Now That All Of Your ICs will be Employees 1/1/20…
This article is particularly important, because it affects basically everyone: every trucking company who utilizes employee drivers will find this helpful. Also, every trucking company who utilizes independent contractors will find this helpful because come January 1, the ICs will all become employees too. So, in light of the fact that the use of independent contractors will be a crime punishable by execution come January 1, it behooves you to become familiar with these laws.
AB5: Expansion of the independent contractor ABC test
I’m taking time to mention this for those of you who have been living under a rock or spent the last six months in drug and alcohol rehab. Yes, AB5 makes the “ABC Test” the law of the land for essentially all practical purposes. Again, a truck driver may only be classified as an independent contractor if the hiring entity can show that the worker meets all of the following criteria (which, of course, is impossible):
A. The worker is free from the control and direction of the hiring entity, both under the contract for the performance of work and in fact;
B. The worker performs work that is outside of the usual course of the hiring entity’s business, and;
C. The worker is engaged in independently established trade, occupation, or business that is of the same nature as the work performed for the hiring entity.
Because the ABC test will now apply to the entire California Labor Code and California Unemployment Insurance Code, and no exemptions exist for Trucking, a trucking company classifying a truck driver as an independent contractor is essentially illegal without any exceptions.
Permitting employees to recover civil penalties for unpaid wages (A.B. 673)
I found this interesting and surprising that come January 1, 2020, California law will enable employees to recover civil penalties for unpaid wages, which used to be available only by an order from the Labor Commissioner. In a civil lawsuit, employees will now be able to recover $100 for each initial violation for failure to pay each employee, and $200 for each subsequent violation, and any willful or intentional violation, +25% of unpaid wages. These penalties will be recoverable either in a lawsuit or in a PAGA claim, but not under both for the same violation.
Obviously, you want to make sure all employees are paid all of their wages always on time.
Expanding the labor commissioners authority to pursue wage claims (SB 688).
Effective January 1, 2020, this new law expands the enforcement abilities of the Labor Commissioner. Currently, the Labor Commissioner can only issue citations for violations alleging unpaid minimum wages. This new law expands on that and will allow the Labor Commissioner to penalize violations of unpaid wages that are less than the contractually agreed upon wages, in excess of minimum-wage. In other words, if you pay your employees less than you promised to pay them, regardless of their agreed-upon wage, The Labor Commissioner will hammer you.
Minimum wage and minimum salary increases.
Effective January 1, 2020, California state minimum-wage will increase to $12 per hour for employers of 25 or fewer employees, and to $13 per hour for employers of 26 or more employees.
Also, the minimum salary permitted in California will automatically increase to $49,920 annually for employers of 25 or fewer employees and $54,080 annually for employers of 26 or more employees. This is based on the calculation of the minimum wage times 2080 hours.
However, be aware that some cities have local ordinances that increase the minimum wage beyond the state minimum wage. However, these local ordinances do not affect the state minimum salary requirement.
Obviously, make sure your employees are making at least minimum wage under state and local laws, unless they are exempt and therefore paid at least the applicable minimum salary under California law.
Harassment, discrimination, and retaliation.
Effective January 1, 2020, AB9 extends the deadline for an employee alleging unlawful discrimination, harassment, or retaliation in violation of the California Fair Employment and Housing Act (FEHA). Effective January 1, 2020, AB9 extends the deadline for an employee alleging unlawful discrimination, harassment, or retaliation in violation of the California fair employment and housing act (FEHA) to file a verified complaint with the California Department of Fair Employment and Housing (DFEH) from one year to three years.
Another important reason trucking companies need to keep good records in the event something like this comes back to haunt them years later.
Sexual harassment prevention training deadline (SB778).
This law extends the deadline for employers with five or more employees to provide two hours of sexual harassment prevention training to supervisors, and one hour of sexual harassment prevention training to employees from January 1, 2020, to January 1, 2021. Currently, the law requires employers of 50 or more employees to provide two hours of training to supervisors.
Obviously, make sure your supervisors and employees undergo the requisite training by January 1, 2021.
Arbitration Agreements and Separation/Settlement Agreements
Banning Mandatory Arbitration Agreements (AB 51): Effective January 1, 2020, this law prohibits California employers from requiring employees and applicants to sign arbitration agreements as a condition of employment, continued employment, or the receipt of any employment related benefit. It also states that employers may not retaliate against an employee who refuses to sign an arbitration agreement.
However, The United States Supreme Court has made it very clear that state laws prohibiting arbitration are preempted by the Federal Arbitration Act (FAA).
Unfortunately, the United States Supreme Court ruled earlier this year that the FAA does not apply to “any class of workers engaged in foreign or interstate commerce”, which obviously includes interstate truck drivers. This creates a huge problem for trucking companies relying on arbitration agreements, because even if we specify that the enforceability of the arbitration agreement is governed by federal law, the US Supreme Court has already excluded truck drivers operating in interstate commerce from mandatory arbitration.
For those companies relying on arbitration agreements, you now must get with your attorneys to discuss the use of arbitration agreements and whether they are even worthwhile having anymore.
Penalties for failing to pay arbitration costs (SB 707)
Effective January 1, 2020, employer who fails to pay the costs and fees for arbitration within 30 days of the deadline will default on the arbitration agreement and waive its right to compel arbitration. In such an event, the employee will be permitted to dismiss a claim from arbitration and proceed in Superior Court.
Also, the employer may be required to pay the employees attorneys’ fees and costs regarding the arbitration, and the statute of limitations will be extended back to when the arbitration was filed.
Finally, this bill also allows the court to sanction employers who breach an arbitration agreement. Assuming you can still require employees to arbitrate a claim, Make sure arbitration fees are paid on time!
“No rehire” provisions in employee settlements are void (AB 749)
I frequently draft employment settlement agreements for trucking companies. Under this new law, a settlement agreement may not prohibit or restrict an employee from obtaining employment with the employer or a related company. However, there is an important exception to this: “no rehire” provisions may still be included in severance or settlement agreements entered into in response to a demand letter or unfiled claim. However, do not interpret this as being required to rehire the employee at sometime in the future.
Lactation accommodation requirements (SB142)
Effective January 1, 2020, employers will be required to provide more lactation accommodations than previously required. Specifically, A lactation room must:
Be close to the employee’s work area;
Be shielded from view and free from intrusion; and
Have certain features, including electricity and resources necessary to operate a breast pump.
The room cannot be a bathroom.
Employers must create and implement a lactation accommodation policy and make it available to employees. The policy must include the following:
A statement about an employee’s right to request lactation accommodation;
The process by which the employee makes the request;
The employer’s obligation to respond to the request; and
A statement about an employee’s right to file a complaint with the Labor Commissioner for any violation.
Also, employers must include this policy in the employee handbook and make those policies available to employees. furthermore, they must distribute the policy to new employees upon hiring and whenever an employee makes an inquiry about or request parental leave.
Notably, failure to provide adequate lactation accommodation will be considered a violation of California rest break laws, requiring an employer to pay one hour of pay per day for each day on which a violation occurs.
Trucking companies with less than 50 employees may request an exemption if the requirements create “significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employers business”.
Remember, employers who do not currently have a lactation policy must now implement one, and your current lactation policy must be updated You may contact Transportation Attorneys to assist with drafting a compliant employee handbook and policies manual.
Expansion of paid family leave (SB 83)
Effective July 1, 2020, the maximum duration of paid family leave benefits an individual can receive from California state disability insurance program will increase from 6 to 8 weeks.
Reporting work injuries and illnesses (A.B. 1804)
Effective January 1, 2020, AB 1804 will require employers to report serious workplace injuries, illnesses, or death immediately by telephone or through an online platform to the California division of occupational safety and health (a.k.a. Cal OSHA).
Saving the best for last: Prohibiting discrimination based on protected hairstyles (SB 188)
Effective January 1, 2020, this law expands the definition of race under FEHA to prohibit racial discrimination and harassment based on a person’s natural hairstyle. Therefore, your dress codes and grooming policies cannot prohibit “natural hair, afros, braids, twists, and locks” – the Democrats decided that such people require an extra level of protection.
So, trucking companies should review their dress and grooming standards to ensure that none of the “protected hairstyles” are prohibited or discouraged. Too bad we couldn’t all just follow “Spencer’s law” on this, which so states: “I don’t give a shit what you do with your hair as long as I don’t have to wear it.”