27 December 2021
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Labor & Employment New Year Round-Up
What to Expect in 2022
Several new pieces of California legislation have either recently gone into effect or will take effect in 2022, impacting nearly all employers and how they handle employment agreements, disability related to COVID, training, rehiring and retention, and a range of other practices. A new presidential administration also means a shift in the political landscape and the role played by the NLRB, OSHA and other regulatory bodies.
Our round-up will help you determine which key issues may impact you in 2022; contact us to be sure you’re ready for all these upcoming changes. Click the “read more” link for each topic to see a comprehensive summary.
Expansions to the California Family Rights Act
Effective January 1, 2022, AB 1033 adds “parent-in-law” to the list of persons that an employee may take time off to care for, pursuant to the California Family Rights Act (CFRA). It also recasts the notice provisions of the small employer family leave mediation pilot program to require the DFEH to notify an employee of the requirement for mediation prior to filing a civil action, and requires the employee to contact the DFEH’s dispute resolution division prior to filing an action.
What this means for employers: Employers should review family leave policies to ensure they are compliant with AB 1033. Although the law adds a new category of person an employee may take time off to care for, it does not expand the total amount of leave an employee is entitled to take per 12 month period. Small employers should be aware of their ability to request mediation, and should consult with labor and employment counsel immediately upon receiving notice by a plaintiff or the DFEH that a plaintiff is seeking a civil lawsuit—the deadline to request a mediation is only 30 days from receipt of notice.
Changes to the Fair Employment and Housing Act
Effective January 1, 2022, SB 807 amends various statutes concerning the Department of Fair Employment and Housing (DFEH) procedures when enforcing California’s civil rights law—notably, the FEHA. These changes include tolling the deadline for the DFEH to file a civil action under the FEHA while a dispute resolution is pending, increasing the amount of time employers must keep certain records, and authorizing the DFEH to appeal court decisions.
What this means for employers: Employers should review their current record retention policies and amend them as necessary. This also provides an opportunity to ensure that employers are retaining all the necessary records so that they do not face unnecessary penalties or subject themselves to avoidable liability. SB 807’s tolling of the statute of limitations deadline provides additional leeway to employees who are seeking redress, and the authorization for the DFEH to appeal decisions grants it additional flexibility when pursing actions against employers.
COVID-19 Rehiring and Retention Requirements for Employers
Effective April 16, 2021, SB 93 requires employers in certain industries to notify former employees laid off due to COVID-19 about job openings for which the former employees are eligible within five days of establishing the open position; they must offer the open position to laid-off employees based on a preference system. SB 93 also requires that if an employer declines to recall a laid-off employee based on lack of qualifications and hires someone else, that employer must provide the laid-off employee written notice within 30 days detailing the specific reasons for the employer’s decision. The bill also contains a collective bargaining agreement waiver provision, providing that the waiver of recall rights must be expressly stated in the collective bargaining agreement.
What this means for employers: Employers subject to SB 93 must create processes and procedures for complying with the new law. Employers with collective bargaining agreements should review the agreements and, if they desire at the next opportunity, negotiate an express waiver of the recall rights set out in SB 93.
Equal Employment Opportunity Commission Determines That COVID-19 Can be a Disability
On December 14, 2021, the Equal Employment Opportunity Commission (EEOC) updated its guidance regarding COVID-19. The EEOC found that COVID-19 can be—but is not always— considered a “disability” under Title I of the Americans with Disabilities Act (ADA). The question that must be answered is: are the employee’s COVID-19 symptoms a “physical or mental” impairment that “substantially limits one or more major life activities”?
What this means for employers: The updated guidelines highlight the importance for employers to have COVID-19 protocols in place. Those protocols, in addition to helping foster a safe working environment, will help ensure that employers do not create unnecessary liability for themselves. Employers must also be mindful of taking adverse employment actions against employees who have COVID-19 and are experiencing symptoms. Employers should consult with labor and employment lawyers experienced in handling ADA claims prior to taking such adverse employment actions.
Employers Must Brace Themselves for the NLRB’s Shift Back to a Pro-Union Agenda
Major changes are on the horizon for both union and non-union private sector employers alike as the new Democratic majority under the Biden administration settles in at the National Labor Relations Board (NLRB). On August 12, 2021, the newly-confirmed NLRB General Counsel, Jennifer Abruzzo, nominated by President Biden, released a General Counsel Memorandum providing a detailed roadmap for the Board’s return to a pro-union, more worker-friendly agenda. While the Board is prone to change every four to eight years as political control shifts in the White House, this memo truly highlights how volatile Board law can be for employers.
What this means for employers: Abruzzo’s memo foreshadows significant changes on the horizon and broad implications for employers across all industries. Given the changing tide, many practices which employers currently take for granted, including those required by law, will likely warrant revision or require bargaining with the union. Employers, both union and non-union, should brace themselves for the changes to come and consult with employment counsel early on in order to make appropriate updates to their policies and practices and to ensure they remain compliant with applicable law.
Joint Employment Pendulum Swings Left Again
Policymakers and courts continue to expand the application of labor and employment laws to independent contractors and employees of franchisees. Rules regarding employee classification and collective bargaining are shifting away from regulations put in place during the previous presidential administration, and challenges to California’s “ABC” are still pending.
What this means for employers: Businesses should bear in mind the current trend toward classifying all workers as employees of the entity to whom they provide service, regardless of the true nature of the relationship, and take steps to mitigate the downside risk of judicial reclassification, such as contracting only with entities, rather than people, for services and having written indemnity agreements with those entities.
California Further Limits Employer’s Ability to Negotiate Employee Silence in Settlements
SB 331 prevents employers from prohibiting employees and former employees from disclosing alleged facts related to harassment, discrimination and other specified unlawful conduct. Further, the law requires additional protections for employees entering into separation agreements.
What this means for employers: Employers are advised to review and revise any form offer letters, employment agreements, severance agreements and settlement agreements to conform to SB 331’s changes. Any provisions contrary to the law will be void as a matter of law and public policy.
Employers Cannot Make Employees Sign Arbitration Agreements as a Condition of Employment . . . or Can They?
Employers are once again prohibited from requiring an employee or prospective employee to sign an arbitration agreement for certain California employment-related claims. In 2019, California passed AB 51, making it unlawful for employers to require employees and prospective employees to agree to arbitrate claims arising under the Fair Employment and Housing Act and/or the California Labor Code as a condition of employment or continued employment. Before AB 51 could take effect, however, the Chamber of Commerce successfully sought a temporary restraining order halting its enforcement. which was followed shortly by a preliminary injunction against enforcement of AB 51. It is expected that the Ninth Circuit’s ruling will be challenged, and AB 51 may again be enjoined in its entirety pending further legal proceedings.
What this means for employers: Employers should consult with legal counsel to explore how best to modify standard arbitration agreements for new hires and ensure compliance; based on careful crafting by counsel, there are various ways an employer may lawfully obtain enforceable agreements. Despite the changing legal landscape in California, arbitration agreements are still recommended as an effective tool to avoid public and lengthy litigation of certain claims and guard against unreasonable jury verdicts.
More Than a Late Payment Penalty – Failure to Promptly Pay Arbitration Invoices Results in Waiver of Right to Compel Arbitration
Beginning in 2022, an arbitration provider must immediately issue to the employer an invoice “for any fees and costs required before the arbitration can proceed” upon initiation of arbitration. Similarly, if the arbitration agreement does not specify timing of payments while the arbitration is pending, invoices “for any fees and costs required for the arbitration proceeding to continue” must also be issued as due upon receipt.
What this means for employers: Employers should be very careful to pay all arbitration invoices immediately to avoid significant negative consequences. Employers should also consult with counsel to evaluate what revisions might be made to existing arbitration agreements to moderate these risks.
Are You Personally Liable for Your Employer’s Wage and Hour Violations?
California law enacted in 2016 creates individual personal liability for wage and hour violations for an “owner, director, officer, or managing agent” of an employer in which the individual had personal involvement and can be said to have been “acting on behalf of an employer.” A recent case clarifies that an owner has no personal liability in such lawsuits, if they have limited involvement in the day-to-day operations of the company.
What this means for employers: While a hands-on owner or other managing agent who participates in the day-to-day operations or wage and hour policy decisions affecting aggrieved employees may face personal liability, those who do not have such close involvement or decisional authority are now more likely to avoid personal liability. All business owners, directors, officers, and managing agents should determine with counsel whether or not their conduct exposes them to personal liability for wage and hour violations.
New Criminal Penalties for Wage Theft
California has passed AB 1003, creating a new offense for the intentional theft of wages by an employer. The offense may be punished as a misdemeanor or a felony, and the offense specifically authorizes restitution of wages, gratuities, benefits or other compensation that is the subject of prosecution.
What this means for employers: Employers should review their policies and pay practices to ensure that they comply with relevant California Labor Code sections. One step employers can take is to obtain employees’ signatures on acknowledgment forms to provide evidence of the employees’ receipt of a specific policy and understanding of the substance of the policy. Employers can also implement regular auditing of policies and pay practices. If you have any doubt about a certain practice, you should contact qualified labor and employment counsel for advice.
How Soon is Now? It’s Time to Review the Independent Contractor/Employee Status of Your Workers
It’s time to review all of your independent contractor arrangements. California’s statute governing the classification of independent contractors underwent fundamental changes when changes to it became law. These exemptions and revisions apply to business-to-business relationships, referral agencies, professional services, performance artists, and other classifications. Many more California workers are exempted from the well-known “ABC test” for determining independent contractors – in all, 109 categories of workers.
What this means for employers: Additional carve-outs of the rigid ABC test do not necessarily provide safe harbors for businesses seeking to use independent contractors instead of employees for specified roles and aspects of their business. Companies are encouraged to contact qualified labor and employment counsel when bringing on new workers, especially those who are residents of or who will be working in the State of California, as either independent contractors or employees.
Biden’s Vaccine Mandate for Large Employers Faces an Uncertain Future – Large Employers Should Prepare for Compliance by January 10
On November 5, 2021, Federal OSHA published new Emergency Temporary Standards (ETS) which implemented a nationwide COVID-19 vaccine mandate for private employers with 100 or more employees. Within 24 hours of publishing, dozens of lawsuits were filed in an attempt to block the ETS from taking effect, challenging it on a number of constitutional and procedural grounds. On November 6, 2021, the Fifth Circuit Court of Appeals issued a stay, putting the implementation of the vaccine mandate on hold. However, on December 17, 2021, the Sixth Circuit Court of Appeals lifted the stay and revived the ETS.
What this means for employers: Until Cal/OSHA issues new guidance, (despite this state of limbo) the Federal OSHA ETS is currently legally required. As such, California employers who would be covered by this vaccine mandate should prepare to implement new policies and procedures by January 10, 2022. Given the complexities inherent in the 490 pages of the federal mandate, employers are highly encouraged to consult with legal counsel in order to ensure these preparation steps are properly handled.
Work Quota Requirements for Warehouse and Distribution Centers
Beginning January 1, 2022, AB 701 creates new requirements for warehouse distribution centers who employ or exercise control over 100+ employees at a single warehouse distribution center, or over 1,000+ employees at one or more warehouse distribution centers in California. AB 701 requires that warehouse distribution centers must provide each employee with a written description of each quota which the employee subject to, and prohibits the establishment of quotas that would prevent compliance with meal or rest periods and use of bathrooms, among other health and safety laws. Warehouse distribution centers must also maintain work speed data for each employee operating under a quota.
What this means for employers: Employers who believe that they may be considered a “warehouse distribution center” should immediately consult with qualified labor and employment counsel for advice. Employers should evaluate their current quotas and create a written description of each quota in existence. Employers should ensure that the applicable quotas enable employees to use the restroom and take meal and rest periods. Employers must also create a system for tracking individual employees personal work rate data, as well as a system for responding to requests for information from employees.
New Implicit Bias Course Requirement for Nurses
Effective on January 1, 2023, AB 1407 requires approved schools of nursing or approved nursing programs to include direct participation in one hour of implicit bias training in their curriculum. AB 1407 also requires hospitals to implement an evidence-based implicit bias program as part of its new graduate program. Nurses who obtained their license within the last two years are required to undergo one hour implicit bias training.
What this means for employers: Hospitals should begin plans to implement the required evidence-based implicit bias programs sooner, rather than later. While hospitals have until January 1, 2023 to implement the programs, creating such a course will not occur overnight and falling behind is preventable, given the timeline set forth.
Additional Power Granted to the Labor Commissioner
Effective January 1, 2021, SB 572 authorizes the Labor Commissioner, as an alternative to a judgment lien, to create a lien on real property to secure amounts due under any final citation, findings, or decision. The requirements to do so are laid out, as well as the process for releasing the lien once amounts owed are paid.
What this means for employers: SB 572’s impact is straightforward, enabling the Labor Commissioner an alternative means of collecting on amounts owed. The practical effects of having judgment lien or a real property lien recording against an employer are limited, but it is important to be aware of the various tools the Labor Commissioner may implement.
Additional Powers Granted to the Division of Occupational Safety and Health
Effective January 1, 2022, SB 606 creates a rebuttable presumption that OSHA violations committed by an employer with multiple worksites are enterprise-wide if the employer has a written policy or procedure that violates the California Labor Code, or if the Division of Occupational Safety and Health has evidence of a pattern or practice of the same violation at more than one worksite. The Division is authorized to issue an enterprise-wide citation if the employer fails to rebut the presumption.
What this means for employers: SB 606 has the potential to greatly expand liability for certain employers with multiple worksites in California. Typically employers use a single employee handbook (or identical workplace policies) for employees within a single state. Thus, even if an unlawful practice is limited to a single worksite, SB 606 may result in liability extending to all of its California’s worksites. Employers must continue to ensure that they are not subjecting their employees to unsafe work environments—a single bad apple is now more costly than ever.
JMBM’s Labor and Employment attorneys counsel businesses and management on workplace issues, helping to establish policies that address problems and reduce job-related lawsuits. We act quickly to resolve claims and aggressively defend our clients in all federal and state courts, before the Department of Labor, the NLRB, and other federal, state and local agencies, as well as in private arbitration forums. We represent employers in collective bargaining negotiations and arbitration.
This is Jim Butler, author of www.HotelLawBlog.com and founding partner of JMBM and JMBM’s Global Hospitality Group®. We provide business and legal advice to hotel owners, developers, independent operators and investors. This advice covers critical hotel issues such as hotel purchase, sale, development, financing, franchise, management, ADA, and IP matters. We also have compelling experience in hotel litigation, union avoidance and union negotiations, and cybersecurity & data privacy.
JMBM’s Global Hospitality Group® has helped clients around the world with more than 4,500 hospitality properties worth more than $112 billion. Contact me at +1-310-201-3526 or jbutler@jmbm.com to discuss how we can help.