**UPDATE** More Relaxed Masking, Distancing Among Cal/OSHA’s Latest Changes To Safety Rules

**UPDATE** August 3, 2021 — – Bay Area Reinstates Indoor Masking For All, Regardless of Vaccination Status

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**UPDATE** July 16, 2021 — – Los Angeles County Reinstates Indoor Masking For All, Regardless of Vaccination Status

The Los Angeles County Department of Public Health announced on Thursday, July 15, 2021 that, due to rising cases of the COVID-19 Delta variant in the County, it will issue a new Health Officer Order mandating masking for everyone while indoors in public spaces, regardless of vaccination status.

The new masking order will take effect at 11:59 p.m. this Saturday, July 17, 2021, and will remain in place for the foreseeable future.

Employers with operations in Los Angeles County should immediately review their policies and practices to ensure all employees are masking up indoors while in the presence of others, in light of this latest order.

We will continue to provide updates on this issue as more information becomes available.

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**UPDATE** June 29, 2021 — New Masking Recommendations for Los Angeles County.

On June 28, 2021, due to growing concern about the Delta variant, Los Angeles County issued a recommendation that everyone mask up “in settings such as grocery or retail stores; theaters and family entertainment centers, and workplaces when you don’t know everyone’s vaccination status.”

Employers who are not yet able to confirm full vaccination status for all individuals together in indoor settings should consider following the World Health Organization and Los Angeles County Public Health recommendations to have everyone continue to mask up until we know more about the dangers posed by the Delta variant.

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**UPDATED** June 21, 2021 — As anticipated, the Cal/OSHA Board voted June 17, 2021 to adopt revisions to its COVID-19 workplace regulations, which include major changes to masking and physical distancing requirements as described in our June 16 blog post (below). Following the Board’s adoption, Governor Newsom signed an Executive Order making the changes effective immediately.

Cal/OSHA has published initial guidance regarding these regulations via these FAQs.

We will continue to provide updates on this issue as more information becomes available.

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June 16, 2021 — Cal/OSHA has released another round of highly anticipated changes to its emergency COVID-19 workplace health and safety regulations (or ETS), heeding clear instruction from its Board last week to provide consistency with the significantly more relaxed masking and distancing protocols that became effective June 15, 2021 in California.

These updates, which are expected to be adopted at the Board’s June 17, 2021 meeting, incorporate the Board’s guidance and include several key departures from regulations currently in place, such as:

  • Fully vaccinated employees would no longer be required to wear a mask at work, and unvaccinated employees would need to wear one only while indoors when in the presence of others.
  • Employers would be able to do away with all measures implemented to maintain physical distancing, including removing previously mandatory partitions.
  • Employers would be required to make approved respirators (e.g., an N-95 mask) available to unvaccinated employees upon their request.
  • Employees who are either fully vaccinated or naturally immune to COVID-19 (through prior exposure and contraction of the virus) who have a COVID-19 exposure and are asymptomatic would not need to be excluded from the workplace.
  • Employers would be required to offer free testing to all unvaccinated employees exposed to COVID-19 regardless of whether the exposure occurred at work.
  • Employers would need to provide notice of potential exposure to all employees at a worksite where a COVID-19 case was present.
  • Employers will need to provide training to employees that includes information about the availability and correct usage of respirators and about access to and effectiveness of vaccinations.
  • While regular cleaning of PPE and other general office supplies will still be required, employees will now be permitted to share these items.

These changes are expected to become effective by June 28, 2021, and possibly as soon as June 17, 2021, if Governor Newsom acts on his expressed intention to accelerate the timeline via an Executive Order.

Employers should carefully review their policies in light of these significant changes, explained in greater detail below:

FACE COVERINGS
Fully Vaccinated Employees no longer need to wear face coverings in the workplace (unless the employer is experiencing an “outbreak” where three or more employees test positive for COVID-19 over a 14-day period).

An employee is fully vaccinated when the employer has documented that at least two weeks have passed since the employee’s final dose of an approved COVID-19 vaccine. Appropriate vaccines include only those approved or under Emergency Use Authorization by the FDA. However, for employees vaccinated abroad, a vaccine listed for emergency use by the World Health Organization is also acceptable.

Unvaccinated Employees: While no longer required to wear a mask in outdoor settings, unvaccinated employees must continue to wear face coverings indoors unless they are alone, are eating or drinking, or are otherwise exempt from wearing a mask due to a medical condition or while performing a task that would be unsafe to complete with a mask.

Keep in mind that for the purposes of these requirements, a face covering means a surgical or medical procedure mask, a respirator, or a woven fabric mask of at least two layers. Scarves, ski masks, bandanas, turtlenecks, or a single layer of fabric are no longer acceptable.

VERIFYING VACCINATION STATUS
While the proposed changes to Cal/OSHA’s regulations provide no guidance on how employers should document vaccination status, the agency will likely address the issue in subsequent FAQs. In the meantime, for avoidance of any doubt in maintaining a healthy workforce, employers should require documentary proof, like an employee’s vaccination card, while ensuring that this documentation must be treated as confidential medical information and kept separate from other employee files.

PHYSICAL DISTANCING AND PARTITIONS
Physical distancing measures, including formerly required partitions, may be removed (unless the employer experiences a major outbreak, with 20 or more COVID-19 cases over a 30-day period).

In a major outbreak, an employer must ensure that all employees in an “exposed group” are separated by at least six feet, or, if not feasible, employees must be as far apart as possible. The “as far apart as possible” condition also applies when employees in movement are subjected to momentary exposure.

Under the new regulations, “exposed group” refers to employees at a work location or area where an employee with COVID-19 case was present during their high-risk exposure period, unless the person(s) with a COVID-19 case (the “Affected Person”) passed through the area momentarily, where such Affected Person was at the location for less than 15 minutes while wearing a face covering the entire time, or where such Affected Person entered the location at a time when no other employees are present.

RESPIRATORS
Employers must provide respirators to unvaccinated employees upon request, and, during a major outbreak, also make respirators available to all employees in the exposed group, regardless of vaccination status. During outbreaks, employers must inform unvaccinated employees in the exposed group that they have the option to request a respirator, including, for example, an N-95.

It is important to keep in mind that use of respirators must be compliant with Title 8, Section 5144, which has specific requirements for voluntary respirator use, including creating and implementing written policies.

NO WORKPLACE EXCLUSION FOR VACCINATED EMPLOYEES
The revised rules now explicitly state that fully vaccinated employees, or those who developed natural immunity, do not need to be excluded from the workplace after a close contact with a COVID-19 case, as long as they are asymptomatic.

EMPLOYER-PROVIDED FREE TESTING
Under the current regulations, employers are required to offer free testing to all employees who experienced a close contact in the workplace. With the changes, employers would no longer be required to offer free testing to fully vaccinated employees, or those with natural immunity, unless these employees have COVID-19 symptoms or there is a major outbreak in the workplace. However, the changes would expand current regulations by requiring employers to provide free testing to employees during paid working time, even where there is no indication that the exposure was work-related.

RETURN TO WORK REQUIREMENTS FOR CLOSE CONTACTS
Employees who test positive for COVID-19 must continue to meet specific requirements before coming back to work. In addition, the revised regulations would require employees who had a close contact to meet specific criteria prior to returning to work.

Specifically, employees who experience a close contact but remain asymptomatic may return to work after 10 days. Exposed employees who develop symptoms typically cannot return to work until all of the following are true:

  1. they are fever-free for 24 hours without the use of fever-reducing medication;
  2. their other COVID-19 symptoms (aside from fever) have improved; and
  3. at least 10 days have passed since the symptoms first appeared.

NOTICE REQUIREMENTS
Under the updated regulations, employers would need to provide notice to all employees and independent contractors at the worksite during a COVID-19 case’s high-risk exposure period. This change makes Cal/OSHA’s reporting requirements more consistent with Labor Code section 6409.6.

The requirement to notify employees kicks in when an employer knew, or should have known, of a COVID-19 case. If an employer should reasonably know that an employee has not received the notice, or has limited literacy in the language used in the notice, the employer must provide verbal notice, as soon as practicable, in a language understandable to the employee.

TRAINING REQUIREMENTS
In addition to the topics included in the current regulations, employers must also provide training to all employees on the following topics:

  • How to participate in the identification and evaluation of COVID-19 hazards;
  • The increased effectiveness of mitigating measures when combined (physical distancing, face coverings, increased ventilation indoors, and respiratory protection);
  • Information on respirators, including the employer’s policies for providing respirators, how to properly wear a respirator, how to perform a seal check, and unvaccinated employees’ right to request a respirator, without fear of retaliation, for voluntary use at no cost to the employee;
  • The different purposes and effectiveness of respirators versus face coverings with regard to COVID-19 as an airborne disease (N95s are more protective respirators that protect users from airborne disease, while face coverings primarily protect people around the user);
  • How to access COVID-19 testing and vaccination;
  • The effectiveness and benefits of vaccination in preventing COVID-19, (including protections against both transmission and serious illness or death);
  • The conditions under which face coverings must be worn in the workplace;
  • Recommendations regarding the use of face coverings outdoors (if physical distancing cannot be maintained) for persons who are not fully vaccinated;
  • Employees’ ability to request and obtain face coverings from the employer at no cost; and
  • Anti-retaliation provisions (employees can wear face coverings at work, regardless of vaccination status, without fear of retaliation).

Consistent with the removal of physical distancing requirements, employers no longer need to provide training on methods of physical distancing.

CLEANING AND DISINFECTION PROCEDURES
Employees are no longer prohibited from the sharing of personal protective equipment (PPE) or other items that employees regularly come into contact with such as phones, desks, keyboards, and the like. Employers must continue to perform regular cleanings of frequently touched surfaces, but the requirement to also disinfect those surfaces has been removed. Also, employers must clean and disinfect equipment and premises used by a COVID-19 case within 24 hours.

VENTILATION
In addition to evaluating how to maximize ventilation with outdoor air and achieving the highest level of filtration efficiency compatible with an existing ventilation system, employers must now also determine whether the use of portable or mounted high efficiency particulate air (HEPA) filtration units, or other air cleaning systems, would reduce the risk of COVID-19 transmission.

CONCLUSION
Revisions to existing policies and practices on this fast-changing topic can be complex. We encourage you to contact us should you have any questions or concerns.

For more information on this topic, please reach out to:
Michelle Freeman, mfreeman@hkemploymentlaw.com, (415) 835-9003
Monte Grix, mgrix@hkemploymentlaw.com, (310) 255-1827
Kirstin Muller, kmuller@hkemploymentlaw.com, (310) 255-1811
Netta Rotstein, nrotstein@hkemploymentlaw.com, (310) 255-1807

To Mask Or Not To Mask? Cal/OSHA Still Sorting It Out

** UPDATE** August 3, 2021 – See the latest on mask guidelines HERE

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June 11, 2021: Employers Advised To Maintain Current Policies Pending June 17 Meeting

In yet another twist in the controversy regarding whether fully vaccinated employees in California will be required to wear masks at work, after an emergency meeting on Wednesday night, Cal/OSHA’s Board scrapped proposed revisions to its Emergency Temporary Standards (ETS) initially adopted on June 3.

The Board’s withdrawal of the revisions—which contained onerous, highly criticized masking rules that would have required fully vaccinated employees to wear masks indoors any time they were in the presence of an unvaccinated individual—sent Cal/OSHA back to the drawing board, with clear direction from the Board to align California workplace safety requirements more closely with the liberal masking guidelines that will become effective for the general population statewide beginning June 15, 2021.

The Board’s flip-flopping has created widespread confusion for California employers who have been closely monitoring Cal/OSHA’s directive as they prepare for the state’s highly anticipated reopening next week.

Here is what employers need to know to ensure they remain in compliance with current Cal/OSHA regulations:

WHERE THINGS CURRENTLY STAND:
For now, there are no new changes to the ETS currently in place. Cal/OSHA is expected to make further revisions to the masking provisions of the new ETS that it will present to the Board on June 17, 2021. If approved, this new ETS would likely go into effect by June 28, 2021, once reviewed by the state Office of Administrative Law.

WHAT EMPLOYERS SHOULD DO NOW:
Since further revisions to the ETS will not become effective before June 15, California employers need to continue to adhere to the ETS implemented in November 2020 (as clarified and/or modified by Cal/OSHA’s FAQs) in the meantime. Although California’s relaxed masking guidelines—which apply to the general public—will kick in on June 15, employers should hold off on updating their masking policies and relaxing their practices and await final word from Cal/OSHA.

STAY TUNED!
We will continue to provide periodic updates on this issue as more information from Cal/OSHA becomes available. Further proposed revisions to the ETS are expected to be published by June 17, with a proposed effective date of June 28.

For the time being, employers should hold on tight for another potentially bumpy ride.

For more information on this topic, you can reach out to:
Kirstin Muller, kmuller@hkemploymentlaw.com, (310) 255-1811
Netta Rotstein, nrotstein@hkemploymentlaw.com, (310) 255-1807
Michelle Freeman, mfreeman@hkemploymentlaw.com, (415) 835-9003

Cal/OSHA Issues New Vaccine Guidelines

In news that will be welcomed by employers, Cal/OSHA has finally updated its Emergency Temporary Standards (ETS) to address whether fully vaccinated employees must be excluded from the workplace if exposed to COVID-19.

Prior to the updated guidance, an employer was required to exclude all employees from the workplace, regardless of vaccination status, if (1) they contracted COVID-19; or (2) were exposed to COVID-19 in the workplace.

Now, employers must only exclude employees who are not fully vaccinated. However, employers must still exclude fully vaccinated employees if they have a confirmed case of COVID-19, or have had a COVID-19 exposure and are experiencing COVID-19 related symptoms.

While this change allows employers to keep more of their employees in the workplace, it is important to remember that the remainder of the ETS remain in effect, including the requirements related to masks, physical distancing, and testing.

More Changes Coming

On May 7, 2021, Cal/OSHA submitted further proposed revisions to the ETS which will be considered at its May 20, 2021 meeting. The revised ETS will provide further direction regarding vaccinated employees, including updated social distancing and testing requirements, as well as updated definitions and the clarification of other terms.

If and when the updated ETS goes into effect, we will provide a further update.

For more information, contact Michelle Freeman in Hirschfeld Kraemer LLP’s San Francisco office, mfreeman@hkemploymentlaw.com, or (415) 835-9003.

Hospitality Industry Must Rehire Employees Laid Off Due To COVID-19

On April 16, 2021, Governor Gavin Newsom signed Senate Bill 93. This new law, effective immediately and through 2024, requires hospitality-related employers to rehire certain employees who lost their jobs for pandemic-related reasons.

Here are the key issues:

Which employers are covered by SB 93? Hotels, private clubs, event centers, airport hospitality operations, airport service providers, or entities providing services (janitorial, building maintenance or security) to commercial buildings.

Which employees are potentially eligible for recall under SB 93? Employees who were employed by the employer for at least six months during the 2019 calendar year and who were terminated involuntarily (laid off) for a pandemic-related reason, including a public health directive, government shutdown order, lack of business, a reduction in force, or other economic, non-disciplinary reason due to the COVID-19 pandemic.

What requirements are imposed on employers under SB 93? The affected employer must offer laid-off employees information about job positions that are available or become available for which the former employees are qualified. The affected employer must then offer positions to such former, laid off employees based on a preference system. Importantly, under the preference system, if more than one employee is entitled to a position based on the foregoing criteria, the employer has to first offer the position to the more senior employee (measured by hiring date).

When and how must an employer provide notice? Within 5 days of establishing of the opening or creation of an open position, written notice of such position must be provided to the eligible former employee. The notice must be delivered by hand or to the employee’s last known address. The notice must also be provided by text and email if the employer has the former employee’s cell phone number and/or email address.

When and how must a former employee respond in order to accept the position? The former employee must be given at least five business days from the date he/she receives it to accept the position. If the employee accepts the position, then the employer must recall the employee back to work.

Are there any exceptions to this mandate to recall laid off employees? Yes, but they are limited. If an employer chooses not to recall an employee for a position based on the grounds that he/she is unqualified, the employer must provide written notice explaining the reasons for the decision within 30 days.

Are there anti-retaliation provisions in SB 93? Yes. Employers are prohibited from taking any adverse employment action against employees who exercise, or try to exercise, their rights under SB 93. Further, employers must maintain records regarding such layoff/recall efforts for three years, including records of communications regarding the layoffs and offers.

We strongly suggest that affected employers review their policies and procedures immediately to ensure that they conform with this new law.

For more information, contact Monte Grix in Hirschfeld Kraemer’s Los Angeles office,  mgrix@hkemploymentlaw.com or (310) 255-1827.

Amazon Union Strikes Out; Is Your Company On Deck?

The NLRB announced today that the unionization effort at Amazon’s Bessemer, Alabama warehouse was resoundingly defeated. Seventy percent of the votes counted opposed SEIU’s effort to represent this fulfillment center’s workers.

This union drive was publicly supported by President Biden along with many other democratic leaders and Hollywood celebrities. Amazon conducted an aggressive messaging campaign focused on the fact that these employees were already receiving solid wages and benefits and didn’t need union representation.

While the Union has stated its intention to file objections to the election results, history tells us that this appeal is unlikely to succeed. Despite the union’s loss, this should be a wake up call for tech companies- large and small- as well as other businesses that historically have not be subject to unionization efforts. The vibrant “minority” union initiative underway at Google coupled with the widespread pro-union publicity garnered during the Amazon organizing campaign should cause executives to carefully consider what proactive steps they should take right now to minimize the risk that their business is the next target of union activity.

So if your company doesn’t want to be next in the batter’s box, make sure you can answer “yes” to the following ten questions:

  1. Does your company’s culture reflect the needs and desires of its millennial and Gen Z workforce?
  2. Has your business decided whether and how to address social justice issues which may resonate with your workforce?
  3. Have you recently conducted an employee satisfactory survey and, if so, have you carefully considered and addressed the issues uncovered?
  4. Have you implemented an effective strategy to prevent and address harassment, bullying and discrimination?
  5. Do your employees have confidence that your HR department will take their concerns seriously?
  6. Have your recently reviewed your solicitation/distribution policy and is it being consistently enforced?
  7. Have you conducted an audit to ensure that your wage-hour practices are legally compliant?
  8. Do your employees have confidence that you are doing everything possible to protect their safety and heath?
  9. Have you conducted management training on preventative labor relations?
  10. Do you have a plan in place on what to do if a union comes knocking at your door?

For more information, contact Steve Hirschfeld at sh@hkemploymentlaw.com, (415) 835-9011.

New York Court Determines that Delaware, Not California, Law Applies to Employee Covenant Not to Compete

In Perry v. Floss Bar, Inc., 2021 U.S. Dist. LEXIS 43429, a district judge in the Southern District of New York denied a preliminary injunction request from Joshua Perry, who was domiciled in California and was the former President of Floss Bar—a Delaware corporation headquartered in New York—who sought to enjoin enforcement of a covenant not to compete agreement governed by Delaware law that prohibited competition for two years following the end of his employment. The covenant not to compete agreement was entered into in conjunction with Perry’s commencement of employment with Floss Bar.

Of note is that in deciding this case, the court addressed two provisions in California law: (1) Section 16600 of the California Business and Professions Code, which generally prohibits enforcement of a covenant not to compete against a former employee; and (2) Section 925 of the California Labor Code, which prohibits an employer from requiring an employee who primarily resides and works in California, as a condition of employment, to agree to a provision that would either require the employee to adjudicate outside of California a claim arising in California or deprive the employee of the substantive protection of California law with respect to a controversy arising in California.

Any provision of a contract that violates the foregoing Section 925 restrictions is voidable by the employee, who may seek injunctive relief and other remedies and may be awarded reasonable attorney’s fees, and if so voided, the matter must be adjudicated in California under California law.

An important limitation in Section 925—which applies to contracts entered into, modified, or extended after January 1, 2017—is that it does not apply to a contract with an employee individually represented by an attorney in negotiating the terms of an agreement to designate either the venue or forum in which a controversy arising from the employment contract may be adjudicated or the choice of law to be applied.

After Perry and Floss Bar’s business relationship deteriorated and he no longer performed services for Floss Bar—though the parties disagreed on whether his employment had in fact been terminated—Perry filed an action in San Francisco Superior Court in July 2020 against Floss Bar and two of its executives, asserting, among various claims under common law and California securities and employment laws, that the covenant not to compete was foreclosing his ability to secure new employment and was unenforceable under California law. The defendants removed the case to the Northern District of California and then successfully moved to change venue to the Southern District of New York.

In reaching the decision to deny the preliminary injunction, the court determined that Perry would not likely be able to show that the Delaware choice of law provision was void. The court noted that the evidence from Perry—that “[n]egotiations about legal language and such was conducted on my behalf by a lawyer in Copenhagen”—showed that Perry was likely represented by counsel in negotiating the covenant not to compete agreement, which was entered into in consideration of his employment with Floss Bar, thus suggesting that the exception in Section 925(e) of the California Labor Code applied. Even if that exception was inapplicable, the court determined that Perry had not shown that he “primarily resided and worked in California” as required to invoke the protections of Section 925, because in the relevant employment year he had worked fewer than 40 days in California.

The court then applied California’s common law test under the Restatement (Second) Conflict of Laws (“Rest.”) to assess whether the choice-of-law provision was otherwise unenforceable. Under this test, a court must determine “(1) whether the chosen state has a substantial relationship to the parties or their transaction, or (2) whether there is any other reasonable basis for the parties’ choice of law.” Nedlloyd Lines, 3 Cal. 4th 459 (1992). If either test is met, the court must then determine whether the chosen state’s law is contrary to a fundamental policy of the other state whose law would apply in the absence of an effective choice of law provision made by the parties. If there is no conflict between the fundamental policies of the two states, the contractual choice-of-law provision will be enforced.

Citing California case law, the court determined that because Floss Bar was a Delaware corporation, Delaware had a “substantial relationship” to the parties and their transaction under California law. The court went on to conclude that Delaware law would not conflict with a fundamental policy of the state of New York, finding that since Floss Bar was headquartered there, signed the operative agreement there, some of the negotiations occurred there and the other defendants lived there, New York, not California, was the relevant state, and that Delaware and New York applied a similar standard of reasonableness in assessing the enforceability of covenants not to compete. (The court did not give great weight to the fact that Perry was domiciled in California, noting that he traveled extensively, including New York and overseas, and that most of his time was spent away from his San Francisco residence.) Since the court determined that the substantive law of California did not apply to the claim that the covenant not to compete was unenforceable, it concluded that Section 16600 of the California Business and Professions Code—which generally invalidates enforcement of a covenant not to compete against a former employee—was not relevant here.

For more information, please reach out to William Ross in the Los Angeles office of Hirschfeld Kraemer LLP, wross@hkemploymentlaw.com, or (310) 255-1828.

Supplemental Paid Sick Leave Returns: Retroactive Application, Immediate Consequences for California Employers

On March 19, 2021, Governor Newsom injected new life into previously expired statewide COVID-19 Supplemental Paid Sick Leave (SPSL) benefits. By signing Senate Bill (SB) 95, eligible California employers must once again provide covered employees with SPSL for COVID-19 related absences in addition to existing paid time off and vacation benefits. Though employers have a built-in 10-day grace period before they must begin providing SPSL, the bill takes effect immediately, is retroactive to January 1, 2021, and will remain in effect through September 30, 2021.

Which Employers Are Covered? The bill has broad application throughout the state, applying to employers with 25 or more employees and specifically covers providers of in-home supportive services and personal waiver care services. It applies to all employers, public or private, and includes those with collective bargaining agreements. SB 95 dramatically expands application of SPSL throughout the state as the prior 2020 Supplemental Paid Sick Leave law, codified in Labor Code section 248, applied only to employers with 500 or more employees in the United States.

Which Employees Are Covered? Unlike the bill’s eligibility requirement for employers, there are no similar eligibility or length of service requirements for employees. Under SB 95, covered employees are entitled to paid sick leave that is in addition to leave that was provided under the previous SPSL which expired on December 31, 2020. But, unlike the 2020 COVID-19 SPSL law that applied to food sector workers, the new law does not include independent contractors.

Under What Circumstances Can Employees Take SPSL? The bill defines a “covered employee” as any employee who is unable to work or telework for an eligible employer because of any the following reasons, any one of which is sufficient for SPSL:

  • The employee is subject to a quarantine or isolation period related to COVID-19;
  • The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
  • The employee is attending an appointment to receive a vaccine for protection against contracting COVID-19;
  • The employee is experiencing symptoms related to a COVID-19 vaccine that prevent the employee from being able to work or telework;
  • The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  • The employee is caring for a family member who is subject to a quarantine or isolation order; or
  • The employee is caring for a child whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19 on the premises.

Employers should be aware that the circumstances under which a covered employee may take SPSL under the 20201 law significantly expanded the circumstances previously available under the state’s 2020 SPSL law.

How Much SPSL Are Employees Entitled to and What is the Rate of Pay? The amount of SPSL available to covered employees, as well as the individual rate of pay for SPSL, are dependent on a number of factors:

  • Full Time vs. Part Time: Full-time employees (those who are scheduled to work, on average, 40 hours or more per week) are entitled to 80 hours of SPSL under the bill. Employees who work less than 40 hours per week receive SPSL under the bill in one of three different ways based primarily on the employee’s work schedule and length of employment:
    • Employees with a regular schedule are entitled to the total number of hours the employee is normally scheduled to work for the employer over two weeks;
    • Employees with a variable schedule are entitled to 14 times the average number of hours the employee worked each day for the employer in the six months preceding the leave; or
    • Employee with a variable schedule who have worked for the employer for 14 days or less are entitled to the total number of hours the employee has worked for the employer.
  • Rate of SPSL Compensation: The rate of pay for covered employees depends on the employee’s exempt or non-exempt status. Under the bill, exempt employees are entitled to SPSL compensation at the rate that the employer calculates wages for other forms of paid leave time. The bill specifically limits SPSL at $511 per day and $5,110 in the aggregate for all covered employees, regardless of exempt or non-exempt status. The bill sets the compensation rate for non-exempt employees by requiring employers to pay the highest of the following:
    • The employee’s regular rate of pay for the workweek in which the employee uses the leave;
    • Dividing the covered employee’s total wages (not including overtime) by the employee’s total hours worked in the full pay period of the prior 90 days of employment;
    • The state minimum wage; or
    • The local minimum wage to which the employee is entitled

What Restrictions Are Placed on Employees’ Use of SPSL? The short answer is, not many. The bill prohibits employers from requiring that covered employees use other paid or unpaid leave (such as PTO, other sick leave, or vacation) before the employee uses SPSL authorized under the new law except in limited circumstances. Employees are additionally free to independently determine when and how much SPSL they need to use. Finally, the bill does not contain language that would otherwise authorize or permit employers from requiring a covered employee to demonstrate proof or verification of the reasons underlying a request for SPSL.

Can Employers “Off-Set” SPSL Leave Against COVID-19 Sick Leave Previously Provided? Yes, under certain circumstances. If an employer has already provided another supplemental benefit for COVID-19 related sick leave that was taken before SB 95 became effective (for example, an employer already voluntarily provided a covered employee with other COVID-19 related paid sick leave between January 1, 2021, and March 28, 2021), the employer may receive credit toward the requirements under SB 95 as long as the prior benefits meet the requirements in the law.

Are There Any Other Immediate Consequences for Employers? Eligible employers have little time to adapt existing policies, procedures, and protocols to comply with the many significant changes encompassed in SB 95. Among these are:

  • Immediate Notice Requirements: SB 95 directs the Labor Commissioner’s office to release a model notice within 7 days of the passing of the bill. Beginning on March 26, 2021, employers must display the required notice in their workplace. If an employer has employee who do not regularly frequent the workplace due to COVID-19 reasons or otherwise, the employer may satisfy the notice requirement by disseminating the required notice through electronic means, such as email.  A copy of the required posting is now available, and accessible by clicking here.
  • Immediate Changes to Paystubs: In what will likely be the most difficult change for employers not previously covered by the state’s 2020 SPSL laws, information concerning SPSL must be listed on employee paystubs or other written notices that employees receive on payday. SB 95 specifically requires that SPSL be separately listed from paid sick leave on employee paystubs. The bill imposes additional paystub requirements for part-time and variable hour employees.
  • Immediate Retroactivity: Because the bill applies retroactively to January 1, 2021, employers must consider the need to make retroactive payments for COVID-19 leave. If retroactive payments are required, such payments should be paid on or before the payday for the next full pay period after an oral or written request is made by a covered employee for retroactive SPSL leave.

While this summary covers many of SB 95’s immediate changes and consequences to supplemental paid sick leave in California, there are others. And, although California’s new SPSL law may appear to resemble aspects of the state’s 2020 SPSL law, there are significant differences. If you have any questions, please reach out to us for assistance.

Questions about COVID-19 and the workplace? Contact the Hirschfeld Kraemer lawyer who normally provides your legal advice, or you can reach out to Adam Maldonado in Hirschfeld Kraemer’s San Francisco office, amaldonado@hkemploymentlaw.com, (415) 835-9075.

University Graduate Student TAs Get the Green Light to Unionize

On Friday, March 12, 2021, the National Labor Relations Board (NLRB) abruptly reversed course and withdrew a proposed 2019 rule that would have barred graduate student teaching assistants at private colleges and universities from unionizing. If the proposed rule (drafted in September 2019 and nearly finalized in December 2020) had been implemented, it would have explicitly excluded graduate student teaching assistants from the definition of “employee” under the National Labor Relations Act (NLRA), thereby precluding them from forming a union.

The 2019 proposed rule came as a direct response to the NLRB’s August 2016 decision in a Columbia University case, decided by a majority-Democrat board, in which the Board held that graduate students were employees of their educational institution and could unionize. That decision was itself a reversal from a 2004 Brown University decision, decided by a Republican controlled NLRB, which held that students were not employees within the meaning of the NLRA. Given the heavily political nature of the NLRB, it is possible that future Boards will once again switch their position with respect to student workers.

In the press release announcing the withdrawal of the proposed rule, the NLRB indicated that its purpose in doing so was to allow it to focus “its limited resources on competing agency priorities, including the adjudication of unfair labor practice and representation cases currently in progress.” While the move is a bit surprising, it appears the change in direction may be a result of the Biden’s Administration’s publicly announced position in favor of expanding the rights of workers to organize.

This decision will likely result in a significant increase in union organizing among graduate student teaching assistants. Colleges and universities with concerns over this development should seek legal advice from an expert in higher education labor relations.

For more information, contact Stefanie Renaud at srenaud@hkemploymentlaw.com, (310) 255-1818 or Steve Hirschfeld at sh@hkemploymentlaw.com, (415) 835-9011.

The Future of Timeclock Rounding Policies: Dead on Arrival

Last week, in Donohue v. AMN Services, LLC, the California Supreme Court handed down a very important, if unsurprising, decision regarding wage and hour class actions. There are three critically important takeaways for employers:

  1. An employer cannot round employee meal period punches — only exact time will work, as any non-compliance (even as minor as one minute) will trigger liability to pay a meal period premium.
  2. Rounding the start time of an employee’s shift is also functionally prohibited because of the potential that it will result in an employee starting his or her meal period after the end of the fifth hour, resulting in a violation of section 512 of the Labor Code and the applicable IWC Wage Orders.
  3. If the employer’s time records, due to rounding or otherwise, do not show a compliant meal period, then there is a “rebuttable presumption” that the employee did not get a compliant meal period. It is up to the employer to provide evidence that this presumption is not accurate; that is, that the employee actually did have the opportunity to take a complaint meal period, but elected not to do so.

Background: What is A Compliant Meal Period?

Per the California Supreme Court’s 2012 decision in Brinker Restaurant Corporation v. Superior Court: For shifts of more than five hours, employers are generally required to provide non-exempt employees an uninterrupted, duty-free meal period of at least 30 minutes before the end of the fifth hour of work, and before the end of 10th hour of work for second meal periods for shifts of more than 10 hours.

Importantly, based on that decision, employers are not required to “police” meal periods and guarantee that employees take such breaks. If an employer provides a meal period, but the employee decides not to take it for personal reasons (rather than the press of work), then there is no employer liability. However, if the employer does not provide the opportunity for a compliant meal period (one that is not missed altogether, or late or short), then the employer owes the employee a “premium” of one hour’s pay.

Up until 2018, it had been widely thought that Brinker and other relevant authority provided some safe harbor to employers. Aside from not having to be the “meal break police,” there was some wiggle room: a meal period that was short by a minute or two could still be compliant under the federally recognized “de minimis” doctrine, i.e., small amounts of otherwise compensable time would not add up to a violation of the Labor Code’s and the Wage Orders’ requirement of providing an off-duty 30-minute meal period.

Federal courts, applying the Fair Labor Standards Act (FLSA), have decided that employers may disregard time as de minimis and thereby not generate FLSA violations, depending on three factors: (1) the practical difficulty the employer would encounter in recording the additional time, (2) the total amount of compensable time, and (3) the regularity of the additional work.

But that wall began to crumble in 2018 when the California Supreme Court decided, in Troester v. Starbucks Corporation, that the de minimis doctrine was inconsistent with California law, where employees performing store-closing tasks typically performed four to ten minutes of off-the-clock work at the end of the day. To be clear, the Court did not altogether close the door on the de minimis doctrine as applied to California law, but it was not an encouraging sign.

In another discouraging sign for employers, last year, in Frlekin v. Apple, Inc., the California Supreme Court held that the time employees spend going through pre- or post-shift searches of their personal effects (to curtail employee theft or “shrinkage”) is compensable time.

Donohue v. AMN Services, LLC – Rounding Practices Under the Microscope

So this brings us to the present case. The plaintiff, a nurse recruiter for AMN, a healthcare services and staffing company, claims AMN did not provide compliant meal periods to her and others in the putative class.

On the surface, AMN did everything right: it had a policy detailing, in line with Brinker, that employees had the right to take a 30-minute, uninterrupted meal period before the end of the fifth hour of work. This same policy specified that supervisors were not to “impede or discourage” the taking of such breaks. Further, AMN flagged non-compliant meal periods and asked the affected employees, through its electronic timekeeping platform, to indicate if the missed, late, or short meal period was due to employee choice or due to work-related reasons. If the latter, the employee was paid a one-hour premium in accordance with California law. And finally, AMN’s timekeeping platform required employees to review their time entries every pay period to verify the accuracy of time entries or to correct them as needed.

But AMN’s timekeeping platform applied a 10-minute rounding policy. For example, a clock-in at 11:02 a.m. would round down to show an 11:00 a.m. clock-in. A clock-out of 5:06 p.m. would round up to show a 5:10 p.m. clock out. AMN was able to provide expert testimony to show that this policy was even-handed over time, and actually resulted in a slight overpayment to the class.

However, the high court determined that this missed the point, holding that California’s meal period provisions are “designed to prevent even minor infringements,” and that AMN’s rounding policy created such infringements. The Court used these examples: where an employee’s actual lunch punches occurred at 11:02 a.m. (out) and 11:25 a.m. (in), those punches would be rounded to reflect a compliant 30-minute meal period, and the safety measures that AMN put in place (the flagging system that would ask the employee why his/her meal period was short) would not be triggered; that is, a meal period that was actually only 23 minutes would not be detected as “short” and no penalty would be paid.

Similarly, the Court used this example for the timing of the meal period: if any employee clocked in at 6:59 a.m. and then clocked out for lunch at 12:04 p.m., that employee’s meal period actually started after the end of the fifth hour of work, in violation of California law, but the rounding policy prevented any inquiry that could have triggered payment of a premium.

AMN argued that such timing issues were de minimis and thus permissible, but the Court held (as it signaled in Troester and in Frlekin) that the de minimis doctrine is inconsistent with the legislative intent behind the California Labor Code and the Industrial Wage Commission’s Wage Orders, which the Court liberally construes.

Importantly, the Court left the door open for an employer to show, at the summary judgment and class certification stages, that the non-compliant meal period was due to employee choice rather than employer practice/policy, but the Court made it clear that the burden to rebut the presumption of non-compliance (whether in the form of class members’ declarations or otherwise) was the employer’s to bear.

What This Means

Employers who apply rounding policies should, in consultation with legal counsel, take a very careful look at their timekeeping practices in light of the Donohue decision. There may be ways to apply some form of a modified rounding policy, but employers will need to think long and hard as to whether the benefits of a limited rounding policy are outweighed by the burdens of monitoring and implementing such a policy. (Indeed, AMN itself dropped its rounding policy in 2015, after the subject lawsuit was filed, and now uses actual punches only.)

Depending upon a company’s needs and capabilities, it may be advisable to abandon rounding policies altogether given the potential for rounding that could fall afoul of California law.

For more information, contact Dan Handman at dhandman@hkemploymentlaw.com, (310) 255-1820, or Monte Grix at mgrix@hkemploymentlaw.com, or (310) 255-1827. Both are in Hirschfeld Kraemer’s Santa Monica office.

Worker Classification “ABC Test” is Retroactive, Per CA Supreme Court

On January 14, 2021, the California Supreme Court issued a disappointing decision in Vazquez v. Jan-Pro Franchising International, Inc., determining that the “ABC test” the court formulated in Dynamex Operations West, Inc. v. Superior Court is retroactive.

To put this in context, we look back to the April 30, 2018 Dynamex decision that upended the prior 30 years of jurisprudence regarding how to classify a worker as an employee versus an independent contractor. Until Dynamex, employers and employees operated under the prior test approved by the California Supreme Court in its 1989 decision in S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations. The Borello test included 12 factors to determine the status of a worker, but no one factor was necessary in order to treat the worker as an independent contractor.

So, for example, a worker who worked at home, using his own computers or his own equipment, could conceivably be classified as either an employee or an independent contractor. The ambiguity in the Borello standard, and the lack of any one predominant or necessary factor, left businesses and workers with the flexibility that they usually wanted.

The Dynamex decision replaced the flexibility of the Borello test with a simple, three-prong test, termed the “ABC test.” To be properly classified as an independent contractor, all three of the following factors must be met:

  • (A) The worker must be free, in everyday tasks, from the hirer’s control and direction;
  • (B) The work performed must be outside the usual course of the hiring entity’s business; and
  • (C) The worker must be customarily engaged in an independent occupation or business of the same type as the work he or she is performing for the hiring entity.

The second (“B”) factor is the one most difficult for employers to meet. In short, the Dynamex “ABC test,” though simple, was an unexpected about-face that left (and continues to leave) employers scrambling. And Dynamex continues to reverberate: the California Legislature thereafter codified and expanded Dynamex in A.B. 5 while carving out numerous exceptions that, though welcomed by the beneficiary employers, are often arbitrary. Uber and other gig economy businesses, which pushed extremely hard for their own carve out but did not get one, instead financed a highly costly ballot initiative to create such a carve out. (This was passed by California voters, but is now being challenged in a pending lawsuit as contrary to the California Constitution.)

In Vazquez, the employer raised the same arguments that the “ABC test” was a “sea change” in the law that employers could not have reasonably anticipated, and therefore should not, as a matter of fairness and applicable law, be applied retroactively. The court, disappointingly but not surprisingly at this point, disagreed. The court reasoned that Dynamex dealt with an issue that had never been decided (an issue of “first impression”), Borello notwithstanding. The court essentially reasoned that Borello concerned whether a worker was an employee or independent contractor under the Workers’ Compensation Act and not under the California Wage Orders. (Narrowly speaking, this is accurate, but it ignores the fact that Borello was the standard for nearly 30 years and was applied by this same court in a variety of contexts.)

The court further rejected the employer’s “reasonable reliance” argument by citing to two of its prior decisions in 2010 and 2014 where the court asserts that it signaled that this area of law was unsettled, and that employers were therefore on notice that reliance on Borello was not warranted. This closes out a significant chapter: the Dynamex ABC test is not merely the standard for analyzing employee versus independent contractor classifications—it is a standard that preexists the April 30, 2018 decision.

Key Takeaways

So what should employers do now? Start with understanding what this means legally: the relevant statute of limitations for most claims under the Labor Code is three years, and in some cases it is four years. Employers should conduct the same classification audit they hopefully undertook in the wake of Dynamex, but (assuming no litigation is yet pending) look back not only to the April 30, 2018 date Dynamex was decided, but go back to the beginning of 2017, and ask these basic questions:

  • One, as we advised in the wake of Dynamex, all of the traditional assumptions from the Borello test must be thrown out the window, and the calculation becomes very simple: Is the worker performing work that is outside your ordinary course of business?
  • Second, businesses that do not have workers sign arbitration agreements with class action waivers should consider doing so right away. Questions of employee/independent contractor classification lend themselves easily to class action treatment, but a class action can be avoided by an effective class action waiver.

Of course, if an employer is dealing with pending litigation/claims that were not resolved prior to the time that Dynamex was decided, understand that the ABC test will apply to such claims, i.e., that Dynamex is retroactive.

Monte Grix is a partner in the Los Angeles office of Hirschfeld Kraemer LLP. He can be reached at mgrix@hkemploymentlaw.com or (310) 255 1827.