At the beginning of each year, we round up some of the more game-changing laws set to take effect for your review. This year will provide more protections for employees, from the outset of their employment (with a ban on mandatory arbitration clauses) to the end of a discriminatory work experience (with the window to file an administrative claim for such discrimination expanded from one year to three). As always, employers in California should pay close attention to the vast body of ever-changing employment law. This article provides only a snapshot of some of the important new employment laws going into effect this year.
AB 5 – Worker classification
We have written about the new landscape of employee/independent contractor classification extensively since the court decision which prompted AB 5 was decided in April 2018. In sum, an employer classifying workers as employees or independent contractors should begin with the presumption that each worker is an employee. If, and only if, the employer can show: (A) the worker is sufficiently free of the employer’s control, (B) the worker is providing services outside the employer’s normal course of business, and (C) the worker actually offers to provide his services to others under his own business name, is it possible that the worker may be considered an independent contractor. This new test was dubbed the “ABC Test” by the California Supreme Court. AB 5 created a variety of exemptions from the ABC Test, which we laid out here. AB 5 also calls for the use of the ABC Test in nearly all areas of employment law, pr
Providing a bit more uniformity for employers even while making it significantly more difficult to establish a true independent contractor relationship.
AB 9 – Employment Discrimination Statute of Limitations
Currently, workers who wish to file various employment discrimination claims against their employers must first exhaust their administrative remedies by filing a claim with the Department of Fair Employment and Housing. This administrative claim had to be filed within one year of the alleged discriminatory action. The short window of time to file led some employees with valid claims to lose their claims for failure to timely file. AB 9 extends this window from one year to three years, a substantial increase in the amount of time within which discrimination claims may be raised.
AB 51 – Banning Mandatory Arbitration
AB 51 will ban employers from requiring their employees to sign mandatory arbitration agreements in exchange for employment or for employment-related benefits. Those employment-related mandatory arbitration agreements which were entered into before January 1, 2020, will be grandfathered in under this new law. However, any such provisions offered or agreed to by employees in 2020 and beyond will be unenforceable. For employers who currently utilize arbitration agreements with their employees, particularly as a means of restricting exposure to class action lawsuits, this is an important change in the law. While this law is set to go into effect on January 1, 2020, a federal court in California granted a temporary restraining order keeping California from enforcing this law until a future hearing on a more permanent injunction takes place. This ban should remain on employers’ radar, but employers can breathe easy for now.
AB 749 – “No Re-Hire” Provisions Invalid
Many times, settlement agreements between employers and aggrieved employees include a provision which states the employee will not be hired by the employer or any of the employer’s parent companies, subsidiary companies, or other affiliates. AB 749 prohibits these provisions except in certain circumstances. One such circumstance is when the ex-employee committed acts of sexual harassment or sexual assault at the workplace.
SB 188 – CROWN Act
Earlier this year, California became the first state to recognize and ban discrimination based on natural hairstyles. These hairstyles include natural and protective styles such as braids, twists, and locks. The law bans this type of discrimination under the race classification in California’s Fair Employment and Housing Act.