Written by Jeremy Mittman

This month, California Governor Gavin Newsom enacted a flurry of new laws that directly impact California employers. Here’s a breakdown of the laws (all of which go into effect on January 1, 2022), and what you need to know:

SB 331: Broadly Prohibits Non-Disclosure Clauses in Settlement Agreements

Senate Bill 331 expands the limit on non-disclosure clauses in settlement agreements to not just include workplace harassment or discrimination claims based on sex, but on any protected characteristic such as race, religion, age, or disability. The new law, however, retains some protections for employers. Employers may still include non-disparagement clauses in settlement agreements as long as the clause includes specific language stating that the employee has the right to disclose information about unlawful actions in the workplace. Omitting that language would render the clause unenforceable. Additionally, SB 331 continues to permit confidentiality of the settlement amount. Finally, claimants who wish to maintain their privacy publicly are still able to do so.

SB 807: Extends Employer Record Retention Requirement

Under Senate Bill 807, employers must now retain personnel records for applicants and employees for four years from the date the record was created or the employment action was taken (this was already a best practice, since often employees in California file lawsuits with a statute of limitations that go back four years). Among other procedural modifications, SB 807 also extends the period in which an individual can file a civil action while the Department of Fair Employment and Housing (DFEH) investigates an alleged violation until the DFEH either files a civil action for the alleged violation or issues a written notice that it has closed its investigation. Additionally, it extends the period the DFEH has to complete an investigation and issue a right-to-sue notice for group employment discrimination complaints to two years.

AB 1003:  Wage Theft by Employers Prompts Harsher Penalties

According to Assembly Bill 1003, intentional wage theft by employers is now considered grand theft in California. Now, when an employer fails to pay its employees’ wages, including gratuities, benefits, or other compensation, of more than $950 to one employee or $2,350 total to two or more employees, it is considered a felony. It is important to note that under AB 1003, an “employee” includes an independent contractor and “employer” includes the hiring entity of an independent contractor.

SB 606:  Expanded Enforcement and Subpoena Power for Cal/OSHA

Senate Bill 606 introduces two new categories of labor code violations and provides the California Division of Occupational Safety and Health (Cal/OSHA) with expanded subpoena power during investigations. The first new category of Cal/OSHA violations applies to employers with multiple work sites. SB 606 creates a rebuttable presumption that those employers have committed an “enterprise-wide” violation if Cal/OSHA determines they have a non-compliant written policy or procedure, or there is evidence of a pattern of violations at more than one of their work sites. The second new category of violations is an “egregious violation,” which will be issued if Cal/OSHA finds that the employer intentionally failed to correct a known violation. Lastly, SB 606 provides Cal/OSHA with the authority to issue a subpoena if an employer fails to timely provide requested documents during an investigation.

AB 1033:  CFRA Expanded to Include Parent-in-Laws

Assembly Bill 1033 expands the California Family Rights Act (CFRA) to also include parent-in-laws. The CFRA allows eligible employees to take up to 12 weeks of unpaid leave during each 12-month period for purposes of family care and medical leave. The list of covered “family members” now includes children (including adult children regardless of whether they are a dependent), spouses, parents, siblings, grandparents, grandchildren, domestic partners, and now parent-in-laws.  Accordingly, CFRA policies should be updated for 2022.