2021 Employment Law

Required Retirement Plans for Employees: In an attempt to address the retirement savings crisis in California, the law now requires every employer with five or more employees to offer a private-sector retirement plan to their employees, or join a State-sponsored program called CalSavers. Businesses that already offer retirement plans to their employees or adopt one by the appropriate deadlines are not affected by this law. The mandated deadlines to adopt the necessary plans are:

• June 30, 2020 for businesses with one hundred or more employees;
• June 30, 2021 for businesses with fifty or more employees;
• June 30, 2022 for businesses with five or more employees[ii];

Under the CalSavers plan, employees will be automatically enrolled unless they opt-out. If they choose to opt-out, they must renew their choice every year, or they will be automatically enrolled again. The automatic enrollment results in a 5% deduction taken from the employee’s gross pay and deposited into the plan. This amount increases by 1% per year until it reaches 8%. Employees are free to elect other percentages but will be subject to the automatic levels if they do not make that election.

The CalSavers plan is currently structured as a Roth IRA, which means there is no tax deduction for money withheld from the employee’s paycheck and deposited into the plan. The benefit comes in later years when the funds are withdrawn, presumably in retirement. At that time there is no tax due on either the initial contributions, or the growth of those contributions.

An employee can be required to have one year of service, defined as 1,000 hours or more worked, and be at least 21 years of age before they can begin participating in a retirement plan. Under CalSavers, any employee paid by W-2, who is age 18 or older and has worked for 30 days from their date of hire, must be automatically enrolled in the plan unless they opt-out. Among other requirements, employers must regularly submit a full employee census to CalSavers and track eligible employees.

If a business is found to be non-compliant, a notice will be issued by the state. If the business remains non-compliant 90 days after the notice, the proposed penalty is $250 per eligible employee. If the business remains non-compliant for 180 days after the notice, the proposed penalty escalates to $500 per eligible employee.

Employee Sexual Harassment Training: All employees, not just supervisors, must receive harassment training before the end of 2020. The Department of Employment and Fair Housing has a free online tool for the training. As you re-onboard employees post Covid-19, you might just want to make this session part of your new hire orientation or have your remote employees take it now and get it out of the way. Do not forget to keep records of the training, as it will be required every two years. There is no free supervisory training yet available from the DFEH, so you will have to arrange for that elsewhere.

COVID-19 In the Workplace: AB 685 takes effect on January 1, 2021 and will expire on January 1, 2023. Under this new California law, If an employer receives a notice of potential exposure to COVID-19, the employer must within one day provide written notice to all employees and subcontracted employees who were on the premises at the same worksite within the “infectious period.” The notice must contain information about what COVID-19 related benefits the employee is entitled to under federal, state, and local laws, and the employer’s disinfection and safety plan. Employers are required to keep a copy of all notices provided to employees for three years. If the employer is notified of a number of COVID-19 cases that meet the definition of a COVID-19 outbreak as defined by the State Department of Public Health, the employer has 48 hours to notify the local public health agency.

SB 1159 took effect September 17, 2020 and expires on January 1, 2023. It creates a rebuttable presumption that an employee contracted COVID-19 at work if they have tested positive or is diagnosed with COVID-19 within 14 days after a day that the employee worked at the employee’s place of employment. The law does set forth that the “place of employment” does not include an employee’s residence if they are working at home. SB 1159 also sets forth specific types of workers that the law covers (such as active firefighting members, Department of Forestry and Fire Protection, peace officers, and fire and rescue service coordinators). For other employees, the law applies if there is an “outbreak at the employee’s specific place of employment.” An outbreak exists if:

• For employers with 100 or fewer employees at a specific place of employment if 4 employees test positive for COVID-19
• For employers with more than 100 employees at a specific place of employment if 4 percent of the number of employees who reported to the specific place of employment tested positive for COVID-19
• If the specific place of employment is ordered closed by a local health department, State Department of Public Health, the Division of Occupational Safety and Health, or a school superintendent.

Leaves of Absence: SB 1383 significantly expanded the California Family Rights Act (CFRA) beginning January 1, 2021 Employers with five or more employees must now comply.

Prior to January 1, 2021 only employers with 50 or more employees were required to comply.

The law also expanded the definition of “family members” beyond what is covered under the federal Family and Medical Leave Act (FMLA), which will impact larger employers. For example, an employee can take 12 weeks of leave to care for a sibling under the CFRA and then another separate 12 weeks to cover an illness under the FMLA for total of 24 weeks of protected leave.

AB 2992 expanded the prohibition on discrimination and retaliation against employees that are victims of crime or abuse when they take time off for judicial proceedings or to seek medical attention or related relief for domestic violence, sexual assault, stalking or other crime that causes physical or mental injury.
Currently, an employee can use up to half of their accrued sick leave to care for a family member, also known as “kin care.” AB 2017 revised the law to clarify that the employee has the right to designate sick leave as kin care, or not, in order to avoid a designation error and unintentional draw down of kin care time when the sick days were actually taken for personal sick leave.

California Consumer Privacy Act: The California Consumer Privacy Act (CCPA) provides California consumers rights over how and whether the personal data they provide to businesses is collected, retained and sold. Because its definitions are broad, employee data that employers collect for employment purposes will be included in the future. AB 1281 extended the exemption to the end of 2021. Employers must still comply with the CCPA’s requirement to provide notice before, or at the time of, collecting personal information from an applicant or employee that describes every category of information that will be collected and the purposes for which it will be used. CCPA regulations describing how employers can give a compliant notice are already in effect.

Extension of Time For Employee Claims: AB 1947 extended the period of time for employees who believe that they have been discharged or otherwise discriminated against in violation of any law enforced by the Labor Commissioner to file a complaint with the Division of Labor Standards Enforcement from six months to one year. AB 1947 also authorized a court to award reasonable attorney’s fees to a plaintiff who successfully brings a whistleblower action under Labor Code Section 1102.5. Prior to AB 1947, workers who prevailed in lawsuits alleging that their employer made, adopted or enforced a policy that prevented them from disclosing information to a government or law enforcement agency where they had reasonable cause to believe that the information disclosed a violation of a state or federal law could obtain damages, but were not permitted to recover attorney’s fees. AB 1947 now affords them the ability to do so.

Successor Liability for Unpaid Wages: Effective January 1, 2021, AB 3075 expands the information corporations must include in the corporation’s statement of information filed with the California Secretary of State. Specifically, AB 3075 requires a corporation to include whether any officer or director, or in the case of a limited liability company, any member or manager, has an outstanding final judgment issued by the Division of Labor Standards Enforcement or a court of law, for which no appeal therefrom is pending, for the violation or provision of the Labor Code. The new law also adds a section to the California Labor Code which provides that a successor employer is liable for any wages, damages and penalties owed to any of the predecessor employer’s former workforce pursuant to a final judgment, after the time to appeal therefrom has expired and for which no appeal therefrom is pending, if the successor employer meets any of the following criteria:

• Uses substantially the same facilities or substantially the same workforce to offer substantially the same services as the predecessor employer. This factor does not apply to employers who maintain the same workforce pursuant to Chapter 4.5 (commencing with Section 1060) of Part 3.
• Has substantially the same owners or managers that control the labor relations as the predecessor employer.
• Employs as a managing agent any person who directly controlled the wages, hours or working conditions of the affected workforce of the predecessor employer (the term managing agent has the same meaning as in subdivision (b) of Section 3294 of the Civil Code).
• Operates a business in the same industry and the business has an owner, partner, officer or director who is an immediate family member of any owner, partner, officer or director of the predecessor employer. Minimum Wage: As a reminder, the minimum wage in California is increasing to $14.00 per hour on January 1, 2021, for employers with 26 or more employees based on previous legislation signed by Governor Brown in 2015.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.