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New California Employment Laws for 2020

California employers may be feeling a bit overwhelmed with the new labor-related bills signed by Governor Gavin Newsome in October 2019. From anti-harassment training to changes in arbitrations, Business Consumer has you covered with a brief rundown of what CA employers want to review before the New Year rolls in.

Independent Contractor or Employee?

Employers that rely on the work of independent contractors want to ensure their workers are properly classified. There’s a new CA law that provides an “ABC test” to determine whether a worker is an independent contractor or an employee. Under the law, a worker is presumed to be an employee rather than an independent contractor unless the hiring entity can satisfy all of the following conditions:

  • The person is free from the control and direction of the hiring entity in connection with the performance of the work.
  • The person performs work that is outside the usual course of the hiring entity’s business.
  • The person is customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed.

The law specifically exempts certain occupations, industries, and contractual relationships from the “ABC” test, and instead permits the use of a less stringent test.  To avoid paying penalties for misclassifying your employees, businesses should evaluate their workforce and reclassify workers as appropriate.

No Rehire Provisions

California employers can no longer use “no rehire” provisions in settlement agreement. As of January 1, 2020, settlement agreements cannot contain any provision that prohibits or restricts an employee from obtaining future employment with the employer. There is an exception to the “no rehire” provision when an employee was found by the employer to have engaged in sexual harassment or sexual assault. Also, an employer can decide not to hire a former employee if the employer had a legitimate non-discriminatory or non-retaliatory reason for terminating the employee’s employment.

Arbitration

2020 will also bring changes to arbitrations. Employers will be prohibited from entering into mandatory arbitration agreements for nearly all types of employment law claims in California. Although the law is slated to go into effect January 1, it may be held up due to certain conflicts it may have with federal law. This article by Fisher Phillips does a great job of explaining the conflict.

California employers should still consult with their legal counsel to determine whether they want to remove all mandatory arbitration agreements to err on the side of caution or keep things as is until the legal battle is over.

In related news, under a new bill, if an employer fails to pay arbitration costs and fees within 30 days of the due date, it will result in a breach of the arbitration agreement, waiving the right to force arbitration. The employer may also be subject to sanctions. The employee would be able to withdraw the claim from arbitration and pursue the claim in court.

Hair Raising Changes

California has become one of the first states to ban race-based hair discrimination with the CROWN Act. Employers cannot use policies that prohibit natural hair. Employers should review their dress codes and hiring practices to ensure they are in compliance with the law.

Accommodations for Lactation

The law mandates that employers provide accommodations to an employee to express breast milk. The employer must provide a private place other than a bathroom in close proximity to the employee’s work area that is clean, safe, and has access to electricity necessary to use a battery powered breast pump. In addition, the employer must provide access to a sink with running water and a refrigerator to store milk in close proximity to the employee’s workspace. Businesses need to implement a policy regarding lactation accommodation that includes the following:

  • A statement about an employee’s right to request lactation accommodation;
  • The process by which the employee makes the request;
  • An employer’s obligation to respond to the request; and
  • A statement about an employee’s right to file a complaint with the Labor Commissioner for any violation of the right to lactation accommodation.

More information and a helpful FAQ are available from the California Department of Industrial Relations. 

Other Changes

Some of the other changes to California labor and employment laws include:

Workplace Bias Claims.  The timeframe to file an employment-related discrimination claim has been extended to three years.

Anti-Harassment Training. Employers with five or more employees have a little extra time to provide anti-harassment training to all employees. The previous deadline has been moved from January 1, 2020, to January 1, 2021. Resources to help employers are available from the California Department of Fair Employment and Housing website.

Unpaid Wage Violations. The Labor Commissioner will now have the authority to issue citations for failing to pay minimum wages under a contract. “Contract wages” are based on an agreement in excess of the applicable minimum wage for regular (non-overtime) hours. 

Late Wages. Employees can recover civil penalties for being paid late. Employees that are not paid on time can sue and recover $100 for the first violation and $200 for each subsequent violation. In addition, the employer will be liable for 25 of the wages that were paid late.

California employers can contact their local Labor Commissioner office for assistance with any labor or employment issue. Did you know that Business Consumer Alliance also provides business and HR advice? Contact us today to see how BCA can help you.

About Business Consumer Alliance Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.