©2024 Seyfarth Shaw LLP www.seyfarth.com 2024 Cal-Peculiarities | 329 Telework: A company-wide policy allowing telework for one or more days per week for all employees whose assignments can be performed remotely.83 Furthermore, covered employers must designate a Commuter Benefits Coordinator who is responsible for implementing the commuter benefits program and complying with the Bay Area Commuter Benefits Program requirements. After initial registration with the Bay Area Air Quality Management District, covered employers must update and verify their registration information on an annual basis.84 Covered employers must also provide an annual notice of the commuter benefits program to all covered employees. The notice must include information on the type of commuter benefits offered, how the covered employee may apply for and receive the benefit, and contact information for further information about the commuter benefit.85 Covered employers must provide commuter benefits information as part of the benefits package to all newly hired employees.86 Covered employers who fail to comply with the Bay Area Commuter Benefit Program requirements may be subject to a civil penalty under California’s air pollution control laws.87 8.10 San Francisco Healthy Airport Ordinance Under the San Francisco International Airport (SFO) Quality Standards Program (QSP), employers must comply with the Healthy Airport Ordinance (HAO).88 Applicable employers can comply with the HAO in two ways: (1) by offering each covered employee (i.e., employees covered by QSP at SFO) and their dependents a “platinum” plan that meets certain requirements free of charge to the covered employee; or (2) by paying the HAO fee rate per hour ($10.30 per hour for 2024) on behalf of the employee to the City Option Program.89 Employers may be subject to penalties for failing to comply with the HAO.90 On August 29, 2023, the Ninth Circuit Court of Appeals revived a challenge by an airline trade association, Airlines for America (“A4A”), to the Healthy Airport Ordinance.91 The lower court held that there is a judicial presumption that the City’s actions are not preempted by federal law.92 In reversing, the Ninth Circuit held that the City acted as a regulator in enacting the ordinance.93 Therefore, there is no such judicial presumption and the case was permitted to continue in the lower court. The Ninth Circuit’s decision was based in large part on the ability of the Airport Director to assess hefty civil penalties that the Court held carried the force of law and therefore made the City a regulator.94 These penalties include daily fines (with potential increases at the Airport Director’s discretion), and the ability to collect liquidated damages of up to $100 for each one-week pay period for each employee for whom the airline has neither offered health plan benefits nor made payments into the fund. The Court also noted that the City can enforce these provisions in a municipal administrative proceeding.95 If the City were acting as a market-participant merely managing the airport as a private party would, its actions could not be preempted. Because the City is acting as a regulator, however, the lower court’s presumption that the ordinance cannot be preempted was incorrect and A4A’s challenge was allowed to proceed. This holding is significant. From time to time, employers and their associations have been stopped by Ninth Circuit courts when they attempted to argue that state and local benefits laws are preempted by ERISA and other federal laws due to the market-participant exception to preemption. The Ninth Circuit has now rejected the market-participant exception, at least based on the penalty provisions of the San Francisco law. 1 SB 30, 2019 bill amending Fam. Code § 297. 2 Id. 3 Id. 4 Fam. Code § 297(b)(3). A person under age 18 who otherwise meets the requirements for a domestic partnership may also register upon obtaining a court order and parental consent. Fam. Code § 297.1.
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