By Terri Olson

Here are some “HR Hot Topics” being implemented for 2020, that all employers and business owners must know about:

1. AB 5 – Classification of Independent Contractor versus Employee  AB 5 makes it difficult for most California companies to hire an independent contractor and may require companies to convert existing contractors into employees. AB 5 expands last year’s California Supreme Court decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles to the Labor Code, Unemployment Insurance Code and all Industrial Welfare Commission Wage Orders.

AB 5 states that a person providing labor or services for payment shall be considered an employee rather than an independent contractor unless the hiring entity can establish that all 3 of these factors are met: a) the person is free from the control and direction of the hiring entity in connection with the performance of the work, and b) the person performs work that is outside the usual course of the hiring entity’s business, and c) the person is customarily engaged in an independently established trade, occupation or business.

If certain classifications of workers meet specific requirements described in AB 5, they may be excluded from the ABC test, including a long list of industries (see author for the list). If properly excluded from AB 5, the status of these workers will be determined under the traditional multi-factor Borello test (right to control test).

What you NEED to do:  Ensure your independent contractors pass the ABC test, or if they are properly excluded from AB 5, the Borello test. Review, audit and/or update independent contractor agreements to document compliance.  Discuss with your HR professional or legal counsel any employees needing to change from independent contractor to employee.

2. AB 9 – Statute of Limitations for Discrimination, Harassment &/or Retaliation Claims:  AB 9 extends the statute of limitations period for employees to file claims of discrimination, harassment and/or retaliation brought under the California Fair Employment and Housing Act (“FEHA”) with the Department of Fair Employment and Housing (“DFEH”) from one (1) year to three (3) years. Employees then have one additional year (after receipt of a right-to-sue letter from the DFEH) to file a civil action in court. Employers could find themselves defending against claims for workplace incidents that occurred as long ago as four years in the past.

What You NEED to do:  Ensure you are following your harassment, discrimination and retaliation policies and procedures and training all employees (especially management) on this subject as mandated. Keep any internal investigation files separate from HR files and store them for at least 7 years, even if employees have terminated.

3. AB 25 – CA Consumer Privacy Act of 2018:  AB 25 exempts employers from compliance with most requirements of the CA Consumer Privacy Act until January 1, 2021, with respect to information collected “by a business in the course of the natural person acting as a job applicant to, an employee of, director of, officer of, medical staff member of, or contractor of that business.”  In other words, as long as employers are collecting the data of its employees and job applicants for purposes solely relating to employment, the CCPA generally does not apply to the collection of that information.

What You NEED to do:  Adhere to the requirements under the CCPA, being aware that employee data should not be co-mingled with consumer or business information collected or tracked.

4. AB 51- Places Prohibitions on Arbitration Agreements:  AB 51 bans mandatory arbitration agreements as a condition of employment, continued employment, receipt of employment-related benefits, or waiving any right to pursue a FEHA or Labor Code claim.  It also prohibits employers from threatening to retaliating against an employee for refusing to sign an arbitration agreement.  It does not prohibit an employer/ employee from entering into such an agreement voluntarily.  A violation of AB 51 is a misdemeanor.  Applies to contracts of employment entered into, modified or “extended” (undefined) on or before January 1, 2020.

What You NEED to do:  Review your Company’s arbitration agreement(s) with an employment attorney to ensure your agreement is current, valid and defendable.  Decide whether to (1) keep your existing arbitration agreements in place, (2) implement new voluntary agreements for everyone, or (3) only implement voluntary agreements with new hires.  Also, what can you offer employees to increase the number of who will sign an agreement willingly?

5. AB 673- Failure to pay wages: Penalties  AB 673 gives employees the right to recover civil penalties for unpaid wages.  These civil penalties were previously enforceable only through an action by the Labor Commissioner.  Now, the employee is entitled to recover $100 for each initial violation for failure to pay each employee and for a “subsequent violation, or any willful or intentional violation” of $200 for each failure to pay.  Employers will also be liable for 25% of the amount unlawfully withheld for certain Labor Code violations. AB 673 limits employee recovery to statutory penalties or civil penalties under the Private Attorney General’s Act (PAGA), but not both, for the same violation.

What You NEED to do:  Review your payroll procedures.  Ensure you pay employees in a timely manner and provide them the required information on their pay stubs.  Also, ensure they are provided the required government publications upon termination.

6. AB 749- Ban on No-Rehire Provisions in Settlement Agreements:  AB 749 prohibits and invalidates any provisions in settlement agreements entered into on or after January 1, 2020, that prevent workers from obtaining future employment with the settling employer or its affiliated companies.

The law applies to any employees who have filed a claim: (1) against the employer in court, (2) before an administrative agency, (3) in an alternative dispute resolution forum, or (4) through the employer’s internal complaint process.  If the employee has complained internally and a severance agreement is reached with the employee without any litigation being filed, the employer would still be restricted from placing a no-rehire provision in the severance agreement.

The law does not prohibit or otherwise restrict an employer from preventing an employee from obtaining future employment if (1) the employer has made a good faith determination that the person engaged in sexual harassment or sexual assault; or (2) there is a legitimate nondiscriminatory or nonretaliatory reason for terminating or refusing to rehire the person.

What You NEED to do:  Update any severance agreement or settlement agreement drafted by an employment attorney to comply with this new requirement.

7. SB 142- Expands CA’s Lactation Accommodation Requirements:  SB 142 expands an employer’s duties and responsibilities in providing lactation accommodation to those employees who need to express breast milk. This bill mandates employers to provide a lactation room or location, not a bathroom, that:

  • Is in close proximity to the employee’s work area;
  • Shielded from view;
  • Free from intrusion while the employee is expressing milk;
  • Safe, clean and free of hazardous materials;
  • Contains a surface to place a breast pump and personal items;
  • Contains a place to sit;
  • Has access to electricity; and
  • The employer must provide access to a sink with running water and a refrigerator for storing milk in close proximity to the employee’s working space.

Additionally, the bill requires employers to develop and implement a lactation policy.  Such lactation policy must include, among other things, a statement about an employee’s right to request lactation accommodation and a statement about an employee’s right to file a complaint with the Labor Commissioner for an employer’s failure to provide the accommodation.

The bill equates a denial of lactation break time or space to a violation of a rest period, thus subjecting the employer to a $100 penalty per violation.

Employers with 50 or fewer employees that demonstrate that this law would impose an undue hardship (significant difficult or expense) may apply for an exemption from the Department of Labor from SB 142’s requirements.

What You NEED to do:  Review and update your lactation policy or create one to meet the required standards.  Ensure your designated room area meets the requirements under this expanded law.

8. SB 188 – Hairstyle Discrimination:  Known as the CROWN Act (Create a Respectful and Open Workplace for Natural Hair), SB 188 expands the Fair Employment and Housing Act’s definition of “race” to include traits historically associated with race, such as hair texture and protective hairstyles.  The bill defines “protective hairstyles” as braids, locks, and twists.  The law prohibits workplace dress code and grooming policies that prohibit natural hair, including afros, braids, twists and locks.

What You NEED to do:  Review and update your dress code policy addressing these protected hairstyles.

9. SB 778 – Extends deadline for Sexual Harassment Training to Jan. 1, 2021:  SB 778 extended the deadline for an employer with 5 or more employees to provide sexual harassment training for ALL employees to January 1, 2021.  The bill took effect immediately.

Training is required every two years. Ensure the trainer and training program meet criteria: 1 hour for non-supervisory staff, 2 hours for leads and above; abusive conduct must be included. New employees need training within 6 months.  Seasonal/ temporary employees hired for less than 6 months need training within 30 days/ 100 hours.

What You NEED to do:  If your employees haven’t been trained, make the necessary arrangements to have it be done this coming year.  Ensure the trainer and training program meet the criteria.

(10)    California Minimum Wage Increase:

Increases*                 26 Employees or more                    25 Employees or less
$12.00/hour               January 1, 2019                              January 1, 2020
$13.00/hour               January 1, 2020                             January 1, 2021
$14.00/hour               January 1, 2021                              January 1, 2022
$15.00/hour               January 1, 2022                              January 1, 2023

*Represents California State only; individual cities may have other minimum wage changes.  Also, minimum weekly compensation for executive, professional and administration exemption classifications must be at least twice CA State minimum wage = $1,040.00/ week, $4,506.67/ month or $54,080.00/ year
*Minimum wage update applies only to city or county

11. IRS Mileage Rates:  

The IRS standard mileage rates for the use of a car (also vans, pickups or panel trucks) are not posted yet.  The current posted rates are:

  • 58 cents per mile for business miles driven
  • 20 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations.

MS. TERRI OLSON (phone: (714) 609-0504, email: founded HR Prescriptions in January 2000 for the sole purpose of helping small and mid-size employers deal with the complexities of managing their human capital.  In acting as her clients’ on and off-site HR Director, her philosophy has been to keep it simple.  She only recommends what the client needs to enhance their employees’ performance and protect their business from legal exposure for non-compliance of State and Federal regulations.  After spending most of her career in the corporate world, Terri began her own venture as an independent consultant.  As an outsourcing specialist, her focus is on providing an on- and off-site HR professional for small to mid-sized companies.  Her clients have come to trust her to give honest and simplified advice to minimize the risks in managing their most valuable asset…their employees.  She provides a bottom-line, pro-active approach to people management, consulting and coaching with a business partner mentality.  Her experience offers real-world insight of what works and doesn’t work in today’s rapidly changing workplace environment.