January 2021 Employment Legislation

Starting in January 2021, there will be some new employment legislation going into effect. Here’s a little breakdown of some key things to know, as an employee.

The California Family Rights Act (CFRA): Senate Bill (SB) 1383

The 2018 version of this bill previously required employers with 50 or more employees to allow qualifying employees to take up to 12 weeks of unpaid, protected leave per year to bond with new children, to care for themselves or a parent or a spouse. Employees qualify for this leave if they worked at least 1,250 hours for the employer in the preceding 12 months.

An employee on unpaid protected leave is still provided the same employer-paid health benefits they had while working. 

The new bill, which takes effect January 1, 2021, expands those same responsibilities to any employer with 5 or more employees. It also broadens the scope of who an employee may take unpaid protected leave to care for to include grandparents, grandchildren, siblings, and domestic partners. Additionally, if an employer employs both parents of a child, they must grant leave to both employees. The new bill also grants 12 workweeks of unprotected leave related to either the employee or their spouse, parent, or child being called to active military duty. 

Previously, there had to be a certain minimum number of employees at the worksite where the employee works in order for the employee to qualify for leave. The new bill got rid of that requirement.

What are the implications of this?

On a federal level, America has very few provisions for employees who need to take leave, paid or unpaid. Even though it’s on a state, rather than Federal, level, the acknowledgement of an employee’s right to take even unpaid leave without their job being immediately at stake feels like progress. The next step might be to institute legislation on the topic of paid leave, so that employees who are the main source of income for their household will not suffer even worse economic stress if they have to take leave to care for their loved ones.

For further reading on the subject:

Here is the text of the bill itself.

For information on how to file a complaint with the Department of Fair Employment and Housing (DFEH), see this pamphlet.

Independent Contractor Clarifications for for Certain Businesses: Assembly Bill (AB) 2257

This bill pertains to the classification of individuals as either employees or independent contractors for the purposes of determining their rights in relation to “the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission.“

There are currently two methods of determining whether an individual should be classified as an employee or an independent contractor: the “Borello” rule, a court-created 10-factor holistic approach to an individual’s “economic realities,” and the “ABC” rule, a statutory rule which says that a worker is an independent contractor, rather than an employee, if they are:

A) “free from the control and direction of the hiring entity in connection with the performance of the work,”

B) “performing work that is outside the usual course of the hiring entity’s business,”

and

C) “customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.” 

These factors are presumed in favor of independent contractor status. The burden falls on the employer or “hiring entity” to prove otherwise.

The most recent existing legislation on the subject, Assembly Bill (AB) 5, provides, among other things, a list of occupations and services that are exempt from evaluation under the ABC rule, and instead subjected to the multi-factor Borello test. AB5 also provides exemptions for evaluation under the ABC rule for certain business relationships.

The newer version of this bill, Assembly Bill (AB) 2257, expands and clarifies the occupations and services that are exempt from evaluation under the ABC rule to include:

-occupations in connection with creating, marketing, promoting, or distributing sound recordings or musical compositions

-a musician or musical group for the purpose of a single-engagement live performance event, unless certain conditions apply

-an individual performance artist presenting material that is their original work and creative in character and the result of which depends primarily on the individual’s invention, imagination, or talent, if certain conditions are satisfied

-services provided by a still photographer, photojournalist, videographer, or photo editor, as defined, who works under a written contract that specifies certain terms, subject to prescribed restrictions

-a digital content aggregator, as defined, by a still photographer, photojournalist, videographer, or photo editor

-services provided by a fine artist, freelance writer, translator, editor, content contributor, advisor, narrator, cartographer, producer, copy editor, illustrator, or newspaper cartoonist who works under a written contract that specifies certain terms, subject to prescribed restrictions

-people who provide underwriting inspections and other services for the insurance industry, a manufactured housing salesperson, subject to certain obligations, people engaged by an international exchange visitor program, as specified, consulting services, animal services, and competition judges with specialized skills, as specified

-licensed landscape architects, specialized performers teaching master classes, registered professional foresters, real estate appraisers and home inspectors, and feedback aggregators

Additionally, the new bill revises the conditions under which certain businesses are exempt from the ABC rule, i.e., referral agencies, business-to-business models, businesses who provide contract services to other businesses. In this instance, the hiring entity need only satisfy one of the aforementioned conditions to qualify for exemption from the ABC rule.

What are the implications of this?

This classification of individuals as either employees or independent contractors will certainly bear on the operations of large networking companies like Uber, Lyft, Doordash, and Instacart, among others. 

Additionally, as well as benefits and unemployment insurance, there are tax implications to working as either an employee or an independent contractor that will, no doubt, be affected by this legislation.

For further reading on the subject: 

Here is the text of the most current legislation (AB 2257), and here is a copy of the previous legislation (AB 5).