California’s New Employment Laws – 2022
In 2021, Governor Newsom signed hundreds of new laws, most of which take effect on January 1, 2022. These new laws address countless areas affecting the lives of all Californians. However, a large proportion of them concern employment issues, covering topics such as wages, employee classification, workplace safety, or settlement agreements.
Here is a brief roundup of the changes we might see in our workplaces this coming year.
Minimum Wage: SB-3 (2016)
In 2022, we will see a statewide increase in the minimum wage: $15.00/hour for employers with 26 or more employees, and $14.00/hour for employers with 25 or less employees. This is the continuation of legislation signed by Governor Jerry Brown back in 2016, with the goal of raising the statewide minimum wage to $15.00/hour by 2022.
In many places in California (including our home in Los Angeles County), the minimum wage has matched or exceeded $15.00/hour for a few years now. However, the statewide minimum wage was $14.00/hour for large businesses and $13.00/hour for smaller businesses in 2021. The increase will affect cities and counties that abide by the state’s minimum wage ordinances rather than local laws.
Wage Theft: AB 1003
A new law makes intentional theft of wages by a company punishable as grand theft if the wages equal over $950 for one employee or $2,350 for multiple employees. The calculation of these wages will include tips, bonuses, and other compensation. This law applies to both employees and independent contractors.
Independent Contractors: AB 1561
Another new employment law calls into question the classification of certain California workers as independent contractors. The ABC test, established in the Dynamex case and codified under AB 5 (2019), establishes whether a worker can be accurately classified as an independent contractor or an employee. AB 1561 makes four key changes to this test:
- The “professional services” exemption from the ABC test extends the sunset date for licensed manicurists to January 1, 2025, giving employers until that date to comply with the ABC test and determine if a worker is an employee or independent contractor.
- The sunset date for an individual working as a subcontractor in the construction industry has also been extended to January 1, 2025.
- Formerly, data aggregators performing paid research were exempt from the ABC test under AB 5. However, with the passage of AB 1561, the relationship between a data aggregator and an individual providing feedback to the data aggregator has been changed in three key ways:
- The ABC test exemption only applies to the relationship between a data aggregator and a “research subject.”
- The requirement for payment of at least minimum wage for hourly work has been eliminated.
- The new law defines “research subject” as a person who willingly engages with a data aggregator to provide feedback on user interface, products, services, people, concepts, ideas, offerings, or experiences.
- For individuals and corporations licensed by the Department of Insurance, the exemption now also applies to people who provide claims adjusting or third-party administration work.
For a more complete explanation of Dynamex, AB 5, and the ABC test, read our article discussing the difference between employees and independent contractors in California.
Settlements and Non-Disparagement Agreements: SB 331
Both public and private employers of any size are now prohibited from settling employee lawsuits and administrative claims through agreements that attempt to cover up:
- Sexual assault and harassment
- Workplace harassment or discrimination based on sex
- A company’s failure to prevent acts of workplace harassment or discrimination
- Retaliation against workers who report any of the above
SB 331 goes further to prohibit employers from requiring any employee to sign a non-disparagement agreement or any other contract that denies the employee the right to disclose information about unlawful workplace practices. Employers may have employees sign a contractual agreement restricting their ability to disclose certain company information, but the contract must also include specific language about the employee’s right to disclose information about unlawful acts by the employer.
This law applies to any agreement:
- Concerning raises, bonuses, or promotions
- Made as a condition of employment
- Made as part of a severance agreement
Workplace Notices: SB 657
This law updates the notice requirement for businesses. Now, companies may also distribute required information to employees via email. Employers must still post physical copies in the workplace, but may now also provide notices to employees electronically.
Warehouse Distribution Centers: AB 701
AB 701 applies to employers who directly or indirectly control the wages, hours, and working conditions of 100 or more employees at a single location, or 1000 or more employees in all of California. Specifically, this law relates to production quotas and:
- Requires employers to provide each employee with a written description of the quota they are expected to achieve.
- Requires employers to provide employees with written information about consequences for failure to meet their quota.
- Prohibits employers from establishing worker quotas that prevent employees from taking meal breaks, rest breaks, or complying with other health and safety laws.
- Prohibits an employer from taking adverse action against an employee for failure to meet a quota that has not been provided to the employee in writing.
Workplace Safety: SB 606
Existing employment law gives Cal/OSHA the power and authority to enforce workplace safety laws, which the organization does by issuing citations to violators and, in serious cases, shutting down entire workplaces.
SB 606 creates categories of workplace health and safety violations: “enterprise-wide” and “egregious.” This new law presumes that violations made by the same company at one or more of their worksites are enterprise-wide violations. This means that Cal/OSHA may issue an enterprise-wide citation to the company.
This law also allows Cal/OSHA to deem a workplace health and safety violation as egregious if one or more of the following provisions is true:
- The employer “intentionally [. . .] made no reasonable effort to eliminate the known violation.”
- The violations resulted in “worker fatalities, a worksite catastrophe, or a large number of injuries or illnesses.”
- The violations resulted in “consistently high rates of worker injuries or illnesses.”
- The employer’s health and safety responsibilities have been intentionally ignored.
- The employer has an extensive history of prior violations.
- The employer’s conduct amounts to bad faith.
Under this law, a company can be penalized for each employee who is affected by an egregious violation, allowing Cal/OSHA to issue larger penalties and fines.
SB 807 extends the amount of time an employer needs to retain personnel records. Previously, this time was two years. That requirement is now four years.
PARRIS Is Here to Help
California’s new employment laws can be confusing to individuals and employers alike. PARRIS attorneys are here to help.
If you think that your employer has violated any of the rights laid out by the state of California, call PARRIS. We’ve been fighting for the rights of California workers since 1985.