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What do California's new labor laws mean for employees?

Under Governor Newsom, California's latest legislative session ended with the creation of several important new employment laws. These give workers more choices and stronger workplace protections.

Sites such as the San Francisco Business Times and The National Law Review have explored the ways these laws may affect California's businesses. Below, we look at the different ways they may empower employees in the workplace.

AB 5 clarifies the standards for independent contractors

As the gig economy continues to grow, more workers find themselves classified as independent contractors, but under the Dynamex test, many of these so-called "independent contractors" should be reclassified as "employees," which would afford them greater protections in the workplace. This test has huge ramifications for California workers, existing California business, and future businesses.

AB 5 takes the California Supreme Court ruling from Dynamex and codifies it into law, setting forth the three-part "ABC" test as the standard for determining whether a worker is an employee or an independent contractor under all provisions of the Labor Code and the Unemployment Insurance Code:

A. The contractor is free from the company's control while performing the work;

B. The work is not central to the employer's business;

C. The contractor must be independently established.

The law also provides exemptions for specific categories of workers from the ABC test, including professionals such as doctors, dentists, realtors, financial advisors, direct sales people and commercial fishermen, among others performing work under a contract for professional services that require an active license.

AB 9 introduces a new deadline for workplace discrimination and harassment complaints

Under the old law, employees who faced workplace discrimination or harassment had one year to exhaust their administrative remedies with the California Department of Fair Employment and Housing (DFEH). AB 9 extends the filing deadline with the DFEH to three years from the offense.

Many victims had previously missed the filing deadline because they were unaware of it. This law increases the chances that victims will be able to file in time, even as it increases the chances that they may resolve their disagreements outside of court.

AB 51 limits employers' use of mandatory arbitration agreements

Businesses have long relied on mandatory arbitration clauses to quiet reports of harassment and discrimination. AB 51 prohibits businesses from requiring workers to sign certain mandatory arbitration clauses as a "condition for employment, continued employment, or the receipt of any employment-related benefit." The new law prohibits employers from retaliating against worker who refuses to sign an arbitration agreement!

To avoid Federal Arbitration Act exemption arguments, under AB51, employees may still choose to enter private arbitration after a dispute arises. The law still allows the use of arbitration so long as the arbitration agreement does not force employees to waive the rights they hold under the California Fair Employment and Housing Act or the California Labor Code.

AB 749 ends the use of "no rehire" clauses

Starting January 1, 2020, businesses will not be able to include "no rehire" clauses in settlements with employees. These clauses in settlement agreements have previously blocked employees from applying for jobs with that same company even if the employee applies for a position in a different office or a different state.

California has long invalidated contracts that block people from seeking lawful employment. AB 749 makes it harder for businesses to use California settlements against workers who move out of the state.

SB 142 adds new rules for lactation accommodation

SB 142 ensures that women who need to express milk during the workday should have reasonable accommodations. The law demands that they have access to a lactation room or another room where they can express milk. That room must meet several standards, including:

  • Be safe and shielded from view
  • Be clean and free of hazardous materials
  • Contain a place to sit and a place to set a breast pump
  • Provide access to an outlet or other means of powering the pump
  • Come with access to a sink and refrigerator or cooler
  • Prioritize the schedules of women who need to express milk

The law applies to all businesses with more than 50 employees. Smaller companies might receive exceptions if they can show that compliance would cause them undue hardship.

SB 778 delays the sexual harassment training deadline for small employers to January 1, 2021

Existing law requires businesses with 5 or more employees to provide sexual harassment training for all its employees by January 1, 2020. Supervisory employees are required to complete a minimum of two hours of training. Non-supervisory employees must complete at least one hour of training.

SB 778 delays the requirement by a year, pushing it from January 1, 2020 to January 1, 2021. The training must then be refreshed every two years.

The law also sets the deadlines by which employers must provide sexual harassment training for temporary employees (hired to work for less than six months) and for seasonal workers. These employees must be trained within 30 calendar days of hire or 100 hours worked, whichever occurs first, beginning January 1, 2020.

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