New and Amended California Laws of Interest to Employers in 2021

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The year 2020 did not disappoint in the adoption of new and amended laws expanding obligations of employers to their employees and the rights and remedies of workers for violation of those obligations.  Companies with employees in California should take heed of the following:  

AB 2143, effective January 1, 2021, amends section 1002.5 of the Code of Civil Procedure, which prohibits inclusion of a “no re-hire” provision in a settlement agreement between an employer and an employee who has filed a claim against the employer.  Under the amendment, such a provision may be included in such a settlement agreement where (a) the claim was not filed in good faith, or (b) “the employer has made and documented a good faith determination, before” the employee filed the claim that the employee engaged in sexual harassment, sexual assault, or any criminal conduct.

AB 1838, effective January 1, 2021, expands the scope of the California Family Rights Act (CFRA) in the following ways:

  1. The CFRA, which required an employer of at least 50 employees within 75 miles of the worksite of an employee who requests leave, to provide unpaid leave to the employee to care for themselves or for other specified family members or for bonding with a new child, now applies to employers of at least five employees. 
  2. The CFRA’s scope is expanded to include care for grandparents, grandchildren and siblings, and an employer that employs both parents of a child must now grant leave to both parents to care for that child’s health condition, birth or placement.  Because the new categories of family members are not covered by the federal Family Medical Leave Act (FMLA), any leave that an employee takes to care for such a family member does not run concurrently under the FMLA. 
  3. An employer must now grant leave to an employee who requests it due to a qualifying exigency related to the covered active duty or call to covered active duty of an employee’s spouse, domestic partner, child, or parent in the Armed Forces. 

In AB 2017, effective January 1, 2021, the California Legislature amended section 233 of the Labor Code, California’s so-called Kin Care Law, to provide that the choice of whether to use accrued sick leave for purposes protected by the Kin Care Law is within the sole discretion of the employee.  Therefore, the employer must ask the employee how to designate use of accrued sick leave; it cannot on its own designate the use as for the purpose of Kin Care. 

AB 1947, effective January 1, 2021, amends section 98.7 of the Labor Code to lengthen from six months to one year the time within which an employee must file a complaint with the Labor Commissioner for retaliation against the employee in violation of the laws the Labor Commissioner enforces.   In addition, AB 1947 amends section 1102.5 of the Labor Code to authorize recovery of attorney’s fees by an employee who files a claim for retaliation for engaging in the whistleblower activities protected by that section. 

As it impacts employers, Prop. 24, adopted by California voters in November 2020, amends the California Consumer Privacy Act to extend to January 1, 2023, the exemption from certain obligations under the CCPA imposed on covered businesses[1] that collect data from job applicants, employees and independent contractors in connection with their role or potential role in the business.  The exemption does not include the required notice to applicants, employees or independent contractors before data is collected or protections related to data breaches. 

SB 973 adds section 12999 to the Government Code to require employers with 100 or more employees that are required under federal law to file an annual EEO-1 report to also file annually with the California Department of Fair Employment and Housing a report containing payroll data, which includes information about employees’ race, ethnicity and gender in specified job categories.  The initial report is due March 31, 2021. 

AB 3075, effective January 1, 2021, amends the Corporations Code to require that entities that do business in California disclose in their Statement of Information filed with the California Secretary of State’s office, “a statement indicating whether any” officer, director, member or manager, as applicable to the type of business entity involved, “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 of any wage order or provision of the Labor Code.” 

AB 2257 further modified the exemptions to the “ABC Test” for classification of workers as employees or independent contractors as established in Dynamex Operations W. Inc. v. Superior Court (2018) 4 Cal.5th 903, and codified by AB5.  The classification of workers exempted from the ABC test is governed by the older case of S. G. Borello & Sons, Inc. v. Dept. of Industrial Relations (1989) 48 Cal.3d 341, which involves a more multi-pronged and less stringent approach to classifying workers as independent contractors.  The legislation, which took effect in September 2020, replaced Labor Code section 2750.3 with sections 2775 to 2787.  The changed exemptions largely impact occupations in the music industry, musicians performing in certain circumstances, and other workers in the artistic realm. 

The minimum wage under California law increased to $14 on January 1, 2021 for employers with more than 25 employees, and to $13 for employers of 25 or fewer employees.  Increases under local ordinances will occur mid-year in those jurisdictions with their own minimum wage ordinances.  The minimum annual salary threshold for exempt employees increased in accordance with the increased state minimum wage. 

AB 685, effective January 1, 2021, requires an employer that is notified of potential exposure to COVID-19 to give notice within one business day to all employees, the employers of subcontracted employees, and union representatives of employees who were on the premises at the same worksite when the potential exposure occurred that they may have been exposed to COVID-19.  An employer is also required to provide those employees with certain information regarding COVID-19-related benefits and options. Additional notice requirements include notice to all employees, the employers of subcontracted employees, and representatives of the disinfection and safety plan that the employer plans to implement and complete in accordance with CDC requirements.  And, except for health facilities as defined in the law, notice to local health authorities within 48 hours is required where the number of cases qualify as a COVID-19 outbreak as defined in the law. 


[1]           A covered business is one that does business in California and (a) has annual gross revenue in excess of $25 million, (b) alone or in combination, annually buys, receives for the business’s commercial purposes, sells, or shares for commercial purposes, alone or in combination, the personal information of at least 50,000 consumers, households, or devices; or (c) derives at least 50 percent of its annual revenues from selling consumers’ personal information.

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