Now that Governor Gavin Newsom’s September 30th deadline to approve or veto legislative bills has passed, California employers can begin preparing for the new laws that will affect their workplaces next year. The recent legislative session has yielded strengthened protections for workers in a diverse array of subject areas, including but not limited to union organization, freelance work, anti-discrimination, paid family leave, and artificial intelligence. The new laws go into effect January 1, 2025. To help employers stay ahead of the curve, we have highlighted the most significant employment laws signed into law below. We encourage employers to consult with legal counsel to ensure compliance.Continue Reading California employment law legislative update: What employers need to know for 2025
California enacts eight noteworthy changes to controversial Private Attorneys General Act
On Tuesday, Governor Gavin Newsom signed Assembly Bill 2288 and its counterpart Senate Bill 92 into law, which amend California’s Private Attorneys General Act (PAGA). While the amendments are expansive in nature, eight major changes under this new version of PAGA are detailed below:Continue Reading California enacts eight noteworthy changes to controversial Private Attorneys General Act
Key victory for California employers: California Supreme Court accepts good faith defense to wage statement violations
On May 6, 2024, the California Supreme Court issued a significant ruling in Naranjo v. Spectrum Security Services, Inc. (Case No. S279397). The decision provides much-needed clarity on California’s wage statement requirements and also held that employers can assert a good faith defense to wage statement claims under appropriate circumstances.
Labor Code section 226 states that California employers must provide employees with accurate itemized wage statements. Employees can seek statutory penalties if an employer fails to provide accurate itemized wage statements and such failure is “knowing and intentional”. (Lab. Code, section 226, subd. (e)(1).). While the statutory penalties are capped at $4,000 per employee (in addition to the employees’ associated attorneys’ fees and costs), the aggregated wage statement penalties can add up quickly in the class action context.Continue Reading Key victory for California employers: California Supreme Court accepts good faith defense to wage statement violations
Is this the end of PAGA?
For the past 20 years, the Private Attorneys General Act (PAGA) has been a thorn to employer’s side in California. In 2004, PAGA, a California state law, was enacted to create a private right of action for workers to file representative actions on behalf of themselves and other workers based on specific labor code violations. The purpose behind enacting such legislation was to give authority to “aggrieved employees” to enforce the law, thereby alleviating the strain on California’s Labor and Workforce Development Agency (LWDA). This private right of action empowered workers with the authority to enforce California’s numerous labor laws that the LWDA purportedly did not have resources to pursue. Successful PAGA litigants recover 25 percent of monetary penalties for state labor law violations, while the remaining 75 percent of penalties go to the LWDA. The statute also allows plaintiffs’ lawyers to recover attorneys’ fees if they prevail on a PAGA lawsuit. Continue Reading Is this the end of PAGA?
California employment law legislative update: Employers must ring in 2023 with a host of new obligations
The deadline for California’s Governor to sign, approve without signing, or veto bills on his desk was September 30, 2022. We have compiled a comprehensive list of the major new laws and obligations that employers in the Golden State should know. As always, it is wise to consult with counsel to ensure that workplace policies
Supreme Court Rules in Favor of Arbitrability of PAGA Action
In a highly-anticipated decision, the U.S. Supreme Court issued its opinion in Viking River Cruises, Inc. v. Moriana (Case No. 20-1573) on June 15, 2022. The Court examined whether the Federal Arbitration Act (FAA) preempted California court precedent, which invalidated contractual waivers of representative claims under California’s Private Attorneys General Act of 2004 (PAGA).
Under PAGA, an employee may sue their current or former employer as a representative of the California Labor and Workforce Development Agency (“LWDA”). In such an action the employee can seek penalties for alleged violations of the Labor Code suffered by the employee themselves and other allegedly “aggrieved employees” if the employee was subjected to one or more violations of the California Labor Code.Continue Reading Supreme Court Rules in Favor of Arbitrability of PAGA Action
California Supreme Court rules additional penalties may be recoverable for meal and rest period violations
On May 23, 2022, the California Supreme Court handed down its decision in Naranjo v. Spectrum Security Services. The decision discusses the penalties recoverable by employees for an employer’s alleged failure to pay meal and rest period premiums where a proper meal or rest period is not provided. The Naranjo Plaintiffs filed a putative class action lawsuit alleging that his employer failed to provide meal and rest periods or premium compensation in lieu thereof as required by California law. In addition to premium pay for meal and rest periods, Plaintiffs also brought derivative claims alleging failure to timely pay wages at termination and failure to provide accurate wage statements. Specifically, Plaintiffs argued that because meal and rest period premiums were not paid, they also were not timely paid all wages due at termination and their wage statements were invalid because they did not reflect the premiums that were not paid.Continue Reading California Supreme Court rules additional penalties may be recoverable for meal and rest period violations
BREAKING: Federal Appeals Court reinstates OSHA vaccine ETS
On December 17, 2021, the Sixth Circuit Court of Appeals dissolved the stay previously placed on OSHA’s so-called “vaccinate or test” Emergency Temporary Standard (ETS). Consequently, covered employers with 100 or more employees will now be required to comply with the ETS under the newly announced deadlines of January 10, 2022 for all non-testing requirements
Ninth Circuit rules to lift preliminary injunction on California’s ban on mandatory employee arbitration agreements
A split Ninth Circuit panel vacated a 2020 preliminary injunction that blocked the enforcement of California’s A.B. 51, which prohibits mandatory arbitration clauses in employment contracts. If the majority decision stands, it will mean that California employers can no longer require their employees or new hires to sign arbitration agreements (among other types of waivers)
Ninth Circuit reverses preliminary injunction: California’s independent contractor law applies to motor carriers
In a split 2-1 decision, the Ninth Circuit Court of Appeals reversed the district court’s order preliminarily enjoining enforcement of California’s Assembly Bill (AB) 5 in California Trucking Association et al. v. Bonta (CTA). If this ruling is not appealed, AB 5, which is chaptered in the California Labor Code under 2750.3, will no longer be enjoined from applying to companies in the trucking industry.
In 2019, the California legislature enacted AB 5 to codify the California Supreme Court’s decision in Dynamex West Operations, Inc. v. Superior Court (2018). In Dynamex, the Court judicially adopted the “ABC test” for employers to pass before classifying a worker as an independent contractor. Prior to the Dynamex ruling, courts applied the multi-factor Borello balancing test to determine the status of a worker.
Over 30 states now apply the ABC test. Subject to some statutory exemptions, in California, the law provides that a worker is presumed to be an employee unless: (a) the worker is free from control and direction of the hiring entity under both in practice and under contract; and (b) the worker performs work outside of the usual course of the hiring entity’s business; and (c) the worker is customarily engaged in an independently established trade, occupation or business of the same nature of the work performed.Continue Reading Ninth Circuit reverses preliminary injunction: California’s independent contractor law applies to motor carriers