Napa County Micro-Winery Ordinance Goes Into Effect May 5, 2022
On, April 5, 2022 the Napa County Board of Supervisors adopted a new “Micro-winery Ordinance”, allowing Napa Valley winegrape growers to produce and sell wine at their family farms. The Ordinance will go into effect May 5, 2022.
The Ordinance will amend the Napa County Code to allow farmers to obtain a use permit for a “micro-winery” via approval by the zoning administrator, instead of the planning commission. This change allows applicants under the Ordinance to avoid public hearings, potentially reducing costs of acquiring a use permit. Note however that a new winery application, even without a planning commission hearing, is still complex, requiring detailed materials from architects, engineers, and potentially other experts.
The Ordinance allows micro-wineries to produce small amounts of wine primarily made from estate-grown fruit, provide limited on-site tastings, and make direct consumer sales. Applicants must follow the below requirements to qualify:
Micro-wineries are only permitted within the Agricultural Preserve (AP) and Agricultural Watershed (AW) zones. The parcel on which the winery is located must be at least 10 acres in size.
Micro-wineries must produce at least 201 gallons of wine onsite annually, up to a maximum of 5000 gallons. At least 75 percent of the fruit must be estate grown either on the property or on contiguous parcels under the same ownership.
Square footage limits
Micro-winery facilities are limited to a maximum of 5,000 square feet, including storage, processing, tasting, and caves.
Trips, tours and tasting, and marketing events.
Micro-wineries can generate no more than 20 average daily trips—equivalent to 10 daily round trips—between visitors, employees, and deliveries. Note that the County assumes each visitor vehicle carries 2.6 visitors. For example, a micro-winery that produced 2,500 gallons pre year with one full-time and one part-time employee could host 19 visitors per day.
Tours, tastings, and retail sales are limited to 9:00 am to 6:00 pm. No marketing events outside of tours and tastings are allowed.
Sunsets in 3 years (May 5, 2025); Convert to Regular Winery Use Permit 2 years After Approval.
Importantly, applications will only be accepted for a 3-year period, at which point the County will evaluate whether to amend, extend, or re-adopt it. Further, any micro-wineries who have use permits approved under the Ordinance may not modify or amend their permit within 2-years after approval.
All use permits are discretionary approvals subject to the California Environmental Quality Act. Micro-wineries should qualify for a Categorical Exemption unless special circumstances exist.
Dickenson, Peatman & Fogarty has represented a number of wine producers in the use permit process. For more information on the new micro-winery ordinance and the application process, please contact Thomas Adams or Joshua Devore.
TTB Approves San Luis Obispo Coast (SLO Coast) Viticultural Area
Last week was an exciting week for producers and consumers of California Central Coast wine. On Wednesday, March 9, the Alcohol and Tobacco Tax and Trade Bureau (the “TTB”) published a final rule establishing a new “San Luis Obispo Coast,” or “SLO Coast,” American Viticultural Area (“AVA”).
The SLO Coast AVA (identified in orange below) spans approximately 408,505 acres in San Luis Obispo County and is home to over 50 wineries and an estimated 78 commercial vineyards covering approximately 3,942 acres. It lies entirely within the multi-county Central Coast AVA and fully encompasses the established Edna Valley and Arroyo Grande Valley AVAs.
Located along the westernmost portion of the Central Coast AVA, the SLO Coast AVA is a region of coastal terraces, foothills, and small valleys along the Pacific Coast. Its westward orientation provides more marine fog and cool marine air compared to other regions of the Central Coast AVA, using the powerhouse of the Pacific Ocean to moderate temperatures and foster optimal vineyard conditions for growing early-to-mid-season grape varietals such as Chardonnay and Pinot Noir.
Aaron Wines in Paso Robles, CA falls within the boundaries of the new SLO Coast AVA and has planted 90% of its 4,000 planted acres within 6 miles of the Pacific Ocean. Winemaker Aaron Jackson is thrilled by the important addition of the SLO Coast AVA to the “few truly coastal AVAs” in the state of California. Brian Talley of Talley Vineyards in Arroyo Grande, CA shares Mr. Jackson’s sentiments, adding that the approval of the SLO Coast AVA will “drive awareness of the coastal part of San Luis Obispo County as a world class winegrowing region.”
The establishment of the SLO Coast AVA formally recognizes the unique topography, climate, and soils of the area and offers winemakers more diversity and flexibility in marketing their wines to consumers.
Effective April 9, 2022, vintners will be able to label bottles with “San Luis Obispo Coast,” “SLO Coast,” and “Central Coast” as appellations of origin if at least 85% of the wine is derived from grapes grown within the boundaries of the SLO Coast AVA and the wine otherwise meets the statutory requirements of 27 CFR 4.25(e)(3). Vintners producing wine from grapes grown in the Edna Valley or Arroyo Grande Valley AVAs can also continue to label bottles with “Edna Valley” or “Arroyo Grande Valley” as appellations of origin for their wines.
Dickenson, Peatman & Fogarty has represented a number of AVA petitioners before the TTB, including the SLO Coast petitioners. For more information on AVA petitions and labeling compliance, please contact Carol Kingery Ritter or John Trinidad.
COVID-19 Supplemental Paid Sick Leave: New California State COVID Leave Law Applies to all California Employers with 26 or More Employees
On February 9, 2022, Governor Newsom signed the new COVID-19 Supplemental Paid Sick Leave law (SB-114), which is retroactive to January 1, 2022 and extends through September 30, 2022.
Similar to the previous law that provided COVID-19 supplemental paid sick leave and expired last year, the new COVID-19 Supplemental Paid Sick Leave law requires employers in California with 26 or more employees to provide up to a total of 80 hours of paid sick leave to employees for certain COVID-19 related reasons. While we expect updated FAQs on the new law from the DIR soon, the key details from the statute are included below.
- 26+ Employees: The law requires employers with 26 or more employees to provide supplemental paid sick leave for certain COVID-19 related reasons.
- Retroactive to January 1 and through September 30: The requirement to provide the paid sick leave will take effect on February 19 (10 days after the law was signed by the Governor), at which point it will be retroactive to January 1 and extend until September 30, 2022. Employers are required to provide retroactive payments to any employees who were provided with an unpaid leave for qualifying reasons since January 1 at the request of the employee (either orally or in writing). The retroactive payment must be paid on or before the payday for the next full pay period after it is requested by the employee.
- Two Categories of Paid Leave (up to 40 hours each): The new supplemental paid sick leave is split into two categories – the first allows employees to take up to 40 hours of leave for COVID related reasons similar to the prior law, and the second allows employees to take an additional 40 hours of leave if they or their family member test positive for COVID-19.
- First Category: Employers must provide up to 40 hours of supplemental paid sick leave for employees that are unable to work or telework due to any of the following reasons:
- Employee is subject to quarantine or isolation order or guidelines due to COVID-19;
- Employee is advised to quarantine or isolate by heath care provider;
- Employee is attending an appointment for themselves or a family member to get a vaccine or booster and/or experiencing symptoms from a vaccine or booster or caring for a family member who is experiencing symptoms from a vaccine or booster (limit of 24 hours per vaccination/booster – see below);
- Employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
- Employee is caring for a family member who is subject to quarantine, or has been advised to isolate;
- Employee is caring for a child whose school or child care is closed or unavailable due to COVID-19.
- Second Category: Employees who test positive for COVID-19, or have to care for a family member who tests positive, are entitled to an additional 40 hours of supplemental paid sick leave. Employers can request proof of a positive test for the employee or family member prior to providing the supplemental paid sick leave. If an employee refuses to get tested or provide test results to the employer, employers are not obligated to provide the additional 40 hours of supplemental paid sick leave. Employers can require documentation of a positive COVID test for retroactive payments requested by the employee as well. Employers are required to pay for the test for employees, but it is unclear if employers will also be required to pay for tests for family members of employees.
- Amount of Leave: Full-time employees that work at least 40 hours per week on average are entitled to 40 hours of supplemental paid sick leave under each category, for a total of 80 hours of supplemental paid sick leave. Other non-full-time employees are entitled to the average amount of hours they normally work over a 14-day period.
- 24-hour Limit for COVID Vaccine/Booster: Employers can limit the supplemental paid sick leave an employee can use for each vaccine or booster and any related side effects, for themselves of a family member, to three days (24 hours), unless the employee provides verification from a healthcare provider that the symptoms are continuing after three days.
- Amount of Pay: Supplemental paid sick leave should be paid at the employee’s regular rate of pay, up to a maximum of $511 per day and no more than $5,110 total per employee. An employee’s regular rate includes any commissions or non-discretionary bonuses.
- Must List Amount Used on Wage Statements: The COVID-19 Supplemental Paid Sick Leave is a separate entitlement from other paid sick leave provided by the employer and must be listed separately on the written notice or wage statement provided to employees each pay period. However, instead of listing the available balance of supplemental paid sick leave, employers are only required to list the amount of leave that has been used to date. If an employee has not yet used any leave, their statement should list “zero.”
- Cannot Require Substitution of Other Leaves: The supplemental paid sick leave is in addition to other paid leave. Thus, employers cannot require employees to substitute their vacation, PTO, or other paid sick leave when using supplemental paid sick leave.
- Distinct from Cal/OSHA ETS Exclusion Pay: Employers cannot require employees to first exhaust their supplemental paid sick leave when exclusion pay is required to be paid under the Cal/OSHA ETS. Based on this, it appears employers cannot apply these hours toward the exclusion pay obligation when employees are required to be excluded from the workplace due to a workplace exposure to COVID-19 but we expect clarification on this requirement in the forthcoming FAQs.
- Notice Requirement: The Labor Commissioner is required to make a model notice available for employers to send to employees, which should be available shortly. The notice should be posted in the workplace and must be emailed to employees who do not frequent a workplace.
New Laws Expand Winery Off-Site Tasting Room Privileges and Manufacturer Charitable Donation Advertising
This week, Governor Gavin Newsom signed three bills that expand certain winery off-site tasting room privileges and grant alcohol beverage manufacturers the right to advertise and promote charitable donations in connection with the sale of alcohol. The laws will become effective on January 1, 2022. We have summarized the new bills and how they amend current law below.
Number of Winery Off-Site Tasting Rooms (SB 19)
Under current California law, Type 02 wineries are permitted to operate tasting rooms only at their licensed Type 02 premises (i.e., the same premises where the winery’s wine is crushed and fermented), and at an off-site Duplicate Type 02 premises (where crushing and fermentation of wine is not permitted). Current law permits a winery to operate only one off-site Duplicate Type 02 tasting room.
SB 19 amends Section 23390.5 of the California Alcoholic Beverage Control Act (“ABC Act”) to increase the number of Duplicate Type 02 locations that a winery can operate to two locations.
Duplicate Type 02 tasting rooms can be quite helpful for wineries to reach consumers, as they allow wineries to operate a tasting room in another location in California and sell wine to consumers there without having to maintain a production facility on the same premises.
Sale and Delivery of Consumer-Provided Containers at Duplicate Type 02 Tasting Rooms (AB 239)
Under current law, a winery may exercise all the same privileges at its Duplicate Type 02 tasting room as at its Type 02 winery premises (such as the sale and delivery of wine), with certain important exceptions. One of those exceptions is that a winery may not, at its Duplicate Type 02 premises, sell or deliver wine to consumers in containers that have been supplied, furnished, or sold by the consumer.
AB 239 amends Section 23390 of the ABC Act to delete that exception. Starting on January 1, 2022, consumers may provide their own bottles and containers to be filled at a Duplicate Type 02 tasting room premise. AB 239 provides an additional means by which wineries can provide wine to consumers that can be cost-effective for both the winery and the consumer.
Advertisements of Charitable Donations in Connection with the Sale of Alcohol (AB 1267)
Generally, California law prohibits an alcohol beverage licensee from giving a gift or “thing of value” in connection with the sale and distribution of alcoholic beverages, unless there is a statutory exception. The ABC Act permits licensees to donate to specified charities and nonprofit organizations (typically 501(c)(3)s). However, where such donations are tied to sales of alcohol beverage products and/or advertised as such – for example, when a licensee advertises that it will donate a portion or percentage of the proceeds from the sale of a product to a charity – the California Department of Alcohol Beverage Control (“ABC”) views these types of donations as “gifts” or “things of value” to consumers that “incentivize” or “entice” consumers to purchase and consume alcohol in violation of California law. During COVID-19, the CA ABC temporarily created an exception for the enforcement of this prohibition; however, this relief is limited to COVID-19 related charities only.
AB 1267 expands and codifies the CA ABC’s relief with respect to charitable donation advertising by amending Section 25600 of the ABC Act. Starting on January 1, 2022, specified manufacturers – winegrowers, beer manufacturers, distilled spirits manufacturers, craft distillers, brandy manufacturers, rectifiers, and wine rectifiers – may donate a portion of the purchase price of alcohol beverages to nonprofit charitable organizations (not limited to just COVID-19 related charities), subject to all of the following limitations:
- The donation is only in connection with the sale or distribution of alcoholic beverages in manufacturer-sealed containers.
- The promotion does not directly encourage or reference the consumption of alcoholic beverages.
- The donation does not benefit a retail licensee or a charity established for the specific purpose of benefiting the employees of retail licensees, and the advertisement for any donations does not promote or reference any retail licensee. (Note that a manufacturer may identify – but not otherwise promote – the name, address, and website of two or more unaffiliated retailers who sell the manufacturers’ product being offered in the charitable campaign, subject to the restrictions in Sec. 25500.1 of the ABC Act).
Note that this new statutory exception will sunset on January 1, 2025, so unless the exception is made permanent or extended, licensees may not advertise any donations related to the sale of alcoholic beverages at all after the date.
The bills’ text can be found on the California Legislative Information website at the following links: SB 19 (Winegrowers: tasting rooms); AB 239 (Winegrowers and brandy manufacturers: exercise of privileges: locations); and AB 1267 (Alcoholic beverages: advertising or promoting donation to a nonprofit charitable organization).
COVID-19 Leave: Employer Obligations After September 30
State and Federal COVID-19 Leave Laws Are Set to Expire on September 30, 2021
As of the date of this article, both the federal and the California COVID-19 leave laws are set to expire on September 30, 2021 and it does not appear that either the State or Federal legislatures will be extending these provisions. The California law, SB-95, requires employers with 26 or more employees to provide up to 80 hours of supplemental paid sick leave for COVID-19 reasons from January 1 to September 30, 2021. The American Rescue Plan Act, which was passed by Congress earlier this year, extended the ability of employers to take a tax credit against their payroll taxes for offering leave to employees for COVID-19 reasons through September 30, 2021. Additionally, the optional COVID-19 related leaves under the federal law, Emergency Paid Sick Leave and Emergency FMLA, both expire on September 30.
After September 30, 2021, employers with 26 or more employees will no longer be required to provide the COVID-19 supplemental paid sick leave under California law. Employers of any size may still choose to put their own COVID-19 policies in place that provide pay for employees who miss work for COVID related reasons, however, employers will no longer receive a tax credit for those payments.
California’s law required employers to initially give notice to employees regarding the availability of the COVID-19 supplemental paid sick leave and the time period of the leave. However, employers may want to remind employees that the leave is expiring on September 30. Note that if an employee is already taking COVID-19 supplemental paid sick leave at the time the leave expires on September 30, they are permitted to take the full amount of leave that they are entitled to even if it extends past September 30.
Employer Pay Obligations After September 30
Although employers will no longer be required to provide separate supplemental paid sick leave for COVID-19 purposes after September 30, under the Cal/OSHA Emergency Temporary Standards (“ETS”) employers must maintain all pay and benefits for employees who are required to be excluded from the workplace due to COVID-19 and otherwise able to work. Employees may choose to use their regular paid sick leave during the exclusion period; however, employers cannot require employees to use their regular paid sick leave.
The exclusion pay is only required for cases of workplace exposure to COVID-19, therefore, if employers are able to show that an employee’s exposure to COVID was outside the workplace no exclusion pay is required in that case. Employers also do not have to pay an employee that receives disability payments or worker’s compensation during the exclusion period. For more information on the Cal/OSHA ETS exclusion pay you can access the DIR’s FAQ page here.
Additionally, many employers are now requiring vaccinations and/or regular COVID-19 testing as a condition of employment. If employees are required to receive the vaccine as part of their job, employers must pay for the cost of the vaccine, if any, and the time it takes the employee to get vaccinated. Further, the DIR issued an FAQ on COVID-19 testing that states that employers must pay for the cost of COVID-19 testing if it is a requirement of the job. This includes paying for the test itself, the time it takes the employee to get tested (including any travel time), and reimbursing employees for travel expenses if the testing location is not at their regular workplace. You can read the DIR’s full FAQ on COVID-19 testing here.
Employee Leave Options After September 30
Even though the State and federal COVID-19 leaves are expiring on September 30, many employees will still need to take time off from work for COVID-19 related reasons. Unless their employers have their own COVID-19 policies in place, much of this time off work may be unpaid.
If an employee is sick with COVID-19 symptoms or is caring for a family member who has COVID-19 symptoms, they can use their regular California paid sick leave if they have accrued time available. Employees can also take family and medical leave under CFRA to care for themselves or their family members if their symptoms rise to the level of a serious health condition. Leave under CFRA is unpaid but employees may qualify for disability insurance from the state.
Regular Rate Blues: California Supreme Court’s Decision on Premium Payments and Other Pay Practice Reminders
On July 15, 2021, the California Supreme Court decided in Ferra v. Loews Hollywood Hotel, LLC that employers must pay premium payments to employees for missed meal, rest, and recovery breaks at the employee’s “regular rate of pay” instead of the employee’s base hourly rate, as many employers were doing. The ruling is retroactive, and employers should audit their practices to determine if a true-up payment is necessary.
Under California wage and hour laws, an employer must provide and permit nonexempt employees who work more than five hours in a day an unpaid duty-free meal period of at least 30 minutes in length starting no later than the end of the fifth hour of work. Employees who work no more than six hours in a day may waive the meal period upon written agreement between the company and the employee. In addition, nonexempt employees who work at least three and one-half hours in a day must be provided and permitted a paid 10-minute duty-free rest period for every four hours of work or major fraction thereof, and a second rest period if working up to six hours a day. Employees who work outdoors are entitled to cool-down recovery periods in fixed, shaded areas whenever needed to prevent heat illness.
If an employer doesn’t provide compliant meal, rest, or recovery periods, the employer must pay the employee one additional hour of pay as a “premium” for each workday that the meal, rest or recovery period was not provided. (Labor Code § 226.7.) Before the recent ruling, it was unclear whether this premium should be paid at the employee’s base hourly rate or their “regular rate of pay” which includes all nondiscretionary incentive payments such as bonuses and commissions. The Court settled this issue: the premium must be paid at the regular rate of pay, not the base rate. This is bad news for employers that acted in good faith by paying premium pay at the base hourly rate.
How To Calculate “Regular Rate of Pay”
Regular rate calculation requires employers to include all compensation for hours worked and divide that number by the total hours worked. “All compensation” includes hourly wages, nondiscretionary bonuses, shift differentials, on-call pay, and commissions. In general, most bonuses are considered nondiscretionary and include any bonus that employees know about and expect such as: production bonuses, bonuses for quality of work, bonuses to induce employees to work more efficiently, attendance bonuses, and safety bonuses. Thus, if nonexempt employees are paid a commission, non-discretionary bonus, or other incentive payment, such payment must be factored into the employees’ regular rate in order to compute any applicable overtime or break premium compensation.
Different Rule for Flat Sum Bonus: Note that California law requires the use of a different rule for calculating “regular rate of pay” when employees earn a non-discretionary, flat sum bonus. A flat sum bonus is typically a bonus paid for working a shift that is not tied to any measure of production or efficiency, for example a flat sum bonus for working on a weekend. When calculating the regular rate of pay from a flat sum bonus, the bonus is divided by only the regular, non-overtime hours worked in the workweek instead of all hours.
For examples showing regular rate calculations you can review the Labor Commissioner’s website here.
When To Use Regular Rate
The regular rate of pay is used when calculating overtime, California paid sick leave (see sick leave section below) and now meal and rest pay premiums.
Overtime “True Up” Calculations
If the employees’ bonus or commission is paid out on a weekly basis, the calculation is simple and the additional pay is added to all other wages earned in the workweek and then divided by the total hours worked in that workweek to come up with the regular rate. However, the majority of bonuses and commissions are not paid on a weekly basis and are more often earned and calculated on a monthly or quarterly basis.
If employees earn nondiscretionary bonuses or commissions on a monthly, quarterly, or other non-weekly basis, the amount of the bonus or commission earned must be spread out over the period it was earned by the employee for purposes of the overtime calculation. Employers must apportion the bonus or commission payments to each workweek during the period the amount was earned on a pro rata basis. Once that is done, employers must then recalculate any additional overtime amounts that may be owed over the period the bonus or commissions was earned, and “true up” the amount by paying the employee the difference.
The true up process for overtime or premium payments should be done whenever the bonus or commission payments are made to employees. Any additional overtime or premium amount owed to employees should be paid at the same time as the bonus or commission or in the following pay period. If you have questions regarding the method of calculating the regular rate or “truing up” payments, you should work with legal counsel to ensure employees are being compensated appropriately.
Paid Sick Leave Pay for Hourly Employees Is Also Regular Rate
An often-overlooked provision of California’s paid sick leave law is that the rate of pay for paid sick leave for hourly (non-exempt) employees is also the regular rate, not the straight hourly rate of employees. This is different than how an employer usually pays vacation or PTO time, so it can often slip by even the most seasoned of HR professionals and payroll personnel.
Nonexempt employees must be paid their regular non-overtime hourly rate for the amount of time taken as paid sick leave. To determine the rate of pay for nonexempt employees taking sick leave, the employer may either:
- Calculate the regular rate of pay for the workweek in which the employee used paid sick leave, whether or not they actually worked overtime in that workweek (see above; this is calculated like the “flat sum” bonus), or
- Divide your total compensation for the previous 90 days (excluding overtime premium pay) by the total number of non-overtime hours worked in the full pay periods of the prior 90 days of employment
For exempt employees, paid sick leave is calculated in the same manner the employer calculates wages for other forms of paid leave time (for example, vacation pay or PTO).
This is a good time for employers to review their pay practices and contact their legal counsel to determine what, if any, corrections should be made. Because the ruling is retroactive, there may be an increase in litigation surrounding meal and rest breaks. It is important to be proactive in evaluating risk.
Top Three Tips for Employers in Implementing Remote Work Policies
The COVID-19 pandemic has created many challenges and changes in the workplace, with one of the biggest changes being the increase in remote work for employees. As the economy reopens this year, employers are now able to bring employees safely back to the workplace. However, many employers are also exploring flexible work arrangements that allow their employees to continue to work remotely.
Implementing a remote work policy can be a benefit to employers in retaining employees by allowing flexibility in their schedules and may also help attract new employees that would not otherwise live close enough to the employer’s workplace. Here are three tips employers should follow when implementing a remote work policy for their workplace.
1) Create a written policy for remote work. Having all or part of your workforce working remotely presents new challenges for both employers and employees, thus it is important to lay out the policy clearly in writing. A remote work policy should clearly state which employees are eligible for remote work (and any employees that are not eligible) and the requirements for working remotely, including the ability to still meet the essential functions of the position. Employers can implement a general work from home policy that allows employees to voluntarily work from home when it is necessary for the employee’s convenience. Alternatively, employers can approve remote work arrangements with employees on an individual basis that allow employees to work remotely either full or part time, in which case the employer should enter into a separate remote work agreement with each employee. Either way, the policies should be signed by employees to acknowledge receipt and should include a statement that the employer has the right to revoke the remote work option at any time.
2) Comply with all labor laws for non-exempt employees working remotely. Remote work for non-exempt employees can pose challenges for employers in ensuring that hours worked are tracked properly, all overtime is paid, and adequate meal and rest breaks are provided. Employees must track their time, including meal and rest breaks, as accurately as possible when working remotely just as they would in the workplace. Employers should be clear about the working hours for non-exempt employees to ensure they are not working off the clock. Policies requiring pre-approval for overtime should also be reiterated in the remote work policy. Working hours and breaks can be difficult to track when employees are not present at the worksite, thus it is important to layout the requirements in writing and set up a system of communication with your remote employees.
3) Reimburse employees business expenses where required. Under California law, employers must reasonably reimburse workers for all “necessary” business expenses incurred by the employee in carrying out their job duties. If the remote work policy is voluntary and employees have a designated office at the workplace that they can use anytime, their expenses for remote work will likely not need to be reimbursed since the remote work is voluntary and not “necessary.” However, during the pandemic most employees were required to work remotely and it became necessary for their job. If employees are still required to work remotely under an employer’s policy, employers must reimburse employees for expenses incurred in working remotely including paying all or part of their cell phone and internet bills, providing or paying for office supplies, and even paying for necessary office furniture.
Employers should work with legal counsel to ensure their remote work policies are compliant.
U.S. Supreme Court Rules Against Union Access to Agricultural Employer’s Land
On June 23, the U.S. Supreme Court held that a California regulation allowing union organizers to enter an agricultural employer’s property is unconstitutional. The regulation, on the books since the mid-1970s, requires farms to permit unions to speak with and recruit farmworkers in the hour before and after work and an hour during lunchtime for up to 120 days each year. (Cedar Point Nursery v. Hassid (U.S., June 23, 2021, No. 20-107) 2021 WL 2557070.)
In the case, a strawberry plant nursery and a fruit shipment company sued the California Agricultural Labor Relations Board arguing that the regulation gave farmworker unions an easement to enter and conduct business on their land without authorization or compensation. The Court agreed, holding that the regulation took away the agricultural employer’s right to exclude trespassers from its private property, amounting to a “taking” of company property without “just compensation” in violation of the Fifth Amendment.
With the regulation essentially gone (barring the unlikely scenario that the government or the unions decide to pay farms for access to their workers), labor unions will have to find alternative means to communicate with and recruit agricultural union members. This ruling is hailed as a resounding victory for agricultural employers. For more information about this contact Sarah Hirschfeld-Sussman or anyone on DP&F’s employment team.
End in Sight for Temporary Covid Relief Measures from CA ABC
The California Department of Alcoholic Beverage Control announced today end dates for the temporary relief measures announced in 2020 in response to the Covid-19 pandemic. Depending on the specific regulatory relief in question, the relief granted by ABC, and the expanded privileges granted to many licensees during Covid, will come to an end on either June 30 or December 31, 2021.
To assist licensees during the difficulties that arose from shut downs and restricted operations during Covid, the ABC issued various Notices of Regulatory Relief, advising the industry that certain practices would essentially be temporarily permitted With the end of Covid somewhat in sight here in California, the ABC has now provided the end dates for these measures.
The following Notices of Regulatory relief will be rescinded and no longer effective as of the close of business on June 30, 2021.
- Returns of Alcoholic Beverages
- Retail-to-Retail Transactions
- Extension of Credit
- Drive-Thru Windows for Off-Sale Transactions
- Hours of Operations for Retail Sales
- Delivery Hours Extended to Midnight
- Distilled Spirits Manufacturers Providing High-Proof Spirits for Disinfection Purposes
- Virtual Wine Tastings
- Extension of Regulatory Relief for Club Licenses: Type 50, 51 and 52
The ABC is allowing certain items of regulatory relief to remain in place until the end of the year. The following Notices of Regulatory Relief will thus temporarily remain in place until December 31, 2021 and rescinded immediately thereafter.
- On-Sale Retailers Exercising Off-Sale Privileges
- Sales of Alcoholic Beverages To-Go
- Deliveries to Consumers
- Free Delivery
- Expansion of Licensed Footprint
- On-Sale Licensees without Kitchen Facilities
- “Virtual” Meet the Winemaker or Brewer Dinners
- Renewal of Relief for Charitable Promotions and Sales
- Relief from Type-75 Requirement to Produce 100 Barrels of Beer Annually
These changes will have a big impact on industry members who have spent over a year incorporating some of these practices into their sales, marketing and distribution programs. For example, as of June 30, Virtual Wine Tastings with consumers (where samples of wine were shipped to the consumer for the tasting) will no longer be permitted, although Virtual Winemaker Dinners in conjunction with licensed retailers can continue until December 31.
Absent legislative changes to the ABC Act, none of the regulatory relief measures provided by ABC during Covid will become permanent, so licensees should start preparing now to make these shifts. It should be noted that proposals are already pending in the legislature to keep some of these measures in place for the long term. For example, a bill is currently pending that would allow certain licenses to donate a portion of their proceeds to charities, which was previously prohibited.
For more information on what each of the Notices of Regulatory Relief specifically provided, please visit https://www.abc.ca.gov/law-and-policy/coronavirus19/ or contact Bahaneh Hobel.
Regulating Social Media in the Workplace
The proliferation of social media creates new and difficult situations for employers. Many employers wonder to what extent they can regulate their employee’s social media activities or legally take an employment action based on an employee’s off-duty conduct.
For better or worse, most of us carry smart phones with the capacity to text, email, comment, and upload photos and videos instantaneously. Platforms like Facebook, Twitter, Instagram and YouTube allow us to easily share our personal, and potentially controversial, opinions publicly. In addition, our viewpoints or activities can easily be disseminated by others. Take, for example, an employee is recorded saying something offensive outside of work and the video is published on someone else’s social media account.
Navigating these situations is not simple. While the First Amendment’s right to free speech generally does not apply to actions taken by private employers, there are other privacy laws in California that do. For example, the California Constitution, at Article I, Section 1, gives every citizen a right to privacy, and California Labor Code Section 980 prohibits employers from asking employees for their social media log-ins and passwords or asking them to access their social media accounts on demand. However, depending on the circumstances, once an employee publishes on social media, the right to privacy may be considered waived.
California law, found at Labor Code Section 96(k), protects employees’ rights to engage in lawful off-duty conduct, and provides remedies when employment is adversely affected in violation of these laws. However, off-duty conduct that harms or potentially harms the employer’s business interests or involves a crime may be a valid basis for an employment decision. Since these are tricky situations, the individual facts must be considered and an employer may want to consult with legal counsel before taking action.
We recommend employers adopt a standard policy to handle these situations. Below are some guidelines to keep in mind when adopting a social media policy.
What Employers Can Regulate
Employers can restrict an employee’s social media behavior in the following ways:
- Use of personal social media during work time or on the employer’s equipment (company computers, phones)
- Use of the employer’s name, logos, brand names, slogans or trademarks and appearing to speak on behalf of the employer
- Communications about confidential or proprietary employer information including non-public information that may be valuable to competitors, such as client lists, product information, and pricing
- Posts about co-workers, supervisors, or the employer, competitors or suppliers that are vulgar, obscene, threatening, harassing, libelous, or discriminatory based on a protected class (but be careful about regulating negative posts made in the context of discussing terms and conditions of employment protected by the National Labor Relations Act, discussed below)
- If the employee chooses to identify themselves as an employee of the employer on any social media network, you can require them to state in clear terms that the views expressed on the social media network are theirs alone and that they do not necessarily reflect the views of the company
- Unlawful conduct, even when it occurs off-duty
What Employers Can’t Regulate
Employers should not prohibit or restrict the following:
- An employee’s communications about wages, hours, or other terms and conditions of their employment as these may be protected under the National Labor Relations Act
- Disclosure of facts related to sexual harassment in the workplace, as these may be protected depending on the circumstances
- An employee’s communications about their political beliefs, political associations or affiliations, engaging or participating in politics, and/or becoming candidates for public office
Before taking any adverse action against an employee based on a social media post or other off-duty conduct, employers should consider the following:
- Does the activity negatively affect the employer’s business? How?
- Does the activity violate the employer’s social media policy?
- Is the employer enforcing the policy uniformly? For example, have other employees posted similar content or about similar topics without being disciplined?
- Can the employer legally take action, or is the activity in question protected under the law? Consult legal counsel if you have any doubts.
- How did the employer learn of the posting or conduct? Did they learn in a way that could be considered an invasion of privacy?
- How will taking action affect employee morale?
- How will the action be perceived by the employer’s customers, community and the public if it is publicized?
Taking action based on an employee’s off-duty conduct or social media activity can be challenging for employers, and there are many factors to consider. Employers should think about the legal risks involved and adopt a legally compliant policy. As always, we recommend employers work with legal counsel when handling these sensitive issues.
ABC Launches New Online Portal for Mandatory Alcohol Beverage Server Training
The California Department of Alcoholic Beverage Control (ABC) has launched a new Responsible Beverage Service (RBS) portal to provide mandatory alcohol beverage service training and certification.
Under the Responsible Beverage Services Training Act, starting on July 1, 2022, all California licensees with on-premise consumption privileges (including bars, restaurants, and wineries, breweries, and distilleries with tasting rooms) must require all alcohol beverage servers and managers to attend responsible beverage service training. All servers and managers in licensees’ employment as of July 1, 2022, must attend this training and pass an online RBS exam by August 30, 2022. If any servers or managers were hired after July 1, 2022, then they must attend training and pass the RBS exam within 60 days after their hire date.
The ABC designed the RBS portal to be a one-stop shop for servers, managers, licensees, and RBS trainers and provides customized access based on user roles. Servers and managers can use the RBS portal to register as servers with the ABC, search for approved training providers, and, after completing training, take an alcohol server certification exam on the RBS portal. Licensees can soon use the RBS portal to confirm server certification and maintain online records. In addition, prospective RBS trainers who will provide training to servers on safe and responsible beverage service can submit their applications using the RBS portal.
The purpose of the mandatory training is to provide licensees, servers, and managers with tools and knowledge to promote responsible consumption and community safety and to reduce underage drinking, including by educating trainees on alcohol beverage control laws and on the impact of alcohol on the body.
All licensees with on-sale privileges should become familiar with the RBS portal and begin preparing their servers and managers to meet the training and certification deadlines above. Although the RBS training does not become mandatory until July 1, 2022, servers may use the RBS portal to search for RBS training providers and take the online certification exam now. There is no harm in fulfilling RBS training and certification requirements before July 1, 2022, so servers may want to register and complete their requirements on the RBS portal sooner rather than later. The RBS portal is available here. For any specific questions, please reach out to Bahaneh Hobel (Head of Alcohol Beverage Law) or Michael Mercurio (Law Clerk).
Governor Newsom Signs New Employee Recall Law (SB-93) – Effective Immediately
SB-93 was signed by Governor Newsom on April 16, 2021 and is effective immediately. The new law requires certain employers to recall eligible workers who were laid-off for reasons related to COVID-19 if their prior positions become available. Here are the key parts of the law employers need to know:
- Covered Employers: SB-93 only applies to employers who operate an “enterprise,” which is defined as a “hotel, private club, event center, airport hospitality operation, airport service provider, or the provision of building service to office, retail, or other commercial buildings” regardless of the number of employees.
- Hotel means a building offering overnight lodging to the public with 50 or more guest rooms, or suites of rooms.
- Private club means a membership-based business that operates a building with 50 or more guest rooms, or suites of rooms, for overnight lodging for members.
- Building service means janitorial, building maintenance, or security services for office, retail, or other commercial buildings.
- Laid-Off Employees: Laid-off employees are eligible to be offered employment if they were: (1) employed for six months or more from January 1, 2019 to January 1, 2020, full-time or part-time; and (2) most recently separated from active service due to a “reason related to the COVID-19 pandemic.” Reasons related to COVID-19 include: a public health directive, government shutdown order, lack of business, a reduction in force, or other economic, non-disciplinary reason due to the COVID-19 pandemic.
- Requirements: Covered employers must offer laid-off employees open positions that (1) become available after April 16, 2021, and (2) are the same or similar to the laid-off employee’s position at the time of the employee’s most recent layoff. Employers must make an offer within five business days of establishing the position, and give the employee five business days to accept or decline the offer.
- The offer must be made in writing and delivered in person or by mail to the employee’s last known address, and by email and text message if the employer has that contact information.
- If more than one laid-off employee qualifies for a position, the employer must offer the position to the employee with the longest length of service, which is the total of all periods the employee worked for employer since their hire date including time when they were on leave or vacation.
- If the laid-off employee is not qualified for the open position, the employer must provide written notice within 30 days stating the length of service of the individual who was hired and the reasons for the employer’s decision not to hire the laid-off employee.
- Record Retention: For each laid-off employee, employers must maintain the following records for three years from the date of the written notice of layoff:
- The employee’s full legal name
- The employee’s job classification at the time of separation from employment
- The employee’s date of hire
- The employee’s last known residential address
- The employee’s last known email address
- The employee’s last known telephone number
- A copy of written layoff notices provided to the employee, and
- All records of communications between the employer and the laid-off employee concerning offers of employment made pursuant to SB-93
The law allows laid off employees to file a complaint with the Division of Labor Standards Enforcement (“DLSE”) for violations of SB-93, and employers who violate the provisions of the law may be subject to penalties. The full text of the law can be found here.
Spring Employment Law Update
Join firm co-managing partner, Jennifer Douglas, along with Marissa Buck and Sarah Hirschfeld-Sussman, on Wednesday, April 7th, 10:00 AM – 12:00 PM for a complimentary webinar on current employment law issues.
In particular, the webinar will address recent changes to employment laws affecting California employers, and COVID-19 issues including vaccination. This webinar is open to all clients.
DP&F’s Employment Law practice advises firm clients in all manner of employment issues including wage and hour, discrimination, reasonable accommodation, leaves of absence, and implementing state and federal regulations.
The team often analyzes legal risks associated with hiring, disciplining and firing in order to counsel clients with these employment decisions. Although counseling is the key to DP&F’s employment practice, the team includes trained and experienced litigators who protect firm clients’ interests when litigation becomes necessary.
The employment law team recognizes the importance human resources plays in every business and an in-depth understanding of human resources enhances the team’s ability to counsel their clients in all areas of employment law.
Employer Focused Summary of American Rescue Plan Act and California COVID-19 Supplemental Paid Sick Leave Act
The American Rescue Plan passed and signed into law by President Biden on March 11, 2021 extends and resets the FFCRA after its expiration on March 31. The extension and reset goes into effect on April 1 through September 30, 2021.
In addition, Governor Newsom signed a new COVID-19 Supplemental Paid Sick Leave Act (SB-95) into law this past Friday, March 19 which is retroactive to January 1, 2021 and extends through September 30, 2021.
The relevant portions of the two laws are summarized below.
Federal: American Rescue Plan Act (“ARPA”)
- <500 Employees: The provisions of the ARPA only apply to employers with less than 500 employees.
- Additional Leave as of April 1: Amount of FFCRA leave available is reset to up to 80 hours (10 days) of emergency paid sick leave (“EPSL”) and up to 12 weeks of emergency FMLA leave (“EFMLA”).
- Leave taken prior to April 1 will not count toward the reset cap
- Providing Leave Not Required: Employers are not required to provide paid leave, but if they choose to they will receive payroll tax credits for doing so until September 30, 2021.
- New Qualifying Reasons for Leave: ARPA expands the qualifying reasons for taking leave under both the EPSL and EFMLA to include:
- Seeking or awaiting results of COVID-19 test after an exposure or at an employer’s request;
- Vaccination appointments;
- Conditions or complications related to receiving the COVID-19 vaccine.
- Changes to Paid Leave for EFMLA: ARPA expands the amount of paid leave available under the EFMLA as follows:
- Eliminates the requirement that the first 10 days of EFMLA is unpaid;
- Increases the total tax credit cap for EFMLA from $10,000 to $12,000 per employee.
- Additional Qualifying Reasons and Pay for both EPSL and EFMLA: Under the ARPA, both EPSL and EFMLA can be taken for the following qualifying reasons (in addition to the new reasons listed above). Note that this is an expansion of the EFMLA leave, which was previously only allowed for childcare purposes.
- Additional Qualifying Reasons and Pay for both EPSL and EFMLA: Under the ARPA, both EPSL and EFMLA can be taken for the following qualifying reasons (in addition to the new reasons listed above). Note that this is an expansion of the EFMLA leave, which was previously only allowed for childcare purposes.
- Qualifying Reasons Related to the Employee’s Own Health:
- Subject to quarantine or isolation order due to COVID-19;
- Advised to self-quarantine by heath care provider due to COVID-19;
- Experiencing symptoms of COVID-19 and seeking medical diagnosis.
- Under the EPSL this is paid at the employee’s regular rate of pay, up to $511/day (capped at $5,110) total; under the EFMLA it is limited to 2/3 of the employee’s regular rate of pay, up to $200/day (capped at $12,000 total)
- Qualifying Reasons Related to Employee’s Need to Care for others:
- Caring for a family member who is subject to quarantine, or has been advised to self-quarantine;
- Caring for a child whose school or child care is closed due to COVID-19.
- Under both EPSL and EFMLA this is paid at 2/3 employee’s regular rate of pay, up to $200 per day.
- Qualifying Reasons Related to the Employee’s Own Health:
- New Non-Discrimination Rule: The new law prohibits the tax credit for employers that discriminate in giving FFCRA paid leave by favoring highly compensated employees, full-time employees, or employees on the basis of tenure with the employer. If employers do not make FFCRA paid leave available to all employees without respect to their compensation level, job category or seniority, they could be denied the tax credit.
California: SB-95 – COVID-19 Supplemental Sick Leave
- 26+ Employees: The law requires employers with 26 or more employees to provide supplemental paid sick leave for COVID-19 reasons. The law does not apply to employers with 25 or fewer employees, however these employers are covered under the federal ARPA discussed above. Employers with 500+ employees will be covered by SB-95 and not by the federal ARPA.
- Retroactive to January 1 and through September 30: The requirement to provide the paid sick leave will take effect on March 29 (10 days after law enacted), at which point it will be retroactive to January 1, and extend until September 30, 2021. This means that if you did not provide paid sick leave for qualifying reasons as of January 1, but instead provided unpaid leave, you will need to provide pay for that leave retroactively by the next full pay period to comply with this law (note that you may qualify for FFCRA tax credits for doing so).
- Reasons for Leave: Employers must provide supplemental paid sick leave for employees that are unable to work or telework due to any of the following reasons:
- Subject to quarantine or isolation order or guidelines due to COVID-19;
- Advised to self-quarantine by heath care provider;
- Attending vaccine appointment;
- Experiencing symptoms of COVID-19 and seeking medical diagnosis;
- Caring for a family member who is subject to quarantine, or has been advised to self-quarantine;
- Caring for a child whose school or child care is closed or unavailable due to COVID-19.
- Amount of Leave: Full-time employees (work at least 40 hours per week on average) are entitled to 80 hours of supplemental paid sick leave. Other employees are entitled to the average amount of hours they normally work over a 14-day period.
- Amount of Pay: Employees get their regular pay during leave, up to a maximum of $511 per day, and $5,110 total.
- Separate from Sick Leave on Wage Statement: The COVID-19 Supplemental Paid Sick Leave is a separate entitlement from other paid sick leave provided by the employer, and must be listed separately on the written notice or wage statement provided to employees.
- Model Notice Forthcoming: The Labor Commissioner shall make a model notice available by the end of this week that employers can send to employees.
If you have questions or need further information please feel free to reach out to DP&F’s Employment Team, Jennifer Douglas, Marissa Buck and Sarah Hirschfeld-Sussman. This post is provided for general informational purposes only and should not be construed as legal advice. The various governmental agencies tasked with enforcing these laws will likely publish FAQs addressing some of the uncertainties that may develop as to how these laws will work in practice. We encourage you to check with those agencies frequently for regulatory guidance.
USPTO Celebrating Women in Wine and IP
The U.S. Patent and Trademark Office is celebrating Women’s History Month by highlighting the numerous and remarkable accomplishments of women in all fields. To celebrate the many successes of women in the world of wine, the USPTO is offering a free event on March 24, 2021, that will showcase the stories of women working at the integral intersection of wine and intellectual property. Speakers will include Katja Loeffelholz of DP&F and Elizabeth Schneider, host of the podcast Wine for Normal People. Join to learn more about these women and their efforts, often behind the scenes, as they strive to keep the wine world swirling. Free registration at https://www.eventbrite.com/e/wine-ip-women-innovators-in-the-wine-industry-registration-143884760191?aff=ebdssbonlinesearch
Prop 65 Warnings Streamlined for Alcohol Beverages Sold Online
California’s Proposition 65 warning regulations were recently amended to modify the delivery of the required state warnings for alcoholic beverages. The modified regulations somewhat ease compliance, as they will now allow for the required warning to be provided to the customer electronically for alcoholic beverages ordered online or via catalog. However, they muddle the standard for other orders that are placed for delivery.
Proposition 65, adopted in 1986, generally requires in California for a statement to be provided before the purchase of products that contain certain chemicals that may cause cancer or reproductive toxicity. Stores are generally required to post signs along-side listed products. The warning methods and language are product-specific, but there is also a requirement that, for products that are sold on line, the warning be provided via electronic device to the customer, without requiring the purchaser to seek out the warning, prior to or during the purchase of the product. Under the existing regulations for internet purchases of products, including alcoholic beverages, the warning or a clearly marked hyperlink using the word “WARNING” must be provided on the product display page or by otherwise prominently displaying the applicable warning to the customer prior to completing the purchase on the website. This rule is not changing.
In addition to the warning on the website, a copy of the alcohol beverage exposure warning was also required to be included on or in all alcohol packages when delivered in California. This portion of the rule is changing, making it easier for online orders, but more convoluted in the case of orders placed other than via the internet or catalog.
Going forward, for an order that is to be delivered to customers in California at a location other than the point of sale that is not made online or from a catalog – for example, for wines ordered in a tasting room for delivery to the customer at another location within California – the product-specific warning must be provided prior to or during the purchase of the wines. The regulation does not specify how the warning must be provided however, but presumably notice should be provided by signage similar to in-store sales, a printed warning on a sales document, or – although not spelled out specifically in the regulation –verbally for phone orders. The regulation is specific though that the warning be provided prior to or at the time of the purchase – not at the time of delivery as was the case previously.
While such transactions are now less clear, with respect to internet or catalog orders of alcoholic beverages, the warning has gotten simpler to deliver. The prior method of a warning on or in the package is still allowed, but the rule has been streamlined to instead allow the required warning to be included in an email or text message with the purchase confirmation rather than having to be printed and included with the shipment. Providing the warning as part of the electronically delivered receipt or confirmation should simplify shipping and can potentially reduce liability for inadvertent warning omissions in shipments to California.
All businesses that employ more than 10 employees that produce or sell alcoholic beverages to consumers in California are subject to Proposition 65 and must be in compliance with the modified regulations by April 1, 2021. Because the definition of “employee” under the regulations is imprecise, we recommend that all applicable Proposition 65 warnings be complied with, even if a winery or retailer has fewer than 10 employees.
For more on this and related issues, please contact Josh Devore.
TTB Adds New Standards of Fill for Wine and Distilled Spirits
On December 29, 2020, the U.S. Tax and Trade Bureau (TTB) published a final rule in the Federal Register that, among other things, expands the number of available standards of fill (or container/bottle sizes) for wine and distilled spirits, effective immediately.
Under the final rule, wine may now use the following new standards of fill: 200 mL, 250 mL, and 355 mL. No previously existing standards of fill were removed. As a result, the complete list of available standards of fill for wine are: 50 mL, 100 mL, 187 mL, 200 mL, 250 mL, 355 mL, 375 mL, 500 mL, 750 mL, 1 L, 1.5 L, and 3 L. In addition, wine can also be bottled in containers larger than 4 L if such containers are filled and labeled in quantities of whole liters (e.g., 4L, 5 L, 6 L).
Similarly, distilled spirits may now use the following new standards of fill: 700 mL, 720 mL, 900 mL, and 1.8 L. No previously existing standards of fill were removed. As a result, the complete list of available standards of fill for distilled spirits are: 50 mL, 100 mL, 200 mL, 375 mL, 700 mL, 720 mL, 750 mL, 900 mL, 1 L, 1.75 L, and 1.8 L. In addition, distilled spirits in metal containers that are generally shaped and designed like a can (i.e., cannot be readily reclosed after opening), can be filled at the following sizes: 50 mL, 100 mL, 200 mL, and 355 mL.
Furthermore, the final rule codifies the TTB’s current policy that distilled spirits may be labeled with the U.S. equivalent measurement in addition to the mandatory metric measurement, and that malt beverages may be labeled with the equivalent metric measure in addition to the mandatory U.S. measure.
The TTB expressly declined to eliminate standard of fill requirements generally and also declined to adopt an administrative approval system that would have allowed the TTB to approve additional container sizes. The TTB also noted, however, that it was committing to a future rulemaking proposing new standards of fill for wine of 180 mL, 300 mL, 360 mL, 550 mL, 720 mL, and 1.8 L, in accordance with the U.S.-Japan Free trade Agreement.
This final rule provides greater flexibility for both importers and domestic producers. Importers may now import into the U.S. certain bottle sizes that are already standard in the global marketplace and approved in other countries. Likewise, domestic producers now have more options for bottling or canning their products. In particular, the newly available 250 mL and 355 mL container sizes for wine make canned wine more viable; these can sizes are readily available since they are already mass-produced for beer and soda, and cans are often preferable to glass or large containers at certain venues or occasions.
NEW Cal/OSHA Emergency Standards for COVID-19 Prevention
On November 30, the Office of Administrative Law reviewed and approved the Emergency Standards for COVID-19 Prevention proposed by the California Occupational Safety and Health Standards Board (Cal/OSHA). The new rule goes beyond Cal/OSHA’s guidance issued to date, and employers must comply immediately.
Cal/OSHA has indicated it plans to take enforcement action based on the new standards. As a result, employers need to critically review any existing COVID-19 policies and procedures and bring them in line with these new regulations.
Which employers must comply?
The emergency rule applies to all California employers and employees except:
- workplaces with one employee who does not have contact with others;
- employees that are working from home; and
- employees subject to Cal/OSHA’s Aerosol Transmissible Diseases standard (such as healthcare facilities, nursing homes, paramedics and emergency responders).
Written COVID-19 Prevention Program
Covered employers must maintain a written COVID-19 Prevention Program, which can be integrated into the employer’s IIPP or maintained in a separate document. The requirements of a written COVID-19 Prevention Program are extensive and will need to be tailored to each employer’s circumstances.
An employer’s COVID-19 Prevention Program must include the following categories of information summarized below. Employers should review the regulations for more details and reach out to legal counsel with any individual concerns.
1. System for Communicating
OSHA requires employers to communicate with employees about certain topics, including asking employees to report any symptoms, exposures or hazards in the workplace, providing information about access to testing and COVID-19 hazards, policies and procedures.
2. Identification of COVID-19 Hazards
Employers have an obligation to identify, evaluate and respond to hazards. The Prevention Program must include:
- A process for screening employees for COVID-19 symptoms (which can include self‑screening at home prior to reporting to work)
- Policies and procedures to respond to COVID-19 cases, taking into account a workplace-specific evaluation of potential COVID-19 hazards
- Strategy for maximizing quantity of outdoor air when possible and increasing filtration efficiency
3. Investigating and Responding to COVID-19 Cases
Employers must have an effective procedure to investigate COVID-19 cases in the workplace, including a procedure for verifying cases, collecting information and contact tracing to determine potential exposure to others.
An employer must give notice of potential COVID-19 exposure within one business day to any employees, contractors or other employers who may have been exposed without revealing personal identifying information. (This is the same requirement as AB-685.)
Cal/OSHA requires that employers offer COVID-19 testing, at no cost to employees during their working hours, if they have had a potential exposure in the workplace, and inform them of any benefits they may be entitled to (such as workers’ compensation and protected leave laws).
4. Correction of Hazards
Employers must implement effective policies and/or procedures for correcting unsafe or unhealthy conditions, work practices, policies and procedures in a timely manner based on the severity of the hazard.
Employers must provide training and instruction on the employer’s policies and procedures, how COVID spreads and how to minimize the spread using various methods.
6. Physical Distancing
The standard requires that employees must be separated by at least six feet, unless the employer can demonstrate that such separation is not possible, in which case employees should be as far apart as possible.
7. Face Coverings
Employers must provide face coverings and ensure they are properly worn by employees (over the nose and mouth when indoors, or outdoors and less than six feet away) with limited exceptions.
8. Other Controls and PPE
Based on the employer’s workplace environment, the employer must put controls and procedures in place to minimize transmission, such as disinfection and cleaning protocols, handwashing stations, erection of barriers and usage of PPE.
9. Reporting and recordkeeping
Employers must follow certain recordkeeping and reporting requirements, including reporting any COVID-19 case that results in the hospitalization or death of any employee to Cal/OSHA, and documenting steps taken to implement the COVID-19 Prevention Program and comply with Cal/OSHA regulations.
Employers must record and track all COVID-19 cases with the employee’s name, contact information, occupation, location where the employee worked, the date of the last day at the workplace and the date of a positive COVID-19 test, and this information shall be made available to employees with personal identifying information removed.
10. Exclusion of Cases
Employers must take steps to ensure COVID-19 cases are excluded from the workplace until return to work criteria is met.
Importantly, the regulation specifies that excluded employees must continue to receive earnings, seniority and other rights and benefits of employment as if they had not been removed from their job, with some exceptions.
11. Return to Work criteria
Generally, employees with symptoms cannot return to work until:
- At least 24 hours have passed since a fever of 100.4 or higher has resolved without the use of fever-reducing medications;
- COVID-19 symptoms have improved; and
- At least 10 days have passed since COVID-19 symptoms first appeared.
Employees without symptoms who test positive cannot return to work until a minimum of 10 days have passed since the date of specimen collection of their first positive COVID-19 test.
A negative COVID-19 test shall not be required for an employee to return to work. This has been interpreted by most in the community to mean that employers cannot require a negative test in order to return to work.
There is different return to work criteria when an employee is subject to an isolation or quarantine order, or when an employee’s removal would create an undue risk to community health or safety.
Response to Multiple Infections & Outbreaks
The Cal/OSHA regulations provide requirements in the event a workplace suffers from multiple COVID-19 infections or an “outbreak.”
An “outbreak” occurs (under the Cal/OSHA regulations and according to the California Department of Public Health) if there are three or more COVID‑19 cases within a 14-day period, or if a local health department identifies a workplace as an outbreak location. In the event of an “outbreak,” the employer must:
- Provide immediate no-cost testing to all employees at the exposed workplace who were present during the period of outbreak, and then another test one week later. Then, employers must provide continuous testing of employees who remain at the workplace at least once per week, until no new COVID cases are detected in the workplace for a 14-day period;
- Exclude any cases and exposed employees from the workplace;
- Investigate and determine possible workplace factors, implement any changes necessary, and document any steps taken;
- Notify the local health department within 48 hours after the employer discovers an outbreak . (This is the same timeframe as required by AB-685. Note that AB-685, and the regulation described above also requires employers notify any employees within one business day that they may have been exposed if they were on the worksite during the infectious period.)
Response to Major Outbreaks
The Cal/OSHA regulations provide requirements in the event a workplace suffers from a “major outbreak” which occurs when there are 20 or more COVID-19 cases in a 30-day period. In such instances, employers must provide testing at least twice weekly until there are no new cases detected in a 14-day period. In the event of a major outbreak, in addition to taking all the same steps for an “outbreak,” an employer must conduct a thorough investigation and take preventative steps such as installing high efficiency air filters and evaluating whether to halt some or all operations temporarily.
Requirements for Employer-Provided Housing & Transportation
The new Cal/OSHA regulations provide specific requirements for employers that have employer-provided housing and transportation, including prioritizing assignment of housing and transportation, cleaning and disinfection protocols, hand hygiene, physical distancing and the use of face coverings.
For more details, a full copy of the approved Cal/OSHA regulations can be found here.
HOW THE PASSING OF PROPOSITION 24 WILL CHANGE THE CCPA
In 2018, California adopted the most extensive privacy provisions in the United States, the California Consumer Privacy Act of 2018 (CCPA.) Emulating provisions adopted in Europe’s General Data Protection Regulation (GDPR), the CCPA gives California consumers of certain, generally larger, businesses rights relating to the use and sale of personal information like names, addresses or internet purchasing history. In general, the CCPA provides consumers with the right to learn what categories of personal information are collected or sold; to request businesses delete their personal information or opt-out of the sale of their personal information; and creates liability for failing to reasonably protect consumers’ personal information.
California residents voted 56%-44% in the November 2020 election to amend and expand the CCPA through the passage of Proposition 24, the California Privacy Rights Act (CPRA). Proposition 24 imports more of the GDPR’s provisions, providing additional consumer privacy rights over sensitive information. It also expands penalties established through the CCPA, and creates a new agency in California to oversee and enforce consumer data privacy laws. Most of the provisions of CPRA go into effect on January 1, 2023, although the creation of the new state agency and requirements for developing new regulations will immediately go into effect. Businesses must comply with the regulatory provisions of the CCPA until those new regulations are in place.
Most notably, the proposition 1) creates a new administrative enforcement agency and eliminates the existing 30-day period to cure CCPA violations to avoid penalties; 2) slightly narrows which businesses are subject to the consumer data privacy requirements; and 3) provides customers with new data privacy rights, including limiting the sharing of personal data.
Changes to Administrative Enforcement Procedures and Penalties
Under the existing CCPA, a business can be penalized for violation of the regulations only if it does not cure any alleged noncompliance within 30 days after being formally notified by the California Attorney General’s office. Prop 24 creates a separate agency to enforce the CPRA – the California Privacy Protection Agency — and eliminates the existing 30 day opportunity to cure compliance oversights (but provides instead for discretion in whether to impose penalties or allow time to cure), effective January 2023. As a result, all businesses subject to the CPRA will need to be in compliance with the CPRA to avoid the potential issuance of administrative fines once the provisions go into effect in 2023. The new California Privacy Protection Agency will be responsible for investigating violations and assessing administrative penalties, although violations will still be subject to enforcement actions brought by the Attorney General as well. Among other changes, Prop 24 also increases the penalty up to $7,500 on businesses that violate the consumer privacy rights of minors.
Changes which Businesses Must Comply with Consumer Data Privacy Laws
Proposition 24 changes which type of businesses will be subject to California’s consumer data privacy requirements. To be subjected to the CPRA, a business must either:
- Derive at least 50% of its annual revenue from selling or sharing (as opposed to just selling under CCPA) the personal information of California consumers;
- Have gross revenue over $25 million (unchanged); or
- Buy, sell, or share the personal information of more than 100,000 (increased from 50,000 under CCPA) California consumers/households. (Helpfully, the standard now counts only California consumers or households; the CCPA also counted “devices.”)
Other notable changes include:
- Delays the applicability of the CCPA to personal information of a business’s own employees and other business-to-business communications until 2023.
- Requires rulemaking for the protection of trade secrets from disclosure as a result of a consumer request.
- Expands consumer “right to know” requests beyond the prior 12-months, beginning with data collected after January 1, 2022.
IMPACT OF CALIFORNIA’S NEW MARKETPLACE FACILITATOR ACT ON ALCOHOL BEVERAGE LICENSEES
During all the chaos that has been 2020, alcohol beverage licensees and third party providers may have missed the enactment of a new law that actually went into effect near the end of 2019. The Marketplace Facilitator Act (the “Act”) has changed the rules and regulations regarding which businesses must collect and remit sales tax for transactions occurring on third party “marketplaces,” which include electronic platforms, apps or websites where a marketplace seller or third party provider sells or offers for sale tangible merchandise for delivery in California In brief, the Act provides that third party providers, referred to as marketplace facilitators, must collect and remit the sales tax for each sale facilitated through the third party provider’s website. The Act applies to marketplace facilitators that either (1) have physical presence in California or (2) have economic nexus with California (i.e. annual sales of tangible personal property delivered to California consumers greater than $500,000).
This new regulation may seem unusual and contrary to ABC requirements for alcohol beverage licensees, who are the actual seller of the alcohol beverage products on a third party provider website. Typically, where alcoholic beverages are sold on a third party provider’s website or marketplace, the third party provider of alcohol beverages does not hold a license from the California Department of Alcoholic Beverage Control (“ABC”). Because only licensees may sell alcoholic beverages and exercise license privileges, including sales and controlling all funds arising from such transactions, the third party provider would not be considered the seller of the alcoholic beverages since it does not hold a license. All sales of alcoholic beverages are made by the licensee. This is problematic since the Act defines the third party provider as the seller.
The ABC recently addressed this contradiction in an industry advisory. Finding that the collection and remittance of sales tax does not constitute sharing in the profits or revenue from the sale of alcoholic beverages, the ABC stated that the third party provider could be the seller for tax purposes, while the licensee would be the seller of the alcoholic beverages for purposes of exercising license privileges, ABC licensees must continue to keep control over the revenue from sales facilitated by the marketplace facilitator on the marketplace, but may segregate the sales tax component of the transaction and provide those funds directly to the marketplace facilitator for remittance.
As the seller under the Act, a third party marketer either located in California or with nexus in California must therefore register with the California Department of Tax and Fee Administration (“CDTFA”) for a Seller’s Permit or Certificate of Registration, and report and pay sales tax on all retail sales of alcoholic beverages sold on its platform for delivery to California customers. A licensee selling alcohol on a third party marketplace for delivery to consumers in California will also report such sales as part of its total sales to the CDTFA, but would claim an “other” deduction since no tax is owed. Note that these new provisions only apply to sales made for delivery in California, and thus a third party provider would not collect and remit taxes for sales made by alcohol beverage licensees for delivery outside of California.