Every year, California signs into law dozens of new laws. While some modify existing statutes, others create entirely new frameworks for legal compliance. Below are three laws which expand upon the law and requirements, as well as create all new obligations, for California employers.
SB-973 – Pay Data Reporting
Among the more controversial of the laws going into effect in 2021, SB-973 requires employers with 100 or more employees to submit a pay data report by the 31st of March 2021 and annual thereafter. Notably, the report must include the breakdown of employees by race, ethnicity, gender, job categories and provide pay band data. More telling, and where the controversy lies, is this information will eventually become public data so its imperative employers get started on this early and often to make sure any problems or discrepancies can be rectified.
AB-979 – Board Diversity Requirement
Sharing a similar goal and objective with the new Pay Data Reporting requirements, AB-979 requires all companies with a Board of Directors to install at least one non-white board member by the end of this year. For those Boards with five to eight members, they will need to have at least two non-white members. That figure jumps to three minority board members for Boards with more than nine directors. Notably, this expands upon legislation from 2019 which required female representation on company Board of Directors. While diversity is undoubtedly beneficial and should be encouraged, there may be legal grounds for a discrimination lawsuit to be brought by the ousted board member who is chosen to be replaced by someone purely because of the replacement’s gender and/or race/ethnicity.
SB-1383 – CFRA Leave Expansion
Saving the best, and most consequential, for last, SB-1383 expands the California Family Rights Act (“CFRA”) to include employers with at least five (5) employees and increases the list of reasons for persons eligible for taking such leave. However, the employee seeking to take leave will still need to meet the old requirements of having worked the for the employer at least 12-months and worked at least 1,250 hours in the immediately preceding 12-months prior to leave. The most interesting, and challenging for employers, is that under the current interpretation, employees could now be eligible under certain circumstances for up to 24-weeks of job protected leave if taking both CFRA and FMLA leave sequentially!
Indeed, these three new laws for 2021 should reinforce the reality that having a qualified employment attorney review your handbook and policies each year is priceless. As the saying goes, an ounce of prevention is worth more than a pound of the cure, and it continues to ring true today.