CA Episode 192: Preview of 2024 California Employment Law Legislative Proposals

Welcome to the Workplace, a podcast by Cal Chamber. I'm Matthew Roberts, associate general counsel for labor and Employment with the California Chamber of Commerce. Hello, listeners. Well, we blinked and suddenly are rapidly approaching spring in that dreaded daylight savings time where we lose an hour. This also means that the legislature at the state Capitol here in California has already been busy the last couple of months introducing bills and revealing some of the top legislative priorities of the year. As usual, there are several employment law bills that, if enacted, will change the way some or all of us do business. So although we have some months to go in this legislative session, it is never too early to begin keeping an eye on the hot topics to date. Joining us today for this discussion are two guests. First, we welcome back Ashley Hoffman, Cal Chambers employment law policy advocate. Thanks for joining me today, Ashley.

Thanks, Matt.

Also joining us today is Chris McKayley, an attorney and lobbyist with his own Firm, Snodgrass and McKayley in Sacrament. Chris regularly works with the Cal Chamber policy advocates, including Ashley, and also serves as an adjunct professor at my alma mater, McGeorge School of Law. Thanks for joining us today as well, Chris.

Oh, thanks so much for having me back. Appreciate it.

Awesome. Well, I am very glad to have you both back. As always, you two are some of my favorite experts on the legislative session, especially as it comes to employment and labor bills.

Wait, Matt. Yes, just some of your favorites.

I may have other people that I talk to as well. Chris. You're not the only ones, but you guys are absolutely on the top of that favorites list, of course. Well, Chris, Ashley, we have a jam packed show today, so let's dive right in. Ashley, starting with you, there was a bill we discussed early last year involving an effort to virtually eliminate the use of criminal history background checks for employers who who are otherwise not required by law to perform those kinds of checks. That bill did not advance, but it appears we have a new effort in a similar vein with Bill SB 1345 introduced by Senator Smallwood Cuevas. Ashley, in its current form, how might this bill impact employment background checks?

Matt, as you indicated, last year we saw SB809, which would have severely limited an employer's ability to conduct a background check. It was very clear that a lot of the legislature had an issue with that, and so that bill did not make it very far. This year's bill is SB 1345 by the same author, Senator Smallwood Cuevas. And even though this year's bill, instead of redoing the Fair Chance act, is amending the Fair Employment Housing act, from our point of view, the bill essentially does the same thing. It says that an employer could not require an applicant, which is either a current employee or a job applicant, from basically, you know, allowing for a background check to be pulled, unless they could show a, quote, business necessity that is extremely narrowly defined. So really, you could only ask for that if you are doing so to comply with current law or if you want to protect against incidents of workplace harassment, violence or theft when you have clear and convincing evidence that taking an action based on that is necessary to. To provide that protection. And there is, quote, no reasonable alternative. So really, the narrowness of that language practically would mean there's. There's probably very few who actually could pull a background check. And even if you could pull one, right. That same business necessity standard does apply for utilizing that, say, for not hiring someone or not for giving someone a promotion.

Okay. And I found this part interesting because, as you know, we already have what's known as the Fair Chance act here in California, where employers must go through specific steps after acquiring a criminal history check, including, in part, considering how the job duties and the criminal history would impact each other. So I don't think we can overstate, really, how much more narrow this is, because employers do already have to do that. But what you're telling me is that employers just may not even be able to get to the stage of getting the criminal background check.

Right? Or even, let's say, hypothetically, you found out about something, maybe not through a background check, maybe word of mouth or disclosure, you know, something like that. If you wanted to rely on it, again, you would have to look at similarly, right, like, does the criminal history have a direct and adverse relationship with one of the duties? And you would have to meet this business necessity requirement, which, I mean, to have clear and convincing evidence, right, that. That this is necessary and there's no reasonable alternative.

It's, it's just in my point of view, it's effectively banning the use of criminal history altogether, especially because some of this is a prospective concern, right, a prospect concern, that someone who potentially has, let's say, violent charges, right, could present some sort of issue in the workplace. How. How are you going to have clear and convincing evidence of that and, you know, something that hasn't actually has happened and then to also say there's no reasonable alternative? I mean, I think it. It's a little bit countervailing of some of the policies we've seen, especially about, like, workplace safety and things of that.

Like, okay, well, moving forward into something completely different in Los Angeles last year, we saw a local ordinance take effect that provided certain financial and legal protections for what are known as, quote, unquote, freelance workers. In essence, those individual workers who are not characterized as employees, but who perform specific tasks or jobs or a project for employers. The ordinance seems to have attracted enough attention at the state level that we've had a bill introduced in a similar vein known as SB988. Chris, walk us through the type of protections that this freelance worker protection law seeks to impose.

Sure. Thanks, Matt. Well, Senator Scott Weiner, a Democrat from San Francisco who was just named by our new Senate leader to be the Senate Budget Committee chair, one of the most powerful positions he's taken on this issue, and SB988 would be titled the Freelance Worker Protection Act. Now, who are these freelance workers? The proposed legislation defines them as independent contractors who are hired to provide certain professional services for at least $250 or more. The hiring party is anyone in the private sector. They've only carved out the government, state or federal governments, but otherwise it's anyone working in the private sector so long as you're performing certain professional services. Now, what are they? Interestingly, Matt, they reference the definition of professional services in California's statute that has the ABC test for classifying workers as either independent contractors or employees. So who are these professional service providers? They could do marketing, be a travel agent, involved in graphic design, grant writing, fine artist services, still photographers and photojournalists, photo editors, translators, freelance writers, ethnicians, and some other folks could all fall under this definition. You asked about some of the provisions. Effectively, what it says is if you have a contract with one of these freelance workers, then you have to have a written contract. And if it doesn't have a date specified from for when you're going to pay the freelance worker, then it has to be no later than 30 days after completion of their services.

Yeah, and as we mentioned, that that seems to align largely with what the Los Angeles ordinance looks like. There's a little bit of differences, especially around that value of the contract. But this begs the question, because you mentioned it already, that they use a definition from AB5. And for those of us who are still traumatized by the whole process of the Dynamics decision and AB5 and then the tortured bills afterwards about all the exceptions, does this bill seek to do anything different how we classify somebody as an independent contractor or an employee, you know, basically the nuts and bolts of AB5?

Yeah. Well, the current language of the bill does not wade into that. It merely defines, again, that Freelance worker is somebody who is hired or retained as an independent contractor. Usually in these types of situations, as you well know, Matt, the legislature often what we say cross references some existing. So it's interesting that they cross reference the definition of professional services out of that codified ABC test. But they don't bring in anything else like how to define that independent contractor. They simply introduce this new term freelance worker, call them an independent contractor being hired. So I guess that's a long winded answer of saying no. There isn't any clarity or distinction as to who actually qualifies as a freelance worker. They just call them independent contractors, paid at least $250 for their services.

All right, thank you, Chris. Well, it wouldn't be a legislative year if we didn't discuss leaves of absence here in California. We're all familiar by now of the paid sick leave expansion and additional reproductive loss leave that took effect this year on January 1st. And as of now, there is at least one pending that seeks a different type of leave expansion. Ashley, SB2499 seeks to do a lot, actually. And can you kind of walk us through that proposal? Because there's a lot of moving parts of this one, I think.

Yeah, I will try and be brief because this is one where I definitely had to compare current code sections to what's in the bill because it's it basically moves time off for jury service as well as crime victim leaves from the Labor Code into the Fair Employment and Housing Act. So first and foremost, it drops the threshold of who is entitled to some of these leaves from 25 employees down to if you employ just one employee. And then it makes a lot of changes as far as who is eligible for I'll just kind of call it the the crime victim leave as well as what, what you can take leave for or receive an accommodation for. So, for example, there are certain scenarios where an employer currently has to to accommodate or provide time off to a victim of certain crimes. This basically expands those same rights not only if the employee was a victim, but also if they had a family member who was a victim. It then also adds on new provisions for what they would be entitled to. So for example, the employee who is a victim or if they have a family member who's a victim, could have time off to care for family member recovering from injuries, to seek, obtain or assist a family member, or seek or obtain civil or legal or criminal legal services. Same thing for seeking of financial services.

To prepare for or attend in certain proceedings, to seek, obtain or provide child care.

As well as make modifications or arrangements regarding home, vehicle or technological devices.

So quite a big expansion in that sense. It also expands what documentation would qualify. So presently the employer is allowed to ask for documentation. This would include in that list simply a written statement signed by the employee saying that they are entitled to this leave. So there's a lot going on here. I know. It also kind of does change a little bit. The definition of what kinds of essentially acts, you know, that someone is a victim of would qualify for this as well. So this one's pretty meaty. It's also a little unclear how it runs with other laws. So, for example, if you are caring for a family member who has suffered injuries. Right. That should already really be covered by either paid sick leave or potentially SIFRA also, too, for child care. Right. There are some existing leaves that cover those scenarios as well. So this is definitely one you have to go through with, I think a fine tooth comb.

Yeah. What I also found kind of interesting about this bill you talked about at the outset is that it takes these leaves and moves them into feeha. And what I found really interesting is that you'll find, at least with regards to the victims of crime and abuse or the crime victims leave, which couldn't come up with two more confusing names for two different leave allotments that they're found in the labor code. So what that means for me is once it moves into feeha, it means there's different government agencies that have enforcement over that. Isn't that right, Ashley?

Yes. I mean, you know, we. We love taking stuff out of the purview of paga, I will say so. Taking things out of the Labor Code. But as you mentioned now, Matt, you know, this is now giving the civil rights department, rather than the Labor Commissioner's office jurisdiction over these leaves.

Okay. All right, so let's now take a trip in my time machine, everybody, and let's revisit those COVID 19 regulations we got during the earlier stages of the pandemic. Remember, they first came about in November 2020, and then over time kind of changed as the situation on the ground, as I like to call it, changed. But in those early times, I think we all remember, you know, certain exclusion periods for those who actually contracted COVID 19 were lengthy, in some cases, 10 to 14 days from the onset of symptoms or from the date of positive tests, really long periods of time, depending on whatever regulation version we're talking. But in all cases, anytime under those early regulations, somebody was excluded for a work related case or a work related close contact you had to continue their wage and benefits under that program that we all remember as exclusion pay. Okay, we get back in the time machine, come back to today, and we do still have COVID 19 regulations for at least another 11 months. But those exclusion periods barely exist. Thanks now to recently revised California Department of Public Health rules around quarantine and isolation. And exclusion pay doesn't even exist at all and is a distant memory that all really thankful for. Chris Yes, a bill introduced seeks to actually take us back in time, doesn't it? What does AB3106 propose as far as Covid rules?

I wish I could get out of the time machine with you as well, Matthew. Yeah. Assembly Member Pilar Schiavo has introduced a bill, AB3106 that is basically excluding employees.

From the workplace.

For any COVID 19 cases until certain return to work requirements are met. So this would add a whole new section to the labor Code that would be enforceable by dosh, the Division of Occupational Safety and Health. And they define a COVID 19 case as somebody with a Covid a positive test.

Or granted an emergency use authorization because of a SARS virus infection. And basically it says that employers in the state are to, quote, unquote, ensure that COVID 19 cases are excluded from the workplace until these return to work requirements are met. Now what are some of those return to work? Basically, the bill says COVID 19 cases with symptoms are not allowed to return to work until three conditions are met. One, at least 24 hours have passed since a fever of 100.4 degrees or higher has been resolved, by the way, Matt, without the use of any fever reducing medication. So I guess if you're taking meds to get your fever down, you have failed the first test. The second condition is that your.

Covid symptoms have, quote, unquote, improved. Not sure what that means because we don't define it here. And then the last, and remember, all three conditions have to be met in order to be allowed to return to work. The third one is at least 10 days have passed since your covid19 or your employees covid19 symptoms have first appeared. And then the last piece, it's a relatively short new bill. It says that the Cal OSHA Standards Board is required to adopt a new standard that extends protections in the bill to diseases that are covered by any permanent disease standards that have been adopted by the Cal OSHA Standard Standards Board.

So Chris, help me out here. Why are we going back in time really with this? The the 10 days from the onset of symptoms and the reintroduction of exclusion pay into the labor code seems contrary to everything we're seeing from other government agencies that do actually have the responsibility for understanding the science behind the infections and then as well as maintaining the health and safety of the workforce. So I am super confused about what this bill intends to do or why it's here in the first place.

Well, I think that's one of the, you know, questions that a number of folks have had in this regard. I wouldn't suggest in any way that we are, you know, over Covid. In fact, I think the most recent information says that we continue to get spikes from time to time, particularly during the winter and summer periods. But nonetheless, you know, I think this is. There's definitely folks who believe that we don't want to potentially spread or get COVID 19 affecting any more people than possible. And therefore anyone who is showing symptoms should be excluded from the workforce or at least their place of work during that time. And whether you agree or disagree with that approach, and as you noted, it seems rather contrary to our current thinking on it, that's basically the basis for the pursuit of this legislation.

Alrighty. I think that one's in for an interesting pathway the rest of the year.

Yeah.

Yeah.

Okay. Ashley, the use of temporary or contracted labor has received attention lately over the last couple years, including a recent expansion to our California paid data reporting rules for employers that employ 100 or more contracted workers. Now we have a new bill, AB 2741, that seeks to place even more rules on employers and staffing agencies that place these contracted workers. Ashley, what are we doing here with temporary workers through AB 2741?

This one is also doozy. So there's a lot of provisions in it. So first and foremost, it's really important to note labor contractor is extremely broadly defined. So basically, anyone who supplies workers to a client. So that would include not only like a staffing agency, but also someone like a farm labor contractor. Right. Who is employing folks who are then working at different sites because the needs of agricultural work fluctuate. And so even though we're talking about kind of the bill talks a lot about temporary workers, I think it's important to note just how broad that is. So it's clearly going after the concept of temporary work and I think trying to drive companies away from that. So, for example, when the labor contractor issues the wage statement, they would have to disclose how much they are being paid by the client as compared to how much the worker is earning. The client must offer temporary workers direct employment when they have worked for, quote, long term and continuous basis, which is not defined in the bill. If a client plans to hire a permanent employee for a position that is like a position that temporary workers are working in, the client employer would have to notify both the labor contractor and all temporary workers and give them an opportunity to apply. Labor contractors, quote, must attempt to place temporary workers into a permanent position. Again, unclear what exactly that would mean. That they would have to do it bans any sort of placement or conversion fee for employers who file those, those reports you mentioned previously where they use 100 or more employees hired through labor contractors. They would have to disclose the number of temporary workers in their workforce compared to permanent workers. And then finally, a labor contractor shall not place a worker where there is a strike, a lockout or other, quote, labor trouble without basically providing certain notice. And the workers were right sorry to refuse that assignment. So there's a lot going on. I know this bill has had a lot of concerns raised from a lot of different industries. You know, unfortunately, I think seeking to go after some of this temporary work. I was a temporary worker right out of college. I know I had a very positive experience.

And so, you know, I think it would be disappointing, right, to see that industry go out of business because of something like this.

So again, something that we have a lot of members, both from kind of the staffing perspective, but then also those who are clients and those who do sometimes use temporary workers who will be concerned.

Okay. One thing I wanted to highlight was the very first thing that you talked about, which I found really interesting because we know in California we have a lot of already strict pay stub requirements. So I found this one kind of really curious. So what you're saying to me is if I am a staffing agency and I am paying a temporary worker that I've paid, that I've placed with a client employer on their pay stub, I need to put their regular pay rate. Right. Like we always have to do. I'm paying you $22 an hour, but I also have to put on there how much the client employer is paying me for you. That's crazy.

Which gets into. I know you know, there have been prior bills that we have opposed regarding, like disclosure of contract terms, you know, potential trade secret disclosures. Right. A lot of concerns from that point of view. From this as well.

Okay, well, we'll keep an eye on that one. Like you said, that's a real big industry specific one, at least as it pertains to what staffing agencies and labor Contractors might have to do. Chris, you're my closer today.

All right. Yeah.

As regular listeners know and as we've kind of talked about here, certain industries can often get singled out for specific bills. And a particular restaurant industry bill regarding tipping employees actually caught my attention as an industry specific bill. So, Chris, this bill is known as AB3143. What's in this bill? What does it require of employers?

Sure. Well, it's a new bill by Assemblyman Josh Lowenthal, and it would add a new section to California's labor code. It's one sentence only, Matt.

Oh, my goodness.

Basically, it's. I know. Can you believe it? I mean, these other bills that we've talked about today are multiple paragraphs, a few of them, and have convoluted language. Yeah. This bill's relatively straightforward. All it does is it says that an employer is prohibited from preventing an employee who works at a restaurant from getting any sort of tip or gratuity that's left for them. You know, unfortunately, I guess we already have requirements in the California labor code that says an employer is prohibited from, you know, swiping. Right. Wage theft, taking gratuities that are paid to an employee, or an employer can't deduct from wages paid to an employee, say, the minimum wage. They can't deduct gratuity. I guess we've had some instances, unfortunately, where restaurateurs have somehow precluded employees from receiving a tip that's left for them, and this bill tries to prevent that from taking place.

Okay. And I think it is important to highlight, as you said, Chris, because there's a lot of industries that may receive gratuities. This is limited specifically to restaurants, right?

That is correct. Now we know, Matt. Right now, for example, the fast food restaurant, higher increased wages. They have definitions of what is a fast food restaurant and in fact, have an exclusion or two. This bill simply says an employee of a restaurant. So it doesn't define restaurant. It doesn't say, is there a minimum number of employees? Is it a fast food restaurant? Is it any type of restaurant? So this bill could probably include some additional clarity to make sure that it is very specific as to whom it applies or does not apply. But right now, it's merely one sentence, Matt.

Okay. Well, clearly the two of you continue to have your work cut out for you this year. Ashley and Chris, thank you both so much for spending some time on the show today to give us current insights on the 2024 legislative session.

Thanks for having us.

Happy to be here. Thanks for having us.

And thank you listeners for joining this discussion on the workplace. Please comment, share and subscribe to Cal Chamber's podcast by visiting calchamber.

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