It’s Time for a California HR Compliance Check


California HR professionals know that the new year generally brings new employment laws, as well as higher minimum wage thresholds at the state and local levels. The start of the year is a great time to update employee handbooks and ensure compliance.

On Jan. 1, the minimum wage for businesses with up to 25 employees was raised to $14 an hour. The rate for larger businesses is now $15, and many localities in the Golden State have set an even higher rate. "Over the last few years, we have seen many cities and counties pass their own minimum wage ordinances, resulting in wage rates in excess of the state minimum," observed Susan Groff, an attorney with Jackson Lewis in Los Angeles. "Several of these ordinances also include a significant paid-sick-leave mandate."

Employers should also note that the salary threshold for the executive, administrative and professional exemptions to overtime rules is double the applicable statewide minimum wage rate.

Here is an overview of what else is new for 2022 and the key issues California HR professionals should follow this year:

New Laws Take Effect

Many bills that were signed into law during the previous legislative session took effect on Jan. 1. Although the California Legislature saw less activity last year due to the continuing COVID-19 pandemic, several key bills were passed that impact the workplace.

"Legislative leadership placed limits on how many bills members could advance this year—12 bills—in light of the pandemic, so we saw less labor and employment bills than we see in a normal legislative year in California," observed Benjamin Ebbink, an attorney with Fisher Phillips in Sacramento, Calif. "Despite the fact that bill numbers were limited, California continues to push the envelope when it comes to labor and employment legislation."

Here are some key areas HR professionals should check for compliance:

Leaves of absence. Under the California Family Rights Act (CFRA), eligible employees may take 12 weeks of leave per year to provide care to family members, including parents. AB 1033 expands the definition of "parent" under the CFRA to include parents-in-law. 

"While, a seemingly minor change, employers need to ensure their policies and procedures are updated," Groff said. Moreover, she said, employers subject to the federal Family Medical Leave Act may confront differences in coverage under federal versus state law as the two laws apply to different family members. 

Jim Evans, an attorney with Alston & Bird in Los Angeles, recommends that employers review and update their CFRA policies and handbook to ensure compliance.

Confidentiality provisions. "Employers should ensure that settlement and severance agreements comply with a new statute," Evans said. Since January 2019, SB 820 has banned confidentiality provisions in settlement agreements that prohibit employees from disclosing facts related to claims of sex discrimination and sexual harassment. A new law, SB 331, expanded this limitation.

"SB 331 broadens restrictions to prevent the use of nondisclosure provisions in any case involving employment discrimination of any type prohibited by the Fair Employment and Housing Act, not just sexual harassment," Evans explained.

SB 331 also limited the use of nondisclosure agreements in employment severance agreements. Beginning Jan. 1, any non-disparagement or other contractual provision that restricts employees from disclosing information related to conditions in the workplace must include the following notice: "Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful."

Records retention. Prior to 2022, employers were required to maintain personnel records for two years. Effective Jan. 1, SB 807 extended this requirement to four years. 

"If litigation has been filed, employers must maintain records until the applicable statute of limitations has expired or until the conclusion of the litigation, whichever occurs later," Evans said. 

Workplace safety. "2022 brings quite a few new laws for workplace safety," noted Karen Tynan, an attorney with Ogletree Deakins in Sacramento. The California Division of Occupational Safety and Health (Cal/OSHA) now has greater power to issue citations across a business enterprise and to issue multiple citations across workplaces when employers have multiple facilities or locations, she said.

SB 606 created a rebuttable presumption that employers with multiple worksites have made enterprise-wide workplace safety violations in certain circumstances. The new law also allows Cal/OSHA to issue a citation to an "egregious" employer for each willful violation. SB 606 ordered "each instance of an employee exposed to that violation to be considered a separate violation for purposes of the issuance of fines and penalties," according to the new law.

California employers should ensure their Injury and Illness Prevention Plan and COVID-19 Prevention Plan are well-established, implemented and enforced, Tynan recommended.

Warehouse production quotas. AB 701 regulated production quotas in warehouses and required Cal/OSHA to establish a new standard for production work in warehouse distribution centers.

"Anyone with warehouse operations needs to pay attention to this bill," Ebbink said. According to the new law, "an employee shall not be required to meet a quota that prevents compliance with meal or rest periods, use of bathroom facilities, or occupational health and safety laws."

Among other rules, the new law designated as "productive time" any time employees spend taking action to comply with occupational health and safety laws. 

Wage theft punishable as grand theft. AB 1003 made intentional wage theft punishable as a grand-theft crime. Ebbink noted that the law applies to intentional violations, so inadvertent payroll mistakes are not covered.

"Although it's probably not much of an issue, HR people do need to pay attention, because the stakes are high," he said. "Make sure you cross your T's and dot your I's."

What to Expect in 2022

The COVID-19 pandemic will continue to impact employers in 2022. California officials lifted many pandemic-related economic restrictions on June 15, 2021, including capacity limits and physical distancing requirements for most businesses. The economic reopening was also accompanied by relaxed mask-wearing guidelines for fully vaccinated people, Evans noted. However, increased infection rates prompted the California Department of Public Health (CDPH) to reinstate a statewide mask mandate for indoor public spaces, regardless of vaccination status. The order is in effect through at least Feb. 15.

The CDPH guidance applies to all workplaces, regardless of whether they serve the public or are open to the public, Evans noted.

"Workplace safety rules for California employers are ever-changing, and HR professionals should monitor federal, state and local public health guidance to determine their obligations with regard to COVID-19 workplace requirements," he said.

Evans noted that HR professionals should also be prepared for requests to continue remote-work arrangements and have clear, documented explanations why certain positions can be remote and why others require a physical presence.

"Employers should be careful in considering employee accommodation requests," he said.

Tynan expects municipalities and counties to continue enacting workplace safety laws, wage laws, and other worker protections.

"Many cities have minimum wage requirements, and cities and counties have safety regulations for COVID-19," she said. 

What else might be on the horizon in 2022? Ebbink said, "It depends where we are with COVID."

Pandemic-related bills might still dominate the legislative session. "If we get back to a normal legislative year, we may see a focus on issues that have been percolating over the last few years," he noted.

Some possible hot topics include expanding paid sick leave to cover more days, accommodations for off-duty cannabis use and bereavement leave. 

"Be prepared for further expansion of employee leaves," Groff said. For the past couple of years, the state legislature has expanded the family members and cover reasons under the CFRA.



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