The new decade is starting off with a massive swell of important new laws and regulations that will affect California businesses.
There are so many new laws and regulations that companies have to be on their toes especially at the start of 2020 to get their bearings. This is the first of a two-part entry looking at the top laws affecting businesses coming into the New Year.
- AB 5
Probably the most earth-shattering new law to hit the books in California is the highly controversial AB 5, which creates a new and more stringent test for determining who is an independent contractor or employee.
Known as the “ABC test,” the standard requires companies to prove that people working for them as independent contractors are:
A) Free from the company’s control when they’re on the job;
B) Doing work that falls outside the company’s normal business; and
C) Operating an independent business or trade beyond the job for which they were hired.
With this in mind, legal experts recommend that employers:
- Perform a worker classification audit, and especially review all contracts with personnel.
- Notify any state agencies about corrections and changes to a worker’s status.
- Discuss with legal counsel whether they should now also include them as employees for the purposes of payroll taxes, workers’ compensation insurance, federal income tax withholding, and FICA payment and withholding.
2. Wildfire safety regulations
Cal/OSHA has issued emergency regulations that require employers of outdoor workers to take protective measures, including providing respiratory equipment, when air quality is significantly affected by wildfires.
The regulations require that employers take action when the Air Quality Index (AQI) for particulate matter 2.5 is more than 150, which is considered in the “unhealthy” range.
All California employers with “a worker who is outdoors for more than an hour cumulative over the course of their shift” would be required to comply with these regulations:
- Checking the AQI.
- Creating a system of communications when the AQI is in the unhealthy range.
- Training outdoor workers in the safety regulation, how to report problems and how to properly don and use a respirator.
- Providing workers with protection that could include respirators, changing work schedules, moving them to a safe location, and more.
3. Arbitration agreements
Starting Jan. 1, the state will bar almost all employee arbitration agreements, under AB 51.
The new law bars employers from requiring applicants, employees and independent contractors to sign mandatory arbitration agreements and waive rights to filing lawsuits if they lodge a complaint for various forms of discrimination, harassment, wage and hour issues, and more.
But on Dec. 6, a coalition of businesses groups filed a suit to overturn the law on the grounds that it is preempted by the Federal Arbitration Act and should be declared invalid.
AB 51 applies to contracts entered into, modified or extended on or after Jan. 1, 2020. If you require new employees to sign arbitration agreements, you could be at risk of violating the new law.
4. Federal overtime rules
New federal overtime regulations have finally been introduced for non-exempt workers after years of wrangling over the issue.
Under the new rule, employers will be required to pay overtime to certain salaried workers who make less than to $684 per week ― or $35,568 per year ― up from the current threshold of $455, or $23,660 in annual salary.
5. Consumer privacy
Starting Jan. 1, 2020, under the state’s California Consumer Protection Act, businesses that are custodians of personal data of California consumers will be required to put in certain safeguards to protect that information and inform website users how their personal data may be used.
The law applies to firms with $25 million or more in annual revenues or those that sell personal information as part of their business. The CCPA requires that businesses must explain to consumers their rights under the act at the time their personal information is collected.
IT security professionals advise you to:
- Review your current processes to see if they need to be updated or recreated.
- Document all uses of the data and map where personal (consumer) data is stored and transmitted.
- Put systems in place to respond to a request from a consumer for the data you are storing on them.
- Update your website homepage with a clear and conspicuous link titled “Do Not Sell My Personal Information,” which allows the consumer to opt out.
- Improve your cybersecurity systems to better protect consumer data.
- Train your employees on how to respond to consumers and how to handle consumer information.
In our next post, we will highlight the next five laws and regulations you need to be aware of for your business.