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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

UPDATE on May 20, 2021: Since this article was published, Cal/OSHA has delayed the vote on the new proposed Emergency Temporary Standards. Please read details on the delayed vote on the Reed Smith EHS Law Insights Blog.

As vaccination rates increase in California, the California Department of Occupational Safety and Health (Cal-OSHA) has released a draft of a new proposed COVID-19 emergency regulation. The California Occupational Safety and Health Standards Board will vote on whether to send the proposed regulation to the Office of Administrative Law (OAL) on May 20th. After it is received, the OAL is only required to allow five calendar days for submission of comments and 10 calendar days for review before filing with the Secretary of State. Given this timeline, it is likely that the new regulations will become effective in early June.

The new COVID-19 emergency regulations loosen a number of the prior requirements for fully vaccinated workers. The new COVID-19 emergency regulations, however, also add a number of new compliance requirements for employers. In that regard, the new proposed regulation contains many important changes to how face coverings and N-95 masks must be used, testing and exposure requirements, and the prior exclusion and wage replacement rules. The key changes in these areas are briefly summarized below:
Continue Reading Cal-OSHA released proposed revisions to the COVID-19 prevention order

Effective July 3, 2020, San Francisco’s Back-to-Work Emergency Ordinance (Emergency Ordinance) seeks to mitigate the economic harm for individuals who are unable to work due to the COVID-19 public health emergency by creating a temporary right to reemployment for certain employees laid off due to the coronavirus pandemic if their employer seeks to fill the same, or substantially similar, position previously held by a laid-off worker.  The Emergency Ordinance also imposes written notice and record retention requirements on employers.  The Emergency Ordinance expires on September 2, 2020 unless reenacted.

The Emergency Ordinance contains several key definitions that employers should refer to in order to determine whether any personnel action the employer is considering taking will be subject to the requirements therein.  Of particular importance, the Emergency Ordinance defines Covered Layoff, Covered Employer and Eligible Employees as follows:
Continue Reading San Francisco mandates certain workers be rehired in emergency ordinance

On June 16, 2020, the California Department of Public Health (CDPH) released guidance for employers responding to COVID-19 outbreaks in the workplace. An outbreak at a non-health care or congregate setting workplace is defined as three or more laboratory-confirmed cases of COVID-19 within a two-week period among employees who live in different households.

The guidance provides a road map for local public health departments (LHDs) and employers to use in understanding the steps that should be taken in response to an outbreak at work. In short, employers should be ready to report positive COVID-19 cases to the LHD and to collaborate with the LHD to coordinate a response to the outbreak.Continue Reading California’s recent guidance for employers facing COVID-19 outbreaks

The Equal Employment Opportunity Commission (EEOC) updated and expanded a Technical Assistance Publication on May 5, 2020, and then again on May 7, 2020, focusing on employer obligations under the Americans with Disabilities Act (ADA) and related laws during the COVID-19 pandemic. The EEOC’s guidance comes as many states are reopening their economies and allowing businesses to admit employees back into the workplace.

The Question-and-Answer format of the updated publication reminds employers of their obligation to continue to provide reasonable accommodations in the workplace, even in the middle of a pandemic. Of particular interest to employers are situations where the worker is already known to have a medical condition that the Centers for Disease Control and Prevention (CDC) has flagged as putting the individual at higher risk for severe illness from COVID-19. The full CDC list is available here, and includes people with moderate to severe asthma, severe obesity, diabetes, and many other impairments. The EEOC’s position regarding the employer’s rights and obligations when returning such individuals to the workplace has two key parts.Continue Reading Returning to work during the COVID-19 pandemic: Employer’s rights and obligations to high-risk workers

The worldwide COVID-19 pandemic has had, and will continue to have, a substantial impact on the U.S. workplace. We have prepared a series of FAQs compiled based on some of the more common questions that clients with California-based employees have posed to us over roughly the past six weeks.

These FAQs are general and high-level…

Employers are facing increasingly difficult business decisions as a result of COVID-19 and, in developing a plan of action, must take care to avoid the many risks for wage and hour litigation that may be asserted in the wake of those decisions, especially as they relate to the execution of temporary layoffs or furloughs. On March 17, 2020, Governor Newsom issued an unprecedented executive order significantly changing notice requirements for employers contemplating layoffs in California. This blog addresses two of the hidden risks that are potentially triggered at the outset of a furlough: (1) WARN notices under both Executive Order N-31-20 and federal WARN, and (2) the payment of wages, including accrued unused vacation or paid time off. Whether employers call it a furlough, a temporary layoff, or a shutdown, the legal analysis is largely the same.

Notification periods under WARN complicate furloughs, even with California’s executive order

In a mass layoff or plant closure situation, employers may be required to provide notice under the federal Worker Adjustment and Retraining Notification (WARN) Act and equivalent California WARN Act (collectively, the Acts). COVID-19 creates WARN compliance challenges for many employers. This is particularly true for employers who are required to quickly shut down operations by state or local mandate, such as bars and gyms in many California cities. These unique circumstances may create a tension with WARN obligations.

Both the federal WARN and California WARN require employers at a covered establishment to provide 60 days’ notice to covered employees prior to a closing or mass layoff, as defined in the Acts. The California WARN, modeled after the federal WARN, applies to a wider range of employees. There are a number of parameters, exceptions, and industry-specific guidelines under both the federal and California WARN. Of utmost importance here, however, is the fact that the California Court of Appeals has held in The International Brotherhood of Boilermakers v. NASSCO Holdings Inc. that California WARN applies to temporarily furloughed employees who have been furloughed for less than six months, even though the same furlough would not have triggered notice obligations under federal WARN which only applies to furloughs in excess of six months.Continue Reading California executive order suspends and modifies California WARN requirements due to COVID-19 but employers contemplating furloughs are not yet in the clear

On July 3, California became the first state to pass legislation that bans discrimination based on natural hairstyles. Governor Gavin Newsom signed into law the CROWN Act (Create a Respectful and Open Workplace for Natural Hair). The CROWN Act amends the state’s Government Code and Education Code to define “race or ethnicity” as “inclusive of traits historically associated with race, including, but not limited to, hair texture and protective hairstyles.” The new law expressly protects hairstyles including, but not limited to, “braids, locks, and twists.” Governor Newsom called the law “long overdue.” The bill passed unanimously in the senate and the assembly, and takes effect on January 1, 2020.
Continue Reading New York and California ban discrimination against natural hair

Companies in the transportation industry with operations in California have some positive news to celebrate. On May 3, 2019, in Anthony Ayala v. U.S. Xpress Enterprises, Inc., et al., the Central District of California granted partial summary judgment and dismissed a truck driver’s meal and rest period claims, finding that they were preempted by the December 2018 ruling of the Federal Motor Carrier Safety Administration (FMCSA).

In its December ruling, the FMCSA stated that California cannot enforce its meal and rest period laws with regard to interstate motor carriers because those laws do not provide any additional safety benefits above those already provided by the meal period rules contained in the federal hours of service rules. It also found that the California meal and rest period rules unduly burden interstate commerce.
Continue Reading Promising news for companies in the transportation industry

In April 2018, the California Supreme Court turned worker classification on its head when it decided Dynamex Operations West Inc v. Superior Court (Dynamex). In Dynamex, the court adopted a three-factor “ABC” test for analyzing misclassification claims under the California Wage Orders. Under the ABC test, for an employer to show that workers were properly classified as independent contractors, they must demonstrate that: the worker (A) was not under the company’s direct control and direction; (B) performed work that was outside the usual course of the hiring entity’s business; and (C) was customarily engaged in an independent business. Because of, in particular, the second element of the test, this standard makes it very difficult for businesses to prove that workers are independent contractors.

Since last year’s ruling in Dymanex, there has been much speculation about the application of the decision, specifically whether it applies retroactively and the scope of any application of the “ABC” test.

To the shock of employers, on May 2, 2019, a unanimous three-judge panel of the Ninth Circuit of the United States Court of Appeals (the Panel), in Vasquez v. Jan-Pro Franchising International, Inc. (Jan-Pro), held that the Dynamex rule should be applied retroactively.Continue Reading Dynamex in retrograde – misclassification test and its retroactive reach may open the flood gates for misclassification cases in California