Governor Newsom signed a stack of new employment laws that will impact California employers. All of these laws are in effect as of January 1, 2022. We recommend that California employers revise and add policies and practices as needed to comply with these new laws.
Minimum Wage: $15 per hour for employers with 26 or more employees and $14 per hour for employers with 25 or fewer employees. By this time next year, all employers will have to pay $15 per hour minimum wage. The Industrial Welfare Commission amended sections 4(A) and 10(C) in Order Numbers 1-15 and sections 4(A) and 9(C) in Order Number 16 (all relating to increased minimum wage).
Minimum Salary Basis Test Salary Rate: The minimum annual salary for exempt employees is $62,400 per year for employers with 26 or more employees and $58,240 per year for employers with 25 or fewer employees.
Minimum salary for computer software professionals to be exempt from overtime: $50/hour ($8,679.16/mo; $104,149.81/yr). See the California Department of Industrial Relations press release for more details.
Subminimum Wage Phase Out: SB 639 gradually phases out subminimum wage allowed to be paid to employees with physical or mental disabilities and allows no new permits, as of January 1, 2022. Amends Labor Code § 1191.
Expanded Wage Lien for Labor Commissioner: SB 572 permits the Labor Commissioner to create a wage lien on real property to secure amounts owed to the Labor Commissioner (such liens already allowed to secure amounts owed to the employee). Adds Labor Code § 90.8.
Intentional wage theft is now grand theft: One of the big headline grabbers of 2021 was AB 1003, which creates new Penal Code § 487m, making intentional wage theft of more than $950 from 1 worker or $2,350 from 2 or more workers, within a 12-month period, punishable by up to 3 years in county jail.
“Wage theft” is defined as the failure to pay employee or independent contractor their full wages, whether salary, commissions, tips, benefits, or other forms of compensation. “Intentional” means with knowledge that the wages, benefits or compensation is due to the worker.
Reminder of 2022 deadlines from previously passed legislation: The Cal Savers Retirement Savings Program which is a retirement savings program for private sector workers whose employers do not offer a retirement plan. If you do not sponsor a retirement plan and you have 5-49 California employees, your Registration Deadline is June 30, 2022. If you have more than 50 employees, then your deadline has passed, and you’ll want to register immediately, as the state has begun to issue citations, which starts at $250 per employee, and can increase to $500 per employee.
Workplace Posters: SB 657 permits workplace postings by email with documents attached for telecommuting workers. Must still post in physical workplace. Adds Labor Code § 1207.
Employment Record Retention: SB 807 requires California employers to keep applicant and personnel records for 4 years from creation or date of employment action. This new law also extends the time the DFEH has to investigate employee complaints and issue a right to sue letter to 2 years and pauses the statute of limitations for DFEH and employees to file a civil action while the DFEH investigates or during any referral to DFEH’s mediation program.
Arbitration Agreements: Not only has the latest anti employment arbitration law been resurrected by the Ninth Circuit, the result of SB 762 is that an employer’s failure to pay arbitration fees in a timely manner will now result in the loss of their right to arbitrate. Because the new law requires everyone to consent to an extension of time to pay, Plaintiffs have the power to prevent an extension. Civil Code § 1657.1; CCP §§ 1281.97 & 1281.98.
CFRA Leave to Care for Parents-in-Law: Those administering leaves of absences will want to know that the California Family Rights Act definition of “parent” now includes parents-in-law. AB 1033 also revises the DFEH mediation pilot program to help small employers by requiring DFEH to provide prior notice of the program and the option of mediation before an employee can file claim of a CFRA violation against an employer with 5-19 employees. Government Code § 12945.1 and 12945.21.
New Settlement, Employment, or Separation Agreements. SB 331, known as the Silenced No More Act, drastically expands restrictions against confidential employment agreements. We already know that settlement agreement provisions that restrict the disclosure of facts related to a civil or administrative claim of sexual assault or sexual harassment are prohibited. As of January 1st, these agreements cannot restrict the disclosure of facts relating to any act of workplace harassment, discrimination, or retaliation.
This law will directly impact new non-disparagement clauses during employment, separation agreements, and settlement agreements. These agreements should now include “safe harbor” language, such as “Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.”
Non-disparagement clauses in separation agreements must also give the individual a reasonable time (at least 5 days) to consider the agreement and consult an attorney, similar to ADEA waivers. Code of Civil Procedure § 1001 and Government Code § 12964.5.
Independent Contractors Update. No major changes for 2022. The sunset date for a few of the exemptions have been extended.
Expanded Cal/OSHA Enforcement Powers. Citing concerns that Cal/OSHA protections fell short during the COVID-19 pandemic, SB 606 expands Cal/OSHA’s enforcement power in ways likely to continue well beyond the pandemic. Cal/OSHA can now:
Wildfire Smoke Protection for Agricultural Workers: AB 73 adds agricultural workers to the definition of “essential workers” to access state stockpile of PPE. This law also requires employers to provide wildfire smoke protection training to their agricultural employees in a “language and manner readily understandable” by those employees, considering their ethnic and cultural backgrounds and education levels, including using pictograms as needed. Health and Safety Code § 131021, Labor Code § 9110.
COVID-19 Outbreak Reporting Requirements (AB 654). Cleans up 2020’s AB 685:
Hospitality and Building Services: SB 93 provides rehire rights for employees laid off due to COVID-19. Not set to expire until December 31, 2024. Labor Code § 2810.8.
Food Delivery Platforms: AB 286 provides that food delivery platforms can’t keep any part of driver’s/eatery’s tip; limits price differences and requires a cost breakdown for each transaction. Bus. & Prof. Code § 22598.
Construction Contractors/Sub-Contractors: For contracts entered on or after January 1, 2022, SB 727 expands a direct contractor’s liability for failure to pay wages to include penalties and liquidated damages, in additional to any unpaid wage, fringe or other benefit payment or contribution and interest owed by the subcontractor. Labor Code §§ 218.7-218.8.
Garment Manufacturing: SB 62 prohibits piece rate compensation unless cba; mandates joint liability between manufacturer, contractor, and brand guarantor (retailer); 4-year record keeping requirement. Labor Code §§ 1174.1, 2670, 2671, 2673, 2675. Labor Commissioner has published FAQs.
Janitorial: Janitorial employees covered by a collective bargaining agreement can no longer bring PAGA claim. (SB 646). Labor Code § 2699.8.
Warehouse Distribution Centers: AB 701 mandates new requirements restricting quotas or task monitoring systems in warehouse distribution centers that employ or exercise control over the wages, hours, or working conditions of 100 or more employees at a single warehouse distribution center, or of 1,000 or more employees at one or more such centers in California. Warehouse distribution centers must provide nonexempt employees, upon hire or within 30 days of the law’s enactment, a written description of each quota applicable to the employee and notice of any adverse employment action that could result from not meeting the quota.
Health Care: SB 362 prohibits chain community pharmacies from establishing quotas for pharmacist and technician tasks. AB 1407 requires that hospitals and nursing training programs provide implicit bias training as part of training for new nurses. Bus. & Prof. Code §§ 4113.7, 4317.
Reinstatement of COVID Paid Sick Leave: supplemental paid sick leave ended in September 2021, but Governor Newsom and lawmakers in Sacramento announced an agreement on January 25, 2022 for a framework to retroactively revive up to two weeks supplemental paid sick leave from January 1, 2022 through September 30, 2022. The proposal would also renew employer tax credits previously available in connection with supplemental paid sick leave. As proposed, California employers with 26 or more employees must pay up to 40 hours of paid sick leave to workers who catch COVID-19 or who take time off to care for a loved one who has COVID-19. The leave would not be available to get the vaccine or recover from vaccine side effects – workers still get 24 hours of paid sick leave in those instances.
Guaranteed Health Care for All: AB 1400, the controversial single payer universal health care bill, CalCare, that would eliminate private medical insurance in California, has advanced to the Assembly floor, for a vote in the coming weeks. The approval from the Assembly Appropriations Committee was “contingent on a statute to create revenue mechanisms to fund CalCare, a fiscal report on whether CalCare can be implemented, and further approval by the legislature”.
Domestic Workers: SB 321 directs Cal/OSHA to create an advisory committee to recommend state policies to protect domestic workers and provide health and safety guidance to domestic workers and employers. If you employ domestic workers, you will want to keep tabs on this committee.