Key California Employment Laws for 2021

If you are a private-sector company with employees in California, please take note of the following new laws which go into effect as of January 1, 2021 (or earlier, as indicated below). Businesses impacted by these changes should review and update existing policies and procedures, including employee handbooks and records retention policies, independent contractor agreements, and arbitration agreements.

Unpaid Family & Medical Leave (SB 1383)
In an earlier blog post, we reviewed this new legislation which expands the California Family Rights Act (CFRA) to cover employers with 5 or more employees. Under CFRA, eligible employees are entitled to up to 12 weeks of unpaid, job-protected leave every twelve months. This leave can be taken for a serious illness of the employee, the employee’s family member, or for baby-bonding. Additionally, the definition of an employee’s family member has been expanded to include grandparents, grandchildren, siblings, and in-laws. Employers who were not previously covered by CFRA must adopt a CFRA leave policy beginning January 1, 2021.

COVID Exposure Reporting (AB 685)
This new law requires employers to provide written notice within one business day to employees when they learn that employees may have been exposed to COVID-19. Specifically, this notice must be given to employees who were at the same worksite as the infected person, to the employees’ union representative (if any), and to the employers of any subcontracted employees who were at the same location. Employers must also provide information about any COVID-19-related benefits employees may be entitled to, such as workers’ compensation benefits, paid sick leave, and time off. Outbreaks of COVID-19 must be reported to the local public health department, which in turn, reports this information to the State public health department. Given the complexity of this law, employers are encouraged to plan ahead to ensure compliance with this notice requirement which begins on January 1, 2021.

Workers’ Compensation/COVID-19 (SB 1159)
Also reviewed in an earlier blog post, this law creates a “rebuttable presumption” that an employee who suffers illness or death from COVID-19 between July 6, 2020 and January 1, 2023 is entitled to workers’ compensation benefits. Employers are now required to notify their workers’ compensation insurer within three business days if an employee tests positive for COVID-19. A penalty of up to $10,000 may be imposed by the Labor Commissioner if an employer fails to timely report an “outbreak” in the workplace, defined as either of the following occurring within fourteen days: (a) four or more employees test positive at a worksite of 100 or fewer employees, or (b) four percent or more test positive at a worksite with more than 100 employees. This law is effective as of September 17, 2020.  

Independent Contractors (AB 2257):
This law makes significant changes to AB 5, California’s independent contractor law passed in 2019. The general “ABC test” still exists, however, many exemptions have been added allowing certain workers to keep their status as independent contractors, including sole proprietors engaged in business-to-business relationships, single-event engagements, professional services, musicians and other performers. This law went into effect on September 4, 2020.

Leave for Crime Victims (AB 2992):
This legislation expands an existing law which provides unpaid leave for victims of domestic violence, sexual assault, or stalking by widening its scope to include victims of other crimes, including crimes that cause physical or mental injury plus a threat of physical violence, as well as any employee whose family member dies as the direct result of such crimes.

Employee Designation of Kin Care Leave (AB 2017):
CA Labor Code Section 233 allows employees to use up to half of their annual paid sick leave to care for a family member who is ill. Previously, employers could determine whether sick leave use was for kin care purposes or not. Under the new law, employees now have the sole right to designate the reason for which available paid sick leave is used.

Pay Data Reporting (SB 973):
This law requires employers of 100+ employees to provide an annual pay data report to the California Department of Fair Employment and Housing by March 31 of each year, similar to the federal EEO-1 report.

Minimum Wage/Exempt Salary Reminders:
The state minimum wage will increase to $14 per hour for large employers (26+ employees) and $13 per hour for smaller employers (≤ 25 employees). This increase also raises the minimum salary a California employee must earn to qualify as exempt from overtime to at least $58,240 (large employers) and $54,080 (small employers). Other criteria must also be met to qualify for exempt status under applicable law. It is important to note that many localities have a higher minimum wage requirement than what is mandated under state law.

Harassment Prevention Training Deadline Approaching:
Finally, all California employers with 5 or more employees are reminded to complete sexual harassment prevention training for their employees by January 1, 2021, and at least every two years thereafter. Free online training is available from the California Department of Fair Employment and Housing in English, Spanish, Korean, Chinese, Vietnamese and Tagalog.

If you would like further information about these or other laws affecting California employers, or assistance with your compliance efforts, please contact Christy Kotowski at ckotowski@outsidegc.com or Michael Brown at mbrown@outsidegc.com.

Christy Kotowski joined Outside GC’s California team as Senior Counsel in 2019. Based in the San Francisco Bay Area, Christy handles a broad range of complex workplace issues at the federal, state and local levels. Previously, she worked as in-house employment counsel for several large companies, and started her legal career in the Silicon Valley office of Morrison & Foerster, one of California’s oldest and largest law firms. She can be reached at ckotowski@outsidegc.com or 510-748-0930.

Michael Brown is a Partner with our California-based team, bringing over three decades of senior in-house counsel experience in the area of business, employment, healthcare, compliance and privacy. Michael has served as in-house counsel to healthcare giants such as Tenet HealthSystems (hospitals), Apria Healthcare (home medical equipment, respiratory and infusion therapy); Clarient, a GE Healthcare company (clinical laboratories); and Edwards Lifesciences (medical device), where he also was a member of the AdvaMed Diagnostic and Compliance Committee that revised the AdvaMed Code of Conduct for the medical device industry.