THE U.S. Supreme Court has put a significant dent in California’s Private Attorneys General Act, which in recent years has resulted in a surge in legal actions against California employers by their workers.
The law has been a huge thorn in the side of employers, who have been on the receiving end of litigation by workers who allege Labor Code violations.
The high court ruled that employers can compel arbitrations for employee-initiated PAGA actions. The court also held that if a plaintiff in a PAGA action is bound to arbitration, they automatically lose standing to prosecute claims on behalf of other “aggrieved” employees and remaining PAGA claims must be dismissed.
This is good news for businesses. Those that move to cement policies that comport with the new decision, will have a chance to drastically reduce their exposure should they be targeted by one of these actions. And because various court rulings have expanded the law’s breadth, PAGA has been a source of confusion among employers. The new ruling provides clarity.

The history of PAGA

The law was enacted in 2004, after the Legislature grew concerned that the state lacked the resources to fully enforce the California Labor Code.
PAGA permits employees to sue for civil penalties on behalf of themselves, fellow employees, and the State of California for alleged Labor Code violations. If they are filing on behalf of other employees, the other workers do not participate in the lawsuit.
The employee in essence acts as the state’s watchdog; they need not suffer any actual harm from an alleged violation in order to file a lawsuit. One employee has the ability to file a suit alleging multiple Labor Code violations.

For any provision of the Labor Code that does not specify a civil penalty, PAGA permits employees to seek a default penalty of up to $100 for each aggrieved employee per pay period for an initial violation, and up to $200 for each aggrieved employee per pay period for a subsequent violation.
If a suit is successful, the state receives 75% of the damages and the rest is distributed among the aggrieved employees.
The number of PAGA lawsuits filed in California on behalf of groups of workers has skyrocketed since 2014, when the California Supreme Court held that because PAGA plaintiffs step into the state’s shoes, their claims cannot be forced into individual arbitration.

A resounding decision

The U.S. Supreme Court’s 8-1 ruling in the case of Viking River Cruises Inc. vs. Moriana is likely to stem a flood of lawsuits filed in recent years accusing companies of widespread wage law
violations.
The court ruled that the Federal Arbitration Act, which states that in employer-worker agreements employees are required to arbitrate legal claims, trumps the earlier California Supreme Court decision barring forced arbitration.
SCOTUS ruled that PAGA plaintiffs can only establish standing to sue by first alleging an individual claim. And since the FAA requires individual claims to go to arbitration if a worker has
signed an arbitration agreement, the plaintiff cannot add additional claims for other employees, Justice Samuel Alito wrote in the decision.

Here’s what employers should take away from the decision:
• Individual PAGA claims can be arbitrated if an employee has signed a contract agreeing to arbitrate Labor Code and other employment-related actions.
• PAGA claims for other alleged aggrieved employees that the complaining employee includes in the lawsuit are not subject to arbitration, and those claims should be dismissed.
• If you have arbitration agreements for your workers, you should revisit them to ensure they allow you to compel arbitration of PAGA claims.

THE WAY courts have interpreted a California law – the Private Attorneys General Act (PAGA), which has been on the books for 18 years – has led to an explosion of lawsuits against employers during the last few years.

The law has generated more than 20,000 lawsuits since 2017 at an average cost of $1.1 million per case, according to one study.

PAGA permits employees to sue for civil penalties on behalf of themselves, fellow workers and the state for alleged labor code violations. If a suit is successful, the state receives 75% of the damages with the employee receiving the balance.
As a result, California employers face increasing litigation uncertainty that traditional insurance may do little to mitigate.
The employee in essence acts as the state’s watchdog; he or she need not suffer any actual harm from an alleged violation in order to file a lawsuit. One employee has the ability to file a suit alleging multiple labor code violations.
The result? An average of 15 PAGA notice letters arrive at the California Labor and Workforce Development Agency daily.

How did we get here?

The law was enacted in 2004 to improve California Labor Code enforcement by empowering employees to pursue violations when the state has insuffi cient resources to pursue them.
The growth in litigation started after a California Supreme Court decision in 2009, holding that PAGA suits did not have to meet the certification requirements that apply to class-action lawsuits.
Litigation activity jumped significantly again in 2014 after the state Supreme Court held that employees could not waive their rights to fi le PAGA claims when they reach arbitration agreements in disputes with their employers.
Three years later, the court ruled that employees were generally entitled to request and receive large amounts of information from employers early in the litigation.
The high cost of providing the information gives employers an incentive to settle claims quickly.
Finally, an appellate court ruling in 2018 gave employees the right to sue over alleged violations that do not directly affect them, so long as at least one violation does.

What’s being claimed?

 

PAGA claims can also involve allegations of discrimination, retaliation and failure to protect the health and safety of employees. There are even COVID-19-related claims. One allegation triggers multiple other ones related to the first, such as failure to pay all earned wages, failure to pay wages in a timely manner, and so on. One potential bright spot: In December 2021, the U.S. Supreme Court agreed to consider whether California employers may enter voluntary agreements with employees in which the employee agrees to pursue only their individual claim and
not bring a PAGA claim. A decision is expected this summer.

Insurance implications

One issue for employers is that employment practices liability insurance typically won’t cover wage and hour disputes or signifi cantly sublimit the amount of coverage available for defense costs only.
Also, EPLI policies usually carve out coverage for wage and hour claims under PAGA representative actions.

Directors and officers liability policies exclude wage and hour claims.
One option is wage and hour insurance, which most likely would provide defense and indemnity coverage for PAGA claims that allege violations of wage and hour laws and regulations.
However, these policies are expensive and usually have quite high retentions, which could price out most smaller employers.

THE DEADLINE is fast approaching for employers with five or more workers in California, and who do not already off er their employees a retirement plan, to register their staff for the CalSavers Retirement Savings Program.

Only California employers that do not off er retirement plans are required to register for CalSavers and there are different registration deadlines depending on employer size, staggered over a few years as follows:

Employers with 100 or more workers – The deadline for registration was June 30, 2020.
Employers with 50 or more workers – The deadline for registration was June 30, 2021.
Employers with five or more workers – The deadline for registration is June 30, 2022.

Employers can register anytime to start the program for their workers. Firms with fewer than five employees are exempt, but they too can sign their workers up for CalSavers.

Employers that don’t provide a retirement plan for their workers, and who fail to register, can face a penalty of $250 per employee, as well as additional penalties for sustained noncompliance.

If you already have a qualified retirement plan for your employees, you do not have to participate.

 

How CalSavers works

Participating employers will deduct a default rate of 5% of pay from the paycheck of each employee at least 18 years old and deposit it into the individual’s CalSavers account. Employees can choose other rates as well.

Employee participation is voluntary, and they can opt out at any time. Regardless of whether any employees want to sign up for a plan, applicable employers are required to register and offer the program to all current employees and new hires.

The deduction amount will automatically escalate one percentage point each year to a maximum of 8%, unless the individual employee elects a different amount, elects out of autoescalation or completely opts out of the program.

Business owners who are employees of their business can also participate. Business owners who are not employees may enroll as an individual and make automatic contributions every month. There are no costs for businesses to sign up and facilitate the program for their employees.

Employers can register here. Once set up and employees have signed up, the employer will be responsible for taking off the chosen deduction for each employee and transferring it to CalSavers at each pay period.

For employees

A CalSavers account is a personal Roth Individual Retirement Account (Roth IRA) overseen by the CalSavers Retirement Savings Investment Board.

Here’s some information employees need to know:
• A portion of their pay is automatically deducted after taxes are taken out and transferred to an IRA that belongs to them.
• Employees can customize their account by setting their own contribution rate (between 1% and 8%), as well as choose the investments they want to put their money in.
• The account is portable: They keep it if they leave their job.

 

EVERY YEAR starts with a flurry of new laws and regulations that California employers have to contend with.
And 2022 is no different as the California legislature had a busy year and the stresses of the COVID-19 pandemic resulted in more activity. The end result is another round of new laws that employers need to stay on top of so they don’t run afoul of them.
With no further ado, here are the top regulations and laws affecting California businesses.

 

1. Big change to Cal/OSHA citations

SB 606 adds two new Cal/OSHA violation categories for purposes of citations and abatement orders: “enterprisewide” and “egregious” violations. Cal/OSHA can issue an enterprise-wide citation that would require abating the violation at all locations. And the employer can face a maximum penalty of $124,709 per violation.
The law also authorizes the agency to issue a citation for an egregious violation if it believes that an employer has “willfully and egregiously” violated a standard or order. Each instance of employee exposure to that violation will be considered a separate violation and fined accordingly.

 

2. Permanent COVID standard

On Sept. 17, 2021, Cal/OSHA released a draft text for proposed permanent COVID-19 regulations, which if adopted would be subject to renewal or expiration after two years and would replace the current emergency temporary standard, which is set to expire Jan. 14, 2022.
Adoption is expected in the spring of 2022. Here’s some of what the draft standard would do:

CDPH rules – It would require that employers follow California Department of Public Health COVID-19 prevention orders.
Masks for unvaxxed staff – Unvaccinated staff must wear masks. Employers must provide masks when the CDPH requires them.
Outbreak rules – During an outbreak in the workplace, all staff would be required to wear face coverings regardless of vaccination status. Employers would need to provide respirators during major outbreaks to all employees.

 

3. COVID exposure notification

On Oct. 5, 2021, AB 654 took effect, updating requirements for what an employer must do if there is an outbreak of COVID-19 cases at its worksites.
This law somewhat curtailed earlier outbreak-reporting requirements as well as other required notifications for certain employers, and updated several provisions of the 2020 outbreak notification law, AB 685.
Here are some highlights:

• Employers have one business day or 48 hours, whichever is later, to report a workplace COVID-19 outbreak to Cal/OSHA and local health authorities.
• Employers do not need to issue these notices on weekends and holidays.
• When an employer has multiple worksites, it only needs to notify employees who work at the same worksite as an employee who tests positive for  coronavirus.
• The new definition of “worksites” for the purposes of the law has been changed to exclude telework.

 

4. Expansion of the California Family Rights Act

AB 1033 expands the CFRA to allow employees to take family and medical leave to care for a parent-in-law with a serious health condition.
More importantly, it adds a requirement that mediation is a prerequisite if a small employer (one with between five and 19 workers) is the subject of a civil complaint filed by one of its employees.

 

5. Workplace settlement agreements and NDCs

A new law took effect Jan. 1 that bars employers from requiring non-disclosure clauses in settlement agreements involving workplace harassment or discrimination claims of all types. This builds on prior law that barred NDCs only in cases of sex discrimination or sexual harassment.
The new law expands that prohibition to all protected classes, such as: race, religion, disability, gender, age, and more.
One important note: While employees can’t be prohibited from discussing the facts of the case, employers can still use clauses that prohibit the disclosure of the amount paid to settle a claim.

 

6. OSHA vaccine mandate

As of this writing, Fed-OSHA’s new emergency COVID-19 standard was set to take effect on Jan. 1, with the most contentious part of the rule mandating that employees who work for employers with 100 or more staff be vaccinated or submit to weekly testing.
Unvaccinated workers would also be required to wear masks while on the job under the new rules, which have faced fierce challenges in courts.
The U.S. Court of Appeals for the Sixth District recently reversed a stay of the order as challenges to it are litigated, meaning the order can take effect as scheduled as the legal process challenging the rule proceeds.
The U.S. Supreme Court will hear expedited arguments Jan. 8 on the U.S. Court of Appeals for the Sixth Circuit’s decision to lift the Fifth Circuit’s stay.

 

7. Wage theft penalties

AB 1003, which took effect Jan. 1, added a new penalty to the California Penal Code: Grand Theft of Wages. The new law makes an employer’s intentional theft of wages (including tips) of more than $950 from one employee, or $2,350 for two or more workers, punishable as grand theft.
The law, which also applies to wage theft from independent contractors, allows for recovery of wages through a civil action.
As a result, employers (and potentially managers and business owners) would be exposed to both criminal and civil liability for wage and hour violations like failing to pay staff accurately and in a timely manner.
Review your compensation policies and practices to make sure you are in compliance with current wage and hour laws.

 

8. COVID cases may be included in X-Mods

The Workers’ Compensation Insurance Rating Bureau of California has proposed plans to start requiring COVID-19 claims to be included when calculating employers’ X-Mods.
The proposal, which would have to be approved by the state insurance commissioner, would bring to an end current rules that exclude the impact of COVID-19 workers’ compensation claims on X-Mods.
If approved, the new rule would take effect on Sept. 1, 2022. That means that employers will be held accountable for COVID19-related workers’ compensation claims and, if any employee needs treatment or dies from the coronavirus, it could result in higher premiums in the future.

 

9. Notices can be e-mailed

A new state law authorizes employers to distribute required posters and notices to employees via e-mail. SB 657 adds e-mail as a delivery option to the list of acceptable notification methods, which also includes mail.
Required posters and notices will still need to be physically posted in the workplace.

 

10. Warehouse quota rules

A new law that took effect Jan. 1 makes California the first (and only) state to regulate quotas used by warehouse employers.
While the bill was written with Amazon Inc. in mind, it affects all warehouses with 100 or more workers, and violations of the new law can be costly for an employer.
Under AB 701, warehouse employees must be provided with a written description of the quotas to which they are subject within 30 days of hire. Common quotas include the number of tasks the employee is required to perform, the materials to be produced or handled, and any adverse employment action that may result from a failure to meet the quota.

 

While employers may still implement quotas, employees are not required to meet a quota if it:

• Prevents them from taking required meal or rest periods,
• Prevents them from using the bathroom (including the time it takes to walk to and from the toilet), or
• Contravenes occupational health and safety laws. The law also bars employers from discriminating, retaliating or taking other adverse action against an employee who:
• Initiates a request for information about a quota or personal work-speed data, or
• Files a complaint alleging a quota violated the Labor Code.

 

A NEW LAW has come to the rescue of a number of freelance professions by exempting them from the onerous requirements of AB 5, which required most independent contractors to be classified as employees in California. Governor Gavin Newsom on Sept. 1 signed AB 2257 as an urgency measure so that it took effect immediately. If you remember, AB 5 set a new standard for hiring independent contractors, requiring many to be reclassified as employees covered by minimum wage, overtime, workers’ compensation, unemployment and disability insurance. It created a three-pronged test that needs to be satisfied to determine if someone is an independent contractor or an employee.

To be independent contractors under AB 5’s “ABC test,” workers must (A) work independently, (B) do work that is different from what the business does, and (C) offer their work to other businesses or the public. All three conditions must be met.

It is prong B that’s problematic. For example, a freelance writer working for a magazine would not be doing something different than the business does. The new law sets limits on the amount of income someone can receive while doing this kind of work before being considered an employee. AB 2257 also expands the “business-to-business” definition in AB 5 to cover a relationship between two or more sole proprietors.

 

 

 

 

THE DEPARTMENT of Insurance has approved emergency workers’ compensation rules dealing with COVID-19 and California employers. The rules were recommended by the Workers’ Compensation Insurance Rating Bureau to bring fairness for employers’ experience rating during the COVID-19 pandemic amid shelter-at-home orders and for dealing with claims of workers who contract COVID-19 on the job. The following new rules took effect on July 1:

1. Classification changes for staff working from home
As a result of the California stay-at-home order, many employers have altered employees’ duties so they can be accomplished from home, and often those duties are clerical-like in nature. Under the rule, an employee can be assigned payroll classification code 8810 if:

• Their duties meet the definition of a “clerical office employee” while working from home, and
• Their payroll for the balance of the policy period is not assignable to a standard classification that specifically excludes clerical office employees.

There are a number of other classifications that already include clerical operations in their definitions, and those classifications would not be eligible for a change.

2. Non-working, paid staff
Salaries paid to workers who are at home not working, yet still collecting a paycheck, will be excluded from payroll for workers’ comp premium calculation purposes when the payments are less than or equal to the employee’s regular rate of pay.

3. COVID-19-related claims
Under the emergency rules, all workers’ comp claims directly arising from a diagnosis of COVID-19 will not be included in the calculation of your experience modification. The Rating Bureau said in proposing this change that since the occurrence of COVID-19 workers’ compensation claims are unlikely to be a strong predictor of future claim costs incurred by an employer, their inclusion in X-Mod calculations would not reflect an employer’s safety efforts and would not reflect the intended goal of the experience rating system.

The takeaway
These rules are effective during the time the stay-at-home order by Gov. Gavin Newsom is in effect, and 60 days after the order is lifted. If you have employees who work from home, discuss with your insurance company or us whether you should change the class code to reflect their new duties. If you do reclassify employees or are paying workers who are not working, document those changes too, and keep careful records. Also, worker COVID-19 claims will be eligible for workers’ compensation benefits under a second-order by Newsom, but under these new rules, they will not count against your X-Mod.

On March 19, 2020, Governor Newsom issued Executive Order N-33-20 directing all residents immediately to heed current State public health directives to stay home, except as needed to maintain continuity of operations of essential critical infrastructure sectors and additional sectors as the State Public Health Officer may designate as critical to protect health and well-being of all Californians.
In accordance with this order, the State Public Health Officer has designated the following list of “Essential Critical Infrastructure Workers” to help state, local, tribal, and industry partners as they work to protect communities while ensuring continuity of functions critical to public health and safety, as well as economic and national security.

Note:  Employees have 14 days to file and the employer has 30 days to respond.  The new rules apply to workers who tested positive for COVID-19 within 14 days of performing work, or those who received a diagnosis within 14 days that was confirmed by a positive test no more than 30 days later. Employers have 30 days to rebut a claim.

 

HEALTHCARE / PUBLIC HEALTH
Sector Profile
The Healthcare and Public Health (HPH) Sector is large, diverse, and open, spanning both the public and private sectors. It includes publicly accessible healthcare facilities, research centers, suppliers, manufacturers, and other physical assets and vast, complex public-private information technology systems required for care delivery and to support the rapid, secure transmission and storage of large amounts of HPH data.

Essential Workforce
• Workers providing COVID-19 testing; Workers that perform critical clinical research needed for COVID-19 response.
• Health care providers and caregivers (e.g., physicians, dentists, psychologists, mid-level practitioners, nurses and assistants, infection control and quality assurance personnel, pharmacists, physical and occupational therapists and assistants, social workers, speech pathologists and diagnostic and therapeutic technicians and technologists).
• Hospital and laboratory personnel (including accounting, administrative, admitting and discharge, engineering, epidemiological, source plasma and blood donation, food service, housekeeping, medical records, information technology and operational technology, nutritionists, sanitarians, respiratory therapists, etc.).
• Workers in other medical facilities (including Ambulatory Health and Surgical, Blood Banks, Clinics, Community Mental Health, Comprehensive Outpatient rehabilitation, End Stage Renal Disease, Health Departments, Home Health care, Hospices, Hospitals, Long Term Care, Organ Pharmacies, Procurement Organizations, Psychiatric, Residential, Rural Health Clinics and Federally Qualified Health Centers, cannabis retailers).
• Manufacturers, technicians, logistics and warehouse operators, and distributors of medical equipment, personal protective equipment (PPE), medical gases, pharmaceuticals, blood and blood products, vaccines, testing materials, laboratory supplies, cleaning, sanitizing, disinfecting or sterilization supplies, personal care/hygiene products, and tissue and paper towel products.

• Public health/community health workers, including those who compile, model, analyze, and communicate public health information.
• Behavioral health workers (including mental and substance use disorder) responsible for coordination, outreach, engagement, and treatment to individuals in need of mental health and/or substance use disorder services.
• Blood and plasma donors and the employees of the organizations that operate and manage related activities.
• Workers that manage health plans, billing, and health information, who cannot practically work remotely.
• Workers who conduct community-based public health functions, conducting epidemiologic surveillance, compiling, analyzing and communicating public health information, who cannot practically work remotely.
• Workers who provide support to vulnerable populations to ensure their health and well-being including family care providers
• Workers performing cybersecurity functions at healthcare and public health facilities, who cannot practically work remotely.
• Workers conducting research critical to COVID-19 response.
• Workers performing security, incident management, and emergency operations functions at or on behalf of healthcare entities including healthcare coalitions, who cannot practically work remotely.
• Workers who support food, shelter, and social services, and other necessities of life for economically disadvantaged or otherwise needy individuals, such as those residing in shelters.
• Pharmacy employees necessary for filling prescriptions.
• Workers performing mortuary services, including funeral homes, crematoriums, and cemetery workers.
• Workers who coordinate with other organizations to ensure the proper recovery, handling, identification, transportation, tracking, storage, and disposal of human remains and personal effects; certify the cause of death; and facilitate access to behavioral health services to the family members, responders, and survivors of an incident.
• Workers supporting veterinary hospitals and clinics

EMERGENCY SERVICES SECTOR
Sector Profile
The Emergency Services Sector (ESS) is a community of highly-skilled, trained personnel, along with the physical and cyber resources, that provide a wide range of prevention, preparedness, response, and recovery services during both day-to-day operations and incident response. The ESS includes geographically distributed facilities and equipment in both paid and volunteer capacities organized primarily at the federal, state, local, tribal, and territorial levels of government, such as city police departments and fire stations, county sheriff’s offices, Department of Defense police and fire departments, and town public works departments. The ESS also includes private sector resources, such as industrial fire departments, private security organizations, and private emergency medical services providers.

Essential Workforce – Law Enforcement, Public Safety, and First Responders
• Including front line and management, personnel include emergency management, law enforcement, Emergency Management Systems, fire, and corrections, search and rescue, tactical teams including maritime, aviation, and canine units.
• Emergency Medical Technicians
• Public Safety Answering Points and 911 call center employees
• Fusion Center employees
• Fire Mitigation Activities
• Hazardous material responders and hazardous devices teams, from government and the private sector.
• Workers – including contracted vendors — who maintain digital systems infrastructure supporting law enforcement and emergency service operations.
• Private security, private fire departments, and private emergency medical services personnel.
• County workers responding to abuse and neglect of children, elders, and dependent adults.
• Animal control officers and humane officers

Essential Workforce – Public Works
• Workers who support the operation, inspection, and maintenance of essential dams, locks, and levees
• Workers who support the operation, inspection, and maintenance of essential public works facilities and operations, including bridges, water and sewer main breaks, fleet maintenance personnel, construction of critical or strategic infrastructure, construction material suppliers, traffic signal maintenance, emergency location services for buried utilities, maintenance of digital systems infrastructure supporting public works operations, and other emergent issues
• Workers such as plumbers, electricians, exterminators, and other service providers who provide services that are necessary to maintain the safety, sanitation, and essential operation of residences.
• Support, such as road and line clearing, to ensure the availability of needed facilities, transportation, energy, and communications support to ensure the effective removal, storage, and disposal of residential and commercial solid waste and hazardous waste.

FOOD AND AGRICULTURE
Sector Profile
The Food and Agricultural (FA) Sector is composed of complex production, processing, and delivery systems and has the capacity to feed people and animals both within and beyond the boundaries of the United States. Beyond domestic food production, the FA Sector also imports many ingredients and finished products, leading to a complex web of growers, processors, suppliers, transporters, distributors, and consumers. This sector is critical to maintaining and securing our food supply.

Essential Workforce
• Workers supporting groceries, pharmacies, and other retail that sells food and beverage products, including but not limited to Grocery stores, Corner stores and convenience stores, including liquor stores that sell food, Farmers’ markets, Food banks, Farm and produce stands, Supermarkets, Similar food retail establishments, Big box stores that sell groceries and essentials
• Restaurant carry-out and quick-serve food operations – including food preparation, carry-out, and delivery food employees
• Food manufacturer employees and their supplier employees—to include those employed in food processing (packers, meat processing, cheese plants, milk plants, produce, etc.) facilities; livestock, poultry, seafood slaughter facilities; pet and animal feed processing facilities; human food facilities producing by-products for animal food; beverage production facilities; and the production of food packaging
• Farmworkers to include those employed in animal food, feed, and ingredient production, packaging, and distribution; manufacturing, packaging, and distribution of veterinary drugs; truck delivery and transport; farm and fishery labor needed to produce our food supply domestically
• Farmworkers and support service workers to include those who field crops; commodity inspection; fuel ethanol facilities; storage facilities; and other agricultural inputs
• Employees and firms supporting food, feed, and beverage distribution (including curbside distribution and deliveries), including warehouse workers, vendor-managed inventory controllers, blockchain managers, distribution
• Workers supporting the sanitation of all food manufacturing processes and operations from wholesale to retail
• Company cafeterias – in-plant cafeterias used to feed employees
• Workers in food testing labs in private industries and in institutions of higher education
• Workers essential for assistance programs and government payments
• Workers supporting cannabis retail and dietary supplement retail
• Employees of companies engaged in the production of chemicals, medicines, vaccines, and other substances used by the food and agriculture industry, including pesticides, herbicides, fertilizers, minerals, enrichments, and other agricultural production aids
• Animal agriculture workers to include those employed in veterinary health; manufacturing and distribution of animal medical materials, animal vaccines, animal drugs, feed ingredients, feed, and bedding, etc.; transportation of live animals, animal medical materials; transportation of deceased animals for disposal; raising of animals for food; animal production operations; slaughter and packing plants and associated regulatory and government workforce
• Workers who support the manufacture and distribution of forest products, including, but not limited to timber, paper, and other wood products
• Employees engaged in the manufacture and maintenance of equipment and other infrastructure necessary to agricultural production and distribution

ENERGY
Sector Profile
The Energy Sector consists of widely-diverse and geographically-dispersed critical assets and systems that are often interdependent of one another. This critical infrastructure is divided into three interrelated segments or subsectors—electricity, oil, and natural gas—to include the production, refining, storage, and distribution of oil, gas, and electric power, except for hydroelectric and commercial nuclear power facilities and pipelines. The Energy Sector supplies fuels to the transportation industry, electricity to households and businesses, and other sources of energy that are integral to growth and production across the Nation. In turn, it depends on the Nation’s transportation, information technology, communications, finance, water, and government infrastructures.

Essential Workforce – Electricity industry:
• Workers who maintain, ensure, or restore the generation, transmission, and distribution of electric power, including call centers, utility workers, reliability engineers and fleet maintenance technicians
• Workers needed for safe and secure operations at nuclear generation
• Workers at generation, transmission, and electric blackstart facilities
• Workers at Reliability Coordinator (RC), Balancing Authorities (BA), and primary and backup Control Centers (CC), including but not limited to independent system operators, regional transmission organizations, and balancing authorities
• Mutual assistance personnel
• IT and OT technology staff – for EMS (Energy Management Systems) and Supervisory Control and Data
• Acquisition (SCADA) systems, and utility data centers; Cybersecurity engineers; cybersecurity risk management
• Vegetation management crews and traffic workers who support
• Environmental remediation/monitoring technicians
• Instrumentation, protection, and control technicians

Essential Workforce – Petroleum workers:
• Petroleum product storage, pipeline, marine transport, terminals, rail transport, road transport
• Crude oil storage facilities, pipeline, and marine transport
• Petroleum refinery facilities
• Petroleum security operations center employees and workers who support emergency response services
• Petroleum operations control rooms/centers
• Petroleum drilling, extraction, production, processing, refining, terminal operations, transporting, and retail for use as end-use fuels or feedstocks for chemical manufacturing
• Onshore and offshore operations for maintenance and emergency response
• Retail fuel centers such as gas stations and truck stops, and the distribution systems that support them.

Essential Workforce – Natural and propane gas workers:
• Natural gas transmission and distribution pipelines, including compressor stations
• Underground storage of natural gas
• Natural gas processing plants, and those that deal with natural gas liquids
• Liquefied Natural Gas (LNG) facilities
• Natural gas security operations center, natural gas operations dispatch and control rooms/centers natural gas emergency response and customer emergencies, including natural gas leak calls
• Drilling, production, processing, refining, and transporting natural gas for use as end-use fuels, feedstocks for chemical manufacturing, or use in electricity generation
• Propane gas dispatch and control rooms and emergency response and customer emergencies, including propane leak calls
• Propane gas service maintenance and restoration, including call centers
• Processing, refining, and transporting natural liquids, including propane gas, for use as end-use fuels or feedstocks for chemical manufacturing
• Propane gas storage, transmission, and distribution centers

WATER AND WASTEWATER
Sector Profile
The Water and Wastewater Sector is a complex sector composed of drinking water and wastewater infrastructure of varying sizes and ownership types. Multiple governing authorities pertaining to the Water and Wastewater Sector provide for public health, environmental protection, and security measures, among others.

Essential Workforce
Employees needed to operate and maintain drinking water and wastewater/drainage infrastructure, including:
• Operational staff at water authorities
• Operational staff at community water systems
• Operational staff at wastewater treatment facilities
• Workers repairing water and wastewater conveyances and performing required sampling or monitoring
• Operational staff for water distribution and testing
• Operational staff at wastewater collection facilities
• Operational staff and technical support for SCADA Control systems
• Chemical disinfectant suppliers for wastewater and personnel protection
• Workers that maintain digital systems infrastructure supporting water and wastewater operations

TRANSPORTATION AND LOGISTICS
Sector Profile
The Transportation Systems Sector consists of seven key subsectors, or modes:
– Aviation includes aircraft, air traffic control systems, and airports, heliports, and landing strips. Commercial aviation services at civil and joint-use military airports, heliports, and seaplane bases. In addition, the aviation mode includes commercial and recreational aircraft (manned and unmanned) and a wide variety of support services, such as aircraft repair stations, fueling facilities, navigation aids, and flight schools.
– Highway and Motor Carrier encompasses roadway, bridges, and tunnels. Vehicles include trucks, including those carrying hazardous materials; other commercial vehicles, including commercial motorcoaches and school buses; vehicle and driver licensing systems; taxis, transportation services including Transportation Network Companies, and delivery services including Delivery Network Companies; traffic management systems; AND cyber systems used for operational management.
– Maritime Transportation System consists of coastline, ports, waterways, and intermodal landside connections that allow the various modes of transportation to move people and goods to, from, and on the water.
– Mass Transit and Passenger Rail includes terminals, operational systems, and supporting infrastructure for passenger services by transit buses, trolleybuses, monorail, heavy rail—also known as subways or metros—light rail, passenger rail, and vanpool/rideshare.
– Pipeline Systems consist of pipelines carrying natural gas hazardous liquids, as well as various chemicals. Above-ground assets, such as compressor stations and pumping stations, are also included.
– Freight Rail consists of major carriers, smaller railroads, active railroad, freight cars, and locomotives.
– Postal and Shipping includes large integrated carriers, regional and local courier services, mail services, mail management firms, and chartered and delivery services.

Essential Workforce
• Employees supporting or enabling transportation functions, including dispatchers, maintenance and repair technicians, warehouse workers, truck stop and rest area workers, and workers that maintain and inspect infrastructure (including those that require cross-border travel)
• Employees of firms providing services that enable logistics operations, including cooling, storing, packaging, and distributing products for wholesale or retail sale or use.
• Mass transit workers
• Taxis, transportation services including Transportation Network Companies, and delivery services including Delivery Network Companies
• Workers responsible for operating dispatching passenger, commuter and freight trains and maintaining rail infrastructure and equipment
• Maritime transportation workers – port workers, mariners, equipment operators
• Truck drivers who haul hazardous and waste materials to support critical infrastructure, capabilities, functions, and services
• Automotive repair and maintenance facilities
• Manufacturers and distributors (to include service centers and related operations) of packaging materials, pallets, crates, containers, and other supplies needed to support manufacturing, packaging staging, and distribution operations
• Postal and shipping workers, to include private companies
• Employees who repair and maintain vehicles, aircraft, rail equipment, marine vessels, and the equipment and infrastructure that enables operations that encompass the movement of cargo and passengers
• Air transportation employees, including air traffic controllers, ramp personnel, aviation security, and aviation management
• Workers who support the maintenance and operation of cargo by air transportation, including flight crews, maintenance, airport operations, and other on- and off-airport facilities workers

COMMUNICATIONS AND INFORMATION TECHNOLOGY
Sector Profile
The Communications Sector provides products and services that support the efficient operation of today’s global information-based society. Communication networks enable people around the world to contact one another, access information instantly, and communicate from remote areas. This involves creating a link between a sender (including voice signals) and one or more recipients using technology (e.g., a telephone system or the Internet) to transmit information from one location to another. Technologies are changing at a rapid pace, increasing the number of products, services, service providers, and communication options. The national communications architecture is a complex collection of networks that are owned and operated by individual service providers. Many of this sector’s products and services are foundational or necessary for the operations and services provided by other critical infrastructure sectors. The nature of communication networks involve both physical infrastructure (buildings, switches, towers, antennas, etc.) and cyberinfrastructure (routing and switching software, operational support systems, user applications, etc.), representing a holistic challenge to address the entire physical-cyber infrastructure.
The IT sector provides products and services that support the efficient operation of today’s global information-based society and are integral to the operations and services provided by other critical infrastructure Sectors. The IT Sector is comprised of small and medium businesses, as well as large multinational companies. Unlike many critical infrastructure Sectors composed of finite and easily identifiable physical assets, the IT Sector is a function-based Sector that comprises not only physical assets but also virtual systems and networks that enable key capabilities and services in both the public and private sectors.

Essential Workforce – Communications:
• Maintenance of communications infrastructure- including privately owned and maintained communication systems- supported by technicians, operators, call-centers, wireline and wireless providers, cable service providers, satellite operations, undersea cable landing stations, Internet Exchange Points, and manufacturers and distributors of communications equipment
• Workers who support radio, television, and media service, including, but not limited to front line news reporters, studio, and technicians for newsgathering and reporting
• Workers at Independent System Operators and Regional Transmission Organizations, and Network Operations staff, engineers and/or technicians to manage the network or operate facilities
• Engineers, technicians and associated personnel responsible for infrastructure construction and restoration, including contractors for construction and engineering of fiber optic cables
• Installation, maintenance and repair technicians that establish, support or repair service as needed
• Central office personnel to maintain and operate central office, data centers, and other network office facilities
• Customer service and support staff, including managed and professional services as well as remote providers of support to transitioning employees to set up and maintain home offices, who interface with customers to manage or support service environments and security issues, including payroll, billing, fraud, and troubleshooting
• Dispatchers involved with service repair and restoration

Essential Workforce – Information Technology:
• Workers who support command centers, including, but not limited to Network Operations Command Center, Broadcast Operations Control Center and Security Operations Command Center
• Data center operators, including system administrators, HVAC & electrical engineers, security personnel, IT managers, data transfer solutions engineers, software and hardware engineers, and database administrators
• Client service centers, field engineers, and other technicians supporting critical infrastructure, as well as manufacturers and supply chain vendors that provide hardware and software, and information technology equipment (to include microelectronics and semiconductors) for critical infrastructure
• Workers responding to cyber incidents involving critical infrastructure, including medical facilities, SLTT governments and federal facilities, energy and utilities, and banks and financial institutions, and other critical infrastructure categories and personnel
• Workers supporting the provision of essential global, national and local infrastructure for computing services (incl. cloud computing services), business infrastructure, web-based services, and critical manufacturing
• Workers supporting communications systems and information technology used by law enforcement, public safety, medical, energy and other critical industries
• Support required for continuity of services, including janitorial/cleaning personnel

OTHER COMMUNITY-BASED GOVERNMENT OPERATIONS AND ESSENTIAL FUNCTIONS
Essential Workforce
• Critical government workers, as defined by the employer and consistent with Continuity of Operations Plans and Continuity of Government plans.
• County workers responsible for determining eligibility for safety net benefits
• The Courts, consistent with guidance released by the California Chief Justice
• Workers to ensure continuity of building functions
• Security staff to maintain building access control and physical security measures
• Elections personnel
• Federal, State, and Local, Tribal, and Territorial employees who support Mission Essential Functions and communications networks
• Trade Officials (FTA negotiators; international data flow administrators)
• Weather forecasters
• Workers that maintain digital systems infrastructure supporting other critical government operations
• Workers at operations centers necessary to maintain other essential functions
• Workers who support necessary credentialing, vetting and licensing operations for transportation workers
• Workers who are critical to facilitating trade in support of the national, state, and local emergency response supply chain
• Workers supporting public and private childcare establishments, pre-K establishments, K-12 schools, colleges, and universities for purposes of distance learning, provision of school meals, or care and supervision of minors to support essential workforce across all sectors
• Workers and instructors supporting academies and training facilities and courses for the purpose of graduating students and cadets that comprise the essential workforce for all identified critical sectors
• Hotel Workers where hotels are used for COVID-19 mitigation and containment measures, including measures to protect homeless populations.
• Construction Workers who support the construction, operation, inspection, and maintenance of construction sites and construction projects (including housing construction)
• Workers such as plumbers, electricians, exterminators, and other service providers who provide services that are necessary to maintaining the safety, sanitation, construction material sources, and essential operation of construction sites and construction projects (including those that support such projects to ensure the availability of needed facilities, transportation, energy and communications; and support to ensure the effective removal, storage, and disposal of solid waste and hazardous waste)
• Commercial Retail Stores, that supply essential sectors, including convenience stores, pet supply stores, auto supplies and repair, hardware and home improvement, and home appliance retailers • Workers supporting the entertainment industries, studios, and other related establishments, provided they follow covid-19 public health guidance around social distancing. • Workers critical to operating Rental Car companies that facilitate continuity of operations for essential workforces, and other essential travel
• Workers that provide or determine eligibility for food, shelter, in-home supportive services, child welfare, adult protective services and social services, and other necessities of life for economically disadvantaged or otherwise needy individuals (including family members)
• Professional services, such as legal or accounting services, when necessary to assist in compliance with legally mandated activities and critical sector services
• Faith-based services that are provided through streaming or other technology • Laundromats and laundry services
• Workers at animal care facilities that provide food, shelter, veterinary and/or routine care and other necessities of life for animals.

CRITICAL MANUFACTURING
Sector Profile
The Critical Manufacturing Sector identifies several industries to serve as the core of the sector: Primary Metals Manufacturing, Machinery Manufacturing, Electrical Equipment, Appliance, and Component Manufacturing, Transportation Equipment Manufacturing Products made by these manufacturing industries are essential to many other critical infrastructure sectors.

Essential Workforce
• Workers necessary for the manufacturing of materials and products needed for medical supply chains, transportation, energy, communications, food and agriculture, chemical manufacturing, nuclear facilities, the operation of dams, water and wastewater treatment, emergency services, and the defense industrial base.

HAZARDOUS MATERIALS
Essential Workforce
• Workers at nuclear facilities, workers managing medical waste, workers managing waste from pharmaceuticals and medical material production, and workers at laboratories processing test kits
• Workers who support hazardous materials response and cleanup
• Workers who maintain digital systems infrastructure supporting hazardous materials management operations

FINANCIAL SERVICES
Sector Profile
The Financial Services Sector includes thousands of depository institutions, providers of investment products, insurance companies, other credit and financing organizations, and the providers of the critical financial utilities and services that support these functions. Financial institutions vary widely in size and presence, ranging from some of the world’s largest global companies with thousands of employees and many billions of dollars in assets to community banks and credit unions with a small number of employees serving individual communities. Whether an individual savings account, financial derivatives, credit extended to a large organization, or investments made to a foreign country, these products allow customers to: Deposit funds and make payments to other parties; Provide credit and liquidity to customers; Invest funds for both long and short periods; Transfer financial risks between customers.

Essential Workforce
• Workers who are needed to process and maintain systems for processing financial transactions and services (e.g., payment, clearing, and settlement; wholesale funding; insurance services; and capital markets activities)
• Workers who are needed to provide consumer access to banking and lending services, including ATMs, and to move currency and payments (e.g., armored cash carriers)
• Workers who support financial operations, such as those staffing data and security operations centers

CHEMICAL
Sector Profile
The Chemical Sector—composed of a complex, global supply chain—converts various raw materials into diverse products that are essential to modern life. Based on the end product produced, the sector can be divided into five main segments, each of which has distinct characteristics, growth dynamics, markets, new developments, and issues: Basic chemicals; Specialty chemicals; Agricultural chemicals; Pharmaceuticals; Consumer products

Essential Workforce
• Workers supporting the chemical and industrial gas supply chains, including workers at chemical manufacturing plants, workers in laboratories, workers at distribution facilities, workers who transport basic raw chemical materials to the producers of industrial and consumer goods, including hand sanitizers, food and food additives, pharmaceuticals, textiles, and paper products.
• Workers supporting the safe transportation of chemicals, including those supporting tank truck cleaning facilities and workers who manufacture packaging items
• Workers supporting the production of protective cleaning and medical solutions, personal protective equipment, and packaging that prevents the contamination of food, water, medicine, among others essential products
• Workers supporting the operation and maintenance of facilities (particularly those with high risk chemicals and/ or sites that cannot be shut down) whose work cannot be done remotely and requires the presence of highly trained personnel to ensure safe operations, including plant contract workers who provide inspections
• Workers who support the production and transportation of chlorine and alkali manufacturing, single-use plastics, and packaging that prevents the contamination or supports the continued manufacture of food, water, medicine, and other essential products, including glass container manufacturing

DEFENSE INDUSTRIAL BASE
Sector Profile
The Defense Industrial Base Sector is the worldwide industrial complex that enables research and development, as well as design, production, delivery, and maintenance of military weapons systems, subsystems, and components or parts, to meet U.S. military requirements. The Defense Industrial Base partnership consists of Department of Defense components, Defense Industrial Base companies and their subcontractors who perform under contract to the Department of Defense, companies providing incidental materials and services to the Department of Defense, and government-owned/contractor-operated and government-owned/government-operated facilities. Defense Industrial Base companies include domestic and foreign entities, with production assets located in many countries. The sector provides products and services that are essential to mobilize, deploy, and sustain military operations.

Essential Workforce
• Workers who support the essential services required to meet national security commitments to the federal government and U.S. Military. These individuals include but are not limited to, aerospace; mechanical and software engineers, manufacturing/production workers; IT support; security staff; security personnel; intelligence support, aircraft and weapon system mechanics and maintainers
• Personnel working for companies, and their subcontractors, who perform under contract to the Department of Defense providing materials and services to the Department of Defense, and government-owned/contractor-operated and government-owned/government-operated facilities

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THE $2 TRILLION Coronavirus Aid, Relief, and Economic Security (CARES) Act stimulus law has a number of provisions that employers and their workers need to know about and can take advantage of during this crisis.

The CARES Act aims to help workers and employers weather the outbreak by:
• Extending unemployment benefits.
• Requiring health plans to cover COVID-19-related costs.
• Providing Small Business Administration (SBA) emergency loans.
• Providing emergency loans for mid-sized and large companies.

Parts of the CARES Act will likely benefit your organization and employees in some way. Here’s what you need to know:

Extended unemployment

The CARES Act extends unemployment insurance benefits to workers, as long as they lost their jobs due to the outbreak.
Unemployment benefits under the CARES Act also apply to furloughed employees.
Workers in California will be able to collect both state unemployment and federal unemployment through the new law.
Under existing state law, workers who have lost their jobs can already receive regular unemployment benefits of between $40 and $450 per week, depending on their highest-earning quarter in a 12-month period beginning and ending before they apply for benefits with the state Employment Development Department. These benefits can last for up to 26 weeks.
The Pandemic Emergency Compensation program funded by the new law will provide an additional $600 per week on top of state unemployment benefits, through July 31.
The law extends state-level unemployment by an additional 13 weeks. For example, whereas most of California’s unemployment benefits last 26 weeks, the bill extends state benefits to 39 weeks.
The extended benefits will last through Dec. 31.

Health plan changes

Under the CARES Act, employer-sponsored group health plans must provide for covered workers – without cost-sharing or out-of-pocket expenses – the cost of COVID-19 testing, treatment and vaccinations when and if they become available.

SBA loans

In response to the Coronavirus (COVID-19) pandemic, small business owners are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000.
This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available following a successful application. This loan advance will not have to be repaid.
This program is for any small business with fewer than 500 employees (including sole proprietorships, independent contractors and self-employed persons) as well as private non-profit organizations affected by COVID-19. You can find more information here.

And the law’s Paycheck Protection Program offers 1% interest loans to businesses with fewer than 500 workers. Borrowers who don’t lay off workers in the next eight weeks will have their loans forgiven, along with the interest. These loans are designed to provide a direct incentive for small businesses to keep their workers on the payroll. If small businesses maintain payroll through this economic crisis, some of the borrowed money via the PPP can be forgiven – the funds will be available through June 30. Act fast.

Mid-sized employers

Under the new law, the Secretary of the Treasury is authorized to implement financial assistance programs that specifically target mid-size employers with between 500 and 10,000 employees.
Loans would not have an annualized interest rate higher than 2% and principal and interest would not be due and payable for at least six months after the loan is made. But unlike loans under the PPP, these are not forgivable.

LEGISLATION SIGNED into law by President Trump extends sick leave benefits for workers who are stricken by the coronavirus, as well as provide for additional weeks of time off under the Family Medical Leave Act so they can be guaranteed of being able to return to their jobs afterwards.
Employers need to pay extra attention to the added paid sick leave and FMLA provisions of this new law, the Families First Coronavirus Response Act, which only applies to employers with fewer than 500 employees.

Paid sick leave

Employees are entitled to two weeks (80 hours) of paid sick time for coronavirus-related issues. Eligible workers must be paid their regular pay, up to $511 per day and $5,110 in total.
Those caring for someone subject to quarantine due to COVID-19, and parents of kids who can’t go to school or daycare, will receive two-thirds of their regular pay, up to $200 daily with a $2,000 cap. The emergency sick leave benefit can be used immediately, regardless of how long the worker has been employed with you. The law does not require certification of an order by the government or a health care provider. But employers can require reasonable notice procedures, such as not announcing in the middle of a shift that they take COVID-19 sick leave. They cannot require the employee to find a replacement worker to cover the shifts they will miss. Employers must post the law’s requirements “in conspicuous places.”
Employers are not allowed to discipline a worker who takes this sick or FMLA leave for coronavirus purposes. If an employer refuses to provide the leave, they can be subject to paying back pay and statutory damages.
Important: This law provides payroll tax credits to offset costs of providing paid leaves.

FMLA

The law provides for 10 additional weeks of FMLA leave, but only for those who must stay at home to care for a child whose school is closed or their childcare provider is unavailable due to COVID-19- related issues. These 10 weeks will be paid at two-thirds the employee’s regular rate of pay, up to $200 per day with a cap of $10,000. They will also receive 12 weeks of leave
with job protection, though employers of health care or emergency care providers can exclude such employees. The employee would likely use up their two weeks of paid sick leave before applying
for FMLA benefits, which unlike traditional FMLA (which is unpaid), are paid leaves after the first 10 days under the new law. Employees who have been working for more than 30 days are eligible, and the employer can require them to provide reasonable notice that they are taking leave.

A final word

This law only applies to employers with fewer than 500 workers, so it leaves uncovered those people who work for larger companies. Also, employers need to make financial plans, as the credit
cannot be claimed until after the employer pays their payroll taxes. A bigger issue is that the law requires that workers be paid the sick leave even if they are not sick, but have been ordered to self-isolate. In states that have ordered workers to self-isolate, such as California, employers could be faced with an avalanche of paid sick leave claims all at once. This law sunsets on Dec. 31, 2020.

The new decade is starting off with a tsunami of new laws and regulations that will affect California businesses. Companies operating in California will have to be prepared for significant changes or open themselves up to potential litigation, fines, and other risks.

Here’s what you need to know coming into the new year:

1. AB 5

The controversial AB 5 creates a more stringent test for determining who is an independent contractor or employee in
California.  Known as the “ABC test,” the standard requires companies to prove that people working for them as independent contractors are:

A) Free from the firm’s control when working;
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.

Legal experts recommend that employers:

• Perform a worker classification audit, and 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 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. Under the new regs, when the Air Quality Index (AQI) for particulate matter 2.5 is more than 150, employers with workers who are outdoors are required to comply with the new rules. These include providing workers with protection like respirators, changing work schedules or moving them to a safe location.

3. Arbitration agreements

Starting Jan. 1, the state will bar almost all employee arbitration agreements. AB 51 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 discrimination, harassment, wage and hour issues. Businesses groups sued to overturn the law on the grounds that it is preempted by the Federal Arbitration Act.

4. Overtime rules

New federal overtime regulations are taking effect for non-exempt workers. Under the new rule, employers will be required to pay overtime to certain salaried workers who make less than $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, under the California Consumer Protection Act, businesses that keep personal data of residents are required to safeguard 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.

6. Return of the individual mandate

A new law brings back the individual mandate requiring Californians at least to secure health insurance coverage or face tax penalties. This comes after the penalties for not abiding by the Affordable Care Act’s individual mandate were abolished by Congress in late 2017. Starting in 2020, California residents are required to have health insurance or pay excess taxes. This will affect any of your staff who have opted out of your group health plan as it may mean they are going without coverage, unless they have opted to be covered by their spouse’s plan. If you have staff who didn’t enroll in your plan for 2020, they may have to wait until your group’s next open enrollment at the end of the year. That could force them to pay tax penalties.

7. New audit, X-Mod thresholds

The threshold for physical workers’ compensation audits for California policies incepting on or after Jan. 1 is $10,500 in annual premium, a drop from $13,000. This means that any employer with an annual workers’ comp premium of $10,500 or more will be subject to a physical audit at least once a year. On top of that, the threshold for experience rating (to have an X-Mod) has also fallen – to $9,700 in annual premium as of Jan. 1, from $10,000.

8. Harassment training partly pushed back

Employers with five or more workers were required to conduct sexual harassment prevention training for their staff by the end of 2019 under a California law passed in 2018. A new law extends the compliance deadline for some employers who had already conducted training prior to 2019. The original law, SB 1343, required all employers with five or more staff to conduct sexual harassment prevention training to their employees before Jan. 1, 2020 – and every two years after that. If you have never trained your staff, you should have done so in 2019.

But if you have, here are the new rules:
• If you trained your staff in 2019, you aren’t required to provide refresher training until two years from the time the employee was trained.
• If you trained your staff in 2018, you can maintain the two-year cycle and comply with the new Jan. 1, 2021 deadline. You did not have to repeat the training in 2019.

9. Hairstyle discrimination

A new law makes it illegal for employers to discriminate against employees and job applicants based on their hairstyle if it is part of their racial makeup. The CROWN Act (Create a Respectful and Open Workplace for Natural Hair), defines race or ethnicity as “inclusive of traits historically associated with race, including, but not limited to hair texture and protective hairstyles like braids, locks, and twists.” This new definition of race means that natural hair traits fall under the context of racial discrimination in housing, employment and school matters.

10. Reporting serious injuries

A new law broadens the scope of what will be classified as a serious illness or injury which regulations require employers to report to Cal/OSHA “immediately.” The new rules being implemented by AB 1805 are designed to bring California’s rules more in line with Federal OSHA’s regulations for reporting. It will mean that some injuries that were not reportable before will be, such as:
• Any inpatient hospitalization for treatment of a workplace injury or illness will need to be reported to Cal/OSHA.
• An inpatient hospitalization must be required for something “other than medical observation or diagnostic testing.”
• Employers will need to report any “amputation” to Cal/OSHA. This replaces the terminology “loss of member.” Even if the tip of a finger is cut off, it’s considered an amputation. As of yet, there is no effective date for this new law, as enabling regulations have to be written – a process that will start this year.