AB 2337 – Employment protections for victims of domestic violence, sexual assault, or stalking
AB 2337 requires that employers with 25 or more employees to provide specific information in writing to new employees upon hire and to other employees upon request of their rights to take leave under Labor Code Section 230.1 (relating to victims of domestic violence, sexual assault, or stalking). This Bill also requires that, on or before July 1, 2017, the Labor Commissioner develops a form that employers may elect to use to comply with these provisions and to post it on the Labor Commissioner’s website. Employers are not required to comply with the notice of rights requirement until the Labor Commissioner posts such form.
The California Legislature enacted a number of new bills that become effective in 2016. Below is a summary of this upcoming year’s most significant legal developments.
Wage and Hour
California’s minimum wage increases to $10 per hour, effective January 1, 2016. Many cities also have local minimum wage ordinances that exceed the state minimum.
AB 1513 provides that employers must pay piece-rate employees for rest and recovery periods and all other periods of “nonproductive” time in addition to their piece-rate compensation. Specifically, the bill would require that employers compensate rest and recovery periods and “other nonproductive time” as follows:
- Compensate employees for rest and recovery periods at a regular hourly rate that is no less than the higher of either the applicable minimum wage or an “average hourly rate.” The “average hourly rate” is calculated as follows: [(total workweek compensation) – (rest/recovery compensation + overtime premium compensation)] ÷ [(total workweek hours worked) – (rest/recovery periods)].
- Compensate employees for all “other nonproductive time” at an hourly rate that is no less than the applicable minimum wage.
This law also requires that the following additional categories of information appear on a piece-rate employee’s itemized wage statement: (i) the total hours of compensable rest and recovery periods, the rate of compensation paid for those periods, and the gross wages paid for those periods during the pay period.
SB 588 authorizes the Labor Commissioner to file a lien on real estate, or a levy on an employer’s property, or impose a stop order on an employer’s business, as a means to remedy nonpayment of wages. The law allows for personal liability for individuals who violate certain Labor Code provisions while acting on behalf of employers.. A bond of up to $150,000 may be required of an employer who does not promptly pay a judgment for unpaid wages.
AB 970 allows the Labor Commissioner to investigate and enforce local overtime and minimum wage laws and issue citations and penalties where employers fail to reimburse employees for employer-required expenses.
California Fair Pay Act
The California Fair Pay Act (CFPA), SB 358, seeks to remedy gender-based wage differentials. Governor Brown has referred to the new law as “the strongest equal pay law in the nation.” The old California law required that employees complaining of wage differentials compare to employees that perform the “same” job, with the “same” skill, effort and responsibility. The new law requires employees to show others performing only “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions”. The comparators need not even work in the “same establishment.” Further, employers now bear the burden of proof on these claims and must “affirmatively demonstrate” that a disparity is based entirely on one or more valid factors other than sex.
The law also targets “pay secrecy,” by allowing employees to disclose, discuss and inquire about their own and other employees’ wages, and to aid other employees in exercising their rights under the CFPA. There is now a private right of action for retaliation or discharge in violation of the CFPA, with available relief including reinstatement, reimbursement for lost wages and benefits, and injunctive relief.
Private Attorneys General Act (PAGA) and the Opportunity to Cure
AB 1506 provides some relief to employers. It amends the Private Attorneys General Act of 2004 (PAGA) to allow employers a limited right to cure wage statement violations, which involve failure to provide itemized wage statements containing 1) pay period dates and 2) the name and address of the legal entity, before individuals can bring civil suits for such alleged violations. However, employers are only permitted to cure such violations once within each 12-month period.
Discrimination, Retaliation and Whistleblower Protections
AB 1509 amends Labor Code sections 98.6, 1102.5, 2810.3 and 6310, expanding whistleblower and anti-retaliation protections to family members of whistleblowers. The law now protects an employee who is a family member of a person who engaged in, or is perceived to have engaged in, legally protected conduct. The law also expands joint employer liability, expanding the definition of employer to include “client employers” (i.e. companies who contract for labor).
AB 987 prohibits employers from discriminating or retaliating against employees who request an accommodation for a disability or religion, regardless of whether the request was ultimately granted. The act of making the request is considered protected conduct and is actionable as a separate claim from the protected-class status of the employee.
SB 600 expands the protections of the Unruh Civil Rights Act by prohibiting discrimination by business establishments based on citizenship, primary language, or immigration status. While this law doesn’t apply in the employment context, it is applicable in conducting business with customers, vendors, etc.
Leave Law Expansions
SB 579 expands child-related leaves, broadening the reasons employees may take time off from work to: 1) find a school or a licensed child care provider and to enroll or re-enroll a child, and 2) address child care provider or school emergencies. This law applies to employers with 25 or more employees.
Unemployment and Disability Insurance
SB 667, effective July 1, 2016, changes eligibility waiting periods where an individual files a second disability claim for the same or related condition as his or her initial claim. Also, the duration of the “disability benefit period” is extended from 14 days to 60 days.
AB 1245 requires employers with ten or more employees file for unemployment insurance using the e-file system. The requirements take effect January 1, 2017 for employers with 10 or more employees and January 1, 2018 for all remaining employers.
Finally, and importantly, AB 622 expands the definition of an “unlawful employment practice” to prohibit employers from using the E-Verify system at a time or in a manner not required by federal law, or not authorized by a federal agency memorandum of understanding, to check the employment authorization status of an existing employee or an applicant who has not received an offer of employment. In other words, the law prohibits the employer from using E-Verify to initiate inquiries on those current employee hired before registration or before an offer of employment is extended and accepted. The purpose of this law is to prevent discrimination such that the employer cannot pick and choose who to run through E-Verify and prohibiting screening. There is a civil penalty of up to $10,000 for each violation of the provisions of the bill. Note that the actions now prohibited under California law already violate federal law and the memorandum of understanding employers agree to when enrolling in E-Verify.
Many laws and regulations went into effect in 2017 that affect employers in California. Below is a summary of some of the major laws and regulations from 2017 for your review to ensure that your company has complied with those laws and regulations.
New Cal/OSHA Regulation on Workplace Violence Prevention
California Labor Code 6400 requires that every employer furnish to employees a place of employment that is safe and healthful to employees. Every employer is also required to adopt an effective written Injury and Illness Prevention Program (IIPP). Employers should address the potential for violence in the workplace and adopt a program for workplace security. Additionally, health care providers have additional obligations to prevent violence in the workplace under a new health care rule.
DFEF Regulation on Gender Discrimination
The California Department of Fair Employment and Housing adopted a new regulation that created a new protected class for individuals who are gender transitioning. Members of this new protected class cannot be discriminated against, harassed, or retaliated against for their status as gender transitioning. Employers may not ask an employee what their gender is during the application and post job offer periods. If an employee’s personnel file is to include what the employee’s gender is, that information must be provided by the employee voluntarily. The legislature passed a law this past year as well on this subject that is discussed below.
AB 2337 – Employment protections for victims of domestic violence, sexual assault, or stalking
AB 2337 requires that employers with 25 or more employees to provide specific information in writing to new employees upon hire and to other employees upon request of their rights to take leave under Labor Code Section 230.1 (relating to victims of domestic violence, sexual assault, or stalking). The Labor Commissioner’s Office has prepared a notice, as required by AB 2337, which employers must provide employees upon hire and must post with other employment posters. The notice is available at http://www.dir.ca.gov/dlse/Victims_of_Domestic_Violence_Leave_Notice.pdf .
New California Gender Identity and Expression Regulations
The California Department of Fair Employment and Housing recently adopted new rules and regulations regarding gender identity and gender expressions rights for employees that go into effect July 1, 2017. The new rules expand the protections afforded to individuals based on their gender identity and gender expression. California employers are now required to implement the following policies:
“Transitioning” is now a protected class. Employers may not discriminate, harass, or retaliate against an employee on the basis that the employee is Transitioning. Transitioning is defined as, a “process some transgender people go through to begin living as the gender with which they identify, rather than the sex assigned to them at birth. This process may include, but is not limited to, changes in name and pronoun usage, facility usage, participation in employer-sponsored activities (e.g. sports teams, team-building projects, or volunteering), or undergoing hormone therapy, surgeries, or other medical procedures.”
In is now unlawful for an employer to condition the availability of fringe benefits upon an employee’s gender identity or gender expression.
Employers must allow their employees to use the restroom or facility that corresponds to the employee’s gender identity or gender expression regardless of the employee’s assigned sex at birth. Single occupancy restrooms must use gender neutral signage for those facilities.
Employers must not require their employees to provide proof of any identity document or proof of any medical treatment or procedure to use facilities designated for a particular gender. Employers may make a reasonable and confidential inquiry of an employee for the sole purpose of ensuring access to comparable, safe, and adequate multi-user restrooms or facilities.
Employers must not impose upon an applicant or employee any physical appearance, grooming, or dress standard which is inconsistent with an individual’s gender identity or expression, unless the employer can establish business necessity.
Name and Identity
Employers must abide by an employee’s request to be identified by a certain name, gender identity, or pronoun. Employers may only insist on using an employee’s legal name or gender if it is otherwise required to meet a legally-mandated obligation.
Employers may not directly or indirectly make inquiries in an employment application that identify an individual on the basis of sex, including gender identity or expression unless the employer establishes a permissible defense (Bona Fide Occupational Qualification, Business Necessity, Job-Relatedness, or Security Regulations). After the employment relationship begins, and employer may only request this information solely on a voluntary basis for recordkeeping purposes. Employers may not discriminate against an employee who fails to designate ‘male’ or ‘female’ on an employment application.
Employers should ensure their policies comply with the new regulations regarding gender identity and expression. The regulations will require amendments to employee handbooks and employment applications and related policies.
AB 1732 – Single user restrooms
AB 1732 requires all single-user toilet facilities in any business establishment, place of public accommodation, or government agency to be identified as all-gender toilet facilities. This Bill would authorize inspectors, building officials, or other local officials responsible for code enforcement to inspect for compliance with these provisions during any inspection.
Lately many businesses and their employees have been victims of scams intended to obtain employees’ personal data and information. With W-2s going out and it being tax season, scammers are trying to hack and obtain employees’ personal information and W-2s to file false tax returns and exploit such information in other serious ways.
A common scam that we are seeing is that a scammer will send an email to someone in the company using a misleading email address and signature block that is as identical as possible to a company officer or owner. The email will ask the employee to reply and send certain personal information and W-2s for the company’s employees. The scam is sometimes successful because the email address and signature block will look like the email address of an officer or owner of the company, but will have one letter or number that is different.
Please be aware of any email requesting employee personal information or W-2s, and please let all employees with access to such information know that such scams are happening right now. Please be sure to check that any email that involves an employee’s personal information is received from and sent to a proper person. In the event of a data breach, the employer must notify its employees of the data breach and may potentially have liability for any losses sustained by employees who are subject to a data breach.
Increase in minimum wage/salary
The statewide California minimum wage will increase to $10.50 per hour on January 1, 2017 for employers with 26 or more employees; the minimum wage for employers with 25 or fewer employees will remain $10.00 per hour. Almost thirty different counties and cities in California have adopted an accelerated schedule for increasing the minimum wage to eventually reaching $15.00 per hour and may have a minimum wage that is higher than the statewide standard. Please contact us if you are unsure whether your municipality has a higher minimum wage than the statewide standard.
The statewide California minimum salary for exempt employees will increase to $43,680 on January 1, 2017 for employers with 26 or more employees as the California minimum salary for exempt employees is directly tied to the minimum wage. The minimum salary for exempt employees will remain at $41,600 for employers with 25 or fewer employees. A municipality with a minimum wage higher than the statewide minimum wage will not affect the minimum salaries for exempt employees. Please contact our office for an analysis of whether your salaried employees are properly classified as exempt.
AB 1066 – Eliminates the overtime exemption for agricultural workers
A previous exemption allowed agricultural farm workers to work up to ten hours in a workday without overtime. AB 1066 has eliminated that exemption and requires all agricultural farm workers be paid overtime for all time worked in excess of eight hours in a workday.
AB 1676 & SB 1063 – Wage discrimination and application to race and ethnicity
Under the Fair Pay Act, which went into effect on January 1, 2016, existing law generally prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. SB 1063 expands the requirements of the Fair Pay Act to include employees’ race or ethnicity and not just gender. AB 1676 provides that an employee’s past salary alone cannot justify a disparity in compensation and must be tied to other bona fide factors.
AB 1843 – Juvenile criminal history in employment applications
Ab 1843 prohibits employers from asking applicants to disclose, or from utilizing as a factor in determining any condition of employment, information concerning or related to “an arrest, detention, process, diversion, supervision, adjudication, or court disposition that occurred while the person was subject to the process and jurisdiction of juvenile court law.” Employment applications that inquire as to an applicant’s criminal background must be modified to comply with this new law.
City of Los Angeles – Ban the Box Ordinance
Los Angeles’ new ‘Ban the Box’ ordinance forbids employers from asking job applicants whether the applicant has been convicted of a crime or has been arrested for a crime and is awaiting criminal proceedings. All employment applications used for employers in the City of Los Angeles must be revised to remove language that asks about a criminal history.
AB 2535 – Itemized wage statements clarification
AB 2535 clarifies that Labor Code Section 226 does not require employers to include in itemized wage statements the total number of work hours by an employee properly classified as exempt. Employers must continue to include the total hours worked by non-exempt employees in the itemized wage statements for each pay period.
SB 1001 – Immigration related unfair practices
Employers who are in the process of verifying that workers have the necessary documentation to work in the United States are prohibited from requesting of such workers more documents or different documents than are required under federal law, to refuse to honor documents tendered that on their face reasonably appear to be genuine, to refuse to honor documents or work authorization based upon the specific status or term of status that accompanies the authorization to work, or to reinvestigate or re-verify an incumbent employee’s authorization to work. Under this Bill, which adds Labor Code Section 1019.1, applicants and employees may file a complaint with the Division of Labor Standards Enforcement. Any person who is deemed in violation of this new law is subject to a penalty imposed by the Labor Commissioner of up to $10,000, among other relief available.
SB 1241 – Choice of law and forum in employment agreements
SB 1241 adds Labor Code Section 925 and prohibits employers from requiring California-based employees to enter into agreements (including arbitration agreements) requiring them to: (1) adjudicate claims arising in California in a non-California forum; or (2) litigate their claims under the law of another jurisdiction, unless the employee was represented by counsel. Any provision of a contract that violates this new law is voidable by the employee, any dispute arising thereunder shall be adjudicated in California under California law and the employee is entitled to recover reasonable attorneys’ fees.
AB 2883 – Director and officer exclusions on workers’ compensation policies
AB 2883 changes the definition of employee and the eligibility criteria to elect exclusion from workers’ compensation coverage. Only corporate officers or members of the company’s board of directors who own 15% or more of the company may elect to be excluded from coverage. Each officer or director who owns 15% or more of the company and wishes to be excluded from coverage must sign a new waiver form attesting to his or her eligibility. The requirement that 100% of the company be owned by officers and/or directors has been eliminated. If your officers or directors are currently excluded from coverage, please contact your workers’ compensation carrier, agent, or broker.
AB 2330 – Minimum salary of private teachers
AB 2330 requires private primary and secondary schools to pay exempt teachers no less than the lowest salary offered by any school district anywhere in the State or the equivalent of no less than 70% of the lowest schedule salary offered by the school district or county in which the private elementary or secondary institution is located. Private teachers’ minimum salaries will no longer be tied to the State’s minimum wage.
AB 1311 – Temporary security guard services employees
AB 1311 requires that security guards employed by private patrol operators that are temporary services employers be paid weekly similar to other temporary services employees.
San Jose Initiative
San Jose voters passed an initiative in November that requires employers to offer hours to existing employees before hiring new employees.