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.

For questions about this or other employment matters contact DP&F’s Employment Team, Jennifer Douglas, Marissa Buck or Sarah Hirschfeld-Sussman.

 

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.

If you have any questions about this or any other employment related matters, please contact DP&F’s employment team, Jennifer Douglas, Marissa Buck or Sarah Hirschfeld-Sussman.

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.

Click Here to Register

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.
  • 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.

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.

5. Training

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.

This update is provided for informational purposes only. If you need specific legal guidance, please contact Jennifer Douglas, Marissa Buck or Sarah Hirschfeld-Sussman to discuss.

Highlights of Napa County’s Updated Shelter in Place Order Including Cloth Face Covering Requirement

On May 7, 2020, Napa County issued an Order modifying the prior Shelter in Place Order that was issued on April 22, 2020. The full text of the Order can be found here, and the updated FAQs are here.

Here are the key changes in the new Order:

  • The Order requires wearing cloth face coverings when inside places of business and in workplaces when interacting with any person where six feet of physical distancing cannot be maintained.
    • A Face Covering is Not Required When: at home; in your car alone or solely with members of your household; exercising outdoors provided you are staying at least six feet apart from anyone who is not a member of your household (but it is recommended that you have a face covering with you and readily accessible); when eating or drinking.
    • Who Should Not Wear a Face Covering: Children 6 years old or younger may not need a face covering and children under 2 should not wear one;  anyone who has trouble breathing or is unable to easily remove a face covering without assistance; anyone who has been advised by a medical professional not to wear a face covering.
    • Essential businesses must require their employees wear a face covering in any area where others may be present, even if there are no customers or members of the public present at the time. Essential businesses should inform customers about the requirement of wearing a face covering, including posting signs at the entrance to the store or facility.
    • All workers operating public transportation, or operating other types of shared transportation are required to wear a face covering when at work in most settings.
    • Workers doing minimum basic operations, like security or payroll, essential infrastructure work, or government functions should wear a face covering when six feet of physical distance cannot be maintained.
    • For more information on cloth face coverings, including links to guidance on how to make your own mask, see the Napa County requirement here.
  • The Order states that businesses will be permitted to reopen within the State of California’s framework that identifies four-stages to reopening.
    • Non-essential businesses will be permitted to reopen according to the State’s four-stage framework. It is anticipated that Early Stage 2 non-essential businesses may be able to open as early as Friday, May 8, 2020. The list of those businesses, and how they will be allowed to operate, will be provided by the State.
    • Counties may be able to move into Deep Stage 2, but only after the State Public Health Officer provides criteria and procedures for doing so, as well as the template for submitting a “readiness plan” that requires self-certification by the Public Health Officer and approval by the Board of Supervisors.
    • Stage 3 non-essential businesses will not be able to reopen until the Governor determines, on a statewide basis, that counties can move into Stage 3. The Governor has also said this stage is months away.
  • The Order allows drive-in activities that can comply with physical distancing requirements.
  • All construction is now allowed but it must comply with Construction Site Requirements to maintain social distancing and sanitation (see Appendix B to the Order).
  • The Order allows outdoor recreation sports that can comply with physical distancing requirements; however, person-to-person contact sports are still prohibited.
    • The list of approved outdoor recreation activities can be found here.
    • Golfing, use of tennis courts, and use of swimming pools (public and semi-private) are permitted as long as they are used in compliance with social distancing protocols. (The specific, detailed requirements for golf courses remain the same – see Appendix C of the Order).
    • You can exercise outdoors if you will not be in close contact with other people or using equipment that other people outside your household have touched. Fitness centers, gyms, recreational centers, fitness equipment at parks, climbing walls, basketball courts, and other shared sports facilities remain closed.
  • Comment on the Short-Term Lodging Industry
    • The Napa County Public Health Officer has advised the lodging industry that reservations beginning on and after June 1, 2020 may be accepted. However, this is not a guarantee that the reservations can be honored, and short-term lodging businesses should inform customers that their reservations will be cancelled if the local and/or state Shelter-At-Home orders continue to prohibit short-term lodging at that time. Further, lodging businesses should consider how they will provide appropriate sanitation and enforce physical distancing protocols when they are allowed to reopen.
    • The Compliance Task Force will not engage in enforcement activities for lodging businesses that are currently accepting reservations for dates beginning June 1, 2020 and beyond, but making new reservations for dates in May is still prohibited and subject to enforcement.

For more information please contact Marissa Buck.

Managing Onsite Employees During COVID

Many of you have continued to have employees work at your facility and others are preparing to re-open and/or have employees return to the workplace.  There are many key issues to consider in having onsite employees and we have attempted to address the majority of them below. Note that the specific requirements will vary depending on your work environment (i.e. an office setting versus a warehouse or production facility) and if you have specific questions you should contact us directly to discuss.

  • Essential Workers Only
    • You should continue to limit employees in the workplace to those who are essential to the onsite business needs. If you have employees returning to the workplace, make sure you know who is returning and when – if you have too many employees coming back on the same day it could be unsafe. It may be helpful to stagger shifts so you have less employees coming and going at the same time.
    • If possible, you can phase in the return of employees but make sure to use non-discriminatory factors in determining who comes back when, such as seniority.
    • To the extent you are able to keep all or part of your workforce remote you should continue to allow employees to work remotely. It is also possible to alternate work from home weeks or days so that you have less employees at the workplace at one time.
    • Continue to stress to employees that they should not come to work if they are sick and to notify the appropriate person if they have been exposed to someone with COVID-19.
  • Refusal or Inability to Return to Work
    • Determine how to handle employees who are either unable or unwilling to return to work, whether it is because of fear, health concerns, family obligations, or employees that remain quarantined due to COVID-19 exposure.
    • These will need to be handled on a case-by-case basis. It may be helpful to create a company policy beforehand on how to handle employees who are not in a protected category, but only if you are able to consistently follow that policy.  At the very least designate one person to address these concerns so that consistency is more likely to be obtained.
    • For employees in high risk groups, consider allowing them to stay remote or on leave and if they are able to return to work consider if additional PPE or other protections are available (i.e. a separate workstation away from other employees, fewer days in the workplace, etc.). 
  • Workplace Safety
    • Social Distancing Protocol: As we provided in an earlier update, all of the Bay Area counties have issued required Social Distancing Protocols that need to be posted at the worksite. A copy of the sample protocol is attached to all relevant County Shelter in Place Orders and they are available in Spanish.  If you don’t already have one, you need to create a protocol and post it where employees can see it when they return to the workplace. It is also helpful to circulate the protocol and any other updated safety policies and procedures to employees before the return to the workplace so employees know what to expect. (If you need us to resend the April 1 email let us know).
    • PPE: Depending on the work environment and the Shelter in Place Order for your County, you may need to provide PPE for your employees, such as gloves, masks, face shields, or goggles. Employers are required by OSHA to provide and pay for PPE. Increasing the availability of hand sanitizer throughout the workplace and sinks with soap is also helpful.
    • Additional Resources: CDC guidance on cleaning and disinfecting facilities can be found here: https://www.cdc.gov/coronavirus/2019-ncov/community/disinfecting-building-facility.html, as well as additional guidance from OSHA on protecting workers during a pandemic: https://www.osha.gov/Publications/OSHAFS-3747.pdf.
  • Symptom Checks Including Temperature Readings
    • The EEOC has stated that doing employee symptom checks, including taking employee temperatures, before they enter the workplace is allowable under the ADA because COVID-19 presents a direct threat to other employees, customers, and the general public. Employers can also ask employees if they have COVID-19 related symptoms. The CDC recently updated the list of COVID-19 symptoms, stating that people with the following symptoms may have COVID-19:
      • cough
      • shortness of breath, or difficulty breathing; OR
      • at least two of the following symptoms: fever, headache, chills, sore throat, repeated shaking with chills, new loss of taste or smell, and muscle pain.
    • All information collected about employee illness is considered confidential medical information and must be treated as such by the employer.
    • Particular Issues Regarding Temperature Checks:
      • While temperature checks are permitted, the EEOC notes in their guidance that employers should be aware that some people with COVID-19 do not have a fever. Temperature checks should be done in conjunction with other symptom checks and/or questions related to high-risk factors such as being in close quarters with a person who has COVID-19 or traveling to a high risk area in the last 14 days.
      • If you send an employee home because they have a temperature they should be paid for reporting to work that day to limit potential liability. Additionally, you should have a policy for what to do if an employee refuses to have their temperature taken.
      • It is not required that you have a medical professional take temperatures, however, the person doing it should be trained, have proper PPE (mask, gloves, face shield or goggles, and a gown), use a no-touch thermometer (and know how to use it), and understand the confidentiality considerations.
      • An employee’s temperature is confidential medical information, thus the temperature check needs to be done as privately as possible to keep the information confidential. Employees should not line up and wait to have their temperature taken, both for privacy reasons and for social distancing purposes.
    • Although you are allowed to take temperatures, you should consider this step carefully to determine if you want to start this process.  For now, you are not required to take temperatures and unless or until it is required, you may want to hold off given the logistical issues and the confidentiality concerns.
    • For more information on symptom checks and other issues regarding return to work procedures, the EEOC’s Question and Answer page can be found here: https://www.eeoc.gov/eeoc/newsroom/wysk/wysk_ada_rehabilitaion_act_coronavirus.cfm.
  • Potential or Actual COVID-19 Exposure in the Workplace
    • Create a plan for how to respond if an employee becomes sick at work including sending the employee home, cleaning and disinfecting the workplace, and identifying all employees who had contact with the sick employee starting 2 days before the employee showed symptoms.
    • The CDC provided guidelines for permitting essential employees to continue working following potential exposure to COVID-19 if they remain asymptomatic and additional precautions are implemented (see below). Potential exposure means living with or having close contact (w/in 6 ft.) of an individual with confirmed or suspected COVID-19 beginning 48 hours before the individual showed symptoms.
      • Pre-screen the employee before they enter the workplace by taking their temperature and assessing symptoms
      • As long as no temperature or symptoms, the employee should self-monitor under the supervision of the employer’s occupational health program
      • The employee should wear a face mask at all times in the workplace for 14 days after the last exposure (face mask provided by employer)
      • The employee should maintain 6 ft. and practice social distancing whenever possible in the workplace
      • Clean and disinfect all areas such as offices, bathrooms, common areas, shared electronic equipment routinely
      • If the employee becomes sick during the day they should be sent home immediately and their workplace should be cleaned and disinfected
      • Compile information on all persons who had contact with the ill employee during the time the employee had symptoms and 2 days prior, including anyone who was w/in 6 ft. of the employee during this time period
    • Determining when an employee can return to the workplace after having COVID-19 should be an interactive process between the employer and the employee and their healthcare provider. For more information on when an individual with COVID-19 can discontinue home isolation see the CDC’s guidance here: https://www.cdc.gov/coronavirus/2019-ncov/hcp/disposition-in-home-patients.html.
    • Additional resources for employers in planning and responding to COVID-19 can be found here: https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html.

Governmental guidance on this crisis evolves constantly.  We will continue to do our best in keeping you informed.  For specific questions please reach out to Jennifer Douglas or Marissa Buck.

Additional Information on Paycheck Protection Program and SBA Disaster Loan Programs

The U.S. Department of the Treasury announced today, March 31, that the SBA and the Treasury expect the CARES Act programs to be up and running by this Friday, April 3, 2020. You can find resources related to the CARES Act programs on Treasury’s website here, which is updated often and currently includes an application for borrowers for the Paycheck Protection Program (PPP). Additionally, the SBA has a resource page for small business that can be accessed here.

Significantly, the SBA is now indicating that 75% of PPP loan amounts will need to be spent on payroll as opposed to other allowed uses in order to qualify for loan forgiveness.  It has also provided details on the loans, which will have relatively short, two year terms for the balance that is not forgiven, but with very low interest rates of 1%.

The Treasury and the IRS also have posted resources regarding the Employee Retention Tax Credit.  But note that you cannot receive the payroll tax credit if you receive a PPP loan.  Additional information on the tax credit is now on Treasury’s Frequently Asked Questions page here, and on the IRS FAQ page here. The IRS has created a new tax form for advance credits and is currently in the process of finalizing the instructions for the form.

Here are some additional details on the available loan programs:

The Paycheck Protection Program (PPP) in the CARES Act will be administered under the U.S. Small Business Administration’s loan provisions.  The SBA and Treasury Department will be releasing additional regulations and guidance to lenders on the program.  The loans will be obtained directly from banks, so you should contact your bank to learn if and how it plans to participate in the program.

Eligible employers can borrow 2.5 times their monthly payroll costs  and other specific costs as described below.  Loan amounts can be up to $10 million.  An employer must either already meet the list of eligibility by number of employees maintained by the SBA, or have up to 500 employees, whichever is greater.  Wineries can have up to 1,000 employees; other employers can check their industry size limit at https://www.sba.gov/size-standards/.

The PPP loans have significant benefits, most notably that 8 weeks of payroll costs and other specific expenses will be forgiven as long as the employer maintains its prior headcount, with some ability to reduce salary levels (discussed below).  Employers that have already reduced headcount can rehire employees and still obtain the full forgiveness amount.  The loans are capped at 4% interest, and have deferred payments for at least six months, and up to one year.  The interest on the loans will not be forgiven, so some payments on the loans need to be made.  The loans can have up to 10 year terms; have no recourse to a businesses’ shareholders, partners or members; and require no collateral or personal guarantee.

The PPP is a separate program from the SBA’s existing Economic Injury Disaster Loan (EIDL) program.  Businesses apply directly to the SBA for these loans, at https://covid19relief.sba.gov.  The EIDL program provides loans of up to $2 million to cover economic injuries incurred in a disaster.  The CARES Act has broadened the eligibility for those loans as well, similar to the Paycheck Protection Program.  For now, a borrower can apply for an EIDL loan and also be eligible for a Paycheck Protection Loan, and can refinance the EIDL loan into a future paycheck protection loan.  However, the EIDL loan is still a loan, and needs to be paid back.  It will not be forgiven, and the proceeds of an EIDL cannot go to cover payroll or other costs that a business would seek to borrow and have forgiven under the PPP.  Note that once the PPP loans become available, business will no longer be eligible for both programs, and there is thus a narrow window to obtain an EIDL and still participate in the PPP.  Also, participants in the PPP loan forgiveness will not be able to use the employment tax credit or payroll tax deferrals in section 2301 and 2302 of the CARES Act.

As for the PPP loans, the loan amount can include 2.5 times the prior year’s average total monthly payroll costs (modified for seasonal employers or new businesses), subject to important limits below.  Payroll costs include:

(aa) the sum of payments of any compensation with respect to employees that is a—

(AA) salary, wage, commission, or similar compensation;

(BB) payment of cash tip or equivalent;

(CC) payment for vacation, parental, family, medical, or sick leave;

(DD) allowance for dismissal or separation;

(EE) payment required for the provisions of group health care benefits, including insurance premiums;

(FF) payment of any retirement benefit; or

(GG) payment of State or local tax assessed on the compensation of employees; and

(bb) the sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is in an amount that is not more than $100,000 in 1 year, as prorated for the covered period…

Importantly, in calculating the payroll costs, the total does not include:

(aa) the compensation of an individual employee in excess of an annual salary of $100,000, as prorated for the covered period;

(bb) taxes imposed or withheld under chapters 21, 22, or 24 of the Internal Revenue Code of 1986 during the covered period;

(cc) any compensation of an employee whose principal place of residence is outside of the United States;

(dd) qualified sick leave wages for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act (Public Law 116–127); or

(ee) qualified family leave wages for which a credit is allowed under section 7003 of the Families First Coronavirus Response Act (Public Law 116–127)….

Thus, in determining eligible loan amounts, the pro rata monthly portion of salary for an employee earning over $100,000 per year is not included (but the amount under $100K annualized is included.)

The loan proceeds can be spent on a variety of business costs and expenses set out in the SBA Act; however only a narrow category of costs can be forgiven under the CARES Act.  These are the amounts incurred and payments made over the 8 weeks after the loan is obtained (not to exceed the principal amount of the loan) for:

(1) Payroll costs.

(2) Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation).

(3) Any payment on any covered rent obligation.

(4) Any covered utility payment.

PPP loan proceeds used for any other purpose will not be forgiven.  The lender will require documentation to prove that the funds to be forgiven were spent on allowed items.  The Treasury Department will be providing regulations as to how the loan forgiveness program is to be implemented.

The amount of forgiveness will be reduced if the business reduces its employee headcount below its previous average full-time employee level, based on the average number of full-time equivalent employees for each pay period within a month, either during the period from February 15, 2019 to June 30, 2019; or from January 1, 2020 to February 29, 2020, at the business’s election.  Seasonal employers are required to use the February to June period.  Employers have the opportunity to re-hire employees that have been released as a result of the current crisis and still take advantage of the full loan forgiveness amount, as long as employee full-time equivalent returns to their prior levels by June 30, 2020.

There is more flexibility as regards to salary reductions without losing the full forgiveness amount.  The amount of forgiveness will be reduced by the amount of any reduction in salary that exceeds 25%, but only for each employee that did not make more than $100,000 on an annualized basis during any single pay period in 2019.  In other words, salaries for those making less than $100,000 per year can be reduced by up to 25% without impacting the loan forgiveness amount.  This also means employees who earned more than $100,000 on an annualized basis in any pay period in 2019 (even those that received a raise to $100,000 annualized only in the last pay period of 2019) could have their salaries reduced by more than 25% without decreasing the available loan forgiveness.  Employers also have the opportunity to remedy any reductions in salary by June 30, 2020 as well.

For a list of Coronavirus related resources, please see our Resources Page.  

Employer Focused CARES Act Summary

While numerous summaries and reports on the stimulus bill enacted on Friday are circulating, the following are the key provisions in the CARES Act that will impact employers, and small employers in particular.  “Small” under the CARES Act includes all business of up to 500 employees in addition to the existing definition of small business maintained by the U.S. Small Business Administration.  For wineries, that limit is 1,000 employees.  Other employers can check their industry limits at https://www.sba.gov/size-standards/.

Important Changes to Families First Coronavirus Response Act (“FFCRA”):

  • Allows an employee who was laid off by an employer on March 1, 2020 or later to have access to paid leave under the EFMLA if they are rehired by the employer and they worked for the employer for at least 30 of the last 60 calendar days prior to being laid off.
  • Allows employers to receive an advance of the payroll tax credit provided under the FFCRA for qualified wages paid for EMLA and EPS leave. Forms and instructions for this process are to be provided by the Secretary of the Treasury.

Unemployment Benefits:

  • Emergency increase in unemployment compensation benefits:
    • Provides an additional $600/week recipients of UI benefits or Pandemic Unemployment Assistance from the date the State enters into the agreement with the Secretary of Labor through July 31, 2020.
    • Payments will be processed through each State along with regular state UI benefits and can be provided in the same check or a separate check, but must be provided on a weekly basis.
  • Federal Funding For First Week of Unemployment Period with No Waiting Period:
    • Provides 100% reimbursement to States for benefits paid during the first week of unemployment if States waive the one week waiting period for UI benefits. California has already waived the 1 week waiting period.
  • Pandemic Unemployment Assistance Program:
    • Creates a new Pandemic Unemployment Assistance program (through December 31, 2020) to help those not traditionally eligible for unemployment insurance (UI) benefits, including self-employed individuals, independent contractors, those with limited work history and those who are unable to work as a result of the coronavirus public health emergency.
  • Pandemic Emergency Unemployment Compensation:
    • Provides an additional 13 weeks of UI benefits to those who remain unemployed after all weeks of state unemployment are no longer available.
    • The amount provided is the same as above – the regular amount provided by the State plus an additional $600/week.

SBA Loan and Loan Forgiveness Provisions

  • Creates a loan program for employers with fewer than 500 employees and other SBA defined small businesses to borrow up to 2.5x their monthly payroll (with a maximum loan amount of $10 million).  Sole proprietors and independent contractors are also eligible.
  • Loans can be used to cover payroll and other specified compensation including: healthcare costs, mortgage interest (but not principal), rent, utilities, and interest (but not principal) on other preexisting debt obligations.
    • Payroll costs means any compensation given to employees that is a salary, wage, commission, payment of cash tip or equivalent, payment for vacation, family, medical, or sick leave (but not wages paid under the FFCRA), allowance for dismissal or separation, health care benefits including premiums, retirement benefits, and state or local tax assessed on compensation.
    • Payroll costs cannot exceed $100,000 annually for an individual employee (prorated).
    • Payroll costs do not include qualified sick and family leave wages under the FFCRA for which a credit is already allowed, among other specified exclusions.
  • Interest rates cannot exceed 4%, and all payments must be deferred for at least 6 months and up to 1 year. Note that interest on the loans will not be forgiven.
  • Loans do not require a personal guarantee or collateral, and are nonrecourse to businesses’ shareholders, partners and members. Employers are also not required to show that they were unable to obtain credit elsewhere.
  • The principal amount that is used to cover payroll, mortgage interest, rent and utilities (but not the other allowed uses) for the 8 weeks following the loan approval will be forgiven as long as employee numbers and payrolls are maintained
    • Allows forgiveness for extra wages provided to tipped employees.
  • The forgiveness amount is reduced proportionately by any decrease in the number of employees as compared to the prior year. Forgiveness is also reduced if any employee who earns under $100K on an annualized basis has their wages reduced by more than 25%. There may be de minimis exceptions to these restrictions described in forthcoming regulations.
    • Exemption for Re-Hires: To encourage employers to rehire any employees who have already been laid off due to the COVID-19 crisis, borrowers that re-hire workers previously laid off will not be penalized for having a reduced payroll at the beginning of the period. This applies to a reduction in force or reduction in salary for 1 or more employees during the period beginning on February 15, 2020 and ending 30 days after the enactment of the Act. Employers must re-hire employees (or eliminate the reduction in wages) no later than June 30, 2020.
  • The remaining balance after forgiveness can have a maturity up to 10 years.  Prepayment penalties are not allowed.

Additional Business Provisions

  • Payroll Tax Credit for Employee Retention:
    • The provision provides a refundable payroll tax credit for 50 percent of wages paid by employers to employees during the COVID-19 crisis. The credit is available to employers whose: (1) operations were fully or partially suspended, due to a COVID-19-related shutdown order, or (2) gross receipts declined by more than 50 percent when compared to the same quarter in the prior year.
    • The credit is based on qualified wages paid to the employee.
      • For employers with greater than 100 full-time employees, qualified wages are wages paid to employees when they are not providing services due to the COVID-19-related shutdown order.
      • For eligible employers with 100 or fewer full-time employees, all employee wages qualify for the credit, whether the employer is open for business or subject to a shutdown order.
    • The credit is provided for the first $10,000 of compensation, including health benefits, paid to an eligible employee. This does not include any wages paid to employees under the FFCRA for EFMLA or EPS leave.
    • The credit applies to wages paid after March 12, 2020, and before January 1, 2021.
    • The credit is reduced by any amounts credited under the FFCRA for wages paid under EMFLA or EPS leave.
    • Employers who receive a covered loan from the SBA (see above) are not eligible for the credit under this section.
  • Delay of payment of payroll taxes:
    • Allows employers to defer payment of the employer share of the Social Security tax they otherwise are responsible for paying to the federal government with respect to their employees.
    • The deferred employment tax is required to be paid over the following two years, with half of the amount required to be paid by December 31, 2021 and the other half by December 31, 2022.
    • The payroll tax deferral period runs from the date of enactment of the Act until December 31, 2020.
    • This section does not apply if an employer had their indebtedness forgiven under the provisions of this Act for a covered SBA loan.
  • Modification of Net Operating Losses (“NOL”):
    • An NOL arising in a tax year beginning in 2018, 2019, or 2020 can be carried back five years. It also temporarily removes the taxable income limitation to allow an NOL to fully offset income.
  • Modification of Limitation on Business Interest:
    • Temporarily increases the amount of interest expense businesses are allowed to deduct on their tax returns, by increasing the 30-percent limitation to 50 percent of taxable income (with adjustments) for 2019 and 2020.
  • Amendment Regarding Qualified Improvement Property:

Enables businesses, especially in the hospitality industry, to write off costs associated with improving facilities immediately, instead of having to depreciate those improvements over the 39-year life of the building.

For a list of Coronavirus related resources, please see our Resources Page.  

Coronavirus (COVID-19) Resources

Updated May 4, 2021

In addition to our periodic blog posts on Coronavirus related news, DPF has compiled a list of Coronavirus resources, including those specifically aimed at the alcohol beverage and hospitality industries,  that may be of interest to our clients. 

CALIFORNIA STATE RESOURCES       

CA Coronavirus Regional Stay Home Order: https://covid19.ca.gov/stay-home-except-for-essential-needs/

CA Coronavirus Safer Economy Guide: https://covid19.ca.gov/safer-economy/

CA Coronavirus Roadmap – Counties: https://covid19.ca.gov/roadmap-counties/

CA Coronavirus Roadmap Reopening Guidance: https://covid19.ca.gov/roadmap/#guidance

CA Coronavirus Industry Reopening Guidance: https://covid19.ca.gov/industry-guidance/

CA Coronavirus Portal:  https://covid19.ca.gov/

03/19/2020 Governor’s Executive Order re Shelter in Place Order:  https://covid19.ca.gov/img/N-33-20.pdf

03/20/2020 List of Designated Essential Workforce under Executive Order:  https://covid19.ca.gov/img/EssentialCriticalInfrastructureWorkers.pdf

COUNTY RESOURCES

Napa County

County Coronavirus Site: https://www.countyofnapa.org/2739/Coronavirus-COVID-19

COVID-19 Exposure Guidance:  https://www.countyofnapa.org/DocumentCenter/View/18019/Guidance-for-Employers-and-the-Community_Positive-or-Exposed-Employees

Social Distancing Protocol: https://www.countyofnapa.org/DocumentCenter/View/17123/Appendix-A-Social-Distancing-Protocol?bidId=

Industry Guidance: https://www.countyofnapa.org/2840/Industry-Guidance

Dine In:  https://www.countyofnapa.org/DocumentCenter/View/17584/Restaurant-Sector-Reopening-Guidelines

Retail: https://www.countyofnapa.org/DocumentCenter/View/17585/Retail-Sector-Reopening-Guidelines-

Professional Services (offices):  https://www.countyofnapa.org/DocumentCenter/View/17586/Professional-Services-Sector-Reopening-Guidelines

Restaurant Specific Facts: https://www.countyofnapa.org/DocumentCenter/View/17712/Restaurant-Specific-FAQs-ENG

Health Notice for Public Pool and Spa Operation:  https://www.countyofnapa.org/DocumentCenter/View/17696/Health-Notice-for-Public-Pools-and-Spas-in-Napa-County-5-19-2020

Social Distancing and Sanitation Protocol – Public Swimming Pools:https://www.countyofnapa.org/DocumentCenter/View/17695/Swimming-Pool-Social-Distancing-and-Sanitizing-in-Napa-County-5-19-202

Updates to Napa County Shelter at Home Orders (Updated May 6, 2020):  https://www.countyofnapa.org/2813/Shelter-at-Home-Order

04/02/2020 Shelter at Home Order Extension:  https://www.countyofnapa.org/DocumentCenter/View/17112/Shelter-at-Home-Order-4-3-2020–?bidId=

03/20/2020 Shelter at Home Order (Updated 03/22/2020): https://www.countyofnapa.org/DocumentCenter/View/16684/Shelter-at-Home-FAQ_ENGLISH

Sonoma County

County Coronavirus site:https://socoemergency.org/emergency/novel-coronavirus/

https://socoemergency.org/emergency/novel-coronavirus/soco-covid-19-check/

Santa Rosa City Temporary Sick Leave Ordinance for COVID-19:https://srcity.org/3348/Temporary-Sick-Leave-Ordinance

Outdoor Dining Guidance:https://socoemergency.org/wp-    content/uploads/2020/05/COVID-19-Guidance-Outdoor- Dining-ENG-05232020.pdf

Covid-19 Check App FAQs:https://sonomacounty.ca.gov/Health/Disease-Control/Coronavirus/FAQ-COVID-app/

https://sonomacounty.ca.gov/Health/Disease-Control/Coronavirus/SoCo-COVID19-Check-App/

Economic Development Board – COVID – 19 App/Strategies to Help Reopen Local Businesses:http://sonomaedb.org/Business-Assistance/Coronavirus/Business-Management-Plans/

04/01/20 Extension of Shelter in Place Order:  https://socoemergency.org/order-of-the-health-officer-shelter-in-place-extended/

Original Shelter in Place Order: https://socoemergency.org/order-of-the-health-officer-shelter-in-place/

Marin County

County Coronavirus site:https://coronavirus.marinhhs.org/

Specific Protection Plan:https://storage.googleapis.com/proudcity/marinrecoversca/uploads/2020/05/COVID-19-Site-Specific-Protection-Plan-SPP-Fillable-accessible.pdf

Guidelines for Businesses: https://marinrecovers.com/agencies/guidelines-for-businesses/

Golf Courses and Racket Clubs: https://marinrecovers.com/parks-outdoor-recreation/

Outdoor Recreational Activity Businesses:  https://marinrecovers.com/parks-outdoor-recreation/

Recreational Equipment Rentals: https://marinrecovers.com/parks-outdoor-recreation/

Pet Groomers: https://marinrecovers.com/personal-services/

Summer/Sports Camps and Child Care:https://marinrecovers.com/summer-camps-youth-activities/

Shelter in Place Order: https://coronavirus.marinhhs.org/marin-public-health-order-may-15-2020

Other County Shelter in Place Orders and county-specific COVID-19 sites Information:

https://covid19.ca.gov/state-local-resources/#top

https://www.counties.org/sites/main/files/file-attachments/2020-mar20-ca-map-shelter_in_place-19-final.pdf

Mendocino County (Red Tier): https://www.mendocinocounty.org/community/novel-coronavirus

Contra Costa County (Red Tier):https://www.coronavirus.cchealth.org/

Solano County (Red Tier):https://www.solanocounty.com/depts/ph/ncov.asp

ALCOHOL BEVERAGE INDUSTRY RESOURCES

U.S. Department of Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB) Coronavirus Specific Information (updated 3/30/2020): https://www.ttb.gov/coronavirus

03/31/2020 TTB Industry Circular re Postponement of Tax Payment and Filing Due Dates: https://www.ttb.gov/industry-circulars/ttb-industry-circulars-2020-2

California Department of Alcoholic Beverage Control COVID-19 Updates:  https://www.abc.ca.gov/law-and-policy/coronavirus19/

05/20/2020 Fifth Notice re Regulatory Relief: https://www.abc.ca.gov/fifth-notice-of-regulatory-relief/

05/15/2020 Fourth Notice re Regulatory Relief: https://www.abc.ca.gov/fourth-notice-of-regulatory-relief/

04/21/2020 Third Notice re Regulatory Relief: https://www.abc.ca.gov/third-notice-of-regulatory-relief/

04/01/2020 Second Notice re Regulatory Relief: https://www.abc.ca.gov/second-notice-of-regulatory-relief/

03/19/2020 First Notice re Regulatory Relief: https://www.abc.ca.gov/notice-of-regulatory-relief/

03/21/2020 FAQ re Regulatory Relief: https://www.abc.ca.gov/law-and-policy/coronavirus19/frequently-asked-questions/

California Wine Institute COVID-19 Resources Page:  https://wineinstitute.org/news-alerts/coronavirus-covid-19-update

California Wine Institute “Winery Tasting Rooms Reopening Protocols” (posted 5/13/2020):

https://wineinstitute.org/our-work/compliance/covid-19-updates/tasting-room-guidance/

California Craft Breweries COVID-19 Resources Page:  http://californiacraftbeer.com/covid-19-resources-for-craft-breweries-ongoing-list/

Brewers Association Coronavirus Resource Center:  https://www.brewersassociation.org/brewing-industry-updates/coronavirus-resource-center/

Distilled Spirits Council of the U.S. COVID-19 Page:  https://www.distilledspirits.org/news/discus-monitoring-covid-19-industry-news/

California Artisanal Distillers Guild Updates:  https://twitter.com/CADISTILLERS

Note that regional trade associations are also providing their members with significant helpful information regarding the Coronavirus outbreak and regulatory response.

HOSPITALITY, TOURISM AND TRAVEL INDUSTRY RESOURCES

California Restaurant Association Coronavirus Resources:  https://www.calrest.org/coronavirus-resources

National Restaurant Association COVID-19 Resources:  https://restaurant.org/covid19

California Hotel & Lodging Association: https://calodging.com/coronavirus-information-resources

U.S. Travel Association: https://www.ustravel.org/toolkit/emergency-preparedness-and-response-coronavirus-covid-19

Napa County Tourism (Visit Napa Valley):  https://www.visitnapavalley.com/

Sonoma County Tourism: https://www.sonomacounty.com/

EMPLOYER RESOURCES:  FEDERAL

EEOC Question and Answer Page (added 05/06/20): https://www.eeoc.gov/eeoc/newsroom/wysk/wysk_ada_rehabilitaion_act_coronavirus.cfm

PPP Loan Forgiveness Guidance (added 05/20/20)

The U.S. Department of the Treasury – SBA Form PPP Forgiveness Application: https://home.treasury.gov/system/files/136/3245-0407-SBA-Form-3508-PPP-Forgiveness-Application.pdf

The U.S Department of the Treasury PPP Loan Resource page: https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequently-Asked-Questions.pdf

Cares Act Resource (added 04/01/20)

The U.S. Department of the Treasury CARES Act Resource page: https://home.treasury.gov/cares

The SBA CARES Act Resource page: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources

IRS – CORONAVIRUS TAX RELIEF:  https://www.irs.gov/coronavirus

The following were added on 04/01/20

The IRS FAQs regarding tax credits for paid leave under the FFCRA: https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs

The IRS FAQs regarding CARES Act: https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act

IRS new tax form, Form 7200, that can be used to request the advance tax credits under both the FFCRA and the CARES Act. The form and the draft instructions (final instructions are expected shortly), can be found here: https://www.irs.gov/forms-pubs/about-form-7200

CYBERSECURITY AND INFRASTRUCTURE SECURITY AGENCY (CISA) GUIDANCE ON ESSENTIAL CRITICAL INFRASTRUCTURE WORKERS: https://www.cisa.gov/sites/default/files/publications/CISA-Guidance-on-Essential-Critical-Infrastructure-Workers-1-20-508c.pdf

FEDERAL MOTOR CARRIER SAFETY ADMINISTRATION: https://www.fmcsa.dot.gov/newsroom/us-department-transportation-issues-national-emergency-declaration-commercial-vehicles

U.S. SMALL BUSINESS ADMINISTRATION:  https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources

U.S. OFFICE OF PERSONNEL MANAGEMENT TELEWORK GUIDANCE: https://www.telework.gov/guidance-legislation/telework-guidance/emergency-telework/

DEPARTMENT OF LABOR RESOURCES 

COBRA Premium Subsidy: https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/cobra/premium-subsidy

Families First Coronavirus Response Act (FFCRA) requirements and questions:

Poster/notice:https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf

https://www.dol.gov/sites/dolgov/files/WHD/Pandemic/1422-spanish.pdf

Questions about Coverage and the Poster:

Poster Questions: https://www.dol.gov/agencies/whd/pandemic/ffcra-poster-questions

Coverage Questions: https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave

https://www.dol.gov/agencies/whd/pandemic/ffcra-questions

EMPLOYER RESOURCES:  STATE AND COUNTY

STATE OF CALIFORNIA EMPLOYMENT DEVELOPMENT DEPARTMENT

COVID-19: https://www.edd.ca.gov/about_edd/coronavirus-2019.htm

COVID-19 FAQ: https://www.edd.ca.gov/about_edd/coronavirus-2019/faqs.htm

Work Sharing Program: https://www.edd.ca.gov/unemployment/Work_Sharing_Program.htm

Disaster Unemployment Assistance: https://edd.ca.gov/about_edd/disaster_related_services.htm

Emergency and Disaster Payroll Tax Extension: https://edd.ca.gov/Payroll_Taxes/Emergency_and_Disaster_Assistance_for_Employers.htm

DEPARTMENT OF INDUSTRIAL RELATIONS (DIR):

COVID-19 2021 Resources: https://www.dir.ca.gov/dlse/COVID19Resources/FAQ-for-SPSL-2021.html

COVID-19 2021 Supplemental Paid Sick Leave Poster: https://www.dir.ca.gov/dlse/2021-COVID-19-Supplemental-Paid-Sick-Leave.pd

Cal/OSHA webinars: https://www.dir.ca.gov/dosh/coronavirus/webinars.html

Cal/OSHA regulations: https://www.dir.ca.gov/OSHSB/documents/COVID-19-Prevention-Emergency-apprvdtxt.pdf

Cal/OSHA requirements: https://www.dir.ca.gov/dosh/coronavirus/Health-Care-General-Industry.html

COVID-19 AB 685 FAQ: https://www.dir.ca.gov/dosh/coronavirus/AB6852020FAQs.html

COVID-19 Emergency Temporary Standards – Fact Sheets – Model Written Program: https://www.dir.ca.gov/dosh/coronavirus/ETS.html

COVID-19 Emergency Temporary Standards FAQ: https://www.dir.ca.gov/dosh/coronavirus/COVID19FAQs.html

COVID-19 FAQ: https://www.dir.ca.gov/dlse/2019-Novel-Coronavirus.htm

Workers’ Comp. Notice Requirement – SB 1159: https://www.dir.ca.gov/dwc/Covid-19/FAQ-SB-1159.html

Expansion of CA COVID-19 Supplemental Paid Sick Leave – AB 1867: https://www.dir.ca.gov/dlse/FAQ-for-PSL.html

Poster for non-food sector employers with 500 or more employees can be accessed here: https://www.dir.ca.gov/dlse/COVID-19-Non-Food-Sector-Employees-poster.pdf

Worker Safety in Wildfire Regions: https://www.dir.ca.gov/dosh/Worker-Health-and-Safety-in-Wildfire-Regions.html

Heat Illness Prevention and High Heat Requirements: https://www.dir.ca.gov/DOSH/HeatIllnessInfo.html

Cal/OSHA Guidance on Face Coverings: https://www.dir.ca.gov/dosh/coronavirus/Face-coverings-poster.pdf

Cal/OSHA Guidance on Requirements to Protect Workers from Coronavirus: https://www.dir.ca.gov/dosh/coronavirus/Health-Care-General-Industry.html

Cal/OSHA Guidance on Protecting Workers During a Pandemic: https://www.osha.gov/Publications/OSHAFS-3747.pdf

Cal/OSHA Guidance on Developing an Emergency Action Plan: https://www.dir.ca.gov/dosh/dosh_publications/iipp.html

https://www.dir.ca.gov/dosh/etools/09-031/index.htm

GOVERNOR’S ORDERS:

Exception to Cal WARN Act 60-day notice requirement for layoffs: https://www.gov.ca.gov/wp-content/uploads/2020/03/3.17.20-EO-motor.pdf

Waiver of one-week waiting period for UI benefits and SDI: https://www.gov.ca.gov/wp-content/uploads/2020/03/3.12.20-EO-N-25-20-COVID-19.pdf

The latest orders can be found on the Governor’s website here: https://www.gov.ca.gov/newsroom/#:~:text

LABOR AND WORKFORCE DEVELOPMENT AGENCY: https://www.labor.ca.gov/coronavirus2019/

CALIFORNIA GOVERNOR’S OFFICE OF BUSINESS AND ECONOMIC DEVELOPMENT: https://business.ca.gov/coronavirus-2019/

STATE OF CALIFORNIA FRANCHISE TAX BOARD: https://www.ftb.ca.gov/about-ftb/newsroom/news-releases/2020-2-more-time-to-file-pay-for-california-taxpayers-affected-by-the-covid-19-pandemic.html

NAPA/SONOMA SMALL BUSINESS DEVELOPMENT CENTER (Includes Coronavirus-specific Business Assistance Webinars and Small business “survival guide”):   https://www.napasonomasbdc.org/covid-19

HEALTH SERVICES RESOURCES

For the latest information about the coronavirus in Sonoma County and advice from health experts on prevention and care, call 2-1-1, text your zip code to 898-211 or visit (copy/paste) https://socoemergency.org/

For the latest information about the coronavirus in Napa County visit https://www.countyofnapa.org/2739/Coronavirus. You may also call Napa County’s information line at (707) 253-4540 (Monday – Friday, from 9am to 12pm and 1pm to 5pm).

CA Dept. of Public Health Resource Page:

https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/COVID-19/guidance-for-face-coverings.aspx

https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/COVID-19/Workplace-Outbreak-Employer-Guidance.aspx

https://www.cdph.ca.gov/Programs/CID/DCDC/CDPH%20Document%20Library/COVID-19/Guidance-for-Face-Coverings_06-18-2020.pdf

https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/Immunization/ncov2019.aspx

https://www.cdph.ca.gov/Pages/LocalHealthServicesAndOffices.aspx

California Correctional Health Care Services: https://cchcs.ca.gov/covid-19-interim-guidance/

CDC – Centers for Disease Control & Prevention: https://www.cdc.gov/coronavirus/2019-ncov/community/organizations/businesses-employers.html

Coronavirus – How to Protect Yourself/If You Think You Are Sick:

https://www.cdc.gov/coronavirus/2019-ncov/downloads/critical-workers-implementing-safety-practices.pdf

https://www.cdc.gov/coronavirus/2019-ncov/community/disinfecting-building-facility.html

https://www.cdc.gov/coronavirus/2019-ncov/prepare/prevention.html

https://www.cdc.gov/coronavirus/2019-ncov/if-you-are-sick/steps-when-sick.html

EPA EXPANDS COVID-19 DISINFECTANT LIST: https://www.epa.gov/newsreleases/epa-expands-covid-19-disinfectant-list

 

Employer’s Summary of Families First Coronavirus Response Act

The Families First Coronavirus Response Act (“FFCRA” or “Act”) was signed into law by the President on Wednesday. Prior to the Senate’s vote to pass the law, the House made additional changes to the bill limiting some of the provisions related to paid leave that were required in the original version of the bill. The expanded FMLA provisions are notably less than originally expected. The Act will officially go into effect within 15 days and will remain in place until December 31, 2020. The following is a summary of the key portions of the Act that are relevant for employers. If you have more specific questions please feel free to reach out to us.

  • Expansion of FMLA leave (“Emergency Family and Medical Leave Expansion Act” or “EFMLA”):
    • Qualifying Reason: The EFMLA provides up to 12-weeks of protected leave for employees who are unable to work entirely (including working remotely) due to the need to care for the employee’s son or daughter (under 18) because their son or daughter’s school or child care service is closed due to coronavirus.
    • Employers: The EFMLA applies to all employers with less than 500 employees. The Secretary of Labor has the authority to provide an exemption for employers with less than 50 employees when the imposition of such requirements would jeopardize the viability of the business. (Currently, it is unclear if this will be considered an automatic exemption or how an employer would obtain it.)
    • Employee Eligibility: Workers who have been on payroll for at least 30 calendar days are eligible for EFMLA benefits.
    • Paid/Unpaid: The first 10 days of leave are unpaid, but employees may elect to use accrued sick or vacation time to cover these days (employers cannot require them to use accrued vacation or sick leave). After the first 10 days, the remaining leave must be paid by the employer in an amount not less than 2/3rds of the employee’s regular rate of pay. However, the amount of paid leave is capped at $200 per day per employee or $10,000 total per employee.
    • Reinstatement: Just as with any other FMLA leave, an employee who uses this EFMLA leave is entitled to reinstatement to the same or equivalent position.
      • For employers with less than 25 employees, reinstatement is not required if the following conditions are met: the position held by the employee at the time the leave started no longer exists due to economic conditions or other operating conditions caused by coronavirus; the employer has tried to restore the employee to an equivalent position but no position is available; and the employer makes a reasonable effort to contact the employee if an equivalent position becomes available within a year.
  • Emergency Paid Sick (“EPS”) Leave Act:
    • For COVID Purposes Only: The EPS Leave Act provides additional paid sick leave for all employees for various coronavirus related issues listed below.
    • Available Immediately: The EPS leave is granted (not accrued) so it is available for immediate use by all employees (once the FFCRA is in effect).
    • New and Separate Entitlement: The EPS leave is provided in addition to any sick leave or PTO already provided by the employer. Thus, the EPS leave under the FFCRA should be tracked separately and employers cannot require employees to use up other accrued paid sick leave or PTO prior to using the emergency sick leave.
    • Employers: The EPS Leave Act applies to all employers with less than 500 employees. The Secretary of Labor has the authority to provide an exemption for employers with less than 50 employees when the imposition of such requirements would jeopardize the viability of the business. (Again, it is unclear how the exemption will be obtained)
    • Amount of Paid Sick Leave: The EPS Leave Act provides 80 hours of EPS leave for full-time employees and part-time employees are eligible for EPS leave equivalent to the average number of hours they work over a two-week period.
    • Reasons for EPS Leave and Caps on Amount Paid: EPS leave must be provided to all employees who are unable to work entirely (including working remotely) due to any of the reasons listed below. The amount of paid leave is capped at certain amounts depending on the reason for the leave.
      • EPS leave related to the employee’s own health – Paid at the employee’s regular rate of pay (or the applicable minimum wage rate, whichever is greater) capped at $511 per day or $5,110 total.
        • The employee is subject to a federal, state, or local quarantine or isolation order for COVID-19;
        • The employee is advised by a health care provider to self-quarantine due to COVID-19 concerns; or
        • The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
      • EPS Leave related to the employee’s need to care for others – Paid at 2/3rds of the employee’s regular rate of pay (or the applicable minimum wage rate, whichever is greater) and capped at $200 per day or $2,000 total
        • The employee is caring for an individual who is under a quarantine or isolation order or has been advised to self-quarantine;
        • The employee is caring for their son or daughter whose school or child care has been closed due to COVID-19; or
        • The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services.
    • The sick leave under the Act does not carry over to the next year and is not payable upon termination.
    • Employers may not require an employee to search for or find a replacement employee to cover the hours during which the employee is using paid sick time as a condition of using sick time provided under the Act.
    • Employers may require employees on sick leave to follow reasonable notice procedures in order to continue receiving such paid sick time.
    • Employers are required to post a notice informing employees of their expanded sick leave rights. A model notice is to be provided by the Secretary of Labor within 7 days.
  • Other Provisions:
    • Payroll Tax Credits are available to employers that provide either the EPS leave or paid FMLA to employees for the specific Coronavirus-related purposes defined by the Act. Employers will be entitled to a payroll tax credit for each calendar quarter equal to 100% of the qualified EPS leave wages or EFMLA paid by the employer in the quarter, however, it is capped at the same limits as the wages above (i.e. $511 per day for EPS leave related to the employee’s health or $200 per day for leave related to the care of an individual or child; or $200 per day or $10,000 total for paid leave for school purposes).
    • The Act also provides for $1 billion in 2020 for emergency grants to states for activities related to unemployment insurance benefits. There are no direct federal unemployment benefits provided to employees.

If you would like further information about this contact Jennifer Douglas or Marissa Buck.

For a list of Coronavirus related resources, please see our Resources Page.  

Employer Guide to Navigating COVID 19

Below is an outline of topics designed to assist California employers in navigating COVID 19 and the related economic fallout.  Everything is changing quickly and this is based on what is currently known and available.

Communications with Employees:

  • Number one priority in this situation continues to be the safety of your employees.
  • It is crucial to regularly communicate with your employees regarding the status of office closures, layoffs, pay or any other updates that affect your business.
  • Make sure you have cell phone and/or personal email addresses to communicate outside work hours.
  • Consistent with the Governor’s order, all employees older than 65 or those with a chronic illness should not return to work. These employees should work from home if possible, or if they are unable to work from home, let them know who they should contact to discuss their options for taking time off.
  • All other employees should work from home if they are able to do so. If employees still need to come to work, they should follow the CDC’s recommended social distancing requirements and stay at least 6 feet away from others. Advise employees to stay in their office or designated workspace as much as possible, and not to congregate in meal or break areas.
  • Note that if the Bay Area Counties March 16, 2020 “Shelter in Place” Order extends to your county, most employees will be required to stay home and will be unable to come to work. Certain workplaces considered essential are allowed to remain open.  A list of the Essential Businesses can be found in the order linked here.
  • All in person meetings should be cancelled if possible and phone conference or webinars should be used instead.
  • Advise employees to immediately notify you if they develop symptoms of COVID-19 or are exposed to someone who has tested positive for COVID-19.
  • Ensure that you have updated contact information for all employees and you are able to reach them when they are outside the office to provide necessary information.

Reduction in Hours or Pay and Layoffs:

  • If a reduction in force or pay is necessary, let your employees know as soon as possible.
  • Whether a temporary closure results in a furlough (with the idea of employees returning on a certain date) or a layoff (uncertain date of return, if ever) can impact whether accrued vacation/PTO needs to be paid out. With so much uncertainty, our general recommendation is to pay out the accrued time, but financial constraints may make this impracticable.
  • You can reduce hours for non-exempt employees and reduce work schedules as needed. You do not need to pay out any accrued PTO for employees in order to make up the difference in hours.
  • You can also reduce salaries for your exempt employees, as long as the reduction in salary does not result in the employees getting paid less than the minimum threshold required for employees to retain their exempt status. Currently the minimum threshold for exempt employees is $54,080 per year for employers with 26 or more employees and $49,920 for employers with less than 26 employees. This reduction can be made before the beginning of a full workweek.
  • Talk with your insurance broker about continuing health benefits for employees on furlough and or a temporary layoff situation.
  • Make preparations for how you will continue to receive mail at your office or do other essential functions as needed during the period when you have a reduced work force. If your office needs to close temporarily, make sure clients and customers are notified.

Employer Resources:

  • The Employment Development Department (“EDD”) has a helpful website with information about the COVID 19 impacts.
  • Employers might be able to avoid potential layoffs by participating in the Unemployment Insurance Work Sharing Program, which allows you to retain your workers by reducing their hours and wages no more than 60 percent and partially offsetting the wage loss with UI benefits. More information can be found here.
  • There is pending legislation at the Federal level that may expand FMLA leave and paid sick time leave for employees that need to take time off due to the coronavirus. We will keep you updated as soon as the emergency law is finalized.

Employee Resources:

  • Employees who are unable to work due to having or being exposed to COVID-19 can apply for disability insurance through the state. The Governor’s order waived the one-week waiting time period so employees can collect disability insurance during their first work off of work.
  • Employees who are unable to work because they are caring for an ill or quarantined family member with COVID-19 can apply for Paid Family Leave (“PFL”), which provides up to 6-weeks of benefit payments for eligible employees.
  • Employees who have to miss work to care for their children due to school closures caused by the coronavirus outbreak may be qualified to received unemployment insurance benefits. The Governor’s order also waived the one-week waiting time period for unemployment insurance.
  • Employees who have reduced hours or lose their jobs (either permanently or in a temporary layoff) can apply for unemployment insurance as well. The Governor’s order waived the one-week waiting time period for unemployment insurance so employees can collect unemployment in their first week out of work.
  • Employees can access the EDD website for answers to FAQs regarding the various benefits they may be entitled to.

Our goal is to help employers navigate this difficult situation. For more information contact Jennifer Douglas or Marissa Buck.

For a list of Coronavirus related resources, please see our Resources Page.  

Communicating with Employees about COVID 19

It is important that employers stay on top of their employees’ workplace safety.  We recommend disseminating information to your employees about the COVID 19 outbreak and staying on top of developments. Below is a sample communication, but, of course, you should make sure it accurately reflects your workplace and the steps you are taking.  One of the biggest issues will be how to handle pay if extended absences become necessary. There is no one size fits all answer.  It should be handled consistently within your company and will depend on your current policies, any government assistance that may become available and the extent to which your employees may be out of work.

SAMPLE NOTICE:

Given the spread of coronavirus disease 2019 (COVID-19) in the U.S. in recent weeks, we ask that you please follow these simple guidelines in an effort to keep all employees healthy and safe. While vigilance is asked of all of you, we do not believe there is cause for panic. If you have any questions or concerns, please contact [insert name].

  • Wash your hands often – Use soap and water and wash for at least 30 seconds, or if soap and water are not available use hand sanitizer that is at least 60% alcohol.
  • Do not touch your face.
  • Clean and disinfect surfaces often.
  • Cover your cough or sneeze with a tissue and then throw it in the trash. If a tissue is not available, use your elbow (not your hands) and turn away from any people nearby.  The CDC does not recommend wearing masks.
  • Avoid shaking hands with people if possible, including clients, customers and guests – this is for your own protection and theirs.
  • Health care providers are requesting that anyone with fever, cough, or shortness of breath contact the doctor or hospital in advance of going and follow any procedures they have in place.
  • We are monitoring our workplace safety, and in order to do that it is important that you notify [Human Resources/person’s name] if you will be out of the office due to any illness. If you are feeling sick, stay home from work. Any specific medical information will be kept confidential.
  • Immediately notify [Human Resources/person’s name] if you were exposed to someone who has tested positive for COVID-19, or if you were exposed to someone who has been put in quarantine due to possible contact with someone with COVID-19.

Information is evolving daily and we encourage you to designate a point person to stay on top of the situation so that you can effectively respond to the needs of your workforce.  For further questions contact Jennifer Douglas.

For a list of Coronavirus related resources, please see our Resources Page.  

Legal challenges to 2020 Employment laws have begun!

As suspected, legal challenges have been made to both AB-51, which prohibits mandatory arbitration in employment, and AB-5, the new independent contractor test.  Below is a brief summary of the challenges and what it may mean for your business.

Arbitration

As of December 30, 2019,  California is prohibited from enforcing AB-51.  Mandatory arbitration is currently still binding.

The United States and California Chambers of Commerce along with other interested parties filed an action to enjoin California’s implementation of AB-51 and sought a temporary restraining order to halt the January 1, 2020 effective date.  The Court determined that it was more likely than not that the moving party (Chamber of Commerce) would prevail at the January 10, 2020 hearing barring implementation of the law.  The primary argument for barring the implementation is that it is preempted by the Federal Arbitration Act (“FAA”).  A link to the Court’s ruling can be found here. At the January 10 hearing, the Court requested supplemental briefing from the parties regarding jurisdictional issues and extended the temporary restraining order until January 31, 2020. The temporary restraining order has been modified to limit its application and protection to arbitration agreements covered by the FAA.  The FAA is applicable to an employment relationship involving interstate commerce, which is interpreted broadly.

We anticipate that the Court will find that AB-51 is preempted and that mandatory arbitration agreements, if lawfully drafted, will continue to be enforceable.

Independent Contractors

AB-5 has faced similar legal challenges, however, there has not been an order providing a blanket prohibition of its enforcement.  As a reminder AB-5 codified a three-part test called the ABC test to determine whether someone providing services to a company is an employee or independent contractor.  All three parts must be shown, which has led many industries vulnerable to claims that contractors are in fact employees.  The law provided numerous exemptions from the ABC test, but not all industries were granted such exemptions.  Independent truck drivers, freelance journalists, and ride-share and delivery drivers (Uber and Postmates) all filed suit against the state of California concerning the enforcement of the law. So far, only truck drivers have obtained a temporary restraining order as to its enforcement. On January 16, 2020, the Court granted a preliminary injunction prohibiting California from enforcing AB-5 against truck drivers during the lawsuit. The state is expected to appeal the decision to the Ninth Circuit. You can read the Court’s decision here.

For now, the law is in effect for everything and everyone else.

If you have any questions about this please contact Jennifer Douglas or Marissa Buck to discuss.

Employment Update: New Laws for 2020

It is that time of year when we look to see what will change for California employers.  We have summarized some important changes to California employment law that may have an effect on your business as we enter the New Year.  There may also be local laws that are not reflected below. If you have any questions about your specific situation, please feel free to reach out to us for a more in depth discussion.

 Minimum Wage

Effective January 1, the state minimum wage has increased for both hourly and salary employees.  The chart below shows the new minimum wage for both, by employer size:

25 or Fewer Employees 26 or More Employees
Minimum Hourly Wage $12.00/hour $13.00/hour
Minimum Exempt Salary $49,920/year $ 54,080/year

Additionally, if you have employees working in any of the cities below in Sonoma County, you need to comply with the local minimum wage ordinances:

City 25 or Fewer Employees 26 or More Employees
Sonoma (City) $12.50/hour $13.50/hour
Santa Rosa* $14.00/hour $15.00/hour
Petaluma $14.00/hour $15.00/hour

*Santa Rosa’s minimum wage increase does not take effect until July 1, 2020.

 Independent Contactors – AB-5

Determining independent contractor status can be challenging.  California has “simplified” the standard to the “ABC” test.  When determining independent contractor status, employers look at three factors – all three of which must be met in order to qualify as an independent contractor:

  1. The worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work, and in fact;
  2. the worker performs work that is outside the usual course of the hiring entity’s business; and
  3. the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

The “ABC” test effectively expands the definition of employee.  AB 5 provides an extensive list of jobs that are excluded from the new “ABC” test and will still be analyzed under the former balancing test known as the Borello factors.  If your business uses independent contractors, this is a good time to re-examine their classification and ensure they are appropriately classified under the new standard, and whether they fall under an exception to the new test and should still be analyzed under the old standard.

 Sexual Harassment

The #metoo movement continued this year and there is a continued growing awareness of sexual harassment and gender equity issues.  Here are a few reminders of the new requirements for employers:

 Training: All employers with 5 or more employees are required to provide sexual harassment training for both supervisory employees (two hours every two years) and regular employees (one hour every two years). All employees must receive the training by the end of 2020, and new employees should receive training within six months of hire. Interactive training videos will be available for use on the DFEH website.

Seasonal/Temporary Employees: For employees hired for less than 6 months, the training must be completed within 30 calendar days or 100 hours worked. If the employees are hired through a temp agency, the agency provides the training and not the hiring client.

Retaliation Against Victim of Sexual Harassment Unlawful: AB 171 creates a rebuttable presumption of unlawful retaliation if an employer discharges, threatens to discharge, demotes, suspends, or takes any other adverse action against the employee (victim) within 90 days following the victim giving notice to the employer or actual knowledge by employer of sexual harassment.

 Additional things to consider:  Harassment laws are broadening and creating new challenges for employers.  The courts are discouraging settlement through summary judgment, which means that harassment claims will be time consuming and expensive to resolve.  As an employer, it’s important to stop harassment before it begins through training, policy and consistent practices.

Lactation Accommodation – SB 142 (Labor Code Sections 1030-1034)

The existing lactation accommodation law has been updated to specify that a location other than a bathroom must be provided for lactation purposes, and the room must include certain features.  The location should be permanent, but temporary locations are acceptable under certain circumstances. Additionally, employers with fewer than 50 employees can seek an exemption if an undue hardship is shown. The new law also requires employers to develop and implement a policy regarding lactation accommodation, which means your employee handbook should be updated to add this policy if it is not already included.

Changes in Arbitrations

Arbitration Agreements – AB 51: Employers are now prohibited from requiring that employees enter into arbitration agreement as a condition of employment where the agreements cover California Labor Code or FEHA claims. This applies to all contracts entered into, extended or modified after January 1, 2020. However, the prohibition does not apply to post-dispute settlement agreements or negotiated severance agreements. Employers can still have optional arbitration agreements in their employment contracts as long as entering into the agreement is not a condition of employment. Additionally, this law is likely to be challenged as preempted under federal law.  We expect a great deal of uncertainty about this next year.  Please contact us to discuss if you have questions about your agreement or intention to implement an agreement.

Arbitration Fee Timeline– SB 707: If the party who drafted the arbitration agreement (which is typically the employer) fails to pay the fees and costs required to initiate the arbitration, or any fees or costs required to continue the arbitration, within 30 days after the due date, it will be considered a material breach of the arbitration agreement and the drafting party will be in default under the agreement. Courts are also authorized, and required, to impose monetary sanctions against the drafting party if costs or fees are incurred as a result of such a breach.

Limits on Settlement Agreements – AB 749

Any settlement agreement entered into on or after January 1, 2020 will be void if it contains a provision that prohibits, prevents, or otherwise restricts an “aggrieved person” from working for the employer in the future. However, employers can still agree with the aggrieved person to end a current employment relationship or to prohibit the aggrieved person from obtaining future employment with the employer if the employer has made a good faith determination that the person engaged in sexual harassment or sexual assault.

Protective Hairstyles “Crown Act” – SB 188

The Crown Act, “Creating a Respectful and Open Workplace for Natural Hair,” prohibits discrimination based on natural hair and any hairstyles associated with race, including protective hairstyles like braids, locks, and twists. You should review all dress code and grooming policies to ensure compliance with this provision.

 Overtime for Agricultural Workers – AB 60

California agricultural employers with 26 or more employees need to adjust their overtime calculations this year. Overtime calculations will remain unchanged for agricultural employers with 25 or fewer employees.  The chart below shows how overtime should be calculated based on the hours worked and employer size:

25 or Fewer Employees 26 or More Employees
Daily OT (1.5 X Regular Rate) > 10 hours > 9 hours
Weekly OT (1.5 X Regular Rate) > 60 hours > 50 hours

California Consumer Privacy Act (“CCPA”)

The CCPA of 2018 goes into effect January 1, 2020. The CCPA applies to any business that: has an annual gross revenue in excess of $25 million; derives 50% or more of its annual revenue from selling consumers’ personal information; or alone or in combination annually buys, receives, sells or shares for a commercial purpose the personal information of 50,000 or more California consumers, households or devices.  If you have questions about whether the law will apply to you, please contact us to discuss. As of January 1, 2020, businesses subject to the CCPA will need to comply with the requirements of the statute.  The CCPA is generally not applicable to employee data until January 1, 2021, however, employee data is still subject to the notice of collection requirement and employees have a private right of action against an employer in the event of a data breach.  Additionally, the employee data exemption only applies to data that is collected in an employment or HR context – thus, if an employee is also a consumer outside of the employment context that data remains fully covered by the CCPA. If the CCPA will apply to you, please contact us and we will send you further information about how best to comply.

For more information about any of these updates please contact Jennifer Douglas or Marissa Buck.

New Sexual Harassment Training Requirement Delayed One Year

On Friday, August 30, 2019, Governor Newsom signed into law SB 778, clarifying requirements for mandatory sexual harassment training.  The bill is an urgency statute, which means it shall go into immediate effect.  The law can be found here.

The key points of the clarifying statute are:

All employers with five or more employees required to provide sexual harassment training under AB 1343 have one more year to do so.  The training must now be complete by January 1, 2021, instead of January 1, 2020.  It no longer needs to be complete in 2019.  This applies for both the one-hour non-supervisory and the two-hour supervisory training (unless the employer was previously required to provide supervisory training under AB 1825).

Employers with 50 or more employees who were already providing two-hour supervisor sexual harassment training under the old AB 1825 requirement remain on the same schedule of training every two years.  Supervisors who had been trained in 2018 do not need to be retrained in 2019.

New supervisors (either direct hires or internal promotions from non-supervisor to supervisor) must be trained within six months of starting the position.

If you have any questions about your specific situation, contact Jennifer Douglas.

Uncertain Immigration Climate – What Can Employers Do?

Since the 2016 election there has been speculation of wide-spread immigration actions by the United States Immigration and Customs Enforcement (“ICE”).  Repeated announcements from the President for “round-ups”, recent mis-match letters from the Social Security Administration (“SSA”) and court action concerning the census citizenship have many in the community on edge.

While it is difficult to predict what will happen, employers should be prepared in the event ICE raids or audits their workforce.  Employers are in a difficult spot – caught between federal and state law.  They must not knowingly employ an individual who is not authorized to work in the United States, but they also must not discriminate against an individual because of the individual’s immigration status, citizenship or national origin.  And for many, the legal reality is overshadowed by the human reality that many long term employees with family and ties to the community may be undocumented and at risk.

In light of announced raids, employers should review current legal authority concerning what they can and cannot do should ICE arrive at the worksite.  A Federal Court temporarily blocked as unconstitutional portions of AB 450, California’s 2017 expansive immigration law.  Most relevant for employers is that California cannot penalize them if they refuse to allow ICE or other enforcement agencies access to employee records or into nonpublic areas without a judicial warrant or subpoena.  Employers may choose to voluntarily allow such access, but they are also not required to provide it.

Employers should communicate to their public facing staff what they want to happen should a federal agency, such as ICE arrive on the premises.  At the very least personnel should know who to contact and should be instructed to ask the agency personnel to wait in a particular area until the designated individual can be reached.

In preparation for any request to see employee records, either with notice or without, employers should conduct an audit of their Form I-9 records.  A Form I-9 (Employment Eligibility Verification form) must be completed for all employees upon hire.  The form is very specific. An audit by ICE will involve whether the form was completed properly by the employer and employee.  ICE may fine employers for technical violations and if it appears that wide spread fraud surrounds the forms the employer can be subject to more substantial penalties and criminal charges. For detailed information about how to properly compete an I-9, the United States Citizenship and Immigration Services has a helpful manual, which you can find here.

While SSA Acting Commissioner Nancy Berryhill recently announced to Congress that no action will be taken against employers who did nothing in response to SSA’s March 2019 no-match letters, the President’s recent statements that he will direct federal agencies to work together to share information about the location of individuals who may be in the United States unlawfully, raises serious concerns that there may be additional scrutiny of employer records.  For employers it is time to make sure your records are in order.

If you have any questions about your specific situation, contact Jennifer Douglas or Lisa Sennott.

Supreme Court Upholds Arbitration Class Action Waivers

It’s official.  Class action waivers are enforceable in employment arbitration agreements.  On Monday, May 21, 2018 the U.S. Supreme Court upheld the enforceability of the waivers in Epic Systems Corp. v. Lewis.  The Court resolved a conflict between the National Labor Relations Act (NLRA) and the Federal Arbitration Act (FAA) as to which Act trumped the other.  The Court found in favor of the FAA’s exemption power, once again thwarting other laws that attempt to restrict the ability of parties from agreeing to arbitrate claims.  The National Labor Relations Board (NLRB) under President Obama’s administration had found class action waivers to violate employee’s NLRA Section 7 rights to engage in concerted activities to improve the terms and conditions of their employment.  The NLRB had ruled that the NLRA exempted the FAA on this issue.  The Court in Epic Systems rejected this ruling in a close 5-4 decision.

This is a victory for employers wishing to avoid class actions from employees.  We encourage all employers who may be interested in entering such enforceable arbitration agreements to consider this path now.  While this is a true victory, it will come as no surprise to California employers that there is California law that operates similar to a class, which cannot be waived in arbitration.  Currently, employment arbitration agreements cannot restrict employees’ ability to bring Private Attorney General Act (PAGA) actions.  PAGA actions are representative actions where an employee stands in the shoes of the California Labor Commissioner to seek penalties for Labor Code violations.  These actions operate similar to a class action, however, the representative employees do not need to have a class certified, making them much easier to bring.  They are lucrative for plaintiff’s lawyers, but not as advantageous for the actual aggrieved employees.  Aggrieved employees (think PAGA class), must share 75% of any recovery with the state.

For more information about arbitration agreements or PAGA actions contact Jennifer E. Douglas or Valerie R. Perdue.

California Supreme Court Redefines Independent Contractor Analysis

On April 30, 2018, the California Supreme Court issued its ruling in Dynamex Operations West, Inc. v. Superior Court, completely overhauling (but not overruling) the independent contractor standard previously set forth in the seminal case of S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal. 3d 341. All businesses using independent contractors in California should review these relationships to make sure they comply with the new standard.

The Dynamex Operations West, Inc. v. Superior Court case arises out of a class action lawsuit filed in April 2005 by a plaintiff who worked for the company for a total of 15 days. The class action complaint alleged that Dynamex misclassified its drivers as independent contractors. Dynamex is a nationwide package and document delivery company.

In its holding, the Supreme Court stated that determining whether a worker is properly classified as an independent contractor under California’s wage orders requires a hiring entity to establish all of the following:

  • A) The worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact;
  • B) The worker performs work that is outside the usual course of the hiring entity’s business; and
  • C) The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

This  new “ABC test” is a departure from the standard set in Borello. The balancing test of Borello was tossed aside in favor of the more rigid ABC test identified above for disputes under the wage orders.

Part A requires looking at the degree of control the company has over the individual. If the individual is subject to the same type of control a business typically exercises over employees, then the individual is not an independent contractor. Examples of this would be setting the person’s schedule, controlling the way in which the person performs the work, and dictating the location where the work is performed. Prior to Dynamex, this was the principal factor considered. Now, it is on equal footing with parts B and C of the ABC test.

Part B requires the individual to perform a type of work that is outside of the company’s ordinary business, i.e., is the individual performing a service for the company, or would the individual be viewed by others as an employee of the company. The Dynamex case uses the example of a retail store that uses the services of a plumber – the plumber is an independent contractor – versus a clothing manufacturer that uses a work-at-home seamstress, or a bakery that uses cake decorators, both would be an employee under the ABC test.

Finally, part C requires proving that the individual is engaged in its own independently established business, rather than being a person assigned independent contractor status by the company. The Dynamex decision offered that individuals meeting part C’s requirement generally take steps to market their own business and obtain a business license, and they often perform their service for numerous other entities.

Do not be misled by the court’s “limitation” of the ABC test to disputes regarding wage orders. The IWC wage orders provide regulations regarding minimum wages, maximum hours, and other basic working conditions which are commonly implicated in wage and hour and misclassification disputes. For this reason, all businesses using independent contractors in California must reconsider any individual treated as an independent contractor to be sure the answer to all three parts of this new test is “yes” because, while limited to wage orders, those orders provide expansive regulations on employee working conditions.

For assistance with this and other employment related issues, please contact Jennifer Douglas or Valerie Perdue. To reach us by phone, call our offices at 707-261-7000 or 707-524-7000.

ICE Inspections – What Employers Need to Know After AB 450

With the recent news regarding ICE raids on 7-11’s across the country, rumors of raids targeted at Northern California businesses and California’s Attorney General announcing plans to prosecute employers for violation of new laws passed through AB 450, employers should have a plan in place in the event of a raid. As of January 1 AB 450 created new laws governing employers’ obligations related to immigration enforcement efforts. Below is some guidance for employers to use in navigating these tricky situations as well as an overview of the new laws stemming from AB 450.

Tips for Handling Immigration Agency Inspections:

  • Do not allow agents to enter any non-public area, or provide access to records, without a valid warrant, or for records a valid “Notice of Inspection.”

Public areas: generally parking lots, lobbies, waiting areas, or other places the public enters or is permitted to enter.

Non-public areas: offices, back of house areas, areas marked “private” or “no trespassing,” and areas where the public is not permitted to enter due to company policy.

  • When requesting a warrant, communicate with the agent in a public area and away from employees.

(Make sure the warrant is valid and signed by a Judge. Warrants from the Department of Homeland Security are not valid.)

  • If you receive a “Notice of Inspection,” notify employees promptly (within 72 hours).
  • Do not unnecessarily re-verify employment.
  • Consider implementing a plan with the procedure to follow in the event of an inspection.
  • Train employees – especially front-of-house workers, or those that greet visitors – on the new law and what to do in the event of an inspection. Employees should be advised to tell inspection agents that they are not authorized to allow entry and the name of the person who is.

Tips for Communicating with Employees about Inspections:

  • Ensure you are abiding by the required notice procedure and content of Labor Code §90.2, described below.
  • You may advise employees that they do not have to talk to immigration enforcement agents, and they do not have to provide any documents.
  • Advise employees to call an immigration attorney, Legal Aid, or another resource.
  • Avoid getting admissions from employees regarding whether they are legally authorized to work unless you are required by law to re-verify their status.

AB 450 created obligations of an employer as it relates to (1) an immigration agency inspection, (2) notice to employees regarding an inspection, and (3) re-verifying employment. Violation of these new laws carries fines for employers that vary from $2,000-$10,000.

Obligations Upon Immigration Agency Inspection:

(Gov. Code §§7285.1, 7285.2, 7285.3)

  • Employers cannot provide voluntary consent to ICE agents to enter non-public areas without a warrant.
  • Employers can and should take an ICE agent to a public area where employees are not present in order to verify if there is a warrant.
  • Employers cannot provide voluntary consent to an ICE agent to access, review or obtain employee records without a subpoena or warrant.

Employers may challenge the validity of the warrant or subpoena.

  • Employers may provide I-9’s or other forms if a Notice of Inspection has been provided to the employer, without requiring a subpoena or warrant.

Employee Notice Regarding Inspection:

(Labor Code §90.2)

  • Provide notice within 72 hours of receipt of any Notice of Inspection. The notice must contain (1) the name of the agency conducting the inspection, (2) the date the notice was received, (3) the nature of the inspection (to the extent known), and (4) a copy of the Notice of Inspection. The Labor Commissioner will have a template available by July 1.
  • Provide a copy of the Notice of Inspection to employees that request it.
  • Provide a notice of the results of the inspection to all affected employees within 72 hours of receipt of the results, along with written notice of the obligations of both the employer and employee. This notice must contain (1) description of the identified deficiencies as stated in the inspection results, (2) the time period to correct the deficiencies, (3) the time and date of any meeting with the employer to correct the deficiencies, and (4) notice that the employee has a right to representation during any meeting scheduled.

“Affected employee” is one that is identified in the results from the immigration agency who may lack work authorization, or whose work authorization contains deficiencies.

Verifying Employment:

(Labor Code §1019.2)

  • Employer is not permitted to re-verify the employment eligibility of a current employee at a time or manner not required by Section 1324a(b) of Title 8 of the US Code. Essentially, this means that employers can only re-verify employment for current employees at the time the work authorization expires.

For assistance with this and other employment related issues, please contact Jennifer Douglas or Valerie Perdue. To reach us by phone call our offices at 707-261-7000 or 707-524-7000.