Bills awaiting Governor Newsom’s signature would impose significant obligations on California employers

California’s 2022 legislative session recently came to a close, with several bills bearing significant implications for California employers sent to Governor Gavin Newsom’s desk in its concluding days. The Governor has until September 30, 2022 to either sign or veto the legislation.

Below are summaries of seven noteworthy bills that may be signed into law soon. We will update this alert to indicate the final status of bills at the end of the month.

1.  SB 1162 - pay data reporting and pay scale disclosure

SB 1162 would expand California’s existing pay transparency and data reporting requirements for employers with 100 or more employees beyond what is currently required under SB 973.  In addition to the information currently required to be reported, California employers with 100 or more employees would also be required to include median and mean “hourly rates” for each combination of race, ethnicity and sex within each job category in their pay data reports to the State of California. Under existing law, employers are required only to provide employee counts by race, ethnicity and sex within each job category and pay band.

The new law, if enacted, would also require employers with 100 or more employees hired through labor contractors to submit a separate pay data report for those employees.  Labor contractors would be required to supply the necessary data to companies that are required to submit this separate report.  The reports would be due each year on or before the second Wednesday of May.  Civil penalties could be imposed on employers that fail to provide a require report.

SB 1162, if enacted, would also significantly expand California employers’ pay scale disclosure obligations.  All California employers would be required, upon request, to provide employees with the pay scale for the position they occupy. The bill would also require employers with 15 or more employees (or their agents) to include the pay scale for a position in any job posting.

Because the bill does not specifically restrict its application to businesses operating in California, it remains to be seen what impact the bill may have on businesses publishing nationwide postings for jobs that could be performed remotely from California. The bill would establish a civil penalty of up to $10,000 per violation of the pay scale provision and posting requirements. However, the bill also provides that no penalty shall be assessed for the first violation of those requirements if the employer shows that postings have been updated to include the required pay scale. 

SB 1162 would also require employers to maintain a job title and wage rate history for each employee for the duration of employment plus three years after termination of employment.  An earlier version of the bill would have required the state to publish the required reports on a public website. Although the publication requirement was removed from the final bill, there remains a possibility that pay data reports could be obtained through discovery in a civil action. If this bill is approved, it will be effective beginning January 1, 2023.

2.  AB 152 – COVID-19 supplemental sick leave extension

California’s COVID-19 supplemental paid sick leave law, which is currently set to expire on September 30, 2022, provides eligible employees with up to 80 hours of paid sick leave. If enacted, AB 152 will extend the deadline by which employees may use supplemental paid sick leave by three months, to December 31, 2022.  Although it extends the deadline to use existing leave, AB 152 does not increase the total amount of leave employees may take and does not change the qualifying reasons for leave.

AB 152 also modifies the existing law’s testing and documentation provisions and makes grants of up to $50,000 available to qualifying small businesses and nonprofit organizations to reimburse them for costs incurred for COVID-19 supplemental leave between January 1, 2022 and December 31, 2022.

For additional information about AB 152, please see our alert here.

3.  AB 1949 – bereavement leave

AB 1949 would amend the California Family Rights Act (CFRA) to require employers to allow employees up to five days of bereavement leave upon the death of a spouse or a child, parent, sibling, grandparent, grandchild, domestic partner or parent-in-law. The bill would require leave to be completed within three months of the date of the death.  Leave would be taken pursuant to any existing bereavement leave policy.

In the absence of any such policy, leave would be unpaid, but employees would be permitted to use other leave balances that may be available to them, including accrued and available paid sick leave. The bill would make it an unlawful employment practice for an employer to discriminate, interfere or retaliate against an employee for exercising bereavement leave rights. If approved, the bill will be effective January 1, 2023.

4.  AB 2188 – off-the-job cannabis use protections (UPDATE: signed by Governor Newsom on September 18, 2022)

AB 2188 would make it unlawful, on or after January 1, 2024, for employers to discriminate against job applicants or take adverse action against employees for their use of cannabis off the job and away from the workplace. The bill would also bar employers from considering the results of drug tests that indicate the presence of “non-psychoactive” cannabis metabolites in a person’s urine, hair, blood or bodily fluids, because such metabolites do not indicate whether a person is currently impaired.

The bill would exempt certain applicants and employees from the bill’s provisions, including employees in the building and construction trades and applicants and employees in positions requiring a federal background investigation or clearance.  The bill would not preempt state or federal laws that require applicants or employees to be tested for controlled substances as a condition of employment, receiving federal funding or federal licensing-related benefits, or entering into a federal contract.

5.  AB 2693 – COVID-19 exposure notice requirements

Under existing law, employers are required to take specified actions within one business day of receiving notice of a potential exposure to COVID-19, including providing written notice to all worksite employees on the premises that they may have been exposed to COVID-19. AB 2693 would authorize employers to satisfy the notice requirement by posting a notice in all places where notices to employees about workplace rules or regulations are customarily posted. The posting would be required to indicate the dates on which an employee with a confirmed case of COVID-19 was on the worksite premises within the infectious period and the location of the exposure, and it would need to remain posted for 15 days. The bill would also require employers to keep a log of the dates the notice was posted and provide the Labor Commissioner with access to those records.

AB 2693 would delete the existing requirement to notify the local public health agency within 48 hours of a COVID-19 “outbreak” at the workplace.  The bill, if approved, extends until January 1, 2024, the period under which employers must provide written notices of COVID-19 exposure.

6.  AB 1041 – use of CFRA and paid sick leave for care of a “designated person”

If enacted, AB 1041 would amend CFRA to allow eligible employees to take CFRA leave to care for a “designated person,” defined as any individual related by blood or whose association with the employee is the equivalent of a family relationship. The bill would also expand the term “family member” under California’s paid sick leave law to include “designated person.” Employees would be permitted to identify a designated person at the time leave is requested, but employers would be authorized to limit an employee to one designated person per 12-month period. The bill, if approved, would be effective on January 1, 2022.

7.  SB 1044 – emergency conditions

SB 1044 would prohibit employers, in the event of an “emergency condition,” from taking or threatening adverse action against any employee for leaving or refusing to report to a workplace within the affected area if the employee has a reasonable belief that the workplace is unsafe. The bill would also prohibit employers from preventing any employee from accessing the employee’s cell phone or other mobile device for seeking emergency assistance, evaluating safety conditions, or communicating with others to confirm their safety.

Notably, the provisions of SB 1044 would be codified as new Section 1139 of the California Labor Code, violations of which could result in imposition of civil penalties under the California Private Attorneys General Act (PAGA).  However, the bill specifies that employers would have the right to cure alleged violations pursuant to PAGA’s cure provisions.

The bill defines “emergency condition” as the existence of either (a) “conditions of disaster or extreme peril to the safety of persons or property at the workplace or worksite caused by natural forces or a criminal act,” or (b) an “order to evacuate a workplace, a worksite, a worker’s home, or the school of a worker’s child due to natural disaster or a criminal act.”  The bill specifically provides that an “emergency condition” does not include a health pandemic.

Going forward

Notably, the California Legislature adjourned without extending the temporary exemptions under the California Consumer Privacy Act (CCPA) for workforce and business-to-business data.

As a result, companies must take steps to comply with the CCPA with regard to such data by January 1, 2023, when the California Privacy Rights Act (CPRA) amendments take effect. See our alert for more information.

If you have any questions regarding any of these bills, please contact the authors, your DLA Piper relationship attorney or the DLA Piper Employment group. Once the deadline for Governor Newsom to sign or veto the bills has passed, we will publish a follow-up alert to notify you which bills the Governor signed into law.