2020 has been a year of constant changes for California employers. Here are some big developments that employers cannot afford to miss in 2021.
Expansion of the California Family Rights Act
One of the biggest legislative changes facing California employers in 2021 will be the expansion of the California Family Rights Act (CFRA). Currently, employers with 50 or more employees are subject to CFRA and its federal equivalent, Family Medical Leave Act (FMLA). Both provide employees with up to 12 weeks of unpaid leave. When Senate Bill 1383, goes into effect on January 1, 2021, CFRA will be expanded to cover all employers with 5 or more employees.
In addition, Senate Bill 1383 expands the scope of family members for whom the employee can take leave. CFRA currently allows employees to take unpaid leave for a number of purposes, including to care for a “family member” with a serious health condition. CFRA currently defines “family member” to include a minor child (unless the child is dependent), a spouse, or a parent. In 2021, the list of family members will be expanded to include grandparents, grandchildren, or siblings. In addition, the definition of a child will be expanded to cover all adult children, regardless of whether they are dependent. Senate Bill 1383 also provides leave due to a qualifying exigency related to active duty or call to active duty of an employee’s spouse, registered domestic partner, child, or parent.
To complement this expansion of the CFRA, the California legislature added qualifying exigency leave as a reason for receiving wage replacement benefits from the California Paid Family Leave Program.
The California legislature passed two bills this year that amend Assembly Bill 5 which set forth the requirements for classifying a worker as an independent contractor. Assembly Bill 2257 recasts, clarifies, and expands exemptions under Assembly Bill 5, including adding exemptions for referral agencies and professional services, such as photographers. Assembly Bill 323 similarly sets forth exemptions for newspaper carriers from Assembly Bill 5 requirements.
California voters also voted in favor of Proposition 22 which allows for the classification of individuals engaged in app-based transportation services, such as rideshare and delivery drivers, as independent contractors. Proposition 22 provides workers with minimum compensation levels, health insurance subsidies to qualifying drivers, medical costs for on-the-job injuries, and prohibits drivers from working more than 12 hours in a 24-hour period for a single company. It requires companies to develop sexual harassment policies, conduct criminal background checks, and require safety training for drivers.
Workplace Equality and Diversity
California passed two new laws intended to promote equality and diversity in the workplace. Assembly Bill 979 requires that by December 21, 2021, publicly held corporations headquartered in California must diversify their boards of directors with directors from “underrepresented communities.” The new law defines a director from an underrepresented community as “an individual who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Island, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender.”
Assembly Bill 973 creates pay reporting requirements for employers to encourage and ensure wage parity for women and minorities. The law requires employers who meet certain employee thresholds and must file an annual Employer Information Report (EEO-1) under federal law, to submit an annual report to the California Department of Fair Employment and Housing (DFEH). The annual report to the DFEH will include the number of employees (and hours they worked): (1) by race, ethnicity, and sex; (2) in each of the job categories in the federal EEO-1 Report; (3) whose annual earnings fall within each of the pay bands used by the U.S. Bureau of Labor Statistics in the Occupational Employment Statistics survey.