By Alison Adelman
Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
The past year brought unprecedented change to all aspects of life. To no one’s surprise, the California legislature passed many new laws to address the vast impact of Covid-19 on both employees and employers. But, there were also significant legal changes unrelated to the coronavirus that may have slipped under the radar. Below is a brief summary of just a selection of important non-pandemic employment law changes you need to know.
Expanded CFRA Family and Medical Leave
One of the more significant legislative changes this year relates to the California Family Rights Act (CFRA). The CFRA previously applied just to employers with 50 or more employees, but it now applies to employers with at least five employees. The new CFRA also eliminates a geographical requirement for employee eligibility. A further amendment broadened the allowable reasons for taking leave; the CFRA now permits eligible employees to take protected leave to care for a child of any age, child of a registered domestic partner, sibling, grandparent, and grandchild (in addition to a parent or spouse).
An additional change to CFRA is that employers no longer have the right to deny reinstatement to a “key employee” after leave. These changes (which are only some of the new aspects) significantly expand employee eligibility for protected leave under state law.
Pay Data Reporting Changes
Private California employers with 100 or more employees (with at least one employee in this state) must now report certain pay and other data to the Department of Fair Employment and Housing. These employers have to report the number of employees by race, ethnicity, and sex in ten job categories, as well as the number of employees by race, ethnicity, and sex whose annual earnings fall within certain pay bands. Additional information may also have to be reported. If an employer has multiple locations, it must submit both a consolidated report and one for each establishment. The Legislature enacted this law to promote pay equity in the face of significant pay discrimination that continues to exist.
Labor Commissioner Complaint Deadline
Prior to January 1, 2021, any person who believed they were discharged or otherwise discriminated against in violation of any law under the jurisdiction of the Labor Commissioner had six months from the alleged violation to file a complaint with the California Division of Labor Standards Enforcement (DLSE). But effective January 1, 2021, these individuals now have twice as much time–one year–to file a complaint. This significant extension of time to file could lead to an increase in filings with the DLSE.
Attorneys’ Fees in Whistleblower Retaliation Cases
The same bill that extended the timeframe to file a DLSE complaint also amended Labor Code section 1102.5 to allow recovery of attorneys’ fees in whistleblower retaliation cases. This makes the statute consistent with most other employment laws that allow for attorneys’ fees. This will likely result in more allegations of whistleblower retaliation.
Board of Director Diversity
While a previous bill enacted requirements for female representation on boards of directors, a new law expanded board diversity rules. By the end of 2021, publicly held corporations whose principal executive offices are in California must have a minimum of one director who is from an underrepresented community. A “director from an underrepresented community” is defined as an individual who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender. At the end of the year 2022, additional directors from underrepresented communicates are required depending on the size of the board.
Restrictions on No-Rehire Clauses
The prior version of Code of Civil Procedure section 1002.5 almost entirely prohibited no-rehire provisions in settlement agreements between an employer and employee who filed a claim against it. The law included an exception from prohibition if the employer made a good faith determination that the employee engaged in sexual harassment or sexual assault. The new code section requires the employee to have filed his or her claim against the employer in good faith. It also adds a requirement that in order for the exception to apply, the employer must have documented the basis for the sexual assault or sexual harassment before the employee filed the claim. The exception from prohibition now also includes employees who engaged in criminal conduct.
These are just a few of the recent and important changes to California labor and employment law. Please feel free to reach out to the SDCBA Labor and Employment Law Section if you would like additional details or to discuss the legislative changes.