The AB5 ABC Test-AB5* expansively applies the ABC test adopted in the California Supreme Court case Dynamex. Now, the ABC test will apply to almost every aspect of employment law. The ABC test requires an employer to prove three factors before the employer may classify a worker as an independent contractor. AB5 contains many exemptions which may allow certain employers to apply the old Borello test when determining which of its workers are employees and which are independent contractors. The three ABC test factors are:

A. The business does not control or direct the work performed by the worker.
B. The worker performs work outside the usual course of the business.
C. The worker customarily engages in work of an independent trade, occupation, or business.

Minimum Wage & Salary-For California employers with 25 or fewer employees, the minimum wage will be $12 per hour. For employers with more than 25 employees, the minimum wage will increase to $13 per hour. In the City of San Diego, the minimum wage for all employees will be $13 per hour.

Minimum salaries required for employees to qualify as exempt employees are tied to the state minimum wage requirements, not the separate minimum wage requirements of cities or counties. Accordingly, exempt employees who work for employers who have 25 or fewer employees must earn at least $49,920 per year ($12/hour x 2 x 2080 hours/year), and exempt employees who work for employers who have at least 26 employees must earn $54,080 per year ($13/hour x 2 x 2080 hours/year). If salaried employees receive less than those minimum salaries, then they will not be exempt from overtime and other wage & hour laws.

Sexual Harassment training-The California legislature extended the deadline to complete sexual harassment training for businesses who employ 5 or more employees from January 1, 2020 to January 1, 2021. Now those business with at least 5 employees must provide 2 hours of sexual harassment training to all supervisors, and provide 1 hour of training to all employees, within six months of hire or promotion and every two years thereafter. In addition, starting January 1, 2021, businesses must provide temporary employees, including seasonal employees, 1 hour of training within 30 days or 100 hours of work.

Lactation-All employers must now develop a written lactation policy and publish it in a handbook and/or otherwise provide it to employees. An employee must have access to a clean, safe, and shielded space that is near the work space of the employee. The space must also have electricity, proper milk storage, seating, and a place to put a lactation pump. The employee must have access to a sink and running water. Employers who have fewer than 50 employees may apply for an exemption.

Discrimination-Traits that are historically associated with race are now protected under the Fair Employment & Housing Act (FEHA). Specifically, an employer may not have a policy that prohibits certain hair styles and texture that are historically associated with race such as braids, locks, and twists.

Also, related law extends the statute of limitations for filing a FEHA claim with the Department of Fair Employment & Housing to three years. Before, it was just 1 year.

Paid Family Leave-California Paid Family Leave (PFL) replaces a portion of wages when an employee must care for a sick family member, bond with a new born baby, or bond with an adopted child. Under the new law, those wage replacement benefits will extend to 8 weeks from the previous 6 week requirement. The state pays those benefits from the State Disability Insurance Fund.

Employment Arbitration-A new California law, AB 51, prevents employers from requiring employees to sign arbitration agreements, and prohibits retaliation if an employee refuses to sign one. Employment arbitration agreements generally provide that the parties may not file employment disputes in court. Rather, they must file employment disputes before an arbitration provider. This law may violate federal law, and courts may determine that it is unconstitutional.

A related law, SB 707, requires employers to pay for the initial arbitration costs within 30 days from the date that either party files the arbitration case. If the employer fails to do so, the employee may file his or her case in court. Further, the law considers an employer’s failure to pay within 30 days a material breach of the arbitration agreement and requires the court or arbitrator to issue sanctions for material breaches of the agreement.

*AB means California Assembly Bill and SB means California Senate Bill

S. Ward Heinrichs, Esq.
Employment Law Office of Ward Heinrichs
4565 Ruffner Street, Suite 207
San Diego, CA 92111
858-292-0792
(858) 408-7543 (fax)