Focused On Business Law

Attorneys Sara Bradley, Marinda Neumann and Lindsay Nakagawa.

2021 New California Laws

On Behalf of | Dec 29, 2020 | Business Law, Employment Law

In 2020, the California legislature adopted a number of new laws affecting employers and employee rights, including laws related to the coronavirus COVID-19 pandemic, independent contractor classifications, and diversity in the workplace. If you have questions regarding whether any new laws apply to your business, please give us a call.

COVID-19 in the Workplace (AB 685)

Effective: January 1, 2021

This law authorizes California’s Division of Occupational Safety and Health (Cal/OSHA) to issue stop work orders or closure orders for places of employment where a risk of COVID-19 infection constitutes an imminent hazard to employees. Such notice would have to be conspicuously posted in the potentially hazardous area at the workplace. This requirement is in effect until January 1, 2023.

Employers will have to provide written notice of a COVID-19 exposure within one (1) business day, which shall include: (a) the potential exposure to all employees and subcontractors who may have been exposed to the virus at the worksite, (b) information regarding COVID-19-related benefits to which the employee may be entitled by law, including without limitation workers’ compensation and sick leave, and (c) the employer’s disinfection plan to sanitize the workplace.

Employers must notify the local public health agency of a COVID-19 outbreak[1] within forty-eight (48) hours.

Diversity in Corporate Board of Directors (AB 979)

Effective: January 1, 2021

In 2018, the California adopted a law that required gender diversity on the boards of public corporations. This law would require public companies to have directors on their boards that were African American, Hispanic, or Native American by the end of 2021.

Security Officer Rest Periods (AB 1512)

Effective: January 1, 2021

Private security officers can be required to remain on the jobsite during rest periods and carry a communication device during such rest periods. If interrupted during the rest period, the security officer may restart the rest period.

COVID-19: California Supplemental Paid Sick Leave (AB 1867)

Effective: September 19, 2020

Private employers with 500 or more employees must provide paid sick time for absences related to COVID-19, if: (a) the covered worker is subject to an isolation order related to COVID-19; (b) the covered worker is advised to self-quarantine or self-isolate due to concerns of a COVID-19 risk or exposure; or (c) the covered worker is prohibited from working by the employer due to concerns about the potential transmission of COVID-19. Full-time employees can receive up to 80 hours of paid leave. The number of paid leave hours available to part-time employees is calculated based on the employee’s average scheduled hours. The employee’s pay for the COVID-19 related leave is capped at $511 per day and $5,110 total. This COVID-19 related paid leave requirement expires December 31, 2020.

No re-hire provisions (AB 2143)

Effective: September 11, 2020

Under existing law, agreements to settle disputes between an employer and an employee cannot contain “no re-hire provisions” prohibiting the employee from working for the employer in the future. This law creates an exception that allows employers to prohibit rehiring an employee if the employer determined, prior to the dispute, that the employee engaged in sexual harassment, sexual assault, or criminal conduct, or if the employee’s claim which is the subject of the dispute was not filed in good faith.

Employee Classification Exemptions (AB 2257)

Effective: September 4, 2020

In 2020, California’s new ABC test to determine whether a worker is an independent contractor went into effect[2]. Under the ABC test, workers will be considered employees unless they are free from the control and direction of the employer, the work performed is outside of the usual course of the employer’s business, and the worker is customarily engaged in an independently established trade or business.

AB 2257 exempts specific occupations from the application of the ABC test, including recording artists, photographers, occupations related to creation, marketing, promotion or distribution of sound recordings, insurance underwriting, real estate appraisers, and home inspectors. The law also creates an exemption for business-to-business relationships between two or more sole proprietors. If a worker meets one of the exemptions, that does not automatically classify him or her as an independent contractor, but instead requires the use of the Borello test which looks at additional factors to analyze the worker’s employment status.[3]

Protections for Employee Victims of Abuse (AB 2992)

Effective: January 1, 2021

Employers are prohibited from terminating or retaliating against an employee who has been the victim of crime or abuse. Under the new law, employers with 25 or more employees must allow an employee who has been a victim of a crime or abuse to take time off work to seek medical attention or to obtain psychological or mental health counseling. Covered employers cannot retaliate against employees who are victims of a crime or abuse.

Statement of Information (AB 3075)

Effective: January 1, 2022

California law requires corporations and limited liability companies to file statements of information annually and semiannually, respectively. Under the new law, the corporation or LLC must include information in the Statement of Information disclosing whether any officer, director, member, or manager has been determined liable by the Division of Labor Standards Enforcement or a court of law for a violation of any wage order or labor code violation.

Employee Sexual Harassment Training (SB 778)

In September 2018, California enacted SB 1343, which extended the requirement that employers provide supervisory employees with two hours of anti-harassment training to businesses with five or more employees, including temporary or seasonal workers. The previous threshold was 50 or more employees. The 2018 law also expanded the training requirement – which had applied only to supervisory employees – to include one hour of training every two years for all non-supervisory employees for covered employers. The initial deadline for providing new training to those employees not previously covered under prior state law was January 1, 2020. With the passage of SB 778, the deadline for the initial training for those employees has been extended to January 1, 2021.

Pay Data Reporting (SB 973)

Covered employers with 100 or more employees will be required to annually report employees’ pay data by race, ethnicity, and gender to the Department of Fair Employment and Housing (DFEH). The data must be submitted for the same categories used in reporting demographic information on the federal EEO-1 form: executive or senior-level officials and managers, first or mid-level officials and managers, professionals, technicians, sales workers, administrative support workers, craft workers, operatives, laborers and helpers, and service workers. The first annual report is due on or before March 31, 2021, and subsequent annual reports will be due by March 31st of each year thereafter.

SB 1159 – Workers’ Compensation

Effective Date: September 17, 2020

On May 5, 2020, California Governor Gavin Newsom adopted Executive Order N-62-20, which created a presumption that any COVID-19-related illness of an employee arose during the employee’s job performance for purposes of awarding workers’ compensation benefits, if certain criteria were satisfied. With the adoption of SB 1159, the California legislature codified that Executive Order into law.

This law creates a rebuttable presumption that an employee’s COVID-19-related illness or death arose at the employer’s workplace or out of the employee’s job duties, and is therefore eligible for workers’ compensation benefits, if:

  • the COVID-19-related illness or death occurred between July 6, 2020 and December 31, 2022[4];
  • the employer has five or more employees;
  • the employee tests positive for COVID-19 within 14 days after the employee last performed services at the employer’s workplace; and
  • the employee’s positive COVID-19 test occurred during an outbreak at the employer’s workplace[5].

The employer can dispute the presumption by providing evidence of: (1) measures in place to reduce the potential transmission of COVID-19 in the workplace; (2) the employee’s risks outside of the workplace; (3) statements made by the employee; and (4) any other evidence typically used to dispute a work-related injury or illness.

California Family Rights Act Expansion (SB 1383)

Effective: January 1, 2021

Previously, the California Family Rights Act (CFRA) applied to employers with 50 or more employees. This bill expands the reach of the CFRA to smaller employers and provides leave to care for a larger pool of family members. The CFRA will now apply to all California employers with at least five employees. Eligible employees will be permitted to take up to twelve weeks of unpaid leave to care for grandparents, grandchildren, and siblings in addition to the originally covered family members of spouse, registered domestic partner, child, or parent. Because the CFRA will apply to employers with at least five employees, it encompasses the benefits provided under California’s New Parent Leave Act (NPLA)[6]. As the NPLA is no longer needed, it has been repealed.

CCPA Amendments and Regulations[7]

The California Consumer Privacy Act (CCPA) became effective on January 1, 2020 and enforceable on July 1, 2020. Because the CCPA was hastily drafted and adopted, it contained numerous errors and inconsistencies. To clarify portions of the CCPA, the Office of Administrative Law (OAL) approved regulations to amend certain provisions, including provisions related to a business’s “Do Not Sell My Personal Information” opt-out link on its website, an authorized agent’s request on behalf of a consumer, and methods for consumers to opt-out.

Two amendments were recently adopted that exempt certain information from the requirements of the CCPA:

  • Medical and Health Information Exception (AB 713): The CCPA requires that businesses make certain disclosures regarding their collection and use of consumer personal information. This law creates exceptions for certain protected medical or health-related information that is otherwise governed by the Health Insurance Portability and Accountability Act (HIPAA), the California Confidentiality of Medical Information Act (CMIA), or the Health Information Technology for Economic and Clinical Health Act (HITECH).
  • Employee and Business-to-Business Information (AB 1281): The CCPA exempted personal information collected in the employment and business-to-business context for a period of one year. This law extends those exemptions until January 1, 2022. California businesses subject to the CCPA should calendar to begin analyzing employee and business-to-business information collection practices and updating their CCPA next fall.

Minimum Wage

Effective: January 1, 2021

The minimum wage for the State of California will increase to $13.00/hour for employers with 25 or fewer employees, and $14.00/hour for employers with 25 or more employees. Please note that some California cities set a higher minimum wage[8].


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[1] An outbreak occurs when three or more individuals from different households contract the virus at the same location.

[2] This test was part of AB 5, also known as the “Gig Worker” law. AB 5 was the subject of Proposition 22, approved by California voters in November, to classify ride-share drivers as independent contractors with certain benefits.

[3] As there are substantial penalties for misclassification, please contact our office if you are considering retaining an independent contractor to determine whether such contractor is properly classified.

[4] This law will automatically be repealed on January 1, 2023.

[5] An outbreak occurs where: (1) at least four employees test positive for COVID-19, if the employer has 100 or less employees; (2) 4% of employees at the employer’s workplace test positive, if the employer has more than 100 employees; or (3) the employer’s workplace is ordered to close by a local public health department, State Department of Public Health, Division of Occupational Safety and Health, or a school superintendent due to a risk of COVID-19 infection.

[6] The NLPA required employers with 20-49 employees provide unpaid bonding leave rights for employees with new babies.

[7] Please note that this is a broad overview of the new amendments and regulations. If your business is subject to the CCPA requirements, please contact us to determine if your policies and practices need to be updated.

[8] Beginning January 1, 2021, the minimum wage for the City of San Diego is $14.00 for all employers, regardless of size. If you would like information about the minimum wage in another city, please contact us.