Get Ready for California Legislative Updates in 2020!

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January 1, 2020

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The California Legislature tends to pass the hard-hitting employment law changes at the end of its session. Here are key updates employers should be aware of.

  • AB 9 | DFEH Claims Extended. Extends the statute of limitations to three years for all claims filed with the Department of Fair Employment and Housing (DFEH), like claims for sexual harassment, harassment, discrimination, and retaliation. Extending the time to file a claim highlights the need for employers to document all claims, investigations, and discipline.
  • AB 51 | Ban on Mandatory Arbitration. Employers will soon no longer be able to require employees to execute arbitration agreements as a condition of employment. However, it is unclear if agreements subject to the Federal Arbitration Act are exempt. The bill applies to contracts entered into, modified, or extended on or after January 1, 2020. Stay tuned … legal challenges are on the horizon.
  • AB 749 | No Rehire Agreements. Employers cannot enter into settlement agreements whereby an employee, who has made a claim against the employer, agrees they cannot obtain future employment from the employer. The rule does not apply where the employer made a good faith determination that the employee engaged in sexual harassment or sexual assault.
  • SB 142 | Lactation Accommodations. Employer obligations for lactation accommodations are expanded to provide nursing individuals with break time “each time such employee has need to express breast milk.” There are also increased requirements for an approved lactation room. Employers must also provide employees with a written lactation accommodation policy.
  • SB 188 | Hairstyle Protections. SB 188 amended the California Fair Employment and Housing Act (FEHA) to include protections for hairstyles, subject to limited exceptions.
  • SB 707 | Arbitration Fees. If an employer with an arbitration agreement fails to pay the required fees to initiate an arbitration proceeding within 30 days after the due date, it is in material breach of the arbitration agreement, is in default of the arbitration, and waives its right to compel arbitration.

Action Items

  1. Review claims procedures and documentation processes.
  2. Have managers trained on managing employee claims.
  3. Have arbitration agreements reviewed by legal counsel.
  4. Review no hire agreements with legal counsel.
  5. Ensure that appropriate lactation accommodations are or can be made available; otherwise, review with legal counsel to determine whether an undue hardship exemption may apply.
  6. Prepare and distribute lactation accommodation policy.
  7. Have dress code and discrimination policies updated, and hiring practices reviewed.
  8. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2019 ManagEase

California: IMPORTANT Changes for Independent Contractors

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January 1, 2020

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AB 5 codifies the already existing Dyanamex “ABC test” for independent contractors. A significant difference between now and next year is that there will be exceptions for certain jobs and relationships that do not currently exist. Those exceptions will revert back to the Borello multi-factor test for determining independent contractor status. Another key difference from Dynamex is that AB 5 will apply for purposes of the Labor Code, Wage Orders, and Unemployment Insurance Code. Starting July 1, 2020, it will apply for purposes of workers’ compensation issues.

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U.S. DOL Opinion Letters: Delaying FMLA Leave, Clarifying FLSA Exceptions, and Applying HSAs to Garnishments

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September 10, 2019

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The U.S. Department of Labor (DOL) recently released three opinion letters addressing the Fair Labor Standards Act, Family and Medical Leave Act, and the Consumer Credit Protection Act.  These opinion letters are issued by the Wage and Hour Division and interpret how laws can be applied in specific situations posed by the letter’s requester, and serve as helpful guidance for employers.

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Third Circuit: Third Party Bonuses May Be Factored into the Regular Rate

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August 20, 2019

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In Department of Labor v. Bristol Excavating, Inc., the Third Circuit Court of Appeal stated that third-party bonuses may be required to be factored in the regular hourly rate for purposes of calculating overtime. The court said that the determinative factor is the agreement of “remuneration for employment” between the employer and employee, which must be reviewed on a case-by-case basis.

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Fifth Circuit: Clarity on Highly Compensated Employee Exception to FLSA Overtime Requirements

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August 21, 2019

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In Faludi v. U.S. Shale Solutions, the Fifth Circuit Court of Appeal confirmed that an employee’s guaranteed day rate satisfied the Fair Labor Standard Act’s (FLSA) highly compensated employee (HCE) exemption, even though the employee was only paid twice monthly.  The HCE threshold—which currently requires the employee to be paid more than $100,000 per year and at least $455 a week on a salary or fee basis—only requires that the employee “regularly receive[s]” the predetermined amount on a weekly or less frequent basis.  There is no requirement that the cash amount be calculated on weekly or less basis.

In addition, the Fifth Circuit also stated that the amount the HCE is paid is not required to bear a “reasonable relationship” to the amount actually earned. Employers should take care when setting highly compensated exempt employee pay to ensure compliance with FLSA requirements.

Action Items

  1. Have highly compensated exempt employee pay reviewed for consistency with this ruling.
  2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2019 ManagEase

California: New Bill Provides Employers Relief from California Consumer Privacy Act Requirements

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Employers with CA Employees; See Below

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January 1, 2020

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Governor Newsom signed AB 25 into law, limiting the scope of the California Consumer Privacy Act (CCPA) as it applies to employers.  The bill imposes the limitations from the date the CCPA goes into effect on January 1, 2020, although such limitations are not permanent and will automatically terminate the following year, barring any legislative action.

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California: FEHA Applies to More Employers

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Employers with 5 or more Employees

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October 1, 2019

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The Department of Fair Employment and Housing (DFEH) changed the definition of “Employer” for purposes of the Fair Employment and Housing Act (FEHA). FEHA still applies to employers with five or more employees. However, the way in which those five employees is calculated has changed. Previously, employers must have had five employees “each working day in any twenty consecutive calendar weeks in the current calendar year or preceding calendar year.”

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California: Changing Definition of “Serious Injury” Expands Employer Responsibilities

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January 1, 2020

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AB 1805 revises the definition of a “serious” injury under the California Labor Code, resulting in expanded reporting responsibilities for employers.  Currently, employers are required to report to Cal/OSHA any serious injury or death in the workplace as soon as possible, but no later than eight hours after the employer became aware of the death or injury.  The timing requirements remain the same, but the revised definition of “serious” injury means employers will potentially need to report more injuries.

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Illinois: Complying with the Illinois AI Video Interview Act

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August 9, 2019

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A few months ago, the Illinois legislature unanimously passed HB 2557, the Artificial Intelligence Video Interview Act (the Act).  This bill addresses employer use of AI in the recruiting/hiring process, namely, AI used to analyze applicants in video interviews.  The bill imposes a number of responsibilities on employers to provide notification, information, and obtain authorization from applicants who will be subject to AI analysis.  The Act applies to employers who are seeking to fill a position in Illinois.

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Minnesota: Split-Day Overtime is Over

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September 18, 2019

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In In re Minnesota Living Assistance, Inc., the Minnesota Supreme Court stated that employers cannot use split-day overtime to comply with state overtime rules, where employees have not yet worked the overtime hours meant to comply with state overtime rules. There, the employer paid employees one rate for the first 5.5 hours worked in a 16-hour day, and 1.5 times that rate for the remaining 10.5 hours. The Court stated that the Minnesota Fair Labor Standards Act requires employers to pay employees overtime for all hours worked in excess of 48 in a week, regardless of whether the employee received time-and-a-half compensation during the first 48 hours worked.

Additionally, time-and-a-half wages paid during the first 48 hours worked in a workweek cannot be excluded when calculating an employee’s regular rate of pay, because those hours were not paid for overtime work (which are excluded when calculating the regular rate of pay). Because federal Fair Labor Standards Act overtime rules vary compared to the state rules, employers must take care to comply with both.

Action Items

  1. Review split-day overtime policies and procedures to ensure compliance with state wage and hour rules.
  2. Have payroll processes updated.
  3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2019 ManagEase