Following the January 1, 2020 statewide minimum wage increase to $12 per hour for employers with 25 or fewer employees and $13 per hour for employers with 26 or more employees, several local minimum wages are also set to increase on July 1, 2020. Additionally, also effective July 1, 2020, California’s Paid Family Leave will be extended to eight weeks and AB 5 will apply to California Workers’ Compensation. Further, as required by SB 1343, California’s Department of Fair Employment and Housing (DFEH) has made available free online training to satisfy the new sexual harassment training for non-supervisory employees.
As always in California, employers must stay informed of local laws affecting minimum wage requirements. Below is a list of local minimum wage increases throughout California taking effect on July 1, 2020.
California employers are reminded that effective January 1, 2021, the state minimum wage requirement will increase again. Employers with 25 or fewer employees will be required to pay a minimum wage of $13 per hour and employers with 26 or more employees will be required to pay a minimum wage of $14 per hour, ultimately reaching $15 in 2022 (large employers) and 2023 (small employers), respectively, as part of the governor’s commitment to raising the minimum wage in California to $15 per hour. Employers are encouraged to keep abreast of the changing minimum wage laws and their effective dates as some jurisdictions are choosing to delay minimum wage increases due to the economic burdens imposed by COVID-19.
California Paid Family Leave (PFL), which provides partial wage replacement benefits to employees who need to take time off from work to care for a seriously ill family member or to bond with a new child, will be extended from six weeks to eight weeks for claims that start on or after July 1, 2020, under SB 83. Paid Family Leave is not a leave entitlement and does not provide job protection, only monetary benefits; however, employees that are eligible for PFL may be protected through other federal or state laws such as Family Medical Leave Act, California Family Rights Act, or New Parent Leave Act.
California’s AB 5 adopted the Dynamex standard—the “ABC test”—for determining whether a worker is an employee or an independent contractor. While AB 5 has applied to California’s Labor and Unemployment Insurance Codes since January 1, 2020, the ABC test did not apply to California Workers’ Compensation. Effective July 1, 2020, however, AB 5 formally expands the application of the ABC test to include workers’ compensation, requiring all individuals defined as employees under AB 5 to be covered by workers’ compensation insurance.
Under the ABC test, an individual is presumed to be an employee and not an independent contractor, unless the hiring entity satisfies all three conditions:
AB 5 will apply to Workers’ Compensation policies issued on or after July 1, 2020, as well as policies in force as of July 1, 2020.
SB 1343, which was passed in 2019 and set to take effect on January 1, 2020, expanded sexual harassment training requirements. Employers with five or more employees are now required to provide sexual harassment prevention training to all employees. Employers are required to provide supervisory employees with two hours of training and non-supervisory employees with one hour of training. SB 778 pushed back the training deadline to January 1, 2021.
As promised by SB 1343, the DFEH is now offering free online training courses to employers and employees to satisfy the training requirements of SB 1343 and SB 778. The online training can be found here.
The DFEH’s online training currently consists of a one-hour, non-supervisor sexual harassment prevention course. A supervisor-specific course will be provided by the DFEH in the near future. The training is offered in English, Spanish, Korean, Chinese, Vietnamese, and Tagalog.
Employers should review their policies and procedures to determine compliance with these summarized laws in anticipation of the July 1, 2020 effective date. Our team can assist you in reviewing existing practices and creating policies and training that are compliant with the new laws enacted in 2020.
To learn more about how the new labor and employment laws might affect your business, contact: