Recent Labor Laws in California: What Bankers Need to Know
by Melanie Cuevas, VP of Government Relations
Each year California enacts about a thousand new laws with impacts that run the gamut and largely reflect the liberal viewpoint of the Legislature’s democratic supermajority. Despite the COVID-19 pandemic’s impact on the legislative process in 2020, California lawmakers tackled numerous issues related to human resources that will have longstanding impacts on California workplaces for years to come – diversity on boards of directors, protected and paid leave benefits, reporting of pay data, and workplace protections for victims of domestic violence.
Below are some key changes to California labor laws that employers, including banks, are now adhering to. Unless otherwise noted, these measures became effective January 1, 2021. While these summaries have been prepared with care, these are not intended to be exhaustive. Please examine the full text of any measure of interest to you and be sure to consult with your legal counsel as you navigate compliance efforts.
Diverse Boards of Directors
In 2018, California became the first state to mandate gender diversity on boards of directors of publicly held corporations headquartered in California, regardless of where they are incorporated. A recent report by the California Partners Project indicates that the measure has been a successful mandate, citing that in 2018 nearly 30 percent of California company boards were entirely male whereas now fewer than three percent are. Last year, Governor Newsom signed Assembly Bill 979 (Holden, 2020), which is designed to do for “underrepresented communities” on boards of directors what Senate Bill 826 (Jackson, 2018) did for board gender diversity. By the end of this year, boards of any size are required to have at least one director from an underrepresented community, as defined.
Paid Family Leave Benefits
Californians who work for an employer with at least five employees are now eligible for expanded paid family leave benefits to care for a new baby or sick family member, enacted by Senate Bill 1383 (Jackson, 2020), which took effect immediately upon signature. Under this measure, the definition of qualifying family members under the California Family Rights Act is expanded to also cover grandchildren, grandparents, siblings and parents-in-law. This expansion will impact larger employers already covered by CFRA and the Family and Medical Leave Act who will, in some cases, have to administer the two 12-week leave periods separately, for a total of 24 weeks of protected leave. Previously, CFRA only applied to employees at larger companies, so this measure extends family leave job protections for roughly an additional 6 million California workers.
Pay Data Reporting
Private employers of 100 or more employees (with at least one employee in California) must report hours-worked data by establishment, job category, sex, race and ethnicity to the Department of Fair Employment and Housing, by March 31, 2021 and annually thereafter. This measure, Senate Bill 973 (Jackson, 2020), also authorizes DFEH to enforce the Equal Pay Act (Labor Code § 1197.5), which prohibits unjustified pay disparities. The Fair Employment and Housing Act (Gov. Code § 12940 et seq.), already enforced by DFEH, also prohibits pay discrimination.
Protection of Victims
Crime and abuse victims also received additional protections, Under Assembly Bill 2992 (Weber, 2020), the prohibition of discrimination and retaliation against employees is expanded to those who are victims of crime or abuse when they take time off for judicial proceedings or to seek medical attention or related relief for domestic violence, sexual assault, stalking or other crime that causes physical or mental injury.
COVID-19 Workplace Procedures
Employers are required to notify their employees of potential COVID-19 exposures in the workplace under the provisions of Assembly Bill 685 (Reyes, 2020), which are set to expire on January 1, 2022. It also requires employers to alert local count health departments of the outbreaks, defined as three or more positive cases within 14 days. The measure also strengthens the power of Cal/OSHA, the state agency that oversees and regulates workplace safety, to enforce the measure’s reporting mandates and even to shut down any worksite that is deemed to be an “imminent hazard” to employees. In this context it is important to also note that Cal/OSHA enacted an Emergency Temporary Standard on COVID-19 infection prevention. The standard requires employers to establish, implement and maintain an effective written COVID-19 prevention program and to provide training and instruction to employees on how COVID-19 is spread, infection prevention techniques, and COVID-19-related benefits that employees may be entitled to under applicable federal, state, and local laws.