A number of key employment bills were signed into law by Governor Jerry Brown at the close of the 2016-2017 legislative session. The bills take effect January 1, 2018, unless noted otherwise. In addition, some prior legislation takes effect this year. Here’s what you need to know about the top ten:
1. Minimum Wage: While not a new law, this year brings the next step from the 2013 law that increased minimum wage over a period of years. Beginning January 1, 2018, all hourly employees need to be paid at least $11.00/hr. ($10.50 for employers with 25 employees or less), and all salaried exempt employees need to be paid at least 2x minimum wage ($45,760/year for full time employees). In addition, a number of California cities have their own, higher, minimum wage. TO DO: Review and update your hourly rate, and check to make sure all your salaried employees are making at least 2x the new minimum hourly rate.
2. Ban the Box (Gov. Code §12952): Section 12952 amends the California Fair Employment and Housing Act (FEHA), which prohibits an employer from engaging in various forms of discriminatory employment practices. The amendment creates new state-wide restrictions on the use of criminal history in making hiring decisions. It restricts public and private employers' ability to make pre-hire and other employment decisions based on an applicant's or employee's criminal history, including a "ban the box" element. The new law makes it unlawful for an employer with 5 or more employees:
- to include on any application for employment any question that seeks the disclosure of an applicant’s conviction history;
- to inquire into or consider the conviction history of an applicant, including any inquiry about conviction history on an employment application, until after the employer has made a conditional offer of employment; and
- to consider, distribute, or disseminate information related to specified prior arrests not followed by conviction, referral to or participation in a diversion program, and convictions that are sealed, dismissed, expunged or statutorily eradicated .
Employers who intend to deny a position of employment solely or in part because of an applicant’s conviction history must make an individualized assessment of whether the applicant’s conviction history has a direct and adverse relationship with the specific duties of the job that justify denying the applicant the position, including: i) the nature and gravity of the offense or conduct; ii) the time that has passed since the offense or conduct and completion of the sentence; and iii) the nature of the job held or sought. The employer must then provide the applicant with written notification of the decision under a specified procedure, including a right to respond. TO DO: Delete questions about “have you ever been convicted of a felony” from your job applications and interview outlines.
3. Salary History Inquiries are Prohibited (Labor Code §432.3): Newly enacted Section 432.3 prohibits employers, including state and local governments, from seeking an applicant's salary history information and/or relying on salary history in deciding whether to offer employment, or what salary to offer an applicant. The bill does not prohibit an applicant from voluntarily, and without prompting, disclosing salary history information, or prohibit an employer from considering or relying on voluntarily disclosed salary information (which seems contradictory). But remember that Labor Code §1197.5 already prohibits an employer from using an applicant’s salary history, by itself, to justify a pay disparity. The new statute is intended to narrow the gender (and race) wage gap by preventing employers from relying on an applicant's prior salary, compensation, and benefits as factors in determining whether to offer employment or what salary to offer. This new law also requires employers to provide the position's pay scale to applicants upon reasonable request. TO DO: Delete questions regarding salary history from your job applications and interview outlines.
4. Recreational Marijuana is Here: Proposition 64 legalized adult-use of recreational marijuana in California effective January 1, 2018. That does not mean employers have to condone use in the workplace. Proposition 64 expressly provides that employers may prohibit marijuana in the workplace, and will not be required to accommodate an employee’s use of marijuana. This is consistent with the Supreme Court’s holding in Ross v. Ragingwire Telecommunications, Inc., in 2008, which addressed the use of medical marijuana under California’s Compassionate Use Act, which conflicts with federal law. Stay tuned, as this is likely not the last of this discussion. TO DO: Review and update your drug and alcohol policy.
5. Protecting Employees From Immigration Enforcement In the Workplace: AB 450 adds three new sections to the Government Code and two new sections to the Labor Code. It is designed to protect immigrant employees from workplace immigration raids, but could also put employers in the uncomfortable position of choosing between complying with federal law or state law. Subject to exceptions required by federal law, AB 450 prohibits employers from granting voluntary consent to immigration enforcement agents to:
- Enter any non-public areas at a place of labor, except with a warrant; or
- Access, review, or obtain employee records, without a subpoena or court order.
The law also requires employers to notify current employees in a posted notice in the language they speak, within 72 hours of receiving a Notice of Inspection of I-9 Employment Eligibility Verification forms or other employment records (using a Labor Commissioner template). Employers must also provide the results of such an inspection to current affected employees and any affected employee's authorized representative. The law further prohibits employers from re-verifying the employment eligibility of a current employee at a time, or in a manner, not required by federal law. Penalties for violation of this law range from $2,000 to $5,000 for a first violation and from $5,000 to $10,000 for subsequent violations. (See, Government Code sections 7285.1, 7285.2, 7285.3; Labor Code sections 90.2, 1019.2.) TO DO: Call your legal counsel if you are contacted by immigration enforcement agencies.
6. Parental Leave for Small(er) Employers (Gov’t Code §12945.6): SB 63 amends the FEHA to expand the California Family Rights Act (CFRA) protections for baby bonding leave to smaller employers. The law requires employers with 20-49 employees to provide 12 weeks of baby bonding leave to eligible employees. The law applies to employees with more than 12 months of service with the employer, who have at least 1,250 hours of service with the employer during the previous 12-month period, and who work at a worksite in which the employer employs at least 20 employees within a 75 mile radius. Employers must maintain and pay for coverage under a group health plan for employees who take this leave, but can recoup it if the employee does not return to work.
The law also authorizes the California Department of Fair Employment and Housing (DFEH) to create a parental leave mediation pilot program. Under the pilot program, within 60 days of receipt of a right-to-sue notice, an employer may request all parties to participate in the department’s Mediation Division Program. If the employer makes such a request, an employee is prohibited from pursuing a civil action until mediation is complete, which would include an employee’s election not to participate in mediation. The employee’s statute of limitations would be tolled during the course of the mediation. (See Government Code section 12945.6.)
TO DO: Update your employee handbook if you have 20-49 employees.
7. Harassment Training Expanded to Cover Gender Identity, Gender Expression, and Sexual Orientation (SB 396): The California Fair Employment and Housing Act (FEHA) requires employers with 50 or more employees to provide training and education regarding sexual harassment to all supervisory employees every two years. Under SB 396, this prescribed training must now include content addressing harassment based on gender identity, gender expression, and sexual orientation. Employers must also display a poster developed by the Department of Fair Employment and Housing regarding transgender rights in a prominent and accessible location in the workplace. (See Government Code sections 12950, 12950.1; Unemployment Insurance Code sections 14005, 14012.) TO DO: Update your training outline.
8. Additional "Whistleblower" Retaliation Protections (SB 306): SB 306 amends Labor Code §98.7, and adds three Labor Code sections authorizing the Labor Commissioner's office to investigate an employer, with or without receiving a complaint, when during a wage claim or other investigation, it suspects retaliation or discrimination.
It also authorizes the Labor Commissioner or an employee to seek immediate injunctive relief from a court allowing the employee to be reinstated pending resolution of the claim, upon a finding of "reasonable cause" that the law has been violated. The Labor Commissioner may also issue citations directing specific relief. (See Labor Code sections 98.7, 98.74, 1102.61, 1102.62.)
9. Employee Assistance After Terrorist Attacks Expanded (Labor Code §4600.05): Newly enacted Labor Code section 4600.05, provides new Workers’ Compensation protections to employees who are injured in the course of employment by an act of domestic terrorism. In the event the Governor declares a state of emergency, it requires employers to provide injured employees with immediately accessible advocacy services to:
- assist injured employees in obtaining medically necessary medical treatment; and
- assist providers of medical services in seeking authorization of medical treatment.
These advocacy services may be provided by the employer, the employer’s insurer, or the employer’s claims administrator. This Legislation arose out of the struggle for treatment experienced by victims of the San Bernardino terrorist attack of 2015. TO DO: Contact your insurance provider should these circumstances arise.
10. Human Trafficking Notice (Civil Code §52.6): Section 52.6 requires certain types of businesses to post a notice regarding human trafficking and assistance hotlines. It has been amended to extend the posting requirement to hotels, motels, and bed and breakfast inns. Separate legislation requires new language in the notice to state that a person can text a specified number for services and support. TO DO: Post this notice if you operate a hotel, motel or inn.
A FEW SIGNIFICANT CASES FROM 2017 & THE TRENDS THEY REPRESENT
- Augustus v. ABM Security Services, Inc. & Vaquero v. Stoneledge Furniture – If you have employees who work alone, or work on commission, make sure they are compensated separately for rest periods and relieved of all responsibilities, or pay a one hour penalty for each violation at the time it occurs.
- Lopez v. Friant & Associates, LLC – Make sure your paystubs have all nine pieces of information required by Labor Code 226(a), as even inadvertent mistakes, with no damage to the employees, will subject an employer to costly PAGA penalties.
- Mendoza v. Nordstrom, Inc. – While employees can volunteer to work on the seventh day of rest, employers must “maintain neutrality,” and not do anything to encourage it.