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Take Note of these New California Employment Laws Coming in 2020

October 23, 2019

California Governor Newsom has signed into law many employment related bills that will significantly alter the legal landscape. Here is a quick snapshot of several of those new laws that go into effect on January 1, 2020 unless noted otherwise:

Codifying the New Independent Contractor Test (AB 5): AB 5 codifies the “ABC” test, which the California Supreme Court decided in Dynamex Operations West, Inc. v. Superior Court, was the test to use in determining whether a worker is an employee or independent contractor. Under the “ABC" test, the California Supreme Court stated that a worker hired to perform services is an employee of the hiring business, unless the hiring business can prove all three of the following elements:

A. the worker is free from control and direction of the hirer in connection with performing the work, both under contract and in fact; and

B. the worker performs work outside the usual course of the hiring entity’s business; and

C. the worker customarily engages in an independently established trade, occupation, or business of the same nature as the work performed for the hirer.

This new law makes the “ABC” test applicable to all Labor Code, Unemployment Insurance Code, and Wage Order claims. It further allows the State Attorney General and certain city attorneys to pursue injunctions against businesses suspected of misclassifying independent contractors.

AB 5 does statutorily exempt numerous professions from the “ABC” test, including:

  • Licensed Health Care Professionals: physician, surgeon, dentist, podiatrist, psychologist, veterinarian

  • Licensed Professionals: lawyer, architect, engineer, private investigator, real estate agent

  • Service Providing Professionals: marketing, human resources administrator, travel agent, licensed agent practicing before the IRS, payment processing agent through an independent sales organization

  • Creative Professionals: still photographer, photojournalist, freelance writer, editor, and newspaper cartoonist who does not license content submissions to a business more than 35 times per year, fine artist, graphic designer, grant writer

  • Financial Services Provider Professionals: accountant, securities broker-dealer, investment advisor

  • Licensed Cosmetologists: esthetician, electrologist, manicurist (until January 1, 2022), barber, cosmetologist, provided that they have independent business and set their own rates, process their own payments, and is paid directly by clients

  • Other Professions: direct salesperson, construction subcontractor, tutor who teaches his/her own curriculum, commercial fishermen

Extending the Deadline to File DFEH Complaints (AB 9): This bill extends the statute of limitations to file a harassment, discrimination and/or retaliation complaint with the Department of Fair Employment of Housing (DFEH) from one year to three years. It, however, does not revive lapsed claims.

Requiring Additional Lactation Accommodations (SB 142): This law requires employers to provide a private, safe lactation room – that is not a bathroom - with a seat, a surface to place items, and electricity or alternative devices needed to operate a breast pump. It also requires employers to provide a sink with running water and refrigeration to store expressed milk near the lactating employee’s workspace. Employers must also implement and distribute a lactation policy to employees. There is an undue hardship exemption for employers with fewer than 50 employees.

Extending the Sexual Harassment Training Deadline (SB 778): Employers deadline for sexual harassment training of non-supervisory employees has been extended from January 1, 2020 to January 1, 2021. The law, however, does not extend the deadline for supervisory employees. Furthermore, the law clarifies that supervisors who received training in 2018 need not be trained again until 2020.

Banning Hairstyle Discrimination (SB 188): This law expands the definition of race discrimination in the workplace and educational institutions to include discrimination based on hairstyles historically associated with African-Americans, such as hair texture and “protective hairstyle” (i.e. braids, locks, and twists).

Extending Paid Family Leave Benefits (SB 83): This law allows employees paying into California’s State Disability Insurance program to receive up to eight (8) weeks of Paid Family Leave (PFL) benefits. Previously, employees could receive up to six (6) weeks of PFL benefits. Additionally, this law creates a task force to develop a PFL program that will extend benefits to six (6) months by 2022.

Prohibiting Arbitration as a Condition of Employment (AB 51): This law prohibits employers from conditioning employment on agreement to mandatory arbitration. The law makes it a misdemeanor for employers to require applicants and employees to waive any right, forum, or procedure established by the California Fair Employment and Housing Act a or the Labor Code.

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