Newsletter

Chuong Vo Joins California JPIA Executive Committee

Chuong Vo, mayor pro tem of the City of Cerritos, has been appointed to the California JPIA’s Executive Committee to fill the vacant seat of Sylvia Munoz Schnopp, who concluded her council member term with the City of Port Hueneme in December 2020.

“The California JPIA provides a unique service for our members: a service that prioritizes a partnership between the program and the members,” said Vo, who was drawn to a leadership role by the Authority’s commitment to teamwork, cooperation, and collaborative decision-making. “There is a delegate from every single agency for whom the Authority provides service. You don’t find that with a typical insurance agency.”

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Vo continued, “Every member agency has a vote and a say in how the California JPIA’s service is provided, which solidifies the partnership between the members and the Authority. The Authority can pull ideas and best practices from more than 120 agencies. That experience is invaluable.”

Elected to the Cerritos City Council in 2020, Vo began his local service on the Cerritos Community Safety Committee and Planning Commission. In addition to his role as delegate to the Authority, he is liaison to the ABC Unified School District and Cerritos Community College, as well as alternate delegate to the Los Angeles County City Selection Committee, Los Angeles County Sanitation Districts 2, 3, 18, and 19, and Southeast Los Angeles County – Workforce Development Board’s Board of Directors. Recipient of an American Red Cross Hometown Hero Award, he also is a member of the Cerritos Optimist Club and the Kiwanis Club.

A police officer for the City of Torrance possessing more than 20 years’ experience in public safety, Vo received a South Bay Medal of Valor Lifesaving Award in 2015 for reviving an elderly gentleman who suffered a heart attack outside Cerritos Elementary School. Vo—who was off duty while dropping off his son—took control of the situation, established a perimeter, performed cardiopulmonary resuscitation until the gentleman regained consciousness, and remained with him until paramedics arrived. Vo visited the gentleman later that day at a local hospital to see how he was doing.

In a resolution, the Torrance City Council and Mayor Patrick J. Furey commended Vo who, they said, “by his quick thinking, leadership, and compassion, exemplified the highest traditions of the Torrance Police Department’s core values of service, excellence, and pride, and definitely exceeded what is routinely expected through his heroic actions.”

Vo assumes his responsibilities as a leader of the Authority in the footsteps of his mentor and former Cerritos Mayor Carol Chen, who served on the Executive Committee from January 2014 through March 2017.

“The California JPIA is pleased to welcome Chuong Vo to serve on the Executive Committee,” said Chief Executive Officer Jon Shull. “He understands the challenges associated with not only maintaining our current members but also recruiting new, risk-aware members who will strengthen the pool’s resources.”

Academy Update

It’s not just another online meeting: The California JPIA has gone virtual, and that includes this year’s training academies. You won’t want to miss the exciting virtual academies planned for March through November. The academies will be held over three consecutive half-days and broadcast from the Authority’s campus in La Palma. The attendees and most speakers will be virtual and will use the On24 and Zoom platforms to view and participate in sessions, in much the same way you may remember from our 2020 Risk Management Educational Forum. The key is that these academies will be very immersive and engaging in much the same fashion as academies have always been.

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What usually would begin in February now starts in March, with the Parks and Recreation Academy scheduled for March 9 -11, 2021.  New to this California JPIA academy is speaker Candace Collins, with Praesidium, who will present “Background Screening and Beyond: Tips for Preventing Sexual Abuse.”  This is just one of the updated sessions in this year’s academy agenda.

The Risk Management Academy, created for new and current risk managers, is scheduled for April 12-14, 2021.  The Authority’s newest Senior Risk Managers, Tony Leite, Toni Consolo, and Lucy Gonzalez, will join the team of speakers and staff this year.  Like other virtual academies, this academy will use Zoom break-out rooms to foster participation and networking among fellow attendees and speakers.

Continuing with the California JPIA’s core values of excellence and innovation, a new academy will be offered this year, geared toward elected officials in office for more than two years.  The Governance Leadership Academy will be held virtually, May 4-6, 2021.  Topics such as “Increasing the Odds of Avoiding an Ethical Crisis,” “Goal Setting – Aligning Community, Council, and Staff Goals,” and “The Critical Connection for Elected Officials: Chief Executive and Department Head Relations” are just a few of the important topics planned.  Like all of our virtual academies, this will be interactive and have opportunities for engaging with the speakers and fellow attendees.

The Executive Academy, one of the academies canceled last year due to COVID-19, is scheduled for May 17-19, 2021.  Experienced, new, and soon-to-be city managers and other chief executives are welcome to attend this virtual academy.  A new addition this year will be an “Idea Exchange” session with two of the speakers guiding a conversation with the attendees covering topics such as ethics, council member on-boarding and development, council/staff relationships, focus and priorities, political sensitivity, and policy development.

Elected officials who have been in office less than two years will want to attend this year’s virtual Newly Elected Officials academy, scheduled June 7-9, 2021.  Topics will address local government finance, structure, and laws, understanding the council-manager form of government, and protecting yourself and your agency from liability.

The Human Resources Academy is scheduled for August 17-19, 2021.  One of the topics included this year, which our members have frequently requested, is “Dealing with Difficult Conversations and Difficult Employee Situations.”

The Public Works Academy will occur October 12-14, 2021.  Sessions similar to the in-person academy are planned, but with a twist to include current events and topics.  The “ADA Litigation in Public Works” session with speaker Barbara Thorpe will include COVID-19 updates.

The last virtual academy for this year is scheduled for November 9-11, 2021. For new managers and supervisors, the Management Academy will have a slight change in topics, but will still include the same outstanding leadership sessions that have historically been a favorite among past attendees.  Scheduled to close out the last day is Scott Grossberg with the session, “Your Job is to Make Your People Successful.”  You won’t want to miss this or any of our other new virtual academies this year.

Registration for all the virtual academies will be made available the month prior to the academy start dates.  For more information on these training academies, please contact Michelle Aguayo by email or (562) 467-8777.

COVID-19 Vaccination Programs in the Workplace

Earlier this month, the California JPIA presented a webinar discussing legal and other unique issues related to COVID-19 vaccination programs in the workplace.

Webinar panelists included Jeff Rush, Workers’ Compensation Program Manager; Paul Zeglovitch, Liability Program Manager; Kelly Trainer, partner with Burke, Williams & Sorensen, LLP; and Giovanni Valencia, partner with Hayford, Felchlin, Valencia & McWhorter.

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The webinar covered several issues, including:

• An update on California’s vaccination plan
• Legal issues to consider with vaccination programs
• Mandatory versus voluntary vaccination programs
• Vaccination programs in a unionized setting
• Religious and medical condition/disability exemptions
• Wage and hour issues
• Incentive program considerations
• Employee safety and privacy-related issues
• Liability exposure
• Workers’ compensation considerations and benefits

The Authority has not taken a position on mandating COVID-19 vaccinations. Members are advised to consult with their legal counsel when deciding the vaccination program that will be implemented at their workplace.

To view the webinar, click here. For additional information, including webinars and FAQs, visit our COVID-19 Information & Resources web page. If you have any questions, contact your assigned Risk Manager.

Sidewalk Program Update

The Authority recently updated the Executive Committee on the sidewalk inspection and maintenance program’s progress, which was created in 2015 to provide members with a systematic way to identify and reduce sidewalk trip hazards.

The sidewalk program currently consists of a master services agreement for various sidewalk inspection and maintenance services negotiated with Precision Concrete Cutting. This master services agreement provides Authority members with favorable pricing for sidewalk assessment and repair services, which translates to significant cost savings when compared to members seeking the services on an individual basis.

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As of January 2021, a total of 31 members have removed a combined 69,835 trip hazards over the course of the sidewalk program.  This averages out to roughly 11,639 trip hazards removed across the membership per year.  Over the same period, the Authority’s members have invested approximately $4.7 million into sidewalk inspection and maintenance efforts, thereby lowering sidewalk-related risk exposures by reducing the total number of trip hazards.  Members continue to be interested and participate in these efforts.

In addition to the current program, Authority staff is researching potential avenues to effectively expand the sidewalk program.  As various elements are analyzed and determined to be viable, staff will present those ideas to the Executive Committee for further review and discussion.

In the meantime, members are encouraged to discuss program participation in its current form with their assigned Risk Manager.

Elected Officials Entitled to Some, Not All, Public Agency Records – Access Depends on if Record Request is from “Elected Official” or “Member of the Public”

Originally published on January 19, 2021. Reprinted with permission from Best Best & Krieger LLP.

As local public agencies welcome newly elected officials, it can be unclear whether the newcomers are entitled to unfettered access to all agency documents or if some records remain off-limits. This determination may be informed by whether the official is seeking the record as an elected official or as a member of the public under the California Public Records Act.

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Elected officials have greater access to the agency’s records than a member of the public when acting as a body. To participate in closed sessions, the elected official may be given records related to real estate negotiations or litigation strategy. The official may also be privy to attorney-client privileged communications between the agency’s attorneys and staff.

The official may also be able to review documents that would otherwise be privileged under the CPRA, such as records protected by the deliberative process privilege or police reports. However, there are clearly some limitations to an official’s access to records. For example, improper review of personnel records could open the agency up to an invasion of privacy claim by the employee.

Moreover, once an official receives an otherwise confidential document, he or she should check with the agency before disclosing the record to a member of the public or, in some cases, to other agency staff. Specifically, documents protected by attorney-client privilege should only be disclosed with approval from the legislative body.

A councilmember may still choose to request records under the CPRA. Government Code section 6252.5 states that, “an elected member or officer of any state or local agency is entitled to access to public records of that agency on the same basis as any other person. Nothing in this section shall limit the ability of elected members or officers to access public records permitted by law in the administration of their duties.” This means that an elected official is entitled to receive the same documents that are available to any other member of the public.

However, disclosure under the CPRA could result in a waiver of otherwise applicable exemptions. Therefore, CPRA requests from an elected official should be handled as any other records request from any member of the public.

In short, agencies and officials should understand their right of access to records so they can contemplate their duty to maintain the appropriate character of the record.

Redistricting in California – What Public Agencies Must Know Ahead of the U.S. Census Bureau’s Data Release

Originally published on January 25, 2021. Reprinted with permission from Best Best & Krieger LLP.

After each decennial U.S. census, local public agencies with officers elected by or from geographical districts, divisions or wards must “redistrict.” This requires review of the recent Census population data and, if necessary, adjustment of voting area boundaries to keep them as nearly equal in population as possible, allowing for certain variances due to geography, topography, communities of interest, etc., all as required in federal and California law.

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While some agencies have elected officers by or from districts for a while, many have only recently transitioned to district-based elections to comply with the California Voting Rights Act, often under threat of litigation. Because an increasing number of local agencies elect officers by voting area compared to 10 years ago, many will be redistricting for the first time in 2021. Even agencies that have redistricted in the past must know that the rules for redistricting have changed with recent legislation, and the process is quite complex.

The U.S. Census is underway. While the Census data would typically be made available to local agencies by March 31, 2021, COVID-19 has delayed the process. The Census Bureau indicated it will require additional time to complete its work. While the data could come sooner, it isn’t scheduled to be available to local agencies until July 31. Once the data becomes available, agencies can start the statutory process of looking at their voting areas to decide whether their electoral maps must be updated.

Fair Maps Act

The recently enacted California Fair Maps Act (Election Code section 21000 et. seq.) prescribes the local agency process for redistricting. Under the Act, cities and counties must conduct certain outreach, maintain websites with publicly available information about draft maps and hold at least four public hearings on the issue. This is very similar to a CVRA transition, so it will look familiar to agencies that have done this recently.

In addition to municipalities, special districts must review their census data and conduct public hearings on redistricting, but the special district process is much simpler. California law allows an agency to adopt a redistricting map either by ordinance or resolution. However, agencies that have adopted their current district maps via ordinance will need to adopt their revised district maps via another ordinance, so timelines need to provide for first and second readings.

Charter city clients are particularly advised to consult with legal counsel given that some parts of the Fair Maps Act will apply to charter cities, and others will not.

In 2020, the Legislature amended the Fair Maps Act to adjust the deadline when the final district map must be adopted. Agencies with elections held between Jan. 1 and July 1, 2022 must complete the redistricting process and adopt the final map no later than 174 days before the election. For agencies with June 7, 2022 elections (consolidated with the Statewide Primary Election), the final deadline is Dec. 15, 2021. Agencies with a Nov. 8, 2022 election (consolidated with the Statewide General Election) must adopt their maps no later than 205 days before the election, or April 17, 2022. The Act permits charter cities to establish different deadlines, however, they may face practical deadlines to finalize maps and submit them to their county in time for a particular election.

Redistricting Process Options

California law provides several ways for a public agency to redistrict:

Council/Board Adoption of the Map – The traditional way is for the council/board to retain a demographer, review the census data, take public input, conduct the hearings and then approve a new map (or keep the same map if the population hasn’t changed appreciably).

Advisory Redistricting Commission – This is an advisory commission that the council/board may directly appoint to conduct some of the public hearings and solicit input for the council/board. However, the council/board retains the final decision on the map. The Fair Maps Act disqualifies some persons from serving on an advisory commission.

Independent Redistricting Commission – This model hands the entire process over to a commission that makes the final decision on the map. The services of a demographer are also required to support the work of the commission. The council/board may offer input and comment, but it does not make the final decision. This is the most complex process because the agency must recruit, appoint and educate a new body to perform this work. This requires adopting an ordinance or resolution setting out the appointment process. Further, with the exception of charter cities, the Fair Maps Act prohibits the council/board or any elected official (e.g., mayor) from directly selecting the commission members. This approach requires approximately four or five months additional implementation time to empanel the commission.

Hybrid Redistricting Commission – Largely the same in complexity as an independent commission, except that the commission approves two or more draft maps and, while the council/board gets to make the final choice, that choice is limited to the menu of maps approved by the commission. The Fair Maps Act has extensive rules for how independent and hybrid commissions work, including a large number of disqualifying factors for certain persons serving on a commission.

At this time, agencies should consider which approach they wish to take toward redistricting and to plan their process and meetings to meet the statutory deadlines.

California Revises Employee-Independent Contractor Test Again

Originally published on December 3, 2020. Reprinted with permission from Collins Collins Muir + Stewart, LLP.

California Governor Newsom recently signed Assembly Bill 2257 (AB 2257) into law, which has been referred to as a “clean up” bill to Assembly Bill 5 (AB 5), the 2019 watershed legislation that changed the test to determine if a worker is an employee or an independent contractor. AB 2257 replaced AB 5 and added exemptions and clarifications to the test in AB 5, making it easier to classify third parties as independent contractors, including in construction and professional design services.

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Evolution of the Independent Contractor Test in California
Several years ago, an employer used an 11-factor test to determine if a worker was an employee or independent contractor. This test, called the Borello test (based on the 1989 California Supreme Court case S. G. Borello & Sons, Inc. v. Department of Industrial Relations), looked at the overall nature of the relationship and focused on whether the company had control over the worker as to both the work done and the manner and means by which the work was performed. The court then changed the test in its 2018 decision, Dynamex Operations West, Inc. v. Superior Court of Los Angeles, and the Legislature adopted this test in 2019 via AB 5. AB 5 and Dynamex apply a three-part “A-B-C” test to determine if a worker is an employee or an independent contractor. AB 2257 keeps the A-B-C test, which presumes that any person providing labor is an employee, unless the hirer can satisfy each element of the test:

A. The worker is free from the control and direction of the hirer in connection with the performance of the work;

B. The worker performs work outside of the usual course of the hirer’s business; and

C. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

If the hirer cannot establish all three factors for their workers, the workers are considered employees and not independent contractors under the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission.

The A-B-C test does not apply to all workers in California. AB 5 carved out exemptions for licensed architects, engineers, accountants, and other professional services. If a worker is exempt, then an employer would still apply the old Borello test that balances factors to determine if the worker is treated more like an employee or an independent contractor. AB 2257 now creates additional exemptions from the A-B-C test, as outlined below, and so it increases the use of the Borello test. A hiring entity must first determine which test to use (A-B-C or Borello) and then assess its relationship with a worker under the appropriate test.

The Borello Test – When a Worker Is Exempt From the A-B-C Test
The A-B-C test is the default test, and a hirer must establish that a worker is subject to an exemption. If it establishes an exemption, the law assesses the relationship using the Borello test, which looks at the entirety of the relationship and assesses the overall “economic reality” of the relationship. The most significant factor in the Borello test is whether the company has control (or the right to control) the worker both as to the work done, and the manner in which the work is performed. Essentially, does the hiring entity control the means and methods of the worker, or is the hiring entity only focused on the final product? It also considers additional factors (depending on the issues involved), such as:

• whether the person performing work is engaged in an occupation distinct from that of the company;
• whether the work is part of the company’s regular business;
• whether the company or the worker supplies the equipment, tools, and the place for the person doing the work;
• the worker’s financial investment in the equipment or materials required to perform the work;
• the skill required in the particular occupation;
• the kind of occupation, with reference to whether, in the locality, the work is usually done under the company’s direction or by a specialist without supervision;
• the worker’s opportunity for profit or loss depending on his or her own managerial skill (a potential for profit does not include bonuses);
• how long the services are to be performed;
• the degree of permanence of the working relationship;
• the payment method, whether by time or by the job; or
• whether the parties believe they are creating an employer/employee relationship.

The Borello test does not automatically make an individual an employee based on one fact or factor. Instead, all factors are balanced and weighed against each other to determine if a worker is more like an employee or an independent contractor based on the “economic reality” of their relationship. This is different from the A-B-C test, which requires the hiring party to establish all three elements of the test in order to classify the worker as an independent contractor.

Retroactivity
AB 2257 adds Labor Code section 2785(b), which applies retroactively to existing claims and actions to the maximum extent permitted by law. If a business is dealing with independent contractor misclassification claims, this section may provide some relief thanks to the expansion of exemptions to the A-B-C test.

Key Exemptions to the A-B-C Test

• Licensed Professional Exemption
• Bona-Fide Business-to-Business Exemption
• Single-Engagement or Event Business to Business Exemption
• Construction Subcontractor Licensed by CSLB
• Miscellaneous Professional Services Exemption
• Musical Industry Exemption

Licensed Professional Exemption
The law specifically exempts certain occupations from the A-B-C test. Notably, an individual who holds an active license from the State of California and is a practicing architect, landscape architect, engineer, lawyer, private investigator, or accountant is exempt. AB 2257 expanded the exemption to include landscape architects. An employer would use the older Borello test to determine if the licensed professional should be classified as an employee or independent contractor. It is important to note that this exception only applies to licensed individuals, not someone generally working in the profession.

Labor Code section 2783 contains additional exemptions for other professions (such as insurance industry professionals, security brokers, and newspaper distributors). This demonstrates an important point about AB 2257 – many industries successfully lobbied for an exemption, and even if a relationship does not meet one of the general exemptions, it is worth reviewing the law for potential loopholes.

Expansion of the Bona Fide Business-to-Business Exemption to Sole Proprietors and Partnerships
AB 5 included a test to exempt bona fide business-to-business relationships from the A-B-C test, but only for corporations and LLCs. This left sole proprietors working under their own shingle  out in the cold. Fortunately, AB 2257 created Labor Code section 2776, which broadens the eligibility for this exemption so that it now includes a separate sole proprietor, or a business entity formed as a partnership, limited liability company, limited liability partnership, or corporation. The relationship is exempt from the A-B-C test and the parties would use the Borello test if they can demonstrate all of the following:

1. The business service provider is free from the control and direction of the contracting business entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.
2. The business service provider is providing services directly to the contracting business rather than to customers of the contracting business. There is no need to establish this factor if:
   • The business service provider’s employees are solely performing the services under the contract under the name of the business service provider; and
   • The business service provider regularly contracts with other businesses.
3. The contract with the business service provider is in writing and specifies the payment amount, including any applicable rate of pay, for services to be performed, as well as the due date of payment for such services.
4. If the work is performed in a jurisdiction that requires the business service provider to have a business license or business tax registration, the business service provider has the required business license or business tax registration.
5. The business service provider maintains a business location, which may include the business service provider’s residence, that is separate from the business or work location of the contracting business.
6. The business service provider is customarily engaged in an independently established business of the same nature as that involved in the work performed.
7. The business service provider can contract with other businesses to provide the same or similar services and maintain a clientele without restrictions from the hiring entity.
8. The business service provider advertises and holds itself out to the public as available to provide the same or similar services.
9. Consistent with the nature of the work, the business service provider provides its own tools, vehicles, and equipment to perform the services, not including any proprietary materials that may be necessary to perform the services under the contract.
10. The business service provider can negotiate its own rates.
11. Consistent with the nature of the work, the business service provider can set its own hours and location of work.
12. The business service provider is not performing the type of work for which a license from the Contractors’ State License Board is required (as this relationship is governed by a different exemption, noted below).

Although this is a long list and a hiring entity must establish each of the elements, most bona fide business-to-business relationships will pass the test. However, the prudent business should confirm its third-party contracts satisfy this test, if other exceptions are not available.

“Single-Engagement” or Event Business to Business Exemption
AB 2257 created Labor Code section 2779 which establishes an exemption for event contractors so that hiring someone as an independent contractor for a one-off event is easier. If two individuals contract and each individual has their own business (either as a sole proprietor or separate business entity such as an LLC or corporation) at the location of a “single-engagement event” or series of events, the exemption applies (and so the parties would use the Borello test) if:

1. Neither individual is subject to the control and direction of the other in the course of the performance of their work;
2. Each individual has the ability to set their own rate with the other;
3. There is a written contract between both individuals that specifies the total amount of payment for both parties;
4. The individuals maintain their own business locations;
5. The individuals provide their own tools and equipment required;
6. They have the requisite business license or business tax registration (provided the jurisdiction they are in requires one);
7. Each individual is customarily engaged in the same or similar type of work they are performing under the contract; and
8. Each individual may freely contract with other businesses to provide those services without restrictions.

The bill provides that “single-engagement” events refer to stand-alone non-recurring events that take place at a single location, or a series of events in the same location, so long as they do not occur more than once a week.

Licensed Construction Subcontractor Exemption
Construction subcontractors remain exempt from the A-B-C test. The relationship is governed by the Borello decision if the contract meets the following criteria:

1. the subcontract is in writing;
2. The subcontractor is licensed by the Contractors’ State License Board and the work is within the scope of that license;
3. The subcontractor has the required business license (if the jurisdiction requires one);
4. The subcontractor maintains a business location separate from the business location of the contractor;
5. The subcontractor has the authority to fire and hire other persons;
6. The subcontractor assumes financial responsibility for errors in labor or services provided; and
7. The subcontractor is customarily engaged in an independently established business of the same nature as that involved in the work performed.

This provision does not apply to truckers who own their truck and work as employees of a trucking company, although the trucking industry is litigating this issue and it may possibly change.

Expansion of Professional Services Exemptions
AB 2257 also expanded and clarified additional exemptions for certain “professional services” in Labor Code section 2778. For purposes of this law, “professional services” includes services for human resources administration, marketing involving original and creative content, graphic design, fine art and photography, appraisers, home inspectors, professional foresters, referral agencies, professional photographers, videographers, freelance writers, content creators, and photo editors, as well as some other limited artistic or technical work. Individuals providing professional services are exempt from the A-B-C test when the individuals perform the specified work under the law and:

1. maintain a business location separate from the hiring entity;
2. have a business license, in addition to any required professional licenses or permits for the individual to practice in their profession;
3. set their own rates;
4. control their own hours;
5. hold themselves out as able to do the same type of work for others; and
6. have discretion and judgment in performing the services.

Musical Recording Exemptions
AB 2257 provided greater clarity for exemptions from the A-B-C test related to the creation, promotion, and distribution of music. Recording artists, songwriters, record producers, musicians, music engineers, photographers for marketing shoots, and any other individual engaged to render any creative, production, marketing, or independent music services now fall under the Borello test.

This exemption does not apply to film and television production crews, musicians engaged in one-time performances, or musicians who do not receive royalties. For example, a musician or recording artist who negotiated and was paid through royalties would be subject to Borello and would likely be an independent contractor, whereas a musician who was not a royalty-based participant in the work created during a specific engagement would be treated as an employee (e.g., a musician in a symphony orchestra would be an employee because they would not be subject to this exemption).

Final Thoughts
The Legislature recognized that AB 5 pushed the pendulum too far towards classifying workers as employees, and this new bill creates helpful new exemptions and restores more balance to the independent contractor determination. Current estimates place national worker misclassification between 10% and 30%, which creates major exposure risks for employers. This new bill should lessen that risk, but cautious employers will ensure their contracts and relationships with independent contractors – especially with sole proprietors – can pass the appropriate test.