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A new law just went into effect that revises California’s test for determining whether a worker is considered an employee or an independent contractor, slicing off a number of various work arrangements from having to comply with the stringent ABC test. The bad news is that the new list of exemptions doesn’t go as far as most businesses would have liked. The good news is that the new law creates a better situation for “business to business” arrangements that had been troubled by California’s recent adoption of the ABC test. What do California businesses need to know about this latest development?

The California legislature just closed the books on one of the most interesting sessions in the State’s history. Not only did it itself shut down completely on two different occasions due to the COVID-19 pandemic, the last few days of session featured the entire Republican contingent of the Senate quarantined and debating and voting on legislation remotely via video feed. Bizarre to say the least.

After returning from its hiatus on May 4, the California legislature has wasted no time in drafting a flurry of new bills which will affect employers in the aftermath of the state’s response to COVID-19. While the state legislature was away, however, Governor Gavin Newsom issued dozens of unilateral executive orders and local county and city governments passed COVID-19 paid sick leave and other ordinances which will affect California employers.

As recently announced, Cal/OSHA is now scrutinizing employers’ adherence to state guidance regarding worker protections during the COVID-19 health crisis. The administration is urging all employers in California to carefully review and follow the state’s guidance on workplace safety and health and to understand their obligations regarding protecting their employees from the virus.

California's Unemployment Insurance (UI) program pays benefits to individuals who have become unemployed or partially unemployed and who meet the program's eligibility requirements.

There has been much confusion lately about the meaning of the terms “layoff” and “furlough.” Neither term has any specific meaning in California employment law. In common usage, a “layoff” is typically considered more permanent in nature. You are eliminating the position and terminating the employment relationship. You must pay all accrued vacation or PTO and must issue a COBRA notice to laid-off employees who are on your health plan. 

California employers breathed a bit easier once a federal judge pressed the indefinite pause button on the newly enacted law aimed at preventing employers from utilizing mandatory arbitration agreements. Now, a few weeks later, U.S. District Court Judge Kimberly J. Mueller issued an order fully explaining her reasons for granting the preliminary injunction that blocked AB 51. The 36-page order, issued on February 7, said that that the law not only would have placed arbitration agreements on unequal footing with other contracts, but it would have interfered with the stated objectives of the Federal Arbitration Act (FAA).

It has become somewhat of an annual tradition in California: with every new year comes a further increase in the state’s minimum wage. And this year is no different. In 2020, the new state minimum wage for employers of 26 or more employees is now $13.00 per hour, and the state minimum wage for employers of 25 or fewer employees just increased to $12.00 per hour.

A coalition of business groups led by the U.S. Chamber of Commerce just filed a lawsuit against California Attorney General Xavier Becerra and other state officials seeking to block AB 51, a recently passed statute which will make it unlawful for California employers to require employees to sign arbitration agreements beginning January 1, 2020.

A recent decision by the California First District Court of Appeal held that mandatory service charges frequently used by hospitality employers may constitute “gratuities” under California law that need to be paid to employees. 

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