Although due to COVID-19 and the gubernatorial recall election, the California legislature did not pass as many employment-related laws as it otherwise might have, employers and human resources professionals should be aware of the new employment laws passed in 2021 that need to be implemented for 2022.
AB 1033 – California Family Rights Act
AB 1033 expands the definition of “family member” for whom family care leave can be taken to include “parents-in law”. Employers should update their handbooks to include this expanded definition of “family member”. The bill also modifies procedural aspects of a DFEH pilot program for mediating CFRA disputes involving small employers.
SB 331 – Non-Disclosure Agreements
SB 331, known as the “Silenced No More Act”, expands on prior legislation prohibiting the use of confidentiality provisions in settlement agreements pertaining to civil/administrative actions involving sex discrimination/harassment claims to include all workplace discrimination or harassment claims involving any protected characteristics under the Fair Employment and Housing Act (FEHA). The new law also prohibits severance/separation agreement provisions that bar employees from disclosing information about unlawful acts in the workplace and requires such agreements to give notice of an employee’s right to consult an attorney and to allow a reasonable time (at least 5 business days) to do so before signing the agreement. Employers should review and revise existing severance/separation agreements to comply with these expanded restrictions, which apply to agreements entered into on/after 1/1/22.
SB 762 – Employment and Consumer Arbitration Fees
SB 762 provides that a drafting party who fails to pay required arbitration fees within 30 days of the due date is in breach of the agreement, in default of arbitration, and waives its right to compel arbitration. The affected employee/consumer can then withdraw the claims from arbitration and proceed in court.
SB 807 – FEHA Record Retention
FEHA requires employers to maintain certain employment records for at least 2 years. This bill increases the retention requirement from 2 years to 4 years. Also, if an employer receives notice that a complaint has been filed with the DFEH, it must maintain the employee’s personnel records until the latter of the matter reaching resolution or the applicable statute of limitations running. Employers should amend their record retention policies and practices to account for these new timelines.
SB 657 – Electronic Delivery of Workplace Notices
SB 657 provides that, when an employer is required to post information about employee rights under applicable statutes, it may also distribute that information to employees by email. The bill does not alter or negate an employer’s existing obligation to post physical copies of such notices in the workplace and does not affect laws related to federal posting requirements.
AB 1561 – AB 5 Amendments
Among other things, this bill extends the Labor Code section 2781 construction subcontractor and trucking services exceptions to 1/1/25.
AB 1003 – Felony Wage Theft
AB 1003 expands an employer’s potential liability for wage underpayments by making intentional wage theft punishable as felony grand theft under the Penal Code if, within a twelve-month period, a single employee’s lost wages exceed $950 or multiple employees’ total lost wages exceed $2,350. The law applies to wages, gratuities, benefits, and other compensation owed to employees and independent contractors.
SB 572 – Real Property Lien Recording for Labor Commissioner Wage Citations
SB 572 authorizes the Labor Commissioner’s Bureau of Field Enforcement to lien real property to secure amounts due from named parties under a final citation for wage claims.
SB 727 – Direct Contractor Liability for Penalties & Liquidated damages
For contracts entered into on or after 1/1/22, SB 727 expands existing direct contractor liability for its subcontractor’s failure to pay employee wages and fringe benefits to include penalties and liquidated damages. The bill does create a safe harbor from penalties for contractors who: (1) monitor the payment of wages/fringes by periodic review of payroll records; (2) take corrective action if a violation is found, including withholding funds; and (3) prior to making final payment, obtain an affidavit under penalty of perjury from the subcontractor that all wages have been paid.
AB 1023 – Penalties for Late Submission of Electronic Certified Payroll Reports
Beginning 1/1/22, AB 1023 requires that CPRs be submitted electronically to the Labor Commissioner’s office at least once every 30 days while work is being performed on a project and within 30 days after the final day of work performed. It also creates a penalty of $100 per day, up to a maximum of $5,000 per project, when CPRs are submitted more than 14 days late.
Minimum Wage Increase
Although not a new law, effective 1/1/22, California’s hourly minimum wage rate will increase to $14.00 per hour for employers with 25 employees or less and to $15.00 per hour for employers with 26 employees or more. Employers need to be aware that increases to the minimum wage rate impact the minimum salary threshold for exempt employees and inside sales personnel, the limitation on employees who can be required to provide their own hand tools, and collective bargaining agreement exemptions pertaining to PAGA claims, as well as statutory overtime, meal break, and paid sick leave mandates. Employers should review the wage rates paid to employees impacted by these increases in order to ensure compliance with these provisions.
| Effective 1/1/22 | ER with 25 EE’s or Less | ER with 26 EE’s or More |
| Minimum Wage Increase | $14.00/hour | $15.00/hr |
| Exempt EE Minimum Salary (2x’s MW) | $58,240/year | $62,400/year |
| Inside Sales Exemption (150% of MW) | $43,680/year | $46,800/year |
| Paid Sick Leave (at least 30% > MW) | ||
| Hand Tool Threshold (2x’s MW) | $28.00/hour | $30.00/hour |
| CBA Exemptions – PAGA, OT, Meal Breaks, CA | $18.20/hour | $19.50/hour |
Please contact your Cook Brown attorney with any questions you have regarding these legislative changes or for assistance in complying with state and federal employment and labor laws.
