At the end of 2021, the California Secretary of State approved a proposition to reform California’s Private Attorneys General Act (PAGA) by collecting signatures for the November 2022 ballot. The Secretary of State recently announced that the California Fair Pay and Employer Accountability Act has qualified for the 2024 ballot, with nearly 1 million signatures submitted in support of PAGA reform.

The proposition seeks to repeal PAGA and eliminate the Labor Commissioner’s authority to contract with private organizations or attorneys to assist with enforcement actions. The proposition proposes instead that the state provide more funding to the Labor Commissioner to enforce Labor Code violations.

PAGA’s scope was limited in 2022 by the Supreme Court decision in Viking River Cruises v. Moriana. However, the California Secretary of State approved the proposition for the November 2024 ballot.

In the meantime, several state challenges are proceeding through California appellate courts regarding how PAGA cases are administered. A petition for rehearing is also pending before the Supreme Court for Viking River Cruises, which is expected to be summarily denied.

Jackson Lewis continues to track legislation and changes in California employment law affecting employers. If you have questions about the proposed reforms to PAGA or related issues, please contact a Jackson Lewis attorney to discuss.

In 2020, California passed Assembly Bill (AB) 1731, which created an alternative process for employers to submit and be approved for work-sharing plan programs. Previously some employees would be eligible for unemployment benefits if they were working less than their usual weekly hours and their employer was participating in a work-sharing plan that met specified requirements and was approved by the Director of Employment Development. Employers were required to submit to the director a signed, written work-sharing plan application form that met specific requirements.

For work sharing plan applications submitted by eligible employers between September 15, 2020, and September 1, 2023, AB 1731 required that, upon approval by the Director of Employment Development, they be deemed approved for one year, except as specified.

Moreover, the Employment Development Department (EDD) is required to mail an eligible employer a claim packet for each participating employee within 5 business days following approval of the application. The EDD must also make online claim forms available to the approved employer for each participating employee within 5 business days following approval of the application if an employer submitted its work sharing plan application online.

On July 19, 2022, Governor Newsom signed Assembly Bill (AB) 1854, which extends the provisions under AB 1731, indefinitely, and requires the EDD to accept electronic signatures on all work sharing plan documents.

Jackson Lewis will continue tracking state legislation that is relevant to employers. If you have questions about the effects of this or other recent legislation, contact a Jackson Lewis attorney to discuss.

In early June 2022, the California Department of Public Health (CDPH) issued an order revising the definition of “close contact.” Under the CDPH order, close contact was defined as “someone sharing the same indoor airspace (e.g. home, clinic waiting room, airplane, etc.) for a cumulative total of 15 minutes or more over a 24-hour period.” This created confusion because “same indoor airspace” could be quite broad and is certainly much broader than the 6 feet-15 minutes-24 hour definition the entire nation had been using.  Compounding the problem was Cal/OSHA’s deference to the CDPH definition of “close contact” in its ETS, which California employers are required to follow.

CDPH had provided some clarification in guidance issued on June 20, 2022, stating that when entities are responding to potential exposure they may prioritize the response by:

  • Identifying close contacts who may be considered “high-risk contacts” based on their proximity to the case in the setting, the duration or intensity of their exposure, and/or their greater risk of severe illness or death from an exposure.
  • Determining any smaller spaces within the larger indoor setting for the purposes of assessing potential exposure.
  • Determining any transient exposures totaling <15 minutes, such as passing in a hallway. Those with transient exposures would not meet the definition of close contact.

On July 18, 2022, Cal/OSHA updated its FAQ for the ETS to address the close contact determination as it relates to the ETS. Cal/OSHA states that a shared indoor airspace may be analyzed in several ways as follows:

  • Smaller spaces contained within a large indoor space that are separated by floor-to-ceiling walls are not part of the same indoor airspace as the large indoor space, e.g. suites, waiting areas, bathrooms, or break areas.
  • Larger indoor settings that are not divided into smaller spaces that are separated by floor-to-ceiling walls may constitute a shared indoor airspace e.g. open-floor plan offices, warehouses, or retail stores. In this situation, Cal/OSHA states that “employers must evaluate whether employees shared the same indoor airspace on a case-by-case basis, considering the duration and proximity of the contact, regardless of the specific task of the employees.”
  • Cal/OSHA states in its guidance that “proximity and length of exposure are key to this determination.”

If you have questions about the Cal/OSHA emergency temporary standards 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.

In March 2022, San Francisco amended its Family Friendly Workplace Ordinance.  The amendments which took effect at the start of July 2022, made the following changes:

  • Expands care by an employee from just parents to care of persons age 65 or older and with whom the employee has a family relationship.
  • Provides potential coverage for employees who work remotely outside San Francisco.
  • Requires a covered employee to provide a flexible or predictable work arrangement upon notice of the employee’s need for such arrangement unless it would cause the employer undue hardship.
  • Requires an employer that does not approve a flexible or predictable work arrangement to engage in an interactive process with the employee to attempt in good faith to determine a mutually acceptable arrangement.

On July 7, 2022, San Francisco’s Office of Labor Standards Enforcement (OLSE) released updated Rules for Interpreting the Family Friendly Workplace Ordinance. The updated rules cover areas including:

  • Explanation of the process of requesting and responding to a request for a flexible or predictable schedule.
  • The employer verification process for requests under the ordinance.
  • Explanation of undue hardship for employers under the ordinance.

The OLSE has also released an updated poster for the Family Friendly Workplace Ordinance. Covered employers must post the poster in a conspicuous place at any workplace or job site where an employee works.

If you need assistance with compliance with the Family Friendly Workplace Ordinance or related issues, contact a Jackson Lewis attorney to discuss.

In June, San Francisco voters passed Proposition G, a new Public Health Emergency Leave Ordinance. The ordinance requires private employers to provide paid leave to employees for “public health emergencies.” The leave ordinance will be in addition to employer-provided paid leave, such as paid sick leave.

The leave ordinance will become operative on October 1, 2022.

Covered Employers

The new leave applies to private employers with more than 100 employees worldwide.

Covered Employees

The leave requirement applies to all employees who perform work within the City and County of San Francisco for covered employers.

Reasons for Leave

A Covered employee may use Public Health Emergency Leave during a public health emergency if the employee is unable to work due to any of the following:

  • The recommendations or requirements of an individual or general federal, state, or local health order.
  • The employee has been advised by a health care provider to isolate or quarantine.
  • The employee is experiencing symptoms of and seeking a medical diagnosis or has received a positive medical diagnosis, for a possible infectious, contagious or communicable disease associated with the public health emergency.
  • The employee is caring for a family member if the school or place of care of the family member has been closed or is unavailable due to the public health emergency.
  • There is an air quality emergency, and the employee is a member of a vulnerable population and primarily works outdoors.

Amount of Leave

Starting on October 1, 2022, and then at the start of each year, employers must provide up to 80 hours of paid leave for Public Health Emergency Leave. Full-time employees or employees on a fixed schedule, must receive an amount equal to the hours they regularly work in a two-week period. For employees with a variable schedule, the ordinance provides two methods of calculating amount required.

Notice Requirement

Employers are required to post a notice that will be developed by the San Francisco Office of Labor Standards Enforcement. To date, the required notice has not been posted.

If you have questions about compliance with San Francisco’s Public Health Emergency Leave Ordinance or related issues, contact a Jackson Lewis attorney to discuss.

California’s Paid Family Leave (PFL) program, which is administered by the Employment Development Department (EDD) provides eligible employees with up to 8 weeks of wage replacement benefits when an employee is off work for certain qualifying reasons.

Businesses with employees using PFL may have increased costs such as cross-training existing staff and hiring and training new and/or temporary employees to cover for employees on leave. This may be particularly true for small employers. To assist with these issues, the California Employment Training Panel and California Labor and Workforce Development Agency funded a grant program for small employers.

Small businesses in California with 1 to 100 employees who have at least one employee utilizing PFL on or after June 1, 2022, may be eligible. Also, to be eligible for the grant, businesses must:

  • Be registered to do business in the State of California
  • Be in an active status with the California Secretary of State’s Office
  • Have an active California Employer Account Number under which employees are listed for payroll.

Small businesses using a Professional Employer Organization (PEO) for payroll services are not eligible for the grant.

Employers interested in applying for the grant can apply through the grant website: Californiapfl.com.

If you have questions about California’s Paid Family Leave program or related issues, contact a Jackson Lewis attorney to discuss.

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). Under AB 5, the test for whether a worker is appropriately classified as an independent contractor became more stringent, creating potential issues for motor carriers that traditionally operated with independent owner-operators.

The 9th Circuit panel found the district court abused its discretion by granting a preliminary injunction. The panel concluded AB 5 is a generally applicable labor law that affects a motor carrier’s relationship with its workforce and does not bind, compel, or otherwise freeze into place the prices, routes, or services of motor carriers.

In August 2021, the California Trucking Association (CTA) filed a petition for writ of certiorari with the U.S. Supreme Court, requesting the high court weigh in on whether the FAAAA preempts the application to motor carriers of a state worker-classification law that effectively precludes motor carriers from using independent owner-operators to provide trucking services.

The Supreme Court denied CTA’s petition. This comes after the Solicitor General for the United States submitted an amicus brief at the request of the Court which stated the petition should be denied. The United States’ brief argued the court of appeals correctly determined that petitioners were unlikely to succeed on their claim that the FAAAA preempts applying the ABC test as codified under California law to owner-operators, and the court’s decision did not conflict with any decision of the Supreme Court.

The Supreme Court’s decision to deny the petition for review means that the 9th Circuit ruling stands, and the preliminary injunction preventing AB 5 from being enforced against motor carriers will be dissolved.

California Assembly Republicans have made a request to Governor Newsom to either delay application of AB 5 or exempt the trucking industry altogether from the ABC test. To date, the Governor has not indicated if he will take any action.

Jackson Lewis continues to track developments pertaining to independent contractors and worker classification issues.  If you have questions about the application of AB 5 or related issues, please contact a Jackson Lewis attorney to discuss.

In Grande v. Eisenhower Medical Center, FlexCare, LLC (“FlexCare”), a temporary staffing agency, assigned Plaintiff to work as a nurse at Eisenhower Medical Center (“Eisenhower”). The plaintiff alleged that during her employment at Eisenhower, FlexCare and Eisenhower failed to ensure she received the required meal and rest periods, wages for certain periods she worked, and overtime wages. She then filed a class-action lawsuit on behalf of FlexCare employees assigned to hospitals throughout California. Plaintiff’s claims were based solely on her work on assignment to Eisenhower.

FlexCare settled with the class and the plaintiff executed a release of claims. The trial court entered a judgment incorporating the settlement agreement. Eisenhower was not named as a released party in the settlement.

A year later, Plaintiff brought a second class-action suit against Eisenhower. FlexCare intervened in the action asserting Plaintiff could not bring the separate lawsuit against Eisenhower because she had settled her claims in the prior class action.

The trial court held a limited trial on the issue of the propriety of the lawsuit and ruled that Eisenhower was not a released party under the settlement agreement.

Accordingly, Eisenhower could not avail itself of the doctrine of res judicata or claim preclusion because the hospital was neither a party to the prior litigation nor in privity with FlexCare. The Court of Appeals agreed with the trial court.

The issue before the California Supreme Court limited its review only to the question, “may a class of workers bring a wage and hour class action against a staffing agency, settle that lawsuit with a stipulated judgment that releases all of the staffing agency’s agents, and then bring a second class action premised on the same alleged wage and hour violations against the staffing agency’s client?”

The Court found that the central issue in the dispute was privity, stating that judgments bind not only parties but also those persons in privity with the parties. The Court stated for the affirmative defense of claim preclusion to be successfully asserted an entity must be a party to the prior action or in privity to a party. While Eisenhower argued it was in privity to FlexCare, the Court stated privity “requires the sharing of an identity or community of interest, with adequate representation of that interest in the first suit, and circumstances such that the nonparty should reasonably have expected to be bound by the first suit.” The Court found that there was no such privity between Eisenhower and FlexCare because they had different legal interests.

The California Supreme Court also held that claim preclusion could not be based on a claimed indemnification or agency relationship between litigants.

The decision means that companies will need to take additional care in determining the “released parties” to include in a settlement release of claims.

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

On June 29, 2022, the Los Angeles City Council approved a new minimum wage ordinance for certain healthcare workers at privately-owned healthcare facilities within the City of Los Angeles. The mayor is anticipated to sign the ordinance, which will become effective 30 days after his signature.

Minimum Wage

On the effective date of the ordinance, the minimum wage for covered employees will be $25 per hour.

On January 1, 2024, and annually thereafter, the minimum wage shall increase based on the annual cost of living, as measured by the Consumer Price Index for the Urban Wage Earners and Clerical Workers for the Los Angeles metropolitan area.

The ordinance expressly bars employers from funding the wage increase by laying off workers, reducing their hours, reducing their vacation, healthcare, or other non-wage benefits, or increasing charges they incur for parking or work-related materials and equipment.

Covered Facilities

The ordinance includes, but is not limited to, the following privately-owned healthcare facilities located within the City of Los Angeles:

  • General acute care hospitals;
  • Acute psychiatric hospitals;
  • Clinics that are part of general acute care hospitals and acute psychiatric hospitals;
  • Skilled nursing facilities that are part of general acute care hospitals and acute psychiatric hospitals;
  • Residential care facilities for the elderly that are located or licensed at the same address or located on the campus of an acute psychiatric hospital; and
  • Chronic dialysis clinics.

Covered Employers

The new minimum wage applies to employees of “covered facilities” who provide patient care, healthcare services, or services supporting the provision of healthcare, including clinicians, nurses, certified nursing assistants, aides, technicians, maintenance workers, janitorial or housekeeping staff, groundskeepers, guards, food service workers, laundry workers, pharmacists, nonmanagerial administrative workers, and business office clerical workers.

The ordinance does not apply to managers or supervisors, as well as employees whose primary work assignments are principally outside a covered facility, like delivery workers.

One-Year Waiver

If an employer can demonstrate by substantial evidence that compliance with the ordinance would raise substantial doubt about the employer’s ability to continue to operate the facility, a court of competent jurisdiction may grant a one-year waiver from the $25 per hour minimum wage requirement. Substantial evidence includes documentation of the employer’s financial condition, as well as the condition of any parent or affiliated entity, and evidence of the actual and potential direct financial impact of compliance with the ordinance. The one-year waiver does not exempt the employer from complying with all other federal, state, or local laws and regulations, including any other applicable minimum wage requirements.

If you have questions about the Los Angeles healthcare minimum wage ordinance or related issues, contact a Jackson Lewis attorney to discuss.

On June 28, 2022, the Los Angeles City Council passed an ordinance designed to increase safety protections for hotel workers in hotels, to limit their daily workload, and to raise their wages. Mayor Eric Garcetti is anticipated to sign the ordinance, which would then take effect 30 days later.

Called the “Hotel Worker Protection Ordinance,” or HWPO, the new law is similar to an ordinance passed last year by the City of West Hollywood.

The following are some of the primary requirements under the HWPO:

Personal Security Devices

Under the HWPO, hotel employers within the City of Los Angeles must provide employees with personal security devices, commonly referred to as “panic buttons,” when assigned to work in a guest room or restroom facility where other workers are not assigned to be present. Hotel employers must provide annual training on using the devices.

Hotel employers shall at all times have a designated and assigned security guard who can receive alerts from the device and can provide on-scene assistance. Hotels with fewer than 60 guest rooms may train a hotel supervisor or manager to fulfill this function in lieu of a security guard.

The HWPO also provides certain rights to hotel employees who report violent or threatening conduct by hotel guests, including reasonable accommodation and paid time off to report such incidents to law enforcement.

Workload and Hours Limitations

HWPO puts limitations on the amount of square footage that hotel employees can be required to clean on a particular workday without triggering wage premiums. The amounts vary based on the size of the hotel and whether any of the space consists of “special-attention” rooms.  Hotel employers also must maintain records, in addition to standardly-required records for all California employers, such as the square footage of all rooms cleaned on a daily basis, for at least three years.

Under HWPO, hotel employers may not require workers to work more than 10 hours in a workday unless the worker consents in writing to do so.

Notice

Hotel employers in the City shall provide written notice of the rights outlined in the ordinance to employees at the time of hire or within 30 days of the effective date.

If you have questions about the Los Angeles Hotel Worker Protection Ordinance or related issues, you may contact the author of this article or the Jackson Lewis attorney with whom you regularly work.