Episode 88: COVID-19 Laws Employers Need to Know

Welcome to the Workplace, a podcast by Cal Chamber. I'm Erica Frank, Cal Chamber's general Counsel and Executive Vice president, and with me on the podcast today is Ashley Hoffman, one of Cal Chamber's policy advocates. Ashley recently joined our outstanding Cal Chamber advocacy team and we are thrilled to have her on board. Welcome, Ashley.

Thanks, Erica. Good morning. I'm happy to be here.

So, Ashley, 2020 certainly is the year for the unusual, unknown and unpredictable. And I think the same can be true when we want to talk about the legislative session that recently came to an end. Zooming became part of the How a Bill Becomes a law dialogue, and COVID 19 took center stage. One of the many peculiar aspects, though, of this year's session is the number of measures that were passed and coined or deemed urgent, meaning that the law will take effect shortly after the governor signs the law, as opposed to January 1, 2021, when most other bills become a law. So, Ashley, I thought it would be helpful for our listeners today if you you would enlighten all of us and discuss what these urgency labor and employment bills are and what they mean and why employers need to be aware of them and how employers could get prepared for what these bills are doing in the event that the governor does sign them.

Sure. So as you mentioned, most bills take effect January 1, 2021. But the bills we're going to be talking about today, there are three of them related to labor and employment, will go into effect immediately upon signing. Two of them have what's called an urgency clause, meaning it takes effect immediately. And those bills actually need a 2/3 vote to pass. The third bill is a budget trailer bill, which means it's a bill from the Budget committee, and that one will also take effect immediately upon enactment.

So why don't we start with those urgency bills? What are the two urgency bills that were coined urgency that California businesses should be aware of?

So the first bill is SB 1159 by Senator Hill. This is a bill relating to workers compensation for COVID 19 positive tests. And you may recall on the podcast that you guys have previously talked about the governor's executive order related to this, establishing essentially a disputable presumption that if an employee tests positive within 14 days of being in the workplace, that it was presumed to be a workplace injury that would be covered by workers compensation. So I look at this bill as having three parts. The first part is codifying that former executive order creating that disputable presumption if the employee tested positive within 14 days of working between March 19 and July 5 which was when the executive order had concluded. And then the second part and the third part really deal with any positive tests that occur after July 6th. So the second part relates to, you know, first responders, firefighters, peace officers, certain medical care providers and in home service providers. So it's essentially the same where if they test positive within 14 days of being, you know, being at the workplace, there's a disputable presumption that it is a workplace injury that will be covered by workers compensation outside of those jobs for other employers, other types of jobs, essentially there is a disputable presumption that a positive test what is a workplace injury if there was an outbreak at the workplace during the time when the employer had been working there the prior 14 days. So what constitutes an outbreak was a big part of this legislation and a lot of discussion back and forth. And the bill ultimately defines work outbreak as based on how many employees the employer has. So if an employer has 100 employees or less and four people have tested positive at that workplace, then there is considered to be an outbreak. If the employer has 100 or more employees, then it's considered an outbreak. If 4% of employees have tested positive, there was also, you know, something to be aware of is what constitutes a workplace. That so the bill makes clear that workplace doesn't include your residence. So if you're an employee who's been working remotely this whole time and you test positive, then there's no presumption that you got at the workplace unless you're some sort of in home service provider and you're providing say medical service, medical care to patients inside your own home. Other than that, it would be essentially the building, agricultural field, the location where the employee works, that that's considered the workplace for purposes of this bill. One thing to note as well is kind of in each of these three instances, there is kind of a shorter amount of time for the employer to respond. Typically workers compensation, you have the employer has a 90 day window to respond to the claim, to decide whether to accept or reject the claim. And this bill limits that time period to either 30 days or 45 days, depending on. And the bill does have a current sunset in 2023. So it'll kind of be determined whether that gets extended or not, depending on the COVID 19 crisis.

SB 1159 is action packed, that's for sure. Now I'm sure a lot of our listeners are trying to take notes or a little bit overwhelmed by everything that SB 1159 does. And I think it's really helpful for you to be able to let them know at least, hey, this worker's comp bill is coming down the pipe. I know Cal Chamber will offer more information regarding the bill, but it's also something that all employers should be aware of and also start talking with their workers comp carrier to get any relevant information that they may need. One last question, Ashley, on SB 1159, does this apply to all employers regardless of size?

Yeah, I believe it does apply to all employers.

So what's the next urgency measure that we need to inform our California employers about?

So the next one is AB 2257. As many of you will remember, the AB 5 was passed in 2019. That bill codified this California Supreme Court's Dynamex decision. Dynamex essentially held that when you're deciding whether a worker is an independent contractor or an employee, the ABC test applies. It had previously been held that there was something called the Borrello factors, which really hinged on how much control do you have over the worker and what they're doing, the tools they're using, etc. An ABC is a lot more of a stricter test, and it definitely limits the ability to classify a worker as an independent contractor. That bill contained some exemptions for certain jobs or certain maybe contracts entered into between businesses, professional services, referral services.

Other kinds of circumstances where the ABC test may not always make sense to apply. And so after that bill is enacted into law, beginning January 1, 2020, obviously a lot of groups really wanted to get exemptions as well. There were, you know, for example, some lawsuits filed about whether the bill should apply. You know, like the newspaper industry, you know, kind of freelance writers, photographers, et cetera, really wanted certain changes to be made as well. And some people had questions about some of the exemptions. And so what this bill does is it works to establish clarifications to the exemptions as well as adding on some additional exemptions. So, for example, you know, it clarifies if there's an exemption for work that's done between, you know, two businesses under a contract, the kinds of terms that a contract would need to contain in order for that exemption to apply for referral services. For example, you know, if I'm a referral service and I'm referring someone to, like an event planner, a graphic designer, a tutor, something like that. It provided some clarification as to what qualifies under that exemption, as well as giving examples of some kinds of exempt referrals that would qualify under that. There were also some exemptions added. For instance, A lot of exemptions added related to the music and the recording industry, data aggregators, again, a lot of exemptions relating to freelance, you know, photographers, newspapers, newspaper writers and things like that.

And so it is, you know, it is a pretty lengthy bill with a lot of exemptions. If you're an industry that you think, you know, these new exemptions may apply to you. I definitely recommend reading the bill very carefully as even though some exemptions have been added, sometimes it's only in limited circumstances. So would highly encourage employers to review the bill carefully in total to see if it does apply to them.

Fantastic summary. Thank you. Sounds like AB 2257, like the workers comp bill, has a lot of meat to it and will be one that a lot of businesses are going to be very concerned about and more importantly interested in and seeing whether or not they fall into those exemptions that were added. So thank you. And then finally, talk to me about this budget trailer bill and what it has in it. Is it all about or is there policy changes in it as well?

Sure. So kind of similar to 1159, I think of this one as well, in kind of multiple stages. So AB 1867 is the budget trailer bill. You may have some people may have heard of SB822. Essentially, for budget trailer bills, there's usually an ascent. There's an assembly version and a Senate version, only one of which will pass. So there's a first piece of AB 1867 that actually deals with SB 1383 or a bill from Senator Jackson relating to the expansion of certain types of leaves. One of the concern was that SB 1383 will expand SEFRA and leave to smaller businesses with only five employees or more to alleviate some of that concern. What AB 1867 does is it establishes a mediation pilot program with the Department of Fair Employment and Housing to be able to file a claim, you know, under the Fair Employment and Housing act about not getting leave. You have to file a claim with the dfeh. And this says that if an employee gets a right to sue notice and the claim has to deal with family leave, that either the employee or the employer, if it has less than 20 employees, can mandate that the parties first do a mediation with the DFEH to try and alleviate some concerns about increased litigation. So the remainder of the bill deals with supplemental paid leave related to COVID 19. So the food sector, as you may recall, there was, you know, an order issued previously relating to supplemental paid leave for food sector employees who needed to take leave due to Covid and So this codifies that prior order, essentially saying that in addition, the normal sick leave that an employer is required to provide that employees are entitled to up to an additional 80 hours of leave for if an employee needs to take leave for Covid related reasons, this does expire on December 31, 2020. But if the kind of corresponding federal laws get extended, then this one would get extended as well.

Just to recap a little bit on the supplemental sick le, then it's extending the governor's executive order that he issued around springtime, I think it was around March of this year, to just the end of this year. Correct. Unless the FFCRA, the federal Families First Response act, is extended beyond December 31, 2020, then this supplemental sick leave will also extend in conjunction with that federal law.

Yes, that is correct. Yes. And one other note too, about food sector employees is unrelated to sick leave. The bill also requires that food sector employees be allowed to wash their hands every 30 minutes. So that's something employers should be cognizant of as well. In addition to, of course, the normal meal and rest breaks that employee has provided, you want to be sure that they are being able to wash their hands about every 30 minutes.

Great. And then just to compound complexity for employers during COVID 19 and all of the guidelines and regulations that have come forth as a result of the pandemic, these requirements are in addition to any local requirements with regards to food sector employees as well. Is that correct?

Right, right. Yeah. Of course. You know, if you have some sort of local ordinance, you know, with stricter requirements. Right. That you want to make sure that you're paying attention to those and complying with those as well, actually do have one more piece of AB 1867.

Oh, yeah, go ahead.

So. So the Last part of AB 1867 is essentially very similar to the food sector provision about supplemental leave related to Covid, but it applies to employers with 500 or more employees, certain emergency first responders, as well as certain healthcare providers. So this is kind of filling in the gap. Whereas the federal laws apply to employers 500 or less, this is providing leave to employees who work for larger companies.

And so this is a key one that a lot of the large employers want to be aware of. Because this bill takes effect immediately upon signature, the employers are required to provide this new leave within just 10 days of the governor signing this bill. And also employers are going to be required to update their wage statements to make note of how much paid leave an employee has available under this new law. And so I think that's a big thing that employers want to be aware of is that they're going to need to update wage statements, although liability for failing to include this on your wage statement will not be enforceable until the next full pay period after enactment. You know, for big companies that have possibly thousands of employees, obviously that can be quite a bit of an undertaking. So you want to make sure that you're definitely updating those to avoid any sort of liability, you know, under the statute or a possible POGA suit.

So, Ashley, just to confirm, on the wage statement requirement, this is only for those employers that fall under this supplemental sick leave requirement, is that correct?

Correct. Yeah.

Well, thank you, Ashley. We certainly have provided quite a bit of information. Almost a little overwhelming for our small businesses. But rest assured, Cal Chambers here to help you all out. And as we hear about when the governor does sign these measures, we'll be sure to let all of our listeners know. Thank you, Ashley, for coming on the podcast today to talk about these measures.

Thank you so much.

And thank you for listening to the workplace. Please comment, share and subscribe to Cal Chambers Podcast by visiting calchamber.

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