Employment Law Bulletin | March 18, 2021

California Supreme Court Rules Employers Cannot “Round” Meal Break Start and Stop Times

California employers must generally provide non-exempt (overtime eligible) employees with one 30-minute uninterrupted off-duty meal break that begins no later than the end of the fifth hour of work, and another 30-minute meal break that begins no later than the tenth hour of work.  An employer who fails to provide compliant meal breaks is obligated to pay the employee one additional hour of pay for each workday the meal break is not provided (“meal premium pay”).

Federal law is well settled that employers may apply a “rounding” policy to adjust employee time entries to the nearest pre-set time increment so long as the policy is neutral on its face, and, in application, fully compensates employees over time.  Based on this principle, many employers round work start and stop entries to the nearest 5, 10 or 15-minute increment.  California law has followed federal guidance on this issue and similarly permitted rounding of work start and stop times.  However, since meal breaks are not required by federal law, the issue of rounding meal break start and stop times remained undecided in California until last month, when the State’s Supreme Court issued its decision in Donohue v. AMN Services, LLC ruling:

  • Employees must record the actual meal break start and stop times.
  • Employers cannot “round” meal break start and stop punches to the nearest pre-set time increment.
  • Employer time records that show noncompliant meal breaks (no break, breaks less than 30 minutes, or breaks starting after the 5th or 10th hour of work) raise a rebuttable presumption that a meal period violation occurred and the employer owes the employee meal premium pay.  The employer must then present evidence to rebut the presumption and show that compliant meal breaks were provided, but the employee voluntarily chose to skip, shorten or take a late break.

In Donohue, the employer’s electronic timekeeping system was set to round all time entries to the nearest 10-minute increment.  The policy was applied consistently and was neutral on its face.  If an employee clocked in at 7:56 a.m., the time was rounded to 8:00 a.m., but if the employee clocked in at 7:49 a.m., the time was rounded to 7:45 a.m.  This type of rounding of work day start and stop times remains lawful under federal and California law, but Donahue applies a different rule in the meal period context.

The Donohue court ruled that rounding is unlawful in the meal break context because it can result in a violation of the meal break requirements.  For example, with a 10-minute rounding rule, the employee who clocks out for lunch at 11:02 a.m. and clocks in after lunch at 11:25 a.m. has received a 23-minute break, but the timekeeping system would record the times as 11:00 a.m. and 11:30 a.m. indicating that a compliant 30-minute meal break was taken, resulting in no meal premium pay.

Ok, now what to do?

  • If your employees record their time on time cards or timesheets, make sure they are writing down their actual meal break start and stop times, taking breaks at least 30-minutes long, and they do not work more than five hours (or ten hours) without starting the break.
  • If your employees record their time electronically, make sure your timekeeping system does not round meal break start and stop time entries.  If it does, remove the rounding rule from the meal break timekeeping settings.
  • Train your managers and supervisors about the meal break rules and how to enforce them.  Make sure they are “providing” employees with the opportunity to take off-duty uninterrupted meal breaks that start on time and are long enough to comply with California’s requirements.
  • Audit employee time records each pay period for missed, short, and late meal breaks and follow up with employees to find out whether they were violations or “voluntary” on the part of the employee.  Document all conversations with employees and keep documentation of all time record changes and the reasons they were made.

Implementing, enforcing and ensuring compliance with California’s meal break rules are challenging.  Contact an SMT employment attorney to get some tips and tricks for keeping your business compliant.

Lisa Ann Hilario

No Se Habla Español?

SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish. Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims. Contact an SMT attorney today to get started.

Spaulding McCullough & Tansil LLP
Employment Law Group

Jan Gabrielson Tansil  | Lisa Ann Hilario | Kari Brown

Employment Law Bulletin | February 17, 2021

Sonoma County Revives, Expands and Extends COVID-19 Paid Sick Leave Ordinance for Employees Working in the County’s Unincorporated Areas

Following the City of Santa Rosa, the Sonoma County Board of Supervisors voted to revive its August 2020 ordinance that required COVID-19 Supplemental Paid Sick Leave (SPSL), while also expanding its reach.  The new Ordinance represents the County’s effort to fill the gap left by the expiration of the federal Families First Coronavirus Response Act (FFCRA) and to reach employers not covered by the prior ordinance, i.e., those with fewer than 500 employees.

Effective February 9, 2021, the Sonoma County Urgency Ordinance (Ordinance) requires all employers, regardless of size or sector, who operate within the County’s unincorporated areas to provide up to two weeks of SPSL for employees through June 30, 2021.  Other pertinent details of the new Ordinance are provided below.

Eligible Employees: Employees are eligible for SPSL if they 1) work two or more hours within the geographic boundaries of unincorporated Sonoma County; 2) make a written request for time off (including email or text); and 3) are unable to work (remote workers are not eligible) for one of the following reasons:

    1. The employee has been advised by a health care provider to isolate or self-quarantine to prevent the spread of COVID-19;
    2. The employee is subject to quarantine or isolation by federal, state or local order due to COVID-19;
    3. The employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
    4. The employee needs to care for an individual who is subject to a federal, state, or local quarantine or isolation order related to COVID-19, or has been advised by a health care provider to self-quarantine related to COVID-19, or is experiencing COVID-19 symptoms and is seeking a medical diagnosis; or
    5. The employee takes time off work because the employee needs to provide care for an individual whose senior care provider or whose school or childcare provider is closed or is unavailable in response to a public health or other public official’s recommendation.*

*Although the Ordinance itself makes no mention of a small employer exemption, the County’s notice (provided below) recognizes a possible exemption for employers of 50 or less who would experience financial hardship in providing the leave for reason #5, above.  It is unclear whether the County intended to provide for a small employer exemption for this purpose, but the County’s reliance in other respects on the FFCRA (where the exemption also appears) would indicate that a small employer might be able to deny a leave on this basis.

Limited Exception for Health Care Providers and Emergency Responders:  Employers of healthcare and emergency responders may deny leave to employees who need it to care for an individual whose senior care provider, school, or childcare provider is closed or unavailable due to COVID-19, if the employer can make a good-faith determination that granting leave would create a staffing shortfall and operational needs would require a denial of all or some of the requested leave.

Documentation and Replacement:  Employers may require employees to identify the basis for requesting leave under the Ordinance, but cannot require employees to furnish a doctor’s note or other supporting documentation.  Employers are also prohibited from requiring employees to find or confirm a replacement as a condition of obtaining leave under the Ordinance.

Previously Provided Paid Leave:  Like the new Santa Rosa Temporary Paid Sick Leave Ordinance, the revised 2021 Sonoma County Ordinance does not reset or replenish an employee’s COVID-related paid sick leave bank.  Any COVID-related paid sick leave taken in 2020 or 2021, prior to the passing of the Ordinance, that was in addition to state required paid sick leave may be credited towards the 2021 SPSL requirement.

Pay Amount:  As under the prior ordinance, employees must be paid at their regular rate of pay up to $511 per day, not to exceed $5,110.

Notice:  Written notice of the rights afforded by the 2021 Ordinance is required to be given in a manner calculated to reach all employees, including posting a notice in English and Spanish in the workplace, on any intranet or app-based platform and/or via email.  Employers must also maintain a record of each employee’s name, the hours worked, and pay rate for at least a three-year period.

The County has created a flyer to assist employers with complying with this notice requirement, which can be found here: https://sonoma-county.legistar.com/View.ashx?M=F&ID=9158148&GUID=98D72E31-C47E-4584-B691-51548909518C.

No Retaliation:  The Ordinance prohibits employers from engaging in retaliation against employees for requesting or taking SPSL or for seeking to enforce the rights afforded under the Ordinance.  Employees who believe their rights have been violated may file an action in court and may seek reinstatement, back pay, and/or other legal or equitable relief. Prevailing employees are entitled to recover attorney’s fees and costs.

Employers covered under this new Ordinance should act quickly to determine employee eligibility and available paid sick leave amounts, as well as post the appropriate notices.  If you have questions or need help navigating the new 2021 Sonoma County Ordinance, please contact an SMT employment law attorney at info@www.smlaw.com.

Kari Brown

No Se Habla Español?

SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish. Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims. Contact an SMT attorney today to get started.

Spaulding McCullough & Tansil LLP
Employment Law Group

Jan Gabrielson Tansil  | Lisa Ann Hilario | Kari Brown

Employment Law Bulletin | February 11, 2021

California Family Rights Act Revisions – All Employers, Take Notice!

Revisions to the California Family Rights Act (CFRA) effective January 1, 2021 require all employers of 5 or more employees to update their employee handbooks and policies.  The major changes are outlined below by employer size:

Employers of 5 or more

The CFRA now applies to employers of 5 or more employees (down from 50 or more employees) and requires employers to provide eligible employees with up to 12 workweeks of job-protected leave per year (1) for the employee’s serious health condition; (2) to care for the employee’s eligible family member’s serious health condition; (3) to bond with the employee’s new child following birth, adoption or foster care placement; and (4) to attend to certain “military exigencies.”

To be eligible for CFRA leave, the employee must have worked for the employer for at least one year and at least 1,250 hours in the year before the leave is to begin.  CFRA leave is not paid by the employer, unless the employee uses their accrued paid time off, but the employer must continue to make the same contributions to group health insurance plans during the leave and  restore the employee to the same or a comparable job position when the leave expires.

Employers of 20-49

Before 2021, employers of 20 to 49 employees were subject to the California New Parent Leave Act which required them to provide up to 12 workweeks of job-protected leave to bond with a new child.  Now that the CFRA requires employers of 5 or more employees to provide child bonding leave, the New Parent Leave Act has been repealed.

Employers of 50 or more

The CFRA revisions also contain changes for employers of 50 or more employees that (1) remove the 75-mile radius requirement from the definition of an “eligible employee;” (2) delete the “key employee” exception to reinstatement; and (3) require employers to provide both parents with separate CFRA child bonding leaves if they work for the same employer.

All Employers

The CFRA is complicated and has employee notice and leave certification requirements with short deadlines.  If this law is new to you or you need a refresher, please reach out to an SMT employment attorney to update your handbook and receive training.

Lisa Ann Hilario

 

DFEH Publishes Pay Data Report Template and FAQs Ahead of March 31, 2021 Filing Deadline

A new law effective January 1, 2021 requires California employers with 100 or more employees to report pay and hours-worked data by establishment, job category, sex, race, and ethnicity to the California Department of Fair Employment and Housing (DFEH).  Reports must be filed by March 31, 2021, and annually thereafter.  Employees located inside and outside of California are counted when determining whether an employer has 100 or more employees, although only data for employees assigned to California establishments and/or working within California must be included in the report.

The Pay Data Report requires extensive reporting of employee data during a single pay period between October 1 and December 31 of the reporting year (the “snapshot period”).  Employers select the snapshot period and then assign each employee to one of ten designated DFEH job categories and provide data according to their gender (female, male, non-binary), race and ethnicity.  Employee self-identification is the preferred method of identifying this information.

The DFEH recently published a User Guide, Report Template, and FAQs which can be found at https://www.dfeh.ca.gov/paydatareporting.  Employers must use the DFEH online Pay Reporting Portal to submit their pay data reports; reports will not be accepted by email or mail.  The Portal is expected to be available by February 16, 2021.  In the meantime, employers should select their “snapshot period” and begin compiling the required data.  Employers must keep the pay data reports for a minimum of 10 years.

Please contact an SMT employment attorney if you have questions about this new law.

Lisa Ann Hilario

No Se Habla Español?

SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish. Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims. Contact an SMT attorney today to get started.

Spaulding McCullough & Tansil LLP
Employment Law Group

Jan Gabrielson Tansil  | Lisa Ann Hilario | Kari Brown

Employment Law Bulletin | February 5, 2021

Santa Rosa Revives COVID-19 Paid Sick Leave

As you may be aware, the Santa Rosa Temporary Paid Sick Leave Ordinance that previously required employers to provide COVID-related paid sick leave benefits expired on December 31, 2020.  In the face of the continued spread of the COVID-19 virus and the lack of any federally required paid sick leave*, Santa Rosa’s City Council took steps this week to revive the 2020 temporary paid sick leave requirements.

Extension of Temporary Benefits

Effective February 2, 2021, employers, regardless of size or sector, with employees who work at least two hours per week within Santa Rosa’s city limits are required to continue to provide up to two weeks of paid sick leave for employees who are unable to work for the following reasons:

    1. The employee is subject to quarantine or isolation by federal, state or local order due to COVID-19, or
    2.  The employee is advised by a health-care provider to self-quarantine due to COVID-19, or
    3. The employee experiences symptoms of COVID-19 and is seeking medical diagnosis, or
    4. The employee is caring for an individual who is quarantined or isolated, or otherwise unable to receive care due to COVID-19, or
    5. The employee is caring for a minor child because a school or daycare is closed, or the child care provider is not available due to COVID-19.

Previously Provided Paid Leave: It’s important to note that the revised 2021 Ordinance does not reset or replenish an employee’s COVID-related paid sick leave bank.  Any COVID-related paid sick leave taken in 2020 for the above reasons that was in addition to state required paid sick leave may be deducted from the 2021 paid sick leave requirement.

Pay Amount: As under the prior ordinance, employees must be paid at their regular rate of pay up to $511 per day, not to exceed $5,110, for reasons 1, 2, and 3 above; and at two-thirds of their regular rate of pay up to $200 per day, not to exceed $2,000, for reasons 4 and 5 above.  The 2021 Ordinance continues to allow for the small employer’s exemption for reason 5 if the employer has less than 50 employees and meets certain criteria.

Notice: Written notice of the rights afforded by the 2021 Ordinance is required to be given to all current employees and to new employees within one week of the employee’s date of hire.  The City of Santa Rosa has created a flyer to assist employers with complying with this notice requirement, which can be found here: https://srcity.org/DocumentCenter/View/31340/Paid-Sick-Leave-Hours_English_Spanish_FINAL

No Refusal or Retaliation: The Ordinance prohibits employers from refusing to provide the paid sick leave benefits to eligible employees and from engaging in retaliation against employees for requesting or taking paid sick leave. Employees who believe their rights have been violated may file an action in court and may seek to recover attorney’s fees if they prevail on their claim.

*The Families First Coronavirus Response Act (FFCRA) expired on December 31, 2020.  However, the federal government is allowing employers to voluntarily provide FFCRA benefits through March 31, 2021 and take advantage of the associated payroll tax credit.

Have questions or need help navigating the new 2021 Santa Rosa Ordinance?  Contact an SMT employment law attorney at info@www.smlaw.com.

Kari Brown

No Se Habla Español?

SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish. Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims. Contact an SMT attorney today to get started.

Spaulding McCullough & Tansil LLP
Employment Law Group

Jan Gabrielson Tansil  | Lisa Ann Hilario | Kari Brown

Employment Law Bulletin | January 19, 2021

In this month’s Employment Law Bulletin we bring you our 2021 Employment Law Update Action Items. Employers can use this handy list to help ensure their organization is in compliance with new laws that took effect in January 2021. Please reach out to an SMT employment attorney if you have questions. We are here to help.

2021 Employment Law Update Action Items

Required Labor Law Postings

  • Update CA Labor Law Poster

CA Minimum Wage Increase

  • Review hourly pay rates and raise if necessary
  • Review exempt EE salaries and raise if necessary
  • Review commissioned EE compensation to determine if they still meet the threshold

Local Minimum Wage Ordinances

  • Determine if any EEs work in cities with local minimum wage ordinances and raise if necessary

OT for Agricultural Workers Act of 2016

  • ERs with > 25 EEs:  implement new 8.5/day; 45/week OT standard now and plan for future changes
  • ERs with 1-25 EEs, first change is not effective until 1/1/2022
  • The new OT law is triggered by ER size, so pay attention to fluctuation in EE counts and apply the correct OT rule
  • Review labor demands and costs and start planning for future changes

2021 IRS Mileage Rate

  • Ensure EEs using personal vehicles for business are being properly reimbursed for business mileage
  • Inform your payroll/finance department of the mileage rate change so EEs are properly reimbursed

Compensable Time

  • Review company procedures and evaluate for potential “off-duty control” and hidden compensable time issues

Employer Annual Pay Data Report

  • Evaluate and select your “snapshot period”
  • Begin compiling required data
  • DFEH is developing a sample report form – watch www.dfeh.ca.gov for more information

Labor Commissioner Enforcement

  • Conduct and document investigations into workplace complaints
  • Train supervisors to recognize, field and report EE complaints to HR
  • Train supervisors that retaliatory conduct is prohibited

Wage Judgments: Successor Liability

  • Comply with wage/hour laws
  • Complete corporate statements properly if there is a judgment that must be reported
  • If selling a business, clear up judgments
  • If buying a business, check the SOS website for judgments and request information during the due diligence process

Direct Patient Care EEs: Educational Programs and Training Costs

  • Determine if this law applies to you
  • Update EHB, policies and forms
  • Inform and train staff who manage continuing education programs

Mandated COVID-19 Reporting

  • Draft/Obtain Notices to quickly distribute to EEs and to public health agency (also see OSHA ETS for additional requirements)
  • Contact SMT to develop protocols and train staff on how to act quickly when notified of a positive test result

Workers Compensation COVID-19 SB 1159

  • Train staff on reporting requirements and ensure timely compliance

OSHA COVID-19 Emergency Temporary Standard (ETS)

  • Create COVID-19 Protection Plan (CPP) or supplement current IIPP
  • Draft/Obtain Notices to communicate required information
  • Develop protocols to ensure compliance with short deadlines

Federal, State and Local Emergency Paid Leaves Expired

  • Decide whether to continue offering benefits, if applicable
  • Revise forms, handbooks and policies as needed

Independent Contractor

  • Analyze where this applies to your business/organization
  • Review accounts payable records and identify anyone paid on 1099 basis
  • Review existing IKor Agreements

Settlement Agreement/Release Issues

  • Review any form Releases for compliance
  • Review any Severance Plan documents for compliance

California Family Rights Act

  • ERs of 5-49 EEs
    • Contact SMT for CFRA leave training
    • Contact SMT about adding a CFRA policy to your Handbook
    • Obtain required CA forms from SMT:
      • Notice of Eligibility
      • Designation Notice
      • Certification forms
    • Train supervisors to recognize and report leaves that may qualify
    • Train HR/person in change of implementing and managing leaves about the new law
  • ERs of 20-49 EEs
    • Contact SMT to revise Handbook to add CFRA policy and delete New Parent Leave policy
  • ERs of 50 or more EEs
    • Study where the FMLA/CFRA overlap and don’t
    • Contact SMT to revise Handbook, policies and forms to reflect changes
    • Train supervisors to report leaves that may qualify
    • Train HR/person in charge of implementing and managing leaves about the new changes to the law

Paid Sick Leave Designation During Kin Care

  • Revise Handbook, policies and forms to state that EEs can choose whether to use paid sick leave for absences to care for family members
  • Inform and train HR/payroll/supervisors who handle paid sick leave benefits

Paid Family Leave Insurance Program

Crime Victims Protected Time Off

  • Ensure notice is provided as required and revise leave policies

Mandated Reporters Now Includes Certain Individuals and HR Professionals

  • Check EHB to see who is designated to accept complaints, consider changes
  • Ensure HR professionals and EEs with direct contact and supervision of minors receive appropriate training

Pre-Employment Inquiries & Availability

  • Check applications and train hiring staff to ensure scheduling questions are in compliance

Sonoma County Health Officer Mandatory Flu Shot Order

If applicable, implement system to document required data and notify Sonoma County Health

 

No Se Habla Español?

SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish. Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims. Contact an SMT attorney today to get started.

Spaulding McCullough & Tansil LLP
Employment Law Group

Jan Gabrielson Tansil  | Lisa Ann Hilario | Kari Brown

Law Bulletin | January 8, 2021

PROPOSITION 19: HOW IT MAY IMPACT YOU

As you may be aware, Proposition 19 passed by a slim margin in November’s election and has, at least in part, significant ramifications for use of the parent-child exclusion from property tax reassessment on transfers of real estate between parents and children. This component of the new law takes effect on February 16, 2021.

California property tax laws require a reassessment of the value of property for tax purposes whenever real property changes ownership. The property value for purposes of determining the property tax due becomes the fair market value of the real property transferred unless an exception applies. Before Prop 19 becomes effective, a parent may transfer his or her principal residence to a child by gift, sale, or as a result of death, and the property’s assessed value — and property taxes due — will remain unchanged. Additionally, before Prop 19 becomes effective, a parent may exclude from reassessment transfers to a child or children of real property other than a principal residence, such as a vacation home, family farm, or commercial property.  This exclusion is limited to $1 million of the assessed value of the transferred real property. Similar though more limited exceptions apply to grandparent to grandchild transfers.

Prop 19, effective February 16, 2021, changes this by:

  1. Requiring that the child or children occupy the parent’s principal residence as their own principal residence. If they do not, the property will be reassessed to its fair market value upon transfer.  Furthermore, even if the child occupies the residence as his or her primary residence, the exclusion from reassessment is limited, the calculation of which depends on the property’s current fair market value and the property’s assessed value. Other limitations apply as well.
  2. Providing that certain family farms may also claim a limited exclusion from reassessment similar to the exclusion applicable to transfers of a principal residence.
  3. Requiring that all real property other than a principal residence, such as vacation homes, rentals, commercial property, and the like, be reassessed to current fair market value upon transfer from parent to child. There are no exceptions.

By way of examples*:

Transfer Old Law New Law
Mom transfers $2 million principal residence to son at death.  Son lives out of the area and wants to rent out the house. The assessed value of the principal residence is $500,000 and Mom’s property taxes are $5,000/year. Exempt from reassessment. Son pays $5,000/year in property taxes. Property is reassessed at Fair Market Value (FMV). Son pays $20,000/year in property taxes.
Mom transfers $2 million principal residence to son at death. Son moves in and claims the home as his principal residence.  The assessed value of the principal residence is $500,000 and Mom’s property taxes are $5,000/year. Exempt from reassessment. Son pays $5,000/year in property taxes. Property is partially reassessed. Son pays $10,000/year in property taxes.  Under Prop 19 formula, new tax base is $1,000,000.
Mom transfers $1.4 million principal residence to son at death. Son lives out of the area and wants to rent out the house. The assessed value of the principal residence is $500,000 and Mom’s property taxes are $5,000/year. Exempt from reassessment. Son pays $5,000/year in property taxes. Property is reassessed at FMV. Son pays $14,000/year in property taxes.
Mom transfers $1.4 million principal residence to son at death. Son moves in and claims the home as his principal residence.  The assessed value of the principal residence is $500,000 and Mom’s property taxes are $5,000/year. Exempt from reassessment. Son pays $5,000/year in property taxes. Exempt from reassessment. Son pays $5,000/year in property taxes.
Mom transfers $3 million commercial property to son at death. The assessed value of the property is $900,000 and Mom’s property taxes are $9,000/year. Exempt from reassessment. Son pays $9,000/year in property taxes. Property is reassessed at FMV. Son pays $30,000/year in property taxes.

*These examples are for illustration purposes only. Other factors not included here are additional assessments (bonds, parcel tax measures), and routine annual assessed value increases.

As a result of this law change, many clients are reaching out to discuss strategies to utilize the parent-child exclusion from reassessment now, prior to the February 16, 2021 change in the law. If you wish to explore your options, please contact your attorney as soon as possible to allow adequate time to complete any transactions ahead of the February 16, 2021 deadline.

From the Estate Planning Team:

Barbara Gallagher, Albert Handelman, Katherine Jeffrey, Kevin McCullough, Mark Miller, Candice L. Raposo, and Carmen Sinigiani.

Spaulding McCullough & Tansil LLP

Employment Law Bulletin | December 17, 2020

MORE (YES MORE), EMPLOYER COVID-19 NOTIFICATION REQUIREMENTS

On October 21, 2020, we published a bulletin covering Assembly Bill 685, a law containing new notification requirements for employers who learn an employee has tested positive for COVID-19 and may have exposed others in the workplace.  That law will go into effect on January 1, 2021 and employers will need to be ready to issue notices to their employees and subcontractors within one business day of discovering the potential exposure, and within 48 hours if there is an outbreak.  These notices must not only disclose the potential exposure, but also must contain information about COVID-related benefits and the employer’s disinfection and safety plan.  Our October bulletin discussing the requirements of AB 685 can be found here: https://www.smlaw.com/employment-law-bulletin-october-21-2020/

As of December 1, 2020, employers now have additional notice obligations.  On November 30, 2020, CalOSHA issued its Emergency Temporary Standards (ETS).  Although the ETS is subject to modification in the future, it was approved by the California Department of Industrial Relations’ Office of Administrative Law and became enforceable immediately.  The ETS requires employers to develop a COVID-19 Prevention Program (CPP) and adds additional notification, pay, testing, and investigation requirements employers must meet.  Failure to comply with the ETS can result in significant penalties and possible operation shutdown.   More information and a Model CPP developed by CalOSHA can be found here:   Frequently Asked Questions and template documents.

Both the ETS and AB 685 require employers to act quickly after receiving notice of a potential exposure to COVID -19 in the workplace.  In order to help our clients achieve compliance with the short deadlines demanded by these laws, we have developed useful and easy to use forms that include employer notification and reporting protocols, workplace investigation forms, and required notices.  If you are interested in learning more about compliance or in getting customized forms to help your business respond effectively to COVID-19 exposure, contact an SMT Employment Law Attorney.

Kari Brown

JANUARY 1, 2021 BRINGS NEW MINIMUM WAGE REQUIREMENTS 

Below are the new minimum wage requirements for the State of California and some Bay Area cities.  Unless indicated below, the minimum wage takes effect on January 1, 2021.  Other cities in California may have their own minimum wage laws.

All Employers Employers with
1-25 employees
Employers of 26 or more employees
California $13.00 $14.00
Santa Rosa
Petaluma
$15.20
Sonoma $14.00* $15.00*
Novato $14.00 $15.00 (26-99 employees)
$15+CPI (employers of 100 or more)
San Francisco
Berkeley
$16.07 (7/1/2020)
$16.07+CPI (7/1/2021)
Alameda $15.00
(7/1/2020)
Oakland $14.36
Richmond $15.00*
San Jose $15.45
Redwood City
San Mateo
$15.62
Santa Clara $15.65
Belmont $15.90

*Allows for a medical benefit credit
CPI = Consumer Price Index

Local ordinance minimum wage rates typically apply to employees who work two or more hours per week inside the city.  This is true even if the employer does not have an office or fixed worksite within the city.  Contact an SMT Employment Law Attorney if you have questions about the application of the new minimum wage laws to your workforce.

Lisa Ann Hilario

No Se Habla Español?

SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish. Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims. Contact an SMT attorney today to get started.

Spaulding McCullough & Tansil LLP
Employment Law Group

Jan Gabrielson Tansil  | Lisa Ann Hilario | Kari Brown

Zoom Shareholder Meetings? | October 23, 2020

Zoom Shareholder Meetings?

Many of us probably have a bit of Zoom fatigue.  At least I do, even when there are no Zoom bombs and everyone knows how to mute/unmute themselves.  But with the year end approaching, we recommend that annual shareholder meetings be held via Zoom or other electronic means.

Such virtual meetings must meet certain statutory requirements, some of which were simplified by an executive order issued last month by Governor Newsom.  This Law Bulletin discusses the requirements for California corporations, though Delaware corporations have similar requirements.  Instructions on how to mute/unmute are not included.

The initial step is to determine whether the corporation’s bylaws or articles prohibit such virtual meetings.  Once those organizational documents have been reviewed (and amended if necessary), the other legal requirements can be addressed.

The next steps are based on sections 20, 21, 600(a), 600(e) and 601 of the California Corporations Code (the “Code”), some of which were suspended by Executive Order N-80-20, para. 3 issued by Governor Newsom on September 23, 2020 (the “Order”).  These next steps are listed below.

  1. Board Action.  The board authorizes such a meeting, consistent with Code section 600(a).  The board can also adopt guidelines and procedures to be used during such meeting.  These board decisions should be memorialized by a formal resolution.
  2. Opportunity to Participate.  The corporation implements “reasonable measures to provide shareholders a reasonable opportunity to participate,” consistent with Code section 600(e).  This requirement was clarified by the Order, which provided that “the corporation shall afford a “reasonable opportunity to participate in the meeting” under Corporations Code section 600, subd. (e), by:
    1. Not imposing unreasonable obligations on shareholders seeking to participate in the shareholder meeting; and
    2. Providing shareholders, as closely as reasonably possible, an opportunity to participate equivalent to the ability of in-person attendees at the corporation’s last in-person meeting, including any ability to vote, ask questions, be heard by other shareholders, or advance proposals. In addition, if such a meeting considers any significant business transaction, controversial proposal, counter-solicitation, or other matter of a sort not considered at the last in-person meeting, the corporation shall provide as closely as reasonably possible an equivalent ability to participate as in-person attendees at the last in-person meeting to consider such a matter.”
  3. Maintain Record.  The corporation maintains a record of any vote or action taken at such meeting, consistent with Code section 600(e).
  4. Notice of Meeting.  The notice of shareholder meeting must include the “means of electronic transmission” for the meeting, consistent with Code section 601.  (As discussed below, the Order suspended the need for shareholder consent to a virtual meeting but not the need for shareholder consent to receive notices by email.)

If the Order was not in effect, the corporation would also need to request and obtain shareholder consent to such a meeting.  These requirements are often the most difficult to meet.  The request would need to meet these requirements, consistent with Code sections 20 and 600(e), respectively:

  • “[T]he consent to the transmission has been preceded by or includes a clear written statement to the recipient as to (a) any right of the recipient to have the record provided or made available on paper or in nonelectronic form, (b) whether the consent applies only to that transmission, to specified categories of communications, or to all communications from the corporation, and (c) the procedures the recipient must use to withdraw consent.”
  • “Any request by a corporation to a shareholder pursuant to clause (b) of Section 20 for consent to conduct a meeting of shareholders by electronic transmission by and to the corporation shall include a notice that, absent consent of the shareholder pursuant to clause (b) of Section 20, the meeting shall be held at a physical location in accordance with subdivision (a).”

The Order facilitates virtual meetings by allowing a corporation to skip both the logistics of sending the request that meets these requirements, as well as the sometimes bigger challenge of obtaining each shareholder’s consent.  As mentioned above, the Order does not change the requirement to request and obtain shareholder consent for other electronic transmissions (like notice of meetings), so the logistics and challenges described above remain for other matters.  Now might be a good opportunity to address those additional requirements to more fully facilitate electronic communication with your shareholders beyond the annual meeting.  Regardless, now is the time to take steps to facilitate virtual annual meetings.  Zoom fatigue notwithstanding.

DJ Drennan

Spaulding McCullough & Tansil LLP

Corporate Team, Business Law Group

Douglas J. (DJ) Drennan | Keenan J. McCullough | Kevin J. McCullough | Donald L. Winkle

Employment Law Bulletin | October 21, 2020

AB 685 – New Employer Obligations to Notify Employees of “Potential Exposure” to COVID-19

Governor Newsom recently signed Assembly Bill 685 requiring employers to notify employees and local public health authorities if employees have been “potentially exposed” to COVID-19 in the workplace.  The Bill also requires employers to notify employees of COVID-19 related benefits and the disinfection and safety plan the employer will implement and complete in accordance with the Centers for Disease Control (CDC) guidelines.

In addition, AB 685 grants Cal/OSHA the authority to shut down a worksite that exposes employees to an “imminent health hazard” related to COVID-19, and to issue citations for serious violations related to COVID-19 without giving employers 15-day’s notice before issuance.

The law is effective from January 1, 2021 until January 1, 2023.  Details of the law and your obligations are below.  Italicized terms are defined later in the article.

Notice to Employees, Subcontracted Employees and Employee Representatives

If an employer receives notice of potential exposure to COVID-19, the employer must provide the following written notices within one business day of notice of the potential exposure:

  • Notice of Potential Exposure:
    • notice to all employees who were on the premises at the same worksite as the individual within the infectious period that they may have been exposed to COVID-19;
    • notice to employee representatives (e.g. unions) who may represent employees;
    • sent by means that ensure the employee receives it within one business day of sending;
    • notice must be in English and the language understood by a majority of employees.
  • Notice of COVID-19 Employee Benefits:
    • the availability of workers’ compensation benefits (if the employee believes COVID-19 was contracted in the workplace);
    • the availability of COVID-19-related leave benefits (e.g. Families First Coronavirus Response Act emergency paid sick leave, Santa Rosa Temporary Paid Sick Leave ordinance, other local ordinances related to COVID-19 sick leave);
    • the availability of the employer’s regular paid sick leave benefit;
    • the availability of family/medical leave (for employers of 50 or more employees);
    • the employer’s anti-discrimination, anti-harassment and anti-retaliation policies.
  • Notice of Disinfection and Safety Plan:
    • notice to all employees and their exclusive representative, of the disinfection and safety plan the employer plans to implement and complete per CDC guidelines.

Notice to the Local Public Health Agency

If an employer is notified of the number of cases that meet the definition of a COVID-19 Outbreak, as defined by the State Department of Public Health, the employer must provide notice of the following to the local public health agency within 48 hours:

  • the names, number, occupation, and worksite of employees who meet the definition of a qualifying individual;
  • the business address and NAICS code of the worksite where the qualifying individual works;
  • an employer that has an outbreak shall continue to give notice to the local health department of any subsequent laboratory-confirmed cases of COVID-19 at the worksite.

No Disclosure of Medical Information

The employer may not require employees to disclose medical information unless otherwise required by law.

No Retaliation

  • employers may not retaliate against a worker for disclosing a positive COVID-19 test, diagnosis or order to quarantine or isolate;
  • employees may file retaliation complaints with the Labor Commissioner.

Application of Law

  • applies to both private and public employers;
  • exceptions
    • does not apply to a “health facility,” as defined in Section 1250 of the Health and Safety Code;
    • does not apply to employees who, as part of their duties, conduct COVID-19 testing or screening or provide direct patient care or treatment to individuals who are known to have tested positive for COVID-19, are persons under investigation, or are in quarantine or isolation related to COVID-19, unless the qualifying individual is an employee at the same worksite.

Recordkeeping Requirements

Employers must maintain written notices for at least three years.

Enforcement

OSHA may issue citations/penalties.

Definitions

  • COVID-19 Outbreak (see Outbreak Definition and Reporting Guidance):
    • outbreak in a non-health care setting – three or more laboratory-confirmed cases of COVID-19 within a two-week period among employees who live in different households;
    • outbreak in a skilled nursing facility – at least one case of laboratory-confirmed COVID-19 in a resident.
  • Infectious period” means the time a COVID-19 positive individual is infectious, as defined by the State Department of Public Health.  In California, the “infectious period” is the 48 hour period before the individual developed symptoms.
  • Notice of potential exposure” means any of the following:
    • notification to the employer from a public health official or licensed medical provider that an employee was exposed to a qualifying individual at the worksite;
    • notification to the employer from an employee, or their emergency contact, that the employee is a qualifying individual;
    • notification through the testing protocol of the employer that the employee is a qualifying individual; or
    • notification to an employer from a subcontracted employer that a qualifying individual was on the worksite of the employer receiving notification.
  • Qualifying individual” means any person who has any of the following:
    • a laboratory confirmed case of COVID-19;
    • a positive COVID-19 diagnosis from a licensed health care provider;
    • a COVID-19 related order to isolate provided by a public health official; or
    • died due to COVID-19.
  •  “Worksite
    • means the building, store, facility, agricultural field, or other location where a worker worked during the infectious period;
    • it does not apply to buildings, floors, or other locations of the employer that a qualified individual did not enter;
    • in a multi-worksite environment, the employer need only notify employees who were at the same worksite as the qualified individual.

Reporting to Cal/OSHA

  • employers must report cases of COVID-19 workplace exposure to Cal/OSHA within eight hours if the employee is admitted to the hospital;
  • employers must record confirmed COVID-19 cases on the employer’s Log 300 if:
    • it is work-related (an event or exposure in the work environment either caused or contributed to the resulting condition); and
    • resulted in:
      • lost time from work (other than the day off);
      • medical treatment beyond first aid;
      • loss of consciousness; or
      • death.

Next Steps

AB 685 requires a lot of employers, but compliance is not required until January 1, 2021. Contact an SMT employment attorney for assistance with developing procedures, policies and forms to comply with this new law.

Lisa Ann Hilario

No Se Habla Español?

SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish. Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims. Contact an SMT attorney today to get started.

Spaulding McCullough & Tansil LLP
Employment Law Group

Jan Gabrielson Tansil  | Lisa Ann Hilario | Kari Brown

Employment Law Bulletin | October 12, 2020

SB 1159: A Rebuttable Presumption That COVID-19 Is an Occupational Injury Eligible for Workers’ Compensation Benefits; Employer Notice Obligations

On September 17, 2020, Governor Newsom signed Senate Bill 1159 which provides a rebuttable presumption that an employee’s illness related to COVID-19 is an occupational injury and therefore eligible for workers’ compensation benefits if specified criteria are met.  The new law took effect immediately upon signing and will remain in effect through January 1, 2023.

SB 1159 applies, in significant part, to California employers of five or more employees and creates a rebuttable presumption that an employee who tests positive for COVID-19 contracted it during the course of employment so long as certain criteria related to timing and the employee’s work location are met.  Specifically, the workers’ compensation insurance claims adjuster must find that the positive test result occurred: (1) after July 6, 2020; (2) within 14 days of when the employee performed work at the employee’s “place of employment” at the employer’s direction; and (3) during a period of an “outbreak” at the employee’s place of employment.

For the purposes of this Bill, an outbreak occurs if, within a 14-day period, four employees (for employers of under 100 employees) or 4% of the employees (for employers of 100 or more) at the specific place of employment test positive for COVID-19.  An employee’s place of employment includes a building, store, facility or agricultural field, but does not include an employee’s residence unless the employee provides home health care services to another individual at the employee’s residence.  However, employers should be aware that there are other worker’s compensation considerations that go beyond SB 1159 for employees who are working from home.

SB 1159 allows for workers’ compensation benefits for firefighters, peace officers, healthcare workers and any employees who were infected between March 19, 2020 and July 5, 2020, upon meeting criteria 1 and 2, above, but does not require these categories of employees to show criteria 3 (that the positive test occurred during an outbreak).

Under SB 1159, employers have the opportunity to overcome the presumption and avoid liability for a COVID-related claim by producing evidence that the virus was contracted somewhere other than the employee’s place of employment and evidence of measures the employer has taken to reduce potential transmission in the workplace.  Health facilities may overcome the presumption by showing that the employee did not have contact with a patient within the 14-day period before the positive test.   If no evidence is presented or the employer fails to overcome the presumption, the employee will be deemed to have contracted the infection at work so long as the claims administrator determines that the above criteria are met.  Before receiving disability benefits for a COVID-19 worker’s compensation claim, SB 1159 requires employees to use all available paid sick leave benefits.

Finally, SB 1159 also creates additional reporting requirements for employers.  As of September 17, 2020, employers who know or reasonably should know that an employee has tested positive for COVID-19 must inform their worker’s compensation claims administrator of (1) the positive test result; (2) the date the employee tested positive; (3) the specific location or locations of employee’s place of employment in the 14 days preceding the positive test; and (4) the highest number of employees who reported to work at the employee’s place(s) of employment in the 45-day period preceding the last day the employee worked.  Notification must be made by e-mail or fax within three business days of discovering that the employee tested positive.  It is important to note that employers are obligated to report the above information regardless of whether they believe the infection occurred at the workplace.  The Bill charges the claims administrator with making the ultimate decision as to whether the employee contracted the infection at work and whether it happened during an outbreak.  A failure to report the required information or an attempt to provide false or misleading information can result in a civil penalty of up to $10,000.  Employers should be aware of SB 1159’s reporting requirements and implement procedures to ensure compliance with its tight deadlines.

Contact an SMT employment attorney for additional guidance on the new requirements of this Bill and steps on how to achieve compliance.

Kari Brown

The Sexual Harassment Prevention Training Deadline Is Almost Here – Are You Ready?

January 1, 2021 is the deadline for employers with five or more employees to provide harassment prevention training to all California-based employees.  As we are just a few months away from that deadline, we thought we would remind you of the training requirements to be sure you are in compliance by the end of the year.

  • Non-supervisory employees must receive one hour of training.
  • Supervisors must receive two hours of training.
  • After the initial training in 2020, employees must be re-trained for every two years.
  • New hires must receive training within six months of their hire date, unless they can provide evidence they completed training with a previous employer during 2020.
  • Employees promoted to a supervisory position must receive the supervisor training within six months of their promotion.
  • Beginning January 1, 2021, seasonal and temporary employees, and employees who are hired to work for less than six months, must receive training within 30 days of their date of hire or within 100 hours worked, whichever occurs first.

Not sure where to go from here?  Contact an SMT employment attorney.  We can provide the employee training or discuss other options to help you select the most efficient and cost-effective training method for your business.

Lisa Ann Hilario

No Se Habla Español?

SMT’s employment attorneys can provide your company with employment policies, forms and employee disciplinary documentation in Spanish. Providing such important information to employees in the language they understand is critical to employee performance, providing a welcoming diverse work environment, and protecting your company against employment claims. Contact an SMT attorney today to get started.

Spaulding McCullough & Tansil LLP
Employment Law Group

Jan Gabrielson Tansil  | Lisa Ann Hilario | Kari Brown