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Attorney for Closing a Medical Practice in California

There are more than 75,000 actively licensed physicians in California who work across thousands of different medical practices (California Health Care Foundation). Of course, medical practices do not always last forever. New practices are being formed every month and many existing practices are being sold or even being closed down.

If you are a doctor in the Bay Area who is preparing to close your medical practice, it is imperative that you have a comprehensive understanding of your responsibilities. Within this article, our Fremont business lawyer for medical practices highlights the key things to know about closing down a medical practice in California.

Know Your Responsibilities When Closing Down Your Medical Practice

You Must Provide Adequate Written Notice to All Current Patients

There are strict rules regarding “patient abandonment” in California. Your practice does not want to be in violation as it closes down. The California Medical Board emphasizes that physicians must give sufficient advance notice—usually defined as somewhere between 30 and 60 days—so patients have time to secure alternate care and obtain their records. Written notices should be sent in writing either or both mail and email, and they should include the closure date and instructions for obtaining records.

You Must Maintain, Transfer, and Retain Medical Records

One of your big responsibilities when closing a medical practice in California is ensuring that medical records are properly handled. California requires physicians to keep medical records at least seven years from the last date of service for adults and, for minors, until age 25. You must either retain the charts yourself or designate a licensed custodian and disclose that custodian’s contact information in the patient‑notification letter.

You Must Safely Dispose of or Transfer Controlled Substances and Return DEA Forms

There are also strict rules for managing controlled substances. You should conduct a final inventory of Schedule II‑V drugs, cancel unused DEA 222 order forms by writing “VOID,” and mail them—along with your registration certificate—to the local Drug Enforcement Agency (DEA) office. Destruction of controlled substances must meet the federal “non‑retrievable” standard.

You Must Coordinate Continuing/Emergency Care as Appropriate

As a best practice, all medical practices in California should set up a proper system for coordinating continuing care and emergency care through their closure date. To do right by your patients, it is crucial that you take a proactive approach—especially if your practice has vulnerable patients.

You Must Notify Licensing Boards, Payers, and Credentialing Entities

Another requirement is to file a change‑of‑status form with the Medical Board, relinquish hospital privileges, and update your NPI profile. Medicare, Medi‑Cal, TriCare, and private plans generally require 30‑90 day’s notice to terminate provider agreements and to redirect electronic funds or capitation payments. Failure to cancel contracts in the proper manner can cause big problems.

You Must Properly Wind Down Business Operations

Finally, you need to develop a plan for the orderly wind down of your business operations. What this entails will depend, in part, on the specific nature of your medical practice. With that being said, there are many employment requirements. You should ensure that you give all employees written notice that meets California Labor Code requirements, pay final wages (including unused PTO) on the last day, and issue COBRA or Cal‑COBRA election forms.

Our California Business Lawyer Can Help You Close Down a Medical Practice

Lynnette Ariathurai is a California business attorney with the skills and experience to help physicians wind down their medical practice. If you have any questions about your responsibilities, please do not hesitate to contact us today. With an office in Fremont, we work with medical practices throughout the Bay Area.

close medical practice California, medical office closing, physician practice closure

Arbitration Clauses in a Contract: When Arbitration Can and Cannot be in a Contract in California

Arbitration is a private dispute resolution process where parties agree to have a neutral third party (the arbitrator) hear their case and make an (often) binding decision. It is not uncommon for business contracts—but commercial agreements and employment agreements—to contain mandatory pre-dispute arbitration clauses. You may be wondering: Is an arbitration clause enforceable in California? The answer is presumptively “yes”—but there are certain requirements that it must meet. Here, our Fremont business lawyer explains the key things to know about when an arbitration clause can and cannot be in a contract in California.

Arbitration Clauses are Generally Enforceable in California

A pre-dispute arbitration clause is a contractual provision requiring parties to resolve future disputes through arbitration instead of litigation. It is commonly included in consumer, employment, and commercial contracts. California lawmakers have long viewed mandatory arbitration provisions with skepticism. In 2019, Assembly Bill 51 (AB 51) was passed in the state to prohibit employers from requiring employees or applicants to sign arbitration agreements as a condition of employment. However, its enforcement was challenged. On January 1st, 2024, a federal court issued a permanent injunction. The court determined that the Federal Arbitration Act (FAA) preempts AB 51. As such, arbitration clauses for employment contracts are still lawful in California.

While Permissible, Arbitration Clauses Must Meet Certain Standards in California

Even though AB 51 never took effect, mandatory arbitration clauses must meet certain criteria to be lawful in California. The California Supreme Court set the standard in the case of Armendariz v. Foundation Health Psychare Services, Inc. Here are five key elements:

Arbitrator must be neutral: In California, arbitration clauses must ensure that the arbitrator is impartial and free from any conflicts of interest.
More than minimal discovery must be allowed: While arbitration does not include a full discovery process, it cannot be limited to only “minimal” discovery.
Fees for the arbitration cannot be unreasonable: Businesses and employers cannot impose excessive arbitration costs on customers and employees.
All forms of relief available in court must be possible remedy: Arbitration agreements must not limit the types of damages or remedies that a party could otherwise seek in court.
The arbitration must be decided in writing: Finally, the arbitrator must make his or her decision in writing with a basic explanation of the basis of the ruling.

Beyond that, a mandatory arbitration provision in California may also potentially be considered invalid and unenforceable if it is substantively unconscionable. For example, a contract arbitration clause that requires an employee to waive all PAGA claims rights has been previously deemed overly broad and substantively unconscionable by courts.

Speak to Our California Arbitration Attorney for a Confidential Consultation

Lynnette Ariathurai is a California business lawyer who has the experience to help companies and employers with the full range of arbitration cases. Contact us today for a fully confidential, no obligation initial consultation. With an office in Fremont, we serve business throughout the region, including in Union City, San Leandro, San Jose, and Santa Clara.

arbitration clause requirements, California mandatory arbitration

Discrimination Policy Lawyer for Business

We Draft and Review Anti-Discrimination Policies for Businesses in California

Lynnette Ariathurai is an experienced discrimination policy attorney for businesses in California. As of 2016, all companies and organizations with five or more employees are required to draft and distribute a legally compliant anti-discrimination policy. The right discrimination policy can help to prevent claims and reduce your risk of liability if an issue does arise. Contact us at our Fremont law office today for a confidential consultation with a California discrimination policy lawyer.

Know the Law: California has Strong Anti-Discrimination Provisions

California has strict anti-discrimination requirements for businesses. As explained by the California Civil Rights Department, our state’s Fair Employment and Housing Act (FEHA) applies to businesses and organizations with five or more employees. The law in California prohibits discriminatory practices in the workplace based on several different protected characteristics, including:

Race
Color
National origin
Sex
Gender
Sexual orientation
Gender identity
Age (40 plus)
Disability status
Medical conditions
Pregnancy status

Note: FEHA prohibits employers from retaliating against a worker who raises a complaint of discrimination. Any complaint must be taken seriously by employers—even if not well-supported.

Employers Must Distribute Written Anti-Discrimination Policy

In 2016, California changed its workplace regulations. Employers that are covered by FEHA—those with five or more employees, including part-time workers—must write and distribute a legally compliant anti-discrimination policy that meets the requirements of 2 CCR §11023. The policy should clearly confirm an employer’s commitment to preventing discrimination, harassment, and retaliation. Among other things, a written workplace anti-discrimination policy should highlight the law and provide basic complaint procedures for affected employees.

Your Anti-Discrimination Policy Should Be Drafted by a Lawyer

No employer wants to face liability from a discrimination claim. Indeed, preventing discrimination complaints from employees is highly desirable. The right (written) anti-discrimination policy can make a big difference. Professional expertise is a must. Employers should consult with an employment lawyer who can ensure that the policy is properly drafted and that it complies with all the requirements of FEHA and other laws/regulations in California. Your attorney can also tailor the policy to the specific needs of your business or organization.

How to Handle an Employee’s Discrimination Complaint (Be Proactive)

Even the best anti-discrimination policy cannot guarantee that no employee complaint will ever arise. Employers need to be ready to accept a complaint, independently investigate the allegations, and develop a defense strategy. There is no one-size-fits-all response to a worker’s discrimination complaint and/or harassment complaint. While these cases are generally best resolved before a lawsuit is filed, employers need to be prepared to fight aggressively to protect their interests.

Contact Our California Business Lawyer for Help with an Anti-Discrimination Policy

Lynnette Ariathurai is a business law attorney who helps companies prevent and resolve discrimination complaints. If you have any questions about writing an anti-discrimination policy, we are here to help. Contact us today for your confidential initial consultation. With an office in Fremont, we help businesses draft discrimination policies throughout the Bay Area including San Jose, San Mateo, Hayward, and Newark.

anti-discrimination policy, California anti-discrimination law, discrimination claims

Updated CA Family Care and Leave Act Impacts Small Businesses

The California Family Rights Act (CFRA) is our state’s counterpart to the federal Family and Medical Leave Act (FMLA). The CFRA provides more expansive protection to employees and, as of January 1st, 2021, the CFRA has been updated and expanded. More small businesses in the Bay Area now have obligations under the statute. In this article, our Fremont employment law attorney for employers provides an overview of the key things small businesses should know about the updated California family care and family leave laws.

Background: An Overview of the CFRA

The CFRA is our state’s primary family care and leave law for employees. Under the CFRA, eligible employees may take up to 12 weeks of job-protected unpaid leave to deal with a qualifying family or medical emergency. The California Department of Fair Housing and Employment emphasizes that the law provides leave for eligible workers to “care for their own serious health condition or a family member with a serious health condition, or to bond with a new child.”

Dramatic Expansion of CFRA—It Now Applies to Many Small Employers

Recent legislation has changed the scope of the family care and medical leave laws in California. Effective as of January 1st, 2021, many more small businesses are covered by the CFRA. Here are five key things that all small business owners in the Bay Area need to know about the law:

Five or more employees: The CFRA applies to all businesses and organizations with five or more total employees. Only employers with four or fewer workers are exempt from coverage.
Executives are employees: The CFRA clearly states that executives and officers are counted as employees.
No more 75 mile radius: The 75 mile radius requirement—which still counted for the federal FMLA—is no longer an element in the CFRA. It doesn’t matter where employees are located. As more and more workers began to work remotely, California removed the 75 mile radius requirement.
No exception for employers based outside of CA: The CFRA counts all employees—regardless of state. Further, there is no exception to the law for employers based outside of California. If you have an employee in California and you have five or more total workers nationwide, that California employee is covered by the CFRA.
“Family member” is broader: Finally, the term “family member” has been dramatically expanded to include more people. A worker may now be able to take unpaid, job-protected leave to care for an adult child, a sibling, or a grandparent.

Small Businesses Must Ensure that their Employee Handbook is Updated

All small businesses in California should review and, if necessary, revise their employee handbook and/or any other materials that they provide to staff. As the reformed CFRA applies to many more small businesses, it is possible that some companies or organizations are using outdated materials that improperly state that they are not covered by the CFRA. Small businesses can consult with an employment lawyer for employers to ensure that their handbook is fully compliant with the January 1st, 2021 revisions to the CFRA.

Get Help from an Employment Lawyer for Employers in California

Lynnette Ariathurai is an experienced employment attorney for employers. If you are a small business owner in Fremont CA, near Newark, or Hayward, East Bay, Milpitas, Union City, San Leandro, Gilroy, San Jose, or Santa Clara with questions about the updated California Family Rights Act (CFRA), we are here to help. Contact us today to set up a confidential initial appointment.

California employment laws, California Family Rights Act, CRFA, family care, family leave, medical leave

Steps to Defend a Claim When an Employee Sues

Owning and operating a successful business is challenging in the current economic environment. No business owner wants to face a lawsuit—especially a legal claim from one of their own employees. If your company is facing a complaint from an employee, it is imperative that you know what to do to protect the best interests of the business. Here, our Fremont employment law attorney for employers highlights five key steps to take to protect yourself and your business against an employee claim.

1. Understand the Nature and Scope of the Claim

First and foremost, it is crucial that you take the time to understand the nature and scope of the claim. Did the employee actually file a lawsuit or did they initiate a claim with state or federal regulators? In employment law cases, many claims go through a regulatory agency before any lawsuit is filed. You may be facing a claim with the:

California Labor Commissioner’s office
California Department of Fair Employment and Housing (DFEH)
United States Department of Labor (DOL)
Equal Employment Opportunity Commission (EEOC)

2. Do Not Take It Personally, Do Not Punish the Employee

As challenging as it can be, it is important to remember that employment law claims are not personal. These complaints should be handled in a professional manner. If the employee still works for your company, do not take any adverse action against them—even if you believe that they filed a false claim in bad faith. You do not want to expose your company to liability for retaliation. The EEOC notes that retaliation is the most common basis for employment claims nationwide.

3. Identify and Preserve Relevant Documents and Record

Employers can effectively protect their interests by identifying, gathering, and organizing all documents and records that may be relevant to the claim. Not only do employers have a general obligation to save information once a claim has been filed, but these records can form evidence to help protect your business against liability.

4. Notify Your Insurance Carrier (If Applicable)

Does your company have employment practices liability insurance or another type of related insurance coverage? If so, it is crucial that you notify your insurer once a claim has been filed. In general, insurance policies require that businesses/organizations provide timely notice of a legal claim. Failure to tell your insurance carrier that a claim has been filed could undermine your coverage.

5. Consult With an Employment Attorney for Employers

Employment law is complicated. There are many specialized rules and regulations in place under both federal and state law. Employers facing a lawsuit (or formal claim) from a current or former employee can benefit from consulting with an experienced employment law attorney. A lawyer will be able to review the specific circumstances of the case and help you determine the best course of action—whether that is building a strong defense or working towards a solution in mediation.

Schedule a Confidential Consultation with a California Employment Lawyer

Lynette Ariathurai is an experienced employment law attorney for employers. If you have questions about defending an employee claim, attorney Ariathurai can help. Contact us now for a confidential consultation. We represent employers in Fremont, Newark, Hayward, East Bay, Milpitas, Union City, San Leandro, Gilroy, San Jose, and Santa Clara.

employee claim, employment law attorney, employment liability

Should Attorneys Speak for Employers During Employee Disputes?

To be successful, businesses and organizations need strong relationships with their employees. A legal dispute with an employee can cause serious headaches for a business owner or manager. Even worse, it could put the company or organization at a liability risk. A lawyer with experience representing employers can help your business navigate a conflict.

This raises an important question: Should an attorney speak on behalf of an employer during a dispute? The answer depends on the circumstances — though it is always important to consult with a lawyer as early in a dispute as possible. Here, our California employment law attorney for employers explains what you can expect from your lawyer during a dispute with an employee.

Preventing Claims through Proactive Guidance

It is important to emphasize that a dispute with an employee is not the same thing as an employment law claim. An attorney can help your business take proactive measures to prevent employee claims. This starts with putting the right practices and structure into place. By doing so, your business can go a long way towards reducing the risk of a dispute. Even if a dispute has already arisen, it may be possible to resolve the matter before a formal claim is filed.

If your Bay Area business is already locked in a dispute with an employee, a lawyer can help you take the appropriate action to resolve it. What exactly this entails depends on the specific situation, including the ultimate objectives of your business. In some cases, the best path forward is to take time to understand the employee’s concerns and look for a mutually workable, low-conflict solution that avoids a claim with the Labor Commissioner, Equal Employment Opportunity Commission (EEOC) or the California Department of Fair Employment and Housing (DFEH).

Defending Employment Law Claims

Not all employee claims are preventable. Even if your company does everything right, there is still a risk that you could face legal action from a current or former employee. Our experienced California employment law attorney for employers can defend your business or organization in an employee claim.

Once a formal claim is filed with the Labor Commissioner, EEOC, DFEH, or any other agency, it is best to let your employment law attorney speak on behalf of your business. It is still possible that the matter could still be resolved outside of court. Nonetheless, it is best practice to work with an employment lawyer for employers who can ensure that the rights and interests of your business are protected.

Get Help from an Employment Lawyer for Employers in California

Attorney Lynette Ariathurai is an experienced, results-driven employment lawyer for employers. If you have any questions about defending your business or organization against an employment dispute, we are more than ready to help.

Contact us now for a strictly confidential initial consultation. We represent employers throughout the Greater Bay Area, including in Fremont, near Newark, Hayward, East Bay, Milpitas, Union City, San Leandro, Gilroy, San Jose, and Santa Clara.

attorney for employers, business attorney, employee dispute, employment attorney, employment lawyer

Best Practices for Navigating Changing COVID Laws for Businesses

The COVID-19 pandemic continues to affect communities around the world. According to data from the California Department of Public Health, there have been more than 4.1 million cases of the virus confirmed in the state as of mid-August of 2021—and with the Delta variant, case rates are rising once again. For businesses, navigating the ever-changing regulatory environment during the pandemic is challenging. Here, our Fremont, CA business lawyer highlights some of the best practices for companies looking to navigate COVID-19 regulations in the Bay Area.

Do Your Research (Local Law Matters)

You need to stay up-to-date on all applicable laws. Indeed, the only truly effective way for businesses to navigate the changing COVID-19 legal landscape is to work with an experienced business lawyer or do frequent independent research into the relevant rules and regulations. Notably, it is imperative that business owners refer not just to federal and state guidelines, but also to local rules and ordinances.

In California, the regulations sometimes vary from city to city or county to county. Here is an example: On August 2nd, 2021, Cal/OSHA released new guidance on masks. Under the statewide public health regulations, facial coverings are required in certain places, such as healthcare settings. For vaccinated people, masks are only “recommended” in most indoor workplace settings. However, some local governments have different requirements. For example, on August 3rd, 2021, the Alameda County Health Care Services Agency reinstated a full indoor mask mandate—regardless of vaccination status. Make sure you know the rules in your area.

Implement a Process for COVID-19 Planning/Rapid Decision-Making

As the COVID-19 outbreak is still a developing public health crisis, it is crucial that businesses in the Bay Area build and implement a process for pandemic planning and rapid decision making. Keep in mind that things can change quickly. Several factors are subject to change, including masking rules, vaccine regulations, social distancing guidelines, and capacity restrictions. A well-developed plan can make navigating the pandemic far easier. Among other things, your business should have:

A plan designed to meet your unique needs/industry
A proactive mindset, always ready to address changing rules
A clear chain of command to ensure swift and decisive decisions when necessary

Be Ready to Seek Professional Guidance on COVID Regulations

Owning and operating a business is difficult enough during normal times. With the COVID-19 pandemic posing a wide range of challenges on businesses in the Bay Area, it has become even more complicated. You should not hesitate to consult with an experienced California business lawyer who can help you and your partners manage the pandemic.

Schedule a Confidential Consultation with a Bay Area Business Lawyer

Attorney Lynnette Ariathurai is a skilled, solutions-focused advocate for business owners. If you have any questions about the best practices for navigating changing COVID-19 laws, our law firm can help. Contact us today for a strictly confidential consultation. From our Fremont law office, we represent businesses throughout the Bay Area, including in Hayward, Union City, Castro Valley, Milpitas, and Newark.

business attorney, California COVID laws, COVID laws, COVID regulations, COVID-19

Preparing Your Business for Bringing Employees Back to the Office in California

According to the California Department of Public Health (CDPH), more than 20 million state residents were fully vaccinated as of July 1st, 2021. With vaccinations rising and COVID-19 cases dropping, more and more employers are getting ready to bring their remote staff back into the office. It is a complicated thing to do—sorting everything out requires careful planning. Here, our Fremont, CA employment law attorney for employers highlights some of the key things to know about preparing your California business to bring employees back to the office.

Follow State and Federal Public Health Guidelines

As a starting point, business owners and managers should keep up with changing federal, state, and local public health & safety guidelines. For example, the Centers for Disease Control and Prevention (CDC) has provided a considerable amount of guidance for employers and employees. As an employer preparing to bring workers back into the office, you need to be ready to answer some key questions, such as:

Will you ask employees to show proof of vaccination status?
Will there be any masking or social distancing policies in place?
Do employees have the option to remain on a full or partial flex schedule?
What steps will you take if an employee tests positive for COVID-19?

Know the Unique Needs of Your Workplace

Every workplace is different. It is crucial that business owners consider the unique needs of their company. Among other things, this means taking proactive steps to adapt the physical workspace for the return of employees. In California, companies are using a wide range of strategies to prepare for the return of remote workers. Some companies are putting an emphasis on ventilation and sanitization. Other businesses are opting to reopen at partial capacity—allowing some employees to continue work remotely either full-time or part-time.

Getting Legal Advice on COVID-19 Laws

Before you bring your employees back to the office, you should seek legal advice concerning the current COVID-19 federal, state, county and city laws that apply to your business. Some questions you may have are:

What protocols must I follow at the workplace for my industry?
Can I require employees to be vaccinated before returning?
Can I terminate an employee who refuses to come back to the office?
Am I required to reasonably accommodate an employee and allow some employees to work from home and require others to work at the office?

The answer to each of those questions may depend on what industry you are in and what city, county, and state that your business resides in. The laws are complicated and continually changing, but you can rely on us for timely, accurate counsel.

Effective, Open Communication with Employees is Key

As employers in California bring their staff back to the workplace, it is important to develop clear, well-articulated policies. Open communication between businesses and employees can go a long way towards reducing conflicts. Employers may also benefit from adopting a more flexible approach that allows for a gradual return to the workplace for many workers. Of course, consistency and clarity are important. At the same time, that does not mean that every employee is dealing with the same issues. There may be some circumstances in which companies are required to make accommodations under the Americans with Disabilities Act (ADA) or other state/federal labor regulations.

Get Help from a Business Law Attorney in Fremont, California

Attorney Lynette Ariathurai is an experienced employment law attorney for employers. If you have any questions or concerns about preparing your California company for bringing workers back to the office, our law firm can help.

Contact us now to arrange a confidential appointment with an attorney. From our Fremont law office, our law firm represents employers throughout the region, including in the San Francisco Bay area and Silicon Valley.

Bringing employees back to the office in california, COVID-19, employment law, labor laws, labor regulations, public health, vaccination status, workplace health and safety

Medical Leave Rules for California Businesses

Recent changes to medical leave rules in California mean that business owners need to learn about their new responsibilities under the law in order to avoid claims and ensure their compliance with state law. Employers in California should specifically know about new medical leave rules that provide California workers with more rights than they currently have under the federal Family and Medical Leave Act (FMLA), which took effect on January 1, 2021, as well as requirements for COVID-19 sick pay that took effect on March 29, 2021.

Expansion of California’s Family and Medical Leave Law

Since January 1, 2021, California employers who have five or more employees must comply with an expanded version of California’s family and medical leave law by allowing employees to take protected leave to care for themselves and for sick family members. The changes to the law arose out of the COVID-19 pandemic, as legislators realized that many parents were unable to be home to provide care for sick children, or for children who needed to learn remotely due to the pandemic’s closure of schools and day care centers. While some people can work remotely, not all jobs come with the possibility of remote work or a work-from-home situation. Accordingly, due to the pandemic, legislators considered how parents who cannot do their jobs from home would need additional protections to take leave from their jobs—both to provide care for their children, and to care for themselves if they become ill with COVID-19.

The new law expands the California Family Rights Act (CFRA), which previously required employers to provide up to 12 weeks of job-protected, unpaid leave for employees who had been working for the employer for at least 12 months and had accumulated at least 1,250 hours of work in that 12-month period. Those requirements have not changed. What has changed is that the law used to apply to employers with 50 or more employees within 75 miles of the worksite, like the federal FMLA. Now, the law applies to employers with 5 or more employees. To be clear, employers with 5 or more employees now must provide job-protected, unpaid leave for up to 12 weeks if they meet the other requirements. In addition, employers must continue to pay the employee’s health insurance coverage under the same terms as if the employee were not on leave.

In some cases, these employees also may be eligible for pay during a medical leave because of another recently passed law.

Expansion of Supplemental Paid Sick Leave Due to COVID-19

In addition to expanding the CFRA to smaller employers, California lawmakers also passed a new law that will require employers to provide supplemental paid sick leave to employees who have been affected by COVID-19. The new law, Senate Bill 95, took effect on March 29, 2021.

This new law expands the employers (and thus their employees) who are covered: both public and private employers in California with more than 25 employees must provide up to 80 hours of COVID-19 paid sick leave, which is in addition to paid sick leave policies that are already in effect through the Healthy Workplaces, Healthy Families Act of 2014. The law also expands the reasons for seeking this paid sick leave, including the need to provide parental care due to school or daycare closures. In addition, employers need to know that this law applies retroactively to January 1, 2021.

Seek Advice from a California Business Law Attorney

The trend in California appears to be moving toward more paid leaves and the expansion of employers who must comply with medical leave policies. For smaller companies, these kinds of expansions can be extremely difficult since they often require employers of very small businesses to hold jobs open for an employee on leave and pay both the employee on leave and the person who steps in to do their job during the leave period. Then, once the leave period ends, the business can be required to provide unemployment compensation to the employee who was terminated to reinstate the employee who was on leave. In short, recently changed California laws have not taken into consideration the financial burden they may be placing on small businesses across the state.

If you have questions about your obligations as an employer under the new leave laws, Attorney Lynnette Ariathurai can assist you. Contact us to learn more about the services we provide for employers in California.

California, cfra, empoyer rules, fmla, medical leave

How Proposition 22 Affects Independent Contractors in California

On November 4, 2020, California voters passed Proposition 22 (“Prop 22”), which CNN describes as a “costly and controversial ballot measure to exempt firms like Uber and Lyft from having to classify their gig workers in the state as employees rather than as independent contractors.” Numerous businesses that will benefit from Prop 22 supported the measure, including Uber, Lyft, DoorDash, Instacart, and Postmates. In total, those companies put $200 million into the ballot measure, according to CNN, making it the “costliest ballot measure in California’s history.”

What do California business owners need to know about Prop 22 and how it will affect independent contractors in California?

What is Prop 22?

Prop 22 was known more formally as the App-Based Drivers as Contractors and Labor Policies Initiative, and it was designed to allow companies operating in the gig economy to avoid the “ABC test” in California. The ABC test, also known as Assembly Bill 5 (AB-5), took effect on January 1, 2020. That recent law, as you may know, makes it more difficult for a gig economy company to classify a worker as an independent contractor as opposed to an employee.

According to the California Labor & Workforce Development Agency, an employer must treat a worker as an employee (and not as an independent contractor) unless the employer can satisfy prongs A, B, and C of the test. The ABC test meant that many Uber and Lyft drivers, for example, would need to be treated as employees as opposed to independent contractors.

With the passage of Prop 22, both ride-hail (i.e., Uber. Lyft) and delivery drivers can be exempt from the ABC test requirements in order to be classified as independent contractors. Prop 22 does provide some employee-like protections to gig economy drivers who will be classified as independent contractors, such as a minimum wage guarantee., overtime pay, access to workers’ compensation, union rights, family and sick leave, or employer related benefits.

Can My Independent Contractors Remain in this Classification?

Businesses that have independent contractors and that operate through an app platform should consult with an attorney about whether their independent contractors can remain independent contractors in light of the new law. Many businesses still have independent contractors and do not currently comply with AB-5. Under AB-5, most of those independent contractors should be classified as employees.

Prop 22, voted in by Californians, shows hope for the gig economy. Many people like to operate businesses for themselves and to use independent contractors to provide services in California. Gig economy business owners, as well as other business owners in California, will need to wait and see if the legislature makes changes to AB-5 in light of Prop 22.

Contact a California Business Law Attorney

Do you have questions about how Prop 22 will affect the classification of your business’s employees or independent contractors? An experienced California business law attorney can speak with you today. Attorney Lynnette Ariathurai has been serving the Northern California business community for years and can provide you with the information you need. Our firm serves clients in Fremont, Hayward, Union City, Milpitas, and Newark.

gig workers, independent contractors, prop 22