Dozens of new state laws are going into effect across California. From minimum wage to rent control to domestic violence, below are some of the key points of some of these new laws:
AB 375: Data Privacy for Consumers
You might have started noticing that recently many websites have been providing notifications such as these:
This is because on January 1, 2019, the California Consumer Privacy Act of 2018 (CCPA) went into effect and starting January 1, 2020, the CCPA’s directives began being implemented. (See Cal. Civ. Code §§ 1798.100 – 1798.199.) The CCPA gives consumers the right to request a business to disclose the categories and specific pieces of personal information that it collects about the consumer, the categories of sources from which that information is collected, the business purposes for collecting or selling the information, and the categories of 3rd parties with which the information is shared. The Act also grants consumers the right to request deletion of personal information and would require the business to delete the consumer’s personal information upon receipt of a verified request. It further requires a business that sells consumers’ personal information to third parties to provide notice to consumers that their information may be sold and that they have the “right to opt-out” of the sale of their personal information by a business to third parties. Businesses are then prohibited from discriminating against consumers for exercising this right, including by denying goods or services to the consumer, charging the consumer a different price, or providing the consumer a different quality of goods or services. However, businesses are authorized to offer financial incentives to consumers for collection of personal information. Consumers are also able to bring a civil action against a business if their personal information is subject to unauthorized access and exfiltration, theft, or disclosure as a result of the business’s violation of the duty to implement and maintain reasonable and appropriate security procedures and practices. Prior to initiating any such action, a consumer is required to give a business 30 days’ written notice identifying the specific provisions of the CCPA the consumer alleges have been violated.
AB 539: Predatory Lending
On January 1, 2020, significant amendments were made to the California Financing Law. Some such amendments came from AB 539, known as the Fair Access to Credit Act. This law subjects consumer installment loans (e.g., personal loans, car loans, auto title loans) and consumer open-end lines of credit of $2,500 or more but less than $10,000 to an annual simple interest rate not to exceed 36% per annum plus the Federal Funds Rate. (See Cal. Fin. Code § 22304.5.) This applies to all loans with an original principal balance under $5,000, including commercial-purpose loans. Commercial-purpose loans of $5,000 or more are not subject to this cap.
SB 187: Debtor Protections
The California Rosenthal Fair Debt Collection Act (Rosenthal Act) regulates the collection of consumer debts by debt collectors. The Rosenthal Act prohibits debt collectors from engaging in unfair or deceptive acts or practices in the collection of consumer debts. On January 1, 2020, SB 187’s amendment to the Rosenthal Act became effective. The definition of “consumer debt” now includes a mortgage debt and the exception for attorneys and counselors at law is removed from the definition of “debt collector.” (See Cal. Civ. Code § 1788.2) Thus, mortgage debt is now explicitly regulated under the Rosenthal Act and attorneys relying on the Rosenthal Act’s “out” can no longer do so.
AB 12: Gun Violence Restraining Orders
On September 1, 2020, the current version of Cal. Pen. Code § 18170 will become inoperative and the new version will become operative. Under existing law, an “immediate family member” of a person or a law enforcement officer may request the court issue a gun violence restraining order preventing the subject of the order from having in their custody or control, owning, purchasing, possessing, or receiving a firearm or ammunition for a period of one year. Under the new version, who can request such is expanded to include: an employer of the subject of the petition; a coworker of the subject, if they have had substantial and regular interactions with the subject for at least one year and have obtained approval of the employer; and an employee or teacher of a secondary or postsecondary school that the subject has attended in the last six months, if the employee or teacher has obtained the approval of a school administrator or a school administration staff member with a supervisorial role. Additionally, the duration of the gun violence restraining order is changed from one year to a period of time between one to five years.
AB 218: Statute of Limitations for Childhood Sex Assaults
Effective January 1, 2020, victims of childhood sexual assault have until the age of 40 (22 years after attaining the age of majority), or five years from the date the victim discovers or reasonably should have discovered that psychological injury or illness occurring after the age of majority (18) was caused by the sexual assault, whichever period expires later, to bring an action for the recovery of damages suffered as a result of childhood sexual assault. (See Cal. Code Civ. Proc. § 340.1.) The previous law gave victims of childhood sexual abuse until the age of 26 or within three years from the date the plaintiff discovers or reasonably should have discovered that the psychological injury or illness occurring after the age of majority was caused by sexual abuse, whichever occurs later. The amendment also expands the definition of childhood sexual abuse, which is now referred to as childhood sexual assault
SB 273: Statute of Limitations for Domestic Violence
Effective January 1, 2020, Cal. Pen. Code § 803.7 extends the statute of limitations to prosecute a domestic violence claim (and all violations under Cal. Pen. Code § 273.5) from one year to 5 years. This section applies to crimes committed on or after January 1, 2020, and to crimes for which the statute of limitations that was in effect prior to January 1, 2020, has not elapsed as of January 1, 2020.
SB 3: Minimum Wage
Minimum wage increases by a dollar. On January 1, 2020, the minimum wage in California will increase again. Employers with 26 or more employees must pay a minimum wage of $13.00 per hour, up from $12.00 per hour. Employers with 25 or fewer employees must pay be a minimum wage of $12.00 per hour, up from $11.00 per hour.
AB 5: Independent Contractors
Workers are more likely to be deemed employers rather than independent contractors. Starting January 1, 2020 the California Legislature has codified the so-called “ABC” test in Labor Code § 2750.3. This ABC test must be satisfied in order to classify a worker as an independent contractor and requires that (a) the person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; (b) the person performs work that is outside the usual course of the hiring entity’s business; and (c) the person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed. This test is essentially identical to the California Supreme Court’s holding in Dynamex decided in 2018. The Dynamex decision left ambiguities in the application of this definition to various industries. The Legislature’s solution was turn this test into an eight page statute with numerous exceptions and ambiguities. Regardless of the wording, you can expect the policy behind this statute to be reflected in future determinations by the courts – workers are presumed to be employees rather than independent contractors.
AB 9: Employment Discrimination
Employees have longer to bring lawsuits for retaliation and discrimination. Starting January 1, 2020, the statute of limitations for certain retaliation and discrimination cases (usually in the employment context) is expanded from one year to file to three years to file under a modified version of Government Code § 12960. As always, there are exceptions, and it is far safest for an employee to bring a claim immediately on discovery.
AB 51: Arbitration Agreements
California has attempted to stymie attempts to compel employees to enter into arbitration agreements as a condition of employment. California enacted Labor Code § 432.6, effective January 1, 2020, which prohibits an employer from requiring an employee to sign an arbitration agreement as a condition of employment. As anticipated, this law appears to be preempted by federal law and has been temporarily blocked by order of the federal district court for the eastern district of California. The new California law is not likely to survive as written. However, employers should be wary, as there is no guarantee that the federal court will strike down the law and the law carries both civil and criminal penalties as against the employer.
SB 1343: Sexual Harassment Training
Employers must provide sexual harassment training to all employees. The deadline for compliance for sexual harassment training is January 1, 2020. Pursuant to Government Code §§ 12950 and 12950.1, all employers of five or more employees must provide at least two hours of classroom or other interactive training and education regarding sexual harassment to supervisory employees and at least one hour to all non-supervisory employees in California within six months of assumption of a position.
AB 1482 Rent Control and Tenant Protections
The law bans landlords from evicting people for no reason, making it illegal to force people out so they can raise the rent for a new tenant. AB 182 also limits rent increases to 5 percent each year plus inflation, but never above 10 percent total. The rent cap does not apply to a property built within the last fifteen years (the limit is a rolling number, so the date housing is excluded changes each year).