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Legal Alert: SB 95 COVID-19 Paid Sick Leave and Federal ARPA Payroll Tax Credits

As the COVID-19 pandemic continues, both the California Legislature and United States Congress have recently passed legislation to address the impacts of COVID-19 in the workplace. California’s Senate Bill 95 (SB 95) requires employers to provide up to an additional 80 hours of supplemental paid sick leave for COVID-19 related reasons from January 1, 2021 through September 30, 2021.

At the federal level, Congress passed the American Rescue Plan Act (ARPA) COVID-19 stimulus bill.  ARPA provides payroll tax credits for employers who voluntarily provide COVID-19 related paid sick leave from April 1, 2021 through September 30, 2021 – some of these tax credits can be used for the mandatory supplemental paid sick leave provided by SB 95.  In addition, ARPA also requires employers to provide a 100% subsidy for an employee’s COBRA/Cal-COBRA health insurance continuation costs for certain qualifying reasons between April 1, 2021 and September 30, 2021.

See the attached Alert for more information and contact an attorney in our Employment Group with any questions.

SB 95 Paid Sick Leave and ARPA – Client Alert

SB 95 Paid Sick Leave and ARPA - Client Alert

Sick Leave

Sick Leave

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Case Alert: CA Supreme Court Rejects Rounding for Meal Periods

The California Supreme Court has ruled that employers cannot round time punches for meal periods. The Court also held that time punch records that show non-compliant meal periods create a rebuttable presumption of liability for violations. Further, the Court called into question the continuing viability of rounding time punches for hours worked in light of technological advancements. See the attached Alert for more information, including key takeaways and recommendations. Contact an attorney in our Employment Group with additional questions.

Donohue v. AMN Client Alert

 

 

Donohue v AMN - Client Alert

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Morning time

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New COVID-19 Workplace Exposure Notice and Reporting Requirements Become Effective January 1, 2021

In response to the COVID-19 pandemic and the need to maintain a safe workplace, AB 685 requires employers to provide specific notices to employees and others related to COVID-19 exposures in the workplace. It also provides the California Division of Occupational Safety and Health (“Cal/OSHA”) with expanded authority to enforce such requirements and ensure safe workplace operations. AB 685 is effective January 1, 2021.

New Employer Notice and Reporting Requirements for COVID-19 Exposures in the Workplace

A.  Notice to Employees and Exclusive Representatives of Potential COVID-19 Exposures at Same Worksite

AB 685 requires employers to provide notices to employees at a worksite and their exclusive representatives (for represented employees) related to potential COVID-19 exposures in the workplace within one business day of being informed of a potential exposure by, a (1) “qualifying individual” at (2) the same “worksite,” within (3) the “infectious period”. These three terms help determine if such notices are required and are defined as follows:

  • A “qualifying individual” means a person who can establish any of the following requirements:
    • A laboratory-confirmed case of COVID-19;
    • A positive COVID-19 diagnosis from a licensed health care provider;
    • A COVID-19 related isolation order issued by a public health official; or
    • Death due to COVID-19, as determined by the County public health department.
  • “Worksite” is defined to include the building, store, facility, agricultural field, or other location where a qualified individual worked during the infectious period. However, it does not apply to buildings, floors, or other locations of the employer that the qualified individual did not enter.
  • The “infectious period” for an individual who develops symptoms for COVID-19 begins two days before they first develop symptoms and ends when the following criteria are met:
    • 10 days have passed since symptoms first appeared, AND
    • At least 24 hours have passed with no fever (without use of fever-reducing medications), AND
    • Other symptoms have improved.
  • For an individual who tests positive for COVID19 but never develops symptoms, the “infectious period” begins two days before the specimen for their first positive COVID-19 test was collected and ends 10 days after the specimen for their first positive COVID-19 test was collected.

Once the potential COVID-19 exposure is identified under the guidelines above, an employer is obligated to send out the following notices:

  1. Notice to Employees at Same Worksite
    The employer must provide a written notice to all employees, and to the employers of subcontracted employees, who were present at the same worksite within the infectious period stating that they may have been exposed to COVID-19. The notice must include information regarding any COVID-19-related benefits or leave rights under federal, state, and local laws, or pursuant to employer policy, as well as the employee’s protections against retaliation and discrimination. Finally, the notice must include the employer’s plans for implementing and completing a disinfection and safety plan pursuant to guidelines issued by the federal Centers for Disease Control. The notice must be sent in a manner the employer normally uses to communicate employment-related information. This can include personal service, email, or text message so long as it can be reasonably anticipated that employees will receive the notice within the one business day requirement. The notice must be in both English and the language understood by the majority of employees.
  2. Notice to Exclusive Representative of Represented Employees
    If the affected employees who are required to receive this COVID-19 exposure notice include represented employees, the employer must send the same notice to the exclusive representative of the affected bargaining unit. Failure to comply with these requirements may subject the employer to a civil penalty. AB 685 also prohibits employers from requiring employees to disclose medical information except as required by law, and prohibits employers from retaliating against an employee for disclosing a qualifying case of COVID-19. Employers are also required to maintain records of these potential exposure notices for at least three years.

B.  Notice to Local Public Health Agency of “Outbreak” at Worksite

Where an employer has three or more laboratory-confirmed cases of COVID-19 within a two-week period among employees who live in different households this constitutes a COVID-19 “outbreak”. Once an employer is on notice of an “outbreak”, it must notify the applicable local public health agency within 48 hours of the names, number, occupation, and worksite of any “qualifying individuals” related to the “outbreak”.

AB 685 also requires the California Department of Public Health (CDPH) to make workplace statistics received from local health departments under this provision – other than personally identifiable employee information – available on its website, such that members of the public can track the number of cases and outbreaks by industry.

C.  Exceptions to Notice and Reporting Requirements

These new COVID-19 notice and reporting requirements apply to all private and public employees, with two exceptions:

  • Health facilities, as defined in Section 1250 of the Health and Safety Code, are exempt from reporting an “outbreak” within 48 hours as described above.
  • The notice requirements do not apply to exposures by employees whose regular duties include COVID-19 testing or screening or who provide patient care to individuals who are known or suspected to have COVID-19, unless the “qualifying individual” is also an employee at the same worksite.

Expanded Cal/OSHA Authority to Address COVID-19 Issues

A.  Cal/OSHA Will Be Authorized to Shut Down A Workplace, Operation, or Process that Creates an Imminent Hazard Due To COVID-19 Exposure Risk

AB 685 expands and clarifies Cal/OSHA’s authority to prohibit entry to a workplace or to the performance of an operation/process within a workplace if Cal/OSHA finds that it exposes employees to a risk of COVID-19 infection and thereby creates an imminent hazard to employees. If Cal/OSHA uses its authority to apply such a workplace restriction, it must then provide the employer with notice of the action and post that notice in a conspicuous place at the worksite. In addition, Cal/OSHA may not impose restrictions that would materially interrupt “critical government functions” essential to ensuring public health and safety functions, or the delivery of electrical power or water.

This expanded authority sunsets on January 1, 2023, and will be repealed automatically on that date unless extended further by the Legislature.

B.  Amends Cal/OSHA Procedures for Serious Violation Citations Relating to COVID-19

Through January 1, 2023, Cal/OSHA, Cal/OSHA is not obligated to provide an alleged violation to an employer in advance for COVID-19 serious violation citations issued and can instead issue the citation immediately. The employer would still be able to contest the citation through the existing Cal/OSHA appeal procedures.

Impact of AB 685 on Employers

Employers should review and revise their existing procedures related to notification of COVID-19 exposures in the workplace in order to ensure they are ready to comply with the new notice and reporting requirements imposed by AB 685 once it becomes effective.

Boutin Jones attorneys are available to assist in employers to ensure compliance with AB 685, to provide legal advice on the impacts of this new law, and to answer any other questions you may have regarding this Employment Law Alert. Please contact an attorney in our Employment Law Group by phone at (916) 321-4444 or via email:

Gage C. Dungy                 gdungy@boutinjones.com

Julia L. Jenness                 jjenness@boutinjones.com

Kimberly A. Lucia             klucia@boutinjones.com

James D. McNairy            jmcnairy@boutinjones.com

Bruce M. Timm                btimm@boutinjones.com

Errol C. Dauis                   edauis@boutinjones.com

Andrew M. Ducart          aducart@boutinjones.com

Kendall C. Fisher-Wu     kfisher-wu@boutinjones.com

Lissa Oshei                      loshei@boutinjones.com

Businesswoman in medical face protection mask

Businesswoman in medical face protection mask

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Visit Our New Real Estate Portfolio

Boutin Jones’ real estate team represents clients with real estate projects in California and throughout the United States.

 

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Real Estate Attorney David Mnatsakanyan Joins Boutin Jones Inc.

Real Estate attorney David Mnatsakanyan has joined Boutin Jones Inc. A graduate of University of California, Hastings College of Law and the University of California, Davis, he is a former Tax Consultant for Deloitte Tax LLP in San Francisco. While there, he delivered consulting and compliance services involving indirect taxes such as sales and use taxes and gross receipts taxes. Before joining Boutin Jones, he worked at a prominent national law firm where he served as counsel in a variety of commercial real estate financing transactions with an emphasis on Qualified 501(c)(3) Bonds. At Boutin Jones, he joins a growing Real Estate practice with sophisticated tax expertise.

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Litigator Dillon Jackson Joins Boutin Jones Inc.

Attorney Dillon Jackson has joined Boutin Jones Inc.’s Litigation Department where he will help represent clients on a wide range of civil litigation matters.

He graduated in 2020 from the University of California, Davis School of Law, Order of the Coif, and received his B.A. from the University of California, Berkeley in 2016, where he was a Regents’ and Chancellor’s Scholar. Prior to graduating law school, Dillon was part of Boutin Jones as a law clerk over the summer of 2019.

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Litigator and Former Military and Fire Pilot Thomas Humann Joins Boutin Jones Inc. as a New Attorney

Thomas Humann has joined Boutin Jones Inc. as an attorney in the firm’s Litigation practice. He is a 2020 graduate of the University of the Pacific, McGeorge School of Law and brings a number of unique leadership and career experiences with him to the practice of law. He graduated from the U.S. Navy Flight School, where he was ranked number one in his graduating class before serving as a Marine Corps officer. He served as an Attack Helicopter Pilot and then went on to become a White House Helicopter Pilot, where among many missions, he piloted the President, Vice President and foreign heads of state in the days following 9/11.

After the Marines, he received the University of Southern California’s Aviation Safety & Accident Investigation Certification and joined the California Department of Forestry and Fire Protection, where he worked as an Aviation Safety Officer and Fire and Rescue Helicopter Pilot, working to battle California’s wildfires.

As a litigator, he will represent clients in a variety of matters including disputes involving employment, real estate and intellectual property, business and private contracts, and probate. He honed his legal skills as a Judicial Extern at the Ninth Circuit Court of Appeals for Judge Callahan and a summer associate at Boutin Jones Inc. Prior to law school and U.S. Navy Flight School, he received a B.A. from College of the Holy Cross.

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Boutin Jones Tax Law Group has Launched the California Tax Notebook

In response to the many changes in tax law enacted in 2020 and the changes we see on the horizon for 2021, the Boutin Jones Tax Law Group has launched the California Tax Notebook. Our newest Boutin Jones blog, the California Tax Notebook, contains timely information such as how the CARES Act impacts tax law, how two recent decisions ruled against taxpayers and in favor of the California Franchise Tax Board, an update on 1031 Exchanges, monthly tax law tips–and more. Visit the site at californiataxnotebook.com and subscribe to receive an email when new articles are published.

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California Small Business Hiring Tax Credit Application Period Underway

By:  Matthew D. Carlson

On September 9, 2020, Senate Bill 1447 was signed into law and created a new tax credit aimed at providing relief to struggling small businesses. SB 1447 provides certain small businesses with a $1,000 tax credit for each net increase to full-time employees. Applications are allocated on a first-come, first-served basis, and are being accepted from December 1, 2020, through January 15, 2021. Applications must be submitted electronically on the California Tax and Fee Administration (“CDTFA”) website (link here).

Eligible Small Business

A small business must satisfy several criteria to qualify for the tax credit. First, the business must meet the definition of a “qualified small business employer,” which means that the business must:

  1. Have 100 or fewer employees as of December 31, 2019; and
  2. Experience a 50% decrease in gross receipts during the three-month period beginning on April 1, 2020, through June 30, 2020, compared to the same period in 2019. (Gross receipts are generally all income less returns and allowances.)

This definition limits tax credits to relatively small businesses that experience significant revenue losses in early 2020 immediately following the Covid-19 outbreak.

Increase to Full-Time Equivalent Employees

A qualified small business must also have a “net increase” in qualified employees in the latter part of 2020. The increase in employment is measured by determining the average number of full-time employees during the three-month period beginning April 1, 2020, and ending on June 30, 2020, compared to the average full-time employees over the five-month period beginning July 1, 2020, and ending November 30, 2020.

For each net increase in the average number of employees from the first period to the second period, the small business is eligible to receive either an income tax credit or a sales and use tax credit of $1,000 per employee. This will benefit employers who were forced to lay off workers and subsequently re-hired employees or hired new employees.

Application Process

The application process begins on December 1, 2020, and ends at the latest on January 15, 2021, or earlier if the maximum cumulative allocation of $100 million is reached before the January deadline. Because of this cap on total credits issued, employers interested in applying for the tax credits should do so as early as possible.

Applications must be submitted to the CDTFA. The CDTFA issues “tentative credit reservations” of $1,000 for each net increase in qualified employees. The credits are capped at $100,000 per small business.

The application is available on the CDFTA website along with frequently asked questions and other information: https://www.cdtfa.ca.gov/taxes-and-fees/SB1447-tax-credit.htm

Notebook with tax credit sign on a table. Business concept.

Notebook with tax credit sign on a table. Business concept.

Notebook with tax credit sign on a table. Business concept.

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SB 1383: California Family Rights Act | Complimentary Zoom Webinar on December 10, 2020

California Senate Bill (SB) 1383 has been signed into law by Governor Newsom. It will significantly expand the application of the California Family Rights Act (CFRA) and its family and medical leave entitlements to all public sector employers and those private sector employers with 5 or more employees.  Until now, CFRA only applied to employers with 50 or more employees.  In addition, SB 1383 also expands the qualifying reasons to take CFRA leave and eliminates previous restrictions on the use of such leave that distinguish it further from its federal law counterpart – the Family and Medical Leave Act (FMLA).  SB 1383 is effective on January 1, 2021. Attached for your review an Employment Law Guidance regarding SB 1383 to help you understand its impact on your business operations.

Employment Law Guidance – SB 1383

If you have any questions on this new law or if we can be of assistance in updating policies and procedures to implement the new law, please feel free to contact us.

To assist smaller employers with less than 50 employees who have not been previously covered under the CFRA leave law, Boutin Jones is also offering a complimentary Zoom webinar on Thursday, December 10, 2020, from 10:00 a.m. to 11:30 a.m. to outline the basics of CFRA leave, provide a general overview of how it will apply in the workplace, and answer questions.  Additional information on this webinar is noted in the attached Employment Law Guidance.  You can register for the webinar online at:  Boutin Jones CFRA Webinar

Employment Law Guidance - SB 1383

Webinar Information

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Proposition 19 Client Alert

Earlier in November, California voters approved Proposition 19, which may significantly increase property taxes when real property is transferred between a parent and child. This Client Alert explains the changes to current law and what to consider in deciding whether to take action before the new law takes effect on February 16, 2021.

 

Current Law Regarding Parent-Child Transfers

Under current law, a parent can transfer their principal residence to a child without a property tax reassessment, regardless of whether or not the child chooses to use the property as the child’s own principal residence. In addition, each parent can transfer up to $1 million of assessed value of other real property (e.g., vacation homes, commercial properties or agricultural property) to their children without a property tax reassessment. Together, two parents can transfer up to $2 million of assessed value of other real property to their children without reassessment. These reassessment exclusions apply whether the parent-child transfer occurs by sale or by gift during the parent’s lifetime, or by transfer following the parent’s death.

Changes under Proposition 19

Proposition 19 will significantly limit the ways a parent-child transfer of real property can be excluded from property tax reassessment. Only two types of transfers will be eligible for exclusion from reassessment on or after February 16, 2021:

  1.  A transfer of the parent’s principal residence to a child who uses the property as their own principal residence after the transfer; and
  2. The transfer of a family farm.

These two exclusions have value limits as well. The maximum value that can be excluded from reassessment is the current assessed value of the property plus $1 million. To the extent that the fair market value of the property exceeds the current assessed value plus $1 million, the excess will be reassessed. If the property’s fair market value at the time of transfer is less than $1 million more than the current assessed value, the property will receive a complete exclusion from reassessment for property tax purposes.

Consider Lifetime Transfers before February 16, 2021

If you own real property with a low assessed value in comparison to its fair market value and if your children are the beneficiaries of your estate plan, you should consider taking action before February 16 to minimize property taxes in the future by (1) making lifetime transfers, whether by gift or sale, (2) by using an entity such as a limited liability company (“LLC”) to hold the property, or (3) both lifetime transfers and using an entity.

Boutin Jones has a team of attorneys who are able to adjust your estate plan to this changing landscape. If you want to discuss your options in more detail with one of our attorneys, contact us before Proposition 19 takes effect this coming February.

Friendly girl explaining some documentation to parent

Friendly girl explaining some documentation to parent

Friendly girl explaining some documentation to parent