These California Labor Laws Could Prompt Changes Across the US

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Nov 21, 2019

This Employment Law This Week monthly rundown discusses the most important developments for employers in November 2019. The update specifically addresses:

  • New California law arguably preempted by FAA
  • California employment law updates could signal changes across the country
  • California Consumer Privacy Act amended
  • Tip of the week

A full transcript of this episode follows. For further information, or to subscribe for updates, click here.

1. New California law arguably preempted by FAA

California has passed a new law that states, “A person shall not, as a condition of employment, continued employment, or the receipt of any employment-related benefit, require any applicant for employment or any employee to waive any right, forum, or procedure for a violation of any provision of the California Fair Employment and Housing Act.” But many employers and law firms are taking the position that this legislation is preempted by the Federal Arbitration Act (“FAA”).

“We can expect to receive challenges in the coming months from employers doing business in California as well as business groups, arguing that this new California law is preempted by the Federal Arbitration Act, or the ‘FAA.’” — Kevin Sullivan, associate, Epstein Becker Green

2. California employment law updates could signal changes across the country

Home to one-eighth of the United States’ population, California is a bellwether for states across the country, and that’s why we’re keeping our focus there this month.

“This year, Governor Gavin Newsom signed almost every employment-related bill that the California Legislature presented to him. Assembly Bill 9 extends the time to file a complaint alleging employment discrimination and related claims with the Department of Fair Employment and Housing, the administrative agency generally charged with enforcing California’s employment and civil rights laws, from one year to three years.

“Assembly Bill 749 prohibits settlement in non-negotiated severance agreements from containing provisions restricting a person from obtaining future employment with the company.

“AB 5 writes into law the ‘ABC test’ set forth in the California Supreme Court’s 2018 Dynamex decision. To establish that someone is a contractor under the now-codified test, a company must show that the worker is free from the control and direction of the company, performs work outside the company’s usual course of business, and that the worker’s regularly engaged in the work that they were hired to do, independent from the work being performed for the company. While a nationwide ‘ABC test’ [and] a federal ban on arbitration are unlikely under the current political environment, they could signal larger changes in the not-so-distant future.” —David Prager, associate, Epstein Becker Green

3. California Consumer Privacy Act amended

Employee data gets a brief reprieve from the California Consumer Privacy Act (“CCPA”), thanks to one of several amendments made ahead of the CCPA’s effective date of January 1, 2020. The CCPA gives consumers rights over their personal information, including rights relating to the access and deletion of that information. Because the law defines the term “consumer” broadly, those rights would extend to information that an employer maintains regarding its employees and job applicants. The amendment creates an exception to many requirements of the CCPA for the personal information of employees and job applicants, but only until January 1, 2021.

4. Tip of the week

Alyson Olson, vice president of human resources at Abode Healthcare, shares some tips for California employers, and for those in an increasing number of states across the country with legalized marijuana, on best practices for determining your approach to drug screening:

“Enforcing drug-free workplace policies and conducting drug tests is becoming particularly risky. You’re going to want to make certain you do a detailed review of the state laws that cover drug testing, as well as non-discrimination. Effective communication and a clear understanding of your policies is imperative. Your employees must understand that if they were to come into the workplace or work while under the influence of marijuana, it is strictly prohibited, even if, in that state they’re working in, marijuana is legal to consume recreationally or medically, it’s still prohibited in your workplace. The law and court decisions are going to continue to evolve over the coming years. It is crucial that you as the employer,that you continue to check your policies, your procedures around drug testing and ensure that they still meet your business needs and are effective.”

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