S. Brett Sutton and Jonathan W. Black
Written by S. Brett Sutton and Jonathan W. Black
Below, we highlight some of the biggest changes for employers in 2020.
AB 51: Assembly Bill 51 prohibits California employers from requiring job applicants or employees, as a condition of employment, continued employment, or the receipt of any job-related benefit, to sign an arbitration agreement requiring that alleged violations of the Fair Employment and Housing Act (most discrimination/harassment claims) or Labor Code (most wage disputes) be resolved in mandatory arbitration. AB 51 also appears to prohibit class action waivers. Violation of AB 51 creates civil liability for employers and qualifies as a misdemeanor criminal offense. However, voluntary arbitration agreements are enforceable even under the new law, so long as they are not tied to any employment benefit.
On Dec. 30, 2019, a California federal judge issued a temporary restraining order, which prohibits enforcement of the law until at least January 10 when the court will conduct a preliminary injunction hearing. If the injunction does not issue, the law will immediately go into effect. For more information, please see our blog posts at:
https://suttonhague.com/new-california-law-prohibits-employers-requiring-applicants-employees-sign-arbitration-agreements/; and https://suttonhague.com/federal-court-delays-enforcement-of-new-california-law-prohibiting-mandatory-employment-arbitration-agreements/
AB 5: In Dynamex Operations West, Inc. v. Superior Court (April 2018), the California Supreme Court adopted the “ABC Test” to determine whether a worker is an independent contractor or employee for purposes of California Wage Orders. Under the test, a worker is an employee unless the employer can establish all of the following: (A) the person is free from control and direction of the hiring entity in connection with the performance of the work; (B) the person performs work that is outside the usual course of the hiring entity’s business; and (C) the person is customarily engaged in an independently established trade, occupation, or business of the same nature of the work performed. Part “B” of the test poses the biggest hurdle for most employers.
With Assembly Bill 5, the California Legislature has codified and expanded Dynamex beyond just Wage Orders. However, the new law also carves out certain occupations from the ABC Test and Dynamex (e.g., real estate agents, securities broker-dealers, etc.).
On Dec. 30, 2019, Uber and Postmates filed a lawsuit in federal court challenging the new law. In another case, a federal judge granted a request by the California Trucking Association for a temporary restraining order in favor of truckers.
Some employers may turn to temporary workers through staffing agencies in lieu of direct hiring of independent contractors. However under existing law, in most cases, California employers are jointly liable for any wage violations claimed by temporary employees. If you are using independent contractors in your business, you should consult with qualified employment law counsel to ensure you can defend the independent contractor classification.
For more information, please see our blog post at: https://suttonhague.com/abcs-not-easy-1-2-3-california-supreme-court-adopts-new-abc-test-dramatically-increasing-risk-using-independent-contractors/.
Minimum Wage Increase: The New Year also brings with it an increase in the minimum wage, which will continue to occur annually until at least 2023. For 2020, the minimum wage for employers with 25 employees or less is $12.00/hour. For employers with more than 25 employees, the minimum wage is now $13.00/hour.
Overtime for Ag Workers: Agriculture employers subject to Wage Order 14 have new overtime requirements. For employers with more than 25 employees, overtime must be paid after 9 hours of a workday or 50 hours in a workweek (down from 9½ and 55 hours in 2019).
SB 142: Senate Bill 142 requires employers to develop and distribute a workplace lactation accommodation policy in a handbook or other set of policies, and must provide the policy to new employees upon hiring and when an employee makes an inquiry about or requests parental leave. AB 142 now requires a location for lactation (1) be safe, clean, and free of hazardous materials; (2) contain a surface to place a breast pump and personal items; and (3) has a place to sit. The location must have access to electricity or alternative devices, access to a sink and a refrigerator suitable for storing milk.
For more information, please see our blog post at: https://suttonhague.com/sb-142-expands-california-employers-lactation-accommodation-requirements/
New Local Ordinances: Additionally, California employers must be mindful of local minimum wage ordinances. As of January 1, 2020, about 15 cities and counties set the local minimum wage at $15 or more per hour, even to businesses that do not reside there if their employee performs a certain number of hours of work in a week within the geographical city or county limits. Note, Sunnyvale and Mountain View require $16.05 per hour in 2020.
AB 1223: While existing law requires employers to provide 30 days of paid leave in a one-year period for employees who participated in an organ donation, Assembly Bill 1223 provides that employers now must also provide an additional 30 days of unpaid leave for such employees.
By Attorneys S. Brett Sutton and Jonathan W. Black, Sutton Hague Law Corporation, which has offices in California and Nevada, including Fresno. https://www.suttonhague.com/ and https://www.calnevalaw.com/. For more information on new laws, the firm’s recent webinar on Employment Law Update for California Employers for 2020 is available for download at www.calnevalaw.com/webinars website.