LEAVES OF ABSENCE
Bereavement Leave for a “Designated Person”
Continuing the Legislature’s “designated person” theme, this bill expands the persons for whom an employee may take up to five days of unpaid (unless the employer’s policy provides for paid) bereavement leave to include the employee’s “designated person.”
A “designated person” for purposes of bereavement leave is defined as any individual related to the employee by blood or whose association with the employee is the equivalent of a family relationship (such as a close friend or chosen family).(SB 1149)
Employees can make this designation at the time they take leave and employers may limit an employee to one designated person per 12-month period.
WAGE AND HOUR
Stay-or-Pay Contract Provisions
This bill changes the effective date of last year’s bill restricting contracts with stay-or-pay provisions entered into on or after January 1, 2027, rather than January 1, 2026. Beginning in 2027, an employment contract generally may not require a worker to repay a debt, permit collection or forbearance on a debt to resume, or incur a penalty, fee, or cost because the employment relationship ends.
The new law also establishes new exceptions to the stay-or-pay prohibition for:
- Contracts entered into pursuant to a recruitment and retention program funded by a federal, state, or local government agency grant if the employee repayment obligations comply with the requirements of the grant and do not exceed the service obligations required by the grant;
- Repayment obligations arising from advanced paid time off upon voluntary separation (if conditions are met); and
- Contracts for the receipt of a discretionary or unearned monetary payment from the employer to induce the worker to be affiliated with the employer or to maintain a relationship with the employer between a securities broker-dealer, insurance producer, or investment adviser and its agents or representatives that are registered and licensed (if the contract satisfies certain conditions).
The law also creates several important exceptions. Among them, qualifying tuition-repayment arrangements for transferable credentials may remain permissible if statutory requirements are satisfied:
- the agreement is separate from any contract for employment;
- the agreement does not require obtaining the transferable credential as a condition of employment;
- the agreement specifies the repayment amount before the worker agrees to the contract, and the repayment amount does not exceed the cost to the employer of the transferable credential received by the worker;
- the agreement provides for a prorated repayment amount during any required employment period that is proportional to the total repayment amount and the length of the required employment period and does not require an accelerated payment schedule if the worker separates from the employment; and
- the agreement does not require repayment to the employer by the worker if the worker is terminated, except if the worker is terminated for misconduct.
Repayment of Bonus Permitted:
Certain discretionary or unearned bonuses (including some signing and retention bonuses) also may contain repayment requirements if, among other things:
- the repayment obligation is contained in a separate agreement;
- the employee is notified of the right to consult counsel and receives at least five business days to do so;
- the obligation is prorated without interest over a retention period not exceeding two years;
- the employee has the option to defer the bonus until the end of the retention period; and
- repayment is triggered only by voluntary separation or discharge for misconduct.
The remedies for violations can be significant. A worker may bring a civil action, including on behalf of similarly situated workers, and recover actual damages or $5,000 per worker, whichever is greater, plus injunctive relief and reasonable attorneys’ fees and costs.
Paid Family Leave Expanded
This new bill expands the definition of “covered active duty” under Unemployment Insurance Code section 3302.1 for purposes of eligibility for the state’s Paid Family Leave (“PFL”) benefits. Current law provides that “covered active duty” includes deployment of a member of the regular Armed Forces of the United States to a foreign country and deployment of reserve components to a foreign country under a federal call or order. The expanded definition provides the following additional situations:
- deployment to a location other than a foreign country;
- for a member of the regular Armed Forces of the United States, duty during the member’s deployment or training with the regular Armed Forces; and
- for a member of the reserve components of the Armed Forces of the United States, including the National Guard, duty performed during training or a call or order to federal or state active duty.
- These changes will take effect when they can be incorporated into the EDD’s integrated claims management system or on July 1, 2028, whichever occurs sooner. (AB 2054)
Pay Data Report Penalties
The penalty imposed on private employers for subsequent failures to file the annual pay data report are increased from $200 per employee to $1,000 per employee under this new legislation. (SB1237). The penalty for initial violations remains $100 per employee.
Labor Commissioner Service and Expansion of a Misclassification Remedy
Several changes to Labor Commissioner proceedings have been implemented by new legislation. (SB 1444)
First, a represented party in a Labor Commissioner proceeding must provide counsel’s email address and accept electronic service from the Labor Commissioner. Parties also must notify the Labor Commissioner of changes to their electronic address while a claim is pending.
SB 1444 also modifies Labor Code section 226.8, which governs willful independent-contractor misclassification such that civil penalties may now be recovered as damages by the employee, the Labor Commissioner, or a public prosecutor (alternatively). The underlying statutory penalties for willful misclassification remain substantial, ranging from $5,000 to $15,000 per violation and from $10,000 to $25,000 where there is a pattern or practice.
WORKPLACE SURVEILLANCE
AB 1331 amends Labor Code Section 1561 to provide that employers are prohibited from using a “workplace surveillance tool” for monitoring or surveilling employees in a workplace bathroom and allowing employees to leave behind workplace surveillance tools when entering a workplace bathroom unless:
- an employee is required to remain available during meal or rest periods;
- the employer has a policy requiring possession of the device for identification or safety reasons; or
- for access to locked or secure areas if the device (a) does not detect or record audio or video and (b) does not have physically embedded or attached artificial intelligence.
Workplace surveillance tools includes a “system, application, instrument, or device that collects or facilitates the collection of employee data, activities, communications, actions, biometrics, or behaviors by means other than direct observation by a person, including, but not limited to, video or audio surveillance, continuous incremental time-tracking tools, geolocation, electromagnetic tracking, photoelectronic tracking, a photo-optical system, or other means.” Smoke or carbon monoxide detectors and metal detectors are expressly excluded. (AB 1331 & 1883)
AB 1883 prohibits certain employers (including government entities, universities, and labor contractors and their clients) from using a workplace surveillance tool that uses AI to collect neural data (such as gait analysis or tools that collect data measuring nervous-system activity such as EEG fatigue headbands or focus-tracking earbuds) or which recognizes an individual’s emotional state.
Both new laws authorize the Labor Commissioner or a public prosecutor to enforce their provisions, and allow for civil actions seeking injunctive relief, punitive damages, and reasonable attorney’s fees and costs. Employers who violate the law’s provisions are subject to civil penalties of up to $500 for each violation.
RESTRAINING ORDERS
Workplace Violence Restraining Orders (WVRO)
Under prior law, an employer seeking a WVRO generally was required to identify an employee who had suffered harassment, unlawful violence, or a credible threat of violence that could reasonably be construed to have occurred, or to be carried out, at the workplace. That requirement at times created concerns when a threat targeted a worksite or group of employees rather than a particular individual.
New legislation addresses this issue by allowing an employer to file a petition to seek a Temporary Restraining Order (TRO) and an order after hearing on behalf of all employees at a workplace, or at a location where a group of employees performs its primary job duties, when harassment, unlawful violence, or a credible threat of violence is directed at that workplace or location. AB 1961
The employer need not name a specific employee in the petition. A court may issue an order restricting the respondent from telephoning or otherwise contacting the workplace or location, coming within a specified distance of it, or engaging in other conduct necessary to make the order effective.
Remote Appearance Permitted
Beginning on January 1, 2028, this bill will allow any party or witness to a petition for a restraining order to appear remotely at a hearing and will prohibit any fee for appearing remotely. Each county’s court will be required to develop rules and instructions for these remote appearances and post them on their websites. The new law also will, commencing on January 1, 2028, require courts to allow filings related to such protective orders to be submitted electronically, as specified. (AB2179)
The Judicial Council also must adopt or modify forms for workplace-wide petitions by January 1, 2028.
Protective Orders: Firearms; Notice and Procedures
This new law requires a TRO petitioner to provide prior notice of the petition to the respondent only if the court determines that requiring prior notice would not likely endanger the petitioner, proposed protected parties, or other persons.
It also requires the applicant’s attorney to certify to the court under oath that providing notice to the party to be restrained in advance of filing the petition would likely endanger the safety of the petitioner or other persons, and require courts to permit a party or witness to appear remotely at a hearing for a workplace violence restraining order at no cost. (AB 1753)
ARBITRATION
Validity of Agreements to Arbitrate
Arbitration agreements will be found to be unenforceable under California law where the agreement would likewise be unenforceable under the Federal Arbitration Act, such as certain interstate commerce transportation worker agreements and claims relating to sexual harassment or sexual assault disputes. (AB 2155)
CIVIL LITIGATION
Los Angeles Superior Court Civil Actions: Mandatory Mediation
Under this new law, County of Los Angeles Superior Court judges are authorized to order cases into mediation regardless of the amount in controversy. Those cases will be entitled to up to three hours of in-person or remote no-cost mediation services through the court’s program. These provisions will be in effect January 1, 2027, through January 1, 2032. (AB 1950)
Whistleblower Protections for Reporting Attorney Misconduct
This law prohibits employers, law firms, attorneys, and their representatives from retaliating against individuals who make qualifying good-faith disclosures of suspected attorney misconduct—or whom they believe have made or may make such disclosures. Protection extends beyond current employees to applicants, former employees, contractors, vendors, clients, and others with a professional relationship to an attorney or firm. (AB 2039)
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