California Legal Update 2021

by Jaimie Graczyk, Esq.

California,  California Legal Compliance,  Hot Topics,  Legislation

It’s never a boring legislative year in California! Please see below for a sample of some significant employment law changes taking place in California starting on January 1, 2021.

Please note that the list below is not exhaustive of all the upcoming changes but highlights the immediate changes that will occur in January 2021 and the changes that we anticipate will impact our members most.

Minimum Wage

Employers Council maintains a listing of current and future minimum wage rates as they apply to various California localities for members. Please refer to this listing for specific information on the many different minimum wage rates in effect in California for 2021.

New Notice and Reporting Obligations for COVID-19 Workplace Exposure

AB 685 places significant obligations on employers to provide employees certain notice of a potential COVID-19 workplace exposure. The notice must be in writing and be provided within one business day of potential exposure. The notice must contain specific information, including certain employer-related benefits available to employees as it relates to COVID-19 and information as to the company’s cleaning protocols and safety plan to eliminate further exposures. The new law also requires an employer to notify public health officials of a COVID-19 outbreak.

Diversity on Corporate Boards

AB 979 requires a publicly-held corporation whose principal executive office is in California to have at least one director from an underrepresented community no later than the close of the 2021 calendar year. The number of diverse directors increases for the 2022 calendar year based on the board’s total number of directors.

Pay Data Reporting

The U.S. Equal Employment Opportunity Commission (EEOC) delayed the 2020 collection of EEO-1 Component 1 data to March 2021, when California’s new pay data report must also be submitted by California employers. SB 973 requires California employers with 100 or more employees to submit to the Department of Fair Employment and Housing (DFEH) a pay data report by no later than March 31, 2021, and annually thereafter. Under the new law, pay data is based on race, ethnicity, and sex in 10 broadly-defined job categories and 11 pay bands used by the United States Bureau of Labor Statistics in its Occupational Employee Survey.

California Consumer Privacy Act

Last year, AB 25 exempted employers until January 1, 2021, from collecting certain information from applicants and employees under the 2018 California Consumer Privacy Act. On September 29, 2020, Gov. Gavin Newsom signed AB 1281, which further extends the exemption for employers to collect certain information from applicants and employees until January 1, 2022. However, California voters passed Proposition 24, a new privacy law that amends the CCPA and provides greater protection to consumers, extending this exemption until January 1, 2023.

California Family Rights Act

On January 1, 2021, California employers with five (5) or more employees will be subject to the California Family Rights Act (CFRA). In addition, employers previously subject to CFRA (those with 50 or more employees) will see new obligations under the Act. Under SB 1383, some of the key amendments that will take effect on January 1 include:

  • expanded definition of family member
  • removal of the sharing of 12 weeks of bonding time for parents working for the same employer
  • removal of the “key employee” reinstatement exemption and
  • addition of qualifying exigency military leave

Settlement Agreements

Last year, Gov. Newsom signed into law AB 749, which prohibited employers from requiring an aggrieved party to sign a no-rehire agreement to settle an employment dispute unless the employee engaged in sexual harassment or assault. As a result of AB 2143, effective January 1, 2021, such no-rehire agreements will require the employer to document the determination of sexual harassment or assault. In addition, AB 2143 amends the exception to include an employee engaged in any criminal act, not just sexual harassment or assault.

Time Period for Filing DLSE Complaints

AB 1947 amends Section 98.7 of the Labor Code to extend the deadline for filing complaints based on an individual’s belief that they were discharged or otherwise discriminated against in violation of any law enforced by the Labor Commissioner from six months to one year after a violation.

Successor Liability for Unpaid Wages

AB 3075 makes a successor to any judgment debtor liable for any wages, damages, and penalties owed to any of the judgment debtor’s former workforce pursuant to a final judgment.

About the author
Jaimie Graczyk, Esq.

Jaimie Graczyk is the managing attorney of California Legal Services at Employers Council. She started as a staff attorney in the Employers Council Arizona Regional Office in December 2016 advising and representing Arizona employers on a wide range of employment law matters. She is licensed to practice law in Arizona and California. She regularly advises California employers on California employment law compliance and best practices, from hiring to firing and everything in between. Jaimie received her law degree from the Sandra Day O’Connor College of Law at Arizona State University and her bachelor’s degree in criminal justice from Michigan State University.