Labor and employment law in California has been evolving rapidly in recent years. While perhaps not quite as momentous as some recent years, 2021 saw much legislative activity. We provide below a summary of the most significant legislation. We also summarize significant legislation that either did not pass or that Governor Newsom vetoed since variations of these laws could still be on the horizon for future passage.

Signed Legislation

Arbitration Fees – SB 762 strengthens existing law that establishes standards for employer breach of arbitration agreements (and concomitant waiver of right to compel or proceed in arbitration) by requiring payment of arbitration fees within 30 days of the due date. It also requires the arbitration provider to simultaneously send both parties a copy of the fee invoice with the due date.

Confidentiality Agreements – SB 331 expands the prohibition on non-disclosure agreements (“NDAs”) found in Civil Code section 1001 and Government Code section 12964.5 in settlement agreements in cases involving sexual harassment, sexual assault, and sex discrimination to cover settlement agreements involving all forms of harassment or discrimination. It also expands the prohibition on overly-broad confidentiality and non-disparagement clauses in employment agreements to prohibit such clauses as part of a severance agreement.

Agricultural Workers – AB 73 expands the definition of essential workers to include agricultural workers for the purpose of accessing the personal protective equipment (PPE) stockpile for emergencies established by the State Department of Public Health and the Office of Emergency Services. It also directs the Division of Occupational Safety and Health (Cal/OSHA) to review and update the content of wildfire smoke training in existing regulations and it requires training provided by employers to be in a language and manner readily understandable by employees.

Domestic Workers Health & Safety – SB 321 establishes an advisory committee to: (1) make recommendations, in consultation with other specified divisions and entities, to the Department of Industrial Relations or the Legislature to protect the health and safety of household domestic service employees, and (2) develop industry-specific occupational health and safety guidance to educate household domestic service employees and employers.

Tips – AB 286: (1) prohibits a food-delivery platform from retaining any portion of amounts designated as a tip or gratuity, and (2) requires food-delivery platforms to disclose to the customer and the food facility specified information related to fees, commissions, and costs charged to both parties.

COVID Exposure Notifications – AB 654 clarifies and strengthens provisions enacted in 2020 relating to workplace COVID-19 exposure notifications.

Warehouse Workers – AB 701 strengthens protections for warehouse workers by requiring specified employers of 100 or more nonexempt employees at a single warehouse distribution center or 1,000 or more nonexempt employees at one or more warehouse distribution centers in California to provide each employee with a written description of: (1) each quota to which the employee is subject within a defined time period, and (2) any potential adverse action that could result from the employee’s failure to meet the quota. Any actions taken by an employee to comply with occupational health and safety laws, as specified, must be considered time on-task and productive time for purposes of any quota or monitoring system. The bill clarifies that meal and rest breaks are not considered productive time unless the employee is required to remain on call. It also establishes a rebuttable presumption of unlawful retaliation if an employer in any manner discriminates, retaliates, or takes any adverse action against any employee within 90 days of the employee doing either of the following: (1) initiating a request for the employee’s quota or personal-work-speed data, or (2) making a complaint related to a quota violation, as specified.

Wage Theft – AB 1003 creates a new offense, punishable as either a felony or a misdemeanor, for an employer’s intentional theft of wages. It specifies that wages, gratuities, benefits or other compensation that are the subject of a prosecution under this section may be recovered as restitution in accordance with Penal Code Sections 1202.4 and 1203.1. Further, it does not prevent the employee or the Labor Commissioner from commencing a civil action to seek Labor Code remedies for acts prosecuted under this section.

Garment Workers – SB 62: (1) prohibits the practice of piece-rate compensation for garment manufacturing except in the case of worksites covered by a valid collective bargaining agreement, and (2) further requires a garment manufacturer that contracts with another person for the performance of garment manufacturing to share joint and individual civil legal responsibility and civil liability for workers employed by that other person.

Civil Procedure and Electronic Court documents – SB 241: (1) establishes a statutory framework for conducting court proceedings in civil cases through the use of remote technology; (2) extends to arbitration continuances or postponements the general rule that a trial continuance or postponement caused by the COVID-19 pandemic extends other case deadlines; and (3) as of July 1, 2024, requires courts to transmit documents issued by the court electronically where parties have consented to or are required to use electronic service.

Port Drayage Workers – SB 338 expands the set of violations that can cause port drayage contractors to be placed on a Division of Labor Standards Enforcement list that extends joint liability for future violations to customers of that contractor.

Pain & Suffering Damages – SB 447 authorizes a decedent’s personal representative or successor in interest to recover damages for a decedent’s pain, suffering, or disfigurement in an action or proceeding on the decedent’s cause of action, as specified.

Electronic Delivery of Employment Posting – SB 657 allows employers to distribute and post information electronically, including via email. This does not alter an employer’s obligation to display any required postings physically in the workplace.

Contractor Liability – SB 727 expands existing direct contractor liability to include liquidated damages and penalties in circumstances where the direct contractor fails to meet payroll monitoring and corrective action requirements, as specified.

Fair Employment and Housing Act Procedures – SB 807 makes clarifying procedural modifications to the Fair Employment and Housing Act. It extends the time that an employer must retain employment records from two to four years and removes the State Personnel Board (SPB) exemption. It also tolls the statute of limitations for filing claims during any period of time in which DFEH is investigating or mediating a complaint.

Workplace Health & Safety – SB 606 establishes a rebuttable presumption that an employer’s written policy that violates specified health and safety regulations exists at all of that employer’s worksites and adopts an “egregious violation” standard that gives Cal/OSHA the ability to stack penalties in cases where an employer willfully and negligently has refused to comply with safety standards.

Mandatory Mediation – AB 1033 revises the mandatory mediation pilot program for claims brought under the California Family Rights Act (CFRA) against small employers with between 5 and 19 employees. It requires the DFEH, when an employee requests an immediate right to sue alleging a violation of the above-described family care and medical leave provisions by an employer, to notify the employee in writing that mediation is mandatory prior to filing a civil action if either the employer or employee requests it. The bill would also require the employee to contact the department’s dispute resolution division, in the manner specified by the department, prior to filing an action and to indicate whether they are requesting mediation.

Rehiring and Retention of Hospitality Workers – SB 93 requires an employer, within five days of establishing a position, to offer its laid-off employees, in writing and by email and text message, all job positions that become available after the effective date of this bill for which the laid-off employees are qualified. Specifies that the Division of Labor Standards Enforcement (DLSE) has exclusive jurisdiction to enforce these provisions.

PAGA: Janitorial Workers – SB 646 exempts from the Private Attorneys General Act of 2004 janitorial employees who are covered by a collective bargaining agreement that meets certain conditions. Specifically, the collective bargaining agreement must provide expressly for certain minimum wages and benefits, a grievance and binding-arbitration process to redress PAGA violations, and the authority of an arbitrator to award any and all remedies otherwise available under the Labor Code. This law does not apply to cases filed before January 1, 2022, its effective date, and will sunset on January 1, 2028.

Legislation Eligible to Advance but Not Signed

Family Leave for Chosen Family – AB 1041(Assembly Member Wicks) would expand caregiving leave and paid sick days so that workers can take leave for chosen family members. 2-year bill (eligible to advance next year).

Bereavement Leave – AB 95 (Assembly Member Low) would establish job-protected bereavement leave for workers after the loss of a loved-one. 2-year bill (eligible to advance next year).

Discrimination Based on Family Responsibilities – AB 1119 (Assembly Member Wicks) would strengthen discrimination protections under the Fair Employment and Housing Act for workers with family responsibilities. 2-year bill (eligible to advance next year).

Lactation Accommodation at State Courthouses – AB 1576 (Assembly Judiciary Committee) would provide lactation accommodation at state courthouses for lawyers and other officers of the court. 2-year bill (eligible to advance next year).

Vetoed Legislation

Paid Family Leave – AB 123 (Gonzalez) would have increased the wage replacement rate: (1) to 65% or 75% for paid-family-leave (PFL) claims commencing after January 1, 2023, but before January 1, 2025, and (2) to 70% or 90% for claims commencing after January 1, 2025. Vetoed.

Veteran’s Preference Policy – SB 665 (Umberg) would have established the Voluntary Veterans’ Preference Employment Policy Act (Act) and authorized a private employer to establish a veterans’ preference employment policy without violating the Fair Employment and Housing Act. It specified that an employer that adopted a voluntary veterans’-preference employment policy shall report annually to the Department of Fair Employment and Housing (DFEH), in a manner prescribed by DFEH, the number of veterans hired in that reporting year under the preference policy and any demographic information about those veterans that the employer obtained in response to DFEH’s reporting requirements.

Proposed Legislation Not Passed

Worker Classification: Employees and Independent Contractors – AB 25 (Kiley) would have repealed provisions relating to the “ABC” test for certain occupations and business relationships.

Employment: Flexible Work Schedules – AB 230 (Voepel) would have weakened overtime protections as they relate to alternative-workweek schedules and schedule changes.

PAGA – AB 385 (Flora) would have prohibited an “aggrieved employee” from maintaining an action on behalf of themselves or any other aggrieved employee if certain conditions apply, including if the aggrieved employee has brought an action under the act in conjunction with, or in addition to, claims for monetary damages or penalties for violations of the Labor Code arising out of the same period of employment.

Wages: Records: Inspection and Copying – AB 436 (Fong) would have lengthened the time for providing copies of wage statements from 21 to 30 days when a request for personnel records also is made.

PAGA: Filing Requirements – AB 530 (Fong) would have required an aggrieved employee bringing a Labor Code Private Attorneys General Act (PAGA) claim to meet certain pleading requirements. Specifically, workers would have been required to inform the employer which specific violations of the Code are being brought under each subdivision of the act and to inform the employer whether the statutory right-to-cure provisions apply.

Worker Classification: Business-to-Business Voluntary Deposit Arrangements – AB 612 (Mayes) would have impacted the misclassification framework for business-to-business arrangements, as recently revised under AB 2257 (Gonzalez, 2020).

Private Employment: COVID-19: Positive Test or Diagnosis: Documentation – AB 757 (Davies) would have allowed employers to require workers to prove COVID-19 infection—or an applicable self-quarantine order—in writing before they could receive COVID-19 paid sick leave required by the Cal/OSHA Emergency Temporary Standard (ETS).

Telework Flexibility Act – AB 1028 (Seyarto) would have provided employer protection for overtime and meal- and rest-break claims related to remote work and alternative/flexible workweek schedules.