New California Laws Affecting the Hospitality Industry

California state flag in front of gavel

How California labor and employment laws will affect the hospitality sector.

In 2019, the state of California passed a series of new labor and employment laws.  As this legislation comes into effect, it will have major impacts on employers throughout the state, including those in the hospitality industry.  Here is a brief overview of the new laws and the changes that they will bring.

California Assembly Bill 5 (AB 5)

AB 5 established a three-factor “ABC” test to help employers determine whether a worker is considered an employee of their company or an independent contractor.  This test presumes that a worker is an employee unless the employer can establish the following factors:

  1. the worker is free from the control and direction of the hiring entity in connection with the performance of the work;
  2. the worker performs work that is outside the usual course of the hiring entity’s business;
  3. the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

If the worker meets all three factors, then they are considered an independent contractor.  If the test determines that a worker is an employee, then said worker qualifies for unemployment insurance, workers compensation benefits, and employee rights.

California Assembly Bill 51 (AB 51)

AB 51 forbids California employers from requiring employees or job candidates to waive their rights relating to a violation of the California Fair Employment and Housing Act or the Labor Code as a condition of employment.  In simpler terms, AB 51 prohibits mandatory arbitration agreements.  Additionally, the law bars employers from threatening or terminating an employee or applicant who refuses to sign such a waiver.

California Assembly Bill 749 (AB 749)

AB 749 states that an agreement to settle an employment dispute cannot include a provision that bars the employee’s ability to seek future employment with the employer.  This law protects employees who have filed claims against an employer in court, to an administrative agency, in an alternative dispute resolution forum, or through the employer’s internal complaint system.

California Assembly Bill 9 (AB 9)

Under AB 9, employees now have three years (increased from one year) to file a claim against an employer for workplace discrimination or harassment.  Complaints should be filed with the Department of Fair Employment and Housing within three years of the date which the unlawful conduct occurred.

These are some of the new California labor and employment laws that employers in the hospitality industry should be aware of.  Want to stay up-to-date with all the latest hospitality news and trends?  Then get the information you need by meeting and connecting with all the top California lodging professionals at the California Lodging Investment Conference.  Contact us today to learn more about this fantastic informational and networking event.


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