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Bryan Hawkins Bryan Hawkins is a litigator practicing in the firm’s Labor & Employment group with extensive jury and bench-trial experience in representing employers in employment-related litigation in court and before administrative agencies such as the Department of Fair Employment and Housing and the Equal Employment Opportunity Commission. His practice also involves counseling employers on employment-related issues, including handbooks and policies. Bryan also provides counseling on labor issues, such as advising employers on how to effectively respond to union organizing campaigns, negotiate collective bargaining agreements, and manage the employer/union relationship. In addition, Bryan’s practice includes litigating complex commercial disputes in areas such as antitrust, business torts, and real estate.

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On January 15, 2025, the United States Supreme Court issued a unanimous decision in E.M.D. Sales, Inc. v. Carrera, holding that the “preponderance of the evidence” is the applicable standard courts must use to analyze whether an exemption is proper under the Fair Labor Standards Act (FLSA). In practical terms, this means employers must demonstrate it is more likely than not that an employee qualifies for an exemption, rather than meeting a stricter burden of proof.

This decision resolves a split among lower courts and provides clarity on the burden of proof in exemption disputes. Employers should carefully review their employee classifications to ensure compliance. Click here to read our insight into the facts of the case, how the Court reached this decision, and how employers should react to this ruling. If you have any additional questions, please contact your labor and employment attorney.

As 2025 approaches, employers in Oregon, Washington, and California must prepare for several updates in employment laws. Here’s a concise overview of the most impactful changes that take effect on January 1, 2025:

Oregon

  1. Paid Leave Oregon Clarification: Employees can now use Paid Leave Oregon benefits to attend legal proceedings related to foster care or adoption. OFLA will no longer provide additional leave for these reasons.
  2. Warehouse Worker Protections: New rules mandate employers provide written documentation of quotas to warehouse employees upon hire or upon changes to the quotas. Employers that fail to comply with these rules may not take adverse actions against employees if quotas aren’t met.
  3. Agricultural Overtime: Employers must pay overtime to agricultural workers after 48 hours worked per week.
  4. Additional Updates: Changes to garnishment exemptions and a mid-year minimum wage increase.

Washington

  1. Minimum Wage Increase: Minimum wage rises to $16.66/hour statewide, with higher local rates (e.g., Seattle at $20.76/hour). Salary thresholds for exemptions also increase.
  2. Expanded Paid Sick Leave: New coverage includes ride-share drivers and additional reasons for protected leave, such as emergencies and care for non-family dependents.
  3. Healthcare Overtime Ban: Hospitals can no longer mandate overtime for most direct care staff, with some exceptions.
  4. Meal Period Compliance: A new court ruling mandates higher penalties for missed meal periods. The case, Androckitis v. Virginia Mason Medical Center[MH1] [MH2] [KJ3] , is pending discretionary review before the Washington Supreme Court.

California

  1. Minimum Wage Updates: Statewide increase to $16.50/hour, with higher thresholds for specific industries (e.g., healthcare workers at $24/hour starting July).
  2. Expanded Sick Leave: New permissible uses include emergencies like wildfire and crime-related incidents.
  3. Freelance Worker Protection: Written contracts are now required, and payment timelines are strictly enforced.
  4. PAGA Reforms: Stricter standing requirements and a process for employers to address and cure alleged Labor Code violations.
  5. Anti-Discrimination and Leave Enhancements: New FEHA provisions on intersectionality and jury duty protections.

Key Takeaways

  • Action Required: Review and update employee handbooks, payroll systems, and compliance protocols to meet new wage, leave, and worker protection standards.
  • Plan for Transition: Ensure proactive communication with managers and employees about policy changes.
  • Monitor Compliance: With penalties and stricter enforcement mechanisms in place, employers should prioritize adherence to new laws to avoid costly infractions.

Click here to read the entire article, including detailed insights and resources to help your organization stay compliant in 2025.

A few weeks ago, Vermont Senator Bernie Sanders announced a bill to implement a 32-hour workweek.  While such a law is a long way from becoming a reality, it does raise interesting questions concerning exactly what a 32-hour workweek would look like, especially in California.

Before engaging in this thought experiment one thing should be made clear – most jurisdictions in the United States are “at-will” employment states, meaning either party has the ability to terminate the employment relationship for any lawful purpose.  Relatedly, employers have the ability to schedule employees to work any schedule they want with very few exceptions in discrete instances.  As such, employers would generally not be required to only schedule employees to work a maximum of 32 hours during any workweek, but rather would be disincentivized to do so through overtime requirements.

Federal law currently requires that all hours worked in excess of 40 hours in a single workweek be paid at one and one-half times the employee’s regular rate of pay. California adds an additional requirement that any hours worked in excess of eight hours in a single workday must be paid at one and one-half times the employee’s regular rate of pay, and any hours worked in excess of 12 hours in a workday be paid at twice the employee’s regular rate of pay.

The proposed method of implementing a 32-hour workweek would be through reducing the overtime hours threshold from 40 hours to 32 hours, meaning that employees working over 32 hours in a workweek would be entitled to overtime pay.  While Senator Sanders’ bill does not prohibit employers from scheduling employees to work 40 hours or more, it would provide a financial disincentive for employers to do so.  Senator Sanders’s bill would also amend federal law to coincide with California’s 8 hour and 12 hour overtime rules, making overtime significantly more expensive for employers across the United States.

What would this mean for California employers?  For one, California’s legislature generally does not like being one-upped in terms of favorable employee laws.  As such, and if a law reducing the federal workweek were passed, it is almost guaranteed that California would also reduce its weekly overtime threshold from 40 hours to 32 hours (if not less).  Moreover, under a 32-hour workweek, an employee would be working an average of 6.4 hours per day.  Given this, one possible outcome is that California reduces its daily overtime threshold to be more consistent with that reduced workweek – possibly to six hours per day.

Going further, California law currently provides that employees are entitled to one meal break before the end of the fifth hour of work and a second meal break after 10 hours of work and two paid 10-minute rest periods for every four hours worked.  This break schedule could be modified if a reduced workweek were put into place – possibly with a first meal break before the end of the fourth hour of work, a second meal break after nine hours, and a paid rest break for every three hours of work.

Reducing the workweek could also cause changes in other employee benefits, including protected leaves.  For example, employees are entitled to 12-weeks of leave under both the Family and Medical Leave Act (“FMLA”) and under California’s Family Rights Act (“CFRA”).  In order to be eligible for these types of leave, an employee must have worked at least 1,250 hours in the preceding 12 months.  Under a 40-hour workweek, an employee would work approximately 2,080 hours a year, meaning that they would have a FMLA/CFRA cushion of roughly 830 hours.  A reduction in the workweek from 40 to 32 hours would result in 1,664 hours per year and a reduced “cushion” of 414 hours.  As this likely does not comport with the intent of these statutes, it’s possible that the FMLA hours requirement would be reduced and almost guaranteed that California would reduce its CFRA threshold.

As for effects on workplace policies, one significant change employers would need to make is revising their paid leave policies. Given the reduction in hours worked, employers would need to revise the rates at which employees accrue paid time-off to ensure accrual rates line up with the new proposed workweek.

The 40-hour workweek has been the hallmark of employment law for more than 80 years.  While a change anytime soon is unlikely, it’s always good for employers, especially California employers, to be prepared for anything. 

On January 18, 2024, the California Supreme Court issued its long-awaited opinion in Estrada v. Royalty Carpet Mills to decide the question of whether California trial courts have inherent authority to strike claims brought under California’s Private Attorneys General Act (“PAGA”) on the grounds that the claims were not manageable.  The Court ultimately upheld the appellate court’s holding, which we previously discussed in detail here, finding that trial courts do not have such inherent authority.

Continue Reading California Supreme Court Sweeps PAGA Manageability Under the Rug in <em>Estrada v. Royalty Carpet Mills</em>

Introduction

With its decision in Adolph v. Uber Technologies, Inc. (“Adolph”) the California Supreme Court has reignited the debate surrounding arbitration agreements containing waivers of an employee’s right to bring a representative action under California’s Private Attorneys General Act (“PAGA”).  This ruling, which challenges the earlier decision by the U.S. Supreme Court in Viking River Cruises, Inc. v. Moriana (“Viking River Cruises”), marks a significant shift back in favor of employees and their ability to pursue PAGA claims notwithstanding the existence of a written waiver. 

Continue Reading Driving the Narrative: California Supreme Court’s <em>Adolph v. Uber Technologies</em> Decision Shifts Gears, Challenging U.S. Supreme Court’s <em>Viking River Cruises v. Moriana</em> Holding

On September 18, 2022, Governor Gavin Newsom signed AB 2188 into law, which prohibits employers from taking any adverse employment action against an employee in conjunction with an employee’s off-duty marijuana use.

AB 2188 makes it unlawful for employers to “discriminate against a person in hiring, termination, or any term or condition of employment” for any of the following reasons:

  • An employee’s use of cannabis and cannabis products off the job and away from work; or
  • Failing an employer-mandated drug screening for having “nonpsychoactive cannabis metabolites in their hair, blood, urine, or body fluids.”

If an employer wishes to punish an employee for marijuana-related conduct, it must show the employee was either in possession of or under the influence of marijuana while in the workplace.

For employers that rely on drug screenings to identify marijuana use, this means employers must reevaluate how they conduct screenings and use tests that differentiate between an employee who is currently under the influence of marijuana versus one who previously used marijuana.

In this article, we review California’s long history of regulating the use, production, and sale of marijuana; analyze the effect AB 2188 has on California employers; and briefly discuss immediate steps employers may take to continue promoting a drug- and alcohol-free workplace.

Brief History of Cannabis Legislation in California

California has always been at the forefront of introducing legislation to legalize and regulate the sale and use of cannabis.  The first of many California laws enacted to address cannabis use was Senate Bill 95, known as the “Moscone Act.”  Enacted in 1976, the Moscone Act was the first pierce of legislation that decriminalized marijuana use in California, and effectively eliminated prison sentences for minor offenders.  This bill was seen as revolutionary in that it was one of the first times a state successfully introduced legislation in an attempt to reduce the stigma of marijuana use.

The next and arguably most revolutionary California law on cannabis is Proposition (Prop) 215, nicknamed the “Compassionate Use Act” (CUA).  Prop 215 was a voter-initiated law that allowed for the use of medical cannabis pursuant to a valid physician’s recommendation.  Prop 215 not only allowed patients and caregivers to possess cannabis for personal medical use, but it also permitted certain patients to cultivate cannabis as well, the first time consumers were given the ability to do so.  However, as discussed further below, the CUA was not seen as having any effect on California’s employment laws, nor did it require employers to accommodate marijuana use for current or prospective employees.

After Prop 215 was enacted into law, California started taking steps to regulate physicians prescribing medical cannabis.  In 2015, California passed the Medical Marijuana Regulation and Safety Act, a set of three bills that set standards for physicians prescribing medical cannabis, instituted regulations on marijuana cultivation, and mandated reporting of movement of commercial cannabis products.

Finally, in 2016 California took the biggest step in cannabis legislation when it passed Prop 64, where California legalized nonmedicinal use of cannabis products for consumers 21 years of age or older.  Prop 64 also further decriminalized marijuana use in that individuals arrested for selling marijuana would no longer be charged with a felony with some exceptions.

Evolution of Marijuana Use and the Workplace

Although cannabis use gradually became more widespread and acceptable over the years, California courts still preserved employers’ ability to maintain stringent rules regarding drugs and alcohol in the workplace.  For instance, in Ross v. RagingWire Telecommunications,[1] the California Supreme Court affirmed the dismissal of an employee who failed to pass a drug test as a prerequisite for employment with defendant RagingWire Telecommunications, Inc.  Although the employee was using marijuana pursuant to a presumably valid prescription from his physician issued under the CUA, the Court found that nothing in the CUA “intended … to change employment law,” and maintained that employers may continue requiring preemployment drug tests and take illegal drug use into consideration in making employment decisions.

The Court’s opinion in Ross allowed employers to breathe a sigh of relief in the wake of all the marijuana legislation passed in California.  However, this sigh of relief proved to be brief after the passage of Prop 64 and legalization of recreational marijuana use.  Under Labor Code § 96(k), employers are prohibited from taking adverse action against an employee for engaging in otherwise lawful off-duty conduct.  For the longest time, this code section was interpreted as prohibiting employers from stopping employees from holding outside employment.  With California legalizing recreational marijuana, employers were put in a hazy position with respect to restrictions on employee marijuana use.

While employers could still prohibit on-duty and workplace use and possession of marijuana, the ambiguity came where the employee would test positive for marijuana, but claimed it came from off-duty use.

California’s Passage of AB 2188 and Effects on the Workplace

In a supposed effort to clear up confusion and provide additional protections to California employees, California passed AB 2188 to prohibit employers from punishing employees for truly off-duty use of cannabis.  Specifically, AB 2188 prohibits employers from punishing employees for the following: (1) using cannabis and cannabis products off the job and away from work; and (2) failing an employer-mandated drug screening for having nonpsychoactive cannabis metabolites in their hair, blood, urine, or body fluids.

Prior to the passage of AB 2188, employers that screened potential or current employees for drugs, either as a condition of employment or due to reasonable suspicion that the employee was under the influence, would do so through hair, urine, or blood tests.  However, most of these tests would not distinguish between an employee’s current impairment or past use given how long cannabis remains in one’s system.

Screenings for marijuana may show traces of cannabis from use that took place weeks before the actual screening.  This is due in part to the lingering presence of “nonpsychoactive cannabis metabolites,” which according to the legislature has “no correlation to impairment on the job.”  Now, employers may take an adverse employment action against an employee only for impairment on the job or at the time of the drug screening, but may not do so only for testing positive for nonpsychoactive cannabis metabolites.

Recognizing the fact that marijuana is still considered illegal under federal law, AB 2188 expressly exempts jobs that require federal clearance or background screening, any job that is statutorily subject to federal drug testing requirements, and certain building/construction trades.

Preparing for AB 2188 Moving Forward

As one can imagine, AB 2188 adds another layer of difficulty for employers to do business in California. Failure to comply with AB 2188 may result in employers being subjected to claims for discrimination or retaliation.  If a claimant were to succeed on these claims, the employer would potentially be liable for damages in the form of lost or future wages, emotional distress damages, statutory penalties, and attorney fees.

With AB 2188 going into effect on January 1, 2024, employers must take the following steps to ensure compliance with AB 2188:

  • Evaluate any policies and procedures regarding drugs and alcohol in the workplace with experienced legal counsel to ensure drug screenings are administered properly; and
  • Review how drug screenings are administered to ensure any drug tests take into consideration psychoactive cannabis metabolites to guarantee employees are not punished for off-duty marijuana consumption.

[1] 42 Cal. 4th 920 (2008).

On June 28, 2018, then California Governor Jerry Brown signed into law the California Consumer Privacy Act (CCPA).  The CCPA provided significant privacy rights and protections to California consumers and placed numerous obligations on California businesses regarding the collection and sale of personal information belonging to California consumers.  While the CCPA constituted a significant change for California businesses, its effect on California employers was limited.  Specifically, the CCPA essentially only required most California employers to (1) provide notices when they collected personal information from their employees and (2) protect any collected personal information.

All of that changed in 2020 when California voters approved the California Privacy Rights Act (CPRA).  The CPRA expands the CCPA and, for the first time, places significant obligations on California employers, which obligations go into effect on January 1, 2023.

The CPRA provides consumers (which includes employees and job applicants) with five basic rights:

  • Right to know what personal information is collected
  • Right to know what personal information is sold and/or shared
  • Right to request that businesses delete their personal information
  • Right to request that businesses correct any incorrect personal information
  • Right to opt out of selling and/or sharing their personal information

A few things for California employers to keep in mind:

First, the CPRA generally only applies to California businesses that collect the personal information of consumers and that either (1) had annual gross revenues in excess of $25,000,000 in the preceding calendar year, (2) buy, sell, or share the personal information of 100,000 or more consumers, or (3) derive 50% or more of their annual revenues from selling or sharing consumers’ personal information.

Second, and beginning January 1, 2023, the more onerous duties contained in the CPRA will apply to employers who collect personal information from their employees and job applicants.

Third, failure to comply with the CPRA could result in enforcement actions being brought against employers by the California Privacy Protection Agency, the Attorney General, any District Attorney in any county in California, and the City Attorneys in the four largest cities in the state.

Based on this, California employers are strongly advised to immediately take steps to ensure they can comply by the January 1, 2023 deadline.  These steps should include (1) determining what personal information they are collecting from their employees and applicants and the reasons for such collection, (2) determining if they are selling or sharing any collected personal information (as those phrases are defined in the CPRA), and (3) preparing privacy policies and notices to post on their website, distribute to their current employees, and/or incorporate into their job application materials.

On May 23, 2022, the California Supreme Court issued its highly anticipated ruling in Naranjo v. Spectrum Security Services and decided two critical questions: first, whether an employee is entitled to “waiting time penalties” for unpaid premium pay, and second, whether employers are required to report premium pay on their employees’ wage statements.

As all members of the defense bar anticipated, the California Supreme Court answered both of these questions in the affirmative, and in turn significantly increased California employers’ potential exposure in wage and hour litigation.

Naranjo involved a putative wage and hour class action brought by an employee against his former employer alleging the failure to provide proper meal breaks. The legal analysis concerned the intersection of three aspects of California wage and hour law: “premium pay,” “waiting time penalties,” and wage statements. California law provides that employees are entitled to both meal and rest breaks throughout the workday. To the extent an employee does not receive a legally compliant meal and/or rest break, the employee is then entitled to an additional hour of wages for every missed break paid at the employee’s regular rate of compensation, which is referred to as “premium pay.”

As for “waiting time penalties” they are incurred when an employer fails to timely provide an employee with their final wages upon separation. These penalties are equal to the amount of the employee’s daily rate of pay for each day the wages remain unpaid, up to a maximum of 30 days. For example, if an employee earning $10 per hour and working eight hours a day fails to receive their final wages, they can accrue up to a maximum of $2,400 in waiting-time penalties ($10 per hour x 8 hours per day x 30 days).

Lastly, California law requires that employers provide their employees with wage statements containing a detailed list of information, such as hours worked, wages earned, hourly rates, and other identifying information. Employees who are injured by a “knowing and intentional” failure of the employer to provide this information are entitled to the greater of actual damages or $50 for the initial pay period in which the violation occurred and $100 for every subsequent pay period, up to a total penalty of $4,000.

The plaintiff in Naranjo brought an action on behalf of himself and all putative class members for unpaid meal breaks resulting from Spectrum’s requirement that employees take on-duty meal breaks without a written policy in place. After a jury trial, the court directed a verdict in favor of Naranjo and the class because of Spectrum’s failure to implement a valid written on-duty meal break agreement. As a result, the trial court found that Spectrum was liable for failing to provide proper wage statements but not for waiting-time penalties.

On appeal, the California Court of Appeal for the Second District held that a failure to pay premium pay does not trigger an entitlement to waiting-time penalties or wage statement violations.

In analyzing the Court of Appeal’s ruling, the California Supreme Court first began with how “wages” were defined under the Labor Code, which is “all amounts for labor performed by employees for every description whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation.” California Labor Code § 200(a). Based on this definition, the Court of Appeal found that premium pay awarded to employees for missed breaks was not for “labor performed,” but rather was intended to act as monetary sanctions against the employer for failing to abide by California meal and rest break law.  The Supreme Court disagreed with this analysis, finding that premium pay does not need to either be a legal remedy OR wages, but can act as both simultaneously.

In holding that premium pay is considered “wages” for purposes of Labor Code violations, the Supreme Court found that an employee is entitled to premium pay for noncompliant breaks because they are required to work when they should have been relieved of duties. For meal breaks, premiums are issued when an employee (1) is required to work too long into a shift without a meal break, (2) required to work through a meal break, or (3) required to remain on-duty without an appropriate agreement in place. The Court focused its reasoning on the fact that the California Legislature in authorizing premium pay intended to compensate employees “for hardships they should not be made to suffer,” as well as for rendering work during times employees otherwise would have been entitled to be free from work.

Based on the above reasoning, the Supreme Court ultimately found that premiums under Labor Code § 226.7 are meant to compensate employees for labor performed, and therefore constitute “wages” for purposes of the Labor Code. On that basis, the Court found that employees who are not compensated for premium pay in a timely manner are entitled to waiting-time penalties.

Because the Supreme Court concluded that premium pay is considered wages, the Court had little difficulty in reaching the conclusion that failing to include premium pay on an employee’s wage statement entitles them to recover penalties for noncompliant wage statements.

The Supreme Court’s decision in Naranjo widens the spout of the firehose that is the potential damages and penalties employees may recover under California law. Previously, counsel was limited in asserting a right to waiting-time penalties. Specifically, they could normally only assert a right to such penalties in cases where an employee allegedly worked “off the clock” or did not receive their proper overtime pay. The groups of employees affected by these issues was relatively small when compared to the larger group of employees who counsel may claim did not receive proper meal or rest breaks. With the Supreme Court’s recent decision, however, counsel (particularly in the putative class action context) will now be able to argue that every single former employee has a claim for waiting-time penalties based on an alleged failure to provide premium pay.

Now more than ever it is critical for California employers to review their policies to ensure that (1) employees are receiving proper and timely meal and rest breaks and (2) any employees not receiving proper breaks timely receive premium pay. Any failure to do so just became significantly more expensive.

On March 23, 2022, in Estrada v. Royalty Carpet Mills, Inc., the California Court of Appeal for the Fourth District created a split in authority when they held that wage-and-hour lawsuits brought under California’s Private Attorneys General Act cannot be dismissed on manageability grounds.  This decision directly contradicted the holding in Wesson v. Staples the Office Superstore, LLC[1], which felt like a breath of fresh air for employers, if not for a brief moment.

Primer on Manageability in California

On September 9, 2021, the California Court of Appeal for the Second District analyzed the Private Attorneys General Act (“PAGA”), a popular tool used by employees when bringing lawsuits alleging wage and hour violations.  The court addressed the requirements plaintiffs need to satisfy in order to successfully bring a PAGA action on behalf of all aggrieved employees. Under PAGA, an “aggrieved employee” is permitted to bring a representative action on behalf of all other “aggrieved employees” to recover civil penalties for alleged California Labor Code violations.  In Wesson, the PAGA claim involved over 300 store managers who argued Staples had improperly classified them as exempt from overtime requirements under the executive exemption.  Staples moved to strike the PAGA claim on the grounds that adjudicating the claims of these 300 store managers would necessarily involve individual “mini-trials,” and that each aggrieved employees’ individualized situation would vary too greatly, which effectively rendered the PAGA claim unmanageable.

In upholding the trial court’s granting of Staples’ motion, the court recognized that judges have “inherent authority to fashion procedures and remedies as necessary to protect litigants’ rights and the fairness of trial.”  Moreover, the court went on to explain that “PAGA claims may well present more significant manageability concerns than those involved in class actions,” because PAGA claims do not have to meet the same criteria that class actions require, but the sheer size of some PAGA actions can prove to be too difficult and time-consuming for courts to handle.

The Wesson court was not the first to address the unruliness that PAGA cases present.  In Williams v. Superior Court[2], the California Supreme Court while addressing the scope of discovery for PAGA cases opined that the “trial of the [PAGA] action must be ‘manageable.’”

Estrada Holding and Reasoning

While things were finally shaping up well for employers in California, the Estrada Court brought things back to reality.  The Estrada case directly addressed the issue of whether courts have the inherent authority to strike PAGA claims and answered with a resounding “no.”  In reaching this conclusion, the Estrada Court emphasized that PAGA claims are distinct from class actions, and that “[a]llowing dismissal of unmanageable PAGA claims would effectively graft a class action requirement onto PAGA claims, undermining a core principle of these authorities.”

The Court further noted that PAGA claims are “effectively administrative enforcement actions,” in that they allow private individuals to prosecute claims on behalf of the State of California’s Labor Workforce and Development Agency (“LWDA”).  The Court found that permitting courts to dismiss PAGA claims on manageability grounds “would interfere with PAGA’s express design as a law enforcement mechanism,” and noted that “[t]he LWDA is not subject to a manageability requirement when it investigates Labor Code violations and assesses fines internally.”

However, the Court shared in some of the concerns expressed by the Wesson court regarding the difficulties that PAGA representative actions pose.  The Estrada Court asserted that their ruling was not intended to force courts to examine each individual aggrieved employee at trial, which the Estrada Court admitted would be “unduly expensive, impractical, and place far too great a burden on our already busy trial courts.”  Rather, the Court emphasized that courts have other tools at their disposal to make these cases more manageable, such as “[limiting] witness testimony and other forms of evidence when determining the number of violations that occurred and the amount of penalties to assess.”

The Court also took solace in that PAGA plaintiffs will have difficulty in proving widespread violations where cases with vast numbers of employees would require too many individualized assessments, which the Court believes will encourage plaintiffs’ counsel to be more prudent in litigating these claims.  It also encouraged parties to work with the trial courts and create a trial plan that would define a workable group of aggrieved employees that may recover for violations actually having occurred.

Key Takeaways

The holding in Estrada created a clash between districts that will eventually need to be decided by the California Supreme Court.  Although employer-interest groups have attempted to put forth legislation to address the inherent issues in the PAGA statute, it has been mostly the courts that have shaped how the statute operates in California.

Nevertheless, employers should minimize their potential exposure to claims brought under PAGA by consulting with their legal counsel and taking the following measures:

  • Reviewing their employee handbook to ensure their meal and rest break policies comply with California law;
  • Conducting regular trainings for supervisors and managers on proper practices for ensuring employees take compliant meal and rest breaks; and
  • Consider implementing an attestation process whereby employees certify on a regular basis that they have been provided with adequate meal and rest breaks for each respective attestation period.

[1] 68 Cal. App. 5th 746 (2021)

[2] 3 Cal. 5th 531 (2017)

California Provides Employees with Another Bucket of COVID-19 Supplemental Paid Leave

On February 9, 2022, California Governor Gavin Newsom approved Senate Bill 114 (“SB 114”), which entitles most California employees to a new bucket of COVID-19 supplemental paid sick leave.  The law will go into effect on February 19, 2022.

California’s prior law entitling workers to COVID-19 supplemental paid sick leave expired on September 30, 2021.  Calls to provide additional leave were made during the recent surge of the “Omicron” variant during the winter of 2021.  While that surge has seemingly receded in the last few weeks, the California legislature moved forward and passed SB 114 on February 7, 2022, and Governor Newsom signed it on February 9.

Types of Leave

SB 114 has many similarities to California’s prior law providing employees with COVID-19 specific paid sick leave.  Both laws apply only to employers with 25 or more employees.  Both laws also entitle most full-time employees to a total of 80 hours of paid leave, which must generally be paid out at the employee’s regular rate of pay.  One significant difference, however, is that SB 114 provides for two separate 40-hour buckets of paid leave that can be used for different purposes.  Specifically, employers must provide a maximum of 40 hours of paid leave to employees who are unable to work or telework for any of the following reasons:

  • The employee is subject to a quarantine or isolation period related to COVID-19.
  • The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
  • The employee is attending an appointment to receive a vaccine or a vaccine booster for protection against contracting COVID-19.
  • The employee is experiencing symptoms, or caring for a family member who is experiencing symptoms, related to a COVID-19 vaccine that prevent the employee from being able to work or telework.
  • The employee is experiencing symptoms, or caring for a family member experiencing symptoms, related to a COVID-19 vaccine or vaccine booster, that prevent the employee from being able to work or telework.
  • The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
  • The employee is caring for a family member who is subject to a quarantine or isolation order or who has been advised to self-quarantine by their doctor.
  • The employee is caring for a child whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19 on the premises.

Employers must also provide an additional 40 hours of paid leave to employees if the employee or their family member tests positive for COVID-19.  A significant change implemented by SB 114 is that employers are now permitted to require proof of a positive test in these situations.  Specifically, the employer may require employees requesting additional leave under the second bucket to submit documentation of their positive COVID-19 status on or after the fifth day after their positive test was taken.  If the employer wishes to implement this requirement, they must pay for any testing required.

With respect to paid leave being taken for employees receiving a vaccine or booster, the employer may limit paid leave to three days, or 24 hours, unless the employee can provide verification from a health care provider that they or their family member are continuing to experience symptoms related to the COVID-19 vaccine or booster.

Notably, an employee does not need to exhaust one bucket of leave before utilizing another.

Most astute readers will realize that there could be significant overlap between these two buckets of paid leave, which runs the risk of causing significant confusion in the administration of this leave.  For example, which bucket should apply in situations where an employee tests positive and is then advised by a health care provider to self-quarantine?  While there are currently no precise answers for this and other similar questions, the California Department of Industrial Relations released a series of Frequently Asked Questions to answer more specific inquiries on SB 114 (https://www.dir.ca.gov/dlse/COVID19Resources/2022-SPSL-FAQs.html).

Retroactivity and Interactions with Other Leave Requirements

This new law is set to go into effect February 20, 2022 and will expire September 30, 2022.  Critically, it applies retroactively to January 1, 2022.  This means that if employees previously took leave that would qualify under this new law but were not compensated (or were compensated in an amount less than required under SB 114), then the employer is obligated to compensate that leave now upon a request from the employee.

The law does provide, however, that if an employer previously provided a supplemental benefit to its employees consistent with this new law, then it can count any previously paid hours against the paid leave required under this new law.

Significantly, SB 114 is intended to be separate from the Cal/OSHA Emergency Temporary Standards’ requirement that requires employers to pay employees “exclusion pay.”  Under Cal/OSHA’s ETS, employees who are excluded from the workplace because of workplace exposure to COVID-19 are to receive exclusion pay during the time spent excluded from work.  Under the previous iteration of California’s Supplemental Paid Sick Leave law, employers were requiring employees to exhaust their supplemental paid sick leave before receiving exclusion pay.  SB 114 expressly prohibits employers from doing this.

Notice and Wage Statement Requirements

Under SB 114, employers are required to place in a conspicuous area a notice listing employees’ rights to supplemental paid sick leave.  For employees who primarily telework or work away from the office, SB 114 permits employers to provide notice through alternative means, such as via e-mail.

With respect to changes to paystubs, employers are only required to enumerate whether an employee has taken supplemental paid sick leave in a specific pay period on that employee’s paystub.  Employers are not required to list the total or remaining hours of supplemental paid sick leave the employee is entitled to on each paystub.  However, supplemental paid sick leave hours must be listed separately from any other leave available to the employee.

Compliance and Next Steps

California employers need to promptly review, and likely update, their current policies and protocols to ensure they are in compliance.  Further, employers need to evaluate whether any retroactive payments need to be made for eligible leave taken since January 1, 2022.  Finally, employers should evaluate their payroll practices to ensure employee paystubs reflect supplemental paid sick leave taken in a given pay period.