No matter how you started 2020 and with what goals, those were likely greatly derailed once COVID started. Not only did it derail your plans, but the whole world. Numbers showed that more than 3.7 million people in California have been infected and more than 58,000 people have died due to COVID.
Most businesses disagreed on what to do to protect and take measures against the pandemic and therefore had to make last minute decisions and compromises. Therefore, most bills and laws passed last year and looking into 2021, will somehow be COVID-related.
There are many new laws for California businesses in 2021 in order to help employees deal with difficulties of the pandemic. Some of the things that you as a small business will have to do include: sharing if employees are sick, replace lost wages and healthcare, and protect jobs of employees who have had to go on sick leave for themself or a family member. Here are some of the significant law changes in CA that you should know about:
Minimum Wage Increase
The mandated minimum wage increase has been in effect for a few years, and the state rates changed as of January 1. It is all dependent on how many employees you have working for your small business. If you are located in an area without a local ordinance and have less than 25 employees, minimum wage is $13/hour. If you have more than 25, the rate is at least $14/hour. There are other levels and exceptions, one being that all employees in LA City and unincorporated County will have their wage increase July 1, 2021. Be sure to check your city/county to make sure you meet the minimums for your location.
Family Leave
For a long time there has been a huge debate about who can afford to take time off to take care of sick family members, or new babies. Up until this point, guaranteed unpaid leave (up to 12 weeks) with job security was only offered to employees that worked at companies with 50 or more employees. Unfortunately, that is only about half of California’s employees–only 8.2 million people out of 15 million total.
Senate Bill 1383 states that any company with 5 or more employees are now required to offer this same benefit–12 weeks of unpaid sick leave with job security afterwards. It also extends the meaning of family member further to include: grandparents, grandchildren, siblings, and in-laws.
However, not everyone is excited about this new bill. The California Chamber of Commerce argued against the original bill proposal which stated that all companies would have to offer the same benefits, without attention to the number of employees. They have labeled SB 1383 as the “job killer”. The concern is that small businesses that are now being required to offer this benefit will not be able to afford to keep their businesses running and be forced to close their doors permanently.
On the other hand many people believe that in this new time of COVID-19 it is more important than ever before to be able to care for your loved ones without fear of losing your source of income. This is especially important for low-income employees who tend to work at smaller businesses and have been the greatest population affected by the lack of guaranteed time off.
COVID-19 Safety
As we get further and further into this pandemic, we have seen COVID numbers grow, as well as workplace COVID outbreaks. Unfortunately, so has the number of companies hiding COVID infections. In November Cal/OSHA–California’s Division of Occupational Safety and Health, drafted Assembly Bill 685 which took effect on January 1.
This bill mandates that all businesses must notify their employees of outbreaks within one business day. They must also offer them information on sick-leave, workers’ compensation, protection against retaliation, and the company’s virus safety measures and policies. They also have 48 hours to report the outbreak to public health agencies which is typically defined as three or more confirmed cases at a company location within two weeks. It also gives harsher penalties for companies that do not comply.
Under this new bill Cal/OSHA also has the power to shut down a worksite immediately if they deem it as being unsafe due to the virus without having to go through the typical 30 day administrative process.
While some people disagree with this new law saying it is too vague or that you could get COVID anywhere and not prove it came from the workplace, overall, labor unions counted it as a win. Often they hear about their employees continuing to work in unsafe conditions due to unreported incidents and they feel this law takes us in the right direction to keep all workers safe and healthy.
Workers’ Compensation
Over the past year, COVID has spread rapidly in California. Some businesses failed to report infections to their worker’s compensation provider saying that their employees could be contracting COVID in any number of places outside work which means they were not required to cover the illnesses. This lack of workers’ compensation meant that employers didn’t have to pay health bills, repay some wages, or give death benefits.
In May 2020, an executive order passed stating that frontline workers that contracted COVID from March to July 2020 caught it from their workplace unless it could be proven otherwise. In September, Senate Bill 1159 passed extending the previous order beyond July for any healthcare workers. It also extended the presumption to any employee at a company with five or more employees that worked during an outbreak.
The California Labor Federation was pleased with this new law as it now would give workers better access to healthcare and wage replacement. However, the state Chamber of Commerce was in opposition against this new law, stating that the law was unfair against employers. They felt that it holds companies responsible for their employee’s actions outside of the workplace. They said it could cost companies billions of dollars.
Independent Contractors
In 2018 a CA Supreme Court decision passed making the definition of independent contractors more stringent requiring workers to be hired as employees in most cases. Many feel this causes a disadvantage to companies because they must provide minimum wage, overtime, paid sick leave, workers’ compensation, and unemployment/disability insurance. Even some workers who now must be classified as employees are not happy as it gives more control to the company regarding their employment.
In 2019, the Legislature passed Assembly Bill 5 which granted an exception to this for certain professions such as physicians, dentists, accountants, lawyers, graphic designers and real estate agents. However, it refused to exempt App ride/delivery companies.
Because of Assembly Bill 5, companies such as Uber, Lyft, DoorDash, Instacart and Postmates spent hundreds of millions of dollars campaigning against this with Proposition 22. While this went on, Assembly Bill 2257 passed which further revisions to AB 5. These changes most affect professions such as writers, photographers, home inspectors, real estate appraisers, landscape architects, consulting services and music/performing arts jobs.
Workers at high-risk for being taken advantage of are still protected including janitorial, trucking, retail, in-home care, and construction services.
Corporate Diversity
Lack of women in the workplace, especially in positions of power, has been a long standing issue. In 2018 nearly 30% of publicly traded companies had zero female members on their boards. However, that year California passed a law –Senate Bill 826– which said that companies had to have at least one woman on their board by the end of 2019. And by the end of 2021, companies with five board members needed to include at least two and companies with 6 needed to include at least three. After this law passed, that percentage dropped from about 30% to 2.35% in 2020. If companies failed to meet this, they would be fined $100,000 for a first offense and $300,000 for following offenses. The number of female board members in California will continue to grow the closer we get to the end of 2021.
In September another new inclusive law was passed, Assembly Bill 979. This Bill states that by the end of 2020 publicly traded companies in California had to have at least one member of their board from an underrepresented community, and up to three by the end of 2022, depending on the company size. These board members are defined as, “an individual who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender,” according to the Los Angelas Times.
According to Assemblywoman Cristina Garcia, 60% of California’s population falls into this category. Adding these underrepresented groups to these boards will, in turn, create more job opportunities in said companies for people as well. While some individuals are in opposition to this new law, companies all across the United States are adding women and minority groups to their boards and increasing their company diversity.
Keep a lookout for legally requiring certain businesses that laid off workers during the pandemic to offer jobs back to them once they rebound and return to hiring more employees again. Some of these businesses could include large hotels, airport hospitality groups, and janitorial companies.
It is important to stay on top of regulations, so be sure to reach out to your human resources department or attorney to help you navigate how these laws apply to your business.
