By Tom Geidt

As always, the new year brought a flurry of new California employment laws that employers should know about.  We summarize the key enactments below.  Each of these took effect on January 1, 2022.

New Restrictions on Nondisparagement and Confidentiality Provisions (S.B. 331)
A 2019 law known as the STAND Act (Stand Together Against Non-Disclosures) generally prohibits employers from using non-disclosure or nondisparagement agreements that prevent employees from disclosing facts relating to claims of sexual harassment, assault, sex discrimination or retaliation.  This year’s “Silenced No More Act” expands on those prohibitions.  These changes are found at Code of Civil Procedure §1001 and Gov’t. Code §12964.5.

First, settlement agreements executed on or after January 1, 2022 may no longer contain any provision that restricts the disclosure of factual information related to an employee’s claim of discrimination, harassment or retaliation under any of the protected categories contained in the Fair Employment and Housing Act (FEHA), not just claims involving sexual harassment or sex discrimination.  This provision applies only to settlements of claims that have been filed in court or before an agency, not pre-litigation agreements.  Settlement agreements in either case may prohibit disclosure of the settlement amount being paid.

Second, the new Act generally prohibits employers from requiring the signing of a nondisparagement agreement or other document that has the purpose or effect of denying employees the right to disclose information about any other form of unlawful discrimination or any unlawful acts in the workplace.  Any nondisparagement or other contractual provision that restricts an employee’s ability to disclose information related to “conditions in the workplace” must contain a sentence stating, in substance: “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.”

Third, the Act imposes new restrictions on severance agreements – agreements that relate to an employee’s separation from employment.  In general, severance agreements must tell employees they have a right to consult an attorney about the agreement and will have at least five business days to do so.  The agreement must not include any clause that prohibits the disclosure of information about unlawful acts in the workplace.  If the agreement contains a nondisparagement clause or other provision that restricts an employee’s ability to disclose information related to conditions in the workplace, the agreement must include the above-quoted disclaimer sentence stating that nothing in the agreement prevents employees from disclosing information about conduct they have reason to believe is unlawful.

The requirements outlined in the preceding paragraph do not apply to “negotiated settlement agreements” – that is, separation agreements that are designed, at least in part, to resolve an underlying legal claim previously asserted by the employee in court, before an agency, or under the employer’s internal dispute resolution procedure.  To qualify for this exemption, the agreement must be voluntary, deliberate, and informed; must provide consideration of value to the employee; and must give the employee notice and an opportunity to retain an attorney before signing.  Confusingly, this exemption for negotiated settlement agreements does not apply to the restriction discussed above in the first paragraph of this summary.  Settlement agreements that have been filed in court or before an agency still must not contain a provision that prevents employees from discussing or disclosing facts underlying their claims of FEHA discrimination, harassment or retaliation.

Finally, all severance agreements – whether negotiated settlement agreements or not – may contain a general release of all claims if the release is otherwise valid; may restrict employees from disclosing the severance amount being paid; and may prohibit employees from disclosing the employer’s trade secrets, proprietary information, or other confidential information that does not involve unlawful acts in the workplace.

Unpaid Wage Violations Can be Prosecuted as “Grand Theft” (A.B. 1003)
Continuing its yearly trend of making wage and hour penalties more and more severe, the Legislature has created a new criminal statute, Penal Code §487m, which defines “theft of wages” as the “intentional deprivation of wages” amounting to more than $950 from any single employee or independent contractor in a 12-month period, or $2,350 in the aggregate from two or more employees or independent contractors.  “Wages” includes gratuities, benefits or other compensation as defined in the Labor Code.  Such “wage theft” may be prosecuted as grand theft and punished as either a felony or misdemeanor.  In any such prosecution, all unpaid wages, gratuities, benefits or other compensation may also be recovered as restitution.  The statute includes “the hiring entity of an independent contractor” as a covered “employer.”

Labor Commissioner Can Place Liens on Real Property to Enforce Wage Awards (S.B. 572)
On the topic of severe penalties, another new law allows the Labor Commissioner to place a lien on a party’s real property to secure amounts due under any final citation, finding or decision upholding an employee’s claim for unpaid wages or some other Labor Code violation.  The lien may be recorded in any county where the real property is located and may continue in effect for at least 10 years.  This could include real property that is owned not only by an employing entity but also by individual executives, managers or other agents of the employer who are named as defendants in a Labor Commissioner proceeding.

CFRA Now Allows Time Off to Care for Parents-in-Law (A.B. 1033)
A year ago, the California Family Rights Act (CFRA) was expanded to cover employers with five or more employees (previously it was 50 employees) and to allow up to 12 weeks of unpaid time off to care for an expanded list of family members who have a serious health condition – a grandparent, grandchild, or sibling in addition to a child, parent, spouse, or domestic partner.  Now, with the passage of A.B. 1033, the list of covered family members includes a parent-in-law.

Strict New Regulations on Quotas for Warehouse Workers (A.B. 701)
This bill restricts employers that operate large warehouse distribution centers in the use of quotas governing employee work tasks.  It requires, among other things, that employees be provided in advance with detailed written descriptions of any quotas to which the employees are subject.  It prohibits quotas that interfere with meal or rest periods, the use of bathroom facilities (including reasonable travel time to and from bathroom facilities), or applicable health and safety laws or standards.  It also prohibits covered employers from taking adverse action against an employee for failing to meet any quota that was not properly disclosed or that otherwise violates the statute.

Another new law (S.B. 362) essentially prohibits certain chain community pharmacies from establishing quotas applicable to the required duties of pharmacists or pharmacy technicians.  These two statutes may portend the enactment of similar quota laws in the future in other industries.

Cal/OSHA Can Penalize Employers for “Enterprise-wide” and “Egregious” Violations (S.B. 606)
This bill created two new categories of workplace health and safety violations that can lead to penalties.  First, it allows Cal/OSHA to presume, based on written policies or evidence of a pattern and practice, that certain violations found at a particular worksite apply to all of the employer’s California worksites.  If the employer is unable to rebut this presumption, Cal/OSHA can issue an “enterprise-wide” citation requiring enterprise-wide abatement, and can assess penalties accordingly.  Second, this bill created a new category of “egregious” violations, as defined by a multi-factor test.  For any such violations, Cal/OSHA can treat each instance in which an employee was exposed to the violation as a separate violation for purposes of assessing fines and penalties.  This new law could dramatically increase an employer’s potential exposure for health and safety violations in a variety of circumstances.

Employers May Disseminate Required Notices by Email (S.B. 657)
This new law, enacted in response to the prevalence of remote work during the pandemic, authorizes employers to email any required postings or other employment law notices to employees as attachments.  The law clarifies, however, that this does not alter the employer’s obligation to physically display the required posting at its workplace.  In other words, this is not a substitute for the physical posting requirement.  While this clarification would seem to render the emailing provision somewhat useless, S.B. 657 does give employers an additional tool for conveying required information to employees who work remotely, so that employees can receive the benefit of the information (and so that employers can prove, if necessary, that they in fact provided the information to all employees).  This is a tiny step by the Legislature toward bringing workplace regulatory processes into step with modern technology.

New Consequences for Employer’s Late Payment of Arbitration Fees (S.B. 762)
This law adds teeth to a 2020 law that was designed to address a perceived abuse by some employers that use mandatory arbitration agreements but purportedly delay the arbitration process by failing to promptly pay the required arbitration fees.  Under the 2020 law, such delay gave employees various recourses, including transferring the matter back to court and requesting additional attorneys’ fees, costs or other sanctions against the employer.  A.B. 657 also now requires that once an employee has met the necessary filing requirements to initiate an arbitration, the arbitration provider must immediately issue an invoice for the required fees and costs before the arbitration can begin, and must send the invoice simultaneously to all parties, stating the full amount due and the due date.  The invoices are to be treated as due upon receipt if the arbitration agreement does not expressly provide otherwise.  During the pendency of an arbitration, follow-up invoices must be sent to all parties, and an employer may not obtain an extension of the due date without receiving the consent of the other party – i.e., in most cases, the employee who filed the claim.

MINIMUM WAGE INCREASES AND OTHER CHANGES

• Minimum wage. As a reminder, California’s minimum wage increased from $14 to $15 on January 1, 2022 for employers with 26 or more employees.  For smaller employers it increased from $13 to $14.  The minimum wage is already higher than $15 in various cities and counties across the State.  For example, it is $16.32 in San Francisco and is due to increase again on July 1, 2022.  Employers should check the websites of the cities where they have employees to stay up on the local requirements.
• Minimum salary for exempt status. The minimum salary threshold for exempt status under California’s administrative, executive and professional exemptions increased on January 1, 2022 from $58,240 to $62,400 ($5,200 per month) for employers with 26 or more employees.  It increased from $54,080 to $58,240 for smaller employers.
• Computer professionals. The minimum salary threshold for the California computer professional exemption has increased in 2022 from $98,907.70 to $104,149.81 ($8,679.15/month).  For hourly-paid computer professionals, the minimum rate increased from $47.48 to $50.00 for every hour worked.
• Minimum pay to qualify for CBA exemption.  Several Labor Code provisions, including the overtime and paid sick leave laws, exempt employers whose collective bargaining agreements meet certain criteria, one of which is that the covered employees be paid at least 30% above the California minimum wage.  As of January 1, 2022, this pay threshold for large employers (26 or more employees) increased from $18.20 to $19.50 per hour – for smaller employers, from $16.90 to $18.20.

If you have questions about any of these provisions, please feel free to contact me or any GBG attorney.

Tom Geidt
tomgeidt@gbgllp.com
415-603‐5003