01/01/2020
If you need help navigating the new business laws in California, we're here for you.
Several new laws go into effect January 1st that will have a significant effect in the business world. Here's a rundown:
*****
AB 5 — Reclassifies many thousands of independent contractors.
*****
It was originally aimed at turning drivers at ride-hailing companies Uber and Lyft into employees, but the new rules reach far beyond those that industry, and have implications for almost every industry in the state. It's highly controversial and the courts are still trying to figure out the specifics. It severally limits if someone can be classified as an independent contractor rather than an employee. Numerous professions, including accountants, lawyers, architects, private investigators, insurance brokers, physicians, psychologists, dentists, podiatrists, were given last-minute exemptions to the law. Business-to-business consultants and construction subcontractors are also generally exempt, assuming they meet certain criteria. You'll want to dig into this puppy quickly because you might find yourself with a bunch of employees and owing payroll taxes with severe penalties if you don't do it right.
*****
Consumer Privacy Act (CCPA) — California's strict new data privacy law.
*****
Californians now have the most stringent data privacy laws in the nation, thanks to the California. The law, modeled after Europe’s GDPR, restricts what companies may do with the data they collect on customers or potential customers, and is expected to set the standard for the rest of the U.S. who will likely hop on the bandwagon in the coming years.
Although companies can continue to collect data about someone's online browsing and buying habits, the law requires that they tell people what they’re collecting and the company must delete it upon request. Companies also can no longer sell data this data if a consumer has asked them not to do so. The rule not only affects large tech companies like Google and Facebook, it also applies to ANY company that meets any ONE of the following three criteria:
- Has $25 million or more in annual revenue,
- Possesses the personal data of more than 50,000 “consumers, households, or devices,” or
- Earns more than 50% of its annual revenue selling consumers’ personal data.
*****
Public Companies MUST have a Woman on their Board of Directors as of now!
*****
Companies were given this ultimatum a year ago and the deadline to comply was celebrated the second the clock struck midnight on New Year's Eve. Any company ignoring this mandate faces a $100,000 one-time fine.
But it gets worse. By the end of 2021, companies with five or more board members must have two female directors or face a $300,000 fine for each of these two seats. that’s not occupied by a woman but should be. As Christmas approached last year, it was estimated that three or four dozen public companies had not yet complied.
*****
AB 51 — Bans mandatory arbitration agreements (and more)
*****
It prohibits employers from asking any employee or job applicant to waive their rights to sue or file a complaint alleging violations of employment law.
It also prohibits employers from threatening, retaliating or discriminating against, or terminating any applicant for employment or any employee because of the refusal to consent to the waiver of any right, forum, or procedure for a violation of specific statutes governing employment.
*****
Minimum Wage Increased
*****
For companies with more than 26 employees, it’s increasing to $13/hour; for those with fewer, it's $12/hour. The figure will gradually increase to $15 per hour for nearly all employees by 2023. No, we're not the highest in the nation.
*****
Can't Discriminate Based on Hairstyles
*****
It is illegal to discriminate against employees on the basis of certain hairstyles, such as Afros or dreadlocks.
*****
AB 1223 Organ Donors get Additional Leave
*****
Previously, state law mandated private employers with 15 or more employees to provide employees 30 days of paid leave in a one-year period when an employee participates in an organ donation. Employers also are required to provide bone marrow donors five days of paid leave. This new law allows for an additional 30 business days of unpaid leave.
Employees are still required to provide their employers with written verification of their participation in either organ donation or bone marrow donation. The verification also must include that the procedure is medically necessary.
