There are a number of new laws that went into effect in 2021 that impact businesses. Here are some of the key ones to be aware of:

Expansion of California’s family medical leave law

With the passage of Senate Bill (SB) 1383, businesses with five or more employees must provide up to 12 weeks of annual unpaid, job-protected leave for family and medical needs. Further details about the bill can be found here.

Revisions to law governing classification of employees and independent contractors

Assembly Bill (AB) 2257 made substantial revisions and additions to some of the existing exceptions under AB5 which sets forth requirements for when someone is an employee versus and independent contractor. For example, AB 2257 revises the exemption for certain business to business contractual relationships. Further details can be found here.

The passage of Proposition 22, which was approved by California voters in November 2020, means that app-based drivers are classified as independent contractors and not employees or agents and overrides the provisions of AB5. However, the law provides a number of labor and wage policies specific to app-based drivers and companies, including that companies provide an hourly wage for time spent on rides equal to 120% of the applicable minimum wage in the driver’s area. The measure provides workers who drive a minimum amount a stipend for health insurance coverage as well as access to occupational accident insurance to cover injuries that occur during work. Further details can be found here.

COVID-19 Related Laws

Assembly Bill 685 sets forth of number of requirements for employers to comply with when they have notice of a potential COVID-19 exposure at the workplace. AB 685 requires employers to, amongst other requirements, provide certain notices after receiving notice of a potential or actual COVID-19 exposure. Further details can be found here.

Separately, for purposes of worker’s compensation, Senate Bill (SB) 1159 creates a rebuttable presumption that an employee contracted COVID-19 at work if the employee tests positive within 14 days after a day that the employee performed labor or services at the employee’s place of employment.

Increase in Statewide Minimum wage

Employers in California must now pay a minimum wage of $14 per hour, a $1 increase from last year. Businesses with fewer than 26 workers must increase their hourly wage to at least $13 an hour. Note that local cities and counties can and sometimes do impose higher minimum wage requirements. Additional details can be found here.

Changes to rules for food delivery services

Under AB 2149 (known as the Fair Food Delivery Act) which was passed into law, online food delivery platforms (such as Postmates, UberEats, etc.) now need to get permission from restaurants before listing them on their apps for orders and deliveries. For additional details, click here.

Required changes to Board of Directors of Public Companies

Under AB 979, publicly held corporations that are primarily based in California must have at least one person on their board of directors who represents an underrepresented community. Additional details about this law can be found here.

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