New California Employment Laws

It’s that time of year again. Time for holiday parties, ugly sweaters, and summaries of legal developments.

The #MeToo movement has resulted in a slew of new bills addressing sexual harassment in the workplace. They include:

  • Assembly Bill (AB) 3109 prohibits language in contracts or settlement agreements that bars anyone from testifying in administrative, legislative or judicial proceedings concerning alleged criminal conduct or sexual harassment. I think that those provisions would have been void under prior law.
  • Senate Bill (SB) 820 prohibits non-disclosure provisions in settlement agreements related to civil or administrative complaints of sexual assault, sexual harassment, and workplace harassment or discrimination based on sex. The bill expressly authorizes provisions that (i) preclude the disclosure of the amount paid in settlement and (ii) protect the claimant’s identity and any fact that could reveal the identity, so long as the claimant has requested anonymity and the opposing party is not a government agency or public official. Settlement agreements signed after January 1, 2019 should be reviewed by counsel to ensure compliance with the new restrictions.
  • SB 1300 significantly expands liability under the Fair Employment and Housing Act.  The law lowers the burden of proof to establish harassment and provides stricter guidance on what constitutes “severe or pervasive” conduct that rises to the level of unlawful harassment (e.g. rejecting the “stray remark” doctrine that previously required more than one offensive remark to succeed on a claim).  It expands FEHA protection to any harassment by contractors, rather than just sex harassment.  It bars a prevailing defendant from being awarded attorney’s fees and costs unless the court finds the action was frivolous, unreasonable, or groundless. This bill also prohibits release of claims under FEHA in exchange for a raise or a bonus or as a condition of employment or continued employment, but presumably not in separation agreements.  These changes take effect at the start of the new year and we will monitor interpretations or guidance of these new and expansive provisions.
  • SB 1343 expands the requirements relating to sexual harassment training. Current law requires all employers with 50 or more employees to provide two hours of sexual harassment prevention training only to supervisors. The new law now mandates training for all employers with five or more employees and becomes effective in 2020.
  • The FEHA already protects employees and applicants from harassment in the employment relationship. SB 224 expands that reach to individuals who may not be employers, but hold themselves “out as being able to help the plaintiff establish a business, service, or professional relationship with the defendant or a 3rd party.” This would potentially include doctors, lawyers, investors, landlords, elected officials, lobbyists, directors, and producers.
  • Defamation laws make certain communications privileged. In other words they cannot support a slander or libel claim unless they’re made with malice. AB 2770 says that those privileged communications include complaints of sexual harassment by an employee to an employer that are made without malice and are based on credible evidence. This bill would also protect employers who (again, without malice) answer questions about whether they would rehire an employee and whether that decision is based on a determination that the former employee engaged in sexual harassment.

Other bills that address sex, gender, and pregnancy discrimination include:

  • AB 1976 deals with lactation accommodation. Employers were already required to provide a reasonable amount of break time to accommodate an employee desiring to express breast milk for her baby and make reasonable efforts to provide a private place for the employee to do so, in close proximity to the employee’s work area, other than a toilet stall. AB 1976 says its not enough that the location is not a toilet stall. Now it can’t be in a bathroom.
  • AB 2282 clears up lingering issues from last year’s ban on salary history inquiries in the interview process. Our own Nancy Yaffe explains it all in this post.
  • While not strictly employment-related, SB 826 requires public companies based in California to have at least one woman on their board of directors by the end of next year. The requirement rises to two female board members by 2021 if the company has five directors, or to three if the company has six or more directors.

There were even some new employment related bills that had nothing whatsoever to do with sex harassment or discrimination.

  • SB 970 requires 20 minutes of classroom or other interactive training regarding human trafficking awareness to hotel and motel employees whom the law deems “likely to interact or come into contact with victims of human trafficking.” This includes any “employee who has reoccurring interactions with the public, including, but not limited to, an employee who works in a reception area, performs housekeeping duties, helps customers in moving their possessions, or drives customers.”
  • AB 2610 creates an exception to the rule that meal periods must begin before the end of the fifth (or in certain conditions sixth) hour for certain drivers transporting nutrients and byproducts from a licensed commercial feed manufacturer to a customer located in a remote rural location.
  • In November California voters approved Proposition 11, which was a reaction to the California Supreme Court’s 2016 decision in Augustus v. ABM Security Services, Inc. As we explained at the time, the decision announced that employees were not “relieved of all duties” for meal and rest breaks if they were required to carry a communications device. Under Proposition 11, the Augustus decision won’t apply to emergency ambulance workers in the private sector. Toni Vranjes wrote an article for the Society of Human Resource Management about Prop 11 in which she interviewed me and other employment lawyers.

What lies ahead? Last April’s California Supreme Court decision in Dynamex Operations West Inc. v. Superior Court threw employers for a loop by announcing a new test for determining independent contractor status. Competing bills seek either to roll back the decision (AB 71) or codify it (AB 5). This is an issue where many workers who appreciate the flexibility of their freelance status have sided with employers in seeking to return to the earlier test.

What else lies ahead? More change, more surprises, more unpredictability. That’s what makes California employment law both aggravating and fascinating.

It’s time once again for the annual roundup of new California employment laws. Since we’ve discussed many of these laws when they were enacted, I’m including links to those earlier discussions.

  • Stop asking about salary history – AB 168 bars employers from asking job applicants about their previous salary. The legislation’s goal is to narrow the gender gap by preventing employers from basing offers on prior salary and thus, presumably, perpetuating historical discrimination. This will also remove the perceived gap in negotiating power between an employers and employees who must disclose their prior salary. Employers should ensure that their job applications don’t seek prohibited information and that those interviewing applicants know not to ask these questions.
  • More employers must offer parenting leave – SB 63, officially titled the Parental Leave Act, requires employers with between 20 and 49 employees to offer parenting leave that mirrors the Family Medical Leave Act. The new Act allows employees who work for a covered employer to take 12-weeks of unpaid, job-protected leave if they have worked a minimum of 1,250 hours in the 12-months prior to taking leave.  Employees can take leave only for the purpose of bonding with a newborn child, adopted child or foster child within a year of the birth or placement. Covered employers will also need to maintain health coverage under the same terms as an active employee. The Act also prohibits discrimination and retaliation against an employee for taking parental leave.The Parental Leave Act does not require employers to pay any portion of the leave but requires that employees be able to use accrued sick and vacation time. Employees can apply to have a portion of the parental leave paid for through the state’s Paid Family Leave program.  As we’ve previously explained, San Francisco requires some employers to pay a remaining portion of parental leave.
  • Expanded harassment training – California requires at least biannual harassment training for supervisors in companies with 50 or more employees. Having given a dozen sessions of the  training in the last month, I can assure you that there’s no shortage of material to talk about. But as of January 1, 2018, SB 396 requires that the training include information on gender identity, gender expression, and sexual orientation. If your handbook doesn’t specifically prohibit discrimination and harassment on those bases, you’re overdue for a revision.
  • Ban the box – Following the leads of San Francisco and Los Angeles, AB 1008 prohibits employers with five or more employees from:
    • Asking on employment applications about criminal convictions;
    • Asking applicants about criminal convictions before making a conditional offer of employment;
    • When conducting background checks on applicants, considering, distributing, or disseminating information about prior arrests not leading to conviction, participation in diversion programs, or convictions that have been sealed, dismissed, expunged, or otherwise nullified.

Employers who wish to rely on criminal conviction information to withdraw a conditional job offer must notify the applicant of their preliminary decision, give them a copy of the report (if any), explain the applicants right to respond, give them at least five business days to do so, and then wait five more business days to decide when an applicant contests the decision. There are exceptions for employers who operate health facilities hiring employees who will have regular access to patients or drugs.

  • Minimum wage increases – On January 1, 2018, the California state minimum wage goes up to $11.00 per hour for businesses with 26 or more employees and $10.50 per hour for smaller companies. The inimitable Sahara Pynes discusses which cities are raising their minimum wages here.

Takeaway: The burdens of employing people in California continue to increase. As a result, it becomes increasingly important for employers to be proactive in determining before they get sued where they’re vulnerable. In terms of time, expense, stress, disruption, and damage to a company’s reputation, an audit of HR practices is way cheaper than a lawsuit.

Takeaway 2: Happy 2018!

While people have many questions and concerns arising from last week’s presidential election, one thing is for sure:  California remains entrenched in a very deep blue bubble.

Blue bubble
Copyright: alphaspirit / 123RF Stock Photo

To say that California leans democratic is an understatement, and the votes on progressive issues showed it.  Californians voted to extend progressive tax rates, restrict ammunition sales, legalize recreational marijuana (although you can’t buy it until the state licenses distributors, so no lighting up yet!), increase the cigarette tax, repeal English-Only education, and ban plastic bags.

Here in Los Angeles, voters approved a ½ cent sales tax for improvements to public transportation (Measure M).  Voters also approved a $1.2 billion dollar bond measure to facilitate the construction of up to 10,000 units of affordable housing for the city’s estimated 28,000 homeless people (Measure HHH).  More money went to improve schools, community colleges, and parks.

Moreover not only do we have a Democratic Governor, but according to the Los Angeles Times, voters elected a two-thirds super-majority of Democrats to the state Assembly, and pending one more district’s vote count, the state’s Senate as well.

What does this mean for employers in the Golden State?  Well, it almost assuredly means progressive employment laws on both the state and local levels will not only remain, but may even increase to keep California in its trend-setting position.  At last count, seven cities have enacted their own paid sick leave ordinances to supplement the three day minimum provided under state law.  State and local organized labor activity remains strong, as shown by its influence on the state’s minimum wage increase and local ordinances like the LA Hotel Minimum Wage Ordinance.  While rumor has it that the NLRB will ultimately turn more pro-business in a Republican administration, and perhaps even put the break on some key pro-labor initiatives (such as micro-units, the Persuader Rule, and maybe even its assault on class action waivers in arbitration agreements as a violation of Section 7 rights), changes on the state and local level are unlikely (at least in the short term).

So while the national post-election map looks very red, California remains very blue — as do its employment policies — and as are the majority of its voters.

Here’s your annual roundup of new California employment laws. Since we’ve discussed many of these laws when they were enacted, I’m including links to those earlier discussions.

In addition to statewide legislation, local ordinances continue to proliferate. These include paid parental leave in San Francisco and numerous cities that have enacted their own minimum wage and paid sick leave requirements.

Copyright: alexraths / 123RF Stock Photo
Copyright: alexraths / 123RF Stock Photo

What can employers do to get ready?

  • Review pay practices to identify potential disparities based on race and ethnicity, as well as gender.
  • Ensure that applications do not elicit information on prior salary or juvenile convictions.
  • Obtain and install appropriate signage for single-user restrooms.
  • Make sure that human resources staff, hiring managers, and supervisors understand the changes affecting them.
  • Wonder what surprises the legislature has for us in the year ahead!

We’ve written throughout the year about new employment laws that take effect in California in 2016. But as the year winds down, here’s a handy list of the most significant ones (with links to our earlier entries). Unless noted otherwise, the laws take effect on January 1, 2016.

  1. California’s Fair Pay Act (SB 358; Labor Code § 1197.5): Where existing law requires that men and women working at the same location receive equal pay for equal work, the new law requires that they receive equal pay for substantially similar work (whatever that means) even if they work in different locations. In addition, if there are disparities, the burden is on the employer to show that the entire disparity is justified by such factors as education, training, and experience. Systems that base compensation on seniority, merit, and production are also acceptable. This one has the potential to open the proverbial floodgates of litigation. You can read more here.
  2. Restrictions on E-Verify Use (AB 622; Labor Code § 2814):  U.S. employers must verify that the workers they hire are authorized to work in this country. But this new statute restricts their ability to use the E-Verify system to do so. Unless required by federal law or as a condition of receiving federal funds, employers can only check the status of applicants who’ve received an offer but have yet to start work. In addition, the employer needs to notify the workers promptly if the E-Verify system doesn’t confirm that they are authorized to work in the U.S. You can read more here.
  3. New Minimum Compensation for Exempt Computer Software Professionals (Labor Code § 515.5): Effective January 1, 2016, for computer software professionals to be considered exempt, they must (among other things) be paid a minimum of $41.85 per hour or $87,185.14 per year. You can read more here.
  4. Scaling Back Certain PAGA Claims (AB 1506; Labor Code §§ 2699, 2699.3, and 2699.5): California’s Private Attorneys General Act (or PAGA) allows private employees to sue to recover penalties that the state labor commissioner could have collected. Under the new law, an employer would have an opportunity to cure a PAGA violation based on failure to include the beginning and end dates of the pay period and the employer’s proper name and address. This one took effect October 2, 2015. You can read more here.
  5. Expansion of Individual Liability for Wage Violations (SB 588; Labor Code §§ 690.020 et seq.): The benignly named “A Fair Day’s Pay Act“ purportedly intends to help employees who can’t collect judgments because their employers change their names or hide their assets. But the bill isn’t limited to those situations. It allows the Labor Commissioner to conduct hearings to determine whether a “person acting on behalf of an employer” should be held personally liable for an employer’s violations. The Labor Commissioner would also be able to levy those individuals’ accounts or property to enforce a judgment and seek payment from successor employers under criteria that are entirely too vague to understand or apply. You can read more here.

    Copyright: grafvision / 123RF Stock Photo
    Copyright: grafvision / 123RF Stock Photo
  6. Removal of the Term “Alien” from the Labor Code (SB 432): Other than removing a term from a statute that causes offense, this is a mostly symbolic gesture. You can read more here.
  7. Clarification of Paid Sick Leave Requirements (AB 304): This bill, which took effect in July, clarifies how to calculate the rate of pay for purposes of paid sick leave. You can read more here.
  8. Meal Periods for Healthcare Workers Who Work More than 12 Hours (SB 237; Labor Code § 516): This bill maintained the status quo by abrogating the holding of Gerard v. Orange Coast Memorial Medical Center. You can read more here.
  9. Piece-Rate Compensation (AB 1513; Labor Code § 226.2): We’ve discussed problems that arise when employees paid on a piece-rate basis are not paid for every hour they work. Under this bill, no matter how much employees are paid per piece, they must also be paid for rest periods and other “nonproductive time.”
  10. Protection for employees when a relative working for the same employer engages in protected activity (AB 1509). Under this law, if a married couple is working for the same employer, and the husband complains of discrimination, that’s not a legal basis to take action against the wife.
  11. Protection for Requesting Accommodation (AB 987): This bill amended the Fair Employment and Housing Act to clarify that employers can’t retaliate against employees for requesting accommodation for a disability or religious observance. (I thought that was pretty clear before.)
  12. Minimum Wage Increase: The minimum wage increases to $10/hr effective January 1, 2016.

Takeaway: The burdens on operating in California continue to become more onerous. As a result, it becomes increasingly important for employers to be proactive in determining before they get sued where they’re vulnerable. In terms of time, expense, stress, disruption, and damage to a company’s reputation, an audit of HR practices is way cheaper than a lawsuit.

Copyright: ximagination / 123RF Stock Photo
Copyright: ximagination / 123RF Stock Photo

We’ve written throughout the year about new employment laws that take effect in California in 2015. But as the year winds down, here’s a handy list of the most significant ones (with links to our earlier entries).

  1. Many California employers will be required to provide Paid Sick Leave starting July 1, 2015. We wrote about the law generally here, about some specific challenges it imposes here, and about how it compares to a similar law in effect in San Francisco here. [Update: November 24, 2014: The DLSE has issued a new notice to post by January 1, 2014. Download it here.]
  2. California Labor Code § 2810.3 will require businesses to automatically share liability with a “labor contractor,” such as a temporary staffing agency, if the agency fails to pay wages or provide workers’ compensation insurance to its employees who are assigned to work at the business.
  3. Expanding the definition of “national origin” under the Fair Employment and Housing Act to include the circumstances under which someone got their driver’s license (i.e. if they got a type of license provided to undocumented workers).
  4. AB 1443 extends the protections under the FEHA to interns.
  5. AB 2503 requires that mandatory sexual harassment training include information on bullying.
  6. AB 2617 prohibits mandatory arbitration agreements from including claims for violations of certain civil code sections dealing with violence or threats of violence based on sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation or political affiliation. It seems to us to be a clear violation of the Federal Arbitration Act, but California courts and legislatures have been fighting that battle for years.
  7. AB 326 – Sometimes technology advances more quickly than legislation. Employers must report workplace deaths or serious illnesses or injuries to Cal OSHA immediately. That’s not changing. But where the old law says the reports must be made by telephone or telegraph, the new law says by telephone or e-mail. Who knew that the job outlook for telegraph operators could get any bleaker?
  8. New minimum wages in San Francisco ($11.05 effective January 1, 2015), Oakland ($12.25 effective March 2, 2015), San Jose ($10.30 effective January 1, 2015), San Diego ($9.75 effective January 1, 2015), and hotels within the City of Los Angeles ($15.37 effective July 1, 2015 or July 1, 2016, depending on the number of hotel rooms).
  9. The minimum pay for exempt computer professionals increases to $41.27 per hour, $7,165.12 per month, or $85,981.40 per year.

Here are steps employers can take to better protect themselves:

  • Make sure personnel policies and handbooks are up to date;
  • Train managers to understand that certain issues, such as requests to accommodate a disability, leave requests, deciding who’s exempt from overtime requirements, etc., should be escalated to someone with specialized knowledge;
  • If you use labor contractors or temporary employment agencies, consider the steps outlined here; and
  • Most importantly, continue following our widely acclaimed blog for further updates on California employment law.

In the meantime, we’ll wait to learn which employment laws are being taken off the books to make room for these new ones.

We’ve written about many of the new employment laws that take effect in California in 2014. But as the year winds down, here’s a handy-dandy list of the most significant ones (with links to our earlier entries).

Expanding paid family leave rights – Like State Disability Insurance, Paid Family Leave is paid for with deductions from employees’ paychecks. When enacted, the law provided up to six weeks of wage replacement benefits to workers who took time off to care for a seriously ill child, spouse, parent, or domestic partner, or to bond with a newborn or a child recently placed through adoption or foster care. Now those rights will extend to workers who need time to care for siblings, grandparents, grandchildren, and parents-in-law. And while we’re on the topic, San Francisco employers need to also pay attention to San Francisco’s new Family Friendly Workplace Ordinance.

Increasing the state minimum wage – Currently $8 per hour, it goes up to $9 on July 1, 2014 and $10 on January 1, 2016. This affects not only nonexempt workers, but also those working under the administrative, professional, and executive exemptions in California (who must earn a salary equivalent to at least two times the state minimum wage for full-time employment to qaulify for the exemption).

Expanded definition of sexual harassment – This new law states that sexual harassment doesn’t have to be motivated by sexual desire. No case or statute said otherwise, but the legislature saw fit to unanimously pass a law saying what sexual harassment isn’t. This will only cause confusion for courts and juries trying to determine what sexual harassment is.

New protections for crime victims – SB 400 takes existing laws that prohibit discrimination against victims of domestic violence or sexual assault and expands them to include stalking victims. It also requires employers to reasonably accommodate (which may include taking safety measures) victims of domestic violence, sexual assault, or stalking. In addition, SB 288 prohibits discrimination against victims of specified felonies (including child abuse, domestic violence, physical abuse of the elderly or a dependent adults, sexual assault, and solicitation for murder) and requires that they be given time off to appear in court.

New protections for immigrants – Thinking about reporting an employee who complained about Labor Code violations to Immigration and Customs Enforcement? Bad idea! Under AB 263, that’s an “unfair immigration-related practices.” Well what if you just threaten to report him? Another bad idea! (Seriously, where do you come up with these?) Employers who do that can lose their business licenses (pursuant to SB 666) and be charged with criminal extortion (pursuant to AB 524)

AB 556 makes “military and veteran status” a protected category under the Fair Employment and Housing Act – For those keeping score (or responsible for updating personnel policies), they join race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, and sexual orientation.

While we wait to learn which employment laws are being taken off the books to make room for these new ones (as if), here are steps employers can take to better protect themselves:

  • Make sure personnel policies and handbooks are up to date (including the lists of categories protected from discrimination);
  • Train managers to understand the various types of leave available to California employees (or at least to refer inquiries to someone knowledgeable);
  • Regarding the expanding definition of sexual harassment:
    • Ensure that personnel policies prohibit not just harassment, but also vulgar language, sexual innuendo, sexual propositions, threats, and bullying.
    • Be vigilant in enforcing those policies.
    • Respond to complaints of bullying, crude behavior, and mistreatment that aren’t necessarily “because of sex” as you would to a sexual harassment complaint. This means you need to conduct (or have someone qualified conduct) a prompt, fair, and thorough investigation and, where necessary, take steps reasonably calculated to stop the behavior.
  • Most importantly, continue following our widely praised blog for further updates on California employment law!

New Year 2014 is coming

My colleagues and I have written about many of the new employment laws that take effect in California in 2012.  But so you don’t have to dig around, here’s a handy-dandy list of the most significant ones (with links to our earlier entries).

  • AB 22 — which restricts use of consumer credit reports.  Read about it here.
  • SB 459 — imposing new penalties for misclassifying employees as independent contractors.  Read about it here.
  • AB 887 — formalizing the prohibition against discrimination based on gender identity and gender expression.  Read about it here.
  • AB 469 — the dramatically named Wage Theft Protection Act requires employers to give newly hired non-exempt, non-union employees a notice with information regarding wages and pay practices. Specifically, this notice must include the rate or rates of pay, the basis on which the wages are to be calculated (such as hourly, piece rate, commission, etc.), the applicable overtime rates, the designated regular pay day, and the name and mailing address of the employer.  Employers must also notify employees within seven days of any changes to this information. The law includes new penalties, as well, and increases the statute of limitations for the DLSE to collect statutory penalties from one to three years.  [Read an important update on this statute here.]
  • New Wage Requirements for Computer Professionals and Physicians to Be Exempt — to qualify as exempt under California law, certain computer professionals and licensed physicians must earn above a specified level.  Effective January 1, computer professionals must earn either $38.89/hr, $6,752.19/mo, or $81,026.25/yr.  Licensed physicians must earn at least $70.86/hr. 

  • SB 559 — prohibiting discrimination based on genetic information.  Read about it here.

  • SB 117 — requiring businesses with contracts with the state of California for more than $100,000 to provide equal benefits for an employee’s same-sex spouse or registered domestic partner.

  • SB 299 — requiring employers to maintain group health benefits for employees on pregnancy disability leave.

  • AB 1146 — requiring hospitals to maintain safe patient handling policies and train staff on safe lifting techniques.

No word yet on which employment laws are being taken off the books to make room for these new ones.