California has had a handful of bills in recent years that discuss the process for hiring employees when there is a change in ownership or control.  There is another bill pending pertaining specifically to grocery stores that experience a change in control. Assembly Bill (AB) 647 would amend certain requirements upon a change in control of a grocery establishment.

The California Chamber of Commerce, the California Grocers Association, and the California Retailers Association have submitted opposition to the bill, stating, “In 2015, AB 359 was signed into law, which added protections for grocery workers from being laid off for 90 days after a store changes ownership through consolidation, merger, or reorganization. AB 647 seeks to extend the timelines in AB 359 by 40 days and include distribution centers, with no supporting data to show this change is needed for the transfer of information or the protection of employees. The most recent amendments to AB 647 create a rebuttable presumption in favor of an employee, sets arbitrary standards for the reinstatement of employees, and create significant litigation risks for the grocery industry, including the addition of punitive damages.”

Under the current law, upon change of control of a grocery store, the incumbent employer has 15 days after the execution of the agreement affecting the change in control to provide the successor employer with a list of eligible grocery workers.  The successor employer is required to maintain a preferential hiring list of eligible workers and to hire from that list for 90 days after the grocery store is fully operational and open to the public. The successor grocery employer must retain each eligible worker for at least 90 days after the commencement date.  

To be an eligible worker, the worker must have been primarily employed by the incumbent employer for at least 6 months prior to execution of the agreement affecting the change in control unless the worker is a “separated employee.”  Separated employees must have been separated from employment for certain non-disciplinary reasons prior to the change in control and satisfy other requirements.  Eligible workers do not include managerial, supervisory, or confidential employees.

AB 647 would extend the timeline for hiring from the list of eligible workers to 120 days after the grocery store is fully operational and require the successor employer to retain each eligible worker it hires for at least 120 days after each worker’s commencement date unless the successor employer determines during the 120-day period that it requires fewer eligible grocery workers.

The bill also would require an incumbent grocery employer to provide the list of eligible grocery workers to any collective bargaining representatives and would require the incumbent grocery employer to add the eligible workers’ cellular telephone numbers and email addresses, if known, to the list of information already required to be provided to the successor grocery employer.

The bill would authorize a successor grocery store employer to obtain the list of eligible grocery workers from a collective bargaining representative if the incumbent grocery employer does not provide the information within 15 days.

The bill would grant a worker who is offered a position that is more than 15 miles from their place of residence the right to refuse an offer without a loss of seniority and would grant a separated employee a right to recall based on seniority before hiring any new employees for one year.

This bill is still in the early stages and it is likely it will not be  know until the end of the legislative session in September whether it will be sent to the Governor for consideration.

Jackson Lewis will continue to track legislation that impacts California employers. If you have a question about this bill or related issues, please contact a Jackson Lewis attorney with whom you regularly work.  

Since the passage of California Assembly Bill (AB) 5 in 2019, there have been subsequent legal challenges and revised legislation that continues to shape the status of independent contractors and related employment law issues in California.  Keeping track of all the cases and exemptions related to AB 5 is almost as difficult as determining who can be an independent contractor.

AB 5, which became effective in January 2020, codified and broadened the California Supreme Court 2018 decision Dynamex Operations West, Inc v. Superior Court, in which it set forth the “ABC” test for determining whether a worker should be classified as an independent contractor. Under the test a worker may be classified as an independent contractor if the employer can satisfy the following criteria:

  •  (a) the worker is free from control and direction in the performance of services; and
  • (b) the worker is performing work outside the usual course of the business of the hiring company; and
  • (c) the worker is customarily engaged in an independently established trade, occupation, or business.

The following are some of the recent developments relating to AB 5 and independent contractors in the Golden State.

AB 5 and Its Retroactive Application

In January 2021, the California Supreme Court held in Vazquez v. Jan-Pro Franchising International, that its Dynamex decision applies retroactively to independent contractor classification claims and decisions/conduct pre-dating Dynamex.

AB 5 and Federal Preemption

Soon after the passage of AB 5, motor carriers challenged its application to their work. Initially, a preliminary injunction preventing AB 5’s application to motor carriers was granted by the federal district court.  That decision was short-lived, however, when in April 2021, the 9th Circuit panel held that the application of California Assembly Bill 5 (AB 5) to motor carriers is not preempted by the Federal Aviation Administration Authorization Act of 1994 (FAAAA).

That 9th Circuit Court decision became final when in 2022 the U.S. Supreme Court declined to review that decision. At this juncture, AB 5 requirements apply to motor carriers in the state.

AB 5 and First Amendment

In 2022, the U.S. Court of Appeals for the 9th Circuit held that AB 5’s requirements pertaining to independent contractors did not violate the First Amendment. A company that handled signature collection for political issues, argued that applying AB 5 to individuals knocking on doors and gathering signatures discriminated against them based on their free speech rights. The 9th Circuit disagreed and upheld a denial of a preliminary injunction against the enforcement of AB 5.

AB 5 and Proposition 22

In 2020, California voters approved Proposition 22, also known as the “Protect- App-Based Drivers and Services Act,” which allows app-based ride-share and delivery driver companies to hire drivers as independent contractors if certain conditions were met. 

This year, the California Court of Appeal upheld Proposition 22, despite challenges.

AB 5 and Exemption Legislation

And since the passage of AB 5, several legislative bills have passed, that exempt certain professions from the “ABC” test, including newspaper distributors, manicurists, and construction trucking subcontractors.

Recent legislative and judicial history both demonstrate that the employment issues arising from AB 5 and its application in the workplace remain challenging and ever-changing.

If you have questions about AB 5 or independent contractor classification, contact a Jackson Lewis attorney to discuss.

Cal/OSHA has been working on a proposed Indoor Heat Illness Prevention Standard since 2017. Now, nearly 5 years later, the Cal/OSHA Standards Board published a draft standard and announced a public hearing on Heat Illness Prevention in Indoor Places of Employment. This comes after Cal/OSHA had stepped up enforcement of indoor heat hazards despite no formal standard in place.

While the draft standard released will apply to all indoor work areas where the temperature equals or exceeds 82 degrees, the trigger for employers to initiate additional preventative measures for heat illness protections (including the use of instruments to measure heat index) will be 87 degrees. These proposed measures include the following:

  • Opening cool-down areas, which are defined as an indoor or outdoor area that is blocked from direct sunlight and shielded from other high radiant heat sources and is either open to the air or provided with ventilation or cooling.
  • Providing each employee with one quart of drinking water per hour.
  • Allow employees to take breaks whenever a worker feels the need to rest to protect from overheating.

Similar to the existing outdoor heat illness and injury prevention standard, employers would be required to establish emergency response procedures to treat employees who become ill as well as monitoring new employees for signs of heat stress during their first 14 days of work in hot conditions.

The proposed standard would require both employees and supervisors to be trained on indoor heat illness prevention and safety.

Under the proposed standard, employers would be required to monitor the temperature and heat index inside buildings and keep records of the readings for twelve months or until the next measurements are taken, whichever is later.

The public hearing on the proposed standard is scheduled for May 18, 2023, and written comments may also be submitted until that date.

If you have questions about heat illness prevention or related issues, contact a Jackson Lewis attorney to discuss.

Most likely, yes. Employers covered by San Francisco’s Fair Chance Ordinance or Health Care Security Ordinance are required to submit the Employer Annual Report Form to the San Francisco Office of Labor Standards Enforcement (OLSE) by May 1, 2023. The purpose of the Annual Report Form is to provide OLSE with a snapshot of the employer’s compliance with either of these two San Francisco ordinances. Covered employers who fail to submit the form by the deadline may be subject to a penalty of $500 per quarter.

Instructions and resources for employers who are required to report are on the OLSE’s website.

Fair Chance Ordinance

San Francisco’s Fair Chance Ordinance (FCO) applies to employers with five or more employees worldwide, as well as employers of any size who contract with the City and County of San Francisco. Similar to the State of California’s Fair Chance Act, the FCO prohibits covered employers from asking job applicants for positions that require at least eight hours of work per week in San Francisco about arrest or conviction records until after a conditional offer of employment is issued.  In addition, the FCO prohibits covered employers from considering certain facts during the application process, including whether a job applicant’s history includes an arrest that did not lead to a conviction.

The annual reporting requirements include disclosing the number of employees the employer hired to work in San Francisco in 2022, whether the employer conducted background checks of job applicants, and whether the employer hired anyone who had a conviction history.

Health Care Security Ordinance

The Health Care Security Ordinance (HCSO) applies to private and non-profit employers who employ any individual in San Francisco, and twenty or more workers, or in the case of non-profits, 50 or more workers, inside or outside of San Francisco.  Under the HCSO covered employers must spend a minimum amount set by law on healthcare for each employee who works eight or more hours each week in San Francisco.

The reporting requirement includes disclosing the number of individuals employed in each quarter of 2022, the number of employees covered by the HCSO in each of those quarters, the employer’s total spending on healthcare, and the types of healthcare coverage the employer offered to employees.

If you have questions about reporting requirements for or your organization’s compliance with, the FCO or HCSO, reach out to a Jackson Lewis attorney to discuss.

Existing law requires an employer to provide an employee with a meal period during a work period of more than five hours per day, except as prescribed. However, on March 23, 2023, Governor Newsom signed Senate Bill (SB) 41, which provides that California’s meal and rest period requirements do not apply to airline cabin crew employees if they are covered by a valid collective bargaining agreement under the Railway Labor Act.

Under the new law, state meal and rest period requirements shall not apply to airline cabin crew employees if the employees meet the following:

  • The employee is covered by a valid collective bargaining agreement under the Railway Labor Act and that agreement contains any provision addressing meal and rest periods for airline cabin crew employees.
  • The employee is part of a craft or class of employees that is represented by a labor organization pursuant to the Railway Labor Act (but is not yet covered by a valid collective bargaining agreement)

The second requirement shall apply for the first 12 months that the craft or class of employees is represented by a labor organization and may apply for longer than the first 12 months only if agreed upon in writing by the employer and the labor organization representing the employee’s craft or class.

The legislation is an urgency statute and states that it is effective immediately.

If you are in the airline industry and covered by a collective bargaining agreement, then it is imperative that you understand the application of SB41 to your business, as it pertains to meal and rest breaks.

Jackson Lewis will continue to track legislation that affects employers doing business in California. If you have questions about SB 41 or related issues, contact a Jackson Lewis attorney to discuss.

The COVID-19 State of Emergency for California ended on February 28, 2023. In its wake, the California Department of Public Health (CDPH) has announced impending updates to its remaining COVID-19 mandates, including those applicable to healthcare workers.

On March 3, 2023, the CDPH announced it would end vaccination requirements for healthcare workers, including those in direct care, adult care, correctional facilities, and detention centers effective April 3, 2023.

In addition to lifting the vaccination mandate, the CDPH will also remove masking requirements for high-risk settings effective April 3, 2023. Masks will no longer be required in health care, long-term care, and correctional facilities as well as homeless, emergency, and warming and cooling centers.

The CDPH indicated that the month between the announcement and the April 3rd effective date is intended to provide health departments and healthcare facilities with time to develop plans customized to their needs and local conditions.

In addition to these healthcare-related orders, the CDPH updated its Isolation and Quarantine Guidance to remove the recommendation that individuals test for COVID-19 in order to leave isolation before Day 10 under certain circumstances. Effective March 13, 2023, a COVID-19-positive person may end isolation after five days if they feel well, have improving symptoms, and are fever-free for 24 hours. The Guidance also amends masking requirements for individuals leaving isolation sooner than Day 10.

If you have questions about the changes in COVID-19 mandates or related issues, contact a Jackson Lewis attorney to discuss.

In November 2022, the City of Los Angeles passed the Retail Fair Workweek Ordinance. The ordinance is set to take effect on April 1, 2023. The ordinance sets forth requirements for retail businesses in handling scheduling and providing work schedules to employees. Covered employees are anyone working in the City of Los Angeles for at least two hours per week for a covered employer and entitled to minimum wage as provided under California labor code and wage orders unless the worker is a bona fide independent contractor.

In advance of the effective date, the City of Los Angeles Office of Wage Standards has published Frequently Asked Questions (FAQs) to assist with compliance with the ordinance.

Here are items to take note of from the FAQs:

Who is a Covered Employer?

Under the ordinance, a covered employer is a business that identifies as a retail business in the North American Industry Classification System (NAICS), has at least 300 employees globally, and exercises control over the wages, hours, or working conditions of any employee. The FAQs clarify that a retail business is any business whose principal NAICS code is within the retail trade categories and subcategories 44 through 45. If a business has more than one unique line of business, the FAQs indicate the Office of Wage Standards will consider the NAICS code that corresponds with the business’s principal business activity e.g., the activity the business derives the largest percentage of its total receipts.

What information is required for a good faith estimate?

Covered employers are required to provide new hires and current employees with good faith estimates of the employee’s work schedule. Pursuant to the FAQs such estimates should include:

  • The estimated number of hours that the employee will be expected to work each week and a notice of rights under the ordinance before hire.
  • The days of the week the employee can expect to work, or the days of the week the employee will not be expected to work.
  • The times or shifts the employee can expect to work, including start and end times, at least 14 days in advance.
  • The locations where the employee is expected to work.
  • Whether the employee can expect to work any on-call shifts.
  • A written good faith estimate of future schedules within 10 days of an employee’s request.

For shifts not separated by 10 hours, does premium pay apply to all hours or only those not separated by at least 10 hours?

Under the ordinance, an employer shall not schedule an employee to work a shift that starts less than 10 hours from the employee’s last shift without written consent. Covered employers shall pay an employee a premium of time and a half for each shift not separated by at least 10 hours.

If an employee agrees in writing to work shifts not separated by at least 10 hours, the employer must compensate the employee with premium pay for all hours in the second shift.

If an overtime premium is paid for a shift, then is Predictability Pay due?

Under the ordinance, employers shall provide predictability pay when a covered employee has agreed to a change in their work schedule after the advance notice requirements under the ordinance.

The employee is entitled to one additional hour of pay at their regular rate for each change to a scheduled date, time, or location that does not result in a loss of time to the employee or does not result in additional work time that exceeds 15 minutes. An employee is entitled to one-half of the employee’s regular rate of pay for the time the employee does not work if the employer reduced the employee’s work time listed by at least 15 minutes.

However, for any hours that the employer pays an overtime premium under California Labor Code section 510, the employer does not need to provide predictability pay.

The Office of Wage Standards will also publish rules and regulations and a required posting for the ordinance.

If you have questions about the Los Angeles Retail Fair Workweek Ordinance or related issues, contact a Jackson Lewis attorney to discuss.

Three years ago, California voters approved Proposition 22, the “Protect App-Based Drivers and Services Act,” which allowed app-based rideshare and delivery companies to hire drivers as independent contractors if certain conditions were met. This week the California Court of Appeal mostly upheld the Proposition as constitutional.

Proposition 22 went into effect in 2021 and was quickly challenged in California state court by various groups seeking a declaration that it violated California’s Constitution. The trial court ruled that Proposition 22 was invalid in its entirety for several reasons including that the legislation intruded on the legislature’s authority to create worker’s compensation laws, limited the Legislature’s authority to amend the legislation, and because it violated the single subject rule for initiative statutes. The single-subject rule requires voter initiatives such as Proposition 22 to only cover one subject.

Proponents of Proposition 22 and the State of California appealed.

The Court of Appeal held that the Proposition did not intrude on the legislature’s authority pertaining to workers’ compensation or violate the single-subject rule. The Court did hold that the Proposition’s definition of an amendment violated the separation of powers principle in the State Constitution. However, the Court found that the unconstitutional provision could be severed from the rest of the Proposition such that Proposition 22 would still apply to covered entities. Based on the majority’s decision Proposition 22 remains in effect for those who qualify under the law, with the exception of the amendment provision deemed invalid. The law has been in effect pending appeal. The case may be appealed to the California Supreme Court.

If you have questions about Proposition 22, or related issues contact a Jackson Lewis attorney to discuss.

On February 19, 2023, San Francisco’s Private Sector Military Leave Pay Protection Act took effect.  The ordinance requires covered employers to provide supplemental pay to an employee while on leave for military duty for up to 30 days in a calendar year.

San Francisco’s Office of Labor Standards Enforcement has issued Implementation Guidance to assist employers with compliance. The guidance provides answers to frequently asked questions (FAQ) regarding the ordinances, such as which employers are covered by the ordinance, which employees are covered, and how to calculate supplemental pay. The FAQ notes the following important points:

Covered Employers

The ordinance covers employers with 100 or more employees worldwide.  The ordinance is not limited to employers that have 100 or more employees who live or work in San Francisco.  Where the employee count fluctuates above or below 100 over the course of the year, the employer should use the average number of employees per pay period during the preceding calendar year.  Moreover, owners who perform work for compensation for the business are also counted for purposes of determining the employee threshold.

Notably, the City and County of San Francisco and all other governmental entities are not covered employers.

Covered Employees

Only employees who work within the geographic boundaries of San Francisco and who are members of the reserve corps of the United States Armed Forces, National Guard, or other United States uniformed service organizations are covered by the ordinance.  The ordinance does not cover employees who work at San Francisco International Airport or who work within federal enclaves such as the Presidio, Fort Mason, and Golden Gate National Recreation Area.

Calculating Supplemental Compensation

Under the ordinance, for up to 30 calendar days in a calendar year, a covered employer must pay a covered employee supplemental compensation, which is the difference between the employee’s gross military pay and the amount of gross pay the employee would have received from the employer had the employee worked their regular work schedule. The employee should not receive more compensation than they would have received had they worked their regular work schedule.

“Gross military pay” includes the basic pay rate which can be assessed for the federal Armed Forces at www.dfas.mil. That website lists the current basic pay rates according to the employee’s rank. Gross military pay does not include any military pay allowances, such as combat, clothing, housing, or aviation.

The employee’s gross pay includes their wages for hours they would have worked and includes overtime if the employee was regularly scheduled for overtime hours. In addition, the employer is required to continue paying all benefits, including health care, retirement, and profit-sharing as if the employee had worked their regular schedule.

If an employee does not have a regular or predetermined work schedule at the time they are required to take military leave, the employer should determine the employee’s regular work schedule based upon the employee’s monthly, bi-weekly, semi-monthly or weekly pay periods immediately preceding the employee’s military leave as follows:

  • Three monthly pay periods;
  • Six bi-weekly or semi-monthly pay periods; or
  • Twelve weekly pay periods.

In calculating supplemental pay, employers should not include periods in which an employee was on unpaid or partially paid leave prior to taking military leave.

The Implementation Guidance covers many other important topics.  If you have questions regarding the guidance or the San Francisco Military Leave Pay Protection Act, contact a Jackson Lewis attorney to discuss.

On March 3, 2023, the Cal/OSHA Standards Board published notice of proposed revised regulations pertaining to workplace exposure to lead for the general industry and construction safety orders.

In its Initial Statement of Reasons for the revisions, the Board indicates that the existing requirements are based on lead toxicity information and medical and epidemiological data that is now more than 40 years old and that more recent evidence demonstrates that low levels of lead exposure may have harmful health effects.

The proposed amendments to the regulations are designed to mitigate these harmful health issues from lower levels of exposure by maintaining employees’ blood lead levels below 10 µg/dl (micrograms per deciliter), whereas existing regulations were designed to maintain employees’ blood lead levels below 40 µg/dl, a level four times higher.

To achieve this reduction in exposure the revisions would:

  • Reduce exposure to airborne lead
  • Reduce exposure to lead through the oral route of exposures, and
  • Expand requirements of blood lead testing of employees who work with lead, independent of measure levels of airborne lead.

The revisions lower the action levels under a time-weighted average for when protective measures are triggered. It also lowered the blood lead level requirement for when employees must be offered medical examinations and consultations at least annually. The revisions also lower the criteria for the temporary removal of an employee from work with lead due to elevated blood lead levels.

The Standards Board anticipates the revisions will reduce the number of employees exposed to harmful amounts of lead.

The 45-day public comment period will remain open until April 20, 2023. On April 20, Cal/OSHA will hold a public hearing on the revisions.

Interested stakeholders, such as employers in the construction industry, may submit written comments.

If you have questions about the proposed changes to Cal/OSHA lead exposure regulations 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.