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Labor + Employment Workforce Watch is a guide to the employment law developments most likely to impact your business. The Troutman Pepper Locke Labor + Employment Team represents employers in the most sensitive workplace matters, enabling our clients to concentrate on their core business operations. Our team is adept at handling and managing labor and employment issues on national, international, and local levels. Recognized as a leading law firm by Chambers USA, our attorneys provide comprehensive advice on every type of employment issue a company may encounter, at every stage of the employment life cycle.

Q. As part of the employee onboarding process, my company requests that employees sign several documents, including an arbitration agreement and confidentiality agreement, on the first day of employment. Is the arbitration agreement enforceable?

A. In the famous words of all attorneys, it depends. Even if an arbitration agreement is otherwise enforceable, California courts may consider terms of other documents presented with the arbitration agreement to render the arbitration agreement unconscionable and unenforceable.

California employers face an abundance of new employment laws set to take effect at the start of the new year. Below find descriptions of new requirements for employee leaves of absence, pay transparency and data reporting, COVID-19 compliance, privacy rights, industry-specific requirements, and other new workplace laws. Unless otherwise stated, the obligations created by the laws below will take effect on January 1, 2023. Learn more about these and other employment developments at Troutman Pepper’s upcoming December 8 Labor + Employment webinar.

Q. When is the deadline for submitting annual pay data reports under California law?

A. In 2021, California passed legislation, requiring private employers with 100 or more employees to submit annual pay data reports to the California Department of Fair Employment and Housing (DFEH) under Government Code Section 12999. Companies must comply if they have more than 100 employees, if any of those employees work in California. According to the FAQs, employers need to include reporting data for California employees only, but they may voluntarily choose to include employees working out of state.

Q: Now that 2021 is behind us, what are the new California employment law changes for 2022?

A: While employers continued to grapple with the effects of COVID-19 on their businesses, last year’s California legislative actions led to relatively fewer employment law changes than usual for the upcoming 2022 year. Below find descriptions of new employment-related changes, including new rules for severance agreements, expanded limitations on confidentiality and nondisparagement provisions in settlement agreements, extended recordkeeping requirements, changes to the California Family Rights Act, arbitration, COVID-19 compliance, wage and hour, and industry-specific developments.

Q: May employers require that employees enter into agreements as a condition of employment, mandating them to arbitrate employment-related claims?

A: Not without risk. California Assembly Bill (AB) 51 bans mandatory arbitration agreements as a condition of employment, but before the statute went into effect, a California federal district court entered an injunction effectively blocking enforcement of AB 51. On September 15, a Ninth Circuit panel reversed the district court’s injunction. The Ninth Circuit panel’s decision does not take effect immediately, however, and it is very likely that the panel’s decision will be challenged and that further legal filings will result in the district court’s injunction remaining in effect for some period of time. In the meantime, California employers that continue to use mandatory arbitration agreements face risk and uncertainty.

Q: Is there new legislation that expands COVID-19 protections to California employees?

A: Since the beginning of 2020, employers have had to make significant changes to their operations due to an increasing number of newly enacted legislation and requirements in response to the COVID-19 pandemic. As we enter the final quarter of 2020, California employers must again quickly respond to new legislation that expands COVID-19 protections to California employees and imposes stringent requirements on California employers. This month, California Governor Gavin Newsom signed three COVID-19-related bills into law that affect employee rights: (1) SB 1159, (2) AB 659, and (3) AB 1867.

Senate Bill 1159: “Workers’ Compensation: COVID-19”

Effective immediately for California employers with 5 or more employees, Senate Bill 1159 creates a presumption of entitlement to workers’ compensation benefits for employees infected with COVID-19 if:

  • The employee tested positive for or was diagnosed with COVID-19 within 14 days after performing labor or services at the employee’s “place of employment” (excluding the employee’s residence) at the employer’s direction; and
  • The employee tests positive during an “outbreak” at the specific place of employment (as determined by the employer’s claims administrator).

Q: My Company’s standard employment settlement agreement includes a no-rehire provision. Can I continue to include that provision for California employees?

A: If the agreement settles an employment dispute with an “aggrieved person,” you may no longer include a no re-hire provision in the agreement for California employees. Assembly Bill No. 749 (“AB 749”), which amends the California Code of Civil Procedure, became effective January 1, 2020 and provides that if an unlawful no-rehire provision is included in a settlement agreement, the provision is void as a matter of law. An “aggrieved person” is defined as a person who has filed a claim against the employer in court, before an administrative agency, in an alternative dispute forum, or through the employer’s internal complaint process.