Five Important California Employment Law Changes for 2021

Five Important California Employment Law Changes for 2021

Jan 04, 2021

Client Alert

Brownstein Client Alert, January 4, 2021

A new year ushers in new legal obligations for employers, particularly those with operations in California. From expanded California Family Rights Act (“CFRA”) coverage to new reporting and data-gathering obligations, employers should be aware of these five significant changes for 2021, all of which became effective Jan. 1, 2021:

Senate Bill 1383 – CFRA Expansion and Repeal of New Parent Leave Act

SB 1383 repeals and replaces the New Parent Leave Act and expands the CFRA. Prior to SB 1383, the CFRA applied only to employers with 50 or more employees within a 75-mile radius. Now, private sector employers with five or more employees will be required to comply with the CFRA, providing up to 12 weeks of unpaid family and medical leave for qualifying reasons to employees who have worked for the employer for at least 12 months and at least 1,250 hours in the 12-month period prior to taking CFRA leave. Subject to certain limited exceptions, employees also must be reinstated to the same or comparable job position upon returning from CFRA leave. However, SB 1383 eliminates one such exception; specifically, employers are no longer permitted to deny reinstatement to key employees (i.e., salaried employees who are among the highest-paid 10% of the company’s employees).

The CFRA previously provided leave to eligible employees for the birth or placement of a child for adoption or foster care, the employee’s own serious health condition, and the serious health condition of the employee’s child (under 18 or an adult dependent), parent, spouse, registered domestic partner or registered domestic partner’s child. SB 1383 expands the list of covered family members to include the employee’s grandparents, grandchildren, siblings and children of any age.

In addition, SB 1383 extends CFRA leave to qualifying exigencies related to the covered active duty, or call to covered active duty, of an employee’s spouse, domestic partner, child or parent in the Armed Forces, as well as now permitting both eligible parents employed by the same employer to take the full amount of CFRA leave for the birth, adoption or foster care of a child.

Assembly Bill 685  – COVID-19 Notification

In addition to the California Division of Occupational Safety and Health (“Cal/OSHA”) notice requirements under the COVID-19 Emergency Temporary Standards , AB 685 requires employers with notice of potential COVID-19 exposure to take all of the following actions within one business day:

  1. Provide written notice to all employees and subcontractor employees who may have been exposed;
  2. Provide written notice to exclusive representatives of employees, if applicable;
  3. Provide information regarding applicable COVID-19-related benefits under federal, state and/or local law, options for exposed employees (including types of available leave) and protections for employees against retaliation and discrimination; and
  4. Notify employees and exclusive representatives (if applicable) of the company’s disinfection and safety plan.

This notice must be provided in a manner that the employer normally uses to communicate employment-related information, such as personal service, mail or text message. In addition, if the number of COVID-19 cases qualifies as an “outbreak” as then defined by the California State Department of Public Health, employers are required to notify their Local Health Department within 48 hours.

When, in Cal/OSHA’s opinion, employees are exposed to COVID-19 in such a manner as to constitute an imminent hazard, AB 685 authorizes Cal/OSHA to: (1) prohibit entry or access to a worksite; (2) prohibit performance of an operation or process at the worksite; and/or (3) require posting of an imminent hazard notice at the worksite. Notably, Cal/OSHA is authorized to issue citations for serious violations related to COVID-19 without undergoing the usual pre-citation procedure, which would otherwise require Cal/OSHA to notify employers 15 days prior to issuing a serious violation and allow employers to submit information rebutting the presumption of a serious violation.

Assembly Bill 2992 – Protected Time Off for Crime Victims

AB 2992 prohibits an employer from discharging or discriminating or retaliating against an employee who is a victim of crime or abuse. The legislation also expands existing law, which requires employers with 25 or more employees to provide protected leave to employees who are victims of domestic violence, sexual assault or stalking; protected leave now must be provided to victims of other crimes or offenses that caused physical or mental injury or a threat of physical injury. The new law also expands the types of documentation an employee may use to justify the leave and verify the occurrence of a crime or abuse, including permitting a written statement signed by the employee, or an individual acting on the employee’s behalf, certifying that the absence is for an authorized purpose.

Senate Bill 973 – Pay Data Reporting

California private employers with 100 or more employees nationwide that are required to file a federal Employer Information Report (EEO-1) are now required to report pay data annually to the California Department of Fair Employment and Housing (“DFEH”). The first report, which will be based on 2020 pay data, is due by March 31, 2021, and subsequent annual reports will be due on or before March 31 each year thereafter. The report must include:

  1. The number of employees by race, ethnicity and sex in 10 job categories: executive and senior-level officials and managers, first- and mid-level officials and managers, professionals, technicians, sales workers, administrative support workers, craft workers, operatives, laborers and helpers, and service workers;
  2. The number of employees by race, ethnicity and sex whose annual earnings fall within each of the pay bands used by the United States Bureau of Labor Statistics in the Occupational Employment Statistics survey; and
  3. The total number of hours worked by each employee in each pay band.

Employers with multiple establishments are required to submit a consolidated report as well as a report for each establishment. If a covered employer fails to submit the required report, the DFEH may seek an order requiring compliance and recover the costs associated with seeking the order.

Assembly Bill 979 – Corporate Board Diversity Requirements

Publicly held corporations whose principal executive offices are located in California must include at least one person from an underrepresented community on their boards by the end of 2021. An “underrepresented community” is defined as anyone who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, Alaska Native, gay, lesbian, bisexual or transgender.

By the close of 2022, corporations with nine or more board members must have three or more members from underrepresented communities, while corporations with five to eight board members must have two or more members from underrepresented communities.

In addition to these new requirements, publicly held corporations with five board members are required to have two females on their board by the end of 2021, and those with six or more board members are required to increase the number of female board members to three. Publicly held corporations with four and fewer board members must continue having one female member. A single board member who self-identifies as both female and from an underrepresented community, each as defined by statute, can satisfy both statutory requirements. More information can be found here.

On Dec. 17, 2020, the Secretary of State issued a Corporate Disclosure Statement Letter providing details on filing and reporting requirements. Specifically, publicly held corporations can report compliance through their annual Publicly Traded Corporate Disclosure Statement filed with the California Secretary of State. The Secretary of State may impose fines of $100,000 for failure to timely file board member information. In addition, a fine in the amount of $100,000 for the first violation and $300,000 for a second or subsequent violation may be assessed for each board seat that is required to be held by an individual from an underrepresented community, but is not, during the calendar year. (Notably, where a director from an underrepresented community held such a seat for at least a portion of the year, it will not constitute a violation.) Further implementing regulations are expected to be forthcoming from the Secretary of State.

This document is intended to provide you with general information regarding employment law changes in California. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions.

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