2020 is here, which means that along with a fresh start comes an onslaught of new laws. To help guide your business in the new year, here is a guide to important California employment laws that will be going into effect this year.
AB 5 codifies the “ABC” test from the Supreme Court of California case, Dynamex Operations West, Inc. vs. The Superior Court of Los Angeles. The test classifies workers as either employees or independent contractors under the California Wage Orders. As of January 1, 2020, a worker must meet all three requirements put out in the ABC test in order to be categorized as an independent contractor.
Here is a breakdown of AB 5 and the ABC Test.
Since January 1, 2020, the California state minimum wage has increased to $12/hr for employers with 25 or fewer employees and $13/hr for employers with 26 or more.
In conjunction with the increased state minimum wage, the minimum salary permitted in California will increase to $49,920 annually for employers with 25 or fewer employees and $54,080 annually for employers with 26 or more.
In addition, cities within California have their respective minimum wage increases; for example, Los Angeles, Pasadena, and Malibu have increased their minimum wage to $14.25.
As of January 1, 2020, the California Consumer Privacy Act of 2018 (“CCPA”) has officially gone into effect. The CCPA aims to give California consumers increased transparency and control over how businesses use and share their personal information. The law affects a wide range of businesses as it applies to all business entities in California and those collecting consumers’ personal information.
Businesses subject to the CCPA must at minimum:
- Provide notice to consumers (on data collection practices) at or before data collection.
- Create procedures to respond to requests from consumers (to opt-out, know, and delete).
- Respond to requests from consumers within specific timeframes.
- Verify the identity of consumers who make requests.
- Not sell personal information of consumers under the age of 16 without explicit consent.
Businesses that do not comply with the proposed regulations in the upcoming new year will face civil damages that could total up to $1 million.
Discrimination and Harassment
SB 188, also known as the Creating a Respectful and Open Workplace for Natural Hair (CROWN) Act, prohibits discrimination based on race-based hairstyles. Effective as of January 1, 2020, the bill enforces that an employer may not withhold or terminate employment or promotion based on a job applicant’s or employee’s hairstyle. Protected hairstyles include braids, dreadlocks, and twists.
Learn more about SB 188.
AB 9, effective since January 1, 2020, extended the deadline for a person alleging unlawful discrimination, harassment, or retaliation in violation of the California Fair Employment and Housing Act (FEHA) to file a verified complaint with the California Department of Fair Employment and Housing (DFEH) from one year to three years from the date of the occurrence.
The deadline for employers with five or more employees to provide sexual harassment prevention training has been extended from January 1, 2020 to January 1, 2021.
Learn why you should start sexual harassment prevention training now.
Arbitration Agreements and Separation/Settlement Agreements
Under AB 51, California employers are prohibited from requiring employees and applicants to sign arbitration agreements as a condition of employment, continued employment, or the receipt of any employment-related benefits. This law applies to contracts for employment entered into, modified, or extended on or after January 1, 2020.
It also states that employers may not retaliate against an employee or applicant who refuses to sign an arbitration agreement.
“No Rehire” provisions will no longer be allowed in employment settlement agreements. Under AB 749, a settlement agreement may not restrict or prohibit a settling party from getting rehired with the employer or its parents, subsidiaries, affiliates, divisions, and contractors.
This new law applies to the “aggrieved party,” or those have filed a claim in court or through the employer’s internal complaint process. For employees who have engaged in sexual harassment or assault, the law will not apply and the “no rehire” provision can be included.
Leave, Accommodation, and Workplace Safety
Effective since January 1, 2020, employers are required to provide more lactation accommodations. In addition, providing access to a sink with running water and refrigerator, the lactation room or location must:
- Be close to the employee’s work area
- Be shielded from view and free from intrusion; and
- Have certain features, including electricity and resources necessary to operate a breast pump.
They must also create and enforce a lactation accommodation policy and make it available to all employees. It must be included in the employee handbook as well as any other materials employers distribute to new employees upon hiring. Whenever an employee makes an inquiry or requests about parental leave, the employer must inform the employee about this policy.
Failure to comply and provide a lactation room will be deemed a violation of California’s rest period laws. The employer will need to pay a premium of one hour of pay per day for each day that violation occurred.
On July 1, 2020, Paid Family Leave (PFL) benefits that individuals can receive from California’s State Disability Insurance program will be increased from six to eight weeks.
Contact CorpStrat for any assistance you may need in ensuring full compliance with these new laws in 2020.