Just a quick update on some California law developments. First, the Governor is considering whether to sign pending legislation awaiting signature or veto. We’ll have a full article on all the new laws. Also, please consider attending our end of year update for even more information. (Information here).
So far, there are no real blockbusters affecting all employers. But here are a few of the more interesting bills now signed into law:
- AB 1654 (here) – Excludes certain construction industry employees and employers from PAGA when they have a valid collective bargaining agreement that contains certain provisions. This bill doesn’t take effect until January 1, 2025, and would sunset on January 1, 2028 unless extended.
- AB 1565 (here) – Would make “direct contractors” with the state liable for any wage violation committed by a subcontractor on the state contract. (except liquidated damages and penalties).
- AB 2291 (here) – Requires development of online, anti-bullying training for schools.
- SB 1252 (here) – Clarifies Labor Code section 226’s requirement that employees be allowed a copy of payroll records, as opposed to mere inspection. But it’s the same group of records and any employer that already was providing requested copies need not worry.
- Still no word on the fate of the Legislature’s annual, futile, attempt to ban arbitration. Also no word on the bill that would affect releases, lower the sexual harassment standard, and require training of non-supervisors. We’ll keep you posted.
On the case law front, a Ninth Circuit panel decided in California Trucking Association v. Su (here) that federal law did not preempt the Labor Commissioner’s application of the “Borello” independent contractor test (S. G. Borello & Sons, Inc. v. Dep’t of Indus. Relations, 769 P.2d 399, 403–07 (Cal. 1989)) to determine if trucking company drivers were properly classified as independent contractors. The panel, though, rejected the notion that the new, “ABC” test was the required standard to apply, as per Dynamex Operations W. v. Superior Court, 416 P.3d 1, 15 (Cal. 2018). Interestingly, if the court had found the ABC tests was applicable, it likely would have held that application of that test to determine contractor status was preempted. Why? Because under the ABC test, a truck driver for a trucking company fails prong B, and can never be a contractor. And the federal law involved, the Federal Aviation Administration Authorization Act, doesn’t allow states to require trucking employers to hire only employees. Unless you’re in the trucking business, this case is likely not going to apply to you. If you are in the trucking business, independent contractor classification is going to be subject to California law rather than federal law.
Stay tuned for more updates in the coming days.