All California peace officers must meet initial standards set by the Commission on Police Officer Standards and Training (POST).  Those standards have recently been expanded, and more change may be coming.

AB 846, effective January 1, 2021, modified Government Code section 1031 to require that a peace officer be free of bias against race or ethnicity, gender, nationality, religion, disability, or sexual orientation, in addition to the preexisting requirement that he or she be free of any physical, emotional, or mental condition that might adversely affect the exercise of the powers of a peace officer.

Government Code section 1029 currently disqualifies any person who has been convicted of a felony, or any offense in another state that would have been a felony if committed in California, from becoming a peace officer.  Two pieces of proposed legislation, introduced by Assemblymember Jim Cooper and AB 60, introduced by Assemblymember Rudy Salas on December 7, 2020, would also disqualify individuals discharged by military tribunals for offenses that would constitute felonies in California.

AB 89, introduced on December 7, 2020, would increase the minimum qualifying age for a peace officer from 18 to 25 for individuals without a college degree.  Individuals between 18 and 24 years of age would only be eligible to serve as peace officers with a bachelor’s degree or advanced degree from an accredited college or university.

Federal legislation introduced on January 4, 2021 by Rep. Bobby Rush (D-Ill.), titled the Providing Officer Licensing to Increase Confidence for Everyone (POLICE) Act, would require the U.S. Attorney General to develop and issue standards for federal law enforcement officers, including licensing and continuing education.  This legislation would also provide incentives for states to implement a comparable system.

Meanwhile, California is currently one of only four states without a process for decertifying officers who do not meet standards during their careers, along with Hawaii, New Jersey, and Rhode Island.  That may soon change.

Last year, SB 731 died on the floor of the Assembly on November 30, 2020, the last day of the legislative session, without a vote.  That legislation would have established a statewide process to decertify officers who were terminated for specified acts of misconduct, including excessive force and dishonesty.  Further, in addition to other changes in law, SB 731 would have given authority to other government agencies to investigate allegations of misconduct where the accused officer resigned during his or her agency’s investigations.

However, this was not the end of the line for the movement toward a statewide decertification process.  On December 7, 2020, Senators Toni Atkins and Steven Bradford introduced Senate Bill 2, which would confirm the Legislature’s intent to “provide a decertification for peace officers.”  In addition, two separate bills, were introduced in the Assembly the same day that would create peace officer decertification procedures.  AB 17 and AB 60 both propose to disqualify any person who has had his or her POST certification revoked from future employment as a peace officer.

AB 17 and 60 would require that a peace officer have his or her certification suspended or revoked upon a determination that he or she has become ineligible pursuant to Government Code section 1029 or has been subject to a sustained termination for serious misconduct on or after January 1, 2022.

Both of these bills would require POST to create a Peace Officer Standards and Training Accountability Advisory Board to review reports of serious misconduct by peace officers and to make a recommendation to the Commission regarding what action, if any, should be taken against the subject peace officer’s certification.  Both statues would require the Commission to create a regulation defining “serious misconduct,” to include at least dishonesty, abuse of power, physical abuse or excessive force, sexual assault, and bias in the performance of an officer’s duties.  AB 60 would also require that participation in organized criminal operations be included in the definition of serious misconduct.

Under both statutes, if the recommendation of the Board was supported by clear and convincing evidence, action would be taken against the officer’s certification in formal proceedings consistent with the Administrative Procedures Act.

Individual agencies would be responsible for investigating the allegations of serious misconduct, but the Commission would have access to review the investigative file and administrative appeal record of the agency, for the purposes of disqualification.   The Commission would also conduct an investigation into any officer who was the subject of three allegations of serious misconduct in five years.

High-profile cases have thrust peace officer standards into the national spotlight.  It is unknown at this time whether these bills, either in their current form or containing modifications, will become law.  What appears certain is that the public, and therefore the Legislature, will remain interested in regulating peace officer standards.  Agencies should consult with legal counsel to stay on top of the changing landscape.

As the COVID pandemic rages on, employees required to work remotely since March 2020 will continue to do so for at least a foreseeable portion of 2021. While a burden for some, the pandemic has opened endless relocation possibilities for others, allowing some remote workers to visit and stay with family, work from a vacation destination, or work from less expensive areas to save on the cost of living. As we enter a new tax year under COVID, many employers are asking whether they have special obligations to out-of-state teleworkers. In addition, employees who have enjoyed the advantages of their new location may be asking to make the arrangement permanent.

Before acquiescing to the permanent relocation of your employees, employers should be aware of complications related to the employment of out-of-state workers.

How Do Payroll Taxes Change When My Employee Works Remotely Outside of California?

California employers must understand and comply with their payroll tax obligations for out-of-state workers, including the following:

State Personal Income Tax

Each state has its own laws regarding taxation of remote work when an employee works in a state other than where their worksite is located, or a state other than their primary residence. Employees of California employers who work outside of California may have new state and local tax obligations, and California employers may be required to withhold state income taxes for the state from which remote workers live and perform their job duties.

An employer is required to withhold state income tax from wages for an employee’s state of residence if the employer has a business nexus in the state. An employee working remotely from their state of residence on a temporary basis may be sufficient to create a business nexus.

California employers are required to withhold income tax when a California resident performs services that are subject to state income tax withholding laws of both California and another state. However, states are prohibited from double taxation of the same income. To comply with multistate tax obligations in such cases, the employer must make the withholding required by the other jurisdiction, and for California, in the amount by which the California withholding amount exceeds the withholding amount for the other jurisdiction. If the withholding amount for the other jurisdiction is equal to, or greater than, the withholding amount for California, no additional withholding for California is required.

For non-residents, a California employer must withhold California personal income tax and report wages paid to nonresident employees for services performed within California. However, only the wages earned in California are subject to California state income tax.

During the COVID-19 pandemic, some state tax agencies, including the California State Franchise Tax Board, have waived the business nexus during the emergency if established only by the presence of resident employees working temporarily from home due to the pandemic. Employers should verify whether any similar waiver is in place for the “home” state of its employees when determining state income tax withholding.

Unless two states have a reciprocity agreement (which allow residents to pay tax only based on where they live, and not where they work), an employee may be required to file multiple returns to ensure proper taxation. California does not have reciprocal tax agreements with other states.

Proposed legislation, such as the Remote and Mobile Worker Relief Act and the Multi-State Worker Tax Fairness Act of 2020, have been previously introduced to Congress in order to create a uniform approach to taxation for multi-state workers. However, these bills have failed to gain any momentum. Until clarifying legislation is adopted, remote workers who work out-of-state from their employer may continue to face multiple reporting and filing obligations in different states, and create additional administrative obligations for the employer.

Other Payroll Taxes

In regard to other employment taxes, when an employee works in California as well as one or more other states, the state that has jurisdiction for coverage of that employee’s services is determined by the application of four tests. The tests are used by all states to determine where a multistate employee’s wages should be reported and subject to state employment taxes. Jurisdiction is determined (1) by the location of the employee’s service, (2) the employee’s “base of operations” from which the employee starts work and receives employer instructions, (3) the place from which the employer exercises basic and general direction and control, and/or (4) the residence of the employee. An employee must perform some service in California before the tests can be applied to determine whether all the employee’s services can be allocated to California. If California is determined to have jurisdiction over the employee’s services, California must be paid Unemployment Insurance (UI), Employment Training Tax (ETT), and State Disability Insurance (SDI).

The stakes of accurate determination of state jurisdiction can be high. Nine states throughout the country now have paid family and medical leave (PFML) insurance programs similar to California’s SDI/Paid Family Leave (PFL), funded by mandatory payroll taxes. Failure to accurately apply jurisdictional tests can result in added payroll taxes for employees, or ineligibility of employees for PFML. Failure to comply can also result in penalties for employers.

Workers Compensation Insurance

Every employer in California is required to either obtain workers’ compensation insurance, or to secure a certificate of consent to self-insure from the Director of Industrial Relations. For out-of-state workers, the state laws of their state of residence may also apply. If an employee files a workers compensation claim in another state for a California employer, the insurance coverage of the California employer may or may not cover the claim. In addition, other factors such as the length of temporary and permanent disability benefits will likely differ state to state. Employers will need to obtain workers compensation insurance coverage, or a comparable certificate of self-insurance, in the state where the remote worker is located and is performing service. Failure to provide adequate workers’ compensation coverage may result in penalties for the employer.

What Other State Laws Apply To My Employee Who Works Remotely Outside of California?

Wage and Hour and Leave Laws

Most employers are required to comply with the federal Fair Labor Standards Act (FLSA), as well as applicable state wage and hour laws. California public agencies are exempt from a number of Labor Code provisions and significant portions of Industrial Welfare Commission Wage Orders. California wage and hour laws apply to workers who perform all or most of their work in the state, or if a worker does not perform the majority of their work in any one state, California wage and hour laws apply if California serves as the base for work operations.

While California employers are already subject to a vast array of leave laws such as mandatory paid sick leave, other states may be more generous with certain leave laws. California employers with remote out-of-state workers must learn and comply with the overtime, meal and rest breaks, leaves of absence, and other labor laws of the state where the employee performs most of their work.

Posting Obligations

An employer is required to post mandated state and federal employment law notices in an area frequented by all employees. Failure to display the correct state and federal employment law notices can result in penalties. An employer with out-of-state remote workers must ensure that such workers are on notice of the applicable state laws for the state in which they are working. For such employees, employers can mail or email postings or post them on an employer intranet page.

Are Independent Contractors the Solution?

Recent California legislation has significantly limited the ability to classify employees as contractors, albeit with numerous occupations exempted. To be considered a contractor under California law for the purpose of the California Labor Code (including Workers Compensation), Unemployment Insurance, and California Wage Order compliance, the individual must satisfy the “ABC” test, or belong to one of the state’s exempted professions and meet different requirements.  Under the ABC test, in order to qualify as an independent contractor, an individual must (A) be free from the control and direction of the hiring entity in connection with the performance of the work; (B) perform work that is outside the usual course of the hiring entity’s business; and (C) be customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity. The law applies to workers in California, but does not necessarily change how out-of-state workers are classified.

While out-of-state contractors who can qualify as independent contractors under applicable law may provide some solutions, general law cities and counties with civil service systems are subject to other restrictions on contracting out services. California employers should seek legal advice before converting employees to out-of-state contractors.

Other Considerations for Out-of-State Remote Workers

Performance Management

Performance management of remote workers can sometimes be challenging, especially when it is unclear how much time the employee is actually working. When remote workers reside locally (and pandemic rules do not apply), an employer can rescind the telework arrangement and require the employee to work in the office to ensure productivity standards. However, if the employee has relocated out-of-state, the arrangement cannot be so easily undone. Employers should ensure that they have the means to manage the performance of out-of-state employees before agreeing to such an arrangement.

Disaster Service Response

For local government agencies, public employees take an oath and are required to act as Disaster Service Workers (DSWs) in the event of a disaster or emergency. An out-of-state worker will either be required to return to the state to perform DSW duties or be able to perform such duties remotely. Local government employers should consider this when deciding to allow permanent out-of-state telecommuting.

Information Technology Requirements

Employers should explicitly detail the information technology obligations of the remote employee, such as providing a sufficient Wi-Fi connection and virus protection for employee-owned devices.

Employers are encouraged to adopt a formal telecommuting policy that outlines the employer’s expectations for employees who work from home. Rather than a “don’t ask don’t tell” approach, employer policies should clearly outline the employer’s stance on out-of-state telecommuting. A telecommuting agreement with each individual employee can also help to clearly lay out expectations, such as whether the employee is required to periodically appear to work in person and how frequently. Employers should remember to negotiate with its labor unions the impacts of such a policy on terms and conditions of employment. For more information about post-pandemic teleworking, see “Working from Home in a Post-Pandemic World” by Danny Yoo.

 

On April 30, 2018, the California Supreme Court issued a landmark decision in the matter of Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903. The California Supreme Court reinterpreted and significantly altered the test for determining whether workers in California were properly classified as independent contractors for the purposes of the wage orders adopted by California’s Industrial Welfare Commission (IWC). The Court established a new test, often referred to as the “ABC” test, which was codified in AB 5 (effective January 1, 2020).

The Court in Dynamex rejected the longstanding and more flexible multifactor standard established in S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341. Under the Borello test, the primary consideration for determining whether an individual is an independent contractor or employee is whether the hiring entity had the right to control the manner and means of the work. Under the “ABC” test in Dynamex, however, the presumption is that the individual is an employee unless the hiring entity demonstrates that all three of the following conditions have been satisfied in order for the individual to qualify as an independent contractor:

A)  The individual is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract terms and in fact;

B)   The individual performs work that is outside the usual course of the hiring entity’s business; and

C)   The individual is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

On September 18, 2019, Governor Gavin Newsom signed AB 5 into law. AB 5 created Labor Code section 2750.3, which codified the ABC test adopted in Dynamex as listed above, and expanded its application beyond Industrial Welfare Commission (IWC) wage orders to the Labor Code and Unemployment Insurance Code. Additionally, AB 5 applied this new Labor Code section 2750.3 to Labor Code section 3351, which relates to employment status for workers’ compensation coverage. Labor Code section 2750.3 also carved out a number of exemptions for occupations that remain subject to the old, multifactor Borello test[1].

Finally, AB 5 amended Unemployment Insurance Code section 621 to incorporate Dynamex’s ABC test. This amendment does not reference the exemptions for occupations in Labor Code section 2750.3 that remain subject to the old, multifactor Borello test. Thus, those independent contractors who fall into one of the exemptions in Labor Code section 2750.3 may not be exempt from the provisions of the Unemployment Insurance Code unless the conditions of the ABC test are satisfied.

LCW published detailed Special Bulletins on the California Supreme Court’s adoption of the “ABC” test, the expansion of Dynamex, and the potential impacts on employers. (The link to one of these articles can be found here.)

An important question left unanswered by the Court and not addressed in AB 5 was whether Dynamex would apply retroactively. The California Supreme Court recently answered this question with a resounding yes delivering another blow to employers and increasing the number of employers who may be liable for the misclassification of workers.

On January 14, 2021, in Vasquez v. Jan-Pro Franchising International, Inc., the California Supreme Court determined that Dynamex applies retroactively. In concluding that the standard set forth in Dynamex applies retroactively — that is, the “ABC” test applies (unless otherwise exempted under Labor Code 2750.3) to all pending independent contractor misclassification cases, which were filed prior to the date the decision in Dynamex became final — the Court relied primarily on the fact that Dynamex addressed an issue of first impression. The Court further noted that it did not change a settled rule on which the parties had relied. Indeed, no decision of the Court prior to Dynamex had determined how the “suffer or permit to work” definition in California’s wage orders should be applied in distinguishing employees from independent contractors. Accordingly, because the Court had not previously issued a definitive ruling on the issue addressed in Dynamex, they saw no reason to depart from the general rule that judicial decisions are given retroactive effect.

The Vasquez decision signifies that Dynamex will be applied in all non-final independent contractor misclassification cases that predate the April 2018 Dynamex decision. In addition, Courts will apply Dynamex to pre-Dynamex conduct in new lawsuits that still may be filed under the applicable statute of limitations.

While the Dynamex ruling is limited to an analysis of the California Wage Orders (Cal. Code Regs. § 11010 et seq.), AB 5 and Labor Code section 2750.3 extend the ABC test in Dynamex to the general Labor Code and Unemployment Insurance Code. Accordingly, employers should carefully consider the clear guidance provided in Dynamex in classifying independent contractors to avoid litigation or defend against it. Public agencies and nonprofits are well advised to review all current independent contractor arrangements under the “ABC” test and reclassify such arrangements if necessary. LCW is available to assist in conducting such a review.

 


[1] These exemptions include, insurance agents; medical professionals such as physicians, dentists, podiatrists, psychologists, and veterinarians; licensed professionals such as attorneys, architects, engineers, private investigators, and accountants; financial advisers; direct sales salespersons; commercial fisherman; some contracts for professional services for marketing, human resources administrators, travel agents, graphic designers, grant writers, fine artists, freelance writers, photographers and photojournalists, and cosmetologists; licensed real estate agents; “business service providers”; construction contractors; construction trucking services; referral service providers; and motor club third party agents. Eight months after AB5 went into effect, Governor Newsom signed AB2257, which immediately exempted the following industries and occupations, among others, from the ambit of AB5: fine artists; freelance writers; still photographers; photojournalists; freelance editors; newspaper cartoonists; translators; copy editors; producers; insurance inspectors; real estate appraisers; manufactured housing salespersons; youth sports coaches; landscape architects; and professional foresters.

On November 3, 2020, 58% of Californians determined the future of ride-share drivers and delivery apps, by voting that drivers should be classified as independent contractors, rather than employees.  The state ballot measure, Proposition 22, made drivers independent contractors according to California law. Prop. 22 supersedes AB5, intended to grant drivers full employment, including minimum wage protections, health care and such benefits as unemployment and sick leave.

The term “hostile work environment” is used – or rather, misused – so often, that its meaning has become somewhat obscured.  In an office full of fans of the local sports team, the sole fan of its archrival may say that being singled out as such creates a “hostile work environment.”  Or, in a workplace full of fashionistas, the sole person who prefers casual wear may claim that the environment is “toxic” due to coworkers’ focus on fashion.  Have the sole fan of the archrival team and the casual wear fan been subject to “hostile” or “toxic” work environments?

From a legal point of view, the answer is no.

Under both California’s Fair Employment and Housing Act and federal anti-discrimination laws such as Title VII of the Civil Right Act of 1964, the Age Discrimination in Employment Act, and the Americans with Disabilities Act, actionable discrimination and harassment are contingent upon protected classifications.  Both California and federal law protect employees from discrimination and harassment based on age, race, color, national origin and/or ancestry, sex, religion, disability, genetic information, and veteran status.  (Notably, California offers broader protection than federal law, and includes additional protected classifications.)

However, neither California nor federal law confers protected classification status upon support for a specific sports team or preference for casual dress.  Likewise not protected – perhaps surprisingly – are socio-economic status, educational level, and income level.  Many are also taken aback to find that weight is not a protected classification under California or federal law.  Despite lively social media discussions regarding body positivity and the obstacles often faced by individuals as a result of their weight, only San Francisco (San Francisco Police Code section 3301) and Santa Cruz (Ordinance No. 2017-09) expressly prohibit weight discrimination.

To constitute actionable hostile work environment, harassment must be based upon an individual’s protected trait or traits, as defined under applicable law.  If it is not, such conduct does not create a “hostile work environment” in the legal sense.

That does not mean that employees may poke fun at others with impunity.  Discourteous, disrespectful, or rude language targeting a coworker for any reason may well expose an employee to discipline, including dismissal, under an agency’s professionalism and/or civility policy.  However, a “hostile work environment” – in a legal sense – exists only where one’s conduct targets another because of the other’s actual or perceived protected characteristic.

To ensure that employees have a thorough understanding of the laws governing unlawful discrimination, harassment, and retaliation, public agencies should provide all employees mandatory harassment training, and clearly communicate their policies governing conduct in the workplace.

 

In 2015, someone shot a police officer and a suspect was later arrested.  While off-duty, a SWAT sniper commented on a friend’s Facebook post which linked to an article about the shooting.  He wrote, “It’s a shame he didn’t have a few holes in him.”  An anonymous tip came in about the post, there was an internal investigation, and the officer was transferred out of SWAT and put back on patrol.  The department felt that his comment showed he had become “a little callous to killing.”

He filed a lawsuit alleging the department had retaliated against him for speech protected under the First Amendment.  On January 12, 2021, the Ninth Circuit Court of Appeals issued a ruling that will serve as the governing authority in California on public employees’ free speech rights.  See Moser v. Las Vegas Metropolitan Police Department (9th Cir., Jan. 12, 2021, No. 19-16511) 2021 WL 98249 (Moser).

The court in Moser began by explaining the applicable test the U.S. Supreme Court has developed to address public employee First Amendment claims against their employers.  Under that test, the plaintiff must show: (a) he spoke on a matter of public concern; (b) he spoke as a private citizen rather than a public employee; and (c) his speech was a substantial factor in his discipline.  If the employee makes this showing, the burden shifts to the employer to demonstrate that its legitimate administrative interests outweighed the employee’s First Amendment rights.  If the employer cannot meet its burden, then the First Amendment will protect the plaintiff’s speech.

Applying this test, the court in Moser found the employee met his burden because:

  1. The SWAT sniper’s comment addressed an issue of public concern, which means it related to any matter that is political, social or another concern to the community or is the subject of legitimate news interest;
  2. The SWAT sniper’s comments were made as a private citizen and not a public employee because he was at home, off-duty and used his personal Facebook account; and
  3. He was transferred out of SWAT because of his Facebook post.

The court then turned to the balancing test between the employer’s administrative interests and the employee’s First Amendment Rights.  Importantly, the court noted that even though the government generally cannot consider the content of the speech under the First Amendment, there is a narrow exception for speech by government employees.  When applying the balancing test, courts may consider the content of the speech to determine how much weight to give the employee’s First Amendment interests.

In Moser, the court held that it could not balance the employer’s administrative interests against the employee’s First Amendment rights because of two factual disputes.  First, it found there was a factual dispute over what the Facebook comment objectively meant.  The police department contended it advocated unlawful violence by law enforcement.  Under the department’s interpretation, the Facebook comment would not have needed the highest level of First Amendment protection.  However, the SWAT sniper contended he did not advocate unlawful violence, but instead expressed frustration at the perils police officers face.  Under his interpretation, his Facebook post would have needed the highest level of protection because it would relate to an important public policy issue.  A significant point to take away from this part of the ruling is that before disciplining employees based upon their speech, public entities must analyze potential ways the employee could claim his or her speech sought to address problems at work.  If it could be interpreted that way, the speech will be entitled to greater protection under the First Amendment.

After addressing the strength of the employee’s First Amendment rights, the court in Moser then considered the other side of the balancing test, which is the employer’s administrative interests.  The court found there was a factual dispute over whether the Facebook post would have caused disruption to the police department or exposed it to future legal liability.  It noted there was no media coverage, no evidence that anyone knew about the post other than the person who made the anonymous tip, and little chance the public would have seen it because the SWAT sniper deleted his Facebook comment.  A significant point to take away from this ruling is that before disciplining employees based on their speech, public entities should consider whether they can produce evidence that the speech has or will disrupt their workplace.

The police department has the option to file a petition for rehearing en banc (i.e., by a larger panel of the Ninth Circuit) to ask it to reach a difference decision, and can ask the U.S. Supreme Court to choose to hear the case and possibly reach a different result.  However, the ruling in Moser is now the law in California and courts will rely on it when issuing rulings related to public employees’ First Amendment rights.  With the rise in social media usage, public entities will increasingly be challenged with how to handle controversial online posts by their employees.  They should consider seeking legal advice when deciding whether to impose discipline.

 

 

At the beginning of the COVID-19 pandemic, many employers allowed some of their employees to work from home (i.e., “telecommute” or “telework”) in the interest of public health.  We are now entering our tenth month of the pandemic, and working from home has become “the new normal” for many employers and employees.  Now, as vaccines will become more readily available, there is hope that the pandemic will end soon.  In a post-pandemic world, employers will have to decide if and when to have employees return to the worksite or if they will allow employees to continue to work from home.  Indeed, some employers have already determined that working from home will continue.  For example, in October 2020, Twitter announced that working from home would be available even after the pandemic.

If an employer decides, however, that it is going to require employees to return to the worksite, it should be prepared for possible requests for accommodation to work from home.  Prior to the pandemic, the EEOC had issued guidance on whether working from home could be an accommodation.  You can find EEOC’s guidance here.

First, the employer must determine if there is a physical or mental condition that limits the employee’s ability to work in the workplace.  The EEOC writes that the employee “must explain what limitations from the disability make it difficult to do the job in the workplace.”  A person who is merely fearful of returning to the worksite likely will not qualify as a person with a disability.  On the other hand, if an employee has a medical reason that makes it difficult to perform their essential functions in the workplace, then that person may qualify as a person with a disability.

Second, assuming the employee can establish that he or she has qualifying limitations, the employer must evaluate whether telework can be provided as a reasonable accommodation.  In responding to the question of how to determine whether working from home is a possible accommodation, the EEOC writes:

Several factors should be considered in determining the feasibility of working at home, including the employer’s ability to supervise the employee adequately and whether any duties require use of certain equipment or tools that cannot be replicated at home.  Other critical considerations include whether there is a need for face-to-face interaction and coordination of work with other employees; whether in-person interaction with outside colleagues, clients, or customers is necessary; and whether the position in question requires the employee to have immediate access to documents or other information located only in the workplace.  An employer should not, however, deny a request to work at home as a reasonable accommodation solely because a job involves some contact and coordination with other employees.  Frequently, meetings can be conducted effectively by telephone and information can be exchanged quickly through e-mail.

Prior to the pandemic, many of these factors weighed against granting an accommodation to work from home for your particular agency.  Some factors will likely continue to weigh against teleworking, both pre- and post-pandemic, e.g., positions that require face-to-face interaction or require access to highly confidential documents and information.  In a post-pandemic world, however, your agency may need to re-analyze these factors to see if they still weigh against teleworking.  For example, the employer may now have an infrastructure that allows basic administrative tasks to be performed remotely, whereas they did not have that prior to the pandemic.

As with any accommodation request, these requests will be unique to each employer and employee.  If you receive an accommodation request, LCW attorneys are available to assist you and your agency with the request.

On January 8, the Department of Occupational and Safety (Cal/OSHA) updated its interpretive guidance concerning emergency COVID-19 regulations that took effect on November 30, 2020. The guidance reflects new information concerning employer obligations and employee entitlements under both Title 8 Sections 3205 and 3205.1, which, respectively, relate to the COVID-19 Prevention Program (CPP)[1] and workplace COVID-19 outbreaks[2].

While Cal/OSHA provides additional information on more than three dozen topics, the purpose of this special bulletin is to provide operational guidance on the more important of these topics,  including: (1) the scope of the regulation’s coverage as it pertains to certain employees; (2) employer testing obligations in the event of “close contact” exposures[3] and/or COVID-19 outbreaks; (3) clarification concerning the definition of an “exposed workplace” for purposes of establishing that a COVID-19 outbreak has occurred; and (4) employer requests to Cal/OSHA to waive the exclusion or quarantine requirements for certain employees.

In addition to describing the Cal/OSHA updates in this special bulletin, Liebert Cassidy Whitmore also updated our template CPP for consortium and non-consortium members and guide to reflect this information. Employers that purchased the template will be receiving the updated version. Other employers should consider purchasing the updated LCW template and guide in order to revise their own CPP documents.

Scope of Regulatory Coverage

Cal/OSHA clarifies the scope of coverage for its regulations, including as it relates to the following two (2) groups of employees: (1) employees who are or may be subject to a related regulation, Section 5199, which concerns Aerosol Transmissible Diseases (“ATDs”); and (2) employees who are vaccinated for COVID-19.

Employees Who May Perform “Services” Covered by Section 5199

Section 3205 expressly exempts from coverage “[e]mployees when covered by [Title 8] Section 5199”.[4] That regulation covers “health care facilities, services, or operations”, and also certain “services”, including those provided by some firefighters and police officers.[5]

Specifically, Section 5199 applies to “[p]aramedic and emergency medical services including these services when provided by firefighters and other emergency responders.”[6] Section 5199 also applies to “[p]olice services, provided during transport or detention of persons reasonably anticipated to be cases or suspected cases of aerosol transmissible diseases; and police services provided in conjunction with health care or public health operations.” Therefore, firefighters and police may be covered by Section 5199, and exempt from Section 3205, when those employees are actually performing the specific services described above.

While Cal/OSHA’s updated guidance discusses employees who work in facilities and operations covered by Section 5199, it omits reference to employees whose coverage depends on the services that the employee performs. The guidance provides that if an employee works in a “single workplace” or “facility or operation” “that is within the scope of section 5199”, the employee is covered by the requirements of Section 5199, and not Section 3205.[7] The guidance does not discuss “services” at all nor does it describe how employers of safety employees should approach or manage the two regulatory schemes to which firefighters and police officers may be subject depending on the services that they perform. Specifically, the guidance does not answer the question as to whether a safety employee who may occasionally perform the “services” that are within the scope of Section 5199, but do not work at a “facility or operation” covered by that regulation, is covered by Section 3205 or 5199 or both regulations.

As a result of the lack of guidance provided by Cal/OSHA on this subject, Liebert Cassidy Whitmore recommends that, unless the employee in question works at a “facility or operation” covered by Section 5199 or is actually performing one of the “services” expressly covered by that regulation, the employee’s employer should consider that such employee is covered by Section 3205.

Employees Who are Vaccinated Remain Subject to Regulatory Requirements

The Cal/OSHA guidance also provides that, for the time being at least, the scope of coverage for the regulations includes employees who have been vaccinated for COVID-19.[8] Cal/OSHA suggests that this guidance may change in the future, but that the regulatory requirements currently cover such employees and the employers of such employees. Liebert Cassidy Whitmore advises employers, particularly those with vaccinated employees, to monitor guidance from Cal/OSHA on this topic.

Testing Obligations in the Event of “Close Contact” Workplace Exposures and “COVID-19 Outbreaks”

In addition to issues related to the scope of coverage, Cal/OSHA also clarifies several points about an employer’s obligations regarding testing employees for COVID-19 in the event that there is a “close contact” exposure under Section 3205 or a “COVID-19 outbreak” under Section 3205.1.[9]

First, Cal/OSHA clarifies that there is no difference between the regulatory requirement to “offer testing” to employees who had a “close contact” COVID-19 exposure in the workplace[10] and the requirement to “provide COVID-19 testing” to all employees at the “exposed workplace” in the event of a COVID-19 outbreak[11]. This guidance clarifies confusion concerning whether the use of different verbiage entailed different obligations to employees under each circumstance.

Second, Cal/OSHA provides that the employer does not need to offer employees COVID-19 testing in or at their worksite following a “close contact” exposure or a COVID-19 outbreak, but can offer such testing at off-site locations. The construction of both Sections 3205 and 3205.1 was unclear on this point and contributed to confusion as to whether employers were required to provide testing to employees in or at the workplace where the exposure or potential exposure occurred or just to those employees who were in or at that workplace.[12] Cal/OSHA’s guidance clarifies that there is no obligation to provide the requisite testing at any specific location.

Relatedly, Cal/OSHA provides that, in order to discharge their obligations to provide “free testing” for employees under both Section 3205 and 3205.1, the employer may send such employees to an off-site testing location and during non-working hours, but must ensure that such employees “incur no costs for the testing.”[13] As a result, employers must provide such employees compensation for their travel time and the costs incurred for such travel as well as pay for the time actually being tested, if during non-working hours.[14]

While these clarifications are consistent with Liebert Cassidy Whitmore’s prior interpretations of the regulation and advice provided to clients, we reiterate our advice to employers to do the following: (1) offer testing to all employees who had “close contact” exposure to someone with COVID-19 while at work or who were at the “exposed workplace” during a COVID-19 outbreak; (2) compensate employee for the testing either by providing such testing during the employee’s regular working hours or by supplementing the employee’s pay for the time spent being tested during non-working hours; and (3) either provide employee testing at the employer’s worksite or compensate employees for costs incurred by employees traveling to and from the off-site testing location.

While Cal/OSHA provided some useful information concerning employers’ testing obligations, the guidance did not address whether an employer may permissibly direct an employee to be tested by the employee’s health care provider if the employer reimburses the employee for the health insurance costs, if any, charged to the employee for such testing. This legal issue is presently unsettled. Until Cal/OSHA answers this question, employers should recognize that there are risks associated with requiring that employees incur expenses associated with their actual testing, even if the employer reimburses such expenses.

Clarification as to What Constitutes an “Exposed Workplace” for Purposes of Establishing the Existence of a COVID-19 Outbreak and Related Employer Obligations

Cal/OSHA provides guidance concerning the conditions necessary for the establishment of a COVID-19 outbreak under Section 3205.1.

Cal/OSHA provided that, in order to establish a COVID-19 outbreak and trigger the resulting regulatory obligations under Section 3205.1, the “exposed workplace” is not an entire workplace or building, but rather “only the areas of the [workplace or] building where the COVID-19 were present,” including a specific “work location, working area, or common are used or accessed by a COVID-19 case.”[15] This interpretive guidance narrows the scope of the physical area in which three (3) or more COVID-19 cases must be present in order for there to be an “outbreak.”

Cal/OSHA further clarifies that it “does not expect employers to treat areas where masked workers momentarily pass through the same space without interacting or congregating as an ‘exposed workplace,’ so they may focus on locations where transmission is more likely.”[16] Finally, Cal/OSHA indicates that separate non-overlapping shifts who work at the same location may each constitute a “separate ‘exposed workplace.’”[17]

Taken together, Cal/OSHA’s interpretations allow for an employer to disaggregate the specific “workplaces” that may comprise a single “worksite”, which may significantly reduce the likelihood of COVID-19 outbreaks under the regulation. As a result, Liebert Cassidy Whitmore recommends that employers subdivide large worksites into smaller workplaces. Further, in the event that there are three (3) or more COVID-19 cases at a worksite, we recommend that the employer identify whether there were a sufficient number of such COVID-19 cases in any one of the specifically identified workplaces necessary in order for the COVID-19 cases to constitute a COVID-19 outbreak at such workplace. Relatedly, Cal/OSHA states that it will consider an employer’s good faith effort to comply with the regulations before issuing any citations or monetary penalties.[18]

Request for Cal/OSHA Waiver of the Regulatory Exclusion/Quarantine Requirement

Cal/OSHA provides information regarding how and under what circumstances an employer may request that Cal/OSHA waive the requirement that employees be excluded from employer worksites and facilities following a “close contact” exposure or COVID-19 diagnosis.[19] The underlying regulation provided no information about how to request such a waiver from Cal/OSHA.[20]

Cal/OSHA clarifies that such requests should only be made if the absence of such employee from the employer’s worksite would cause a staffing shortage that would have an “adverse on a community’s health and safety” and pose an undue risk to the community’s health and safety as a result.[21] The guidance makes clear that the type of operations that may qualify for waiver are “narrower than the definition of ‘critical infrastructure’” and that Cal/OSHA will not provide waivers to employers in anticipation of a future workplace exposure or outbreak, but only if such exposure or outbreak has occurred.[22]

While Cal/OSHA does not discuss guidance provided the California Department of Public Health (“CDPH”) the quarantines following “close contact” exposure, Liebert Cassidy Whitmore interprets the Cal/OSHA waiver as separate and distinct from the expedited return to work provided to certain employees under the CDPH framework. While this question is untested and therefore unsettled, the firm interprets Cal/OSHA guidance as potentially authorizing the immediate return to work for individuals following a “close contact” exposure or COVID-19 diagnosis under the emergency circumstances described in the regulation and associated guidance.

The Cal/OSHA guidance provides for how an employer may request a waiver. An employer should submit the request to rs@dir.ca.gov, but that in the event of an emergency, an employer may request a provisional waiver by contacting the local Cal/OSHA office while the employer prepares the written waiver request. The written waiver request should provide the following:

  1. Employer name and business or service;
  2. Employer point-of-contact name, address, email and phone number;
  3. Statement that there are no local or state health officer orders for isolation or quarantine of the excluded employees;
  4. Statement describing the way(s) in which excluding the exposed or COVID-19 positive employees from the workplace impacts the employer’s operation in a way that creates an undue risk to the community’s health and safety;
  5. Number of employees required to be quarantined under the Cal/OSHA regulation, and whether each was exposed to COVID-19 or tested positive for COVID-19; and
  6. The employer’s control measures to prevent transmission of COVID-19 in the workplace if the employee(s) return or continue to work in the workplace, including the prevention of further exposures. These measures may include, but are not limited to, preventative steps such as isolating the returned employee(s) at the workplace and requiring that other employees use respiratory protection in the workplace.

Liebert Cassidy Whitmore recommends that, in advance of a potential workplace exposure or COVID-19 outbreak that would jeopardize the employer’s ability to continue to provide essential services, an employer identify portions of its operations and job classifications, in particular, that are necessary to provide for the health and safety of the community. Further, we recommend that employers prepare a template waiver request, or use the one developed by our firm and available to Liebert Library subscribers, in order to expedite a written waiver request to Cal/OSHA in the event of an incident that would compromise the employer’s ability to adequately provide for the community’s health and safety.

Conclusion

While there remain a number of unanswered questions concerning the Cal/OSHA regulations regarding COVID-19, the January update provides some important clarifications with which employers should be familiar. This information will help employers ensure compliance with the regulations and minimize potential legal exposure due to non-compliance.

Liebert Cassidy Whitmore attorneys are available to assist public agencies that have any questions about this guidance.

[1] See 8 C.C.R § 3205.

[2] 8 C.C.R § 3205.1.

[3] “Close contact” exposure has the same definition as the term “COVID-19 exposure” as used in the regulation. (See 8 C.C.R. § 3205(b)(3).)

[4] 8 C.C.R § 3205(a)(1)(C)

[5] 8 C.C.R § 5199(a)(1)(A)(8), (a)(1)(C).

[6] 8 C.C.R § 5199(a)(1)(A)(8).

[7] See Cal/OSHA “COVID-19 Emergency Temporary Standards Frequently Asked Questions”, Nos. 6 and 7, https://dir.ca.gov/dosh/coronavirus/COVID19FAQs.html#footnote (Last updated on January 8, 2021.)

[8] See Cal/OSHA “COVID-19 Emergency Temporary Standards Frequently Asked Questions”, No. 24, https://dir.ca.gov/dosh/coronavirus/COVID19FAQs.html#footnote (Last updated on January 8, 2021.)

[9] See Cal/OSHA “COVID-19 Emergency Temporary Standards Frequently Asked Questions”, Nos. 28-30, https://dir.ca.gov/dosh/coronavirus/COVID19FAQs.html#footnote (Last updated on January 8, 2021.)

[10] 8 C.C.R. § 3205(c)(3)(B)(4).

[11] 8 C.C.R. § 3205.1(b)1).

[12] See 8 C.C.R. §§ 3205(c)(3)(B)(4) and 3205.1(b)1).

[13] See Cal/OSHA “COVID-19 Emergency Temporary Standards Frequently Asked Questions”, No. 30, https://dir.ca.gov/dosh/coronavirus/COVID19FAQs.html#footnote (Last updated on January 8, 2021.)

[14] The underlying regulations provides that the testing must be offered or provided “during their working hours” and “during employees’ working hours.”

[15] See Cal/OSHA “COVID-19 Emergency Temporary Standards Frequently Asked Questions”, Nos. 38-39, 41-42, https://dir.ca.gov/dosh/coronavirus/COVID19FAQs.html#footnote (Last updated on January 8, 2021.); See also 8 C.C.R. § 3205(b)(7).

[16] See Cal/OSHA “COVID-19 Emergency Temporary Standards Frequently Asked Questions”, No. 38, https://dir.ca.gov/dosh/coronavirus/COVID19FAQs.html#footnote (Last updated on January 8, 2021.)

[17] See Cal/OSHA “COVID-19 Emergency Temporary Standards Frequently Asked Questions”, No. 44, https://dir.ca.gov/dosh/coronavirus/COVID19FAQs.html#footnote (Last updated on January 8, 2021.)

[18] See Cal/OSHA “COVID-19 Emergency Temporary Standards Frequently Asked Questions”, No. 10, https://dir.ca.gov/dosh/coronavirus/COVID19FAQs.html#footnote (Last updated on January 8, 2021.)

[19] See Cal/OSHA “COVID-19 Emergency Temporary Standards Frequently Asked Questions”, Nos. 61-62, https://dir.ca.gov/dosh/coronavirus/COVID19FAQs.html#footnote (Last updated on January 8, 2021.)

[20] 8 C.C.R. § 3205(c)(11)(E).

[21] See Cal/OSHA “COVID-19 Emergency Temporary Standards Frequently Asked Questions”, No. 61, https://dir.ca.gov/dosh/coronavirus/COVID19FAQs.html#footnote (Last updated on January 8, 2021.)

[22] Id.

We are excited to continue our video series – Tips from the Table. In these videos, members of LCW’s Labor Relations and Collective Bargaining practice group will provide various tips that can be implemented at your bargaining tables. We hope that you will find these clips informative and helpful in your negotiations.

 

On January 7, 2021, the United States Department of Labor (DOL) published a final rule establishing new guidance on classifying individuals as independent contractors under the Fair Labor Standards Act (FLSA).  The new guidance is set forth in Title 29 of the Code of Federal Regulations at Part 795.100 et seq. and is available online here.  The effective date of the final rule is March 8, 2021.

For California employers, the new DOL rule has little to no immediate effect due to established Ninth Circuit law on evaluating independent contractor status under the FLSA.  In addition, the California legislature adopted a new test for evaluating independent contractor status under California law.  The California ABC test was discussed in a previous LCW bulletin available online here.  In addition, the California common law test for independent contractor status still applies to certain categories of individuals and is used by CalPERS.  Nevertheless, it is possible courts will incorporate the new DOL guidance in evaluating independent contractor status in a way that will affect California public agencies.  Thus, we recommend employers familiarize themselves with the test and its concepts.

What is an Independent Contractor?

In the context of employment law, an “independent contractor” is an individual or entity that performs services for a potential employer, but is not an employee.  The significance of the distinction between employee and independent contractor is that an independent contractor is not covered by many of the laws governing employers and employees, such as the FLSA.  In this way, a person performing services as an independent contractor need not be paid minimum wage or overtime, among other statutory benefits that attach to employee status.

A simple example of an independent contractor (under both California and federal law) would be an individual like an electrician, hired to fix a one-time, specialized problem for a fee.  The independent contractor electrician would have multiple clients, be in business for themselves, use their own tools, decline work at their option, and generally would have complete control over the work the electrician was hired to perform.  In contrast, most employees must perform services for their employers at prescribed times and places; their work is directed and overseen by managers; and their compensation is regulated by law.

There are, however, many grey areas between the classic independent contractor and the classic employee.  It is within this grey area where employing entities may misclassify an employee as an independent contractor.  Misclassification may subject an employer to back minimum wages and overtime, liquidated damages, and other penalties.  In addition, for California public agencies, misclassification may give rise to significant liability under applicable pension systems.

The New DOL Two-Factor Test for Independent Contractor Status

Under the new DOL test for independent contractor status, an individual is an independent contractor if the individual is, “as a matter of economic reality,” in business for themselves.  Whereas an employee is economically dependent on the employer, an independent contractor is not.  To determine economic dependence, the DOL will look at two “core” economic reality factors, which the DOL believes are the most probative of economic dependence: (i) The nature and degree of control over the work, and (ii) The individual’s opportunity for profit or loss.  Other, non-core factors the DOL will look at are the amount of skill required for the work, the degree of permanence of the working relationship, and whether the work is part of an integrated unit of production.  Additional factors may also be relevant if they indicate the individual is in business for themselves, as opposed to being economically dependent on the potential employer.

Interestingly, the new DOL test’s factors are similar to the six factors articulated by the Ninth Circuit in the case, Real v. Driscoll Strawberry Associates, which established the still-governing law in California on evaluating independent contractor status under the FLSA.  Where the new DOL rule departs from the Ninth Circuit is in its emphasis on the nature and degree of control over the work and the individual’s opportunity for profit or loss.  It remains to be seen whether the Ninth Circuit or other courts will adopt the DOL’s designation of these two factors as “core,” or will otherwise incorporate the new DOL rule.

Four Tests for Independent Contractor Status

With the issuance of the DOL’s final rule, California public employers are faced with four overlapping, yet distinct tests for independent contractor status: the DOL’s new federal two-factor standard, the Ninth Circuit’s six-factor standard under Driscoll, the California three-factor “ABC test,” and the California common-law multi-factor standard under S.G. Borello & Sons, Inc. v. Department of Industrial Relations.  The below chart sets forth the basic elements of each test.  As you can see, the degree of control a potential employer exerts over an individual is a factor in each test.  Under the current Ninth Circuit test, employers have more flexibility in evaluating independent contractor status.  In contrast, the California ABC test is more rigid and significantly limits independent contractor status.  Employers that adhere to the California ABC test will likely be in compliance with the common law and federal tests.  Public agency employers are encouraged to work with counsel to determine which test – or combination of tests – to use in evaluating independent contractor status.

FLSA

(Ninth Circuit)

FLSA

(DOL)

California Law

(CA Labor Code)

California Law

(Common Law / CalPERS)

“Driscoll” 29 C.F.R. 795.100, et seq. Cal. Lab. Code 2775, et seq.

“Borello”

 

Six Factors:

·   Nature and degree of control

·   Opportunity for profit/loss

·   Investment in facilities/equipment/employment of helpers

·   Special skill required

·   Permanency of working relationship

·   Services rendered are integral part of hiring entity’s business

Two-Factor Test:

(i)      Nature and degree of control

(ii)    Opportunity for profit/loss.

Other Factors:

·         Skill required

·         Degree of permanence of working relationship,

·         work part of an integrated unit of production

ABC Test:

A)      Free from control and direction of hiring entity

B)      Work performed outside usual course of hiring entity’s business

C)      Person customarily engaged in an independently established trade, occupation, or business

Control of Work Test

·     Who controls the work

·      Secondary factors: engaged in district occupation /business; work done by specialist without supervision; particular skill required; who supplies tools, place of work; length of engagement; method of payment; intent of the parties.

Applies to Public Agencies Applies to Public Agencies May Apply to Public Agencies Used by CalPERS