In November, California quietly approved the Division of Occupational Safety and Health’s (“Cal OSHA”) COVID-19 Emergency Temporary Standard (“ETS”). Almost immediately, Cal OSHA’s ETS caused significant confusion and challenges for employers, who were already struggling with countless federal, state, and local requirements pertaining to COVID-19. Cal OSHA’s ETS also appeared to create new and different notification obligations for COVID-19 cases than those already provided for under AB 685 and standing health officer orders, and imposed confusing obligations on employers related to COVID-19 testing, work exclusions, and reporting of COVID-19 cases.

In places, Cal OSHA’s ETS could also be viewed as requiring inconsistent response measures to those recommended under current guidance from the Centers for Disease Control and Prevention (“CDC”) and standing health officer orders. Moreover, the ETS require preventive measures without consideration for the feasibility of those measures for certain workplaces.

In response to numerous concerns raised by employers and business associations, Cal OSHA’s standards board held a public meeting on the ETS in mid-December. And in response to stakeholder concerns, Cal OSHA promised to provide additional guidance on the ETS in the form of updated Frequently Asked Questions (“FAQs”) on its website.

At the start of January, and more than a month after the ETS had gone into effect, Cal OSHA finally published its additional guidance on the ETS.

The FAQs cover a host of topics, including information on the ETS’s applicability, how Cal OSHA intends to enforce the ETS, key requirements, and guidance for how employers can comply. Cal OSHA also provided clarification on testing requirements, considerations for “multiple infections,” or outbreak conditions, and requirements for providing exclusion pay to employees. Although much of the FAQs are merely a restatement of the actual ETS, there are some clarifications in the FAQs that have a substantial impact on employers. The FAQs also at times appear to depart from the ETS and provide an altered compliance obligation.

Some highlights from the FAQs include the following:

  • Scope of Coverage: The ETS applies to all employers, employees, and all places of employment with three exceptions:
    • A workplace where there is only one employee who does not have contact with other people;
    • Employees who are working from home; and
    • Employees who are covered by Cal OSHA’s Aerosol Transmissible Diseases Standard and regulations.
  • Communication with Employees: Under the ETS employer must have effective communication with employees on (i) how to report COVID-19 symptoms, exposures, and hazards to the employer without fear of reprisal, (ii) COVID-19 hazards in the workplace, (iii) the employer’s COVID-19 related policies and procedures; (iv) testing resources, (v) how the employer will notify employees of potential COVID-19 exposures; (vi) the employer’s cleaning and disinfection protocols; and (vii) how employees can participate in identification and evaluation of COVID-19 hazards in the workplace. Employers must also provide training to employees on a wide range of COVID-19 related topics, including information on benefits that may be available to the employee and the proper use of face coverings.
  • Outbreaks and Exposed Workplaces: The FAQ somewhat clarifies the definitions of an outbreak, major outbreak, and “exposed workplace” for Cal OSHA purposes. For purposes of the ETS, “an outbreak” is three or more employees who are COVID-19 positive in 14 days, whereas “a major outbreak” is 20 or more employees testing positive in 30 days in an exposed workplace. An “exposed workplace” is, in turn, considered to be a work location, working area, or common area that is used or accessed by a COVID-19 case during their high-risk period or infectious period and can include bathrooms, walkways, hallways, aisles, break or eating areas, and waiting areas. However, the FAQs indicate that Cal OSHA does not expect employers to treat areas where masked employees momentarily pass through as part of the “exposed workplace.” Cal OSHA’s FAQs also do not address the fact that their interpretation of an outbreak or exposed workplace may be markedly different from the local health departments or how employers should address an outbreak condition when there are competing definitions or requirements under California laws (e.g., the ETS and health officer order).
  • Testing Requirements: In an attempt to clarify the testing obligation for employers, Cal OSHA’s FAQ states that when testing is required under the ETS, employers must only (i) inform employees on the need for testing and how they can obtain COVID-19 testing; (ii) offer testing to the affected employees at no cost; and (iii) ensure employees are compensated for the time it takes to get tested. Despite the plain language of the ETS conveying different obligations for testing in response to a COVID-19 case and outbreak conditions, Cal OSHA’s FAQ also states that there is no difference in meaning between the obligation to “offer” or “provide” testing in the ETS. Further, even though the ETS conveys that employees are to be immediately tested in some circumstances, employers are not required to mandate employee testing, exclude the employee from the workplace until testing is complete, or obtain a declination from an employee who refuses to be tested.

Despite Cal OSHA providing 69 FAQs and responses, employers are likely to continue to have questions as well as face compliance challenges. Cal OSHA has, for example, not addressed the permissibility of employers using COVID-19 testing resources that are approved through an alternate regulatory pathway than the Food and Drug Administration and Emergency Use Authorization pathway outlined in the ETS, even if these testing resources are more readily available or affordable.

Cal OSHA’s FAQs also do not address challenges posed by the exclusion pay provisions. This is especially significant given that some of the sick leave benefits Cal OSHA contemplates as being available for employers to meet exclusion pay provisions expired at the end of 2020 and have not been renewed. Moreover, Cal OSHA does not address the apparent conflict in the exclusion pay provisions and workers’ compensation compensability. The conflict arises especially with employees who become symptomatic as they may not be eligible for exclusion pay and may also not be eligible for workers’ compensation.

Cal OSHA’s FAQs has advised that additional resources for compliance are forthcoming and that resources, including sample training materials, will be posted and updated on Cal/OSHA’s COVID-19 webpage.

If you need assistance in complying with the ETS or other Cal OSHA safety regulations, please reach out to the Jackson Lewis attorney with whom you often work or any member of our Workplace Safety and Health Team.

The CCPA has reached the one-year mark. This is a good time for businesses to review the success of their compliance programs and recalibrate for the CCPA’s second year. Here are a few suggestions to kick off that review:

  1. Privacy Policies. The CCPA requires a business to update the information in its privacy policy or any California-specific description of consumers’ privacy rights at least once every twelve months. If a business has not already done so, now is a good time to review both online and offline data collection practices to ensure privacy policies accurately disclose, at a minimum, the categories of personal information (“PI”) it collected in the preceding 12 months, the categories of PI it sold in the preceding twelve months, and the categories of PI it disclosed for a business purpose in the last 12 months.

Read the full article at Jackson Lewis Workplace Privacy, Data Management & Security Report.

The Federal Motor Carrier Safety Administration (FMCSA), within the federal Department of Transportation, is responsible for regulating commercial motor carrier safety.  In 2018, the FMCSA determined that federal law preempts California’s meal and rest break rules for interstate motor carrier drivers who are subject to the FMCSA’s rest break regulations.

The FMCSA regulations apply to commercial motor carrier drivers who operate in interstate commerce and meet other specified criteria.

California’s meal and rest break laws generally require commercial truck drivers to take more rest breaks, at greater frequency, and with less flexibility, than the federal regulations.

California’s Labor Commissioner, charged with enforcement of California’s meal and rest break laws, along with other pro-labor organizations, petitioned the federal Ninth Circuit Court of Appeal for review of FMCSA’s preemption determination.

On January 15, 2021, the Ninth Circuit Panel, in the consolidated case of International Brotherhood of Teamsters v. Federal Motor Carrier Safety Administration, held that the FMCSA’s determination reflected a permissible interpretation of the Motor Carrier Safety Act of 1984, and denied the petitions for review.  The Ninth Circuit’s decision means that for now interstate motor carriers need not comply with California’s meal and rest break laws but must comply with the FMCSA’s rest break requirements.  Interstate motor carriers are now permitted to implement uniform rules for drivers regardless of whether the drivers operate within California.

The Ninth Circuit’s decision may not mean interstate motor carriers are forever exempted from California’s meal and rest break regulations.  Before 2018, the FMCSA held that preemption did not apply, and the new administration could reverse the FMCSA’s 2018 determination.

Jackson Lewis monitors judicial and administrative decisions affecting employers in California. If you have any questions about this decision or related issues, please contact a Jackson Lewis attorney for assistance.

In Vazquez v. Jan-Pro Franchising International (Vazquez), the California Supreme Court answered “Yes” to the Ninth Circuit’s question, “Does your independent contractor ABC test in Dynamex Operations West, Inc. v. Superior Court (Dynamex) apply retroactively?”

In 2018, the Dynamex Court concluded that under California wage orders, anyone who performs work for a business is presumed to be an employee entitled to the protections afforded by the wage orders.

The Dynamex Court also held that a hiring entity can avoid that presumption of employment and wage order application when it comes to independent contractors, but only if the hiring entity establishes:

(A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;

(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and

(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

This infamous “ABC Test” was codified into California statutory law by Assembly Bill 5 (AB 5).

Before the ABC Test, California courts and California hiring entities used a multifactor test outlined in S.G. Borello & Sons, Inc. v. Department of Industrial Relations, commonly known as the “Borello Test.” The Borello Test focused on the amount of control a business exercised over a worker by looking at numerous factors. The more control a business exercised over a worker (e.g. set hours, location of where work was to be performed), the less likely that the worker could be properly classified as an independent contractor.

Since the ABC Test is more stringent than the Borello Test, employers and industry groups argued they should not be held accountable under the ABC Test in misclassification lawsuits that predated the Dynamex opinion.

The Vazquez Court disagreed, holding that it “did not change a settled rule on which the parties below had relied” and that Dynamex addressed an issue of first impression. The Vazquez Court simply concluded that there was no reason to depart from the general rule that judicial decisions are given retroactive effect.

What does this mean for California employers? Any employers defending against independent contractor misclassification cases that predate the 2018 Dynamex decision should reevaluate those issues under the more demanding ABC Test rather than rely on the more favorable, but outdated Borello Test.  And for those lucky employers not facing misclassification litigation at the moment, the Vazquez decision justifies company worker classification audits looking back beyond 2018.

Jackson Lewis tracks California case law relevant to employers. If you have questions about this case or related issues with worker classification contact a Jackson Lewis attorney to discuss.

California’s Department of Fair Employment and Housing (DFEH) continues to advance toward the March 31, 2021 pay data collection deadline.  When SB 973 was passed in September, DFEH had six months to develop and implement a data collection system that could accomplish the task.  It is delivering.  DFEH issued its first guidance on November 2 and released more FAQs on November 23.  And now, DFEH has again released new FAQs and updated its pay data reporting website.

Please find the rest of this article on our Pay Equity Advisor blog.

At the end of 2020, California approved the Division of Occupational Safety & Health’s (“Cal OSHA”) COVID-19 Emergency Temporary Standard (“ETS”).

Among the many requirements in the new ETS, Cal OSHA imposed a performance-based obligation on employers to establish and implement an effective COVID-19 Prevention Program, COVID-19 preventive measures (e.g., social distancing and mandatory use of face coverings), and COVID-19 case management (e.g., investigation, recording, and reporting). In establishing these requirements, the ETS also published prescriptive written COVID-19 Prevention Program components and procedures for handling COVID-19 cases, as well as steps to regulate multiple infections and presumed outbreaks at the workplace that are already subject to substantial state and local health department requirements. Moreover, the ETS substantially departs from other health and safety regulations by compelling worker exclusion following a potential workplace exposure to COVID-19, mandating exclusion pay in limited circumstances,  and that employees be provided COVID-19 testing. The ETS further imposes potential liability on employers if they fail to comply with the various requirements.

The ETS has created confusion and frustration among California employers already facing a multitude of federal, state, and local COVID-19 requirements, which are in a constant state of flux. The ETS also attempts to impose requirements that are administered by other responsible agencies and authorities, making employers’ obligations unclear and duplicative. For example, the ETS imposes an obligation on employers to notify state and local health departments of multiple COVID-19 cases despite this obligation already being imposed on employers under AB 685, guidance from the state health department, and standing health department orders.

Cal OSHA’s ETS also uses inconsistent language to discuss requirements (e.g., “offer” vs. “provide” in the context of required testing), imprecise language, and imposes obligations that do not make sense from either a technical or feasibility standpoint. For instance, the ETS defines a “COVID-19 test” as one that is (i) approved by the United States Food and Drug Administration (“FDA”) or has an Emergency Use Authorization from the FDA, and (ii) is administered in accordance with the FDA approval or Emergency Use Authorization. In doing so, Cal OSHA fails to take into account that COVID-19 tests can be approved for use under other regulatory pathways and that many COVID-19 tests on the market are not approved by FDA or under an Emergency Use Authorization. Restricting testing in this way also unnecessarily complicates an already complicated requirement and makes compliance more difficult, costly, and time-intensive.

Despite numerous concerns raised in public meetings and written responses to the ETS, Cal OSHA also has not provided sufficient guidance on how to comply with the ETS, leaving many obligations on testing, worker exclusion, and COVID-19 case management unclear. Cal OSHA only just recently provided the public updated FAQs but still left numerous questions and ambiguities.

In response to the ETS’ ambiguities and overwhelming compliance burden, the Western Growers Association, the California Business Roundtable, the California Association of Winegrape Growers, the California Farm Bureau Federation, Ventura County Agricultural Association, and the Grower-Shipper Association of Central California joined together to file a lawsuit against Cal OSHA and related entities and individuals over the ETS before the Los Angeles Superior Court. The lawsuit contends that the Board violated employers’ due process rights and the state’s administrative procedure laws by failing to provide clear and adequate notice of the link between the ETS and the emergency situation necessitating the new rules. The lawsuit also claims that the ETS improperly imposes “unprecedented financial and operational costs on employers” in the state and without evidence that the new requirements will significantly or even materially improve workplace health and safety as it pertains to COVID-19. The required measures further lack clarity, such that employers are not understanding what is required of them, and do not take into account resources, feasibility, or costs. Further, the action alleges that many of the requirements in the ETS have little to no connection to workplace health and safety and instead deputize employers to monitor non-work-related COVID-19 exposure risks. The suit filed by the agricultural associations follows a lawsuit filed in San Francisco Superior Court by retail industry groups seeking declaratory and injunctive relief from the ETS.

To date, Cal OSHA and the other entities named in the suits have not publicly responded or acknowledged either complaint.

Jackson Lewis will continue to monitor issues pertaining to COVID-19 and the workplace in California. If you have questions about the ETS or related workplace safety issues, contact a Jackson Lewis attorney to discuss.

The City of San Jose recently passed an ordinance extending its supplemental paid sick leave ordinance until June 30, 2021 and expanding it to apply to all employers with employees working in San Jose.

Extension

When it was first passed, San Jose’s supplemental paid sick leave ordinance was set to expire on December 31, 2020. In late 2020, the City committed to extending the ordinance into 2021 but waited to see if the Emergency Paid Sick Leave (EPSL) provided under the Families First Coronavirus Response Act (FFCRA) would be extended before taking action. When the federal government did not extend the FFCRA, the City of San Jose passed a revised ordinance that extends the City’s supplemental sick leave until June 30, 2021. The ordinance is retroactive to January 1, 2021.

Expansion

San Jose’s original ordinance was designed to provide sick leave to employees who did not receive EPSL under the FFCRA; thus it only applied to employers with 500 or more employees. Because the FFRCA was not extended into 2021, the City of San Jose decided to expand its ordinance to apply to all employers with employees in the City of San Jose, regardless of the size of the employer. That means that San Jose’s supplemental paid sick leave is now available to all employees working in the city.

Reasons for Leave

The revised ordinance does not change the reasons for which sick leave may be taken. An employee may take leave when unable to work because the employee:

  • Is subject to a federal, state, or local quarantine or isolation order related to COVID-19 or is caring for someone who is;
  • Has been advised by a health care provider to self-quarantine due to concerns related to COVID-19 or is caring for someone who is;
  • Is experiencing symptoms of COVID-19 and seeking a medical diagnosis; or
  • Is caring for their child if the child’s school or place of care is closed or unavailable due to COVID-19 precautions.

No Additional Time

Like the original ordinance, the revised ordinance provides full-time employees with 80 hours of paid sick leave (part-time employees receive a pro-rata amount). However, the ordinance states that 80 hours is the total amount available to employees for the period of April 2, 2020, to June 30, 2021.

Other local ordinances such as the City and County of Sacramento have also been extended. But like the federal government, the state of California has thus far not extended statewide supplemental paid sick leave.

Jackson Lewis continues to monitor local, state, and federal legislation pertaining to COVID-19. If you have questions about supplemental paid sick leave or other employment concerns related to COVID-19, contact a Jackson Lewis attorney to discuss.

The Department of Fair Employment and Housing (DFEH), the administrative agency charged with enforcing the California Family Rights Act (CFRA), has released new documentation for Family and Medical Leave that reflects the expansion of CFRA which went into effect on January 1, 2021.

These new documents include the required poster for employers for both Family and Medical Leave as well as for Pregnancy Disability Leave.

Employers should be sure to update their posters and new hire and leave packets to include the revised information, in addition to relevant company policies and procedures pertaining to leave.

If employers need additional guidance regarding compliance with California leave laws, they can contact a Jackson Lewis attorney to discuss.

2020 presented a myriad of challenges for California employers, including the constant march of California court opinions regarding the Private Attorneys General Act (PAGA) claims.

The California courts focused on two issues involving PAGA this year:

  • Can a Plaintiff proceed with their PAGA claim (standing)?
  • Can a Defendant compel arbitration when there is a PAGA claim?

Standing Cases

The biggest PAGA standing decision in 2020 was from the California Supreme Court in Kim v. Reins International California, Inc. The issue before the court was, does an employee bringing an action under PAGA lose standing to pursue representative claims as an “aggrieved employee” by settling and dismissing his or her individual claims against the employer? The Court concluded that no, settlement of individual claims does not strip an aggrieved employee of standing, as the state’s authorized representative, to pursue PAGA remedies.

The California Court of Appeal had several decisions pertaining to PAGA standing. In Starks v. Vortex Industries, Inc. Plaintiff Starks filed notice with the Labor & Workforce Development Agency (LWDA) alleging various Labor Code violations and eventually filed a Complaint alleging a PAGA cause of action against Vortex. Over a year later, Plaintiff Herrera filed a substantially identical PAGA action against Vortex.

Plaintiff Starks settled with Vortex and Plaintiff Herrera moved to intervene and set aside the judgment. The Court of Appeal agreed with the trial court that Plaintiff Herrera’s motion was untimely and as an agent of the LWDA could not attack the judgment.

In Robinson v. Southern Counties Oil Company, the Court of Appeal agreed with the trial court holding. The trial court had previously sustained without leave to amend a demurrer to Plaintiff’s amended complaint holding that Plaintiff was barred from bringing a PAGA action asserting the same claims that were settled in a prior class action/PAGA case that he opted out of. Moreover, the trial court held he lacked standing to bring a representative action on behalf of employees employed during the period when he was no longer employed by Southern Counties.

Arbitration and PAGA

Provost v. YourMechanic, Inc., is a decision that straddles the line between standing and arbitration. YourMechanic sought to compel the plaintiff to arbitrate whether he was an “aggrieved employee” within the meaning of the Labor Code before he could proceed with his single-count representative action under PAGA that alleged various Labor Code violations against the company. The Court of Appeal concluded that a PAGA-only representative action is not an individual action at all, but instead is one that is indivisible and belongs solely to the State of California. Therefore, YourMechanic could not require the plaintiff to submit by contract any part of his representative PAGA action to arbitration.

In Olabi v. Neutron Holdings, Inc., the plaintiff sued Neutron Holdings (dba Lime) for Labor Code violations under the PAGA and unfair competition regulations. The plaintiff claimed Lime intentionally misclassified him and other independent contractors resulting in violations of the Labor Code. Lime filed a petition to compel arbitration. Before the hearing on the motion to compel arbitration, the plaintiff dismissed his unfair competition claim with prejudice and disavowed any victim-specific relief. The trial court denied the petition to compel arbitration. Because the language of the arbitration agreement broadly excluded PAGA actions and the PAGA claim was the only claim remaining in the action, the Court of Appeal concluded that the trial court did not err in denying the petition to compel arbitration.

In Brooks v. Amerihome Mortgage Company, LLC, the plaintiff filed a PAGA notice with the Labor Workforce Development Agency, asserting wage violations under the Labor Code. In response, AmeriHome filed a demand to arbitrate the plaintiff’s claims on an individual basis. Following the expiration of the required PAGA notice period, the plaintiff filed a first amended complaint on behalf of himself and other alleged aggrieved employees of AmeriHome asserting a single cause of action under PAGA and moved for a preliminary injunction enjoining the arbitration. The trial court granted the preliminary injunction, reasoning that allowing the arbitration to proceed would impermissibly split a single, pure PAGA claim into an arbitrable individual claim and a non-arbitrable representative claim. The Court of Appeal agreed and affirmed the trial court’s decision.

In Jarboe v. Hanlees Auto Group, the Court of Appeal held that one of the defendants could compel arbitration with respect to the plaintiff’s individual Labor Code claims. However, the Court of Appeal also held that the arbitration agreement could not be enforced for the plaintiff’s PAGA claim because the PAGA claim belongs to the State of California and cannot be the subject of the parties’ private arbitration agreement. In addition, the Court of Appeal held that the arbitration agreement did not cover the other 15 defendants in the action based on either the third-party beneficiary doctrine or equitable estoppel. Finally, the Court of Appeal held that the trial court did not abuse its discretion in refusing to stay the PAGA action pending the resolution of the arbitration between the plaintiff and the one defendant.

Jackson Lewis will continue to track developments related to the Private Attorneys General Act and other litigation developments. If you have questions about PAGA or related issues, contact a Jackson Lewis attorney to discuss.

The California Employment Development Department (EDD) has released the Voluntary Plan Employee Contribution and Benefit Rates for 2021.

Employers are required to withhold and send state disability contributions to the EDD. The 2021 rates are as follows:

Employee Contribution Rate 1.2%
Taxable Wage Ceiling (per employee per year) $128,298.00
Maximum Contribution (per employee per year) $1,539.58
Maximum Weekly Benefit Amount (WBA) $1,357.00
Maximum Benefit Amount (WBA X 52 weeks) $70,564.00
Assessment Rate 0.14%

The employee contribution rate is the percentage withheld from the wages of employees who are covered by Disability Insurance (DI) and Paid Family Leave (PFL). The taxable wage ceiling is the maximum yearly wage that is subject to DI and PFL withholding. The maximum contribution is the maximum amount withheld from the yearly wages of an employee who is covered by state disability and who annually earns an amount equal to or exceeding the taxable wage ceiling.

The change in contribution rates and the maximum weekly benefit amount is relevant to employers who must comply with San Francisco’s Paid Parental Leave Ordinance (PPLO).  The city of San Francisco requires most employers with 20 or more employees worldwide to supplement PFL benefits received by employees to bond with a new child.  During the PFL leave period, the PPLO supplemental compensation provided by an employer, added to the PFL wage replacement benefit received from the EDD, must equal 100% of the employee’s gross weekly wage, subject to a cap.  For 2021, the PPLO cap will be $2,262 per week.  So, if an employee receives the PFL maximum weekly benefit amount of $1,357, the employer’s PPLO supplemental compensation obligation will be $905 a week.

The EDD also released an updated Overview of California’s Paid Family Leave Program and the required Disability Insurance Provisions brochure based on legislative changes that went into effect on January 1, 2021.

Jackson Lewis continually monitors governmental changes affecting California employers. If you have questions regarding Paid Family Leave, the Paid Parental Leave Ordinance or other wage replacement requirements contact a Jackson Lewis attorney to discuss.