2021 New Employment Laws


By Jeff Epstein

Many of these new or changed laws are incredibly significant. Employers must get the guidance they need to make sure they comply with the laws and adjust their policies accordingly. If not, they may find themselves in a precarious position just like those brave souls in the picture.

  1. New Notice and Reporting Obligations for COVID Workplace Exposure
  2. Expanded Coverage Under State Leave Law and New Obligations
  3. Significant Changes to California’s Independent Worker Law
  4. New Workers Compensation Law Affects Almost All Employers
  5. New Pay Data Reporting for Larger Employers (As if They Do Not Have Enough Reporting Requirements)

The most important of the new laws are discussed in the bulletin.

1.  New Notice and Reporting Obligations for COVID Workplace Exposure

AB685 imposes new notice and reporting obligations regarding COVID-19. The new law is in effect until January 1, 2023 and applies to all California businesses. The law prescribes exhaustive notice requirements in the event of a COVID-19 exposure in the workplace and it expands Cal/OSHA’s authority to issue Orders Prohibiting Use (OPU), sometimes called Stop Work Orders, for workplaces that pose a risk of an “imminent hazard” relating to COVID-19. Here are some details.

Employers may be subject to citations and/or penalties for failure to comply with these requirements.

The provisions of the new law come into effect when an employer receives notice, whether officially from a health care provider or government agency or directly by an employee, that an employee has a confirmed case of COVID-19, has a positive COVID-19 test result from a licensed health care provider, is subject to a COVID-19-related order to isolate by a public health official, or who died due to COVID-19 (which would which would presumably come from some other source than the employee) and who was on site at the workplace.

Notice Requirement:

            The new notice requires employers to take the following actions within one business day of being aware any potential exposure as outlined above:

Who Must be Notified

            (A)  Provide written notice of possible exposure to all employees who were at the same site as the qualifying individual within the infectious period as defined by the California Department of Public Health – which is at minimum, the 48 hours before the individual developed symptoms. On site means the specific “worksite” the COVID exposed employee entered, such as the specific buildings or off-site work area (i.e. a construction site). It does not extend to areas which the individual did not enter.  

            (B)  Provide written notice to all individuals and entities who may represent employees, including unions and sometimes attorneys. 

            (C)  Provide written notice to the employers of any exposed subcontracted employees.

            (D)  Employers are also required to notify the local public health department within 48 hours of becoming aware of a COVID-19 workplace “outbreak”. Currently an outbreak is defined by the California Department of Public Health as three or more laboratory-confirmed cases of COVID-19 within a two-week period among employees who live in different households. The notice to the local public health department should include the number of COVID-19 cases at the worksite, as well as names, occupations and worksites of qualifying individuals.  The elements of a notice to employees listed below do not apply to this notice.

What Must be Included in the Notice and How it Must be Delivered

            a. That they may have been exposed to COVID-19;

            b. What COVID-19 related benefits are available to them under law. That includes workers’ compensation benefits, COVID leave, paid sick leave, and the company’s anti-discrimination, anti-harassment, and anti-retaliation policies; and

            c. The employer’s disinfection and safety plan (per the guidelines of the federal Centers for Disease Control) to eliminate future exposure.

            The notice should be provided in any manner that makes it most likely to be received (e.g. personal service, email, or text message) and that is typically used for communicating with the employee. It must be in English and if the majority of the employees understand another language in that language as well. An employer must retain a record of the written notice for at least three years.

Additional Authority for OSHA

            Effective January 1, 2021, and until January 1, 2023, the Division of Occupational Safety and Health will have the authority to determine whether a worksite or any part thereof exposes workers to COVID-19 such that it creates an “imminent hazard.” If it determines there is an “imminent hazard,” it may prohibit operations at or entry to that worksite at the immediate area in which the hazard exists. This is done by posting a notice to the employer in a conspicuous place. There are certain carve-outs, for example government entities and health care facilities.

            Usually, whenever Cal/OSHA intends to issue a serious citation, the agency has to provide a “1BY” notice, whereby the employer is afforded notice by the agency of its intent to issue a “serious” citation, together with the specific safety orders and allegations to support those types of citations.  Employers are given 15 days to provide additional evidence to support their defense, which could potentially determine whether Cal/OSHA will issue serious citations.  However, beginning January 1, 2021, and until January 1, 2023, if OSHA alleges that there has been a “serious violation” due to COVID-19, it need not deliver to the employer a 1BY notice containing the alleged violation descriptions prior to issuing its citation and with no chance to respond.

2.  Expanded Coverage Under State Leave Law and New Obligations

Employers with as few as five employees will have to comply with the California Family Rights Act (CFRA). The CFRA previously only applied to private employers with 50 or more employees within 75 miles of the worksite. The revised CFRA expands the scope and requires compliance by employers with five or more employees and also eliminates the requirement that employees work within 75 miles of the same worksite (does that include employees who work outside of California?). So many smaller employers who likely never had to comply with a family and medical leave law such as CFRA must now do so.

Remember that employers covered by the CFRA are required to provide unpaid, job-protected leave of up to 12 weeks during each 12-month period for employees to bond with a new child of the employee or to care for themselves or a family member with a serious medical condition.

The new law also significantly expands the definition of “family members.” The list of family members is expanded to include siblings, grandparents, grandchildren, and domestic partners. Second, the definition of “child” is expanded to cover all adult children, whether they are dependent or not, and children of a domestic partner. This new definition of “family member” under the CFRA is inconsistent with the definition under the federal FMLA and so the two laws are no longer in sync. This creates the unfortunate situation in which an employee is eligible for 12 weeks of leave under the CFRA but remains eligible for a full additional 12 weeks under the FMLA. So, an employer who is covered by the FMLA might find themselves in the situation below.

An employee working for an employer with 50 or more employees needs to take family leave to care for a brother with a serious health condition. Now the employee would be eligible to take up to 12 weeks of leave to do so. However, because “siblings” are not covered under the federal FMLA, that same employee would potentially still be eligible to take an additional 12 weeks of leave under the FMLA to take care of a child, parent, or spouse. Under this example, an employer could be faced with providing up to 24 weeks of leave to such an employee.

In addition, the changed law deletes language that allows an employer to refuse reinstatement to salaried employees who are among the highest 10% of the employees and where the refusal is necessary to prevent substantial and grievous economic injury. So, the highest paid employees must also be guaranteed reinstatement.

3.  Significant Changes to California’s Independent Worker Law

By now hopefully everyone is familiar with the relatively new law regarding classifying workers as employees vs. independent contractors. I sent out a prior bulletin and did a seminar on that topic. Recently both the legislature and the people of California, through the ballot box, have made significant changes to the law. If a business fails to understand and adapt to the changes in worker classification law, it can expose a business to significant risk, including the collection of unpaid wages and back taxes and civil penalties.

The legislature made some significant changes and additions to the list of exemptions to the law:

            (A)  The Business-To-Business Exemption – This is a new type of business-to-business exemption. It is for a “stand-alone non-recurring event in a single location, or a series of events in the same location no more than once a week” as long as the worker has “control and direction” over the work, mutual freedom to negotiate the rate of pay, a written contract that specifies the pay rate, the tools and materials are provided by the worker, and both the hiring and performing entities maintain separate business locations.

            (B)  Referral Agency Exemption – There are two changes to this exemption. It expands the referral agency exemption by adding additional services, including, but not limited to, consulting, youth sports coaching, caddying, wedding or event planning, services provided by wedding and event vendors, and interpreting services. The requirements for this exemption have also been modified to allow service providers to negotiate their rates with the client. This is good news for referral agencies and their clients.

            (C)  Entertainment/Music Industry Exemptions – Some positions in the music industry that are generally exempt include: recording artists; songwriters; lyricists; composers;  managers of recording artists; record producers and directors; and musical engineers. However, film and television unit production crews are not exempt. Neither are musicians and vocalists who do not receive royalties.

            (D)  Professional Services Exemption – The new law expands the professional services exemption set forth under AB 5. This exemption now includes services provided by a still photographer, photojournalist, videographer, photo editor, translators, copy editors, and illustrators who work under a written contract that specifies the rate of pay, time of payment and intellectual property rights.  

Proposition 22 Carves Out Additional Exemption to the Law:

Under this new law app-based transportation and delivery drivers are classified as independent contractors and it adopted certain labor and wage policies specific to app-based drivers and companies. The ballot initiative defined app-based drivers as workers who (a) provide delivery services on an on-demand basis through a business’s online-enabled application or platform or (b) use a personal vehicle to provide prearranged transportation services for compensation via a business’s online-enabled application or platform. It also included certain policies regarding the contractors such as providing workers with minimum compensation levels, health insurance subsidies, medical costs for on-the-job injuries, and prohibiting drivers from working more than 12 hours in a 24-hour under certain circumstances.

4.  New Workers Compensation Law Affects Almost All Employers   

Under the new law, which applies to any employer with five or more employees, there is now a rebuttable presumption of workers’ compensation coverage when an employee tests positive for COVID-19 within 14 days after performing services at their place of employment at the employer’s direction if the positive test occurs on or after July 6, 2020, and the positive test occurred during a period of an “outbreakat the workplace. There is no “outbreak” requirement for people working in healthcare or in public safety positions.

One positive provision is that employees must exhaust all available supplemental COVID-19 sick leave pay, including California and federal supplemental COVID sick leave, before receiving temporary disability benefits from the worker’s compensation carrier.

An important requirement is that an outbreak must exist. An “outbreak” exists if one of the following occurs within a period of 14 days at a specific place of employment:

  1. Four employees test positive (if the employer has 100 or fewer employees);
  2. Four percent of the number of employees who reported to the worksite test positive (if the employer has 100 or more employees); or
  3. The specific place of employment is ordered closed by a local health department, the State Department of Health, the Division of Occupational Safety and Health, or a school superintendent due to the risk of infection of COVID-19.

When a presumption is applicable under this section, an employer has only 45 days after the claim form is filed to deny the claim (as opposed to the typical 90 days) and otherwise may only rebut the presumption with evidence obtained after that 45-day period. The new law does  provide that evidence of measures in place to reduce the potential transmission of COVID-19 in the employee’s place of employment or evidence of an employee’s nonoccupational risks of COVID-19 infection may successfully rebut the presumption.

An employer that “knows or reasonably should know” that an employee has tested positive for COVID-19 must report to the workers’ compensation insurance claims administrator in writing—via email or fax—within three business days. The notice must include the date of the positive test, the address of the employee’s place of employment during the 14-day period preceding the test, and the highest number of employees who worked at the employee’s place of employment in the 45 days preceding the last day the employee worked at each location.

This new law should be read in conjunction with New Notice and Reporting Obligations discussed above, which implements various notice requirements for cases of COVID-19 in the workplace.

5.  New Pay Data Reporting for Larger Employers (As if They Do Not Have Enough Reporting Requirements)

The new law is designed to address pay inequities based on gender, race, and ethnicity. California employers who have 100 or more employees, and who are required to file an annual Employer Information Report (EEO-1) under federal law, are required to report the data to the California Department of Fair Employment and Housing (DFEH).

The determination of 100 or more employees is made “if the employer either employed 100 or more employees in the Snapshot Period chosen by the employer or regularly employed 100 or more employees during the Reporting Year.”  However, the determination of 100 employees is broad as employers with some employees working in California must count all employees, including those outside of California, and part-time employees are counted as if they were a full-time employee.

These employers are required to submit an annual report containing two categories of information.  The first category requires employers to report the number of employees by race, ethnicity, and gender in identified job categories. Those categories such as executive or senior-level officials and managers, first or mid-level officials and managers, administrative support workers, and laborers or helpers.

The second category requires employers to report the number of employees by race, ethnicity, and gender whose annual earnings, based on W-2 wages, fall within each of the pay bands used by the U.S. Bureau of Labor Statistics. This report must also include the total number of hours worked by each employee in each pay band during the reporting year.

According to the DFEH it intends to issue standard forms for employers to submit their pay data reports and will implement an employer submission portal on the DFEH website. That should hopefully help, but of course the data must still be gathered.   


Last year I reported that a new law would prohibit employers from requiring employees to enter into arbitration agreements covering claims under the FEHA  or Labor Code-based rights as a condition of employment. This new law was been challenged as being preempted by the Federal Arbitration Act.  As of this writing that law is currently enjoined from being enforced. We will see what ultimately happens to this law.

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