California to Implement Laws in January 2021 That Impact Pay Data Reporting, Leave Laws

California Gov. Gavin Newsom signed numerous legislative bills into law at the end of September 2020 that could impact businesses and their employees. Some of the laws are new — annual report and pay data — while others such as sick leave designation expand upon existing laws.

Paychex has been monitoring this legislation and provides the following summary:

California Annual Report and Pay Data

This new law — SB 973 — impacts employers with 100 or more employees, requiring them to submit workforce pay and hours data from the prior calendar year (or reporting year) by March 31, 2021 and on or before March 31 each year after to the California Department of Fair Employment and Housing (DEFH).

The pay data, similar to the now rescinded federal EEO-1 (Component 2) report, that is required includes W-2 earnings and hours on the each employee, categorized by race, ethnicity and gender in the following job categories:

• Executive or senior-level officers and managers
• Mid-level managers
• Technicians
• Sales workers
• Professionals
• Craft workers
• Administrative support
• Laborers
• Service workers

Employers must base their information to report on a snapshot of the workforce from the end of any pay period between Oct. 1 and Dec. 31 of the previous year. An employer with 100 or more employees (inside and outside California) is required to file an EEO-1 report.

The legislation is designed to allow California state agencies to collect wage data that will enable them to more easily identify wage patterns and allow for targeted enforcement of pay equity and discrimination laws. However, there has been some criticism that the way data will be reported (e.g., hospitals required to report would have to include doctors, nurses, lawyers and accountants in one category despite their dissimilar duties and pay) would make it difficult to see actual trends in pay disparity.

Sick Leave Designation in California

AB 2017 amends the “Kin Care” Law which requires an employer who provides sick leave to permit employees to use up to half their accrued sick time to attend to an illness of a family member (kin care).

Effective Jan. 1, 2021, the employee has the sole discretion to decide how accrued sick leave hours taken under the provisions of AB 2017 will be designated, either as personal sick leave or kin care. This update may help the employer avoid inaccurately designating the type of sick time used for the employee.

Employers are still prohibited from denying an employee the right to use sick leave or from taking discriminatory action against an employee for using or attempting to use sick leave to attend to an ill family member.

California Family Rights Act Expanded

Under the existing law, an employer with 50 or more employees cannot refuse a request by an employee who has at least 1,250 hours of service with the employer in the past 12 months to take up to 12 weeks of unpaid protected leave to bond with a new child of the employee or to take care of themselves or a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner.

Effective Jan. 1, 2021 under SB 1383, which expands the state’s family rights act, it will be unlawful for any employer with five (5) or more employees to deny a request by an employee to take up to 12 weeks unpaid protected leave to bond with a new child of the employee or to take care of themselves or a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner.

Additionally, employers cannot refuse a request for an employee to take up to 12 workweeks of unpaid protected leave during any 12-month period related due to exigency related to covered active duty or call to covered active duty of an employee’s spouse, domestic partner, child or parent in the Armed Forces of the United States.

This could significantly impact small businesses, their labor force and productivity, especially with the law allowing the use of intermittent leave. An employee can use 12 weeks, but they do not have to be consecutive.

California Expands Protection of Abuse Victims

The law expands existing protective leave to employees who are victims of any violent crime. In addition to domestic violence, sexual assault or stalking, employees who are victims of crimes that caused physical injury, mental injury and the threat of physical injury would be eligible for protective leave under AB 2992, which takes effect Jan. 1, 2021.

Under this amended law, employees who are immediate family members of homicide victims could take protective leave, as well.

The documentation requirements or burden of proof for an employee requesting such leave also changed. Besides a police report, a court order or documentation from a licensed medical professional stipulating treatment or services rendered, employees can now provide a written and signed statement indicating they were a victim of a crime to explain that an absence from work was due to a crime as specified under the law.

An employer should be given “reasonable advance notice” by an employee of any time off request, unless that is not feasible. An employee who is absent due to a crime specified under the law must provide an employer with such certification within a reasonable amount of time after the absence.

Looking Forward

With many new and expanded laws set to take effect Jan. 1, 2021 in California, employers should consider revising policies in their employee handbooks or conducting training sessions to keep HR personnel and managers up to date. Paychex provides HR services that can help your California business keep up with changing state and federal laws and regulations, and make it easier to manage your HR, payroll, and employee benefits.