Bill Introduction Deadline & Looking Ahead
February 22 was the deadline for bill introductions in the California Legislature. Legislators introduced 2,576 bills (1,799 ABs and 777 SBs) for consideration in the 2019-2020 legislative session. Of course, committees can still introduce bills past the deadline (rule waivers can be obtained, etc.). As is often the case, many bills are “spot” bills intended to reserve a place in a particular Code for possible subsequent legislation. In addition to these bills, there are bills that are drafted to start an initial discussion of policy issues and there are bills that are “trailer” bills – substantive bills intended to implement policy decisions necessary to validate budget requests for various agencies of state government.
As you may recall, all bills introduced in California must be in print for 30 days prior to being heard by their first policy committee. Since approximately 1,700 bills were introduced in the last week leading up to the deadline, committees likely won’t begin scheduling hearings until mid-March. There are a few popping up in the first weeks of March, but those hearings are mostly on non-controversial bills.
The deadline for policy committees to hear and report all bills with fiscal implications is April 26th, and non-fiscal bills must be heard and reported by May 3rd. May 17th is the last day for fiscal committees to meet and by May 27th we are Floor session only.
It will be a busy next couple of months.
Privacy: The Leading Legislative Issue in 2019
While we may have thought 2018, with the passage of the California Consumer Privacy Act (CCPA), was the year of privacy, it looks as though 2019 will far surpass last year’s efforts. As you may recall, the Legislature passed the CCPA in the span of about a week, after a deal was struck between privacy advocates and the business community to avoid a more detrimental initiative being placed on the November ballot. As with any legislation drafted in a hurry, there were many unresolved issues and unintended consequences. Initially, we believed efforts in 2019 would be all about CCPA clean up; however, as bill introductions continued to roll out this past week, it became clear that this year will be about clean up PLUS efforts to go even further! Even Republicans have jumped into the issue of privacy with their own legislative package!
The following is a list of all the privacy-related legislation introduced so far in 2019:
Assembly Bill 25 (Chau) – Civil Code spot bill relating to CCPA. This is considered the primary vehicle for CCPA amendments. Assemblymember Chau was the author of the first CCPA law from last year, Assembly Bill 375. The other bill from last year, an immediate clean-up of AB 375, was Senate Bill 1121 (Dodd). Assemblymember Chau also has introduced a number of CCPA-related spot bills.
Assembly Bill 288 (Cunningham) – requires a social media company, as defined, to provide users that close their accounts the option to have the user’s personally identifiable information permanently removed from the company’s database and records and excluded from sale. The bill would require a social media company to honor such a request within a reasonable time. The bill would authorize specified relief for a consumer for a violation of these provisions. As currently drafted the definition of “social media company” is so broad that it essentially encompasses anyone with a website. The author’s office has since reached out to the business community stating their intention to tighten this definition up to really get at social media sites.
Assembly Bill 384 (Chau) – amends the Confidentiality of Medical information Act (CMIA) to expand the definition of “medical information” for purposes of the act to include any information in possession of, or derived from, a digital health feedback system, which the bill would define. The bill would also require a manufacturer or operator that sells or offers to sell a device or software application that may be used with a digital health feedback system to a consumer in California to equip the device or software application, and the system, with reasonable security features that meet certain requirements, including that the measures be appropriate to the nature of the device, software application, or system.
Assembly Bill 594 (Salas) – is a spot bill stating the intent of the Legislature to enact legislation relating to artificial intelligence (AI).
Assembly Bill 873 (Irwin) – Civil Code spot bill relating to CCPA. These two bills by Assemblymember Irwin will be the vehicles for the California Chamber of Commerce clean up language.
Assembly Bill 874 (Irwin) – Civil Code spot bill relating to CCPA.
Assembly Bill 846 (Burke) – amends CCPA to express the intent of the Legislature to enact legislation that would clarify that the California Consumer Privacy Act of 2018 does not prohibit a consumer from choosing to participate in a customer loyalty program that offers incentives such as rewards, gift cards or certificates, discounts, or other benefits and would further clarify that a business that offers a customer loyalty program may continue to offer rewards, gift cards or certificates, discounts, or other benefits associated with a customer loyalty program in a manner that is reasonably anticipated within the context of a business’s ongoing relationship with a consumer.
Assembly Bill 981 (Daly) – amends the Insurance Code to exempt insurance institutions, agents, and support organizations to which the Insurance Information and Privacy Protection Act (IIPPA) applies from the CCPA.
Assembly Bill 1130 (Levine) – revises the definition of personal information for purposes of the Information Practices Act of 1977 (applicable to public agencies) to add specified unique biometric data and government issued identification numbers in addition to those for driver’s licenses and California identification cards to these provisions.
Assembly Bill 1132 (Gabriel) – Civil Code spot bill relating to Information Practices Act of 1977. This applies to government agencies.
Assembly Bill 1146 (Berman) – amends CCPA by excepting from the California Consumer Privacy Act of 2018 vehicle information shared between a new motor vehicle dealer and specified parties, including the vehicle’s manufacturer, if the information is shared pursuant to, or in anticipation of, a vehicle repair relating to warranty work or a recall, as specified.
Assembly Bill 1202 (Chau) – requires data brokers to register with, and provide certain information to, the Attorney General. The bill would define a data broker as a business that knowingly collects and sells to 3rd parties the personal information of a consumer with whom the business does not have a direct relationship, subject to specified exceptions. The bill would require the Attorney General to make the information provided by data brokers accessible on its internet website. The bill would make data brokers that fail to register subject to injunction and liability for civil penalties, fees, and costs in an action brought by the Attorney General, with any recovery to be deposited in the Consumer Privacy Fund, as specified.
Assembly Bill 1241 (Quirk-Silva) – requires an agency, as defined, that contracts with a person or private entity that owns or licenses an electronic database that contains the personal information of individuals for the purpose of hiring and training specified individuals, to do so only if the contract requires the person or private entity to comply with the requirements for disclosure and maintenance of personal information that are applicable to an agency pursuant to the act. By imposing additional requirements on local agencies, the bill would impose a state-mandated local program.
Assembly Bill 1281 (Chau) – requires a business in California that uses facial recognition technology to disclose that usage in a physical sign that is clear and conspicuous at the entrance of every location that uses facial recognition technology, as defined. The bill would consider a violation of these provisions to be unfair competition within the meaning of the Unfair Competition Law, and would authorize these provisions to be enforced consistent with that law.
Assembly Bill 1316 (Gallagher) – prohibits a person who operates a social media internet website located in California, as defined, from removing or manipulating content from that site on the basis of the political affiliation or political viewpoint of that content.
Assembly Bill 1329 (Kiley) – prohibits a person or entity from printing an individual’s social security number on any card required for the individual to access products, goods, or services provided by the person or entity.
Assembly Bill 1330 (Kiley) – Civil Code spot bill relating to security breach notifications.
Assembly Bill 1395 (Cunningham) – prohibits a smart speaker device, as defined, or a specified manufacturer of that device, from saving or storing recordings of verbal commands or requests given to the device, or verbal conversations heard by the device, regardless of whether the device was triggered using a key term or phrase.
Assembly Bill 1355 (Chau) – amends CCPA to exclude consumer information that is deidentified or aggregate consumer information from the definition of personal information.
Assembly Bill 1416 (Cooley) – amends CCPA to specify that the act also does not restrict a business’s ability comply with any rules or regulations. The bill would further specify that the act does not restrict a business’s ability to collect, use, retain, sell, authenticate, or disclose personal information in order to: (1) exercise, defend, or protect against legal claims, (2) protect against or prevent fraud or unauthorized transactions, (3) protect against or prevent security incidents or other malicious, deceptive, or illegal activity, or (4) investigate, report, or prosecute those responsible for protecting against fraud, unauthorized transactions, and preventing security incidents or other specified activities. The bill would additionally specify that the act does not restrict a business’s ability to collect, use, retain, sell, authenticate, or disclose a consumer’s personal information for the purpose of assisting another person or government agency to conduct specified activities.
Assembly Bill 1564 (Berman) – amends CCPA to require the business, in a form that is reasonably accessible to consumers, to make available to consumers a toll-free telephone number or an email address for submitting requests for information required to be disclosed, as specified. The bill would, if the business maintains an internet website, require the business to make the internet website address available to consumers to submit requests for information required to be disclosed, as specified.
Assembly Bill 1758 (Chau) – Civil Code spot bill relating to CCPA.
Assembly Bill 1760 (Wicks) – While initially introduced as a spot bill, Assemblywoman Wicks held a press conference this past week announcing her intentions with the bill. According to her press packet, her bill, “Privacy for All,” will build on last year’s efforts by:
· Requiring companies to have consumers opt-in for the use and sharing of personal information;
· Limiting use of personal information to what consumers would expect based on the service;
· Giving consumers the right to know what personal information companies have about them, how their personal information is being used, and who it is being shared with;
· Ensuring that companies can’t charge higher prices or provide inferior service to punish consumers for exercising their privacy rights; and
· Providing legal recourse so Californians can go to court to force companies to follow the law and respect their rights.
Senate Bill 299 (Jackson) – Civil Code spot bill relating to customer records. Rumors are this could potentially be amended into another “opt-in” bill.
Senate Bill 561 (Jackson) – expands a consumer’s rights to bring a civil action for damages to apply to other violations under the act. The bill would also delete provisions in the CCPA authorizing the California Department of Justice to provide compliance guidance to individual businesses or third parties and the “right to cure” provisions in the CCPA. The bill is supported by Attorney General Xavier Becerra and addresses their three remaining concerns with the CCPA. It would also add a private right of action for all violations of the CCPA. See: https://oag.ca.gov/news/press-releases/attorney-general-becerra-senator-jackson-introduce-legislation-strengthen
Senate Bill 564 (Leyva) – Civil Code spot bill relating to damages for appropriation of likeness.
Senate Bill 752 (Stern) – Civil Code spot bill relating to CCPA. These two bills are intended to be amended at some point to address online advertising.
Senate Bill 753 (Stern) – Civil Code spot bill relating to CCPA.
Labor Another Key Issue for 2019
Each year there are approximately 25-30 bills in the labor arena. Last year, California saw an increase a result of the #metoo movement. However, many of those bills were vetoed by Governor Brown. With Governor Newsom at the helm, many of these past vetoed bills are being re-introduced, on top of a whole new wave of bills tackling some tough issues. These include legislation regarding janitorial services contractors and lactation accommodation. The most urgent issue in the subject matter area of employment is the effort to address the various issues created with the California Supreme Court’s decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903. There was a hearing this past Tuesday, which is covered in depth in another story within this newsletter.
Below is a list of the labor-related bills introduced for consideration in 2019:
Assembly Bill 5 (Gonzales) – is the primary placeholder bill for the legislative response to Dynamex and independent contractor/employee status.
Assembly Bill 9 (Reyes) – extends the time period for filing a harassment complaint with the Department of Fair Employment and Housing to 3 years from the current 1 year.
Assembly Bill 51 (Gonzales) – among other provisions, AB 51 prohibits a person from, as a condition of employment, continued employment, the receipt of any employment-related benefit, or as a condition of entering into a contractual agreement, prohibiting an applicant for employment, employee, or independent contractor from disclosing to any person an instance of sexual harassment that the employee or independent contractor suffers, witnesses, or discovers in the workplace or in the performance of the contract, or otherwise opposing any lawful practice, or from exercising any right or obligation or participating in any investigation or proceeding with respect to unlawful harassment or discrimination. The bill would also prohibit an employer from requiring any applicant for employment or any employee to waive any right, forum, or procedure for a violation of any provision of the California Fair Employment and Housing Act (FEHA) or other specific statutes governing employment, as a condition of employment, continued employment, the receipt of any employment-related benefit, or as a condition of entering into a contractual agreement. The bill would also prohibit an employer from threatening, retaliating or discriminating against, or terminating any applicant for employment or any employee because of the refusal to consent to the waiver of any right, forum, or procedure for a violation of specific statutes governing employment. [See: AB 3080 (Gonzales) vetoed in 2018]
Assembly Bill 71 (Melendez) – is the Republican alternative to Dynamex. The bill would essentially codify the test for employment status outside of the wage and hour context set forth in S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations (1989) 48 Cal.3d 341.
Assembly Bill 170 (Gonzales) – requires a client employer, to share with a labor contractor all civil legal responsibility and civil liability for all workers supplied by that labor contractor for the payment of wages and the failure to obtain valid workers’ compensation coverage.
Assembly Bill 171 (Gonzales) – prohibits an employer from discharging or in any manner discriminating or retaliating against an employee because of the employee’s status as a victim of sexual harassment, as defined by the California Fair Employment and Housing Act. The bill would establish a rebuttable presumption of unlawful retaliation based on the employee’s status as a victim of domestic violence, sexual assault, sexual harassment, or stalking if an employer takes specific actions within 90 days following the date that the victim provides notice to the employer or the employer has actual knowledge of the status. [See: AB 3081 (Gonzales) vetoed in 2018]
Assembly Bill 203 (Salas) – requires construction employers engaging in specified work activities or vehicle operation in counties where Valley Fever is endemic to provide effective awareness training on Valley Fever to all potentially exposed employees annually and before an employee begins work that is reasonably anticipated to cause substantial dust disturbance. The bill would require the training to cover specific topics and would authorize the training to be included in the employer’s injury and illness prevention program training or as a standalone training program.
Assembly Bill 233 (Cooley) – relates to defining certain insurance licensees as independent contractors. Addresses Dynamex issue as it relates to insurance producers. (amends the Insurance Code)
Assembly Bill 403 (Kalra) – extends the time period for filing a harassment complaint with the Division of Labor Standards Enforcement to 3 years from the current 6 months.
Assembly Bill 440 (Fong) – Labor Code spot bill relating to the Labor Code Private Attorneys General Act (PAGA).
Assembly Bill 443 (Flora) – extends the time for the employer to respond to a request to inspect wage records to 28 calendar days.
Assembly Bill 547 (Gonzales) – makes a number of changes to the law regarding janitorial services contractors, including requiring the Director of the Department of Industrial Relations to form an advisory committee to refine the recommendations of a different advisory committee on in person sexual violence and harassment prevention training requirements for janitorial employers and employees. In addition, this bill would prohibit the division from approving a registration, as described above, if the employer does not include in their written application the name of any subcontractor or franchise servicing contracts affiliated with a branch location and the number of subcontracted or franchise employees servicing each of those contracts, the total number of employees working out of a listed branch office, and the address of each work location serviced by a branch office. [See: AB 2079 (Gonzales) vetoed in 2018]
Assembly Bill 674 (Petrie-Norris) – Labor Code spot bill relating to the Labor Commissioner.
Assembly Bill 1007 (Jones-Sawyer) – Labor Code spot relating to Cal-OSHA.
Assembly Bill 1124 (Maienschein) – requires, by June 13, 2019, the Occupational Safety and Health Standards Board to adopt emergency regulations that require employers to make respirators available to outdoor workers on any day the outdoor worker could reasonably be expected to be exposed to harmful levels of smoke from wildfires, or burning structures due to a wildfire, while working.
Assembly Bill 1661 (Gloria) – Labor Code spot bill relating to wages and hours.
Assembly Bill 1677 (Weber) – Labor Code spot bill relating to obligations of employers.
Senate Bill 142 (Weiner) – provides more extensive regulation of and standards for lactation accommodation. [See: SB 937 (Weiner) – died on Senate Floor in 2018]
Senate Bill 171 (Jackson) – requires, on or before March 31, 2021, and on or before March 31 each year thereafter, a private employer that has 100 or more employees and who is required to file an annual Employer Information Report under federal law, to submit a pay data report to the Department of Fair Employment and Housing that contains specified wage information. The bill would require the department to make the reports available to the Division of Labor Standards and Enforcement upon request. The bill would authorize the department, if the department does not receive the required report from an employer, to seek an order requiring the employer to comply, as specified. The bill would require the department to maintain the pay data reports for a minimum of 10 years and make it unlawful for any officer or employee of the department or the Division of Labor Standards Enforcement to make public in any manner whatsoever any individually identifiable information obtained from the report prior to the institution of certain investigation or enforcement proceedings. [See: SB 1284 (Jackson) – died in Assembly Appropriations Committee in 2018]
Senate Bill 238 (Grove) – Labor Code spot bill relating to employment status.
Senate Bill 363 (Pan) – makes workplace violence prevention plans applicable to state hospitals.
Senate Bill 530 (Galgiani) – requires the Division of Labor Standards Enforcement (DLSE) to develop recommendations for an industry-specific harassment and discrimination prevention policy and training standard for use by employers in the construction industry. The bill would also require the department to convene an advisory committee by March 1, 2020, consisting of specified representatives from the construction industry and state agencies to assist the division in developing the policy. [See: SB 1223 (Galgiani) – died on Senate Floor in 2018]
Senate Bill 649 (Galgiani) – Labor Code spot bill relating to employee records.
Senate Bill 671 (Hertzberg) – Labor Code spot bill relating to the Division of Labor Standards Enforcement.
Senate Bill 702 (Hill) – Labor Code spot bill relating to DIR Director.
Senate Bill 734 (Boregas) – Labor Code spot bill relating to 8-hour working day.
Senate Bill 730 (Stern) – establishes the Commission on the Future of Work. This is one of the priority items identified in Governor Gavin Newsom’s State of the State address.
Workers’ Compensation Bill Introductions
In a typical year, we would usually see approximately 25-30 workers’ compensation bills introduced. For whatever reason, this year the numbers are down substantially.
The following is the list of workers’ compensation bills introduced for consideration in 2019:
Assembly Bill 27 (Rodriguez) – among its other provisions, the bill requires an emergency ambulance employee who requests mental health treatment for critical incident stress management, as defined, or post-traumatic stress disorder (PTSD), to receive in-person treatment from a qualified professional who is trained in the areas of critical incident stress management or PTSD. Because this bill amends Proposition 11, passed last year, it requires a 4/5 vote.
Assembly Bill 346 (Cooper) – adds police officers employed by a school district, county office of education, or community college district to the list of public employees entitled to a leave of absence without loss of salary, in lieu of temporary disability payments, while disabled by injury or illness arising out of and in the course of employment.
Assembly Bill 499 (Mayes) – amends both the Insurance Code and the Labor Code. The Labor Code amendment is to Sec. 5814.1 and requires the Workers’ Compensation Appeal Board to award the director an amount not to exceed 10% of the compensation paid to an applicant when the director has made payments from the Uninsured Employers Fund.
Assembly Bill 932 (Low) - extends workers’ compensation benefits to firefighters who responded while off-duty to the mass shooting in Las Vegas on October 1, 2017.
Assembly Bill 1400 (Kamlager-Dove) – extends certain workers’ compensation injury presumptions to fire service personnel, not just active firefighters.
Assembly Bill 1750 (Burke) – Labor Code spot bill relating to certain benefits provided to state employees.
Senate Bill 416 (Hueso) – generally expands certain injury or illness presumptions to all persons defined as peace officers (with some exceptions).
Senate Bill 537 (Hill) – Labor Code spot bill relating to independent bill review.
Senate Bill 567 (Caballero) – adds a number of presumptive illnesses for workers’ compensation purposes for employees providing acute patient care in an acute hospital setting.
Senate Bill 731 (Bradford) – prohibits consideration of various factors when determining the extent of permanent disability. The bill amends Labor Code Sec. 4663 relating to apportionment. This is the latest legislative effort to unwind the Court of Appeals decision in City of Jackson v. Workers' Compensation Appeals Board (Rice) (2017) 11 Cal. App. 5th 109.
Budget Trailer Bill (Department of Health and Human Services) – looks to clarify how certain employee/patients can claim workers’ compensation benefits for psychiatric injuries and to clarify the employee status of a person who is committed to a State hospital and assigned to a vocational program.
Budget Trailer Bill (Department of Industrial Relations) – changes the way in which permanent disability is evaluated for purposes of the Subsequent Injuries Benefit Trust Fund (SIBTF). This is part of a Budget Change Proposal (BCP) that would considerably increase the resources used to defend claims against the SIBTF.
Dynamex Hearing
The first of what is expected to be a number of hearings on the subject of Dynamex was held this last week by the Assembly Labor & Employment Committee. This was a particularly scripted informational or subject matter hearing, as opposed to a hearing on a specific bill. This was really the first opportunity for interest groups on all sides of the issue to publicly express their position, opinion, and concerns relative to how the California Legislature should deal with the future of the workplace as its effects on employees, independent contractors, and the gig or part-time economy.
The California Supreme Court’s decision last year in the Dynamex case launched what will be one of the most controversial battles for the Legislature this session pitting organized labor groups against business groups of all sizes and shapes. The future of big tech firms like Uber, GrubHub, Lyft are on the line, but legislators are also hearing from a range of other industries and businesses from exotic dancers, to hair and nail salons, real estate and insurance agents, trucking companies, emergency room doctors, court reporters, and many more.
More than 100 speakers lined packed the committee room and lined the hallways outside waiting for an opportunity to be heard. The Committee initially indicated that speakers in the public comment portion of the hearing would be allotted 1 minute apiece. However, given the number of people present, the Chairman requested that testimony be limited to 30 second each, which was not well received by folks who committed substantial time and expense to travel to Sacramento for the hearing.
Organized labor groups led by the California Labor Federation and the Teamsters used the hearing as an opportunity to promote AB 5 (Gonzalez), which would extend the Dynamex ABC Test beyond wage orders to all employment situations. Labor speakers stressed there was nothing in the Dynamex decision that limits the ability of individuals to go into business for themselves. They also indicated that current law does not apply wage orders to exempt employees so that Dynamex does not affect such employees and/or anyone who truly has their own independent business and performs work for more than one employer.
Labor’s position on this legislation was supported by the hearing’s opening panel which consisted of a retired judge and two labor law professors. These witnesses argued that the Court limited Dynamex to wage orders which simply means that you have a wage floor. They testified that misclassification of workers cost the state millions of dollars in lost employment taxes and denies workers the basic protections of workers’ compensation, unemployment, disability and retirement benefits. Moreover, that misclassification schemes apply predominantly to low wage workers like, janitors, home healthcare workers, truckers and landscape industry where workers often have little choice if they want to work.
A second panel consisting representatives of the California State Chamber of Commerce, emergency room doctors, insurance agents and brokers and the tech sector employers either argued why their industry needed an exemption from Dynamex or that the Legislature needed to provide employers with more clarification and flexibility in the ABC Test.
The State Chamber of Commerce testified that the Dynamex decision was foisted upon the employer community in California without any debate or notice. The result is a change effecting almost every employer in the state from the traditional Brello test which looked at the totality of the circumstances to an inflexible ABC Test. The Chamber also indicated that, although Dynamex was limited to wage orders, for now, that it is virtually impossible for employers to deal with a situation where a worker is an employee for purposes of wage orders and not an employee for workers, compensation and other employee benefits. Compounding the unfairness of the new ABC Test is that the co have failed to distinguish whether Dynamex applies retroactively.
During the employer panel there was much focus on the fact that under the Brello test the primary indicator of weather a worker is an employee or independent contractor was the control factor whereas, under the Dynamex ruling it the B prong of the test which whether the hiring entity and the worker are doing the same or similar work. This is a completely arbitrary test that, at minimum, results in confusion and, worse case, produces the wrong result in even the clearest cases of independent contractor like emergency room doctors.
Unless the Assembly Labor Committee sets another informational hearing, the next likely hearing on this issue will be when the committee hears AB 5 which is intended to expand Dynamex to all employment situations and contain amendments to exempt certain licensed professionals.
