Assembly Bill 51 (“AB 51”) prohibits employers from requiring employees to execute arbitration agreements as a condition of employment. After being signed by California Governor Gavin Newsom on October 10, 2019, AB 51 was set to go into effect on January 1, 2020; however, on December 30, 2019, the Honorable Kimberly J. Mueller, Chief Judge
2019: A Year to Forget for California Employers
From the California Supreme Court’s landmark decision in Dynamex to the passage of dozens of new employment laws, 2019 was an important year for California employers. While some of these new laws were discussed here, this blog discusses some additional laws (there are a lot) and provides some updates on legal challenges to AB 5 and AB 51.
- Pursuant to previously enacted laws, on January 1, 2020 California’s annual minimum wage increased to $13 per hour ($12 per hour for employees with 25 or fewer employees).
- SB 778 clarifies California employers’ duties to provide harassment training to employees. Pursuant to previously enacted SB 1343, employers had a duty to provide harassment training to both supervisory and nonsupervisory employees once every two years. SB 778 extends the initial deadline for providing new training to employees from January 1, 2020 to January 1, 2021. It also clarifies that employees who completed harassment training in 2019 do not need to retrained for another two years and then every two years thereafter.
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Goodbye 2019, Hello 2020
As 2019 comes to an end, employers should know about important new obligations that will ring in their new year. Our Labor & Employment experts offer some guidance on critical developments in Oregon, Washington, California, and Idaho that employers should be prepared for in 2020.
Oregon
- The statute of limitations for discrimination and harassment claims
California Codifies Dynamex – Now What?
On September 18, 2019, California Governor Gavin Newsom signed Assembly Bill (“AB”) 5, thereby codifying the California Supreme Court’s landmark decision in Dynamex Operations West, Inc. v. Lee. This represents the culmination of a seismic shift in California employment law that began a little over a year ago.
To refresh, starting in 1989, the leading test in California for distinguishing employees and independent contractors was the multifactor standard set forth in S.G. Borello & Songs, Inc. v. Department of Industrial Relations. Under Borello, the key question was whether the employer “[had] the right to control the manner and means of accomplishing the result desired.” In addition to this factor, the Borello test also endorsed multiple “secondary” indicia in analyzing and determining the employment relationship.
In April 2018, the California Supreme Court issued its decision in Dynamex. In Dynamex, the Court announced a new, more objective standard for determining worker classification for the purposes of the California wage orders. Under this new standard, the burden is on the hiring entity to establish that the worker is an independent contractor who was not intended to be included within the coverage of the California wage orders. In order to satisfy this burden, the hiring entity must establish all of the following: (1) that the worker is free from the control and direction of the hiring entity in connection with the performance of work, (2) that the worker performs work that is outside the usual course of the hiring entity’s business, and (3) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
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California Supreme Court Confirms that the “anti-SLAPP” Statute Applies to Claims of Discrimination and Retaliation
Prior to the California Supreme Court’s decision in Wilson vs. Cable News Network, Inc., California Courts of Appeal were split on whether California’s anti-SLAPP statute applied to an employee’s claims of discrimination and retaliation. The Supreme Court in Wilson resolved this split in favor of the statute’s application, bringing a welcome bit of good
California Legislature Moves to Codify Dynamex
With its decision last year in Dynamex, the California Supreme Court fundamentally changed the test for determining whether workers are properly classified as either employees or independent contractors. Specifically, and as for claims brought under the California wage orders, the Supreme Court adopted the “ABC test,” which involves an analysis of the following three factors: (1) whether the worker is free from the control and direction of the hiring entity in connection with the performance of work, (2) whether the worker performs work that is outside the usual course of the hiring entity’s business, and (3) whether the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed. Since that time, California employers and various industry groups have been lobbying the California legislature left and right to take steps to either limit the ruling’s application or expand it.
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California Legislature Proposes Legislation Broadening Racial Discrimination Laws
On April 22, 2019, the California Senate voted unanimously to update California’s anti-discrimination laws to include within the definition of the term “race” “traits historically associated with race, including, but not limited to, hair texture and protective hairstyles.” If the bill ultimately becomes law, California would become one of the first states in the nation
California Court of Appeal Significantly Broadens the Scope of Employees Entitled to Reporting Time Pay
Many classes of California workers are entitled to “reporting time pay,” which is partial compensation given to employees who go to work expecting to work a certain number of hours but are deprived of working the full time due to inadequate scheduling or lack of notice by the employer. Prior to the California Court of Appeal’s decision in Skylar Ward v. Tilly’s, Inc. most employers understood that such pay was only required if the employee physically appears at the workplace. In that decision, however, the Court of Appeal told those employers that they were wrong.
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California Court of Appeal Calls into Question the Validity of Employee Non-Solicitation Provisions
California Business and Professions Code section 16600 invalidates any contract restraining anyone from engaging in a lawful profession, trade, or business. While this language has been understood to prohibit non-compete agreements, it was generally understood that it still permitted employee “non-solicitation agreements,” which are agreements preventing former employees from poaching employees from their former employers.
California Courts Slowly Interpret Dynamex
Almost six months ago, the California Supreme Court issued its decision in Dynamex, which dramatically altered the landscape pertaining to the classification of California workers as either employees or independent contractors. This past Monday, the California Court of Appeal issued one of the first decisions interpreting that seminal case.
In Dynamex, the California Supreme Court issued a new, employee-friendly test for determining whether a worker is properly classified as an employee or independent contractor for the purposes of claims brought under California’s wage order – the “ABC” test. Under the ABC test, the burden is on the hiring entity to establish that the worker is an independent contractor. In order to satisfy this burden, the hiring entity must establish all of the following: (1) that the worker is free from the control and direction of the hiring entity in connection with the performance of work; (2) that the worker performs work that is outside the usual course of the hiring entity’s business; and (3) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
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