California Law Alerts: September 2019

On September 18, 2019 California Governor Newsome signed final legislation for AB 5, drastically altering worker classification compliance. See official law alert below or Read How AB5 Compliance Affects CA Employers

On August 30, 2019 the California Fair Employment and Housing Act was amended to extend the Sexual Harassment Training deadline by one year. (S. B. 778)

Additionally, the Pregnancy Leave Brochure was updated to include new rights and obligations included in the New Parent Leave Act. 

California Law Alerts for September 2019

tryHRIS’s membership includes the Regulatory Compliance Database, which alerts you the moment Federal & State laws, regulations or requirements change, keeping you informed.

Law Alert 3: Assembly Bill 5 (AB 5) Redefines Worker Classification

The new legislation amends the California Labor Code, the California Unemployment Insurance Code, and for the Industrial Welfare Commission’s wage orders, to define a person providing labor or services for remuneration as an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied for the ABC Test.

On September 18, 2019, California Governor Gavin Newsom signed legislation (A.B. 5) codifying the California Supreme Court decision in Dynamex Operations West, Inc. V. Superior Court of Los Angeles, where the court “cited the harm to misclassified workers who lose significant workplace protections, the unfairness to employers who must compete with companies that misclassify, and the loss to the state of needed revenue from companies that use misclassification to avoid obligations such as payment of payroll taxes, payment of premiums for workers’ compensation, Social Security, unemployment, and disability insurance.”

Specifically, the law amends the California Labor Code, the California Unemployment Insurance Code, and for the Industrial Welfare Commission’s wage orders (IWC wage orders), a person providing labor or services for remuneration will be considered an employee rather than an independent contractor unless the hiring entity demonstrates that all of the following conditions are satisfied (ABC Test):

  1. The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
  2. The person performs work that is outside the usual course of the hiring entity’s business; and
  3. 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 clarifies:

  • Any exceptions to the terms “employee,” “employer,” “employ,” or “independent contractor,” and any extensions of employer status or liability, that are expressly made by a provision of the Labor Code, the Unemployment Insurance Code, or in an applicable IWC wage order, including, but not limited to, the definition of “employee” in subdivision 2(E) of Wage Order No. 2, remain in effect.
  • That it does not apply to the following occupations, and instead, the determination of employee or independent contractor status for individuals in those occupations is governed by Borello (a multi-factor test):
    • A person or organization who is licensed by the California Department of Insurance pursuant to Chapter 5 (commencing with Section 1621 – insurance agents), Chapter 6 (commencing with Section 1760 – surplus line brokers), or Chapter 8 (commencing with Section 1831 – life and disability insurance analysts) of Part 2 of Division 1 of the Insurance Code.
    • A licensed physician and surgeon, dentist, podiatrist, psychologist, or veterinarian performing professional or medical services provided to or by a health care entity.
    • A licensed, practicing lawyer, architect, engineer, private investigator, or accountant.
    • A securities broker-dealer or investment adviser or their agents and representatives that are registered with the Securities and Exchange Commission or the Financial Industry Regulatory Authority or licensed by the State of California.
    • A direct sales salesperson.
    • A commercial fisherman working on an American vessel. 
  • That the holding in Dynamex does not apply to a contract for professional services, defined within the law, and instead the determination of whether the individual is an employee or independent contractor is governed by Borello if the hiring entity demonstrates that all of the following factors are satisfied:
    • The individual maintains a business location, which may include the individual’s residence, that is separate from the hiring entity. However, individual may choose to perform services at the location of the hiring entity.
    • If work is performed more than six months after the effective date of the law, the individual has a business license, in addition to any required professional licenses or permits for the individual to practice in their profession.
    • The individual has the ability to set or negotiate their own rates for the services performed.
    • Outside of project completion dates and reasonable business hours, the individual has the ability to set their own hours.
    • The individual is customarily engaged in the same type of work performed under contract with another hiring entity or holds themselves out to other potential customers as available to perform the same type of work.
    • The individual customarily and regularly exercises discretion and independent judgment in the performance of the services.

Moreover, the law and Dynamex do not apply to:

  • Specific occupations subject to the state’s Business and Professions Code (real estate licensee and repossession agency);
  • A bona fide business-to-business contracting relationship under specific conditions;
  • The relationship between a contractor and an individual performing work pursuant to a subcontract in the construction industry;
  • The relationship between a referral agency and a service provider under specific conditions; and
  • The relationship between a motor club with certificate of authority and an individual performing services pursuant to a contract between the motor club and a third party to provide motor club services utilizing the employees and vehicles of the third party.

The law also states that an action for injunctive relief to prevent the continued misclassification of employees as independent contractors may be prosecuted against the employer in court, in addition to any other remedies available.

The law is effective January 1, 2020.

Read the governor’s signing message and CA A.B. 5

Law Alert 2: Sexual Harassment Training Requirement Deadline Extended.

This legislation extends the deadline from January 2020 to January 2021 due to the outcry from the business community. Employers now have an additional 12 months to provide their Supervisors and Employees with approved sexual harassment training.  

On August 30, 2019, California Governor Gavin Newsom signed legislation (S.B. 778) amending the California Fair Employment and Housing Act. Employers with five or more employees are required by January 1, 2021, to provide:

  • At least two hours of classroom or other effective interactive training and education regarding sexual harassment to all supervisory employees in California; and
  • At least one hour of classroom or other effective interactive training and education regarding sexual harassment to all nonsupervisory employees in California.

Thereafter, each covered employer must provide sexual harassment training and education to each employee in California once every two years. New nonsupervisory employees must be trained within six months of hire and new supervisory employees must be trained within six months of their assumption of a supervisory position.

The law also clarifies that an employer who has provided this training and education to an employee in 2019 is not required to provide refresher training and education again until two years thereafter. Additionally, beginning January 1, 2020, seasonal, temporary, or other employees that are hired to work for less than six months, must be provided sexual harassment training by their employer within 30 calendar days after hire date, or 100 hours worked — whichever is earlier.

The law took effect August 30, 2019.

Read CA S.B. 778

tryHRIS offers California Approved Sexual Harassment Training for Supervisors. $95 per course for Unlimited Supervisors. Completion Certificates included.

Law Alert 1: Pregnancy Leave Brochure Updated

In August 2019, the California Department of Fair Employment and Housing updated its pregnancy leave brochure to include information about rights and obligations under the state’s New Parent Leave Act.

View New Brochure.

If you have questions regarding these or other law alerts, our advisors can help your company navigate every new change, requirement, legislation, law and regulation. Give us a call to see how we can help streamline HR for professionals or office managers.

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California Law Alerts: August 2019

California Occupational Safety and Health Board adopted an emergency regulation for California Employers that took effect July 29, 2019.

Law Training for Employees and Supervisors

tryHRIS’s membership includes the Regulatory Compliance Database, which alerts you the moment Federal & State laws, regulations or requirements change, keeping you informed.

Download a PDF of this Law Alert for record.

California August Law Alert: Outdoor Workers and Protection from Wildfire Smoke

This emergency legislation adds protections for outdoor workers exposed to wildfire smoke. 

On July 18, 2019, the California Occupational Safety and Health Board adopted an emergency regulation to add protections for outdoor workers exposed to wildfire smoke. Specifically, the regulation requires that employers check the Air Quality Index (AQI) and forecasts, before each shift and periodically thereafter, for workplaces where:

  • The current AQI for PM2.5 is 151 or greater, regardless of the AQI for other pollutants; and
  • The employer should reasonably anticipate that employees may be exposed to wildfire smoke.

The regulation also contains mandatory employer-provided training and instruction requirements for employees to protect against wildfire smoke, along with employee rights. For example, employers must:

  • Allow employees who show signs of injury or illness due to wildfire smoke exposure to seek medical treatment and not punish affected employees for seeking such treatment.
  • Have effective provisions made in advance for prompt medical treatment of employees in the event of serious injury or illness caused by wildfire smoke exposure.

The regulations took effect on July 29, 2019 and expire on January 18, 2020.

Read the regulation.

If you have questions regarding these law alerts or other HR related issues, our advisors can help your company navigate every new change, requirement, legislation, law and regulation. Give us a call to see how we can help streamline HR for professionals or office managers.

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Additional California Employment Law Alerts

California Law Alerts: July 2019

July brought more than a heatwave this year. A wave of compliance law changes washed over California. Although three of the four law changes effect Employer compliance, employers who leverage the fourth law change (an individual mandate) may stand out in today’s hot job market.

Effective methods of Employee training

tryHRIS’s membership includes the Regulatory Compliance Database, which alerts you the moment Federal & State laws, regulations or requirements change, keeping you informed.

Law Alert 1: Paid Family Leave Benefits Expanded

This legislation expands Paid Leave Benefits by an additional two weeks for the care of a family member or to bond with a child.

On June 27, 2019, California Governor Gavin Newsom signed legislation (S.B. 83) expanding the state’s Paid Family Leave (PFL) benefits. Currently, the PFL provides wage replacement benefits for up to six weeks to workers who take time off work to care for a seriously ill family member or to bond with a minor child within one year of birth or placement. Beginning July 1, 2020, these wage replacement benefits increase to up to eight weeks for workers who take time off work to care for a seriously ill family member or to bond with a minor child within one year of birth or placement.

The law took effect June 27, 2019.

 Read CA S.B. 83

**Straight from our Compliance Database** 

Make tracking employee leave easier with the Formulated Leave Tracking Sheet. 

Law Alert 2: CROWN Act

On July 3, 2019, California Governor Gavin Newsom signed legislation (S.B. 188) modifying the California Fair Employment and Housing Act (FEHA) by enacting the Creating a Respectful and Open Workplace for Natural Hair Act (CROWN Act).

Protective hairstyles are hairstyles such as braids, locks, and twists.

The act clarifies that workplace dress codes and grooming policies that prohibit natural hair, including afros, braids, twists, and locks, have a disparate impact on Black individuals as these policies are more likely to deter Black applicants and burden or punish Black employees than any other group.

The law is effective January 1, 2020.

Law Alert 3: FEHA Regulations

These regulations further define interpretations of the Fair Employment and Housing Act.

On June 24, 2019, the California Department of Fair Employment and Housing adopted new regulations interpreting the Fair Employment and Housing Act (FEHA). Among other things, the regulations:

  • Clarify the definition of employer.
  • Define “regularly employing” and “regular basis.”
  • Explain how to count employees for purposes of coverage.
  • Add obligations for employers to post a transgender rights poster.
  • Add harassment training requirements regarding gender identity, gender expression, and sexual orientation.

The regulations are effective October 1, 2019.

Law Alert 4: Minimum Essential Coverage

Individual Mandate

This individual mandate reintroduces the penalty for any individual without health insurance coverage in California beginning on January 1, 2020. For those seeking employment, health insurance benefits will surely come up during each interview. Leveraging benefits you offer may help you to capture those purple squirrels.

This mandate requires California residents to ensure that they, along with their spouses or dependents, are enrolled in and maintain minimum essential coverage for each month beginning on and after January 1, 2020. The California Health Benefit Exchange (Exchange), The law also imposes an individual shared responsibility penalty for the failure to maintain minimum essential coverage, to be determined and collected by the California Franchise Tax Board (FTB), in collaboration with the Exchange.

Applicable entities that provide minimum essential coverage to an individual must also file specified returns with the FTB regarding the coverage. An applicable entity is:

  1. A carrier licensed or otherwise authorized to offer health coverage with respect to minimum essential coverage, including coverage in a catastrophic plan, that is not described in bullet three or four.
  2. An employer or other sponsor of an employment-based health plan with respect to employment-based minimum essential coverage.
  3. The State Department of Health Care Services and county welfare departments with respect to coverage under a state program.
  4. The Exchange with respect to individual health plans, except catastrophic plans, on the Exchange.

Of note, Covered California defines minimum essential coverage as “[t]he type of health insurance coverage that an individual must have in order to comply with the individual mandate set forth by the federal Affordable Care Act (ACA)”

The law took effect on June 27, 2019.

Read CA S.B. 78 and about Covered California

If these law alerts have you a bit overwhelmed and you find you have more questions than answers, our advisors can help your company navigate every new change, requirement, legislation, law and regulation. Give us a call to see how we can help streamline HR for professionals or office managers.

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