Employment Laws to Review for 2022
PART ONE (General Laws)
Part one features more general laws that will apply to most organizations.
It may seem as if it was a ‘light’ year for new California employment laws crossing the Governor’s desk, however, there are still some things you will want to know to prepare for 2022.
SB 807
Employer Record Retention Requirement Increased From 3 to 4 Years
As you know, employee personnel files should be retained as long as the employee is employed with the company. Under this new law, employment files of separated employees must be kept for four years after the date of the employees’ separation.
Applications, resumes, interview notes and other related records for applicants must also be saved for four years after the employment decision was made about the applicant.
In addition, there are other Federal and State requirements on the retention of certain employee records and documents. Contact SDHR Consulting for help if you are confused about the myriad retention requirements for your employee-related files.
SB 606
Expanded Enforcement Opportunities for CAL/OSHA
This law expands Cal/OSHA’s enforcement powers in several ways. It creates two new categories of violations, ‘enterprise-wide’ and ‘egregious’.
An enterprise-wide violation makes the assumption that a violation is company-wide if one or more worksites does not have compliant written policies or procedures. An egregious violation occurs when the employer makes no reasonable effort to eliminate a known threat, a violation results in the death of an employee(s) or in a large number of injuries or illnesses, has an extensive history of prior violations, or has intentionally and in bad faith disregarded their health and safety responsibilities.
While the law does not specifically address COVID-19, the sponsors plainly stated this was one of the reasons they introduced the bill, to ensure workers are safe as the pandemic continues.
Companies need to ensure all their workplaces are in compliance and provide a safe environment for their employees. This not only includes a written Injury and Injury Prevention Program (IIPP) but also a written COVID Prevention Program (CPP). SDHR Consulting will customize and write these required compliance documents for your organization.
AB 1003
Increased Penalties for Wage Theft
California has some of the strictest laws in the nation regarding employee wages. AB 1003 makes the intentional theft of wages, including gratuities, in an amount greater than $950 from any one employee, or $2,350 in total from 2 or more employees, by an employer in any consecutive 12-month period punishable as grand theft. Intentional theft of wages can include not paying an employee’s regular wages on time or not paying a separating employee within the specific timeframe based on the circumstances of their leaving.
AB 1033
California Family Rights Act – Expanded to Cover a Parent-In-Law
The California Family Rights Act (CFRA) was significantly expanded on January 1st, 2021 to cover small employers with five or more employees. CFRA provides employees who have over one year of employment and who have worked more than 1250 hours in the last 12 months with the right to take up to 12 weeks of protected leave. The leave is available to the employee for specified reasons such as their own or a family member’s illness or injury, birth, adoption or placement of a foster child, and a family member who is on covered active duty or has been called to active duty by the US Armed Forces.
Beginning on January 1, 2022, the covered family members have been expanded and an employee has the right to take CFRA when they need to care for a parent-in-law.
Have you updated your Employee Handbook in the last couple of years? If not, now is the time and SDHR Consulting can help!
AB 701
Productivity Quotas for Warehouse and Distribution Centers
This law requires warehouse and distribution center employers to provide each nonexempt employee upon hire, with a written description of each quota to which the employee is expected to meet including details on the number of tasks or materials to be produced. The written description must include any potential negative employment action that could result from failure to meet the quota.
The employer is not allowed to take negative employment action against an employee who fails to meet a quota if it has not been disclosed in writing or if the quota does not allow an employee to comply with rest or meal breaks.
SB 657
Electronic Distribution of Documents
This law was intended to make it easier for employers to support their remote employees by distributing the information employees need concerning their wage, hour, and working conditions in California. An employer can now distribute the California minimum wage, sick leave, and Wage Order information to remote employees via email. Employers must continue to post this information at their workplace as they would do for their in-person/ onsite workforce.
Are your posters up to date? SDHR Consulting can help ensure you have the latest and greatest posters at your workplace. This may seem like a small thing but fines can be up to $1000 per missing poster!
SB 331
Settlement and Non-Disparagement Agreements
This law requires that employers who are implementing non-disparagement agreements as a condition of employment or who are offering a separating employee a severance agreement must include a provision stating the employee is allowed to discuss conduct by the company they believe to be unlawful in regards to all forms of workplace harassment or discrimination. Current law only required this provision if the employee wanted to disclose information they felt was unlawful on the basis of sex discrimination or harassment.
PART TWO (Specific Laws)
Part two features specific laws that will pertain to organizations that meet certain criteria.
Corporate Board Diversification
While this bill was passed in 2020, some of the deadlines are fastly approaching. By the end of 2021, publicly held corporations with their principal executive office in California must have at least one director from an underrepresented community. By the end of 2022, corporations with four to nine directors must have at least two directors from this group and corporations with nine or more must have at least three. A “Director from an underrepresented community is one who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender.”
Female Representation on Corporate Boards
This bill was passed in 2018 and requires publicly held companies with their executive office in California to have a minimum of one female on their Board of Directors. Since this law was passed, the number of boards with no female directors has dropped from 30% to 2.3% by the end of 2020. The next phase of this law requires public companies in California with six or more board members to have at least three women directors and boards of five must have at least two by the end of 2021.
The deadline for employers with 50+ employees to offer a retirement plan to their California employees or enroll in the state-sponsored plan, CalSavers, was June 30, 2021. For employers with 5+ employees, the deadline is June 30, 2022. CalSavers may be a great option for small employers to check out. Registration is now open on the CalSavers website.
California Minimum Wage Increases
The state minimum wage, as well as many city minimum wages, are increasing effective January 1, 2022. Below is information for the state and Southern California cities with increases in 2022. You can find a full list of California city increases, including those in Northern California here.
| State of California Employer Classification | Minimum Wage |
|---|---|
| Employers – 26 or more employees | $15/hour |
| Employers – 26 or more employees – Exempt | $62,400/year |
| Employers – 25 employees or less | $14/hour |
| Employers – 25 employees or less – Exempt | $58,240/year |
| Computer Professionals – Exempt | $104,149.81/year |
| Southern California City Minimum Wages | Minimum Wage |
|---|---|
| San Diego – All employers | $15/hour |
| West Hollywood: – 50+ employees – 49 or fewer employees – Hotel workers | $15.50/hour $15.00/hour $17.64/hour |
Arbitration Agreements
California passed AB51 which prohibited employers from requiring employees to sign an Arbitration Agreement as a condition of employment. It was scheduled to go into effect on January 1, 2020, but was put on hold. On September 15, 2021, the Ninth Circuit upheld most of AB51, which includes that employers cannot mandate employees sign the Agreement. The court’s ruling is being appealed, so we may see more on this issue. For now, employers should make it clear in the arbitration agreement that it is voluntary for employees to sign it.
Ban the Box Enforcement – CA Fair Chance Act
In October, the Department of Fair Employment and Housing (DFEH), announced it would be stepping up enforcement by scanning online job advertisements to look for statements indicating the employer will not consider any job applicants with a criminal record. Their initial scans found 500 violations for which notices were sent to remove the unlawful statements. The DFEH is offering a toolkit to assist California employees to comply with the Fair Chance Act.
IRS Increases limits for contributions to 401k’s and Healthcare Flexible Spending Accounts (FSA)
Beginning in 2022, employees may now contribute $20,500 to their 401k. This is an increase of $1000 over the 2021 limit. Employees over age 50 may contribute an additional $6500 ‘catch-up’ contribution for the year.
The maximum an employee can contribute to a Healthcare FSA will increase by $100 from $2,750 to $2,850. The carryover amount an employee can roll over to the next year is also increasing and will be $570.
Author: Traci Hagan
