the date the PAGA notice was filed with the LWDA. For larger employers, curing such wage statement deficiencies could take months for a single year, much less, 33 days for a three-year time frame. Moreover, the requirement for “fully compliant” corrected wage statements is typically interpreted to mean wage statements that comply with all nine requirements set forth in the Labor Code section.

The bill also seeks to reduce, from three years to one year, the itemized wage statements that the employer would be required to provide in order to cure a violation and expand the types of itemized wage statement violations that can be cured.

These changes would allow more employers to take advantage of the cure period and remedy issues before a complaint is filed.

While employers wait on the California legislature and Supreme Court to provide more clarity on PAGA, employers should contact a Jackson Lewis attorney immediately upon receiving a PAGA notice. Time is of the essence when a PAGA notice is received, and remedying the curable violations could save employers hundreds, thousands, even millions of dollars in civil penalties.

While litigation over the controversial Assembly Bill 5 (AB 5) continues throughout the state, a San Diego Superior Court judge recently issued a preliminary injunction enjoining and restraining a company from failing “to comply with California employment law” regarding a category of individuals within the City of San Diego while the litigation is pending. This decision is noteworthy because it appears to require the company to immediately reclassify its independent contractors as employees, despite the fact the Court has not yet ruled on the merits of the City’s claim.

The case was brought by the City Attorney of San Diego against Maplebear, Inc. doing business as InstaCart, a same-day grocery delivery company. The lawsuit asserts a cause of action for Unfair Competition under California’s Business and Professions Code in which the City claims that Instacart “maintains an unfair competitive advantage by misclassifying workers” who provide shopping services as independent contractors instead of employees.

In the Order issued by the Honorable Timothy Taylor, he notes that the probability of one side prevailing is “not free from doubt.” On the other hand, he writes that the City will “more likely than not” be able to establish that Instacart Shoppers “perform a core function” of the business; are not free of control, and are not engaged in an independently established trade, occupation, or business. The Court also points out that while the City has the burden going forward with evidence, Instacart has the burden of establishing proper classification.

Judge Taylor’s Order goes on to note, “[t]he policy of California is unapologetically pro-employee (in the several senses of that word). Dynamex [the case that spawned AB 5] is explicitly in line with that policy. While there is room for debate on the wisdom of this policy, and while other states have chosen another course, it is noteworthy that all three branches of California have now spoken on this issue.” An attitude that is likely to be reiterated again and again as businesses grapple with the fallout from Dynamex and AB 5.

After issuance of Judge Taylor’s Order granting the City’s request for a preliminary injunction, Instacart moved on an ex parte basis to confirm that the preliminary injunction is subject to an automatic stay pending appeal, to stay enforcement of the preliminary injunction pending appeal or, in the alternative, to dissolve the preliminary injunction altogether. Judge Taylor denied Instacart’s ex parte application and the Company has since filed an appeal.

Jackson Lewis will continue to monitor developments in this case and others involving the application of AB 5 in the gig economy. Contact a Jackson Lewis attorney if you have questions about AB 5 or the classification of individuals as employees or independent contractors.

Prior pay, alone or in combination with other factors, is not a job-related “factor other than sex” that can be used to justify a difference in pay under the Equal Pay Act (EPA), a majority of judges on the U.S. Court of Appeals for the Ninth Circuit has held again. Rizo v. Yovino, No. 16-15372 (Feb. 27, 2020).

The Court previously reached this conclusion in 2018. On appeal to the U.S. Supreme Court, the Supreme Court remanded the case because the authoring judge (Judge Stephen Reinhardt) passed away before publication of the opinion.

The new majority decision, authored by Judge Morgan Christen, reiterates, “Allowing employers to escape liability by relying on employees’ prior pay would defeat the purpose of the Act and perpetuate the very discrimination the EPA aims to eliminate.” Accordingly, the Court held, “[A]n employee’s prior pay cannot serve as an affirmative defense to a prima facie showing of an EPA violation.”

The Ninth Circuit has jurisdiction over Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington.

Please find the full article on the Jackson Lewis Publications page here.

The much anticipated California Consumer Privacy Act (“CCPA”) is now in effect (as of January 1, 2020), and as we’ve recently reported, class action litigation under the CCPA has already begun.  Organizations should have already assessed whether their business is subject to the new law and if so, taken steps to ensure compliance.  Likely, one of the most difficult compliance areas of the CCPA is responding to consumer requests to know the personal information a business collects about them.  Under the CCPA consumers have the right to know what personal information a business is collecting about them.  The information must be made available, free of charge, within 45 days, although extensions are available in limited circumstances. The business’s response to a request to know must be in a “readily useable format that allows the consumer to transmit this information to another entity without hindrance.” In addition, in October of 2019, as required by the CCPA, Attorney General Xavier Becerra announced Proposed Regulations that operationalize the new law and provide clarity and specificity to assist in implementation of the CCPA. The Proposed Regulations, which were recently updated, have yet to be finalized, but as is, have a technical and substantive impact on the consumer request to know process.

Please find the full article on the Jackson Lewis Workplace Privacy, Data Management & Security Report.

In a closely watched decision, Intel Corporation Investment Policy Committee v. Sulyma, Slip Op. No. 18-1116 (U.S. S. Ct., Feb. 26, 2020), construing ERISA’s three-year statute of limitations, see ERISA § 413(2), 29 U.S.C. § 1113(2), the Supreme Court held unanimously (J. Alito) that “actual knowledge” means “. . . when a plaintiff actually is aware of the relevant facts, not when he should be.”

ERISA contains a two-part statute of limitations provision for breach of fiduciary duty claims.  There is a six-year statute of repose, ERISA § 413(1), 29 U.S.C. § 1113(1); also, a matter is time-barred: “three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation.”  ERISA § 413(2) (emphasis added).  The meaning of “actual knowledge” was the point of this case.

Please find the full article on the Jackson Lewis Benefit Law Advisor here.

Years after California legalized recreational use of cannabis, employers continue to struggle with determining their rights and liabilities regarding employees who engage in that activity.

In 2016, a majority of California voters approved Proposition 64, titled “The Control, Regulate and Tax Adult Use of Marijuana Act” (Prop 64). Prop 64 permits adults 21 years of age and over to possess and grow specified amounts of cannabis for recreational use.

That said, Prop 64 did not address the myriad implications of allowing recreational use of cannabis, including employers’ rights and obligations to employees who choose to engage in that activity. Further confusing the issue has been employees who use marijuana to treat an illness pursuant to the Compassionate Use Act of 1996.

Recently, Assemblymen Rob Bonta introduced Assembly Bill 2355, titled “Employment discrimination: medical cannabis” (AB2355). The bill seeks to make it an unlawful employment practice for an employer to refuse to hire or employ a person, to discharge a person from employment, or to discriminate against an employee, because of the employee’s status as a medicinal cannabis user.

Bonta introduced a similar bill in 2018, which failed. In an apparent effort to secure a different result for AB2355, Bonta has included some exceptions to the proposed protections.

First, employers may still refuse to hire applicants or terminate current employees, if retaining the person would cause the employer to:

  • Lose a monetary or licensing-related benefit; or
  • Incur damages under federal law or regulations, including the Department of Transportation regulations.

Further, if the employer requires all employees and job applicants to be drug and alcohol-free for legitimate safety reasons as required by federal or state laws, the employer will not be subject to the requirements of AB2355.

The bill also specifically provides that employers would still have a right to refuse accommodation, suspend an employee, or take any other lawful action if the employer discovers the employee is using or impaired by medical cannabis at work or during working hours.

With these more specific carve-outs, AB2355 may have a higher likelihood of success than Bonta’s prior attempt at legislating this issue.

Even if the bill does not pass, employers should ensure they are complying with other requirements of California law that pertain to employee drug testing and disability accommodation.

If you have questions about cannabis and the workplace, consider contacting a Jackson Lewis attorney to discuss.

As the #metoo movement strengthened in 2018, the State of California worked quickly to enact legislation requiring harassment prevention training, not just for supervisors, but for all employees. At the same time, California attempted to address the unique issues facing hotel workers, particularly housekeeping staff, through legislation that would have required hotel employers to provide their employees with “panic buttons” – portable devices that employees can quickly and easily activate to summon help if they are harassed or threatened. However, that legislation failed to pass.

Taking up this charge, an increasing number of cities and counties within California have enacted local ordinances that impose similar requirements on hotel employers, including “panic buttons.” The County of Sacramento passed such an ordinance in early 2018, but that ordinance did not include hotels within city limits. The City of Sacramento recently enacted its own hotel worker protection ordinance on January 14, 2020.

The cities of Oakland, Long Beach, and Santa Monica have also enacted ordinances requiring hotel employers to provide employees with “panic buttons” and other protections.

Oakland passed its ordinance, known as “Measure Z,” in late 2018.  That ordinance requires hotel employers to provide panic buttons to their employees. Employers are also required to post notices in hotel rooms informing patrons that harassment is prohibited and that employees have panic buttons.  Not satisfied with simply addressing those issues, Oakland’s ordinance also provides for a specific minimum wage, limits the square footage an employee can be required to service and creates an entirely new city department.

Santa Monica’s ordinance, portions of which went into effect January 1, 2020, requires both panic buttons and posted notices. Santa Monica’s statute also included a mandate for training employees regarding safety, public health protection, prevention of human trafficking, domestic violence, and sexual violence. The training requirements under the Santa Monica ordinance go into effect on January 1, 2021.

Not surprisingly, several of these ordinances have faced legal challenges. Hotel employers and trade associations have sought injunctions. So far, those challenges have encountered very little success. For example, a hotel trade association filed a lawsuit in federal court in late 2019, seeking an injunction barring enforcement of the Santa Monica ordinance. However, on December 18, 2019, the court declined to issue an injunction.

Sacramento’s hotel worker protection ordinance goes into effect on July 14, 2020.

If you have questions on how to comply with local employment ordinances contact a Jackson Lewis attorney.

The State of California has filed a notice of appeal of the district court’s decision granting a preliminary injunction enjoining the State from enforcing Assembly Bill 51 (AB 51) against employment arbitration agreements governed by the Federal Arbitration Act (FAA).

Please find the full article on the Jackson Lewis Publications page here.