Derek G. Barella, Shane W. Blackstone, Michael S. Chamberlin, John M. Dickman, Sébastien Ducamp and Matthew Durham
In the
final days of September 2016, California Governor Jerry Brown signed into law
various employment bills addressing issues such as restrictions on choice of
law and venue in employment agreements, pay equity, notifications and postings,
and limitations on criminal background inquiries regarding juvenile court
proceedings. The new legislation continues California’s trend of increasing
employee-friendly laws. A summary of the significant, recently enacted
California laws that impact private sector employers follows below.
Unless
otherwise noted, the following bills are effective January 1, 2017.
Restrictions on Employment Contracts
SB 1241 limits
California employers’ ability to select choice of law and forum in employment
contracts.
Specifically, the bill prohibits employers from requiring an
employee, who primarily resides and works in California, to agree to a
provision, “as a condition of employment,” that would (1) require the employee
to adjudicate (either through arbitration or litigation) a claim arising in
California in an out-of-state forum, or (2) deprive the employee of the
substantive protection of California law with respect to a controversy arising
in California. SB 1241 applies to all employment contracts required as a condition
of employment entered into, modified, or extended on or after January 1, 2017.
For more information, see our client briefing on SB 1241 here.
California Minimum Wage
Governor Brown signed SB 3 in April 2016. SB 3 provides minimum
wage increases on an annual basis for almost all California minimum wage
workers. For employers with at least 26 employees, the minimum wage will
increase to $10.50 per hour in 2017; $11 per hour in 2018; $12 per hour in
2019; $13 per hour in 2020; $14 per hour in 2021; and $15 per hour in 2022.
Thereafter, the state director of finance will apply a formula to determine
additional annual minimum wage increases based on changes in the Consumer Price
Index. For employers of 25 or fewer employees, these same wage increases will
go into effect one year later than the effective date for larger employers. See
our client briefing covering SB 3, here.
AB 1676 specifies
that, for California’s equal pay statute (Labor Code § 1197.5), prior salary
cannot, by itself, justify any disparity in compensation for employees that
perform substantially similar work.
SB 1063 amends
California’s equal pay statute to prohibit an employer from paying any of its
employees at wage rates less than the rates paid to employees of another race
or ethnicity for substantially similar work.
Notifications and Postings
AB 2337 requires
employers to inform each employee of his or her employment leave rights as a
possible victim of domestic violence, sexual assault, or stalking by providing
that information in writing to new employees upon hire, and to other employees
upon request. Employers would not be required to comply with the notice
requirement until the Labor Commissioner develops the related materials.
AB 2437 requires
that on and after July 1, 2017, a licensed barbering or cosmetology business
must post a model notice pertaining to workplace rights and wage and hour laws,
developed by the Labor Commissioner, and would require the licensing agency to
inspect for compliance of the posting requirement.
AB 1847 amends
the Revenue and Taxation Code by requiring some employers who are already
required to notify employees who may be eligible for the federal earned income
tax credit, to also notify these employees that they may be eligible for the
California Earned Income Tax Credit.
AB 2532 repeals
the existing unemployment insurance code requirement that community action
agencies, or any private organization contracting with a state or local
government agency that provides specified employment services, must post a
notice stating that only citizens or those persons legally authorized to work
in the United Staates may use the agency’s or organization’s employment
services funded by the federal or state government.
Revised PDL and CFRA Notices – Pursuant to the amended California Fair Employment
and Housing Act and California Family Rights Act regulations, covered
California employers are required to post two amended workplace
notices—Pregnancy Disability Leave Notice A: “Your Rights and Obligations as a
Pregnant Employee,” and California Family Rights Act Notice B: Family Care and
Medical Leave and Pregnancy Disability Leave. These new requirements went into
effect on April 1, 2016. For more information, see our client briefing here.
Juvenile Court Records
AB 1843 prohibits
an employer from asking an applicant for employment to disclose, or from
utilizing as a factor in determining any condition of employment, information
concerning or related to an arrest, detention, processing, diversion,
supervision, adjudication, or court disposition that occurred while the person
was subject to the process and jurisdiction of juvenile court law.The bill also
excludes from the Labor Code’s definition of “conviction” an adjudication by a
juvenile court or any other court order or action taken with respect to a
person who is under the process and jurisdiction of a juvenile court. The bill
provides certain exceptions for employers at a health facility.
All-Gender Bathroom
AB 1732 requires,
beginning March 1, 2017, that all single-user toilet facilities in any business
establishment, place of public accommodation, or government buildings be marked
as “all-gender” toilet facilities. The bill authorizes those responsible for
code enforcement to inspect for compliance with these provisions during any
inspection.
Private Sector Retirement Programs
SB 1234 provides
approval for the California Secure Choice Retirement Savings Program (SCRSP)
and sets forth recommendations and requirements for the design and
implementation of that program. SCRSP applies to those private sector employers
with five or more employees that do not already offer a sponsored retirement
plan.
Agricultural Industry
AB 1066, the
“Phase-In Overtime for Agricultural Workers Act of 2016,” removes the exemption
for agricultural employees regarding overtime hours, meal breaks, and other
working conditions, including specified wage requirements. Starting July 1,
2019, the Act also creates a schedule that phases in overtime pay after 40
hours in a week for agricultural workers. Beginning January 1, 2022, the bill
requires that any agricultural work performed for over 12 hours in one day be
compensated at the rate of no less than twice the employee’s regular rate of
pay. The bill provides that employers with 25 or fewer employees have an
additional three years to comply with the phasing in of these overtime
requirements.
SB 836 (the
budget bill for 2016) requires that a person seeking to be licensed as a farm
labor contractor attest, as part of the initial licensing or license renewal
process, that the person’s supervisorial employees have been trained at least
once for at least two hours each calendar year in the prevention of sexual
harassment in the workplace. The measure also requires that all new
non-supervisorial employees, including agricultural employees, receive training
during the hiring process, and that all non-supervisorial employees, including
agricultural employees, receive training at least once every two years in
identifying, preventing, and reporting sexual harassment in the workplace. The
amended statute also specifies the nature of the required training. The new
requirements went into effect on June 27, 2016.
SB 954 requires
per diem wages to include industry advancement and collective bargaining
agreement (CBA) administrative fees if the payments are made under a CBA to
which the employer is obligated. The law excludes from per diem wages, if the
payments are not made under a CBA to which the employer is obligated, employer
payments related to certain apprenticeship or training programs, worker
protection and assistance programs or committees established under the federal
Labor Management Cooperation Act of 1978, and industry advancement, and CBA
administrative fees. The measure also prohibits credit for payments for
industry advancement and CBA administrative fees if those payments are not made
under a CBA to which the employer is obligated.
Clarification of Existing Workers’ Compensation Law
AB 2883 clarifies the rules that govern when owners or officers of businesses
may exclude themselves from workers’ compensation coverage, deletes duplicative
sections, and describes how officers and owners of employers can declare that
they are not “employees” for purposes of workers’ compensation insurance.
Unfair Immigration-Related Practice
SB 1001 makes
it unlawful for an employer to request more 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. The bill also provides a complaint
procedure through the Division of Labor Standards Enforcement (DLSE) and
authorizes the Labor Commissioner to institute penalties up to $10,000 against
employers violating the new law.
Heat
Illness and Injury Prevention Standards
SB 1167 requires the Division of Occupational Safety
and Health to propose to the Board, a standard for indoor workers that
minimizes heat-related illnesses and injuries by January 1, 2019.
Domestic
Worker Bill of Rights
SB 1015 deletes the January 1, 2017 repeal date of the
Domestic Worker Bill of Rights, making current overtime protections permanent.
California domestic workers will continue to receive overtime pay.
Paid
Family Leave
AB 908, signed
last April, will increase employee benefits for employees covered by State
Disability Insurance. Employees who make more than 33 percent of the California
average weekly wage will receive 60 percent benefits. Employees who make less
than 33 percent of the average weekly wage will see increases of up to 70
percent. Expanded benefit levels will go into effect on January 1, 2018. See
our client briefing here.
Janitorial
Industry Reform
AB 1978 expands employer requirements to cover about
220,000 employees in the janitorial industry. The bill requires every
janitorial employer covered by the law to keep accurate records of specific
information regarding employees for three years. The bill requires the DLSE to
enforce its provisions and would authorize the Labor Commissioner to adopt
regulations to carry out the law. The bill requires every janitorial employer,
effective July 1, 2018, to register annually with the Labor Commissioner. The
bill also prohibits a janitorial employer from conducting any business without
registration as required by the bill, and would authorize the Commissioner to
revoke a registration under certain circumstances. The bill requires the
Commissioner to maintain a public database of registered property service
employers. By January 1, 2019, the DLSE is required to mandate sexual violence
and harassment prevention training requirement for employees and employers in
the industry. The bill also requires employers, from July 1, 2018 until January
2019, to provide employees with the DFEH pamphlet on sexual harassment. The
bill establishes civil fines for specific violations of its provisions and
gives the Labor Commission authority to enforce the civil fine provisions.
Employment
Discrimination
AB 488 authorizes workers in a nonprofit sheltered
workshop or rehabilitation facility to sue under FEHA for prohibited harassment
or discrimination.
AB 1687 sponsored by the Screen Actors Guild, creates
restrictions as to what information online entertainment employment service
providers may disclose about a subscriber’s age and how a subscriber may
request to have such information removed from online databases.
Apprenticeship
AB 1926 requires, when a contractor requests the
dispatch of an apprentice to perform work on a public works project, that the
apprentice be paid the prevailing rate for the time spent on any mandated
pre-employment activity, including travel time to and from the activity, if
any, except as specified in the bill.
AB 2288 ensures that federal Workforce Innovation and
Opportunity Act of 2014 funds awarded for pre-apprenticeship training (1)
follow the Multi-Craft Core Curriculum implemented by the State Department of
Education, and (2) develop a plan for outreach and retention for women
participants to help increase the representation of women in the building and
construction trades.
Arbitration
SB 1007 provides that a party to an arbitration
proceeding shall have the right to have a court reporter during the arbitration
proceeding.
Commuter
Benefits
SB 1128 authorizes the Bay Area Air Quality Management
District and the Metropolitan Transportation Commission to jointly continue the
Bay Area Commuter Benefits Program, a program that requires employers with 50
or more full-time employees in the Bay Area to offer commuter benefits to their
employees. Employers subject to the program are required by law to register via
the program website, select a commuter benefit, and offer their program to
their employees.
The text and legislative history of each bill is available here.
California employers should ensure policies and practices are
updated, as needed, to ensure compliance with all new legislation.
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