Do You Have Workers in California? Here Are 5 Hot Topics to Review

​LAS VEGAS — The COVID-19 crisis has reshaped the workforce, and many employees and contractors may be performing work from different locations than they did before the pandemic began. Whether your business is new to California or you need a refresher, here are some key rules specific to the Golden State that HR professionals should note.

California law generally provides more protections for employees than federal law, said Trisha Zulic, SHRM-SCP, director of human resources, business operations and strategy for WSA Distributing Inc. in San Diego. She was speaking at the SHRM Annual Conference & Expo 2021 on Sept. 9.

When it comes to COVID-19 workplace safety rules, remote work, wage and hour compliance, and many other areas of employment law, HR professionals need to ensure they are complying with California state and local laws in addition to federal requirements.

1. COVID-19-Related Legislation

California lawmakers approved AB 685 in 2020, which took effect on Jan. 1. The law requires employers to notify their employees, the California Division of Occupational Safety and Health (which is known as Cal/OSHA), and the California Department of Public Health of any employee exposure to COVID-19 that the employer knew about or should have known about.

Additionally, Cal/OSHA has issued and amended COVID-19 Prevention Emergency Temporary Standards that include pandemic-related notice requirements, as well as rules on mask wearing, tracking COVID-19 vaccination status, employee safety training, COVID-19 prevention programs and more.

Employers should also note that many cities and counties in California have their own COVID-19-related workplace safety rules, which may be more stringent than state and federal law.

"Cal/OSHA recommends employers review the guidance relevant to their worksites, local information guidance criteria, along with the guidance on Cal/OSHA requirements … and their existing safety procedures to ensure the workplace is protected from the spread of COVID-19," according to the agency's website.

2. Remote-Work Compliance

"Make sure you are complying with remote-work rules," Zulic said. Employers should have workers sign a temporary remote-work agreement that sets clear expectations and health and safety standards, she said.

Employers still need to follow wage and hour rules and other employment laws for remote workers. Additionally, California law requires an employer to reimburse an employee for "all necessary expenditures or losses incurred by the employee" in carrying out job duties or employer directives.

So if home-office expenses are "necessary," the employer will need to cover reasonable costs.

Zulic noted that workers may be hesitant to return to the office if they've been working from home for a year. "Keep employees updated about when they might be expected to return to work," she said. For example, an employer might let workers know that the policy will be updated every 60 days and that employees will receive 30 days' notice when they are expected to return to work.

3. Minimum Wage Rules

Starting on Jan. 1, employers with at least 26 employees had to pay workers at least $14 an hour. Employers with 25 or fewer employees must pay at least $13 per hour. Both rates will rise by $1 an hour on Jan. 1, 2022.

Zulic recommended that small employers consider paying the rate for larger businesses if it will help them to be more competitive.

Employers should note that many cities set their own hourly rates, which may be higher than the state rates.

The minimum salary for exempt employees is double the state's minimum wage for the executive, administrative and professional exemptions, so businesses with at least 26 employees must pay $58,240 and smaller businesses must pay $54,080. Those rates will increase with the minimum wage for 2022.

Zulic reminded conference attendees that pay isn't the only factor that needs to be considered when classifying employees as exempt. Workers must also perform certain duties to qualify.

4. Independent-Contractor Rules

California's AB 5 codified a three-pronged "ABC" test to determine whether workers should be classified as independent contractors or employees. The stringent test renders most workers employees unless their jobs fall under an exception.

"AB 5 was really aimed at ride-share drivers to try to make them employees," Zulic said. But the law had a broad reach, so it was amended several times.

About 67 job types were carved out of AB 5. Some jobs were excluded from the start, and many freelance journalists, musicians, translators and other workers in California were added to the list of exceptions under an amendment, AB 2257.

Notably, California voters approved Proposition 22 in November 2020, which allows gig-economy companies to classify app-based ride-hailing and delivery drivers as independent contractors if certain criteria are met. On Aug. 20, however, a state judge said the law is unconstitutional and unenforceable, though several app-based companies said they will appeal the ruling.

"Work with accounting to make sure that the independent contractors are truly independent contractors," Zulic suggested. She said employers also may want to review worker classification with legal counsel.

5. California Family Rights Act Amendments

SB 1383 expanded the California Family Rights Act (CFRA)—which provides eligible employees with job-protected, unpaid time off for certain reasons—to cover businesses with at least five employees.

Zulic noted that the law doesn't specify whether it covers businesses with five employees in California or five employees total.

At the time the law was enacted, Sandra McCandless and Anna Youssefi, attorneys with Dentons in San Francisco, said, "CFRA can be read to apply to employers with only a single employee in California, as long as the employer has 5 or more employees nationwide."