Episode 185: Key Employment Law Bills Awaiting Gubernatorial Action, Part 2

Welcome to the Workplace, a podcast by Cal Chamber. I'm Matthew Roberts, the Labor Law helpline Manager and Employment Law Council with the California Chamber of Commerce. Hello listeners. Welcome to part two of our end of legislative session Employment Bill Roundup. If you missed part one, please be sure to go back and check that episode for great information on potential new anti discrimination updates as well as leaves of absence expansions. Joining us again for part two, we welcome back Chris McKayley again, an attorney and lobbyist with his own firm, Apria and Michele in Sacramento. Chris works regularly with our policy advocates here at the Chamber and also serves as an adjunct professor at my alma mater, McGeorge School of Law. All right, thanks for joining me again, Chris.

Shout out to McGeorge.

Absolutely. So as we mentioned at the start of part one of this kind of series that we're doing, this is a two part podcast. So this is part two because of the volume of bills that we will discuss us overall. Again, these are bills that have passed the legislature but are not yet laws as the governor still would need to sign them over the next month to enact them as laws. So again, stay tuned to this space and other Cal Chamber news posts for up to date info on these bills that we're discussing today. So with those lawyerly disclaimers out of the way, let's get to actual business. Chris, this is probably the best time in the show to address what the bill that may require the most work from employers in terms of compliance updates and things that they need to do with all these new bills, SB553. So Chris, we've discussed this bill frequently on the podcast this year. Go ahead and take it away with where we are on 553.

Oh sure.

Well, yeah, it's gotten a lot of coverage and I could never do as good a job as my good friend and your colleague Rob Moutrie, a policy advocate with Cal Chamber who led the business community not only in the lobbying efforts on 553, but also ultimately on the negotiations with the administration and the proponents and of course the author's office. So Senate Bill 553 is authored by the chairman of the Senate Labor Committee, Dave Cortese, a Democrat from San Jose. And this stems from the fact that pre Covid, the Cal OSHA Standards Board was charged with and they did prepare and adopt a regulation dealing with workplace violence in hospitals. And those regulations were or that standard was.

Very specific to the hospital industry and it had a number of, you know, important provisions, but they really fit just in the Hospital context. Now, pre Covid.

Cal OSHA staff began an extensive effort to adopt workplace violence standards for all other industries. So again, there was already one in effect for hospitals. They said we should do that something for all other employers because we recognized that the one in hospitals which have a lot more instances of not just potential for violence, but more importantly, they have staffing, they have the ability, for example, to lock down portions of a hospital. They have a lot of on site counseling available there. I remember early on. Sorry, before I get to that little story. So what happened was, is we got hit by Covid. And as you well know, Matthew, the entire staff of Cal OSHA was forced to spend those Covid years on the COVID standards, whether it dealt with sick leave or obviously things from masking requirements and.

Spacing in workplaces and all that good stuff. And so organized labor was unhappy that it was taking as much time as it was, but you have to count two plus years of COVID distraction, et cetera. So they went to Senator Cortese and said, can you please introduce a statutory workplace violence prevention program for all employers? Well, what did they use as the basis, Matthew? They used that hospital standard and stuck it in and basically said, we're going to apply it to everybody. The employer community naturally immediately reacted and said, whoa, Senator, first of all, Cal OSHA staff is working diligently on a regulation. Maybe in the next 912 months it should be ready to go. So let them do their work. Well, that kind of fell on deaf ears with the author and the sponsors, the proponents, because they said, no, we want it now. The second issue, of course, was, well, if you're going to do it, at least adopt the current version of the standard for all other industries instead of the hospital one. That too, unfortunately, generally fell on deaf ears. And I think because of Rob's efforts in the employer community, we got the administration to begin weighing in. And so they negotiate with the author and the proponents and the employer community. And so now we are going to end up with workplace violence standards for all employers. So this bill covers a number of things, prevention plans. So basically every employer, as part of their iipp, is going to have to establish, implement and maintain a workplace violence prevention plan. They're going to have some exemptions in there for like teleworking employees and of course, healthcare facilities who are already covered.

It specifies specific elements of the plan itself. Employers are going to have to have violent incident logs where employers are going to have to record information of any violent incidents for any workplace violence incidents. There's Also some training provisions where employers are going to have to provide effective training to specified employees, including appropriate materials, materials in content for workplace violence and require training on different elements of their prevention plan and a number of different record keeping provisions. And these are going to be effective next July 1, generally for the prevention plan provisions. And then there are some temporary restraining order TRO provisions as it relates to workplace violence. And those will be effective January 1, 2025. This is another one of those delayed implementation. So again, there's a lot that goes into this, Matthew. I'm sure that Cal Chamber will have an excellent program for its members, but you're going to have to cover the plan, training on the plan, the incident logs and all the record keeping that's going to be required. So I know that you'll have a great program down the road for this.

Yeah, that's a little bit of a spoiler alert, Chris.

Oh, sorry about that, Matthew.

We totally fine because I was going to tease it anyway. We are going to have a plan, a program in place to kind of help employers should this bill get signed by the administration to get them up to speed quickly. Because again, although there's a July 1st implementation versus, you know, normally January 1st, as we're used to, you went through a list of things that is a lot of work for employers. And it's not just the idea of let's just create a plan that says we're going to prevent workplace violence in the workplace. No, your plan has to have specific elements. Like you said, it's not just an incident report like you're used to with, you know, if there's some kind of workplace incident or injury or something like that, you, you know, you just, you write out some notes and that's your report on this. The logs have very specific requirements that will assist employers with should this become law again. So I really think it's important for employers to take the time early to learn how these new standards are going to work.

Exactly.

Now, if you've been a frequent listener to this podcast out there, you'll know we've talked quite a bit about returning remote workers to the office over the last few years as remote work became way more prevalent than it used to be thanks to the pandemic. So the legislature is actually looking to add to the kind of issues that we've already talked about in returning remote workers. So, Chris, how might employers look differently at returning remote workers to the office next year, year under the requirements of SB 723?

Yeah, well, Matthew, Senator Maria Elena Durazzo who used to be the head of the Los Angeles Labor Federation, is now a state senator and a member of the Senate Labor Committee, has what I think a lot of us view as a rather onerous return to work mandate on employers.

In a number of specific industries. And it includes hotels and restaurants who unfortunately, as you well know, have been really disproportionately impacted by COVID 19 and the pandemic.

And that mandate, you know, it takes an existing one that was temporary in nature for purposes of, again, dealing with the pandemic. And it makes this return to work mandate permanent. And it also broadens its applicability to again, a number of different industries out there. And so I think that's one of the things that makes it particularly problematic for a lot of folks in the employer community. And why, frankly, the employer community opposed this bill basically throughout the process and as you can probably imagine, is seeking a gubernatorial veto of this particular measure just because of its broad applicability of who is a laid off employee. And again, the fact that it is also creating a presumption. And that new presumption, Matthew, is that a separation due to lack of business or a rif, a reduction in force or some sort of non disciplinary reason is due to a reason related to the pandemic unless the employer establishes that to be or to not be the case, if you will. And so, you know, that's another problematic provision of this bill that's got a one year extension of that particular provision here. So again, another troubling approach to trying to get workers back to the office in California.

And then another bill that looks like it's kind of generated out of the pandemic, again as it relates to remote work is SB731 and these requirements around.

Bringing remote workers back to the office. But upon providing notice provisions, what do we see going on with 731, SB731.

So our own Democratic state Senator Angelique Ashby, her first year in the California Legislature, this is another feeha statute or feeha provision.

And it would also make it an unlawful employment practice if the employer fails to provide an employee who's working from home at least 30 calendar days notice before requiring that employee to return to in person work. And it also specifically prohibits the employee from being required to return to work if the employer has not provided that specified notice. And that notice, by the way, Matthew, has to be.

In written form and sent by mail or email and it has some required text. So if SB731 gets signed into law, employers are going to have to use specified text that's found in that statute.

Yeah, and I found that kind of interesting because part of that text is letting them know the basic rules around reasonable accommodations which we've talked about. So if an employee, it basically makes the employer tell the employee we need you back after this 30 day notice. By the way, here's some basic rules about how reasonable accommodation works again, to provide employees with the idea that maybe they'll want to try to extend their remote work situation because they have a medically advisable need to do so under our reasonable accommodation rules. So I found, I found that text kind of interesting. We've seen that in other bills like in the Fair Chance act, where when you give notice that you're going to revoke someone's offer because of criminal history that you've discovered during the background check, that final notice also has to include a provision of how they can file claims against you with the government. So.

Well, exactly. That you can file something with the, the new crd, renamed California Civil Rights Department. But. Well, and it's also interesting to me because it says, hey, you have the right to continue working remotely as an accommodation if you have some sort of a disability. And what is going to be the interaction when an employee gets the notification saying, hey, within 30 days you have to return to work in person. And then they read this lengthy paragraph here. What sort of interaction is that going to result in between the employer and the remote worker?

Yeah, I find that really fascinating. All right, Chris, let's move on to the final section of this episode on termination and post termination issues. Oh yes, of course, anybody who reads the news has seen an increase in layoff articles in the last year where some business are reducing staff. And California was no exception to that. So the first bill we want to discuss here impacts our mass layoff law, otherwise known as Cal Warn. Chris, explain what AB 1356 does.

Well, Matthew, this is authored by Assemblymember Matt Haney, a Democrat from San Francisco. And the focus has been on the tech industry. And as you know, California, I think most of the states have WARN act notice akin to the federal WARN notice, Worker Adjustment and Retraining Notification Act. That's what WARN WARN stands for. And as you know, the idea behind the federal WARN act and of course the analogous CAL WARN act is that if there is either a facility closure or a quote unquote, mass layoff that's generally defined as 50 or more people at a single establishment, then we want to provide advance notice of that upcoming layoff to both the employee but also the state and local governments. Why? So that they can help transition, either retrain those individuals or provide them benefits, you know, help them find a new job and be a bridge until they find something. So the purpose of it is good. What the author of the bill and the proponent said was, in today's environment, it's inadequate. So they said, first we want a 50% increase. We want to go from 60 to 90 days.

Cal Chamber led the opposition efforts to this bill and that first provision got reduced to 75 days. So there's a 33% increase in that.

One concern that we Express, certainly at 90 days and arguably might be there for 75, Matthew, is remember the prior days when school districts, we're worried about state funding and we got instances where basically all teachers got pink slips. Will there be over notification? Because as you know, Matthew, under the WARN act, there are some significant financial penalties for failure to provide that notice.

Absolutely.

The second thing is the author said, I don't want it to be at a single establishment. It can be at multiple facilities. Now, it's still 50 or more within 30 days. But nonetheless, our friends in the retail industry, for example, said, hey, we've all read about some major retailers shutting down in, say, downtown San Francisco, right? Well, what happens if they're. So they easily meet the 50 threshold. Okay, so those people all are going to get a warn notice, obviously. But what about if we have five or 10 people at a facility at another.

The same employer, but it's in a different county or maybe it's in Southern California versus Northern California? So we of course wanted it to say the single establishment keep existing law.

What the author and proponents ended up doing was saying, well, for those other.

Layoffs.

You'Re only going to have to send the notice to the employee and to the state edd, we'll relieve you of the burden of the additional local notification. I'm not sure that's particularly helpful, particularly for the employees, because in some instances. I don't know what you think here, Matthew, but I think one of the concerns is, hey, you know, are we going to view this employer differently? Because not only did they have that closure or their mass layoff, you know, 200 miles away, but they just laid off five people. Here are more to come. So it might create an expectation or a fear really for employees that, oh, I might be next in line to lose my job. What will that do to morale? And will we start losing some employees because they might go looking, you know, somewhere else?

And the third Item was the issue of contract workers. Now Matthew, I know I'm a little long winded on 1356, but I wanted to describe for your listeners sort of the process and the changes that ultimately evolved. They basically said, we want all contractors to be subject to a WARN act notice. Now interestingly, the author and proponents had the same witness at all the hearings. And this gentleman got up and he said, look, I've been working full time for a major high tech company as a contract worker and I'm doing the same job and I've been there for like three and a half years. And you know what our response was? Hey, that full time worker makes total sense. I mean they're doing the same job and they've been there for three plus years. They should probably be treated as an employee. Right, but we thought full time they may not be okay with that approach. So how about 50% of the time or 20 hours a week? That's what we suggested. The proponents and author instead came back with a different provision and they said, how about 10 hours a month?

And we thought, well, that seems silly. Only 10 hours a month and you're going to be subject to a WARN act notice? That doesn't make a lot of sense here. Well, now what we ended up with is something potentially even worse. Now it's somebody who worked in the last six months for at least 60 hours preceding the date on which the notice is required.

Well, so that means in the last six months, maybe they worked for 60 days. So the first two months and then the mass layoff or plant closure occurs four months later and they get a WARN act notice.

Right.

This doesn't make any sense at all.

Yeah, and I appreciate actually, Chris, your long windedness on AB 1356 because I just.

Yeah, you're making me feel bad, Matthew. You're calling it long winded too.

I put that in air quotes for the listeners who can't see me.

Oh, thank you, thank you.

But I find the expansion incredible when you think about it, not from this academic perspective of mass layoffs, but as you started to drive into it. If you have to provide notice to a site that's getting five employees laid off, it used to be, or actually it currently still is, the provision where you don't have to give them any notice. You're going to lay five employees off from your facility here in Sacramento and you tell them on the Friday and send them on their way to the weekend with their terrible news. You didn't have a notice requirement. But now, like you said, you have this notice requirement if you're ending up laying off a total of 50 employees up and down the state with multi establishment employers getting hit particularly hard with this. But like you said, if they're picking and choosing who they're laying off and not just this huge mass layoff at one facility or a closure where everyone gets the sense like, okay, hey, yeah, the work's ending here at this facility. That's what's going on here. Or they're really greatly reducing the employee count in one fell swoop. Now you've got a trickle and you can't really keep that stuff private anymore because you have to give them 75 days notice. And now you got two and a half months out there where employees, like you said, are looking over their shoulders. And you're going to have issues, I think, without a doubt in both retention of employees that you plan to keep all along. Like, just because you lay those 5 or 10 off doesn't mean that you're going to end up laying more people off. Those are just the ones you chose at the facility. But that notice leading out is so long. And if you don't meet the notice already, those penalties, like you said, they're massive. Like, employers have been hammered with Warren and Cal Warren lawsuits over time and it's really expensive. So I think the conversation was excellent. And I think it's a really important point to highlight here if you're looking into the future of workforce reduction like we've seen so much in the news. Get counsel, get counsel quickly if you're just even thinking about it. So that way you can address how your Warren and Cal warn notices are going to look, when you're going to deliver them, who you're going to deliver them to in an effort to kind of both comply with the law, but again, from a practical standpoint, keep your existing workforce that you plan to keep like moving and not losing that morale like you said. All right, Chris. Well, let's conclude this session with a bill that has been attempted before, at least in some form, but is now finding its way to the governor's desk this time, SB497. Now, Chris, how does this change the rules around what we know as retaliation claims?

Yeah. So Senate Bill 497 by Senator Lola Smallwood Cuevas, a Democrat from Los Angeles and also a member of the Senate Labor Committee, creates one of those presumptions and it's basically a 90 day presumption of retaliation in certain claims. And so basically the onus will be on the employer. And so you know, what will happen is that when the employee is engaged in some sort of, you know, protected activity, they filed a harassment or discrimination complaint or they engaged in some sort of whistleblowing, if there's any sort of quote unquote retaliation against that individual, you know, they've been disciplined for, I don't know, stealing something or whatnot, then if it's done within 90 days.

The presumption is that the employer retaliated against the employee for engaging in some sort of protected lawful activity. And of course, as you know, with a legal presumption, the burden turns to the employer because the presumption is in favor of the employee and against the employer that you, the employer, have engaged in unlawful activity within that 90 day period. And now the onus is on you that all of your disciplinary conduct, whether it is discipline or termination, etc. Was 100% lawfully based and in no way was based upon the employees exercise of their lawful protected rights. Again, such as filing a whistleblower complaint or a general harassment or some sort of other complaint. So you know, if this comes into play, unfortunately what we might see is a general uptick in litigation and of course claims by a disciplined or terminated employee that oh, you, employer actually engaged in retaliation against me and that is against the law. And now the burden will always shift and fall on the employer to disprove that allegation.

Right. And I think, you know, SB497 is just yet another reminder for our employers. Work hard to document your employment decisions and your adverse action actions, your discipline, your terminations and rely again only on objective, legitimate business reasons for your terminations. Because that's always been the gold standard in these laws. But now you're even further behind the eight ball should this bill get signed because it's already presumed that you retaliated against the employee has no burden of proof at that initial stage to show it. So Chris, I could talk with you literally all day.

Oh yes, I know you've been generous with your time and, and I always appreciate it. And all I think about on our podcast, Matthew, is you're going to have very extensive and lengthy training for all of your members this fall.

Yeah, this fall is the learning season for us here at the Chamber for any of these bills that do get signed. So Chris, thank you so much for joining me today for our epic two part discussion on the end of the legislative session.

Thank you, Matthew. Thanks for having me.

And thank you listeners for joining this discussion on the workplace. Remember to tune into part one if you missed it. And as always, please comment, share and subscribe to Cal Chambers podcast by visiting calchamber.com.