New Employment Laws Affecting California Employers Effective January 1, 2021

There are fourteen (14) significant developments in California employment law which require your attention:

Wage & Hour

1 – State Minimum Wage & Minimum Salary Threshold Increased. In 2016, California enacted a new law which will gradually increase the minimum pay received by nonunion employees. The hourly minimum wage will increase based upon the size of the employer to $15 per hour.

Effective January 1, 2021, California’s state minimum wage will increase from $12 to $13 per hour for employers with twenty-five (25) or fewer employees, and from $13 to $14 per hour for employers with twenty-six (26) or more employees.

2 – State Minimum Salary Threshold Increased. In In 2016, California enacted a new law which created a “Minimum Salary Threshold” establishing the minimum compensation a salaried employee can be paid to be exempt from California’s overtime laws. After 2023, the Minimum Salary Threshold and state minimum hourly wages will be linked to the Consumer Price Index.

In 2021, the Minimum Salary Threshold will increase from $49,920 to $54,080 per year ($26 per hour based on a 40-hour workweek and 2,080 hours worked per year) for employers with twenty-five (25) or fewer employees, and from $54,080 to $58,240 per year ($28 per hour) for employers with twenty-six (26) or more employees.

Both the state minimum wage and Minimum Salary Threshold will continue to increase annually until 2023:

Starting in January 2024, further increases will be made using a formula linked to the US Bureau of Labor Statistics, non-seasonally adjusted, Consumer Price Index.

Note: Any scheduled annual increase can be rejected by the California state legislature.

3 – Local Minimum Wages Increased: Some California cities and counties have enacted local city or county wide minimum wages which are higher than California’s Minimum Wage. Employers must pay qualifying employees either the California Minimum Wage or the Local Minimum Wage, whichever is greater.

A few of the major population centers law are listed, below. Please be certain to check local laws to determine wage rates.

Alameda: As from July 1, 2020, the local minimum wage for all nonunion employees size is $15.00 per hour. On July 1, 2022, the minimum wage is scheduled to be adjusted annually at a to be determined amount.

Belmont: As from January 1, 2021, the local minimum wage for all nonunion employees regardless of their employer’s size will increase from $15.00 to $15.90 per hour.

Berkeley: On July 1, 2020, the local minimum wage for all nonunion employees regardless of their employer’s size increased from $15.59 per hour to $16.07 per hour. The local minimum wage will increase based on the local Consumer Price Index every July 1.

Cupertino: As from January 1, 2021, the local minimum wage for all nonunion employees regardless of their employer’s size will increase from $15.35 to $15.65 per hour.

El Cerrito: As from January 1, 2021, the local minimum wage for all nonunion employees regardless of their employer’s size will increase from $15.37 to $15.61 per hour.

Emeryville: On July 1, 2020, the local minimum wage for all nonunion employees regardless of their employer’s size increased to $16.69 per hour. The local minimum wage will increase based on the local Consumer Price Index every July 1.

Fremont: The local minimum wage is determined by the employer’s size. As from July 1, 2020, for employers of 25 or fewer employees, the local minimum wage is $13.50. For employers with 26 or more employees, the local minimum wage is $15 per hour. The local minimum wage is scheduled to be increased on July 1, 2022, in an amount to be determined.

Long Beach: The local minimum wage is determined by the employer’s size (with an exception for Hotel & Concessionaire Workers – discussed below). As from January 1, 2021, for employers of twenty-five (25) or fewer nonunion employees, the minimum wage will be $13 per hour. For employers with twenty-six (26) or more employees, the local minimum wage will be $14.00 per hour. The City has planned increases of $1.00 per hour until the local minimum wage, regardless of size, will be $15.00 per hour, adjusted annually based on the local Consumer Price Index.

As from July 1, 2020, the local minimum wage for Hotel Workers is $15.47 per hour, and the local minimum wage for Concessionaire Workers is $15.30 per hour.

Los Altos: As from January 1, 2021, the local minimum wage for all nonunion employees regardless of their employer’s size is $15.65 per hour.

Los Angeles’ (city and county): The local minimum wage for nonunion employees is determined by employer size, with a special rate for Hotel Workers. As from July 1, 2020 the local minimum wage for employers with twenty-five (25) or fewer nonunion employees is $14.25 per hour. For employers with twenty-six (26) or more nonunion employees, the local minimum wage is $15.00 per hour. The City has planned increases of $1.00 per hour until the local minimum wage, regardless of size, will be $15.00 per hour, adjusted annually based on the local Consumer Price Index.

Los Angeles International Airport employees have a special local minimum wage and mandatory health benefit.

Malibu: The local minimum wage is determined by employer size. As from July 1, 2020, the local minimum wage for employers with twenty-five (25) or fewer employees is $14.25. The local minimum wage for employers with twenty-six (26) or more employees is $15.00 per hour.

Menlo Park: As from January 1, 2021, the local minimum wage for all nonunion employee regardless of their employer’s size is $15.25.

Milpitas: The local minimum wage for all nonunion employees regardless of their employer’s size is $15.40 per hour and is indexed to inflation, with scheduled changes on July 1, 2021.

Mountain View: As from January 1, 2021, the local minimum wage for all nonunion employees regardless of their employer’s size is $16.30 per hour and indexed to inflation, with scheduled changes on January 1, 2022.

Oakland: As from January 1, 2021, the local minimum wage for all nonunion employees, regardless of size, will increase from $14.14 to $14.36 per hour. As from January 1, 2021, the local minimum wage for Hotel Workers with benefits is $15.61 per hour. The local minimum wage for Hotel Workers without benefits is $20.82 per hour. The local Hotel Workers minimum wage is linked to Consumer Price Index.

Palo Alto: As from January 1, 2021, the local minimum wage for all nonunion employees regardless of their employer’s size is $15.65 per hour.

Pasadena: As from July 1, 2020, the local minimum wage for employers with twenty-five (25) or fewer employees will be $14.25 per hour. The local minimum wage for employers with twenty-six (26) or more employees is $15.00 per hour.

Petaluma: As from January 1, 2021, the local minimum wage for all nonunion employees will be $15.20 per hour.

Redwood City: As from January 1, 2021, the local minimum wage for all nonunion employees regardless of their employer’s size is $15.62 per hour.

Richmond: As from January 1, 2021 the local minimum wage will be $15.21 per hour.

San Diego: As from January 1, 2021 the local minimum wage will be $14.00 per hour, with future increases linked to the local Consumer Price Index.

San Francisco: As from July 1, 2020, the local minimum wage increased from $15.59 to $16.07 per hour. Future increases are linked to the Consumer Price Index.

San Jose: As from January 1, 2021 the local minimum wage will be $15.45 per hour. Future increases are linked to the local Consumer Price Index.

San Leandro: As from July 1, 2020, the local minimum wage for all nonunion employees regardless of their employer’s size is $15.00 per hour.

San Mateo: As of January 1, 2021, the local minimum wage for all nonunion employees regardless employer size will increase to $15.62 per hour.

Santa Clara: As from January 1, 2021, the local minimum wage for all nonunion employees regardless of their employer’s size will increase to $15.65 per hour.

Santa Monica: As from July 1, 2020, the local minimum wage for employers with twenty-five (25) or fewer employees is $14.25. The local minimum wage for employers with twenty-six (26) or more employees is $15.00 per hour. As from July 1, 2021 the local minimum wage for all employers will increase to $15.00 per hour.

Santa Rosa: As from January 1, 2021, the local minimum wage for employers regardless of their employer’s size will increase to $15.20 per hour.

Sonoma: As from January 1, 2021, the local minimum wage for employers with 25 or fewer employees will increase to $14.00 per hour. For employers with twenty-six (26) or more employees the local minimum wage will increase to $15.00 per hour.

South San Francisco: As from January 1, 2020, the local minimum wage for all nonunion employee regardless of their employer’s size is $15.24 per hour.

Sunnyvale: As from January 1, 2021, the local minimum wage for all nonunion employees regardless of their employer’s size will increase to $16.30 per hour.

Immediate Action Required: Review your job descriptions, employee locations, and payroll to ensure compliance with local and state wage laws.

4 – IRS Lowers Standard Mileage Reimbursement Rates: Effective January 1, 2021, the IRS Optional Business Standard Mileage Rate (“OBSMR”) will decrease from $0.575 to $0.56 per mile. The OBSMR is used by the IRS to calculate the deductible costs of operating an automobile for business use in lieu of tracking actual costs. Many businesses use the OBSMR as their “go to” rate of reimbursement for its employees who drive their own car or truck for business purposes.

California employers should however be aware that in 2007, the California Supreme Court found that the OBSMR will not automatically be considered “full compensation” for mileage as the OBSMR does not take into account the actual costs incurred by the employee to operate their vehicle. Full compensation is a matter for negotiation between the employee & employer, and must take into account the costs of gas, vehicle maintenance, depreciation and insurance. See Gatusso v. HartHanks Shopper, Inc.

Immediate Action Required: (1) Review your existing policies and forms to confirm that your business engages in a dialogue with each employee to calculate the correct mileage reimbursement rate for each employee. (2) Confirm that personnel and payroll files fully document each employee agreement that either the OBSMR fully compensates him / her for the actual costs of operating his/her vehicle or each employees’ actual costs to operate their vehicle. (3) Ensure that payroll reimbursement records fully document (i) miles driven, and date mileage incurred, (ii) per mile reimbursement rate, (iii) date and amount each employee was reimbursed.

COVID-19

5 – CalOSHA Adopts Emergency COVID-19 Temporary Standards: On November 30, 2020, new regulations were adopted creating temporary emergency standards for all California employers not covered by CalOsha’s Aeorsol Transmissible Diseases Standard. The COVID-19 Prevention Emergency Temporary Standards require that all California employers amend their Injury and Illness Prevention Plan (“IIPP”) to include a written COVID-19 Prevention Plan (“CPP”). CalOSHA further requires that all employees be trained in the employer’s specific COVID-19 prevention, investigation and response procedures. This must include how to:

• Identify, evaluate, and correct COVID-19 hazards;
• Ensure that physical distancing of at least six feet be practiced by everyone at the workplace, unless it is not possible;
• Correctly use of face coverings;
• Use engineering controls, administrative controls, and personal protective equipment as required to reduce transmission risk.

Employers are further required to (a) provide testing to employees exposed to COVID-19, and with multiple infections or a major outbreak, implement regular workplace testing for employees in the exposed work areas; (b) exclude COVID-19 cases, and exposed employees, from the workplace until they are no longer an infection risk, (c) maintain records of COVID-19 cases and report serious illnesses and multiple cases to Cal/OSHA and the local health department, as required.

Immediate Action Required: Review your existing IIPP and COVID-19 prevention plan to ensure compliance. Incorporate the CalOSHA Model COVID-19 Prevention Program in your existing IIPP.

6 – Employers Must Provide All Workers With Notice Of COVID-19 Case(s): Effective January 1, 2021, and within one (1) business day, all California employers are required to:

• Notify employees, employees of subcontracted workers, and/ union representatives of suspected and diagnosed cases of COVID-19 at a “worksite” within the “infectious period”.
• Provide employees about benefits and other options including Workers’ Compensation, Families First Coronavirus Response Act, Emergency Paid Sick Leave and Paid Sick Leave benefits. Employer should also advise affected employees of any accrued and unused paid vacation or paid time off (“PTO”) benefits available to him/her.
• Report workplace “outbreaks” to local health departments. An “outbreak” is defined as three (3) probable or confirmed cases within a fourteen (14) day period.

COVID-19 has been classified as a workplace hazard by CalOSHA. Failing to comply with the CalOSHA guidelines and notice requirements can result in monetary fines and the possible shutdown of your business.

Everything Else

7 – Paid Family Leave Benefits Expanded. Enacted in 2002 (and effective as of 2004), California’s Paid Family Leave (“PFL”) aka Family Temporary Disability Insurance (“FTDI”) provides wage replacement benefits to workers who take time off to care for a seriously ill child, spouse, parent, grandparent, grandchild, sibling, or domestic partner, or to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption.

Effective July 1, 2020, the maximum PFL benefits paid by California’s State Disability Insurance has been increase from six (6) to eight (8) weeks.

As of January 1, 2021, PFL has been expanded to include active duty or call to active duty of the individual’s spouse, domestic partner, child, or parent in the Armed Forces of the United States.

Recommended Action. Provide training to Human Resources professionals and employees as required.

8 – California Family Rights Act (“CFRA”) Coverage Expanded: Enacted in 1993, The California Family Rights Act qualified employees the right to take time off from work to care for a family member without fear of losing their job. Since it was enacted, CFRA has been amended several times, making it unlawful for any employer with fifty (50) or more employees (within) 75 miles of the worksite) to refused to grant a request by a qualifying employee (one who has at least 1,250 hours of service with the employer during the previous 12-months), to take up to twelve (12) workweeks of unpaid leave during any twelve (12) month period to bond with a new child of the employee, to care for themselves, a child, a parent, or a spouse.

Employees are guaranteed a return to the same or comparable position upon return from CFRA leave. If the same position is no longer available due to a layoff or closure, the employer must offer a position comparable in pay, benefits, shift, schedule, geographic locations and working conditions (privileges, perquisites, and status), unless the employer can prove that no comparable position exists. However, an employee is not entitled to reinstatement if the employee would have been otherwise laid off or terminated.

As from January 1, 2021, CFRA Leave has been expanded and applies to all California employers with five (5) or more employees. If both parents of a child are employed by the same employer, the employer must grant CFRA leave to each employee for that child’s health condition, birth, or placement.

CFRA has also been expanded to provide for leave for qualified employees who need to take leave due to being called to active duty or a call to active duty by the employees spouse, domestic partner, child, or parent in the Armed Forces of the United States.

Recommended Action: Subject employers should (a) amend their employment handbooks to reflect the new leave benefits, and (b) train human resources and supervisors with the CFRA Leave benefits.

9 – Sick Leave & Kin Care Leave Expanded: Effective January 1, 2021 employees may (at their sole discretion) use up to half of their annual accrued paid sick leave to provide care for a family member.

Recommended Action: Update your written sick leave policies and train human resources and supervisors with the new permitted use of paid sick leave benefits.

10 – Additional Protections For Victims of Crime or Abuse: California law has long prohibited employers with twenty-five (25) or more employees from discharging, discriminating, or retaliating against an employee who is the victim of domestic violence, sexual assault, or stalking for taking time off from work for injuries caused by domestic violence, assault, stalking, or testifying in Court pursuant to a subpoena in a related court action.

Effective January 1, 2021 these protection have been expanded, prohibiting employers from discharging, or discriminating against an employee who is a victim of crime or abuse for taking time off from work to obtain or attempt to obtain “relief” Relief includes taking time off to obtain temporary restraining order, restraing order, obtaining psychological counseling, engaging in safety planning, seeking other injunctive relief, and to help ensure the health, safety, or welfare of the victim or their child. The law has also been amended to make it unlawful for employers to act against an employee when an unscheduled absence occurs, if the employee provides certification that they were receiving services for injuries relating to the crime, abuse, or if the employee was a victim advocate.

Recommended Action: Before taking disciplinary action, inquire as to whether the absence was due to the employees status as a victim of crime, abuse, or a family members’ status as a victim of crime or abuse. Consult with an employment attorney should you have concerns prior to taking disciplinary action.

11 –Whistleblower Protections Expanded. Effective January 1, 2021, California has expanded the protections provided to whistleblowers by prohibiting employers from retaliating against an employee for disclosing a violation of law or providing information regarding a violation of law to or testifying before any public body conducting an investigating, hearing or inquiry. “Retaliation” has been defined to include most adverse employment action which materially affects the terms or conditions of employment.

Whistleblower protections have also been amended to prohibit employers from adopting or enforcing any rule, regulation, or policy which prevents sch disclosure or participation; or for refusing to participate in any activity that would cause a violation of law.

Damages for violation of this section include reinstatement with backpay and benefits, actual damages, a civil penalty of $10,000 for each violation, and reasonable attorney’s fees.

Recommended action: Train supervisors and human resources. Create proper policies and procedures for handling whistleblower complaints.

12 – “No Rehire” Terms in Settlement Agreements Likely Void. Since January 1, 2020, employers cannot bar re-employment as part of a settlement the employee filed a claim against the employer (a) in court, (b) before an administrative agency, (c) in an alternate dispute resolution forum, or (d) using the employer’s internal complaint process. “No rehire” terms entered into after January 1, 2020 will be held void as a matter of law and may invalidate the entire settlement agreement. However, if the employer has made a good faith determination that the employee harassed or sexually assaulted, the employer may restrict that employee from obtaining future employment.

Effective January 1, 2020, California will permit “no rehire” terms in cases of sexual harassment, sexual assault, and other criminal conduct so long as (a) the individual did not bring their claim in good faith, and (b) the employer made a documented and good-faith determination that the accused had engaged in sexual harassment or sexual assault before the aggrieved person filed a claim.

Recommended Required. Review Consult with an employment attorney before entering into any separation, severance or similar agreement which uses “no rehire” terms.

13 – More Time To File A DLSE Claim: Effective January 1, 2021 the time for filing a claim with the Department of Labor Standards Enforcement (“DLSE”) for unlawful discharge or discrimination in violation of any law enforced by the Labor Commissioner has been extended from six (6) months to one (1) year.

Recommended Required. Train supervisors and human resources with the new time needed to file a claim.

14 – The Labor Commissioner May Now Represent Claimants in Arbitration: Commencing on January 1, 2021, the Labor Commissioner may represent claimants in labor related arbitration (a) when the Labor Commissioner has determined that the claim has merit, (b) when the claimant is financially unable to represent himself/herself, and (c) where a court order compelled arbitration. In such instances, the petition to compel arbitration must now be served on the Labor Commissioner as well as all other parties.

Written updates of these and other new laws will be part of my firm’s next employee handbook and employment forms update. Should you have questions about these or any other workplace law, please contact me at doug@dmwadelaw.com.

 

The materials contained herein are for informational purposes only and not to provide legal advice. For advice about a particular problem or situation, please contact an attorney.