Insight & Commentary on California Workplace Law Issues & Developments
On June 8, 2022, the California Privacy Protection Agency (CPPA) Board, will meet to discuss and take potential action regarding a draft of its proposed regulations. The June 8th public meeting includes an agenda item where the CPPA Board will consider “possible action regarding proposed regulations … including possible notice of proposed action.”
Read the full article on Jackson Lewis’ Workplace Privacy, Data Management & Security Report.
In April, a Los Angeles Superior Court held that Assembly Bill (AB) 979 which required publicly-held corporations headquartered in California to diversify by adding “underrepresented communities” to their board of directors, was unconstitutional. On May 13, 2022, a second Los Angeles Superior Court found Senate Bill (SB) 826, which required gender diversity on the boards of directors of publicly-held corporations, was also unconstitutional.
In the most recent case, Robin Crest, et al. v. Alex Padilla, California taxpayers asked the Court to enjoin the State of California from spending taxpayer funds or using taxpayer-financed resources to enforce SB 826.
After a bench trial, Judge Duffy-Lewis issued a 23-page verdict identifying the constitutional flaws of SB 826. The Court found that the plaintiffs demonstrated that SB 826 was presumptively unconstitutional because it affected two or more similarly situated groups, in this case, men and women, in an unequal manner. Once the Court concluded the statute was presumptively unconstitutional the burden shifted to the State to prove the statute was narrowly tailored and necessary to fulfill a compelling state interest. The Court found the State failed to meet its burden.
The State argued that the SB 826 fulfilled several compelling state interests by: (1) eliminating and remedying discrimination in the director selection process; and (2) increasing gender diversity on boards of publicly held corporations to benefit the public and the state economy, and to benefit and protect California taxpayers, public employees, and retirees. The Court disagreed.
The Court concluded that the State Legislature’s goal in passing SB 826 was to achieve gender equity or parity and not to boost the State economy or improve opportunities for California taxpayers, public employees, or retirees. Accordingly, the Court concluded that the Legislature lacked a compelling state interest for passing the statute.
Further, the Court found that the State failed to prove that SB 826’s use of gender-based classifications was necessary to boost the State’s economy or improve opportunities for women in the workplace or protect California taxpayers, public employees, pensions, or retirees.
Finally, the Court found the State did not prove SB 826’s use of gender-based classifications was limited in scope or duration to that which was necessary to remedy specific, unlawful discrimination against women or to restore victims of specific, purposeful, or intentional unlawful discrimination to the position the victims would have held in the absence of discrimination. Accordingly, the Court found the statute was not narrowly tailored.
The Court ruled SB 826 violated the Equal Protection Clause of the California Constitution and as such enjoined enforcement of the statute.
The ruling means that the State is precluded from enforcing SB 826 at this time. It is unclear whether the State will appeal the Superior Court’s ruling. However, if it does so, the injunction against the State using taxpayer funds may remain in place until a further ruling.
If you have questions regarding compliance with AB 979 or SB 826 or related issues regarding corporate compliance, contact a Jackson Lewis attorney to discuss.
Local employment ordinances are not unusual in California and exist from San Diego to San Jose. However, San Francisco is unusual in that it has far more comprehensive employment law ordinances than other localities.
Here are some highlights of San Francisco’s employment requirements for employers.
Minimum Wage
Effective July 1, 2022, the minimum wage for employers within the geographic boundaries of San Francisco, is $16.99, regardless of the size of the business.
San Francisco’s minimum wage will also increase for a small subset of “Government Supported Employees.” These are employees who are either (1) under the age of 18 and employed as an after-school or summer employee in a bona fide training or apprenticeship program in a position that is subsidized by the federal, state, or local government; or (2) over the age 55 and employed by a Nonprofit Corporation that provides social welfare services as a core mission to individuals who are over the age of 55 and are in a position that is subsidized by federal, state, or local government, subject to additional limitations.
Employers are required to post official notice of the minimum wage in a place where employees can read easily.
Paid Sick Leave
San Francisco’s Paid Sick Leave Ordinance (PSLO) requires employers to provide paid sick leave to employees, including temporary and part-time employees.
As with California’s paid sick leave, employees must earn one hour of paid sick leave for every 30 hours worked. However, unlike state paid sick leave, San Francisco has different caps on paid sick leave based on the number of employees. For employers with 10 or more employees, employees’ accrual of paid sick leave may be capped at 72 hours. These employers must allow employees to accrue at least up to 72 hours of sick leave. Employers with fewer than 10 employees may cap an employee’s sick time balance at 40 hours. However, these employers may allow employees to accrue up to at least 48 hours of paid sick leave or provide an “advance” of 24 hours or three days of paid sick leave to comply with the state law “up-front option,” and later allow employees to accrue up to 40 hours to comply with San Francisco’s ordinance.
Fair Chance Ordinance
Employers with five or more employees are also required to comply with San Francisco’s Fair Chance Ordinance (FCO). Similar to the state Fair Chance Act, the FCO prohibits covered employers from asking about arrest and conviction records until after a conditional offer of employment and prohibits covered employers considering certain things including arrests not leading to a conviction.
The FCO also:
Employers must conspicuously post the official FCO Notice in every workplace/job site under the employer’s control.
Family Friendly Workplace Ordinance
Employers with 20 or more employees are required to comply with the Family Friendly Workplace Ordinance (FFWO).
The ordinance was amended in March 2022, to expand requirements under the ordinance.
The FFWO provides San Francisco employees who have been employed for at least six months by their current employer and work at least eight hours per week on a regular basis with the right to request flexible or predictable work arrangements to assist with caregiving responsibilities.
Covered employees may request flexible arrangements to care for (1) a child or children under the age of eighteen; (2) a person or persons with a serious health condition in a family relationship with the employee; or (3) any family member (age 65 or older) of the employee.
Within 21 days of an employee’s request for a flexible or predictable working arrangement described above, an employer must meet with the employee regarding the request. The employer must respond to an employee’s request within 21 days of that meeting. An employer who denies a request must explain the denial in a written response that sets out a bona fide business reason for the denial and provides the employee with notice of the right to request reconsideration.
Paid Parental Leave Ordinance
Employers with 20 or more employees worldwide are covered by the Paid Parental Leave Ordinance (PPLO), which entitles certain employees to up to eight weeks of supplemental compensation if the employee is eligible to receive paid family leave compensation under the California Paid Family Leave law for purposes of bonding with a new child.
During the leave period, covered employers are required to provide supplemental compensation in an amount such that the California Paid Family Leave wage replacement plus the supplemental compensation equals 100% of the employee’s gross weekly wage, subject to a cap.
Employees must first apply for California Paid Family Leave before seeking PPLO benefits.
If you need assistance with compliance with San Francisco employment ordinances or related issues, contact a Jackson Lewis attorney to discuss.
The underlying action, Naranjo v. Spectrum Security Services, was a class action brought by former and current employees, alleging violations of meal period violations. The plaintiffs sought not only premium wages for the violations but also waiting time penalties and penalties for failure to provide accurate wage statements. The results of the trial court decision were mixed and appealed.
The California Court of Appeal case discussed several issues including whether unpaid premium wages for meal and rest period violations entitled an employee to recover waiting time penalties under Labor Code section 203 and wage statement violations under Labor Code 226. The Court of Appeal deemed premium pay for missed meal and rest periods not “wages” thus not entitling employees to waiting time or wage statement violation penalties.
On appeal the California Supreme Court considered the following questions:
For the first question, the California Supreme Court held contrary to the prior Court of Appeal decision, stating that the extra pay for missed meal and rest periods constitutes “wages” and therefore must be reported on statutorily required wage statements pursuant to Labor Code section 226 and paid within statutory deadlines when an employee separates from employment pursuant to Labor Code section 203.
The ruling by the California Supreme Court means that if an employer fails to pay premium pay for missed meal and rest periods, additional penalties for failure to provide an accurate wage statement and waiting time penalties may also be recoverable by plaintiffs.
As to the second question, the Court held that the rate of prejudgment interest that applies to amounts due for failure to provide meal and rest periods is the 7 percent default rate set by the state Constitution.
Jackson Lewis will continue to track California case law relevant to employers. If you have questions about meal and rest period compliance and related issues, contact a Jackson Lewis attorney to discuss.
As we head into the summer months, employers with outdoor worksites in California may wish to review their Heat Illness Prevention Plans (HIPP) and obligations under Cal/OSHA’s outdoor heat illness prevention standard.
Covered Employers
As the name of the standard implies, Cal/OSHA’s outdoor heat illness prevention standard applies to all employers with an outdoor place of employment. Simply put, the standard applies whenever an employee is working outside. For example, a supermarket that assigns employees to gather shopping carts in the parking lot would be covered under this standard, even though the market itself is indoors.
Requirements for Covered Employers
Covered employers must take the following steps to prevent heat illness in the workplace:
The following industries must comply with additional high-heat illness prevention procedures:
Written HIPP
Covered employers must have a written HIPP. We generally recommend that this be a stand-alone document. Cal/OSHA provides sample procedures for Heat Illness Prevention for employers to review and tailor to their specific work activities.
Cal/OSHA has many resources for employers to ensure compliance with heat illness prevention requirements, including an Enforcement FAQ.
If you have questions about the Cal/OSHA Heat Illness Prevention requirements or related workplace safety issues, please reach out to the Jackson Lewis attorney with whom you often work or any member of our Workplace Safety and Health Team.
Last November, the City of West Hollywood passed an ordinance implementing a new citywide minimum wage and leave requirement. It went into effect on January 1, 2022, for hotel employers and on July 1, 2022, for all other employers.
In response to public feedback on the ordinance, the City Council approved amendments on May 16, 2022.
The following amendments were implemented:
The City also published administrative regulations to assist in the implementation of the ordinance. The regulations provide guidance in areas such as:
Jackson Lewis continues to track employment regulations across the state. If you have questions about compliance with the new West Hollywood ordinance or related questions, contact a Jackson Lewis attorney to discuss.
Over the last 12 months, many employees have started to return to work at a worksite other than their home, even though some remain remote or partially remote. Employers may need a refresher on commute time for employees.
Under the California Wage Orders, hours worked are defined as the time during which an employee is subject to the control of the employer and includes the time the employee is “suffered and permitted” to work. Generally, this means that the time an employee spends commuting to and from the office or similar worksite is not compensable.
However, there are some circumstances where time spent commuting to a worksite may be deemed compensable. Here is a refresher on some of the issues with commute time.
Employer-Provided Transportation
In certain circumstances travel to a worksite via employer-provided transportation may be compensable. In a case from 2000, the California Supreme Court held that where the employer requires its employees to meet at a designated place, use the employer’s transportation to and from the worksite, and prohibits employees from using their own transportation, the time spent on the employer transportation would be compensable.
However, if the use of employer-provided transport is completely voluntary, the time spent is not compensable.
Longer Commute
Travel involving a substantial distance from the assigned workplace to a distant worksite to report to work on a short-term basis may be compensable. In part, it will depend on how long the new worksite is assigned.
According to the California Labor Commissioner, the travel time is measured by the difference between the time it normally takes the employee to travel from his or her home to the assigned worksite and the time it takes the employee to travel from home to the distant worksite. This could calculate to no compensable time if, for instance, the travel time is less from the employee’s home to the distant worksite than the employee’s normal commute.
No Regular Work Site
Some employees in certain occupations, by the nature of the industry and the occupation, are not assigned to a specific workplace and have a reasonable expectation that they will be routinely required to travel reasonable distances to job sites on a daily basis. If an employee has no regular job site, travel time to the new job site each day is not compensable.
As a reminder, compensation paid for drive time is separate from potential reimbursement obligations an employer may have for mileage and other business expenses when an employee travels for work.
If you have questions about commute time and compensation or related issues, contact a Jackson Lewis attorney to discuss.
In 2017, California started its stair-step climb to a $15.00 minimum wage, allowing smaller businesses with 25 employees or less to raise their minimum wage on a delayed schedule from larger businesses. All employers regardless of size were scheduled to be at the same minimum wage of $15.00 per hour effective January 1, 2023.
However, buried in the minimum wage ordinance was an exception that would trigger an accelerated increase if the U.S. Consumer Price Index (CPI-W) exceeds 7 percent over a specified period of time.
Based on current projections, the CPI-W will have risen by 7.6 percent in the two-year period that ends in July. Accordingly, on May 12, 2022, when the Governor announced his proposal for a state inflation relief package, it was also announced that California’s minimum wage is now projected to increase to $15.50 per hour, rather than $15.00 per hour, on January 1, 2023, for all businesses regardless of size.
The minimum wage increase not only will affect hourly employees but will impact some exempt employees as well. In California, some exempt employees must receive a salary of at least twice the state minimum wage, in addition to meeting the general duties and other requirements.
Jackson Lewis continues to track legal changes that affect California employers. If you have questions about minimum wage or salary compliance or related issues, contact a Jackson Lewis attorney to discuss.
In a recent decision, the California Court of Appeal held that the doctrine of exclusive concurrent jurisdiction applies to a Private Attorneys General Act (PAGA) representative action in Shaw v. The Superior Court of Contra Costa County. The decision is good news for employers facing overlapping PAGA complaints.
Underlying Facts
On July 21, 2022, Plaintiff Shaw provided notice to the Labor and Workforce Development Agency (LWDA) under PAGA of alleged violations of the Labor Code against Beverages & More!, Inc (BevMo). Plaintiff alleged Labor Code violations based premised on a specific policy. Over one year prior, however, Plaintiff Paez filed a PAGA action against BevMo regarding the same policy.
BevMo sought to stay the Shaw case under the doctrine of exclusive concurrent jurisdiction. Under the doctrine of exclusive concurrent jurisdiction, when two or more courts have subject matter jurisdiction of a dispute, the court that first asserted jurisdiction assumes it to the exclusion of other courts.
Shaw filed a petition to coordinate her action with the Paez action and asked for the appointment of her counsel as “liaison counsel” for the aggrieved employees. Shaw and BevMo agreed that the PAGA claims in Shaw’s case and the Paez case overlapped completely.
The trial court in Shaw stayed the action until either the Paez action was resolved, or the coordination motion was granted. The coordination motion was denied, as was Shaw’s motion to intervene in the Paez case.
Court of Appeal Ruling
The California Court of Appeal for the First Appellate District held that the trial court did not err in applying exclusive concurrent jurisdiction to the overlapping PAGA claim. The opinion held that there was no evidence of legislative intent to alter the common law.
Impact for Employers
While employers previously sought to abate or stay overlapping PAGA actions prior to Shaw, there had not been definitive authority that the doctrine of exclusive concurrent jurisdiction applied. This decision should help employers better manage overlapping PAGA matters by ensuring that the initial case can proceed before the latter filed overlapping actions.
If you have questions about PAGA or need assistance in managing overlapping PAGA actions, please contact Jackson Lewis’ California Class and PAGA Action team or the Jackson Lewis attorney with whom you regularly work.
At the end of April, the Cal/OSHA Standards Board voted to approve the Third Readoption of the Cal/OSHA COVID-19 Emergency Temporary Standard (ETS). The revised version of the ETS took effect on May 6, 2022.
As promised when passed, Cal/OSHA has released updated guidance to assist with this version of the ETS that expires January 1, 2023.
Cal/OSHA posted an update to the Revisions to the ETS FAQ. This FAQ details the changes in the May 6th version of the ETS and requirements from prior ETS that remain. There is a separate General COVID-19 ETS FAQ that responds more to the application of the ETS and has been updated to conform to the recent changes in the ETS.
The Cal/OSHA Isolation and Quarantine Fact Sheet has also been updated to reflect changes in the revised ETS. The Fact Sheet includes an easy reference table that explains when employees must be excluded from the workplace, depending on whether they test positive for COVID-19 or have close contact with positive cases.
Finally, the Cal/OSHA Fact Sheet on “What Employers Need to Know” has been updated for the amendments to the ETS that went into effect May 6th. The following is a summary:
If you have questions about the Cal/OSHA ETS or related workplace safety issues, please reach out to the Jackson Lewis attorney with whom you often work or any member of our Workplace Safety and Health Team.
