2022 Laws Impacting Businesses, Employers & Employees – Part 1

New California & Federal Employment Laws for 2022 – Part 1

By Randy A. Lopez

As of January 1, 2022, California passed many new employment laws and extended some already in effect that may impact you and your business.  Below is a brief explanation of some of the new laws.  If you were unaware of these new laws, please plan accordingly by updating your employee handbooks and taking the appropriate corrective actions.

Intentional Wage Theft = Grand Theft

California’s “Wage Theft: Grand Theft” law (AB 1003) makes intentional theft of wages, gratuities, benefits and other compensation a criminal offense if the amount exceeds $950 from any single employee or $2,350 from two or more employees by an employer in any 12-month period.  This law is also applicable to independent contractors as “employees” and their hiring entities as “employers”.  

If “grand theft” is committed by an employer, it is punishable either as a misdemeanor by imprisonment in county jail for up to one (1) year or as a felony with imprisonment for up to three (3) years.  Many violations that could be considered wage theft under the new law include failure to pay overtime, paying below minimum wage, permitting or requiring off the clock work, and improper meal and rest period practices.

Minimum Wage

Minimum wage has now increased to $15 an hour for employers with 26 or more employees and $14 an hour for employers with less than 25 employees.  The minimum wage will also be adjusted every year through 2023.  By 2023, employers with less than 26 employees will increase their minimum wage to $15 an hour.  From January 1, 2023, and every January thereafter, the minimum wage will be adjusted for inflation.

Please remember that various cities and counties throughout the State of California have enacted their own minimum wage increase laws/ordinances, that sometimes include Paid Sick Leave requirements.  Please be cognizant of these increases depending on your location or the location of your employees to ensure that the correct minimum wage is being paid.

Additionally, for exempt salaried employees, the minimum salary requirement has increased: $58,240 per year for employers with 1 to 25 employees; and $62,400 per year for employers with 26 or more employees.

Employment Settlement Agreement and Releases

Previously, SB 820 (2019) prohibited confidentiality clauses relating to sex-based discrimination/harassment matters.  In conjunction with SB 820, California Code of Civil Procedure §1001 prohibited confidentiality and non-disparagement clauses/agreements that prevented the disclosure of claims relating to harassment or discrimination based on sex.  SB 331 now expands these protections to cover harassment or discrimination based on any protected class.  This impacts litigation settlements and separation/severance agreements as follows:

  • Litigation or Administrative Settlements

Settlement of litigation or administrative action matters cannot preclude the plaintiff/claimant from disclosing factual information relating to any type of workplace harassment, discrimination, or retaliation.  Special language needs to be included explaining such to the employee; however, the agreement can still keep the amount of the settlement confidential as well as the identity of the individual. 

  • Severance/Separation Agreements

Language needs to be included explaining the employee’s right to disclose unlawful acts in the workplace.  Further, the law now requires that everyone, including those under the age of 40, be provided at least five (5) days to consider a severance/separation agreement.  The five (5) days does not need to be utilized so an employee can sign in under five (5) days.  The employee, however, must do so knowingly and voluntarily, and may not be induced by any threat to alter the offer by the employer.

  • Pre-Litigation Claims

The law does not apply to pre-litigation claims that are resolved so long as: (a) the separation agreement is voluntary, deliberate, and informed; (b) the agreement provides valuable consideration; and (c) the employee is given notice and opportunity to retain an attorney or is represented by an attorney. 

COVID-19 Exposure Notice Requirements

Employers must notify all employees, employees’ representative (i.e., union representatives) and subcontractors who were on premises at the same worksite as the COVID-positive person within the infectious period.  Per the CDC, the “infectious period” is: (a) for asymptomatic individuals, generally ten (10) days after the first positive test; and (b) for symptomatic individuals, ten (10) days after the onset of symptoms and after the resolution of fever for at least 24 hours and improvement of other symptoms.  Previously, employers were required to notify employees that they may have been exposed to COVID within one (1) day of receiving notice. 

The notice must inform employees of the potential exposure, any applicable benefits which employees might be entitled to, and the cleaning and disinfecting plan that the employer has implemented under Cal/OSHA standards.

The workplace definition has also eliminated certain “sites” such as where the employee worked alone without exposure to other employees; personal residence of employee; and alternative worksite where the employee is working remotely.

In case of an “outbreak”, employers must (within 48 hours or one day, whichever is later) notify the local public health agency of the names, number, occupation, and worksite of the employees who meet the definition of “qualifying individual”.   

Certain industries are exempt from reporting requirements: (1) community clinics; (2) rural health clinics; (3) federally qualified health centers; (4) chronic dialysis clinics; (5) adult day health centers; (6) home health agencies; (7) pediatric day health and respite care facilities; (8) hospices; (9) community care facilities; (10) residential care facilities for persons with chronic life-threatening illness; (11) residential care facilities for the elderly; and (12) child day care facilities. 

Workplace Safety

SB 606 creates two new categories of Cal/OSHA violations, “enterprise wide” and “egregious”. An “enterprise wide” violation means the employer has a non-compliant written policy or procedure or Cal/OSHA “has evidence of a pattern or practice for the same violations committed by that employer involving more than one of the employer’s worksite.”

An “egregious” violation means the employer intentionally made no reasonable effort to eliminate the known violation and the violation resulted in the worker being harmed in a catastrophic way. Examples of egregious violations include: (a) those resulting in a high rate of worker injury or illness; (b) where the employer has intentionally disregarded their health and safety responsibilities, (c) where the employer has acted in bad faith in their performance and duties; or (d) where the employer has committed a large number of violations that significantly effect any safety and health programs that might be in place.

Personnel File Retention

Employers are now required to maintain personnel files for four (4) years from creation, and four (4) years from the date of termination or the non-hiring of an applicant.

Additional requirements: if an employer knows that a verified complaint has been filed against it alleging FEHA violations, then it must preserve all records and files until (a) the time for filing a civil action has expired, or (b) once the matter has been fully disposed of and all appeals, proceedings or related proceedings have ended.

Electronic Posting

As more employees work remotely, employers are now allowed to provide certain workplace postings to employees via email.  Employers must still comply with the physical posting requirements in the workplace.  For employers that have employees fully remote and do not have a physical workspace, alternative arrangements can be made.  This law does not change the federal posting requirements.

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We know this is a lot of new information to digest.  If you have any questions relating to these new laws or any other issues, please do not hesitate to contact either Toni Y. Long or Randy A. Lopez directly. 

DISCLAIMER: The information contained above is solely provided for informational purposes and does not constitute legal advice.  All readers should consult with legal counsel for additional and/or current information, and before acting on any of the information presented.