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CalSHRM Legislative Update - April 2017

    CALSHRM LEGISLATIVE REPORT – APRIL 2017

    By: Michael S. Kalt, CalSHRM Government Affairs Director

    Wilson Turner Kosmo LLP

    mkalt@wilsonturnerkosmo.com

    Telephone:  619-236-9600

    Twitter:  @michaelkalt_law

    LEGISLATIVE SUMMARY

    The 2017 legislative session is heating up, with key committee votes expected prior to the April 28th deadline for policy committees to vote on fiscal bills.  A number of significant employment bills remain pending and facing key votes shortly, including bills that would:

    • Require employers to offer hours to existing non-exempt employees before hiring new employees (AB 5);
    • Prohibit employers from inquiring about salary history during the hiring process (AB 168);
    • Require larger employers to collect and publish information concerning gender pay differences for exempt employees (AB 1209);
    • Preclude employers from inquiring about criminal convictions until after a conditional offer of employment (AB 1008);
    • Require employers with more than 20 employees to provide up to 12 workweeks of parental leave (SB 63);
    • Prohibit employers from responding to federal immigration agency requests or assisting with “immigration worksite enforcement actions” unless certain conditions are met (AB 450);
    • Prohibit employers from discriminating based on an employee’s reproductive health decisions (AB 569);
    • Enable private employers to grant hiring preferences to veterans (AB 353 and AB 1477);
    • Increase to $47,476 the salary threshold level for the overtime exemption (AB 1565);  
    • Amend the Private Attorneys’ General Act (PAGA) to limit potential civil claims and recoverable damages (AB 281, AB 1429 and AB 1430); and
    • Enact so-called “right-to-work” legislation prohibiting compelled contribution to labor organizations (AB 1174).

    Looking ahead, all bills have until April 28, 2017 to pass the policy committees and until June 2, 2017 to pass the original house of origin, so many amendments are possible and particularly for the “spot bills” identified at the end of this report.  In the interim, below is a summary of and status update for the pending employment bills of general application:

    PENDING STATEWIDE BILLS

    Extending San Jose’s Opportunity to Work Ordinance State-Wide (AB 5)

    In the November election, San Jose’s voters passed the “Opportunity to Work Ordinance” (Measure E) which essentially requires San Jose employers with more than 35 employees to:  (1) offer hours of work to existing qualified part-time employees before hiring new staff, (2) keep records of their compliance with the Ordinance, and (3) refrain from retaliation against employees who exercise their rights under the Ordinance.  As discussed at the end of this Report, The San Jose Ordinance took effect March 13, 2017 and the San Jose Board of Equality Assurance has recently posted draft FAQ’s and Notices.

    https://www.sanjoseca.gov/index.aspx?NID=5360

    This bill would enact on a state-wide basis a version of the San Jose Ordinance that is fairly similar but also with some distinct differences.  If enacted, employers with more than 10 employees in the state would be required to offer additional hours of work to existing qualified non-exempt employees with the skills and experience to perform the work before hiring additional employees or subcontractors. In this respect, this version would apply more broadly since the San Jose version is limited to employers with 35 or more employees.  Whether an employee is “qualified” to be offered the additional hours is determined by the employer’s “good faith and reasonable judgment” and hours must be distributed using a “transparent and nondiscriminatory process.”  Employers would not be required to offer employees work hours if the acceptance of such offer would require payment of overtime under any law or collective bargaining agreement.  However, employers would also not be prohibited from offering such additional hours even if it resulted in overtime compensation, if the employer elected to do so.

    Notably, while San Jose’s Ordinance permits an employer to apply for a hardship exemption if these requirements are impossible, futile or impracticable, AB 5 does not appear to contain such an exemption.

    Employers would also be required to retain all of the following: (1) for any new hire of an employee or subcontractor, documentation that the employer offered additional hours of work to existing employees prior to hiring the new employee or subcontractor; (2) work schedules of all employees; (3) if applicable, the written statement of an employee subject to welfare to work programs and (4) any other record or documents that the employer must maintain to demonstrate compliance with this section.

    This law would also prohibit discrimination or retaliation against employees who attempt to enforce its provisions.  However, the retaliation provision is currently worded extremely broadly to include adverse employment actions (e.g., termination, discipline, suspension) as well as informing another employer that the person has engaged in protected activities under this section, or reporting or threatening to report the actual or suspected citizenship or immigration status of an employee or family member because the employee exercised a right under this section.

    As with other laws proposed by this bill’s author, it would allow these provisions to be waived in a collective bargaining agreement provided that such waiver is explicitly set forth in the agreement in clear and unambiguous terms.

    Continuing another recent trend, employers would also be required to post a notice that the Division of Labor Standards Enforcement (DLSE) will develop concerning these provisions.  This poster would need to be posted “in a conspicuous place where it may be read by employees during work hours and in all places where notices to employees are posted physically and electronically.”

    The DLSE will be tasked with enforcing this section, and developing rules and regulations to carry out its provisions.  The DLSE “may” also issue guidelines to encourage employers to create training opportunities that permit employees to perform work for which the employer can be expected to have a need for additional hours of work.

    Employees would be permitted to file a complaint for violations with the DLSE to recover a to-be-determined civil penalty, or a civil complaint for damages and reasonable attorney’s fees.

    Status:  Scheduled to be heard in the Assembly Labor and Employment Committee on April 19, 2017. 

    New Rules Regarding Federal Agency “Immigration Worksite Enforcement Actions” (AB 450)

     

    Work-related immigration topics have been a particular legislative priority recently, and this wide-ranging bill continues that trend and highlights the current tension between California and the federal government related to immigration.  Amongst other things, it would limit California employers from voluntarily complying with federal immigration authorities, impose new notice requirements, enact many new statutory penalties and provide greater Labor Commissioner access to the worksite.

     

    For instance, new Labor Code section 90.1 would, “except as otherwise required by federal law,” prohibit employers or their agents from providing access to a federal government immigration enforcement agent to a place of labor without a properly executed judicial warrant.  Similarly, new Labor Code section 90.2 would, “except as otherwise required by federal law,” prohibit an employer or their agents from providing a federal immigration enforcement agency access to the employer’s employment records, including I-9 forms, without a subpoena.  Both new sections would authorize the California Labor Commissioner to recover civil penalties ranging from $10,000 to $25,000 from the employer or agent for each violation.

     

    New Labor Code section 90.25 would require employers that receive notice of an “immigration worksite enforcement action” to provide written notice to each employee and their representative of this impending enforcement action.  “Immigration worksite enforcement action” is defined to include audits or inspections of I-9 Forms or other employment records, worksite investigations, worksite interviews, worksite raids or any other immigration worksite enforcement action by a federal immigration agency.  This notice would need to be delivered within 24 hours of the employer learning of the impending worksite enforcement action, and would need to be delivered by hand if possible, and if not possible, by mail and email (if known) in the language the employer normally uses for notices.  This notice would need to include: (1) the name of the federal immigration agency conducting the immigration worksite action; (2) the date the employer received notice; (3) the nature of the worksite enforcement action, if known; (4) a copy of the notice the employer received about the enforcement action; and (5) any other information the Labor Commissioner deems material and necessary.

     

    Once again except as required by federal law, the employer’s notice obligations would continue after the enforcement action is concluded.  Within 24 hours of receiving notice regarding the results of the immigration worksite enforcement audit, the employer would need to comply with the same notice procedures to advise each affected employee of: (1) a description of all deficiencies or other items identified in the federal immigration audit; (2) the time period for correcting any potential deficiencies identified; (3) the date/time of any meetings with the employer to correct the deficiencies; (4) the employee’s right to be represented during this meeting; and (5) any other information the Labor Commissioner deems material and necessary. 

     

    Employers who fail to provide this advance notice or the post-enforcement action notices to all affected employees would be subject to civil penalties ranging from $10,000 to $25,000.  Unlike the statutory penalties in proposed new Labor Code sections 90.1 and 90.2 against employers who provide improper access, these statutory penalties would not be required if the federal agency had specifically directed the employer not to provide notice to an affected employee.

     

    In addition to notifying potentially affected employees about an impending “immigration worksite enforcement action,” new Labor Code section 90.8 would also require, except as prohibited by federal law, employers notify the Labor Commissioner within 24 hours of learning of an impending worksite enforcement action.  If that occurs, the employer will also be required to provide the Labor Commissioner access to the worksite, and the Labor Commissioner would then have the discretion to conduct an investigation under Labor Code section 90.5 regarding minimum labor standards requirements.  The Labor Commissioner would also have the right to ensure employer compliance with all health and safety requirements, and the Chief of the Division of Occupational Safety may inspect a workplace inspection authorized under Labor Code section 6314.

     

    In those situations where a federal immigration agent appears at “or near” the employer without advance notice, the employer shall immediately notify and provide access to the Labor Commissioner.  Failure to notify the Labor Commissioner, except where directed by the federal agency or if otherwise prohibited by federal law, will result in statutory penalties ranging from $10,000 to $25,000 for each violation.

     

    While present during a federal immigration worksite enforcement action, the Labor Commissioner may notify affected employees they have (1) the right to remain silent; (b) the right to speak to a lawyer before answering questions; and (c) the right to speak to his or her foreign consulate. 

     

    This new law would also impose new limits on an employer’s ability to conduct self-audits even outside the presence of a federal immigration agency.  New Labor Code section 90.9 would require the employer, except as required by federal law, to notify the Labor Commissioner before conducting a self-audit or inspection of I-9 forms and before checking the employee work authorization documents of a current employee at a time or in a manner not required by federal law.  Once again, the employer would need to provide access to the Labor Commissioner, presumably to monitor the self-audit, and the Labor Commission would be authorized to inspect for additional labor standards issues.  Failure to provide this notice would also subject the employer to statutory penalties from $10,000 to $25,000 except where a federal agency or a federal statute prohibited notifying the Labor Commissioner.

     

    In 2016, the Legislature enacted SB 1001 and new Labor Code section 1019.1 prohibiting employers from engaging in various actions while determining the employment eligibility of an applicant or employee (e.g., refusing docs that appear reasonably genuine, requiring more or different documents, etc.).  This bill would enact new Labor Code section 1019.2 to prohibit employers or their agents from checking the employment eligibility of a current employee, including conducting a self-audit or inspection of I-9 Forms, at a time or in a manner required under federal law.  As with section 1019.1, new section 1019.2 would authorize the Labor Commissioner to recover civil penalties ranging from $10,000 to $25,000 per violation.

     

    Lastly, and seemingly unrelatedly, new Labor Code section 98.85 would authorize the Labor Commissioner, if it determines an employee complainant or witness is needed regarding an investigation related to wages, compensation, the return of tools or a discrimination charge, to issue a certification to the employee complainant or witness that they have submitted a valid complaint or are cooperating in an investigation.

     

    Status:  Scheduled to be heard in the Assembly’s Labor and Employment Committee on April 19, 2017.

     

    Job-Protected “Parental Leave” Bill Re-introduced (SB 63)

     

    Entitled the New Parent Leave Act, this bill would add new Government Code section 12945.6 to require, beginning January 1, 2018, employers to provide up to 12 workweeks of job-protected parental leave for an employee (male or female) to bond with a new child within one year of the child’s birth, adoption or foster care placement.

     

    Unlike the California Family Rights Act (CFRA, Government Code section 12945.2) and the Family Medical Leave Act (FMLA), which apply only to employers with more than 50 employees, this bill would define “employer” as either (a) an entity employing 20 or more persons within 75 miles of the worksite where an employee (presumably seeking leave) is employed “to perform services for a wage or salary;” or (b) the state of California or any of its political or civil subdivisions, except for specified school districts.  However, as with CFRA and the FMLA, an employee would need to have worked more than 12 months for the employer, and to have worked at least 1,250 hours during the previous 12-month period.

     

    The bill also specifies that employees eligible for “parental leave” are also entitled to take leave under Government Code section 12945 (pregnancy disability, child birth and related conditions) if otherwise qualified for such leave.  However, this new law would not apply to an employee subject to both the CFRA and the FMLA.

     

    As with CFRA, an employer shall be deemed to have refused to provide this job-protected leave unless on or before the leave’s commencement the employer guarantees reinstatement in the same or comparable position.  This bill would also authorize the employee to use accrued vacation pay, paid sick time, other accrued paid time off, or other paid or unpaid time off negotiated with the employer during this parental leave.  The basic minimum duration of the leave shall be two weeks, but an employer would be permitted to grant requests for additional occasions of leave lasting less than two weeks.

     

    Employers would also be required to maintain and pay for medical coverage under a group health plan for an eligible employee during the duration of the parental leave, not to exceed twelve weeks over the course of a 12-month period, commencing on the date the parental leave commences, and at the level and conditions that would have existed if the employee continued working.  Notably perhaps, SB 63 does not contain the language contained in CFRA authorizing the employer to recover these medical premiums if the employee failed to return from leave, if certain conditions are present.

     

    It also provides that if the employer employs two employees who are entitled to leave for the same event otherwise entitling them to “parental leave,” the employer may, but is not required to, grant simultaneous leave to both employees.  However, and again in contrast with the CFRA, SB 63 does not contain language suggesting that where both parents work for the same employer, the employer may limit the overall leave to the maximum amount a single employee could use.

     

    Lastly, it provides this leave shall run concurrently with parental leave taken under Education Code section 44977.5 for certain certificated school employees.

     

    This bill is nearly identical to last year’s version which Governor Jerry Brown vetoed, except that this year’s version proposes 12 weeks of leave compared to six.  It is expected to be heavily opposed once again.

     

    Status:  Passed the Senate’s Labor and Industrial Relations Committee and referred to the Judiciary Committee, with no hearing yet scheduled.

     

    Prohibition on Salary History Inquiries (AB 168)

     

    This bill would add new Labor Code section 432.3 to preclude employers from inquiring orally or in writing, personally or through an agent, about salary history information of an applicant, including about compensation and benefits.  It would also require private employers, upon reasonable request, to provide to an applicant the pay scale for a position.

     

    A similar bill (AB 1676) was introduced last year, before being modified to instead amend the Equal Pay Act to state that prior salary history by itself would not be a defense to an equal pay-related claim.  Similar prohibitions on salary history inquiries have already passed in Massachusetts, Philadelphia and the District of Columbia and are pending in other states and municipalities.

     

    Status:  Not yet referred to a committee and no hearing scheduled.

     

    “Ban the Box” Bill (AB 1008)

     

    In 2013, California enacted a law (AB 218) precluding state agencies and cities from inquiring about or using information related to criminal conviction history except in specified instances.  Citing the emerging national trend, this bill would amend the Fair Employment Housing Act to preclude private employers from inquiring about an applicant’s criminal record or conviction history until after a conditional employment offer is made, and would impose new notice and disclosure requirements if this information is sought.

     

    Specifically, new Government Code section 12952 would preclude employers from including on employment applications any question seeking the disclosure of an applicant’s criminal history, or to otherwise inquire or consider the conviction history of an applicant, until after a conditional employment offer is made.  It would also preclude during any background checks the consideration or dissemination of the following specific items: (a) arrests not followed by conviction; (b) referral to or participation in a pretrial or post-diversion program; (c) convictions that have been sealed, dismissed, or expunged pursuant to law; (d) misdemeanor convictions for which no jail sentence can be imposed, or infractions; and (e) misdemeanor convictions for which three years have passed since the date of conviction or felony convictions for which seven years have passed since conviction.  It would also prohibit employers from interfering with or restraining the exercise of any right provided under this new section.  These limitations would not apply to any position for which a state or local agency is required by law to conduct a criminal history background check, or to any position within a criminal justice agency.

     

    Before denying a position based upon this history, the employer would also need to conduct an individualized assessment of whether the conviction history has a direct and adverse relationship with the specific duties of the position.  Employers would need to consider at least all of the following: (a) the nature and gravity of the offense; (b) the time that has passed since the offense and completion of any sentence; and (c) the nature of the job held or sought.  Employers would also be specifically directed to conduct this individualized assessment consistent with the Equal Employment Opportunity Commission’s 2012 Guidance on the Consideration of Arrests and Conviction Records in Employment Decisions.

     

    If an employer makes a preliminary decision to deny employment, the employer must provide written notice of this intent to the applicant and provide all of the following: (a) the conviction that is the basis for the denial; (b) a copy of the conviction history report, if any; (c) examples of mitigation or rehabilitation evidence the applicant may voluntarily provide; and (c) notice of the applicant’s right to respond and the deadline for doing so.

     

    The applicant will then have at least ten business days to respond before a final employment decision can be made.  This response can consist of a challenge to the conviction or evidence of mitigation/rehabilitation evidence, including (a) that one year has passed since release from a correctional institution without subsequent conviction; (b) compliance with the terms and conditions of probation or parole; or (c) any other evidence of mitigation/rehabilitation, including letters of reference.

     

    Employers would need to consider the applicant’s response before making a final decision, and consistent with the “individualized assessment” standard, not disqualify an applicant that has showed evidence of rehabilitation or mitigation.  However, if an employer does make a final decision to deny an applicant in whole or in part upon prior conviction history, the employer must notify the employee in writing of the following: (a) the final denial or disqualification; (b) any existing procedure to challenge this decision; (c) whether the applicant is eligible for other positions with the employer; (d) the earliest day the applicant may reapply; and (e) the right to file a complaint with the Department of Fair Employment Housing.

     

    Status:  Referred to the Assembly Labor and Employment Committee, but no hearing yet scheduled. 

     

    Veterans’ Hiring Preference for Private Employers (AB 353 and AB 1477)

     

    These largely similar bills attempt to address the higher-than-normal unemployment rate for returning veterans.  Accordingly, new Government Code section 12958 would authorize employers to extend a preference during hiring decisions to honorably discharged veterans.  Employers would be permitted to require a veteran to submit United States Department of Defense Form 214 to confirm eligibility for this preference.  Section 12958 further specifies that such a preference shall be deemed not to violate any state or local equal employment opportunity law, including the FEHA.

     

    Government Code section 12940(a)(4) presently provides that using veteran status in favor of Vietnam-era veterans shall not constitute sex discrimination.  These bills would broaden this exemption by removing the references to “sex” and to “Vietnam-era veterans,” and provide that FEHA’s discrimination provisions would not affect an employer’s ability to use veteran status as a factor in hiring decisions if the employer maintains a veterans’ preference policy in accordance with new section 12958.

     

    A similar bill (AB 1383) unanimously passed the Assembly before stalling in the Senate in 2016, and similar preferences have been enacted in 32 states.

     

    Status:  AB 353 unanimously passed the Assembly’s Veterans Affairs Committee and has been referred to the Labor and Employment Committee to be heard on April 19, 2017.  AB 1477 has been referred to the Assembly’s Veterans Affairs and Labor and Employment Committees but no hearings have been scheduled yet.

     

    Expanded Protections for Military Service Members (AB 1710)

     

    Military and Veterans Code section 394 presently prohibits any discrimination against an officer, warrant officer or enlisted member of the military or naval forces of the state or the United States because of that membership, including with respect to employment.  This bill would expand these prohibitions to include not only the denial of or disqualification from employment, but also the “terms, conditions or privileges of that service member’s employment.

     

    Status:  Referred to the Assembly’s Veterans Affairs and Judiciary Committees, but no hearings have been scheduled.

     

    Prohibition on Reproductive Health Discrimination (AB 569)

     

    This bill would add Labor Code section 2810.7 to prevent employers from taking any adverse employment action based on the use of any drug, device or medical service related to reproductive health by an employee or an employee’s dependent.  It would also prohibit employers from requiring an employee to sign a waiver or other document that purports to deny any employee the right to make his or her own reproductive health care decisions, including the use of a particular drug, device or medical services.  Employers that provide employee handbooks would need to include notice of the employee’s rights and remedies under this new section.

     

    Status:  Referred to Assembly Labor and Employment and Judiciary Committees, and scheduled to be heard in the Labor and Employment Committee on March 29, 2017.

     

    Rest Period Rules for Emergency Medical Service Providers (AB 263)

     

    This bill would add multiple new Labor Code provisions regarding the rights and working conditions of emergency medical service workers.  Specifically, new Labor Code section 226.9 would identify “rest period” rules specific to such emergency medical service workers.  While it would retain the generally applicable rule requiring 10-minute rest breaks for every four hours worked, it would specify that the employees must be relieved of all duties and cannot be made to remain on call.  It would permit employers to interrupt a rest period and require the employee resume work if either the employer receives an emergency call which requires the emergency vehicle lights and siren to be activated, or an unforeseeable, natural or man-made disaster.  If the rest period is interrupted for either of these reasons, the employer shall pay one hour of pay at the regular rate and provide an equivalent rest period as soon as practicable during, and also identify on the itemized wage statement the amount owed for interrupted rest periods.

     

    New Labor Code section 226.10 would include corresponding provisions relating to meal periods, but also specify that its provisions apply regardless of any written agreements for “on duty” meal periods, and would also require employers to maintain accurate time records relating to meal periods and interruptions.

     

    Status: To be heard in the Assembly’s Labor and Employment Committee on April 19, 2017.

     

    On-Call Rest Periods for Emergency Medical Service Employees (AB 817)

     

    This bill would amend Labor Code section 226.7 to allow emergency medical service provides to require employees to monitor and respond to pages, radios, station alert boxes, intercoms, cell phones or other communication methods during rest or recovery periods without penalty, to provide for the public health and welfare.  Any mandated rest or recovery period interrupted for emergency response purposes shall be re-scheduled.

     

    This bill deems itself declaratory of existing law and would potentially apply retroactively if enacted.

     

    Status:  Pending in the Assembly’s Labor and Employment Committee but no hearing is yet scheduled.

     

    Gender Pay Differential Reporting Requirements (AB 1209)

     

    Reflecting the ongoing legislative focus on gender-related pay differentials, this bill would enact new Labor Code section 2810.7 and impose new reporting obligations on employers that are required to file a statement of information with the Secretary of State and have more than 250 employees.  Specifically, employers would need to collect information relating to both the difference between the median and mean salary of male and female exempt employees, and between male and female board members.  Employers would also need to publish this information by July 1, 2020 on a publically available website, and then update and republish it annually by July 1st of the following year.  Employers would also need to submit this collected information to the California Secretary of State.

     

    Status:  To be heard in the Assembly’s Labor and Employment Committee on April 19, 2017.

     

    Public Employers Subject to Equal Pay Act Violations (AB 46)

     

    California’s Equal Pay Act (Labor Code section 1197.5 et seq.) has recently been a legislative focus with amendments in 2015 materially altering its definitions and exceptions (SB 358) and in 2016 to expand its protections to preclude impermissible wage differentials for employees of different races or ethnicity for substantially similar work (SB 1063).  This bill would again amend the Equal Pay Act to clarify that “employer” means both public and private employers, but that public employers would be exempted from the statutory and misdemeanor penalties identified in Labor Code section 1199.

     

    Status:  Not yet referred to a committee and no hearing yet scheduled.

     

    Increased Salary Threshold for Overtime Exemption (AB 1565)

     

    Presently, the salary threshold for being exempt from overtime is $43,680 for employers with 26 or more employees, and $41,600 for employers with 25 or fewer employees, and these levels will increase annually as the recently-enacted five-step minimum wage increase take effect (SB 3).  This bill would add new Labor Code section 514.5 to set the overtime exemption salary level at $47,476 annually (or $3,956 monthly), which is the amount proposed in the stayed DOL overtime regulations.  This new salary threshold level would govern for overtime purposes until surpassed by the generally applicable formula for overtime purposes in California (i.e., twice the minimum wage for full-time employment), which is currently slated to occur in January 2019 for employers with 26 or more employees, and in January 2020 for employees with 25 or fewer employees.

     

    Notably perhaps, at least for now, AB 1565 does not distinguish on the basis of employer size, so potentially all employers would be immediately subject to the $47,476 threshold level if enacted.

     

    Status:  Scheduled to be heard in the Assembly’s Labor and Employment Committee on April 19, 2017.

     

    PAGA Reforms Proposed Again (AB 281, AB 1429 and AB 1430)

     

    California’s Private Attorneys General Act (Labor Code section 2699, et seq.) (PAGA) authorizes aggrieved employees to initiate civil actions to recover specified civil penalties for enumerated Labor Code violations.  Responding to concerns such PAGA claims are filed too easily, these bills would amend PAGA in several respects.

     

    For instance, AB 281would limit aggrieved employees to recover civil penalties only for violations that actually injured the employee.  Second, it would expand the Labor Code violations that would first afford employers an opportunity to cure before civil suit to include all such violations other than health and safety violations.  Third, it would expand the cure period from 33 to 65 calendar days.

     

    AB 1429 would amend PAGA to limit civil actions solely to violations of Labor Code sections 226 [wage statements], 226.7 [meal/rest period provisions], 510 [overtime] and 512 [meal periods], and would require the employee to follow certain procedures before bringing an action.  It would also cap the civil penalties recoverable under PAGA to $10,000 per claimant, and would require the superior court to review any penalties sought as part of a settlement agreement.

     

    AB 1430 would require the Labor and Workforce Development Agency to investigate alleged violations and to issue either a citation or determine if there is a reasonable basis for a civil action.  An aggrieved employee would only be permitted to commence a civil action upon receipt of notice that there is a reasonable basis for a civil action, or the agency fails to timely provide such notification.

     

    Status:  All three bills have been referred to the Assembly’s Labor and Employment and Judiciary Committees, but no hearings yet scheduled.

     

    New Rules for Gratuities (AB 1099)

     

    While Labor Code section 351 currently identifies various rules regarding the payment of gratuities to employees, this bill would add new Labor Code section 352 regarding the payment of gratuities by debit card.  This new section would require that any employer that permits a patron to pay for services performed by an employee by debit or credit card to also accept a debit or credit card for payment of the gratuity.  It would also provide that payment of the gratuity by a patron using a credit card must be made to the employee not later than the next regular payday following the date the patron authorized the credit card payment.

     

    Status: Scheduled to be heard in the Assembly’s Labor and Employment Committee on April 19, 2017.

     

    Payday Rules for Barbers and Cosmetologists (SB 490)

     

    While Labor Code section 204 identifies generally applicable payday rules, this bill would enact new Labor Code section 204.11 to identify rules relating to the payment of commission wages paid to employees licensed under the Barbering and Cosmetology Act.  If enacted, commission wages paid to such employees would be due and payable twice during each calendar month on pre-designated paydays.  Wages paid to that employee for which the license is required and when paid as a percentage of a flat sum portion of the sums paid to the employer by the client recipient of such services, constitute commissions provided that the employee who is paid, in every pay period in which hours are worked, a regular hourly rate of at least two times the state minimum wage rate in addition to commissions paid.  The bill further provides that the employer and employee may agree on a commission in addition to the base hourly rate.

     

    Status:  Referred to the Senate’s Labor and Industrial Relations Committee, but no hearing has been scheduled yet.

     

    Partial Affirmative Defense Proposed for Relying upon Division of Labor Standards Enforcement’s Guidance (SB 524)

     

    Responding to employer concerns some Labor Code provisions are vague or that interpretations change, this bill proposes new Labor Code section 98.73, which would provide a partial affirmative defense to employers who relied in good faith upon the Division of Labor Standards Enforcement’s (DLSE) guidance.

     

    Under this section, employers who requested, obtained, and complied with a DLSE opinion letter would not be liable for costs or subject to punishment for a violation of an employment statute or regulation if they demonstrate they were acting in good faith when the violation occurred.  To establish this good faith defense, the employer would need to prove that: (1) it previously sought an opinion letter or enforcement policy from the DLSE; (2) it relied upon and conformed to the applicable opinion letter or enforcement policy published by the DLSE; and (3) it provided true and correct information to the DLSE in seeking the opinion letter or enforcement policy.  This partial affirmative defense would apply even if after the alleged violation or omission occurred the opinion letter or enforcement policy relied upon had been modified, rescinded, or deemed invalid, but this defense would not apply to violations occurring after such a nullification.

     

    An employer satisfying these elements would be immune from certain civil and criminal penalties and costs, but would still be required to make restitution for lost wages to the employee.  An employer asserting such a defense would also be required to post an undertaking with the reviewing court or administrative body in an amount equal to the reasonable estimate of alleged unpaid wages resulting from the employer’s reliance upon the DLSE’s advice.

     

    If enacted, this defense would apply to all actions and proceedings that commence on or after January 1, 2018.  A very similar bill (AB 2688) stalled in 2014.

     

    Status:  Referred to the Senate’s Labor and Industrial Relations and Judiciary Committees, but no hearings scheduled.

     

    Expanded Harassment Training for Farm Labor Contractors (SB 295)

     

    While California presently provides that farm labor contractor licenses will not be issued unless the applicant certifies certain employees have received sexual harassment training, this law would expand these requirements.  For instance, it would require that training for each agricultural employee be in a language understood by the employee.  It would also require a licensee, as part of their application, to provide the Labor Commissioner with a complete list of sexual harassment training materials and resources utilized to provide sexual harassment training to the agricultural employees in the preceding year.  It would also require the licensee to identify the total number of agricultural employees who received sexual harassment training, and for the Labor Commissioner to publish the total number of agricultural employees trained the previous calendar year.

     

    Status:  Referred to Senate Labor and Industrial Relations Committee, and is scheduled to be heard on April 4, 2017.

     

    Human Trafficking Training for Hotel/Motel Employees (SB 270)

     

    Continuing the Legislature’s recent emphasis on targeting human trafficking, this bill would amend Civil Code section 52.6 to require hotels or motels providing lodging services to train employees on the signs of human trafficking and how to contact law enforcement agencies.  It would also require the Department of Justice to develop an approved training program for use by hotels and motels and post it on its website and would authorize the Department to approve a private program, as specified.  By January 1, 2019, this training would need to be incorporated into the initial training process for all new employees, and for all employees who did not receive an initial training.

     

    Status:  Referred to the Senate Judiciary Committee, but no hearing yet scheduled.

     

    Whistleblower Protections for Legislative Employees (AB 403)

     

    Known as the Legislative Employee Whistleblower Protection Act, this bill would prohibit interference with the right of legislative employees to make protected disclosures of ethics violations and would prohibit retaliation against employees who have made such protected disclosures.  It would also establish a procedure for legislative employees to report violations of these prohibitions to the Legislature, and would impose civil and criminal liability on an individual violating these protections.

     

    Status:  This bill unanimously passed the Assembly Judiciary Committee, and will soon be referred to the next committee.  It also appears very similar to AB 1788 which unanimously passed the Assembly before stalling in the Senate’s Appropriations Committee.

     

    Cure Period for Non-Serious OSHA Violations (AB 442)

     

    This bill would add new Labor Code section 6334 to provide “small businesses” and “microbusinesses” a 30-day cure period for non-serious violations before the Division of Occupational Safety and Health (DOSH) may commence an enforcement action.  This 30-day correction period would commence upon effective service by DOSH upon the employer or where written notice is served during an inspection by DOSH.  This notice of a correctable non-serious violation shall be an informal enforcement action and shall not constitute a first violation or an earlier violation supporting a subsequent finding of a repeat violation or an admission of guilt by the employer.

     

    For purposes of this new section, “small business” and “microbusiness” would have the same definitions as Government Code section 14837, and “nonserious violation” would mean any violation that is not classified as a serious violation under Title 8 of the California Code of Regulations.

     

    Status: Referred to the Assembly Labor and Employment Committee, but no hearing yet scheduled.

     

    Illness and Injury Prevention Program Disclosures (AB 978)

     

    The California Occupational Safety and Health Act of 1973 requires every employer to establish and maintain an effective illness and injury prevention program (IIPP).  This IIPP must be in writing, except in certain circumstances, and must contain certain statutorily-enumerated items such as identifying the person responsible for the program, a training program, and specification of compliance and reporting methods.

     

    Responding to concerns that many employees, particularly non-English speaking employees, are unaware of an employer’s IIPP, this bill would amend Labor Code section 6401.7 and, impose new disclosure requirements regarding these IIPPs.  For instance, new subsection (e)(2) would require employers who receive a written request from a current employee or their authorized representative to provide a paper or electronic copy of the IIPP (including all required attachments) within five business days free of charge.  The employer would be permitted to designate in writing the “authorized representative” to whom such requests should be directed.  A similar bill (AB 2895) stalled in 2016.

     

    Status:  Passed the Assembly Labor and Employment Committee and pending in the Appropriations Committee, but no hearing yet scheduled.

     

    “Right to Work” Protections from Union Membership (AB 1174)

     

    Echoing the trend in other states, this bill would amend Labor Code section 922 to prohibit a person from requiring an employee, as a condition of employment, to contribute financial support to a labor organization or any charity sponsored by a labor organization.  This bill would not apply to any employment contract entered into prior to January 1, 2018, and would not apply to certain enumerated federal employees.

     

    Status:  Scheduled to be heard in the Assembly’s Labor and Employment on April 19, 2017.

     

    Individual Alternative Workweek Schedules for the “Holiday Season” (AB 1173)

     

    While California authorizes “alternative workweek schedules” whereby non-exempt employees can work up to ten hours daily without receiving overtime, it is often difficult to obtain the two-thirds work-unit approval required under Labor Code section 510.  This bill would create a “holiday season” exception (from November to January) to enable individual non-exempt employees in the “retail industry” to request an “employee-selected flexible work schedule” providing for workdays up to ten hours within the forty-hour workweek, and would allow the employer to implement this schedule without the obligation to pay overtime compensation for those additional hours in a workday.  Employers would be required to pay overtime at the rate of one-and-a-half times the regular rate for daily hours worked in excess of ten hours, and double-time for work performed in excess of twelve hours per workday and in excess of eight hours on a fifth, sixth or seventh day in the workweek.

     

    Status:  Referred to the Assembly’s Labor and Employment Committee but no hearing yet scheduled.

     

    Sleep Time for Domestic Workers (SB 482)

     

    This bill would amend Labor Code section 1454 regarding live-in domestic workers who are required to be on-duty for 24 or more consecutive hours.  It would authorize the domestic worker and the employer to agree, in writing, to exclude from hours worked a bona fide regularly scheduled sleeping period of not more than eight hours for uninterrupted sleep if the employee has eight hours free of duty and is available for continuous, uninterrupted sleep, and the employer otherwise complies with this section.  If the sleeping period is interrupted by an emergency, only time spent working during the emergency would constitute hours worked.  However, absent a written agreement, the hours available for sleep will constitute hours worked.  This bill is nearly identical to SB 1344 which stalled in 2016.

     

    Status:  Scheduled to be heard in the Senate’s Labor and Industrial Relations Committee on April 5, 2017.

     

    Labor Commissioner Tracking of “Piece Rate” Recovery (SB 391)

     

    In 2015, California enacted two versions of Labor Code section 226.2 (one effective from 2016 to 2021, and one effective from 2021 onward) enumerating rules relating to “piece rate” payments, and enumerating an affirmative defense to employers who had previously paid under an alternative method and essentially wished to take advantage of a temporary safe harbor through the Labor Commissioner’s office provided certain steps were taken.  This bill would amend section 226.2 to require the Labor Commissioner to post information on the commissioner’s website regarding the success of this program.  For instance, the Labor Commissioner would be required to post information regarding payments made to the commissioner, the total number of employees located for whom the commissioner collected payments and the amounts remitted to those employees, and the balance remaining from the amounts paid to the commissioner after remitting payments to these employees.

     

    Status: Referred to the Senate Labor and Industrial Relations Committee, but no hearing yet scheduled.

     

    Original Contractor Liability for Subcontractor Labor Code Violations (AB 1701)

     

    This bill would enact new Labor Code section 218.7 and impose liability upon director contractors with construction contacts with the state for any debt owed to a wage claimant incurred by a subcontractor acting at any tier.  The direct contractor would be liable for any wage, fringe or other benefit payment or contribution, including interest and state tax payment owed to a wage claimant, but would not include penalties or liquidated damages unless otherwise provided by law.  It would also authorize the wage claimant to sue directly or through the Labor Commissioner or district attorney, and would also prohibit the direct contractor from attempting to evade this law’s requirements.

     

    Status: Referred to the Assembly’s Labor and Employment Committee, but no hearing yet scheduled.

     

    Workers’ Compensation Exceptions for Victims of Terrorism or Workplace Violence (AB 44)

     

    This bill would exempt medical treatment for employees or first responders who sustain physical or psychological injury as a result of an act of terrorism or workplace violence from the generally applicable utilization review and independent medical review processes for Workers Compensation claims.  Instead, it would provide for an expedited proceeding before the Workers’ Compensation Appeals Board to resolve disputes regarding treatment.  The bill would apply retroactively to the employees and first responders injured in the San Bernardino terrorist attack of December 2, 2015, and any other employees or first responders injured by an act of terrorism or violence in the workplace that occurs prior to January 1, 2018.

     

    It would also amend Labor Code section 4656 to identify physical or psychological injury arising from an act of terrorism or violence in the workplace to the list of injuries for which aggregate disability payments may be made for not more than 240 compensable weeks within a 5-year period from the date of injury (as opposed to the generally applicable rule of 104 weeks within a 2-year period from the date of injury).

     

    Status:  Referred to the Assembly Insurance Committee, but no hearing yet scheduled.

     

    Workers’ Compensation Coverage Applies Regardless of Immigration Status in Residential Dwelling Context (AB 206)

     

    California’s Workers’ Compensation provisions (specifically Labor Code section 3351) already define “employee” broadly, including “aliens and minors.”  (Labor Code section 3351(a).)  Within this broad definition, Labor Code section 3351(d) presently provides that this definition of “employee” includes persons employed by owners or occupants of residential dwellings, including for the care and supervision of children.  This bill would modify subsection (d) to specify that this particular provision related to residential dwellings “applies without regard to immigration status.”

     

    This bill would also expand the scope of Workers’ Compensation protections by eliminating the current exclusion from coverage contained in Labor Code section 3352(h) for employees who were employed or contracted to be employed for less than 52 hours.  If so amended, this particular exclusion, which in turn modifies the residential dwelling coverage provision in section 3351 (discussed above), would still apply to any individual employed or contracted to be employed for wages of not more than one hundred dollars.

     

    Status:  Referred to the Assembly Insurance Committee, but no hearing yet scheduled.

     

    Workers’ Compensation Liability for Unauthorized Medical Treatments (AB 221)

     

    While California’s Workers’ Compensation system generally requires employers to provide all medical services reasonably required to treat work-related injuries, this bill would impose some limits.  Specifically, it would amend Labor Code section 4600 to provide that for claims of occupational disease or cumulative injury filed on or after January 1, 2018, neither the employee nor the employer shall be liable for payment of medical treatment unless one of the following conditions has occurred: (1) the employer authorized the treatment; (2) the employer has “accepted” the injury for which the treatment is sought; (3) the appeals board finds the injury for which treatment was provided was compensable; or (d) an agreed medical examiner or a qualified medical examiner has determined the claimed disease or injury was caused, in whole or in part, by the employment.

     

    Similarly, it would amend Labor Code section 4903 to provide that an employer shall not be liable for any medical liens related to treatment unless one of those conditions were met, or the parties agree to a settlement by compromise and release and the amount of compromise and release, exclusive of the costs of treatment, is $25,000 or more.

     

    Status:  Referred to the Assembly Insurance Committee, but no hearing yet scheduled.

     

    Expanded Workers’ Compensation Exception for Board of Director Members (SB 189)

     

    While Workers’ Compensation’s definition of “employee” includes most officers and directors of private corporations, it presently excludes officers and directors of quasi-public or private corporations (as defined) who own at least 15% of the issued stock and signs a sworn written waiver of their status and intent to waive workers’ compensation protections.  This bill would amend Labor Code section 3352 and expand this exception to such officers or directors who own at least 10% (rather than the current 15%) of outstanding stock and executes a written waiver.

     

    Status: Referred to the Senate Labor and Industrial Relations Committee, but no hearing yet scheduled.

     

    Mandatory Annual Disbursement of Supplemental Right-to-Work Disbursements (AB 553)

     

    Within California’s Workers’ Compensation system, there is a $120,000,000 fund designed to provide supplemental return-to-work payments intended to compensate those injured workers whose permanent disability benefits are disproportionately low in comparison to their earnings loss.  This bill would amend Labor Code section 139.48 to require the Administrative Director to distribute the $120,000,000 annually to eligible workers (as specified) and would require, commencing with the end of the 2017 calendar year, that any remaining program funds available after these supplemental payments are made be distributed pro rata to those eligible workers, subject to a $25,000 limit per calendar year.  It would prohibit attorneys’ fees from being allowed out of any of the payments paid to workers from this program, and prohibit a person from collecting a fee or commission for providing assistance to a worker who applies for benefits under this program.

     

    Status:  Referred to the Assembly Insurance Committee, but no hearing yet scheduled.

     

    Restoring Unemployment Insurance Benefits Eligibility for “Trade Disputes” (AB 306)

     

    This bill would repeal Unemployment Insurance Code section 1262 which provides that an individual is ineligible for unemployment compensation benefits if they left work because of a trade dispute.  Instead, and to the contrary, it would also amend Unemployment Code section 1256 to state that an employee will be deemed to have left their most recent work with good cause (and thus eligible for unemployment insurance benefits) if they were prohibited from performing work by the employer due to a trade dispute regarding wages, hours or other conditions of employment.  An employee would also be deemed to have left their most recent work with good cause if they left during a bona fide strike of more than 50 percent of the bargaining unit employees in a refusal to perform work or services for the employer.

     

    Status:  Referred to the Assembly’s Insurance Committee, but no hearings yet scheduled.

     

    Workforce Development Task Force (AB 1111)

     

    Entitled the Removing Barriers to Employment Act, this bill would require the Labor and Workforce Development Agency and the Labor Commissioner to create a grant program designed to identify and assist individuals with barriers to employment.

     

    Status: Referred to the Assembly Labor and Employment and the Jobs, Economic Development and Economy Committees, but no hearings yet scheduled.

     

    Attorneys’ Fees for CBA-Related Motions to Compel Arbitration (AB 1017)

     

    Labor Code section 1128 presently provides that in the private employment context, the court shall award attorney’s fees to a prevailing party on a motion to compel arbitration absent substantial and credible issues presented about whether the dispute was subject to arbitration.  This bill would extend this remedy to both public and private employment.

     

    Status:  Referred to the Senate Judiciary Committee, but no hearing yet scheduled.

     

    Health Facility Whistleblower Protections (AB 1102)

     

    This industry-specific bill would amend Health and Safety Code section 1278.5 to prohibit “health facilities” from discriminating or retaliating against employees who refuse an assignment or change in assignment that would violate statutorily-enumerated staffing requirements, including nurse-to-patient ratios.

     

    Status:  Passed the Assembly’s Health Committee, and scheduled to be heard in the Assembly’s Judiciary Committee on April 18, 2017.

     

    Minimum Wage for Health Professionals/Interns (AB 387)

     

    This bill would expand the definition of “employer” in the minimum wage provision (Labor Code section 1182.12) to include a person who directly or indirectly, or through an agent or any other person, employs or exercises control over the wages, hours or working conditions of a person engaged in a period of supervised work experience to satisfy requirements for licensure, registration or certification as an allied health professional.  “Allied health professional,” in turn, would share the same definition as in Section 295p of Part F of Subchapter V of Chapter 6A of Title 42 of the United States Code.

     

    Status:  Passed the Assembly’s Labor and Employment Committee and referred to the Appropriations Committee, but no hearing yet scheduled.

     

    Resident Apartment Manager Wages (AB 543)

     

    This bill would amend Labor Code section 1182.8 to expand the resident manager exemption from Industrial Welfare Commission Orders, and allow an employer who does not charge the resident manager rent, pursuant to a written agreement, to apply up to two-thirds of the fair market value of the apartment to meet the employer’s minimum wage obligations.

     

    Status: Scheduled to be heard in the Assembly’s Labor and Employment Committee on March 29, 2017.

     

    New Notice Requirements for Sale or Transfer of a Car Wash Employer (AB 1700)

     

    The Labor Code imposes a number of specific regulations relating to the employment practices of car washes due to concerns about pervasive Labor Code violations.  Amongst these are specific rules related to car washer wages/hours/working conditions, the requirement to register with the Labor Commissioner and the posting of a $150,000 bond for the benefit of the state to compensate against potential non-payment of wages.  This bill would add new Labor Code section 2066.5 to require a car washing or polishing employer to provide written notice of these requirements to a successor prior to the sale or transfer of a business.

     

    Status: Referred to the Assembly’s Labor and Employment Committee but no hearing has been scheduled.

     

    REMAINING “SPOT BILLS” TO WATCH

     

    To meet the February 17th bill introduction deadline, legislators introduced a number of currently non-substantive “place holder” bills that will likely be materially amended shortly and in advance of key committee votes (so-called “spot bills”).  “Spot bills” potentially worth tracking include: proposed amendments to the Equal Pay Act (AB 1388), PAGA (AB 945 and AB 1045), the Fair Employment and Housing Act (AB 1702), meal periods (SB 753), DLSE enforcement (AB 1704) immigration (AB 1356), alternative workweek schedules (AB 1241 and SB 662) employee privacy (SB 744), and payment of wages (AB 1703).CALSHRM LEGISLATIVE REPORT – MARCH 2017

    By: Michael S. Kalt, CalSHRM Government Affairs Director

    Wilson Turner Kosmo LLP

    mkalt@wilsonturnerkosmo.com

    Telephone:  619-236-9600

    Twitter:  @michaelkalt_law

     

    LEGISLATIVE SUMMARY

    The 2017 legislative session is heating up, with key committee votes expected prior to the April 28th deadline for policy committees to vote on fiscal bills.  There have already been several major developments with the proposed CFRA expansion bill (SB 62) being effectively “gutted and amended” into a senior housing bill, so material CFRA changes presently seem unlikely in 2017, and the “parental leave” bill (SB 63) has passed an initial key committee vote.  As expected, some of the previously introduced so-called “spot bills” have begun to develop into more substantive bills, including SB 490 which would enact new payday rules for barbers and cosmetologists.  Overall, a number of significant employment bills remain pending and facing key votes shortly, including bills that would:

    • Require employers to offer hours to existing non-exempt employees before hiring new employees (AB 5);
    • Prohibit employers from inquiring about salary history during the hiring process (AB 168);
    • Preclude employers from inquiring about criminal convictions until after a conditional offer of employment (AB 1008);
    • Require employers with more than 20 employees to provide up to 12 workweeks of parental leave (SB 63);
    • Prohibit employers from discriminating based on an employee’s reproductive health decisions (AB 569);
    • Enable private employers to grant hiring preferences to veterans (AB 353 and AB 1477);
    • Amend the Private Attorneys’ General Act (PAGA) to limit potential civil claims and recoverable damages (AB 281, AB 1429 and AB 1430); and
    • Enact so-called “right-to-work” legislation prohibiting compelled contribution to labor organizations (AB 1174).

    Looking ahead, all bills have until April 28, 2017 to pass the policy committees and until June 2, 2017 to pass the original house of origin, so many amendments are possible and particularly for the “spot bills” identified at the end of this report.  In the interim, below is a summary of and status update for the pending employment bills of general application:

    PENDING STATEWIDE BILLS

    Extending San Jose’s Opportunity to Work Ordinance State-Wide (AB 5)

    In the November election, San Jose’s voters passed the “Opportunity to Work Ordinance” (Measure E) which essentially requires San Jose employers with more than 35 employees to:  (1) offer hours of work to existing qualified part-time employees before hiring new staff, (2) keep records of their compliance with the Ordinance, and (3) refrain from retaliation against employees who exercise their rights under the Ordinance.  As discussed at the end of this Report, The San Jose Ordinance takes effect March 13, 2017 and the San Jose Board of Equality Assurance has recently posted draft FAQ’s and Notices.

    https://www.sanjoseca.gov/index.aspx?NID=5360

    This bill would enact on a state-wide basis a version of the San Jose Ordinance that is fairly similar but also with some distinct differences.  If enacted, employers with more than 10 employees in the state would be required to offer additional hours of work to existing qualified non-exempt employees with the skills and experience to perform the work before hiring additional employees or subcontractors. In this respect, this version would apply more broadly since the San Jose version is limited to employers with 35 or more employees.  Whether an employee is “qualified” to be offered the additional hours is determined by the employer’s “good faith and reasonable judgment” and hours must be distributed using a “transparent and nondiscriminatory process.”  Employers would not be required to offer employees work hours if the acceptance of such offer would require payment of overtime under any law or collective bargaining agreement.  However, employers would also not be prohibited from offering such additional hours even if it resulted in overtime compensation, if the employer elected to do so.

    Notably, while San Jose’s Ordinance permits an employer to apply for a hardship exemption if these requirements are impossible, futile or impracticable, AB 5 does not appear to contain such an exemption.

    Employers would also be required to retain all of the following: (1) for any new hire of an employee or subcontractor, documentation that the employer offered additional hours of work to existing employees prior to hiring the new employee or subcontractor; (2) work schedules of all employees; (3) if applicable, the written statement of an employee subject to welfare to work programs and (4) any other record or documents that the employer must maintain to demonstrate compliance with this section.

    This law would also prohibit discrimination or retaliation against employees who attempt to enforce its provisions.  However, the retaliation provision is currently worded extremely broadly to include adverse employment actions (e.g., termination, discipline, suspension) as well as informing another employer that the person has engaged in protected activities under this section, or reporting or threatening to report the actual or suspected citizenship or immigration status of an employee or family member because the employee exercised a right under this section.

    As with other laws proposed by this bill’s author, it would allow these provisions to be waived in a collective bargaining agreement provided that such waiver is explicitly set forth in the agreement in clear and unambiguous terms.

    Continuing another recent trend, employers would also be required to post a notice that the Division of Labor Standards Enforcement (DLSE) will develop concerning these provisions.  This poster would need to be posted “in a conspicuous place where it may be read by employees during work hours and in all places where notices to employees are posted physically and electronically.”

    The DLSE will be tasked with enforcing this section, and developing rules and regulations to carry out its provisions.  The DLSE “may” also issue guidelines to encourage employers to create training opportunities that permit employees to perform work for which the employer can be expected to have a need for additional hours of work.

     

    Employees would be permitted to file a complaint for violations with the DLSE to recover a to-be-determined civil penalty, or a civil complaint for damages and reasonable attorney’s fees.

     

    Status:  Scheduled to be heard in the Assembly Labor and Employment Committee on April 19, 2017.

     

    Job-Protected “Parental Leave” Bill Re-introduced (SB 63)

     

    Entitled the New Parent Leave Act, this bill would add new Government Code section 12945.6 to require, beginning January 1, 2018, employers to provide up to 12 workweeks of job-protected parental leave for an employee (male or female) to bond with a new child within one year of the child’s birth, adoption or foster care placement.

     

    Unlike the California Family Rights Act (CFRA, Government Code section 12945.2) and the Family Medical Leave Act (FMLA), which apply only to employers with more than 50 employees, this bill would define “employer” as either (a) an entity employing 20 or more persons within 75 miles of the worksite where an employee (presumably seeking leave) is employed “to perform services for a wage or salary;” or (b) the state of California or any of its political or civil subdivisions, except for specified school districts.  However, as with CFRA and the FMLA, an employee would need to have worked more than 12 months for the employer, and to have worked at least 1,250 hours during the previous 12-month period.

     

    The bill also specifies that employees eligible for “parental leave” are also entitled to take leave under Government Code section 12945 (pregnancy disability, child birth and related conditions) if otherwise qualified for such leave.  However, this new law would not apply to an employee subject to both the CFRA and the FMLA.

     

    As with CFRA, an employer shall be deemed to have refused to provide this job-protected leave unless on or before the leave’s commencement the employer guarantees reinstatement in the same or comparable position.  This bill would also authorize the employee to use accrued vacation pay, paid sick time, other accrued paid time off, or other paid or unpaid time off negotiated with the employer during this parental leave.  The basic minimum duration of the leave shall be two weeks, but an employer would be permitted to grant requests for additional occasions of leave lasting less than two weeks.

     

    Employers would also be required to maintain and pay for medical coverage under a group health plan for an eligible employee during the duration of the parental leave, not to exceed six weeks over the course of a 12-month period, commencing on the date the parental leave commences, and at the level and conditions that would have existed if the employee continued working.  Notably perhaps, SB 63 does not contain the language contained in CFRA authorizing the employer to recover these medical premiums if the employee failed to return from leave, if certain conditions are present.

     

    It also provides that if the employer employs two employees who are entitled to leave for the same event otherwise entitling them to “parental leave,” the employer may, but is not required to, grant simultaneous leave to both employees.  However, and again in contrast with the CFRA, SB 63 does not contain language suggesting that where both parents work for the same employer, the employer may limit the overall leave to the maximum amount a single employee could use.

     

    Lastly, it provides this leave shall run concurrently with parental leave taken under Education Code section 44977.5 for certain certificated school employees.

     

    This bill is nearly identical to last year’s version which Governor Jerry Brown vetoed, except that this year’s version proposes 12 weeks of leave compared to six.  It is expected to be heavily opposed once again.

     

    Status:  Passed the Senate’s Labor and Industrial Relations Committee and referred to the Judiciary Committee, with no hearing yet scheduled.

     

    Prohibition on Salary History Inquiries (AB 168)

     

    This bill would add new Labor Code section 432.3 to preclude employers from inquiring orally or in writing, personally or through an agent, about salary history information of an applicant, including about compensation and benefits.  It would also require private employers, upon reasonable request, to provide to an applicant the pay scale for a position.

     

    A similar bill (AB 1676) was introduced last year, before being modified to instead amend the Equal Pay Act to state that prior salary history by itself would not be a defense to an equal pay-related claim.  Similar prohibitions on salary history inquiries have already passed in Massachusetts, Philadelphia and the District of Columbia and are pending in other states and municipalities.

     

    Status:  Not yet referred to a committee and no hearing scheduled.

     

    “Ban the Box” Bill (AB 1008)

     

    In 2013, California enacted a law (AB 218) precluding state agencies and cities from inquiring about or using information related to criminal conviction history except in specified instances.  Citing the emerging national trend, this bill would amend the Fair Employment Housing Act to preclude private employers from inquiring about an applicant’s criminal record or conviction history until after a conditional employment offer is made, and would impose new notice and disclosure requirements if this information is sought.

     

    Specifically, new Government Code section 12952 would preclude employers from including on employment applications any question seeking the disclosure of an applicant’s criminal history, or to otherwise inquire or consider the conviction history of an applicant, until after a conditional employment offer is made.  It would also preclude during any background checks the consideration or dissemination of the following specific items: (a) arrests not followed by conviction; (b) referral to or participation in a pretrial or post-diversion program; (c) convictions that have been sealed, dismissed, or expunged pursuant to law; (d) misdemeanor convictions for which no jail sentence can be imposed, or infractions; and (e) misdemeanor convictions for which three years have passed since the date of conviction or felony convictions for which seven years have passed since conviction.  It would also prohibit employers from interfering with or restraining the exercise of any right provided under this new section.   These limitations would not apply to any position for which a state or local agency is required by law to conduct a criminal history background check, or to any position within a criminal justice agency.

     

    Before denying a position based upon this history, the employer would also need to conduct an individualized assessment of whether the conviction history has a direct and adverse relationship with the specific duties of the position.  Employers would need to consider at least all of the following: (a) the nature and gravity of the offense; (b) the time that has passed since the offense and completion of any sentence; and (c) the nature of the job held or sought.  Employers would also be specifically directed to conduct this individualized assessment consistent with the Equal Employment Opportunity Commission’s 2012 Guidance on the Consideration of Arrests and Conviction Records in Employment Decisions.

     

    If an employer makes a preliminary decision to deny employment, the employer must provide written notice of this intent to the applicant and provide all of the following: (a) the conviction that is the basis for the denial; (b) a copy of the conviction history report, if any; (c) examples of mitigation or rehabilitation evidence the applicant may voluntarily provide; and (c) notice of the applicant’s right to respond and the deadline for doing so.

     

    The applicant will then have at least ten business days to respond before a final employment decision can be made.  This response can consist of a challenge to the conviction or evidence of mitigation/rehabilitation evidence, including (a) that one year has passed since release from a correctional institution without subsequent conviction; (b) compliance with the terms and conditions of probation or parole; or (c) any other evidence of mitigation/rehabilitation, including letters of reference.

     

    Employers would need to consider the applicant’s response before making a final decision, and consistent with the “individualized assessment” standard, not disqualify an applicant that has showed evidence of rehabilitation or mitigation.  However, if an employer does make a final decision to deny an applicant in whole or in part upon prior conviction history, the employer must notify the employee in writing of the following: (a) the final denial or disqualification; (b) any existing procedure to challenge this decision; (c) whether the applicant is eligible for other positions with the employer; (d) the earliest day the applicant may reapply; and (e) the right to file a complaint with the Department of Fair Employment Housing.

     

    Status:  Referred to the Assembly Labor and Employment Committee, but no hearing yet scheduled. 

     

    Veterans’ Hiring Preference for Private Employers (AB 353 and AB 1477)

     

    These largely similar bills attempt to address the higher-than-normal unemployment rate for returning veterans.  Accordingly, new Government Code section 12958 would authorize employers to extend a preference during hiring decisions to honorably discharged veterans.  Employers would be permitted to require a veteran to submit United States Department of Defense Form 214 to confirm eligibility for this preference.  Section 12958 further specifies that such a preference shall be deemed not to violate any state or local equal employment opportunity law, including the FEHA.

     

    Government Code section 12940(a)(4) presently provides that using veteran status in favor of Vietnam-era veterans shall not constitute sex discrimination.  These bills would broaden this exemption by removing the references to “sex” and to “Vietnam-era veterans,” and provide that FEHA’s discrimination provisions would not affect an employer’s ability to use veteran status as a factor in hiring decisions if the employer maintains a veterans’ preference policy in accordance with new section 12958.

     

    A similar bill (AB 1383) unanimously passed the Assembly before stalling in the Senate in 2016, and similar preferences have been enacted in 32 states.

     

    Status:  AB 353 unanimously passed the Assembly’s Veterans Affairs Committee and has been referred to the Labor and Employment Committee to be heard on April 19, 2017.  AB 1477 has been referred to the Assembly’s Veterans Affairs and Labor and Employment Committees but no hearings have been scheduled yet.   

     

    Expanded Protections for Military Service Members (AB 1710)

     

    Military and Veterans Code section 394 presently prohibits any discrimination against an officer, warrant officer or enlisted member of the military or naval forces of the state or the United States because of that membership, including with respect to employment.  This bill would expand these prohibitions to include not only the denial of or disqualification from employment, but also the “terms, conditions or privileges of that service member’s employment.

     

    Status:  Referred to the Assembly’s Veterans Affairs and Judiciary Committees, but no hearings have been scheduled.

     

    Prohibition on Reproductive Health Discrimination (AB 569)

     

    This bill would add Labor Code section 2810.7 to prevent employers from taking any adverse employment action based on the use of any drug, device or medical service related to reproductive health by an employee or an employee’s dependent.  It would also prohibit employers from requiring an employee to sign a waiver or other document that purports to deny any employee the right to make his or her own reproductive health care decisions, including the use of a particular drug, device or medical services.  Employers that provide employee handbooks would need to include notice of the employee’s rights and remedies under this new section.

     

    Status:  Referred to Assembly Labor and Employment and Judiciary Committees, and scheduled to be heard in the Labor and Employment Committee on March 29, 2017.

     

    Rest Period Rules for Emergency Medical Service Providers (AB 263)

     

    This bill would add multiple new Labor Code provisions regarding the rights and working conditions of emergency medical service workers.  Specifically, new Labor Code section 226.9 would identify “rest period” rules specific to such emergency medical service workers.  While it would retain the generally applicable rule requiring 10-minute rest breaks for every four hours worked, it would specify that the employees must be relieved of all duties and cannot be made to remain on call.  It would permit employers to interrupt a rest period and require the employee resume work if either the employer receives an emergency call which requires the emergency vehicle lights and siren to be activated, or an unforeseeable, natural or man-made disaster.  If the rest period is interrupted for either of these reasons, the employer shall pay one hour of pay at the regular rate and provide an equivalent rest period as soon as practicable during, and also identify on the itemized wage statement the amount owed for interrupted rest periods.

     

    New Labor Code section 226.10 would include corresponding provisions relating to meal periods, but also specify that its provisions apply regardless of any written agreements for “on duty” meal periods, and would also require employers to maintain accurate time records relating to meal periods and interruptions.

     

    Status: To be heard in the Assembly’s Labor and Employment Committee on March 29, 2017.

     

    Public Employers Subject to Equal Pay Act Violations (AB 46)

     

    California’s Equal Pay Act (Labor Code section 1197.5 et seq.) has recently been a legislative focus with amendments in 2015 materially altering its definitions and exceptions (SB 358) and in 2016 to expand its protections to preclude impermissible wage differentials for employees of different races or ethnicity for substantially similar work (SB 1063).  This bill would again amend the Equal Pay Act to clarify that “employer” means both public and private employers, but that public employers would be exempted from the statutory and misdemeanor penalties identified in Labor Code section 1199.

     

    Status:  Not yet referred to a committee and no hearing yet scheduled.

     

    PAGA Reforms Proposed Again (AB 281, AB 1429 and AB 1430)

     

    California’s Private Attorneys General Act (Labor Code section 2699, et seq.) (PAGA) authorizes aggrieved employees to initiate civil actions to recover specified civil penalties for enumerated Labor Code violations.  Responding to concerns such PAGA claims are filed too easily, these bills would amend PAGA in several respects.

     

    For instance, AB 281would limit aggrieved employees to recover civil penalties only for violations that actually injured the employee.  Second, it would expand the Labor Code violations that would first afford employers an opportunity to cure before civil suit to include all such violations other than health and safety violations.  Third, it would expand the cure period from 33 to 65 calendar days.

     

    AB 1429 would amend PAGA to limit civil actions solely to violations of Labor Code sections 226 [wage statements], 226.7 [meal/rest period provisions], 510 [overtime] and 512 [meal periods], and would require the employee to follow certain procedures before bringing an action.  It would also cap the civil penalties recoverable under PAGA to $10,000 per claimant, and would require the superior court to review any penalties sought as part of a settlement agreement.

     

    AB 1430 would require the Labor and Workforce Development Agency to investigate alleged violations and to issue either a citation or determine if there is a reasonable basis for a civil action.  An aggrieved employee would only be permitted to commence a civil action upon receipt of notice that there is a reasonable basis for a civil action, or the agency fails to timely provide such notification.

     

    Status:  All three bills have been referred to the Assembly’s Labor and Employment and Judiciary Committees, but no hearings yet scheduled.

     

    New Rules for Gratuities (AB 1099)

     

    While Labor Code section 351 currently identifies various rules regarding the payment of gratuities to employees, this bill would add new Labor Code section 352 regarding the payment of gratuities by debit card.  This new section would require that any employer that permits a patron to pay for services performed by an employee by debit or credit card to also accept a debit or credit card for payment of the gratuity.  It would also provide that payment of the gratuity by a patron using a credit card must be made to the employee not later than the next regular payday following the date the patron authorized the credit card payment.

     

    Status: Scheduled to be heard in the Assembly’s Labor and Employment Committee on March 29, 2017.

     

    Payday Rules for Barbers and Cosmetologists (SB 490)

     

    While Labor Code section 204 identifies generally applicable payday rules, this bill would enact new Labor Code section 204.11 to identify rules relating to the payment of commission wages paid to employees licensed under the Barbering and Cosmetology Act.  If enacted, commission wages paid to such employees would be due and payable twice during each calendar month on pre-designated paydays.  Wages paid to that employee for which the license is required and when paid as a percentage of a flat sum portion of the sums paid to the employer by the client recipient of such services, constitute commissions provided that the employee who is paid, in every pay period in which hours are worked, a regular hourly rate of at least two times the state minimum wage rate in addition to commissions paid.  The bill further provides that the employer and employee may agree on a commission in addition to the base hourly rate.

     

    Status:  Pending in the Senate Rules Committee for referral to a policy committee.

     

    Partial Affirmative Defense Proposed for Relying upon Division of Labor Standards Enforcement’s Guidance (SB 524)

     

    Responding to employer concerns some Labor Code provisions are vague or that interpretations change, this bill proposes new Labor Code section 98.73, which would provide a partial affirmative defense to employers who relied in good faith upon the Division of Labor Standards Enforcement’s (DLSE) guidance.

     

    Under this section, employers who requested, obtained, and complied with a DLSE opinion letter would not be liable for costs or subject to punishment for a violation of an employment statute or regulation if they demonstrate they were acting in good faith when the violation occurred.  To establish this good faith defense, the employer would need to prove that: (1) it previously sought an opinion letter or enforcement policy from the DLSE; (2) it relied upon and conformed to the applicable opinion letter or enforcement policy published by the DLSE; and (3) it provided true and correct information to the DLSE in seeking the opinion letter or enforcement policy.  This partial affirmative defense would apply even if after the alleged violation or omission occurred the opinion letter or enforcement policy relied upon had been modified, rescinded, or deemed invalid, but this defense would not apply to violations occurring after such a nullification.

     

    An employer satisfying these elements would be immune from certain civil and criminal penalties and costs, but would still be required to make restitution for lost wages to the employee.  An employer asserting such a defense would also be required to post an undertaking with the reviewing court or administrative body in an amount equal to the reasonable estimate of alleged unpaid wages resulting from the employer’s reliance upon the DLSE’s advice.

     

    If enacted, this defense would apply to all actions and proceedings that commence on or after January 1, 2018.  A very similar bill (AB 2688) stalled in 2014.

     

    Status:  Referred to the Senate’s Labor and Industrial Relations and Judiciary Committees, but no hearings scheduled.

     

    Expanded Harassment Training for Farm Labor Contractors (SB 295)

     

    While California presently provides that farm labor contractor licenses will not be issued unless the applicant certifies certain employees have received sexual harassment training, this law would expand these requirements.  For instance, it would require that training for each agricultural employee be in a language understood by the employee.  It would also require a licensee, as part of their application, to provide the Labor Commissioner with a complete list of sexual harassment training materials and resources utilized to provide sexual harassment training to the agricultural employees in the preceding year.  It would also require the licensee to identify the total number of agricultural employees who received sexual harassment training, and for the Labor Commissioner to publish the total number of agricultural employees trained the previous calendar year.

     

    Status:  Referred to Senate Labor and Industrial Relations Committee, and is scheduled to be heard on April 4, 2017.

     

    Human Trafficking Training for Hotel/Motel Employees (SB 270)

     

    Continuing the Legislature’s recent emphasis on targeting human trafficking, this bill would amend Civil Code section 52.6 to require hotels or motels providing lodging services to train employees on the signs of human trafficking and how to contact law enforcement agencies.  It would also require the Department of Justice to develop an approved training program for use by hotels and motels and post it on its website and would authorize the Department to approve a private program, as specified.  By January 1, 2019, this training would need to be incorporated into the initial training process for all new employees, and for all employees who did not receive an initial training.

     

    Status:  Referred to the Senate Judiciary Committee, but no hearing yet scheduled.

     

    Whistleblower Protections for Legislative Employees (AB 403)

     

    Known as the Legislative Employee Whistleblower Protection Act, this bill would prohibit interference with the right of legislative employees to make protected disclosures of ethics violations and would prohibit retaliation against employees who have made such protected disclosures.  It would also establish a procedure for legislative employees to report violations of these prohibitions to the Legislature, and would impose civil and criminal liability on an individual violating these protections.

     

    Status:  This bill unanimously passed the Assembly Judiciary Committee, and will soon be referred to the next committee.  It also appears very similar to AB 1788 which unanimously passed the Assembly before stalling in the Senate’s Appropriations Committee.

     

    Cure Period for Non-Serious OSHA Violations (AB 442)

     

    This bill would add new Labor Code section 6334 to provide “small businesses” and “microbusinesses” a 30-day cure period for non-serious violations before the Division of Occupational Safety and Health (DOSH) may commence an enforcement action.  This 30-day correction period would commence upon effective service by DOSH upon the employer or where written notice is served during an inspection by DOSH.  This notice of a correctable non-serious violation shall be an informal enforcement action and shall not constitute a first violation or an earlier violation supporting a subsequent finding of a repeat violation or an admission of guilt by the employer.

     

    For purposes of this new section, “small business” and “microbusiness” would have the same definitions as Government Code section 14837, and “nonserious violation” would mean any violation that is not classified as a serious violation under Title 8 of the California Code of Regulations.

     

    Status: Referred to the Assembly Labor and Employment Committee, but no hearing yet scheduled.

     

    Illness and Injury Prevention Program Disclosures (AB 978)

     

    The California Occupational Safety and Health Act of 1973 requires every employer to establish and maintain an effective illness and injury prevention program (IIPP).  This IIPP must be in writing, except in certain circumstances, and must contain certain statutorily-enumerated items such as identifying the person responsible for the program, a training program, and specification of compliance and reporting methods.

     

    Responding to concerns that many employees, particularly non-English speaking employees, are unaware of an employer’s IIPP, this bill would amend Labor Code section 6401.7 and, impose new disclosure requirements regarding these IIPPs.  For instance, new subsection (e)(2) would require employers who receive a written request from a current employee or their authorized representative to provide a paper or electronic copy of the IIPP (including all required attachments) within five business days free of charge.  The employer would be permitted to designate in writing the “authorized representative” to whom such requests should be directed.  A similar bill (AB 2895) stalled in 2016.

     

    Status:  Scheduled to be heard in the Assembly Labor and Employment Committee on March 29, 2017.

     

    “Right to Work” Protections from Union Membership (AB 1174)

     

    Echoing the trend in other states, this bill would amend Labor Code section 922 to prohibit a person from requiring an employee, as a condition of employment, to contribute financial support to a labor organization or any charity sponsored by a labor organization.  This bill would not apply to any employment contract entered into prior to January 1, 2018, and would not apply to certain enumerated federal employees.

     

    Status:  Referred to the Assembly’s Labor and Employment and Judiciary Committees, but no hearings yet scheduled.

     

    Minimum Wage for Health Professionals/Interns (AB 387)

     

    This bill would expand the definition of “employer” in the minimum wage provision (Labor Code section 1182.12) to include a person who directly or indirectly, or through an agent or any other person, employs or exercises control over the wages, hours or working conditions of a person engaged in a period of supervised work experience to satisfy requirements for licensure, registration or certification as an allied health professional.  “Allied health professional,” in turn, would share the same definition as in Section 295p of Part F of Subchapter V of Chapter 6A of Title 42 of the United States Code.

     

    Status:  Scheduled to be heard in the Assembly’s Labor and Employment Committee on March 29, 2017.

     

    Individual Alternative Workweek Schedules for the “Holiday Season” (AB 1173)

     

    While California authorizes “alternative workweek schedules” whereby non-exempt employees can work up to ten hours daily without receiving overtime, it is often difficult to obtain the two-thirds work-unit approval required under Labor Code section 510.   This bill would create a “holiday season” exception (from November to January) to enable individual non-exempt employees in the “retail industry” to request an “employee-selected flexible work schedule” providing for workdays up to ten hours within the forty-hour workweek, and would allow the employer to implement this schedule without the obligation to pay overtime compensation for those additional hours in a workday.  Employers would be required to pay overtime at the rate of one-and-a-half times the regular rate for daily hours worked in excess of ten hours, and double-time for work performed in excess of twelve hours per workday and in excess of eight hours on a fifth, sixth or seventh day in the workweek.

     

    Status:  Referred to the Assembly’s Labor and Employment Committee but no hearing yet scheduled.

     

    Resident Apartment Manager Wages (AB 543)

     

    This bill would amend Labor Code section 1182.8 to expand the resident manager exemption from Industrial Welfare Commission Orders, and allow an employer who does not charge the resident manager rent, pursuant to a written agreement, to apply up to two-thirds of the fair market value of the apartment to meet the employer’s minimum wage obligations.

     

    Status: Scheduled to be heard in the Assembly’s Labor and Employment Committee on March 29, 2017.

     

    Sleep Time for Domestic Workers (SB 482)

     

    This bill would amend Labor Code section 1454 regarding live-in domestic workers who are required to be on-duty for 24 or more consecutive hours.  It would authorize the domestic worker and the employer to agree, in writing, to exclude from hours worked a bona fide regularly scheduled sleeping period of not more than eight hours for uninterrupted sleep if the employee has eight hours free of duty and is available for continuous, uninterrupted sleep, and the employer otherwise complies with this section.  If the sleeping period is interrupted by an emergency, only time spent working during the emergency would constitute hours worked.  However, absent a written agreement, the hours available for sleep will constitute hours worked.  This bill is nearly identical to SB 344 which stalled in 2016.

     

    Status:  Referred to the Senate Labor and Industrial Relations Committee, but no hearings yet scheduled.

     

    Labor Commissioner Tracking of “Piece Rate” Recovery (SB 391)

     

    In 2015, California enacted two versions of Labor Code section 226.2 (one effective from 2016 to 2021, and one effective from 2021 onward) enumerating rules relating to “piece rate” payments, and enumerating an affirmative defense to employers who had previously paid under an alternative method and essentially wished to take advantage of a temporary safe harbor through the Labor Commissioner’s office provided certain steps were taken.  This bill would amend section 226.2 to require the Labor Commissioner to post information on the commissioner’s website regarding the success of this program.  For instance, the Labor Commissioner would be required to post information regarding payments made to the commissioner, the total number of employees located for whom the commissioner collected payments and the amounts remitted to those employees, and the balance remaining from the amounts paid to the commissioner after remitting payments to these employees.

     

    Status: Referred to the Senate Labor and Industrial Relations Committee, but no hearing yet scheduled.

     

    Workers’ Compensation Exceptions for Victims of Terrorism or Workplace Violence (AB 44)

     

    This bill would exempt medical treatment for employees or first responders who sustain physical or psychological injury as a result of an act of terrorism or workplace violence from the generally applicable utilization review and independent medical review processes for Workers Compensation claims.  Instead, it would provide for an expedited proceeding before the Workers’ Compensation Appeals Board to resolve disputes regarding treatment.  The bill would apply retroactively to the employees and first responders injured in the San Bernardino terrorist attack of December 2, 2015, and any other employees or first responders injured by an act of terrorism or violence in the workplace that occurs prior to January 1, 2018.

     

    It would also amend Labor Code section 4656 to identify physical or psychological injury arising from an act of terrorism or violence in the workplace to the list of injuries for which aggregate disability payments may be made for not more than 240 compensable weeks within a 5-year period from the date of injury (as opposed to the generally applicable rule of 104 weeks within a 2-year period from the date of injury).

     

    Status:  Referred to the Assembly Insurance Committee, but no hearing yet scheduled.

     

    Workers’ Compensation Coverage Applies Regardless of Immigration Status in Residential Dwelling Context (AB 206)

     

    California’s Workers’ Compensation provisions (specifically Labor Code section 3351) already define “employee” broadly, including “aliens and minors.”  (Labor Code section 3351(a).)  Within this broad definition, Labor Code section 3351(d) presently provides that this definition of “employee” includes persons employed by owners or occupants of residential dwellings, including for the care and supervision of children.  This bill would modify subsection (d) to specify that this particular provision related to residential dwellings “applies without regard to immigration status.”

     

    This bill would also expand the scope of Workers’ Compensation protections by eliminating the current exclusion from coverage contained in Labor Code section 3352(h) for employees who were employed or contracted to be employed for less than 52 hours.  If so amended, this particular exclusion, which in turn modifies the residential dwelling coverage provision in section 3351 (discussed above), would still apply to any individual employed or contracted to be employed for wages of not more than one hundred dollars.

     

    Status:  Referred to the Assembly Insurance Committee, but no hearing yet scheduled.

     

    Workers’ Compensation Liability for Unauthorized Medical Treatments (AB 221)

     

    While California’s Workers’ Compensation system generally requires employers to provide all medical services reasonably required to treat work-related injuries, this bill would impose some limits.  Specifically, it would amend Labor Code section 4600 to provide that for claims of occupational disease or cumulative injury filed on or after January 1, 2018, neither the employee nor the employer shall be liable for payment of medical treatment unless one of the following conditions has occurred: (1) the employer authorized the treatment; (2) the employer has “accepted” the injury for which the treatment is sought; (3) the appeals board finds the injury for which treatment was provided was compensable; or (d) an agreed medical examiner or a qualified medical examiner has determined the claimed disease or injury was caused, in whole or in part, by the employment.

     

    Similarly, it would amend Labor Code section 4903 to provide that an employer shall not be liable for any medical liens related to treatment unless one of those conditions were met, or the parties agree to a settlement by compromise and release and the amount of compromise and release, exclusive of the costs of treatment, is $25,000 or more.

     

    Status:  Referred to the Assembly Insurance Committee, but no hearing yet scheduled.

     

    Expanded Workers’ Compensation Exception for Board of Director Members (SB 189)

     

    While Workers’ Compensation’s definition of “employee” includes most officers and directors of private corporations, it presently excludes officers and directors of quasi-public or private corporations (as defined) who own at least 15% of the issued stock and signs a sworn written waiver of their status and intent to waive workers’ compensation protections.  This bill would amend Labor Code section 3352 and expand this exception to such officers or directors who own at least 10% (rather than the current 15%) of outstanding stock and executes a written waiver.

     

    Status: Referred to the Senate Labor and Industrial Relations Committee, but no hearing yet scheduled.

     

    Mandatory Annual Disbursement of Supplemental Right-to-Work Disbursements (AB 553)

     

    Within California’s Workers’ Compensation system, there is a $120,000,000 fund designed to provide supplemental return-to-work payments intended to compensate those injured workers whose permanent disability benefits are disproportionately low in comparison to their earnings loss.  This bill would amend Labor Code section 139.48 to require the Administrative Director to distribute the $120,000,000 annually to eligible workers (as specified) and would require, commencing with the end of the 2017 calendar year, that any remaining program funds available after these supplemental payments are made be distributed pro rata to those eligible workers, subject to a $25,000 limit per calendar year.  The amendments would further prohibit attorneys’ fees from being allowed out of any of the payments paid to workers from this program.

     

    Status:  Referred to the Assembly Insurance Committee, but no hearing yet scheduled.

     

    Workforce Development Task Force (AB 1111)

     

    Entitled the Removing Barriers to Employment Act, this bill would require the Labor and Workforce Development Agency and the Labor Commissioner to create a grant program designed to identify and assist individuals with barriers to employment.

     

    Status: Referred to the Assembly Labor and Employment and the Jobs, Economic Development and Economy Committees, but no hearings yet scheduled.

     

    Attorneys’ Fees for CBA-Related Motions to Compel Arbitration (AB 1017)

     

    Labor Code section 1128 presently provides that in the private employment context, the court shall award attorney’s fees to a prevailing party on a motion to compel arbitration absent substantial and credible issues presented about whether the dispute was subject to arbitration.  This bill would extend this remedy to both public and private employment.

     

    Status:  Referred to the Senate Judiciary Committee, but no hearing yet scheduled.

     

    Health Facility Whistleblower Protections (AB 1102)

     

    This industry-specific bill would amend Health and Safety Code section 1278.5 to prohibit “health facilities” from discriminating or retaliating against employees who refuse an assignment or change in assignment that would violate statutorily-enumerated staffing requirements, including nurse-to-patient ratios.

     

    Status:  Scheduled to be heard in the Assembly’s Health Committee on March 28, 2017.

     

    “SPOT BILLS” TO WATCH

     

    To meet the February 17th bill introduction deadline, legislators introduced a number of currently non-substantive “place holder” bills that will likely be materially amended shortly and in advance of key committee votes (so-called “spot bills”).   “Spot bills” potentially worth tracking include: proposed amendments to the Equal Pay Act (AB 1388), PAGA (AB 945 and AB 1045), the Fair Employment and Housing Act (AB 1556 and AB 1702), wage-related penalties (AB 1209), overtime (AB 1565), meal periods (SB 753), DLSE enforcement (AB 1704) immigration (AB 450 and 1356), farm labor contractors (AB 1503) alternative workweek schedules (AB 1241 and SB 662) and employee privacy (SB 357 and SB 744), OSHA retaliation (AB 1700), payment of wages (AB 1701 and AB 1703).

     

    LAWS TAKING EFFECT IN MARCH

     

    California’s Gender Neutral Bathroom Law Takes Effect on March 1, 2017 (AB 173)

     

    Effective March 1, 2017, this law signed by Governor Jerry Brown on September 29, 2016 will require all businesses, places of public accommodation and government agencies with single-occupancy restrooms to use signage indicating the restroom is gender-neutral. The new legislation defines "single-user toilet facility" as a "facility with no more than one water closet and one urinal with a locking mechanism controlled by the user."  California is the first state to require gender-neutral signage, although Philadelphia, Austin, Portland, Sa Francisco, West Hollywood and Washington, D.C. have each passed similar legislation.

     

    Employers who are subject to this legislation should ensure immediate compliance by exchanging all male/female signage with gender-neutral signage.  Compliance will be checked during any inspection conducted by public inspectors, building officials or health inspectors tasked with code enforcement.

     

    This legislation continues the trend started in 2011, wherein California enacted legislation making it unlawful to discriminate against transgender individuals, including in restrooms.  While this legislation does nothing more than require establishments with "single-user toilet facilities" to use gender neutral signage, it is consistent with the proposed regulations from the Fair Employment and Housing Council that would increase protections for transgender individuals in both the application process and in the use of public restrooms.

    The full text of the legislation can be found at: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB1732

     

    San Jose Issues Preliminary FAQs and Draft Forms Regarding its Opportunity to Work Ordinance Taking Effect on March 13, 2017

     

    San Jose’s “Opportunity to Work Ordinance” passed during the November 2016 election, and will requires San Jose employers with 36 or more employees to (1) offer hours of work to existing qualified part-time employees before hiring new staff, (2) keep records of their compliance with the ordinance, and (3) refrain from retaliation against employees who exercise their rights under the ordinance.  Employers must begin complying with the Ordinance on March 13, 2017.  On January 27, 2017 the city’s Office of Equality Assurance posted preliminary Frequently Asked Questions (FAQs) which provide more detail on the requirements of the Ordinance, and is currently seeking public comment on the FAQs.  A copy of the Opportunity to Work Ordinance FAQs as well as a memorandum of compliance tips for employers may be found at:

    http://www.sanjoseca.gov/DocumentCenter/View/65736

     

    The Ordinance was enacted to promote full-time jobs and prevent San Jose employers from choosing to employ workers on a part-time basis to avoid providing health insurance and other benefits.  To this end, the ordinance requires employers to offer additional hours of work to existing qualified employees with the skills and experience to perform the work before hiring additional employees, temp workers or subcontractors.  Whether an employee is “qualified” to be offered the additional hours is determined by the employer’s “good faith and reasonable judgment” and hours must be distributed using a “transparent and nondiscriminatory process.”  The Ordinance, however, does not require employers to offer employees work hours if the acceptance of such offer would require payment of overtime.

     

    The FAQs clarify that employers with 36 or more employees at any location (not just those with 36 or more working within the City of San Jose), must comply with the Ordinance.  Employers are to count both full and part-time employees, but government employees are exempt from these requirements.

     

    Although the Ordinance does not contain specific guidance on the method to distribute or communicate offers of additional hours to employees, its requirement that employers document and retain records of the offers made to existing employees suggests such offers should be made in writing.  Employers are also required to retain all employee work schedules, payroll records and other records to demonstrate compliance.  The FAQs indicate such records must be retained for “no less than four years,” which is longer than employers are required to retain employment records under other state laws.

     

    San Jose’s Office of Equality Assurance has published a Notice of Employee Rights that all San Jose employers will be required to post, which is available at:  http://www.sanjoseca.gov/DocumentCenter/View/65743

     

    It has also published the template “Hardship Exemption” form that employers may submit:  https://www.sanjoseca.gov/DocumentCenter/View/65902

     

    A copy of the Opportunity to Work Ordinance may be found at: http://opportunitytowork.org/files/OTW_language.pdf

     

    It is anticipated the City of San Jose will soon publish templates for offers of additional work to part-time employees, and pamphlets.

    CALSHRM LEGISLATIVE REPORT –  FEBRUARY 2017

    By: Michael S. Kalt, CalSHRM Government Affairs Director

    Wilson Turner Kosmo LLP

    mkalt@wilsonturnerkosmo.com

    Telephone:  619-236-9600

    Twitter:  @michaelkalt_law

    LEGISLATIVE SUMMARY

     

    The 2017 California legislative session is officially underway, with the Democrats maintaining super-majority status in both the Assembly and the Senate, meaning they can potentially override any veto by Governor Jerry Brown.  This re-acquisition of super-majority status is significant, especially since one of the more significant employment bills vetoed last year (SB 654 – parental leave), has already been re-introduced (SB 63).  The deadline to introduce bills in this new legislative cycle expired on February 17, 2017, and not unexpectedly, a number of significant employment bills have been introduced, including bills that would:

    • Require employers to offer hours to existing non-exempt employees before hiring new employees (AB 5);

    • Prohibit employers from inquiring about salary history during the hiring process (AB 168);

    • Preclude employers from inquiring about criminal convictions until after a conditional offer of employment (AB 1008);

    • Require employers with more than 20 employees to provide up to 12 workweeks of parental leave (SB 63);

    • Expand the California Family Rights Act to allow leave to care for grandparents, grandchildren, siblings and parents-in-law (SB 62);

    • Prohibit employers from discriminating based on an employee’s reproductive health decisions (AB 569);

    • Enable private employers to grant hiring preferences to veterans (AB 353 and AB 1477);

    • Amend the Private Attorneys’ General Act (PAGA) to limit potential civil claims and recoverable damages (AB 281, AB 1429 and AB 1430); and

    • Enact so-called “right-to-work” legislation prohibiting compelled contribution to labor organizations (AB 1174).

    Numerous so-called “spot bills” were also introduced and will likely be materially amended shortly, including regarding the Equal Pay Act (AB 1388), PAGA reforms (AB 945 and AB 1045), the Fair Employment and Housing Act (AB 1556 and AB 518), overtime (AB 1565), meal periods (SB 753), immigration (AB 450 and 1356) and employee privacy (SB 357 and SB 744).

    Looking ahead, all bills have until June 2, 2017 to pass the original house of origin, so many amendments are possible and particularly for the “spot bills.”  In the interim, below is a summary of the pending employment bills of general application, followed by an update regarding the City of San Jose’s Opportunity to Work Ordinance, which takes effect March 13, 2017, and California’s gender-neutral bathroom law, which takes effect March 1, 2017.

    PENDING STATEWIDE BILLS

    Extending San Jose’s Opportunity to Work Ordinance State-Wide (AB 5)

    In the November election, San Jose’s voters passed the “Opportunity to Work Ordinance” (Measure E) which essentially requires San Jose employers with more than 35 employees to:  (1) offer hours of work to existing qualified part-time employees before hiring new staff, (2) keep records of their compliance with the Ordinance, and (3) refrain from retaliation against employees who exercise their rights under the Ordinance.  As discussed at the end of this Report, The San Jose Ordinance takes effect March 13, 2017 and the San Jose Board of Equality Assurance has recently posted draft FAQ’s and Notices.

    https://www.sanjoseca.gov/index.aspx?NID=5360

    This bill would enact on a state-wide basis a version of the San Jose Ordinance that is fairly similar but also with some distinct differences.  If enacted, employers with more than 10 employees in the state would be required to offer additional hours of work to existing qualified non-exempt employees with the skills and experience to perform the work before hiring additional employees or subcontractors. In this respect, this version would apply more broadly since the San Jose version is limited to employers with 35 or more employees.  Whether an employee is “qualified” to be offered the additional hours is determined by the employer’s “good faith and reasonable judgment” and hours must be distributed using a “transparent and nondiscriminatory process.”  Employers would not be required to offer employees work hours if the acceptance of such offer would require payment of overtime under any law or collective bargaining agreement.  However, employers would also not be prohibited from offering such additional hours even if it resulted in overtime compensation, if the employer elected to do so.

     

    Notably, while San Jose’s Ordinance permits an employer to apply for a hardship exemption if these requirements are impossible, futile or impracticable, AB 5 does not appear to contain such an exemption.

     

    Employers would also be required to retain all of the following: (1) for any new hire of an employee or subcontractor, documentation that the employer offered additional hours of work to existing employees prior to hiring the new employee or subcontractor; (2) work schedules of all employees; (3) if applicable, the written statement of an employee subject to welfare to work programs and (4) any other record or documents that the employer must maintain to demonstrate compliance with this section.

     

    This law would also prohibit discrimination or retaliation against employees who attempt to enforce its provisions.  However, the retaliation provision is currently worded extremely broadly to include adverse employment actions (e.g., termination, discipline, suspension) as well as informing another employer that the person has engaged in protected activities under this section, or reporting or threatening to report the actual or suspected citizenship or immigration status of an employee or family member because the employee exercised a right under this section.

     

    As with other laws proposed by this bill’s author, it would allow these provisions to be waived in a collective bargaining agreement provided that such waiver is explicitly set forth in the agreement in clear and unambiguous terms.

     

    Continuing another recent trend, employers would also be required to post a notice that the Division of Labor Standards Enforcement (DLSE) will develop concerning these provisions.  This poster would need to be posted “in a conspicuous place where it may be read by employees during work hours and in all places where notices to employees are posted physically and electronically.”

     

    The DLSE will be tasked with enforcing this section, and developing rules and regulations to carry out its provisions.  The DLSE “may” also issue guidelines to encourage employers to create training opportunities that permit employees to perform work for which the employer can be expected to have a need for additional hours of work.

     

    Employees would be permitted to file a complaint for violations with the DLSE to recover a to-be-determined civil penalty, or a civil complaint for damages and reasonable attorney’s fees.

     

    Job-Protected “Parental Leave” Bill Re-introduced (SB 63)

     

    Entitled the New Parent Leave Act, this bill would add new Government Code section 12945.6 to require, beginning January 1, 2018, employers to provide up to 12 workweeks of job-protected parental leave for an employee (male or female) to bond with a new child within one year of the child’s birth, adoption or foster care placement.

     

    Unlike the California Family Rights Act (CFRA, Government Code section 12945.2) and the Family Medical Leave Act (FMLA), which apply only to employers with more than 50 employees, this bill would define “employer” as either (a) an entity employing 20 or more persons within 75 miles of the worksite where an employee (presumably seeking leave) is employed “to perform services for a wage or salary;” or (b) the state of California or any of its political or civil subdivisions, except for specified school districts.  However, as with CFRA and the FMLA, an employee would need to have worked more than 12 months for the employer, and to have worked at least 1,250 hours during the previous 12-month period.

     

    The bill also specifies that employees eligible for “parental leave” are also entitled to take leave under Government Code section 12945 (pregnancy disability, child birth and related conditions) if otherwise qualified for such leave.  However, this new law would not apply to an employee subject to both the CFRA and the FMLA.

     

    As with CFRA, an employer shall be deemed to have refused to provide this job-protected leave unless on or before the leave’s commencement the employer guarantees reinstatement in the same or comparable position.  This bill would also authorize the employee to use accrued vacation pay, paid sick time, other accrued paid time off, or other paid or unpaid time off negotiated with the employer during this parental leave.  The basic minimum duration of the leave shall be two weeks, but an employer would be permitted to grant requests for additional occasions of leave lasting less than two weeks.

     

    Employers would also be required to maintain and pay for medical coverage under a group health plan for an eligible employee during the duration of the parental leave, not to exceed six weeks over the course of a 12-month period, commencing on the date the parental leave commences, and at the level and conditions that would have existed if the employee continued working.  Notably perhaps, SB 63 does not contain the language contained in CFRA authorizing the employer to recover these medical premiums if the employee failed to return from leave, if certain conditions are present.

     

    It also provides that if the employer employs two employees who are entitled to leave for the same event otherwise entitling them to “parental leave,” the employer may, but is not required to, grant simultaneous leave to both employees.  However, and again in contrast with the CFRA, SB 63 does not contain language suggesting that where both parents work for the same employer, the employer may limit the overall leave to the maximum amount a single employee could use.

     

    Lastly, it provides this leave shall run concurrently with parental leave taken under Education Code section 44977.5 for certain certificated school employees.

     

    This bill is nearly identical to last year’s version which Governor Jerry Brown vetoed, except that this year’s version proposes 12 weeks of leave compared to six.  It is expected to be heavily opposed once again.

     

    CFRA Expansion to Include Leave to Care for Grandparents, Grandchildren and Siblings (SB 62)

     

    California’s Family Rights Act (CFRA – Government Code section 12945 et seq.) generally authorizes eligible employees to take up to 12 weeks of job-protected leave in a year for (a) the birth or placement of a child; (b) to care for the employee’s parent, spouse, or child who has a serious health condition; or (c) to care for the employee’s serious health condition that prohibits them from performing the essential functions of their job.  This bill would expand these leave rights and, if enacted, create additional differences between CFRA and the federal Family Medical Leave Act (FMLA).

     

    For instance, like the FMLA, CFRA presently defines “child” as an individual under the age of 18 or an adult dependent child.  This bill would eliminate the age and dependency status of a child, meaning employees would be eligible for CFRA leave to care for adult, independent children.  It would also redefine the term “child” to include a biological, adopted or foster son or daughter, a stepchild, a legal ward, a son or daughter of a domestic partner or a person to whom the employee stands in loco parentis.

     

    This bill would also expand CFRA to allow employees to take leave to care for a grandparent, grandchild, sibling, parent-in-law or domestic partner with a serious health condition.  This would make the CFRA much more expansive than the FMLA, which presently does not authorize leave for grandparents, grandchildren or parents-in-law.

     

    Lastly, this bill would delete the so-called “same employer” exception (currently found in subsection (q)) under which where both parents work for the same employer, the employer may limit both parents’ leave to an aggregate of 12 weeks following birth, adoption or foster care of a child.  This would also make the CFRA materially different from the FMLA, which contains a “same employer” exception allowing the employer to limit both parents to 12 weeks leave related to birth/adoption/foster placement of a child or to care for a parent with a serious health condition.

     

    This bill is very similar to a bill introduced in 2012 (AB 2039) which passed the Assembly on a party-line vote but stalled in the Senate.

     

    Prohibition on Salary History Inquiries (AB 168)

     

    This bill would add new Labor Code section 432.3 to preclude employers from inquiring orally or in writing, personally or through an agent, about salary history information of an applicant, including about compensation and benefits.  It would also require private employers, upon reasonable request, to provide to an applicant the pay scale for a position.

     

    A similar bill (AB 1676) was introduced last year, before being modified to instead amend the Equal Pay Act to state that prior salary history by itself would not be a defense to an equal pay-related claim.  Similar prohibitions on salary history inquiries have already passed in Massachusetts, Philadelphia and the District of Columbia and are pending in other states and municipalities.

     

    “Ban the Box” Bill (AB 1008)

     

    In 2013, California enacted a law (AB 218) precluding state agencies and cities from inquiring about or using information related to criminal conviction history except in specified instances.  Citing the emerging national trend, this bill would amend the Fair Employment Housing Act to preclude private employers from inquiring about an applicant’s criminal record or conviction history until after a conditional employment offer is made, and would impose new notice and disclosure requirements if this information is sought.

     

    Specifically, new Government Code section 12952 would preclude employers from including on employment applications any question seeking the disclosure of an applicant’s criminal history, or to otherwise inquire or consider the conviction history of an applicant, until after a conditional employment offer is made.  It would also preclude during any background checks the consideration or dissemination of the following specific items: (a) arrests not followed by conviction; (b) referral to or participation in a pretrial or post-diversion program; (c) convictions that have been sealed, dismissed, or expunged pursuant to law; (d) misdemeanor convictions for which no jail sentence can be imposed, or infractions; and (e) misdemeanor convictions for which three years have passed since the date of conviction or felony convictions for which seven years have passed since conviction.  It would also prohibit employers from interfering with or restraining the exercise of any right provided under this new section.   These limitations would not apply to any position for which a state or local agency is required by law to conduct a criminal history background check, or to any position within a criminal justice agency.

     

    Before denying a position based upon this history, the employer would also need to conduct an individualized assessment of whether the conviction history has a direct and adverse relationship with the specific duties of the position.  Employers would need to consider at least all of the following: (a) the nature and gravity of the offense; (b) the time that has passed since the offense and completion of any sentence; and (c) the nature of the job held or sought.  Employers would also be specifically directed to conduct this individualized assessment consistent with the Equal Employment Opportunity Commission’s 2012 Guidance on the Consideration of Arrests and Conviction Records in Employment Decisions.

     

    If an employer makes a preliminary decision to deny employment, the employer must provide written notice of this intent to the applicant and provide all of the following: (a) the conviction that is the basis for the denial; (b) a copy of the conviction history report, if any; (c) examples of mitigation or rehabilitation evidence the applicant may voluntarily provide; and (c) notice of the applicant’s right to respond and the deadline for doing so.

     

    The applicant will then have at least ten business days to respond before a final employment decision can be made.  This response can consist of a challenge to the conviction or evidence of mitigation/rehabilitation evidence, including (a) that one year has passed since release from a correctional institution without subsequent conviction; (b) compliance with the terms and conditions of probation or parole; or (c) any other evidence of mitigation/rehabilitation, including letters of reference.

     

    Employers would need to consider the applicant’s response before making a final decision, and consistent with the “individualized assessment” standard, not disqualify an applicant that has showed evidence of rehabilitation or mitigation.  However, if an employer does make a final decision to deny an applicant in whole or in part upon prior conviction history, the employer must notify the employee in writing of the following: (a) the final denial or disqualification; (b) any existing procedure to challenge this decision; (c) whether the applicant is eligible for other positions with the employer; (d) the earliest day the applicant may reapply; and (e) the right to file a complaint with the Department of Fair Employment Housing.

     

    Veterans’ Hiring Preference for Private Employers (AB 353 and AB 1477)

     

    These largely similar bills attempt to address the higher-than-normal unemployment rate for returning veterans.  Accordingly, new Government Code section 12958 would authorize employers to extend a preference during hiring decisions to honorably discharged veterans.  Employers would be permitted to require a veteran to submit United States Department of Defense Form 214 to confirm eligibility for this preference.  Section 12958 further specifies that such a preference shall be deemed not to violate any state or local equal employment opportunity law, including the FEHA.

     

    Government Code section 12940(a)(4) presently provides that using veteran status in favor of Vietnam-era veterans shall not constitute sex discrimination.  These bills would broaden this exemption by removing the references to “sex” and to “Vietnam-era veterans,” and provide that FEHA’s discrimination provisions would not affect an employer’s ability to use veteran status as a factor in hiring decisions if the employer maintains a veterans’ preference policy in accordance with new section 12958.

     

    A similar bill (AB 1383) unanimously passed the Assembly before stalling in the Senate in 2016, and similar preferences have been enacted in 32 states.

     

    Prohibition on Reproductive Health Discrimination (AB 569)

     

    This bill would add Labor Code section 2810.7 to prevent employers from taking any adverse employment action based on the use of any drug, device or medical service related to reproductive health by an employee or an employee’s dependent.  It would also prohibit employers from requiring an employee to sign a waiver or other document that purports to deny any employee the right to make his or her own reproductive health care decisions, including the use of a particular drug, device or medical services.  Employers that provide employee handbooks would need to include notice of the employee’s rights and remedies under this new section.

     

    Public Employers Subject to Equal Pay Act Violations (AB 46)

     

    California’s Equal Pay Act (Labor Code section 1197.5 et seq.) has recently been a legislative focus with amendments in 2015 materially altering its definitions and exceptions (SB 358) and in 2016 to expand its protections to preclude impermissible wage differentials for employees of different races or ethnicity for substantially similar work (SB 1063).  This bill would again amend the Equal Pay Act to clarify that “employer” means both public and private employers, but that public employers would be exempted from the statutory and misdemeanor penalties identified in Labor Code section 1199.

     

    PAGA Reforms Proposed Again (AB 281, AB 1429 and AB 1430)

     

    California’s Private Attorneys General Act (Labor Code section 2699, et seq.) (PAGA) authorizes aggrieved employees to initiate civil actions to recover specified civil penalties for enumerated Labor Code violations.  Responding to concerns such PAGA claims are filed too easily, these bills would amend PAGA in several respects.

     

    For instance, AB 281would limit aggrieved employees to recover civil penalties only for violations that actually injured the employee.  Second, it would expand the Labor Code violations that would first afford employers an opportunity to cure before civil suit to include all such violations other than health and safety violations.  Third, it would expand the cure period from 33 to 65 calendar days.

     

    AB 1429 would amend PAGA to limit civil actions solely to violations of Labor Code sections 226 [wage statements], 226.7 [meal/rest period provisions], 510 [overtime] and 512 [meal periods].

     

    AB 1430 would require the Labor and Workforce Development Agency to investigate alleged violations and to issue either a citation or determine if there is a reasonable basis for a civil action.  An aggrieved employee would only be permitted to commence a civil action upon receipt of notice that there is a reasonable basis for a civil action, or the agency fails to timely provide such notification.

     

    Partial Affirmative Defense Proposed for Relying Upon Division of Labor Standards Enforcement’s Guidance (SB 524)

     

    Responding to employer concerns some Labor Code provisions are vague or that interpretations change, this bill proposes new Labor Code section 98.73, which would provide a partial affirmative defense to employers who relied in good faith upon the Division of Labor Standards Enforcement’s (DLSE) guidance.

     

    Under this section, employers who requested, obtained, and complied with a DLSE opinion letter would not be liable for costs or subject to punishment for a violation of an employment statute or regulation if they demonstrate they were acting in good faith when the violation occurred.  To establish this good faith defense, the employer would need to prove that: (1) it previously sought an opinion letter or enforcement policy from the DLSE; (2) it relied upon and conformed to the applicable opinion letter or enforcement policy published by the DLSE; and (3) it provided true and correct information to the DLSE in seeking the opinion letter or enforcement policy.  This partial affirmative defense would apply even if after the alleged violation or omission occurred the opinion letter or enforcement policy relied upon had been modified, rescinded, or deemed invalid, but this defense would not apply to violations occurring after such a nullification.

     

    An employer satisfying these elements would be immune from certain civil and criminal penalties and costs, but would still be required to make restitution for lost wages to the employee.  An employer asserting such a defense would also be required to post an undertaking with the reviewing court or administrative body in an amount equal to the reasonable estimate of alleged unpaid wages resulting from the employer’s reliance upon the DLSE’s advice.

     

    If enacted, this defense would apply to all actions and proceedings that commence on or after January 1, 2018.  A very similar bill (AB 2688) stalled in 2014.

     

    Expanded Harassment Training for Farm Labor Contractors (SB 295)

     

    While California presently provides that farm labor contractor licenses will not be issued unless the applicant certifies certain employees have received sexual harassment training, this law would expand these requirements.  For instance, it would require that training for each agricultural employee be in a language understood by the employee.  It would also require a licensee, as part of their application, to provide the Labor Commissioner with a complete list of sexual harassment training materials and resources utilized to provide sexual harassment training to the agricultural employees in the preceding year.  It would also require the licensee to identify the total number of agricultural employees who received sexual harassment training, and for the Labor Commissioner to publish the total number of agricultural employees trained the previous calendar year.

     

    Human Trafficking Training for Hotel/Motel Employees (SB 270)

     

    Continuing the Legislature’s recent emphasis on targeting human trafficking, this bill would amend Civil Code section 52.6 to require hotels or motels providing lodging services to train employees on the signs of human trafficking and how to contact law enforcement agencies.  It would also require the Department of Justice to develop an approved training program for use by hotels and motels and post it on its website and would authorize the Department to approve a private program, as specified.  By January 1, 2019, this training would need to be incorporated into the initial training process for all new employees, and for all employees who did not receive an initial training.

     

    Whistleblower Protections for Legislative Employees (AB 403)

     

    Known as the Legislative Employee Whistleblower Protection Act, this bill would prohibit interference with the right of legislative employees to make protected disclosures of ethics violations and would prohibit retaliation against employees who have made such protected disclosures.  It would also establish a procedure for legislative employees to report violations of these prohibitions to the Legislature, and would impose civil and criminal liability on an individual violating these protections.  This bill appears very similar to AB 1788 which unanimously passed the Assembly before stalling in the Senate’s Appropriations Committee.

     

    Cure Period for Non-Serious OSHA Violations (AB 442)

     

    This bill would add new Labor Code section 6334 to provide “small businesses” and “microbusinesses” a 30-day cure period for non-serious violations before the Division of Occupational Safety and Health (DOSH) may commence an enforcement action.  This 30-day correction period would commence upon effective service by DOSH upon the employer or where written notice is served during an inspection by DOSH.  This notice of a correctable non-serious violation shall be an informal enforcement action and shall not constitute a first violation or an earlier violation supporting a subsequent finding of a repeat violation or an admission of guilt by the employer.

     

    For purposes of this new section, “small business” and “microbusiness” would have the same definitions as Government Code section 14837, and “nonserious violation” would mean any violation that is not classified as a serious violation under Title 8 of the California Code of Regulations.

     

    Illness and Injury Prevention Program Disclosures (AB 978)

     

    The California Occupational Safety and Health Act of 1973 requires every employer to establish and maintain an effective illness and injury prevention program (IIPP).  This IIPP must be in writing, except in certain circumstances, and must contain certain statutorily-enumerated items such as identifying the person responsible for the program, a training program, and specification of compliance and reporting methods.

     

    Responding to concerns that many employees, particularly non-English speaking employees, are unaware of an employer’s IIPP, this bill would amend Labor Code section 6401.7 and, impose new disclosure requirements regarding these IIPPs.  For instance, new subsection (e)(2) would require employers who receive a written request from a current employee or their authorized representative to provide a paper or electronic copy of the IIPP (including all required attachments) within five business days free of charge.  The employer would be permitted to designate in writing the “authorized representative” to whom such requests should be directed.  A similar bill (AB 2895) stalled in 2016.

     

    “Right to Work” Protections from Union Membership (AB 1174)

     

    Echoing the trend in other states, this bill would amend Labor Code section 922 to prohibit a person from requiring an employee, as a condition of employment, to contribute financial support to a labor organization or any charity sponsored by a labor organization.  This bill would not apply to any employment contract entered into prior to January 1, 2018, and would not apply to certain enumerated federal employees.

     

    Minimum Wage for Health Professionals/Interns (AB 387)

     

    This bill would expand the definition of “employer” in the minimum wage provision (Labor Code section 1182.12) to include a person who directly or indirectly, or through an agent or any other person, employs or exercises control over the wages, hours or working conditions of a person engaged in a period of supervised work experience to satisfy requirements for licensure, registration or certification as an allied health professional.  “Allied health professional,” in turn, would share the same definition as in Section 295p of Part F of Subchapter V of Chapter 6A of Title 42 of the United States Code.

     

    Individual Alternative Workweek Schedules for the “Holiday Season” (AB 1173)

     

    While California authorizes “alternative workweek schedules” whereby non-exempt employees can work up to ten hours daily without receiving overtime, it is often difficult to obtain the two-thirds work-unit approval required under Labor Code section 510.   This bill would create a “holiday season” exception (from November to January) to enable individual non-exempt employees in the “retail industry” to request an “employee-selected flexible work schedule” providing for workdays up to ten hours within the forty-hour workweek, and would allow the employer to implement this schedule without the obligation to pay overtime compensation for those additional hours in a workday.  Employers would be required to pay overtime at the rate of one-and-a-half times the regular rate for daily hours worked in excess of ten hours, and double-time for work performed in excess of twelve hours per workday and in excess of eight hours on a fifth, sixth or seventh day in the workweek.

     

    Resident Apartment Manager Wages (AB 543)

     

    This bill would amend Labor Code section 1182.8 to expand the resident manager exemption from Industrial Welfare Commission Orders, and allow an employer who does not charge the resident manager rent, pursuant to a written agreement, to apply up to two-thirds of the fair market value of the apartment to meet the employer’s minimum wage obligations.

     

    Sleep Time for Domestic Workers (SB 482)

     

    This bill would amend Labor Code section 1454 regarding live-in domestic workers who are required to be on-duty for 24 or more consecutive hours.  It would authorize the domestic worker and the employer to agree, in writing, to exclude from hours worked a bona fide regularly scheduled sleeping period of not more than eight hours for uninterrupted sleep if the employee has eight hours free of duty and is available for continuous, uninterrupted sleep, and the employer otherwise complies with this section.  If the sleeping period is interrupted by an emergency, only time spent working during the emergency would constitute hours worked.  However, absent a written agreement, the hours available for sleep will constitute hours worked.  This bill is nearly identical to SB 1344 which stalled in 2016.

     

    Labor Commissioner Tracking of “Piece Rate” Recovery (SB 391)

     

    In 2015, California enacted two versions of Labor Code section 226.2 (one effective from 2016 to 2021, and one effective from 2021 onward) enumerating rules relating to “piece rate” payments, and enumerating an affirmative defense to employers who had previously paid under an alternative method and essentially wished to take advantage of a temporary safe harbor through the Labor Commissioner’s office provided certain steps were taken.  This bill would amend section 226.2 to require the Labor Commissioner to post information on the commissioner’s website regarding the success of this program.  For instance, the Labor Commissioner would be required to post information regarding payments made to the commissioner, the total number of employees located for whom the commissioner collected payments and the amounts remitted to those employees, and the balance remaining from the amounts paid to the commissioner after remitting payments to these employees.

     

    Workers’ Compensation Exceptions for Victims of Terrorism or Workplace Violence (AB 44)

     

    This bill would exempt medical treatment for employees or first responders who sustain physical or psychological injury as a result of an act of terrorism or workplace violence from the generally applicable utilization review and independent medical review processes for Workers Compensation claims.  Instead, it would provide for an expedited proceeding before the Workers’ Compensation Appeals Board to resolve disputes regarding treatment.  The bill would apply retroactively to the employees and first responders injured in the San Bernardino terrorist attack of December 2, 2015, and any other employees or first responders injured by an act of terrorism or violence in the workplace that occurs prior to January 1, 2018.

     

    It would also amend Labor Code section 4656 to identify physical or psychological injury arising from an act of terrorism or violence in the workplace to the list of injuries for which aggregate disability payments may be made for not more than 240 compensable weeks within a 5-year period from the date of injury (as opposed to the generally applicable rule of 104 weeks within a 2-year period from the date of injury).

     

    Workers’ Compensation Coverage Applies Regardless of Immigration Status in Residential Dwelling Context (AB 206)

     

    California’s Workers’ Compensation provisions (specifically Labor Code section 3351) already define “employee” broadly, including “aliens and minors.”  (Labor Code section 3351(a).)  Within this broad definition, Labor Code section 3351(d) presently provides that this definition of “employee” includes persons employed by owners or occupants of residential dwellings, including for the care and supervision of children.  This bill would modify subsection (d) to specify that this particular provision related to residential dwellings “applies without regard to immigration status.”

     

    This bill would also expand the scope of Workers’ Compensation protections by eliminating the current exclusion from coverage contained in Labor Code section 3352(h) for employees who were employed or contracted to be employed for less than 52 hours.  If so amended, this particular exclusion, which in turn modifies the residential dwelling coverage provision in section 3351 (discussed above), would still apply to any individual employed or contracted to be employed for wages of not more than one hundred dollars.

     

    Workers’ Compensation Liability for Unauthorized Medical Treatments (AB 221)

     

    While California’s Workers’ Compensation system generally requires employers to provide all medical services reasonably required to treat work-related injuries, this bill would impose some limits.  Specifically, it would amend Labor Code section 4600 to provide that for claims of occupational disease or cumulative injury filed on or after January 1, 2018, neither the employee nor the employer shall be liable for payment of medical treatment unless one of the following conditions has occurred: (1) the employer authorized the treatment; (2) the employer has “accepted” the injury for which the treatment is sought; (3) the appeals board finds the injury for which treatment was provided was compensable; or (d) an agreed medical examiner or a qualified medical examiner has determined the claimed disease or injury was caused, in whole or in part, by the employment.

     

    Similarly, it would amend Labor Code section 4903 to provide that an employer shall not be liable for any medical liens related to treatment unless one of those conditions were met, or the parties agree to a settlement by compromise and release and the amount of compromise and release, exclusive of the costs of treatment, is $25,000 or more.

     

    Expanded Workers’ Compensation Exception for Board of Director Members (SB 189)

     

    While Workers’ Compensation’s definition of “employee” includes most officers and directors of private corporations, it presently excludes officers and directors of quasi-public or private corporations (as defined) who own at least 15% of the issued stock and signs a sworn written waiver of their status and intent to waive workers’ compensation protections.  This bill would amend Labor Code section 3352 and expand this exception to such officers or directors who own at least 10% (rather than the current 15%) of outstanding stock and executes a written waiver.

     

    Mandatory Annual Disbursement of Supplemental Right-to-Work Disbursements (AB 553)

     

    Within California’s Workers’ Compensation system, there is a $120,000,000 fund designed to provide supplemental return-to-work payments intended to compensate those injured workers whose permanent disability benefits are disproportionately low in comparison to their earnings loss.  This bill would amend Labor Code section 139.48 to require the Administrative Director to distribute the $120,000,000 annually to eligible workers (as specified) and would require, commencing with the end of the 2017 calendar year, that any remaining program funds available after these supplemental payments are made be distributed pro rata to those eligible workers, subject to a $25,000 limit per calendar year.  The amendments would further prohibit attorneys’ fees from being allowed out of any of the payments paid to workers from this program.

     

    Employment Revitalization Initiative Proposed (AB 316)

     

    This bill would require the Labor and Workforce Development Agency to create a new grant program (the Employment Revitalization Initiative) to award grants and to assist eligible targeted populations for workforce development purposes.

     

    Workforce Development Task Force (AB 1111)

     

    Entitled the Removing Barriers to Employment Act, this bill would require the Labor and Workforce Development Agency and the Labor Commissioner to create a grant program designed to identify and assist individuals with barriers to employment.

     

    Attorneys’ Fees for CBA-Related Motions to Compel Arbitration (AB 1017)

     

    Labor Code section 1128 presently provides that in the private employment context, the court shall award attorney’s fees to a prevailing party on a motion to compel arbitration absent substantial and credible issues presented about whether the dispute was subject to arbitration.  This bill would extend this remedy to both public and private employment.

     

    Health Facility Whistleblower Protections (AB 1102)

     

    This industry-specific bill would amend Health and Safety Code section 1278.5 to prohibit “health facilities” from discriminating or retaliating against employees who refuse an assignment or change in assignment that would violate statutorily-enumerated staffing requirements, including nurse-to-patient ratios.

     

    “SPOT BILLS” TO WATCH

     

    To meet the February 17th bill introduction deadline, legislators introduced a number of currently non-substantive “place holder” bills that will likely be materially amended shortly and in advance of key committee votes (so-called “spot bills”).   “Spot bills” potentially worth tracking include: proposed amendments to the Equal Pay Act (AB 1388), PAGA (AB 945 and AB 1045), the Fair Employment and Housing Act (AB 1556 and AB 518), wage-related penalties (AB 1209), overtime (AB 1565), meal periods (SB 753), immigration (AB 450 and 1356), farm labor contractors (AB 1503) alternative workweek schedules (AB 1241 and SB 662) and employee privacy (SB 357 and SB 744).

     

    LAWS TAKING EFFECT IN MARCH

     

    California’s Gender Neutral Bathroom Law Takes Effect on March 1, 2017 (AB 173)

     

    Effective March 1, 2017, this law signed by Governor Jerry Brown on September 29, 2016 will require all businesses, places of public accommodation and government agencies with single-occupancy restrooms to use signage indicating the restroom is gender-neutral. The new legislation defines "single-user toilet facility" as a "facility with no more than one water closet and one urinal with a locking mechanism controlled by the user."  California is the first state to require gender-neutral signage, although Philadelphia, Austin, Portland, Sa Francisco, West Hollywood and Washington, D.C. have each passed similar legislation.

     

    Employers who are subject to this legislation should ensure immediate compliance by exchanging all male/female signage with gender-neutral signage.  Compliance will be checked during any inspection conducted by public inspectors, building officials or health inspectors tasked with code enforcement.

     

    This legislation continues the trend started in 2011, wherein California enacted legislation making it unlawful to discriminate against transgender individuals, including in restrooms.  While this legislation does nothing more than require establishments with "single-user toilet facilities" to use gender neutral signage, it is consistent with the proposed regulations from the Fair Employment and Housing Council that would increase protections for transgender individuals in both the application process and in the use of public restrooms.

    The full text of the legislation can be found at: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB1732

     

    San Jose Issues Preliminary FAQs and Draft Forms Regarding its Opportunity to Work Ordinance Taking Effect on March 13, 2017

     

    San Jose’s “Opportunity to Work Ordinance” passed during the November 2016 election, and will requires San Jose employers with 36 or more employees to (1) offer hours of work to existing qualified part-time employees before hiring new staff, (2) keep records of their compliance with the ordinance, and (3) refrain from retaliation against employees who exercise their rights under the ordinance.  Employers must begin complying with the Ordinance on March 13, 2017.  On January 27, 2017 the city’s Office of Equality Assurance posted preliminary Frequently Asked Questions (FAQs) which provide more detail on the requirements of the Ordinance, and is currently seeking public comment on the FAQs.  A copy of the preliminary Opportunity to Work Ordinance FAQs may be found at:

    http://www.sanjoseca.gov/DocumentCenter/View/65736

     

    The Ordinance was enacted to promote full-time jobs and prevent San Jose employers from choosing to employ workers on a part-time basis to avoid providing health insurance and other benefits.  To this end, the ordinance requires employers to offer additional hours of work to existing qualified employees with the skills and experience to perform the work before hiring additional employees, temp workers or subcontractors.  Whether an employee is “qualified” to be offered the additional hours is determined by the employer’s “good faith and reasonable judgment” and hours must be distributed using a “transparent and nondiscriminatory process.”  The Ordinance, however, does not require employers to offer employees work hours if the acceptance of such offer would require payment of overtime.

     

    The FAQs clarify that employers with 36 or more employees at any location (not just those with 36 or more working within the City of San Jose), must comply with the Ordinance.  Employers are to count both full and part-time employees, but government employees are exempt from these requirements.

     

    Although the Ordinance does not contain specific guidance on the method to distribute or communicate offers of additional hours to employees, its requirement that employers document and retain records of the offers made to existing employees suggests such offers should be made in writing.  Employers are also required to retain all employee work schedules, payroll records and other records to demonstrate compliance.  The FAQs indicate such records must be retained for “no less than four years,” which is longer than employers are required to retain employment records under other state laws.

     

    San Jose’s Office of Equality Assurance has published a Notice of Employee Rights that all San Jose employers will be required to post, which is available at:  http://www.sanjoseca.gov/DocumentCenter/View/65743

     

    It has also published the template “Hardship Exemption” form that employers may submit:  https://www.sanjoseca.gov/DocumentCenter/View/65902

     

    A copy of the Opportunity to Work Ordinance may be found at: http://opportunitytowork.org/files/OTW_language.pdf

     

    It is anticipated the City of San Jose will soon publish templates for offers of additional work to part-time employees, and pamphlets.

    CALSHRM LEGISLATIVE REPORT – JANUARY 2017

    By: Michael S. Kalt, CalSHRM Government Affairs Director

    Wilson Turner Kosmo LLP

    mkalt@wilsonturnerkosmo.com

    Telephone:  619-236-9600

    Twitter:  @michaelkalt_law

    LEGISLATIVE SUMMARY

    The 2017 California legislative session is officially underway, with the Democrats maintaining super-majority status in both the Assembly and the Senate, meaning they can potentially override any veto by Governor Jerry Brown.  This re-acquisition of super-majority status is significant, especially since one of the bills vetoed last year (SB 654 – parental leave), has already been re-introduced.  And while the deadline to introduce bills in this new legislative cycle is not until February 17, 2017, a number of significant employment bills have already been introduced, including bills that would:

    • Require employers to offer hours to existing part-time non-exempt employees before hiring new employees (AB 5);
    • Prohibit employers from inquiring about salary history during the hiring process (AB 168);
    • Require employers with more than 20 employees to provide up to 12 workweeks of parental leave (SB 63);
    • Expand the California Family Rights Act to allow leave to care for grandparents, grandchildren, siblings and parents-in-law (SB 62); and
    • Create exceptions from Workers’ Compensation for victims of terrorism or workplace violence (AB 46).

    Looking ahead, there are still several weeks for bills to be introduced, and all bills have until June 2, 2017 to pass the original house of origin, so many amendments are possible.  In the interim, below is a summary of the pending employment bills of general application, followed by an update regarding the City of San Jose’s Opportunity to Work Ordinance, which takes effect March 13, 2017.

     

    PENDING STATEWIDE BILLS

     

    California Considering Extending San Jose’s Opportunity to Work Ordinance State-Wide (AB 5)

     

    In the November election, San Jose’s voters passed its “Opportunity to Work Ordinance” (Measure E) which essentially requires San Jose employers with more than 35 employees to:  (1) offer hours of work to existing qualified part-time employees before hiring new staff, (2) keep records of their compliance with the Ordinance, and (3) refrain from retaliation against employees who exercise their rights under the Ordinance.  As discussed at the end of this Report, The San Jose Ordinance takes effect March 13, 2017 and the San Jose Board of Equality Assurance has recently posted draft FAQ’s and Notices.  https://www.sanjoseca.gov/index.aspx?NID=5360

     

    This bill would enact on a state-wide basis a version of the San Jose Ordinance that is fairly similar but also with some distinct differences.  If enacted, employers with more than 10 employees in the state would be required to offer additional hours of work to existing qualified non-exempt employees with the skills and experience to perform the work before hiring additional employees or subcontractors. In this respect, this version would apply much broader since the San Jose version was limited to employers with 35 employees.  Whether an employee is “qualified” to be offered the additional hours is determined by the employer’s “good faith and reasonable judgment” and hours must be distributed using a “transparent and nondiscriminatory process.”  Employers would not be required to offer employees work hours if the acceptance of such offer would require payment of overtime under any law or collective bargaining agreement.  However, employers would also not be prohibited from offering such additional hours even if it resulted in overtime compensation, if the employer elected to do so.

     

    Notably, while the San Jose version permits an employer to apply for a hardship exemption if these requirements are impossible, futile or impracticable, AB 5 does not appear to contain such an exemption.

     

    Employers would also be required to retain all of the following: (1) for any new hire of an employee or subcontractor, documentation that the employer offered additional hours of work to existing employees prior to hiring the new employee or subcontractor; (2) work schedules of all employees; (3) if applicable, the written statement of an employee subject to welfare to work programs and (4) any other record or documents that the division requires the employer to maintain to demonstrate compliance with this section.

     

    Not surprisingly, this law would also prohibit discrimination or retaliation against employees who attempt to enforce its provisions.  However, the retaliation provision is currently worded extremely broadly to include adverse employment actions (e.g., termination, discipline, suspension) as well as informing another employer that the person has engaged in protected activities under this section, or reporting or threatening to report the actual or suspected citizenship or immigration status of an employee or family member because the employee exercised a right under this section.

     

    As with other laws proposed by this bill’s author, it would allow these provisions to be waived in a collective bargaining agreement provided that such waiver is explicitly set forth in the agreement in clear and unambiguous terms.

     

    Continuing another recent trend, employers would also be required to post a notice that the Division of Labor Standards Enforcement (DLSE) will develop concerning these provisions.  This poster would need to be posted “in a conspicuous place where it may be read by employees during work hours and in all places where notices to employees are posted physically and electronically.”

     

    The DLSE will be tasked with enforcing this section, and developing rules and regulations to carry out its provisions.  The DLSE “may” also issue guidelines to encourage employers to create training opportunities that permit employees to perform work for which the employer can be expected to have a need for additional hours of work.

     

    Employees would be permitted to file a complaint for violations with the DLSE to recover a to-be-determined civil penalty, or a civil complaint for damages and reasonable attorney’s fees.

     

    Prohibition on Salary History Inquiries (AB 168)

     

    This bill would add new Labor Code section 432.3 to preclude employers from inquiring orally or in writing, personally or through an agent, about salary history information of an applicant, including about compensation and benefits.  It would also require private employers, upon reasonable request, to provide to an applicant the pay scale for a position.

     

    A similar bill (AB 1676) was introduced last year, before being modified to instead amend the Equal Pay Act to state that prior salary history by itself would not be a defense to an equal pay-related claim.  Similar prohibitions on salary history inquiries have already passed in Massachusetts, Philadelphia and the District of Columbia and are pending in other states and municipalities.

     

    Job-Protected “Parental Leave” Bill Re-introduced (SB 63)

     

    Entitled the New Parent Leave Act, this bill would add new Government Code section 12945.6 to require, beginning January 1, 2018, employers to provide up to twelve workweeks of job-protected parental leave for an employee (male or female) to bond with a new child within one year of the child’s birth, adoption or foster care placement.

     

    Unlike the California Family Rights Act (CFRA, Government Code section 12945.2) and the Family Medical Leave Act (FMLA), which apply only to employers with more than 50 employees, this bill would define “employer” as either (a) an entity employing 20 or more persons within 75 miles of the worksite where an employee (presumably seeking leave) is employed “to perform services for a wage or salary;” or (b) the state of California or any of its political or civil subdivisions, except for specified school districts.  However, as with CFRA and the FMLA, an employee would need to have worked more than 12 months for the employer, and to have worked at least 1,250 hours during the previous 12-month period.

     

    The bill also specifies that employees eligible for “parental leave” are also entitled to take leave under Government Code section 12945 (pregnancy disability, child birth and related conditions) if otherwise qualified for such leave.  However, this new law would not apply to an employee subject to both the CFRA and the FMLA.

     

    As with CFRA, an employer shall be deemed to have refused to provide this job-protected leave unless on or before the leave’s commencement the employer guarantees reinstatement in the same or comparable position.  This bill would also authorize the employee to use accrued vacation pay, paid sick time, other accrued paid time off, or other paid or unpaid time off negotiated with the employer during this parental leave.  The basic minimum duration of the leave shall be two weeks, but an employer would be permitted to grant requests for additional occasions of leave lasting less than two weeks.

     

    Employers would also be required to maintain and pay for medical coverage under a group health plan for an eligible employee who takes parental leave during the duration of the leave, not to exceed six weeks over the course of a 12-month period, commencing on the date the parental leave commences, and at the level and conditions that would have existed if the employee continued working.  Notably perhaps, SB 63 does not contain the language contained in CFRA authorizing the employer to recover these medical premiums if the employee failed to return from leave, if certain conditions are present.

     

    It also provides that if the employer employs two employees who are entitled to leave for the same event otherwise entitling them to “parental leave,” the employer may, but is not required to, grant simultaneous leave to both employees.  However, and again in contrast with the CFRA, SB 63 does not contain language suggesting that where both parents work for the same employer, the employer may limit the overall leave to the maximum amount a single employee could use.

     

    Lastly, it provides this leave shall run concurrently with parental leave taken under Education Code section 44977.5 for certain certificated school employees.

     

    Status:  This bill is nearly identical to last year’s version (SB 1166) which Governor Jerry Brown vetoed, except that this year’s version proposes 12 weeks of leave compared to six.  It is expected to be heavily opposed once again.

     

    CFRA Expansion to Include Leave to Care for Grandparents, Grandchildren and Siblings (SB 62)

     

    California’s Family Rights Act (CFRA – Government Code section 12945 et seq.) generally authorizes eligible employees to take up to 12 weeks of job-protected leave in a year for (a) the birth or placement of a child; (b) to care for the employee’s parent, spouse, or child who has a serious health condition; or (c) to care for the employee’s serious health condition that prohibits them from performing the essential functions of their job.  This bill would expand these leave rights and, if enacted, create additional differences between CFRA and the federal Family Medical Leave Act (FMLA).

     

    For instance, like the FMLA, CFRA presently defines “child” as an individual under the age of 18 or an adult dependent child.  This bill would eliminate the age and dependency status of a child, meaning employees would be eligible for CFRA leave to care for adult, independent children.  It would also redefine the term “child” to include a biological, adopted or foster son or daughter, a stepchild, a legal ward, a son or daughter of a domestic partner or a person to whom the employee stands in loco parentis.

     

    This bill would also expand CFRA to allow employees to take leave to care for a grandparent, grandchild, sibling, parent-in-law or domestic partner with a serious health condition.  This would make the CFRA much more expansive than the FMLA, which presently does not authorize leave for grandparents, grandchildren or parents-in-law (domestic partners?).

     

    Lastly, this bill would delete the so-called “same employer” exception (currently found in subsection (q)) under which where both parents work for the same employer, the employer may limit both parents’ leave to an aggregate of 12 weeks following birth, adoption or foster care of a child.  This would also make the CFRA materially different from the FMLA, which contains a “same employer” exception allowing the employer to limit both parents to 12 weeks leave related to birth/adoption/foster placement of a child or to care for a parent with a serious health condition.

     

    Status:  This bill is very similar to a bill introduced in 2012 (AB 2039) which passed the Assembly on a party-line vote but stalled in the Senate.

     

    Public Employers Not Subject to Misdemeanor Liability for Equal Pay Act Violations (AB 46)

     

    California’s Equal Pay Act (Labor Code section 1197.5 et seq.) has recently been a legislative focus with amendments in 2015 materially altering its definitions and exceptions (SB 358) and in 2016 to expand its protections to preclude impermissible wage differentials for employees of different races or ethnicity for substantially similar work (SB 1063).  This bill would again amend the Equal Pay Act to clarify that “employer” means both public and private employers, but that public employers would be exempted from Labor Code section 1199 which identifies the statutory and misdemeanor penalties for Equal Pay Act violations.

     

    Workers’ Compensation Exceptions for Victims of Terrorism or Workplace Violence (AB 44)

     

    This bill would exempt medical treatment for employees or first responders who sustain physical or psychological injury as a result of an act of terrorism or violence in the workplace from the generally applicable utilization review and independent medical review processes for Workers Compensation claims.  Instead, it would provide for an expedited proceeding before the Workers’ Compensation Appeals Board to resolve disputes regarding treatment.  The bill would apply retroactively to the employees and first responders injured in the San Bernardino terrorist attack of December 2, 2015, and any other employees or first responders injured by an act of terrorism or violence in the workplace that occurs prior to January 1, 2018.

     

    It would also amend Labor Code section 4656 to identify physical or psychological injury arising from an act of terrorism or violence in the workplace to the list of injuries for which aggregate disability payments may be made for not more than 240 compensable weeks within a 5-year period from the date of injury (as opposed to the generally applicable rule of 104 weeks within a 2-year period from the date of injury).

     

    Workers’ Compensation Coverage Applies Regardless of Immigration Status in Residential Dwelling Context (AB 206)

     

    California’s Workers’ Compensation provisions (specifically Labor Code section 3351) already define “employee” broadly, including “aliens and minors.”  (Labor Code section 3351(a).)  Within this broad definition, Labor Code section 3351(d) presently provides that this definition of “employee” includes persons employed by owners or occupants of residential dwellings, including for the care and supervision of children.  This bill would modify subsection (d) to specify that this particular provision related to residential dwellings “applies without regard to immigration status.”

     

    This bill would also expand the scope of Workers’ Compensation protections by eliminating the current exclusion from coverage contained in Labor Code section 3352(h) for employees who were employed or contracted to be employed for less than 52 hours.  If so amended, this particular exclusion, which in turn modifies the residential dwelling coverage provision in section 3351 (discussed above), would still apply to any individual employed or contracted to be employed for wages of not more than one hundred dollars.

     

    Workers’ Compensation Liability for Unauthorized Medical Treatments (AB 221)

     

    While California’s Workers’ Compensation system generally requires employers to provide all medical services reasonably required to treat work-related injuries, this bill would impose some limits.  Specifically, it would amend Labor Code section 4600 to provide that for claims of occupational disease or cumulative injury filed on or after January 1, 2018, neither the employee nor the employer shall be liable for payment of medical treatment unless one of the following conditions has occurred: (1) the employer authorized the treatment; (2) the employer has “accepted” the injury for which the treatment is sought; (3) the appeals board finds the injury for which treatment was provided was compensable; or (d) an agreed medical examiner or a qualified medical examiner has determined the claimed disease or injury was caused, in whole or in part, by the employment.

     

    Similarly, it would amend Labor Code section 4903 to provide that an employer shall not be liable for any medical liens related to treatment unless one of those conditions were met, or the parties agree to a settlement by compromise and release and the amount of compromise and release, exclusive of the costs of treatment, is $25,000 or more.

     

    Expanded Workers’ Compensation Exception for Board of Director Members (SB 189)

     

    While Workers’ Compensation generally defines “employee” broadly, including for most officers and directors of private corporations, it presently excludes officers and directors of quasi-public or private corporations (as defined) who own at least 15% of the issued stock and signs a sworn written waiver of their status and intent to waive workers’ compensation protections.  This bill would amend Labor Code section 3352 and expand this exception to such officers or directors who own at least 10% (rather than the current 15%) of outstanding stock and executes a written waiver.

     

    MUNICIPAL DEVELOPMENTS

     

    San Jose Issues Preliminary FAQs Outlining Employer Obligations Under its Opportunity to Work Ordinance Requiring Employers to Offer Part Time Workers Additional Hours Before Hiring New Staff

     

    The San Jose “Opportunity to Work Ordinance” (the Ordinance), a ballot measure that passed during the November 2016 election, will require San Jose employers with 36 or more employees to (1) offer hours of work to existing qualified part-time employees before hiring new staff, (2) keep records of their compliance with the ordinance, and (3) refrain from retaliation against employees who exercise their rights under the ordinance.  Employers must begin complying with the Ordinance on March 13, 2017.  On January 27, 2017 the city’s Office of Equality Assurance posted preliminary Frequently Asked Questions (FAQs) which provide more detail on the requirements of the Ordinance, and is currently seeking public comment on the FAQs.

     

    The Ordinance was enacted to promote full-time jobs and prevent San Jose employers from choosing to employ workers on a part-time basis in order to avoid providing health insurance and other benefits.  To this end, the ordinance requires employers to offer additional hours of work to existing qualified employees with the skills and experience to perform the work before hiring additional employees, temp workers or subcontractors.  Whether an employee is “qualified” to be offered the additional hours is determined by the employer’s “good faith and reasonable judgment” and hours must be distributed using a “transparent and nondiscriminatory process.”  The Ordinance, however, does not require employers to offer employees work hours if the acceptance of such offer would require payment of overtime. 

     

    The FAQs clarify that employers with 36 or more employees at any location (not just those with 36 or more working within the City of San Jose), must comply with the Ordinance.  Employers are to count both full and part-time employees.  Government employees are, of course, exempt.  The government typically excludes itself from the burdensome regulations it freely imposes on the private sector.

     

    Although the Ordinance does not contain specific guidance on the method to distribute or communicate offers of additional hours to employees, its requirement that employers document and retain records of the offers made to existing employees suggests such offers should be made in writing.  Employers are also required to retain all employee work schedules, payroll records and other records to demonstrate compliance.  The FAQs indicate such records must be retained for “no less than four years,” which is longer than employers are required to retain employment records under other state laws.

     

    San Jose’s Office of Equality Assurance will publish a Notice of Employee Rights that all San Jose employers will be required to post, templates for offers of additional work to part-time employees, and pamphlets.

     

    A copy of the preliminary Opportunity to Work Ordinance FAQs may be found at:  http://www.sanjoseca.gov/DocumentCenter/View/65736

     

    A copy of the Opportunity to Work Ordinance may be found at: http://opportunitytowork.org/files/OTW_language.pdf.

     

    CALSHRM LEGISLATIVE REPORT –  OCTOBER 2016

    By: Michael S. Kalt, CalSHRM Government Affairs Director

    Wilson Turner Kosmo LLP

    mkalt@wilsonturnerkosmo.com

    Telephone:  619-236-9600

    Twitter:  @michaelkalt_law

    LEGISLATIVE SUMMARY

    With the expiration of the September 30th deadline for Governor Jerry Brown to sign or veto bills, California’s 2016 legislative session drew to a close.  Although the overall number of new employment laws appears down slightly compared to recent years, there were still a number of new laws enacted in 2016 for employers to consider, including laws that will:

    • Increase California’s minimum wage to $10.50 in January 2017 and to $15.00 by 2022 (SB 3);
    • Expand California’s Equal Pay Act to target race and ethnicity-related wage differentials (SB 1063);
    • Amend California’s Equal Pay Act to preclude prior salary history from justifying gender-related wage differentials (AB 1676);
    • Prohibit hiring-related inquiries concerning juvenile arrests (AB 1843);
    • Expand the prohibitions regarding unlawful “immigration-related practices” (SB 1001);
    • Require employers to provide written information regarding the employee’s sexual assault/domestic violence leave rights (AB 2337);
    • Preclude employment contract provisions requiring California employees agree to non-California venues and non-California law for future disputes (SB 1241);
    • Phase-out the overtime exemptions for agricultural workers (AB 1066);
    • Amend the wage statement requirements to remove the duty to track hours worked for many exempt employees;
    • Expand California’s heat illness regulations to include indoor employees (SB 1167); and
    • Require employers without private retirement plans to develop programs to enable employees to participate in California’s new state-sponsored retirement program (SB 1234).

    Amongst the bills that failed passage this year but may resurface in 2017 were those that would require smaller employers to provide “parental leave” and would require employers to post work schedules by certain deadlines.

    Things were also active at the municipal level with many cities enacting either or both their own minimum wage increase and paid sick leave laws.  This trend will likely also continue in 2017, and other cities may attempt to emulate San Francisco’s laws regarding so-called “predictive scheduling” or providing paid family leave.

    Discussed below are the new state laws enacted in 2016 with general application to private employers, followed by an overview of the more significant municipal-level developments.  Unless otherwise indicated, these new laws generally take effect January 1, 2017.

    NEW LAWS STATE LAWS ENACTED OR EFFECTIVE IN 2016

    California’s Minimum Wage to Increase to $15.00 by 2022 (SB 3)

    In June 2016, the California Legislature quickly introduced and passed this law increasing the state-wide minimum wage to $15.00 an hour by 2022.  For employers with more than 25 employees, the minimum wage will increase according to the following schedule:

     

    Increase Date

    New Rate

    New Salary Threshold for Overtime Exemption

    January 1, 2017

    $10.50

    $43,680

    January 1, 2018

    $11.00

    $45,760

    January 1, 2019

    $12.00

    $49,920

    January 1, 2020

    $13.00

    $54,080

    January 1, 2021

    $14.00

    $58,240

    January 1, 2022

    $15.00

    $62,400

     

    For employers with 25 or fewer employees, the minimum wage will increase on a slightly slower schedule, as follows:

     

    Increase Date

    New Rate

    New Salary Threshold for Overtime Exemption

    January 1, 2018

    $10.50

    $43,680

    January 1, 2019

    $11.00

    $45,760

    January 1, 2020

    $12.00

    $49,920

    January 1, 2021

    $13.00

    $54,080

    January 1, 2022

    $14.00

    $58,240

    January 1, 2023

    $15.00

    $62,400

     

    As a reminder, the federal Department of Labor is presently slated to increase the salary threshold for overtime exemption purposes to $47,476 on December 1, 2016 which may require some California employers to consider both the federal and state salary tests for overtime exemption purposes.

     

    SB 3 also contemplates annual subsequent increases after the final scheduled increase, generally tied to consumer inflation, which the Director of Finance will determine by August 1st of each year with the increase, rounded to the nearest ten cents, to become effective the following January 1st.  Once this formula is applied, the minimum wage may increase or stay the same, but it will not decrease.

     

    Beginning in July 2017, the Director of Finance will be required to determine whether economic conditions can support the next scheduled minimum wage increase and, if not, the Governor would have the authority through a proclamation to temporarily suspend the next increase.  The Governor would not be permitted to temporarily suspend scheduled minimum wage increases more than two times, and if the Governor does temporarily suspend a scheduled minimum wage increase, all remaining scheduled increases shall be postponed by an additional year.

     

    As noted above, these increases to the hourly minimum wage will also impact the salary level needed for exempt employee purposes, with the salary level ultimately increasing to $62,400 when the $15.00 level is reached in 2022.

     

    Lastly, this new law amends Labor Code section 245.5 to remove the exemption from California’s Paid Sick Leave requirements for in-home supportive service employees.  Accordingly, beginning on July 1, 2018, in-home supportive service employee who work 30 or more days in California within a year from commencement of employment will be entitled to accrue and use paid sick leave, albeit on a slightly different schedule enumerated in new subsection (e) to Labor Code section 246.

     

    No Duty to Track “Hours Worked” on Itemized Wage Statements for Exempt Employees (AB 2535)

     

    While Labor Code section 226 requires employers to provide written wage statements containing specifically-enumerated information, including identifying the total hours worked, it contains an exception from the reporting the total hours worked for employees who are paid solely on salary and are exempt from overtime.  Responding to concerns that there are many employees who are exempt from overtime, in which case employers may not track hours worked, but whose compensation is not “solely based on a salary” (e.g., salespersons paid on commission, high-ranking executives partially compensated with stock options, etc.), this law amends section 226 to expand this exception.

     

    Specifically, in addition to the current language exempting tracking hours for those compensated solely on salary, new subsection (j) eliminates the need to show hours worked for employees exempt from minimum wage and overtime under a specified exemption for: (a) executive, administrative, or professional employees; (b) the “outside sales” exception; (c) salaried computer professionals; (d) parents, spouses, children, or legally-adopted children of the employer provided in applicable orders of the IWC; (e) directors, staff, and participants of a live-in alternative to incarceration rehabilitation program for substance abuse; (f) crew members employed on commercial passenger fishing boats; and (g) participants in national service programs.

     

    Salary History by Itself not a Bona Fide Factor Justifying Gender-Based Wage Differential (AB 1676)

     

    In 2015, California enacted SB 358, substantially revising its Equal Pay Act protections, including materially revising the standard when attempting to justify a gender-related wage differential.  Citing a concern that salary history potentially institutionalizes prior discriminatory pay practices, this law originally proposed to add new Labor Code section 432.3 to prohibit any employer from seeking salary history information about an applicant for employment.

     

    However, facing substantial opposition and since Governor Brown had vetoed a very similar bill in 2015 (AB 1017), this law was materially amended during the legislative process.  As a result, rather than creating a new Labor Code provision prohibiting salary history discussions, it instead amends California’s Equal Pay Act (Labor Code section 1197.5) to provide that “prior salary shall not, by itself justify any disparity in compensation.”

     

    Equal Pay Regardless of Race or Ethnicity (SB 1063)

     

    Following up on last year’s amendments to California’s Equal Pay Act regarding gender-based wage differentials (SB 358), the Wage Equality Act of 2016 enacts nearly identical language to preclude wage differentials based on race or ethnicity.  Specifically, it amends Labor Code section 1197.5 to prohibit employers from paying an employee at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work when viewed as a composite of skill, effort, and responsibility and performed under similar working conditions.

     

    As with gender, the employer bears the burden to demonstrate that the wage differential is based upon one or more of the following factors: (a) a seniority system; (b) a merit system; (c) a system that measures earnings by quantity or quality of production; or (d) a bona fide factor other than race or ethnicity, such as education, training, or experience.  As with the “bona fide factor” exception following SB 358’s enactment, the employer must demonstrate that the factor is not derived from a race or ethnicity-based differential, is job-related to the position in question, and is consistent with a business necessity (i.e., an overriding legitimate business purpose that cannot be achieved through an alternative business practice).  The employer must also demonstrate that each factor relied upon is applied reasonably and the one or more factors relied upon account for the entire wage differential.

     

    Lastly, because SB 1063 amends section 1197.5 generally, it also prohibits employers from discriminating against employees who report or assist with concerns about race/ethnicity-based wage differentials, it provides the same enforcement mechanisms, and it incorporates its protections for employees to disclose, inquire, or discuss wages.

     

    “Immigration-Related Practices” Protections Expanded (SB 1001)

     

    California has made immigration-related abuses a legislative priority, including last year’s bill enacting a new $10,000 penalty for E-Verify violations (AB 622), the 2014 amendment to FEHA prohibiting discrimination against drivers licenses issued to undocumented workers (AB 1660), and the 2013 bills prohibiting retaliation for “immigration-related practices” (AB 263 and SB 666).  Continuing that trend, this law adds new Labor Code section 1019.1 to broaden the protections from “unfair immigration-related practices” beyond the retaliation context and extend them to any employee or applicant regardless of whether they have made a complaint.  The law’s author states it is intended to expand the current law to include applicants, and also to provide a state law remedy in addition to the currently-existing federal remedy for such violations which, in the author’s estimation, operate too slowly.

     

    Lastly, the law’s author had expressed concern that immigrant workers who have been provided temporary legal status and the ability to apply for work authorization under President Obama’s Executive Orders, including the Deferred Action for Parents of Americans of United States Citizens (DAPA) and the Deferred Action for Childhood Arrivals (DACA), may be subject to abuse.  To address these concerns, this new section specifies that it shall be unlawful for an employer, in the course of satisfying federal law requirements for eligibility determinations (8 U.S.C. § 1324(b)) to: (1) request more or different documents than required under federal law to verify eligibility; (2) to refuse to honor documents that on their face reasonably appear to be genuine; (3) refuse to honor documents or work authorization based upon the specific status or term of status that accompanies the authorization to work; or (4) attempt to reinvestigate or re-verify an incumbent employee’s authorization to work using an “unfair immigration practice” (defined in Labor Code section 1019).

     

    This section also authorizes an employee or applicant (or their representative) to file a complaint with the Division of Labor Standards Enforcement, and authorizes the Labor Commissioner to award a penalty up to $10,000 and equitable relief.

     

    Removing the Wage/Hour Exemption for Agricultural Employees (AB 1066)

     

    Known as the Phase-In Overtime for Agricultural Workers Act of 2016, this law phases in additional daily and weekly overtime requirements for agricultural workers (as defined in Wage Order 14-2001) over the course of four years, beginning in 2019 (but with a three-year delay for employers with less than 25 employees).  Under new Labor Code section 862, employers with more than 25 employees must pay daily and weekly overtime under the following schedule:  (1) beginning January 1, 2019, agricultural workers are entitled to one-and-a-half times their regular rate for hours worked over nine and one-half hours daily or 55 hours weekly; (2) beginning January 1, 2020, agricultural workers are entitled to one-and-a-half times their regular rate for hours worked over nine hours daily and 50 hours weekly; (3) beginning January 1, 2021, agricultural workers are entitled to one-and-a-half times their regular rate of pay for hours worked over eight and one-half hours daily and 45 hours weekly; and (4) beginning January 1, 2022, agricultural workers are entitled to one-and-a-half times their regular rate for hours worked over eight hours daily and 40 hours weekly.  Beginning January 1, 2022, agricultural workers are entitled to double their regular rate of pay for hours worked beyond twelve hours daily.

     

    As mentioned, employers with fewer than 25 employees have a three-year grace period, meaning these phase-in requirements do not commence until January 1, 2022, and the requirement to pay double-time commences January 1, 2025.

     

    Beginning January 1, 2017, and except as otherwise expressly specified, all other existing California provisions regarding overtime compensation shall apply to agricultural workers.

     

    The Governor will have the discretion to temporarily suspend a phased-in overtime requirement if the Governor also suspends a scheduled phased-in increase in the state minimum wage for specified “economic conditions” (as defined in SB 3).  If the Governor temporarily suspends a phased-in increase, all implementation dates will be postponed by an additional year, and the Governor’s suspension authority shall end upon no later than January 1, 2022.

     

    Lastly, the law directs the Department of Industrial Relations to update IWC Wage Order 14-2001 regarding agricultural workers to be consistent with this new law’s requirements, except that any existing provisions providing greater protections to agricultural workers shall continue to apply.

     

    Overtime Provisions for Domestic Worker Employees (SB 1015)

     

    In 2013, California enacted the Domestic Worker Bill of Rights (AB 241) which added Labor Code section 1454 and amended Wage Order 15-2001 to entitle a domestic work employee working as a personal attendant (as defined) the right to daily overtime after nine hours worked and weekly overtime after 45 hours worked.  Entitled the Domestic Worker Bill of Rights of 2016, SB 1015 removes the prior January 1, 2017 sunset provision for section 1454, thus making those overtime provisions permanent.

     

    “Foreign Labor Contractor” Requirement Update (SB 477)

     

    As a reminder, in 2014, California enacted SB 477 to strengthen its regulations regarding “foreign labor contractors” who recruit foreign workers to relocate to California.  For purposes of SB 477, “foreign labor contracting activity” is defined as “recruiting or soliciting for compensation a foreign worker who resides outside of the United States in furtherance of that worker’s employment in California, including when that activity occurs wholly outside the United States.”  However, foreign labor contracting for purposes of SB 477 does not include recruiting activities undertaken directly by the employer to locate workers for the employer’s own use, and is also limited to the recruitment of non-agricultural employees (since farm labor contractors are subject to other regulations).

     

    In light of SB 477’s focus on unscrupulous traffickers, by July 1, 2016 all foreign labor contractors were required to register with the Labor Commissioner.  By August 1, 2016, the Labor Commissioner was required to post on its website the names of all registered foreign labor contractors, as well as a list of the labor contractors who were denied renewal or registration.

     

    Although this law focuses on foreign labor contractors rather than employers, it has several implications for employers.  First, new Business and Professions Code section 9998.2(c) precludes employers from knowingly entering into an agreement for the services of an unregistered foreign labor contractor.  While employers are not subject to these registration requirements for their direct recruitment efforts, and SB 477 specifically exempts from joint and several liability those employers who use a registered foreign labor contractor, this liability exemption for the contractor’s tortious activities only applies if the employer works with a registered foreign labor contractor.

     

    Second, new Business and Professions Code section 9998.2(a) requires by July 1, 2016, an employer using the services of a foreign labor contractor to disclose to the Labor Commissioner the contact information of the employer’s designated person to work with the foreign labor contractor, and submit a declaration consenting to jurisdiction if the employer’s contact person has left the jurisdiction or is unavailable.

     

    Lastly, the employer must be mindful that Business and Professions Code section 9998.6 precludes any person from discriminating or retaliating against a foreign worker or their family members because they have exercised any rights under this new law.

     

    Expanded Protections for Janitorial Service Workers (AB 1978)

     

    Known as the Property Service Workers Protection Act, this law enacts numerous measures to protect janitorial industry employees from sexual assault and other Labor Code violations.  Amongst other things, it requires the Department of Industrial Relations to develop by July 1, 2018 training materials for both supervisors and workers regarding sexual harassment and sexual violence, and to establish requirements for such training.  It also directs Cal-OSHA to require janitorial industry employers to include this training as part of its injury and illness prevention plans.  It also establishes a system of janitorial contractor registration to encourage labor standards compliance and to establish prompt and effective sanctions for violating this part.

     

    Employers to Provide New Hires with Written Information about Time-Off Related to Sexual Assault, Domestic Violence or Stalking (AB 2337)

     

    Labor Code section 230.1 prohibits employers with more than 25 employees from discriminating or retaliating against employees who are victims of domestic violence, sexual assault, or stalking from taking time off from work for specified purposes to address the domestic violence, sexual assault, or stalking.  This law adds new subsection (h) to require employers to provide written information regarding these rights under section 230.1 and rights under Labor Code section 230, subsections (c), (e) and (f) prohibiting retaliation and requiring employers to reasonably accommodate victims of domestic violence, sexual assault or stalking.  Employers will be required to provide this written information to new employees upon hire and to other employees upon request.

     

    By July 1, 2017, the Labor Commissioner must post on its website a form employers can use, and employers need not comply with these notice requirements until the Labor Commissioner posts the form.  Alternatively, employers may develop and use their own notice provided it is “substantially similar in content and clarity” to the Labor Commissioner’s form.

     

    Prohibition on Inquiring About Juvenile Court Actions (AB 1843)

     

    Consistent with the “ban the box” trend advancing nationwide, Labor Code section 432.7 prohibits employers from requesting applicants to disclose, or from using as a factor in determining employment conditions, information concerning an arrest or detention that did not result in a conviction, or information concerning a referral to or participation in a pre- or post-trial diversion program.  Since 2014 (SB 530), California employers have also generally been prohibited from inquiring about or using information related to a conviction that has been judicially dismissed or ordered sealed.

     

    This law amends Labor Code section 432.7 to provide similar protection related to juvenile-related arrests as it currently provides for adult criminal histories.  Specifically, new subsection (a)(2) precludes employers from requiring applicants to disclose, verbally or in writing, or from utilizing as a condition of employment, information concerning 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.

     

    New subsection (a)(3) further provides that “conviction,” for both subsections (a)(1) dealing with adults and (a)(2) dealing with juvenile courts, shall not include any adjudication by a juvenile court or any other court or action taken with respect to a person who is under the process and jurisdiction of juvenile court law.

     

    Currently, section 432.7 authorizes health facilities to inquire of applicants seeking specific types of positions for information about certain crimes, notwithstanding this general prohibition applicable to most employers.  This law retains this ability for convictions but imposes new limits regarding inquiries about juvenile-related offenses.  Specifically, new subsection (f)(2) prohibits inquiries from health facilities about juvenile-related arrests, detentions, adjudications, etc. unless the information relates to a juvenile court conviction of a misdemeanor or felony for specific crimes within five years of the application.  An employer seeking such disclosures will be required to provide the applicant with a list of the specific offenses under Health and Safety Code section 11590 or Penal Code section 290 for which disclosures are sought.  However, even health providers are precluded from inquiring into an applicant’s juvenile offense history that has been sealed by the juvenile court.

     

    Non-California Venue Provisions in Employment Agreements (SB 1241)

     

    This law adds new Labor Code section 925 prohibiting an employer from requiring an employee, who primarily resides and works in California, as a condition of employment to agree to a provision that would require the employee to adjudicate outside California a dispute arising in California, or deprive the employee of the protection of California law with respect to a controversy arising in California.  For purposes of this new law, “adjudication” includes litigation and arbitration.

     

    Any such choice of law or venue provision would be voidable at the request of an employee. If the court invalidated such a provision, the matter would be adjudicated in California and under California law, and the prevailing employee would be entitled to recover reasonable attorneys’ fees incurred enforcing this provision.

     

    This new law will not apply to an employee who is individually represented by legal counsel in negotiating the terms of an agreement to designate either the choice of venue or law provisions.

     

    This section applies to any contract entered into, modified or extended on or after January 1, 2017.

     

    FEHA Protections Extended to Handicapped Employees Hired Under Special Licenses (AB 488)

     

    While the Fair Employment and Housing Act (Government Code section 12940 et seq.) generally prohibits harassment or discrimination against “employees,” Government Code section 12926 had excluded from the definition of “employee” individuals employed by their parents, spouse or children, and also excluded “individuals employed under a special license in a non-profit sheltered workshop or rehabilitation facility.”  In 2014, California expanded FEHA to protect unpaid interns and volunteers (AB 1443), and this new law continues that expansion trend by ensuring individuals with disabilities hired under a special license for sheltered work are provided the same protections as other employees under FEHA.

     

    New Government Code section 12926.05 provides that individuals employed under a special license under Labor Code section 1191 or 1191.5 (regarding hiring employees with physical or mental handicaps) may bring an action for harassment or discrimination under FEHA.  If so, the employer may establish an affirmative defense by showing that (1) the challenged activity was permitted by statute or regulation; and (2) the challenged activity was necessary to serve employees with disabilities under a special license pursuant to Labor Code sections 1191 and 1191.5.  This new section further specifies that it shall not be disability discrimination for employers to pay less than the state minimum wage to disabled employees employed pursuant to sections 1191 or 119.5.

     

    DFEH Authorized to Investigate and Prosecute Human Trafficking Complaints (AB 1684)

     

    Since 2005, Penal Code section 236.1 and Civil Code section 52.5 have authorized human trafficking victims to pursue civil and criminal claims against traffickers.  However, citing a concern these remedies are rarely utilized, this law amends Government Code section 12930 to authorize the DFEH to receive, investigate, conciliate, mediate and prosecute human trafficking complaints on behalf of a human trafficking victim.  The law further provides that any damages recovered will belong to the victim but costs and attorney’s fees awarded in such action will belong to the DFEH.  This law unanimously passed the Legislature without opposition.

     

    PAGA Amendments

     

    As part of the 2016-2017 Fiscal Year Budget Change Proposal, the Governor passed several amendments to PAGA—purportedly intended to reduce litigation costs for employers and improve outcomes for employees.  The LWDA states on its website that the following procedural changes to PAGA are in effect as of June 27, 2016.

    • A $75 filing fee is required with new PAGA claim notices and any employer responses to an initial claim (including any employer cure).  This fee is waivable for those qualified as in forma pauperis.
    • PAGA claim notices must now be filed online to the LWDA, with written notice (certified mail) to the employer. Similarly, employer cure notices and/ or employer responses to a PAGA claim must also be filed online, with a copy sent to the aggrieved employee by certified mail.
    • The LWDA’s timeframe to review notices extends to 60 days. (Formerly 30 days.)
    • Alleged aggrieved employees filing in court must provide a file-stamped copy of their PAGA Complaint to the LWDA (for any case filed on or after July 1, 2016).
    • Court approval is required for any settlement of a PAGA civil action, whether or not the settlement includes an award of PAGA penalties.
    • Proposed PAGA settlements are to be submitted to the LWDA at the same time they are submitted to the court.
    • A copy of any court judgment, and any other order that awards or denies PAGA penalties, must be provided to the LWDA.

    These are essentially procedural changes and less-impactful than some of the broader, more substantive changes contained in the original proposal.  For example, the original proposed amendments included an amnesty program for invalidated “commonplace industry practices” and a provision allowing the LWDA to object-to or comment-on proposed PAGA settlements.  Nonetheless, the actual amendments may be a precursor to more sweeping reform, and the legislative environment surrounding PAGA actions deserves close attention.

     

    Increased Paid Family Leave Benefits (AB 908)

     

    Under California’s family temporary disability insurance program, employees may receive up to 6 weeks of wage replacement benefits when taking time off work to care for specified persons (e.g., child, spouse, parent, etc.) or to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption.  Citing a concern that the relatively low wage replacement rate dissuaded employees from using this benefit, this newly-enacted law amends Insurance Code section 3301 to increase the wage replacement benefits.  Specifically, it modifies the formula for calculating these benefits to ensure a minimum weekly benefit of $50, and to increase the wage replacement rate from the current 55% to 70% for most low-wage workers, and to 60% for higher wage earners.

     

    Beginning January 1, 2017, this bill also removes the 7-day waiting period for these family leave benefits.

     

    New Workplace Smoking Prohibitions Took Effect June 9th (ABx2 6 and SBx2 6)

     

    Labor Code section 6404.5 prohibits smoking of tobacco products inside an enclosed space at a place of employment and enumerates fines for violations of these protections.  ABx2 6 amends this section to use the new definition of “smoking” (contained in amended Business and Professions Code section 22950.5) that includes “the use of an electronic smoking device that creates an aerosol or vapor, in any manner or in any form, or the use of any oral smoking device for the purpose of circumventing the prohibition of smoking.”

     

    SBx2 6 also expands these prohibitions to include so-called “owner-operated businesses” (i.e., those with no employees and the owner-operator is the only employee).  It eliminates most of the specified exemptions that permit smoking in certain work environments, such as hotel lobbies, bars and taverns, banquet rooms, warehouse facilities, and employee break rooms.

     

    Because of their unique procedural history and subject matter, these laws took effect June 9, 2016.

     

    Heat Illness Prevention Regulations for Indoor Employees (SB 1167)

     

    Since 2006, California’s Division of Occupational Safety and Health (DOSH) has adopted and enforced regulations establishing a heat illness prevention standard for outdoor workers.  This law requires DOSH, by January 1, 2019, to propose for the review and adoption a heat illness and injury prevention standard applicable to workers working in indoor places of employment.  This standard shall be based on environmental temperatures, work activity levels and other factors.  The DOSH also will have the authority to propose high heat provisions limited only to certain industry sectors.

     

    As a reminder, the Division of Occupational Safety and Health has previously produced a flyer entitled “Cal/OSHA Heat Illness Prevention for Indoor Working Environments” which focuses on five key areas of prevention: a written IIPP; frequent drinking of water; rest breaks; acclimation and weather monitoring; and emergency preparedness.

     

    Employer Participation in State-Sponsored Retirement Program (SB 1234)

     

    In 2012, California enacted SB 1234 to create the California Secure Choice Retirement Savings Program (SCRSP) and to create a feasibility study to determine whether the legal and practical conditions of implementation of SCRSP could be met.  Simply summarized, the SCRSP would establish a state administered retirement program for employees that do not have a private retirement plan through their employers, but exempts employees covered under the Railway Labor Act, or provided certain types of pensions, or that have certain enumerated private retirement plans through their employers.

     

    This law expresses legislative approval of the SRSCP and its implementation on January 1, 2017, and also changes the implementation requirements for employers, depending on size.  Specifically, employers with 100 or more employees must have an arrangement to allow employees to participate in the SRCSP within 12 months after opening of enrollment, employers with 50 or more employees must have such an arrangement within 24 months after opening of enrollment, and employers of five or more employees must have an arrangement within 36 months after opening of enrollment.  Notwithstanding these deadlines, any employer may enact a payroll deposit retirement savings arrangement early if they prefer.

     

    The Employment Development Department will be required to develop and disseminate to employers information about the SCRSP, which employers must provide to employees at time of hire, and the employee must acknowledge receipt of these materials.

     

    Increased Local Enforcement to Combat Wage Theft (SB 1342)

     

    Citing concerns about the continued prevalence of wage theft, especially for lower income workers, this law adds new Government Code section 53060.4 to authorize city or county legislative bodies to delegate subpoena-issuing authority for enforcing local laws or ordinances, including local wage laws, to officials or department heads.

     

    New Temporary Pay Rules Regarding Security Guards (AB 1311)

     

    Labor Code section 201.3 sets forth specific rules regarding wages for temporary service employers, including generally requiring such employees be paid weekly and not later than the regular payday of the following “calendar” week.  Responding to a recent court decision regarding security guards, this law enacts new subsection (b)(1)(B) and creates a new industry-specific rule for security guards employed by temporary service providers since that industry generally uses a different payday than other industries.  Under this new rule, registered security guards working for temporary service employers must be paid weekly, regardless of when the assignment ends, and must be paid no later than the regular payday of the following “workweek” (rather than “calendar week” for other industries).  This law was enacted on an urgency basis and is immediately effective.

     

    Expedited Release of Prevailing Wage Escrowed Amounts (AB 326)

     

    Labor Code section 1742.1 presently provides that in prevailing wage proceedings, a contractor or subcontractor may avoid certain penalties by depositing the full amount of an assessment or notice with the Department of Industrial Relations (DIR).  Responding to concerns the DIR is not required to release these funds within any particular timeframe, this law amends section 1742.1 to specify the DIR must release the escrowed funds, plus any interest earned, to the person entitled to those funds “within 30 days” following either the conclusion of all administrative and judicial review, or upon receiving written notice from the Labor Commissioner of a settlement or a final disposition of an assessment issued, or from the authorized representative of the awarding body or a settlement or final disposition.

     

    Bond Requirements for Minimum Wage Violations (AB 2899)

     

    Labor Code section 1194 prohibits employers from paying employees a wage less than the minimum wage, and allows aggrieved employees to recover lost wages, civil penalties, and liquidated damages for violations.  Labor Code section 1197.1 allows a party to contest a citation issued by the Labor Commissioner through the superior court.

     

    This law amends section 1197.1 to require a person seeking a writ of mandate contesting the Labor Commissioner’s ruling to post with the Labor Commissioner a bond equal to the unpaid wages, excluding penalties, in favor of the aggrieved employee.  It also specifies the procedures for an appellant to pay any judgment as result of that hearing or the withdrawal of the writ.  It provides that if the employer fails to pay the amounts owed within 10 days after the proceedings are concluded, the portion of the bond needed to cover the amount owed will be forfeited by the employer to the employee.

     

    Elimination of Some Employment Verification Requirements (AB 2532)

     

    Unemployment Insurance Code sections 9601.5 and 9601.7 require any state or local government agency, and any private employer contracting with a state or local government agency, that provides specified employment services to verify an individual’s legal status or authorization to work prior to providing services to that individual in accordance with federal procedures.  This law repeals both of these sections and the requirements contained in them.

     

    MUNICIPAL DEVELOPMENTS

     

    San Diego’s Minimum Wage and Paid Sick Leave Ordinance

     

    San Diego’s Proposition I—formally the “Referendum of Ordinance Regarding Earned Sick Leave and Minimum Wage” (the Ordinance)—received over 63 percent of the votes on the ballot measure on June 7, 2016.  To give some history, the City Council had previously approved the Ordinance on August 18, 2014, after which a referendum petition qualified the measure for the ballot, and the Council subsequently voted to place it on the ballot in 2016.

     

    Since San Diego voters passed the measure, the City passed and the Mayor approved an updated Implementing Ordinance modifying substantive portions of the new rule, as discussed below.

     

    Who is Affected?

     

    The Ordinance defines employers and employees broadly.

     

    Employers are defined as any “person or persons, including associations, organization, partnerships, business trusts, limited liability companies, or corporations, who exercise control over the wages, hours, or working conditions of any employee, engage an employee, or permit an employee to work.”  Note, a narrow exception to this definition includes aged, blind, or disabled people who receive in-home supportive services.

     

    Eligible employees are defined as “any person who, in one or more calendar weeks of the year, performs at least two hours of work within the geographic boundaries of the City for an employer, and who qualifies for the payment of minimum wage under the State of California minimum wage law.”  To determine if an employer is within the geographic boundaries of the city, visit here.

     

    San Diego’s New Minimum Wage

     

    Proposition I increases the current minimum wage from $10 per hour to $10.50 per hour.  Looking forward, starting January 1, 2017, the minimum wage will become $11.50 in the City of San Diego, and starting January 1, 2019, the minimum wage will increase “by an amount corresponding to the prior year’s increase, if any, in the cost of living, as defined by the Consumer Price Index.”

     

    Unlike the California minimum wage, these wage rates will not affect the exemption salary tests in California.  Rather, the minimum wage rate used to calculate this amount must be the state minimum wage and not municipal.

     

    San Diego’s New Sick Leave Entitlement

     

    California law currently requires employees who work in California for 30 or more days within a year from the beginning of employment to be entitled to use 3 days or 24 hours of sick leave per year, whichever is greater, with a possible cap and carry-over of that time at 48 hours.

     

    San Diego’s Ordinance requires these same employees, working within the boundaries of the City of San Diego (as discussed above), must receive up to five days or 40 hours of sick leave per year.

     

    Also in line with the California law, the San Diego Ordinance states that sick leave must begin to accrue when employment starts, but employers need not allow employees to use it until the employee’s 90th day of employment.

     

    Leave under the new Ordinance may be used under the following circumstances:

     

    (1)     if an employee is physically or mentally unable to work due to illness, injury, or a medical condition;

     

    (2)     for “Safe Time” defined as time away from work necessary to handle certain matters related to domestic violence, sexual assault, or stalking;

     

    (3)     for medical appointments;

     

    (4)     to care for or assist “certain family members” with an illness, injury, or medical injury; and

     

    (5)     a place of business is closed by order of a public official due to a Public Health Emergency, or an employee is providing care or assistance to a child, whose school or child care provider is closed by order of a public official due to a Public Health Emergency.

     

    Please note, the ability to use Paid Sick Leave for school/child-care-related closures and emergencies differs from the California law.

     

    Alternative Accrual Methods, Including “Frontloading,” and PTO Exception

     

    As with the California law, the default accrual rule under the San Diego Ordinance is that employees must receive one hour of paid sick leave for every 30 hours worked.

     

    While the San Diego Ordinance initially did not recognize any alternative accrual methods, the Implementation Ordinance amends this and allows “lump sum” or “frontloading” method that is allowed for under the general California sick leave law.

     

    Section 39.0105(b)-(c) of the Amended Ordinance now states:

     

    (b)     Employers must provide an Employee with one hour of Earned Sick Leave for every 30 hours worked by the Employee within the geographic boundaries of the City, but Employers are not required to provide an Employee with Earned Sick Leave in less than one-hour increments for a fraction of an hour worked. Employers may cap an Employee’s total accrual of Earned Sick Leave at 80 hours.

     

    (c)     An Employer may satisfy the accrual and carry-over provisions of this section if no less than 40 hours of Earned Sick Leave are awarded to an Employee at the beginning of each Benefit Year for use in accordance with this Division, regardless of the Employee’s status as full-time, part-time, or temporary.

     

    Employers utilizing the lump sum or frontloading method may not differentiate between classes of employees (e.g., part-time, full-time, temporary, etc.) with regard to the amount they bank at the beginning of the benefit year, as defined within the Ordinance.

     

    Unlike the California sick leave law, the San Diego Ordinance also initially did not make clear that employers providing so-called “personal time off” (PTO) plans would not be required to provide additional sick leave.  Responding to concerns this omission would create conflict with the state law and discourage PTO plans, Section 39.0105(g) of the Amended Ordinance specifies:

     

    (g)     An Employer who provides an Employee with an amount of paid leave, including paid time off, paid vacation, or paid personal days sufficient to meet the requirements of this section, and who allows this paid leave to be used for the same purposes and under the same conditions as the Earned Sick Leave required by this Division, is not required to provide additional Earned Sick Leave to the Employee.

     

    As a reminder, the San Diego Ordinance allows sick leave to be used for slightly different purposes than the state law, so employers wishing to rely upon this PTO exception from the San Diego Ordinance should compare their plan to ensure it allows PTO to be used “for the same purposes and under the same conditions” as the San Diego Ordinance.

     

    While the San Diego Ordinance initially did not allow employers to cap sick leave accrual, the amendments allow employers to cap accrual at 80 sick leave hours, the theory being that an employee may accrue enough to use the full amount in one year, and have enough ready to carry-over to the next year and begin using immediately.  (As reminder, under the California law, employees may accrue up to 48 hours, or double the 24 hours of usage allowed).

     

    Sick Leave Paid at Employee’s Regular Rate of Pay

     

    Similar to the California sick leave law, the rate of pay at which employers are charged with paying out sick leave is at the employee’s regular rate of pay, as opposed to their base rate of pay.  For employers with a non-exempt workforce who utilize different rates of pay, commissions, structured bonus plans, or any other wage that may require adjustment of their overtime rate, must be cognizant of this and revise their payment practices for sick leave or paid time off accordingly.

     

    Updated Posting and Notice Deadlines

     

    Under the Implementing Ordinance, the City is responsible for providing posters and individual notices, templates for which can now be found here.  Employers are charged with disseminating this individual notice, which must include the employer’s name, contact information, and information on how the employer satisfies the requirements under the Ordinance, to all employees by October 1, 2016.  This differs slightly from the California sick leave law, which requires notice via the Wage Theft Prevention Act, and which is only required for non-exempt employees. There is nothing within the Ordinance which requires acknowledgment or signature of this notice.  However, employers are urged to keep a record of this for purposes of potential audits by the City’s Enforcement Office, as defined within the Ordinance.

     

    Recordkeeping Requirements and Enforcement

     

    Employers are required to create contemporaneous records documenting their employees’ wages paid and accrual and use of sick leave.  Employers are already required to provide such a record on their employees’ wage statements under the general California sick leave law.  Under the City’s Ordinance, employers must also “allow Enforcement Official[s] reasonable access to these records in furtherance of an investigation conducted” pursuant to the Ordinance.

     

    The lengthiest and most detailed update to the Ordinance is within section 39.0113, which outlines the authority and duties of the City’s newly developed Enforcement Office, including investigatory rights, access rights, the ability to promulgate regulations, and implementation of the complaint process.

     

    The Take Away

     

    Employers are urged to review and update their sick leave and/or paid time off policies and practices to ensure they are compliant, raise the minimum wage of anyone working within the City of San Diego to at least $10.50 per hour, watch for the notice and posting requirements from the City, and maintain appropriate records as discussed within the Ordinance.

     

    For more information on California’s state-wide sick leave law, see Wilson Turner Kosmo’s 2015 Special Alert here:  California Amends Recently-Enacted Paid Sick Leave Law, Effective Immediately.  You may also review the City’s Frequently Asked Questions, as well as updates regarding the Minimum Wage and Sick Leave Ordinance, here.

     

    Berkeley’s Paid Sick Leave Law and Minimum Wage Increase

     

    Berkeley California recently passed its own minimum wage increase and sick leave ordinance.

     

    Minimum wage increases in Berkeley are now scheduled as follows:

     

    Date

    Minimum Wage

    October 1, 2016

    $12.53

    October 1, 2017

    $13.75

    October 1, 2018

    $15.00

    October 1, 2019 and annually thereafter

    Increase determined using local CPI

     

     

    As with similar municipal ordinances in California, the Berkeley Ordinance applies to any employee who, in a calendar week, performs at least two hours of work within the city boundaries.

     

    In addition to those sick leave benefits outlined within the general California law, beginning on October 1, 2017, Berkeley employees are to begin accruing additional paid sick leave at a rate of one hour for every 30 hours of work (and in one hour increments only).  For small businesses with fewer than 25 employees, there is an accrual cap of 48 hours per year, and for all other businesses, the cap is 72 hours.  All employers may limit use of sick leave to 48 hours per year.  Like with the general California sick leave law, accrued but unused sick leave must carry over from year to year, but need not exceed the cap.  Note, the ordinance does not address the use of a “lump sum” or “frontloading” method for providing sick leave.

     

    Berkeley’s ordinance also states that these requirements may be waived in a bona fide collective bargaining agreement, if the waiver is explicitly included in unambiguous terms.  It also provides that employers with other paid leave policies that meet the law’s accrual, cap, carry-over, and use requirements, are not required to provide additional paid sick leave.

     

    There are also several notice, posting and record-keeping requirements, as well as enforcement and penalties associated with not adhering to the ordinance, which are outlined within the Berkeley Ordinance itself.

     

    Los Angeles’ Paid Sick Leave Law and Minimum Wage Increase

     

    Somewhat similar to the San Diego and California minimum wage increases, the minimum wage for Los Angeles employers with more than 25 employees increased to $10.50, and will continue to increase each July 1st, reaching $15.00 on July 1, 2020.  For employers with 25 or fewer employees the minimum wage will increase in a similar format, starting to $10.50 on July 1, 2017 and reaching $15.00 on July 1, 2021.

     

    On July 1, 2016, the Los Angeles Paid Sick law took effect for employers with more than 25 employees, and the law will take effect for employers with 25 or fewer employees on July 1, 2017.  While the Los Angeles version more closely tracks the California version than the San Diego version, there are several key differences, including that employees are entitled to use six days of paid sick leave and accrue up to 72 hours (compared to three days and 48 hours respectively), and there is no exemption for collective-bargaining level employees.

     

    The City of Los Angeles has issued the required poster providing a general overview of the minimum wage increase and sick leave law here.

     

    San Francisco Enacts Paid Parental Leave Ordinance

     

    San Francisco enacted its Paid Parental Leave Ordinance (Ordinance No. 160065), as well as a recent amendment to that ordinance, which will require beginning on January 1, 2017, employers with 50 or more employees to pay to an employee on “parental leave” (as defined) the difference (so-called “supplemental compensation”) between their gross weekly wage and the Paid Family Leave Benefits paid from the state of California under its Paid Family Leave program.  (Employers with 35 or more employees would need to make such payments beginning July 1, 2017, and employers with 20 or more employees would need to make such payments beginning January 1, 2018).

     

    Please note also, in contrast with the pending bill that would require employers to provide unpaid parental leave to employees who worked 1,250 hours in the preceding 12 months (SB 654 [discussed above]), the San Francisco Ordinance applies to any employee who (1) began employment with the “Covered Employer” (as defined) at least 180 days prior to the leave period; (b) performs at least eight hours of work per week for the employer in San Francisco; (c) at least 40% of those total weekly hours worked for the employer are in San Francisco; and (d) who is eligible to receive paid family leave compensation under the California Paid Family Leave law for the purpose of bonding with a new child.

     

    As noted, the Ordinance requires the “Covered Employer” to provide “supplemental compensation” to an employee on leave representing the difference between the amount paid from the California Paid Family Leave fund and the employee’s “gross weekly wage.” Where the employee has multiple Covered Employers, this supplemental compensation can be apportioned between or among the employers based on the percentage of the employee’s gross weekly wages received from each employer.  However, in cases where an employee works for a Covered employer and a non-Covered Employer, the Covered Employer is responsible only for its percentage of the employee’s total gross weekly wages.

     

    The Ordinance also notes that an employer’s Supplemental Compensation obligation may also be proportionately capped by reference to the State maximum weekly benefit amount, depending on income levels.

     

    As with many recent statutes and ordinances, this Ordinance requires the employer to post a poster to be developed by the San Francisco Office of Labor Standards Enforcement, it requires the employer to retain “Supplemental Compensation” records for three years; it prohibits retaliation, and authorizes agency enforcement.

     

    More information about the San Francisco Ordinance can be found on the San Francisco’s Office of Labor Standards Enforcement website (sfgov.org/olse) or at sfgov.org/olse/paid-parental-leave-ordinance).[i]

     

    [i] The legislative content in this report is non-exhaustive, is for informational purposes only, and is not for the purpose of providing legal advice. You should always contact legal counsel to determine if this information, and your interpretation of it, is appropriate to your particular situation.

    CALSHRM LEGISLATIVE REPORT –  SEPTEMBER 2016

    By: Michael S. Kalt, CalSHRM Government Affairs Director

    Wilson Turner Kosmo LLP

    mkalt@wilsonturnerkosmo.com

    Telephone:  619-236-9600

    Twitter:  @michaelkalt_law

    LEGISLATIVE SUMMARY

    The August 31st deadline for bills to pass the Legislature saw the usual flurry of activity, with a number of critical votes being cast.  As expected, there were also a number of employment bills that passed and have been sent to Governor Jerry Brown for signature or veto, including bills that would:

    • Require employers with more than 20 employees to provide up to six weeks of job-protected “parental leave” (SB 654);
    • Expand California’s Equal Pay Act to target race and ethnicity-related wage differentials (SB 1063);
    • Expand the prohibitions regarding “immigration-related practices” (SB 1001);
    • Prohibit hiring-related inquiries concerning juvenile convictions (AB 1843);
    • Preclude salary history from justifying gender-based waged differentials (AB 1676);
    • Phase-out the overtime exemption for agricultural workers (AB 1066);
    • Expand California’s heat illness regulations to include indoor employees (SB 1167); and
    • Require employers to provide written information regarding the employee’s sexual assault/domestic violence leave rights (AB 2337).

    Governor Brown has until September 30th to sign or veto any bills that made it to his desk.

    There were also several bills that failed passage but might resurface next year, including bills that would have:

    • Required employers pay double-time for employees working on Thanksgiving (AB 67);
    • Required employers to provide copies of their Illness and Injury Prevention Programs (AB 2895);
    • Authorized the Labor Commissioner to commence investigations even if no complaint had been made (AB 2261); and
    • Created whistleblower protections for employees of the Legislature (AB 1788).

     

    Discussed below are the key employment bills of potential general application that the Governor is reviewing, followed by an overview of new laws that have already been enacted or have taken effect in 2016:

    BILLS SENT TO GOVERNOR BROWN

    Job-Protected “Parental Leave” for Employees of Smaller Employers (SB 654)

    Entitled the New Parent Leave Act, this bill would add new Government Code section 12945.6 to require, beginning January 1, 2018, employers to provide up to six weeks of job-protected parental leave for an employee (male or female) to bond with a new child within one year of the child’s birth, adoption or foster care placement.

    Unlike the California Family Rights Act (CFRA, Government Code section 12945.2) and the Family Medical Leave Act (FMLA), which apply only to employers with more than 50 employees, this bill would define “employer” as either (a) an entity employing 20 or more persons within 75 miles of the worksite where an employee (presumably seeking leave) is employed “to perform services for a wage or salary;” or (b) the state of California or any of its political or civil subdivisions, except for specified school districts.  However, as with CFRA and the FMLA, an employee would need to have worked more than 12 months for the employer, and to have worked at least 1,250 hours during the previous 12-month period.

    The bill also specifies that employees eligible for “parental leave” are also entitled to take leave under Government Code section 12945 (pregnancy disability, child birth and related conditions) if otherwise qualified for such leave.  However, a recent amendment provides that this new law would not apply to an employee subject to both the CFRA and the FMLA.

    As with CFRA, an employer shall be deemed to have refused to provide this job-protected leave unless on or before the leave’s commencement the employer guarantees reinstatement in the same or comparable position.  This bill would also authorize the employee to use accrued vacation pay, paid sick time, other accrued paid time off, or other paid or unpaid time off negotiated with the employer during this parental leave.  The basic minimum duration of the leave shall be two weeks, but an employer would be permitted to grant requests for additional occasions of leave lasting less than two weeks.

    Employers would also be required to maintain and pay for medical coverage under a group health plan for an eligible employee who takes parental leave during the duration of the leave, not to exceed six weeks over the course of a 12-month period, commencing on the date the parental leave commences, and at the level and conditions that would have existed if the employee continued working.  Notably perhaps, SB 654 does not contain the language contained in CFRA authorizing the employer to recover these medical premiums if the employee failed to return from leave, if certain conditions are present.

    It also provides that if the employer employs two employees who are entitled to leave for the same event otherwise entitling them to “parental leave,” the employer may, but is not required to, grant simultaneous leave to both employees.  However, and again in contrast with the CFRA, SB 654 does not contain language suggesting that where both parents work for the same employer, the employer may limit the overall leave to the maximum amount a single employee could use.

    Lastly, it provides this leave shall run concurrently with parental leave taken under Education Code section 44977.5 for certain certificated school employees.

    Status:  This bill initially failed passage as SB 1166, but resurfaced in a late-session “gut and amend” of a hazardous waste bill.  It rocketed through the Legislature in a very short time period, passing on a straight party-line vote, and faces heavy opposition.  It is presently unclear if Governor Brown will sign.

    Prohibition on Inquiring About Juvenile Court Actions (AB 1843)

    Consistent with the “ban the box” trend advancing nationwide, Labor Code section 432.7 prohibits employers from requesting applicants to disclose, or from using as a factor in determining employment conditions, information concerning an arrest or detention that did not result in a conviction, or information concerning a referral to or participation in a pre- or post-trial diversion program.  Since 2014 (SB 530), California employers have also generally been prohibited from inquiring about or using information related to a conviction that has been judicially dismissed or ordered sealed.

    This bill would amend Labor Code section 432.7 to provide similar protection related to juvenile-related arrests as it currently provides for adult criminal histories.  Specifically, new subsection (a)(2) would preclude employers from requiring applicants to disclose, verbally or in writing, or from utilizing as a condition of employment, information concerning 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.

    New subsection (a)(3) would further provide that “conviction,” for both subsections (a)(1) dealing with adults and (a)(2) dealing with juvenile courts, shall not include any adjudication by a juvenile court or any other court or action taken with respect to a person who is under the process and jurisdiction of juvenile court law.

    Currently, section 432.7 authorizes health facilities to inquire of applicants seeking specific types of positions for information about certain crimes, notwithstanding this general prohibition applicable to most employers.  This bill would retain this ability for convictions but would impose new limits regarding inquiries about juvenile-related offenses.  Specifically, new subsection (f)(2) would prohibit inquiries about health facilities about juvenile-related arrests, detentions, adjudications, etc. unless the information relates to a juvenile court conviction of a misdemeanor or felony for specific crimes within five years of the application.  An employer seeking such disclosures would be required to provide the applicant with a list of the specific offenses under Health and Safety Code section 11590 or Penal Code section 290 for which disclosures are sought.  However, even health providers would be precluded from inquiring into an applicant’s juvenile offense history that has been sealed by the juvenile court.

    Status:  This bill passed both Legislative chambers, albeit with some bi-partisan opposition, and has been sent to Governor Brown.

    Employers to Provide New Hires with Written Information about Time-Off Related to Sexual Assault, Domestic Violence or Stalking (AB 2337)

    Labor Code section 230.1 prohibits employers with more than 25 employees from discriminating or retaliating against employees who are victims of domestic violence, sexual assault, or stalking from taking time off from work for specified purposes to address the domestic violence, sexual assault, or stalking.  This bill would add new subsection (h) to require employers to provide written information regarding these rights under section 230.1 and rights under Labor Code section 230, subsections (c), (e) and (f) prohibiting retaliation and requiring employers to reasonably accommodate victims of domestic violence, sexual assault or stalking.  Employers will be required to provide this written information to new employees upon hire and to other employees upon request.

    The bill also requires the Labor Commissioner, by July 1, 2017, to develop a form employers could use and to post it on its website, and specifies that an employer need not comply with these notice requirements until the Labor Commissioner posts the form.  Alternatively, employer’s may develop and use its own notice provided it is “substantially similar in content and clarity” to the Labor Commissioner’s form.

    Status:  This bill unanimously passed the Assembly and Senate, and has been forwarded to Governor Brown for signature or veto.  It does not appear meaningfully opposed, and is likely to be signed into law.

    Non-California Venue Provisions in Employment Agreements (SB 1241)

    This bill would add new Labor Code section 925 prohibiting an employer from requiring an employee, who primarily resides and works in California, as a condition of employment to agree to a provision that would require the employee to adjudicate outside California a dispute arising in California, or deprive the employee of the protection of California law with respect to a controversy arising in California.

    Any such choice of law or venue provision would be voidable at the request of an employee. If the court invalidated such a provision, the matter would be adjudicated in California and under California law, and the prevailing employee would be entitled to recover reasonable attorneys’ fees incurred enforcing this provision.

     

    This section would not apply to an employee who is individually represented by legal counsel in negotiating the terms of an agreement to designate either the choice of venue or law provisions.

     

    If enacted, this section would apply to any contract entered into, modified or extended on or after January 1, 2017.

     

    Status:  This bill passed the Legislature on party-line votes.  Governor Brown vetoed a similar bill in 2011 (AB 267) citing a concern about not wanting to dissuade non-California companies from hiring California employees.

     

    Salary History by Itself not a Bona Fide Factor Justifying Gender-Based Wage Differential (AB 1676)

     

    In 2015, California enacted SB 358, substantially revising its Equal Pay Act protections, including materially revising the standard when attempting to justify a gender-related wage differential.  Citing a concern that salary history potentially institutionalizes prior discriminatory pay practices, this bill originally proposed to add new Labor Code section 432.3 to prohibit any employer from seeking salary history information about an applicant for employment.

     

    However, facing substantial opposition and since Governor Brown had vetoed a very similar bill in 2015 (AB 1017), this bill has recently been materially amended.  Specifically, rather than creating a new Labor Code provision prohibiting salary history discussions, this bill would instead amend California’s Equal Pay Act (Labor Code section 1197.5) to provide that “prior salary shall not, by itself justify any disparity in compensation.”

     

    Status:  This bill passed the Assembly on a party-line vote, but following amendment it passed the Senate unanimously and with overwhelming support in the Assembly.  It has been sent to Governor Brown and enactment looks likely.

     

    Equal Pay Regardless of Race or Ethnicity (SB 1063)

     

    Following up on last year’s amendments to California’s Equal Pay Act regarding gender-based wage differentials (SB 358), the Wage Equality Act of 2016 would enact nearly identical language to preclude wage differentials based on race or ethnicity.  Specifically, it would amend Labor Code section 1197.5 to prohibit employers from paying an employee at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work when viewed as a composite of skill, effort, and responsibility and performed under similar working conditions.

     

    As with gender, the employer would bear the burden to demonstrate that the wage differential is based upon one or more of the following factors: (a) a seniority system; (b) a merit system; (c) a system that measures earnings by quantity or quality of production; or (d) a bona fide factor other than race or ethnicity, such as education, training, or experience.  As with the “bona fide factor” exception following SB 358’s enactment, the employer would be required to demonstrate that the factor is not derived from a race or ethnicity-based differential, is job-related to the position in question, and is consistent with a business necessity (i.e., an overriding legitimate business purpose that cannot be achieved through an alternative business practice).  The employer would be required to demonstrate that each factor relied upon is applied reasonably and the one or more factors relied upon account for the entire wage differential.

     

    Lastly, because SB 1063 amends section 1197.5 generally, it would also prohibit employers from discriminating against employees who report or assist with concerns about race/ethnicity-based wage differentials, it would provide the same enforcement mechanisms, and it would incorporate its protections for employees to disclose, inquire, or discuss wages.

     

    Status:  This bill passed the Legislature on party-line votes in both chambers and has been sent to Governor Brown.

     

    Equal Pay Certifications for Certain State Contractors (AB 1890)

     

    Entitled the Equal Pay for Equal Work Act of 2016, this bill would amend Government Code section 12990 which presently identifies criteria for employers who wish to become a contractor for public works, including agreeing to California’s non-discrimination laws and submitting a non-discrimination program to the Department of Fair Employment and Housing (DFEH) for approval and certification.  This bill would require employers with a state contract amounting to more than $50,000 that is either required by federal regulations to submit a federal non-discrimination report or has more than 100 employees in the state, to submit its non-discrimination program to the DFEH and to submit periodic reports, no more than annually on a schedule to be determined by the department, of its compliance with this program.  The DFEH will also have the discretion to require employers not meeting these requirements to submit a non-discrimination program, in which case those employers must comply with the same requirements.

     

    A non-discrimination program would need to include policies and procedures designed to ensure equal employment opportunities for applicants and employees, a description of employment selection procedures, and a workforce analysis.  This workforce analysis would need to include: (a) the total number of workers within a specified job category identified by race or national origin, and sex; (b) the total wages required to be reported on a W-2 for all workers within that job category identified by race, ethnicity, and sex; and (c) the total hours worked on an annual basis for all workers in a specific job category identified by race, ethnicity, and sex.  Exempt employees would be presumed to work 40 hours a week and part-time employees would be presumed to work 20 hours a week, unless the employers utilizes a different standard number of hours per week for exempt employees, in which case the employer shall report total hours worked on an annual basis by those employees based on that standard number.

     

    A recent amendment clarifies, however, that employers with a state contract that are required to submit a federal nondiscrimination report (e.g., an EEO-1 Report) may submit a copy of that report to the DFEH and be deemed in compliance with these requirements.

     

    These proposed reporting changes appear similar to the August 2014 federal Department of Labor OFCCP’s Notice of Proposed Rulemaking to require covered federal contractors and subcontractors with more than 100 employees to submit an annual equal pay report on employee compensation.  As a reminder, the federal Equal Employment and Opportunity Commissioner is presently considering proposed changes to its EEO-1 Report, which would apply to all employers with more than 100 employees (not just federal contractors) and would require the submission of payroll data broken down by race/ethnicity, not just gender.

     

    Status:  This bill has passed the Legislature and been sent to Governor Brown, who vetoed a fairly similar bill (AB 1354) in 2015.

     

    “Immigration-Related Practices” Protections Expanded (SB 1001)

     

    California has made immigration-related abuses a legislative priority, including last year’s bill enacting a new $10,000 penalty for E-Verify violations (AB 622), the 2014 amendment to FEHA prohibiting discrimination against drivers licenses issued to undocumented workers (AB 1660), and the 2013 bills prohibiting retaliation for “immigration-related practices” (AB 263 and SB 666).  This bill would add new Labor Code section 1019.1 to broaden the protections from “unfair immigration-related practices” beyond the retaliation context and extend them to any employee or applicant regardless of whether they have made a complaint.  The bill’s author states it is intended to expand the current law to include applicants, and also to provide a state law remedy in addition to the currently-existing federal remedy for such violations which, in the author’s estimation, operate too slowly.

     

    Lastly, the bill’s author has expressed concern that immigrant workers who have been provided temporary legal status and the ability to apply for work authorization under President Obama’s Executive Orders, including the Deferred Action for Parents of Americans of United States Citizens (DAPA) and the Deferred Action for Childhood Arrivals (DACA), may be subject to abuse.

     

    To address these concerns, this new section would specify that it shall be unlawful for an employer, in the course of satisfying federal law requirements for eligibility determinations (8 U.S.C. § 1324(b)) to: (1) request more or different documents than required under federal law to verify eligibility; (2) to refuse to honor documents that on their face reasonably appear to be genuine; (3) refuse to honor documents or work authorization based upon the specific status or term of status that accompanies the authorization to work; or (4) attempt to reinvestigate or re-verify an incumbent employee’s authorization to work using an “unfair immigration practice” (defined in Labor Code section 1019).

     

    This section would also authorize an employee or applicant (or their representative) to file a complaint with the Division of Labor Standards Enforcement, and would authorize the Labor Commissioner to award a penalty up to $10,000 and equitable relief.

     

    Status:  This bill has passed the Legislature and been sent to Governor Brown for signature or veto.  Passage appears likely.

     

    Removing the Wage/Hour Exemption for Agricultural Employees (AB 1066)

     

    Known as the Phase-In Overtime for Agricultural Workers Act of 2016, this bill would phase-in additional daily and weekly overtime requirements for agricultural workers (as defined in Wage Order 14-2001) over the course of four years, beginning in 2019 (but with a three-year delay for employers with less than 25 employees). If enacted, under new Labor Code section 862, employers with more than 25 employees would have to pay daily and weekly overtime under the following schedule:  (1) beginning January 1, 2019, agricultural workers would be entitled to one-and-a-half times their regular rate for hours worked over nine and one-half hours daily or 55 hours weekly; (2) beginning January 1, 2020, agricultural workers would be entitled to one-and-a-half times their regular rate for hours worked over nine hours daily and 50 hours weekly; (3) beginning January 1, 2021, agricultural workers would be entitled to one-and-a-half times their regular rate of pay for hours worked over eight and one-half hours daily and 45 hours weekly; and (4) beginning January 1, 2022, agricultural workers would be entitled to one-and-a-half times their regular rate for hours worked over eight hours daily and 40 hours weekly.  Beginning January 1, 2022, agricultural workers would be entitled to double their regular rate of pay for hours worked beyond twelve hours daily.

     

    As mentioned, employers with fewer than 25 employees would have a three-year grace period, meaning these phase-in requirements would not commence until January 1, 2022, and the requirement to pay double-time would commence January 1, 2025.

     

    Beginning January 1, 2017, and except as otherwise expressly specified, all other existing California provisions regarding overtime compensation shall apply to agricultural workers. 

     

    The Governor would have the discretion to temporarily suspend a phased-in overtime requirement if the Governor also suspends a scheduled phased-in increase in the state minimum wage for specified “economic conditions” (as defined in SB 3).  If the Governor temporarily suspended a phased-in increase, all implementation dates will be postponed by an additional year, and the Governor’s suspension authority shall end upon no later than January 1, 2022.

     

    Lastly, the law directs the Department of Industrial Relations to update IWC Wage Order 14-2001 regarding agricultural workers to be consistent with this new law’s requirements, except that any existing provisions providing greater protections to agricultural workers shall continue to apply. 

     

    Status:  This bill passed the Legislature despite heavy opposition, and its prospects with Governor Brown are not clear.  Governor Schwarzenegger vetoed a similar measure in 2010.

     

    Overtime Provisions for Domestic Worker Employees (SB 1015)

     

    In 2013, California enacted the Domestic Worker Bill of Rights (AB 241) which added Labor Code section 1454 and amended Wage Order 15-2001 to entitle a domestic work employee working as a personal attendant (as defined) the right to daily overtime after nine hours worked and weekly overtime after 45 hours worked.  Entitled the Domestic Worker Bill of Rights of 2016, SB 1015 would remove the current January 1, 2017 sunset provision for section 1454, thus making those overtime provisions permanent.

     

    Status:  This bill passed both the Senate and Assembly on party-line votes, and has been sent to Governor Brown.

     

    Expanded Protections for Janitorial Service Workers (AB 1978)

     

    Known as the Property Service Workers Protection Act, this bill would enact numerous measures to protect janitorial industry employees from sexual assault and other Labor Code violations.  Amongst other things, it would require the Department of Industrial Relations to develop by July 1, 2018 training materials, for both supervisors and workers, regarding sexual harassment and sexual violence, and to establish requirements for such training.  It would also direct Cal-OSHA to require janitorial industry employers to include this training as part of its injury and illness prevention plans.  Additionally, it would establish a system of janitorial contractor registration to encourage labor standards compliance and to establish prompt and effective sanctions for violating this part.

     

    Status:  This bill passed the Legislature with some bi-partisan support, and has been sent to Governor Brown.

     

    Heat Illness Prevention Regulations for Indoor Employees (SB 1167)

     

    Since 2006, California’s Division of Occupational Safety and Health (DOSH) has adopted and enforced regulations establishing a heat illness prevention standard for outdoor workers.  This bill would require DOSH, by January 1, 2019, to propose for the review and adoption a heat illness and injury prevention standard applicable to workers working in indoor places of employment.  This standard shall be based on environmental temperatures, work activity levels and other factors.  The DOSH would have the authority to propose high heat provisions limited only to certain industry sectors.

     

    As a reminder, the Division of Occupational Safety and Health has previously produced a flyer entitled “Cal/OSHA Heat Illness Prevention for Indoor Working Environments” which focuses on five key areas of prevention: a written IIPP; frequent drinking of water; rest breaks; acclimation and weather monitoring; and emergency preparedness.

     

    Status:  This bill has passed both Legislative chambers, albeit with some bi-partisan opposition, and has been sent to Governor Brown for signature or veto.  The Legislature has previously passed two similar bills (AB 838 [2009] and AB 1054 [2007]), but both were vetoed by then-Governor Schwarzenegger.

     

    Employer Participation in State-Sponsored Retirement Program (SB 1234)

     

    In 2012, California enacted SB 1234 to create the California Secure Choice Retirement Savings Program (SCRSP) and to create a feasibility study to determine whether the legal and practical conditions of implementation of SCRSP could be met.  Simply summarized, the SCRSP would establish a state administered retirement program for employees that do not have a private retirement plan through their employers, but exempts employees covered under the Railway Labor Act, or provided certain types of pensions, or that have certain enumerated private retirement plans through their employers.

     

    This bill would express legislative approval of the SRSCP and its implementation on January 1, 2017, and would also change the implementation requirements for employers, depending on size.  If enacted, employers with 100 or more employees would have to have an arrangement to allow employees to participate in the SRCSP within 12 months after opening of enrollment, employers with 50 or more employees would have to have such an arrangement within 24 months after opening of enrollment, and employers of five or more employees must have an arrangement within 36 months after opening of enrollment.  Notwithstanding these deadlines, any employer would have the option to have a payroll deposit retirement savings arrangement early if they prefer.

     

    The Employment Development Department would be required to develop and disseminate to employers information about the SCRSP, which employers would be required to provide to employees at time of hire, and the employee would need to acknowledge receipt of these materials. 

     

    Status:  This bill passed the Legislature on party-line votes, and it is presently unclear if Governor Brown will sign.

     

    Expedited Release of Prevailing Wage Escrowed Amounts (AB 326)

     

    Labor Code section 1742.1 presently provides that in prevailing wage proceedings, a contractor or subcontractor may avoid certain penalties by depositing the full amount of an assessment or notice with the Department of Industrial Relations (DIR).  Responding to concerns the DIR is not required to release these funds within any particular timeframe, this bill would amend section 1742.1 to specify the DIR must release the escrowed funds, plus any interest earned, to the person entitled to those funds “within 30 days” following either the conclusion of all administrative and judicial review, or upon receiving written notice from the Labor Commissioner of a settlement or a final disposition of an assessment issued, or from the authorized representative of the awarding body or a settlement or final disposition.

     

    Status:  This bill unanimously passed the Legislature and has been sent to Governor Brown.

     

    Elimination of Some Employment Verification Requirements (AB 2532)

     

    Unemployment Insurance Code sections 9601.5 and 9601.7 require any state or local government agency, and any private employer contracting with a state or local government agency, that provides specified employment services to verify an individual’s legal status or authorization to work prior to providing services to that individual in accordance with federal procedures.  This bill would repeal both of these sections and the requirements contained in them.

     

    Status:  This bill has passed the Legislature and has been sent to Governor Brown.

     

    Bond Requirements for Minimum Wage Violations (AB 2899)

     

    Labor Code section 1194 prohibits employers from paying employees a wage less than the minimum wage, and allows aggrieved employees to recover lost wages, civil penalties, and liquidated damages for violations.  Labor Code section 1197.1 allows a party to contest a citation issued by the Labor Commissioner through the superior court.

     

    This bill would amend section 1197.1 and require a person seeking a writ of mandate contesting the Labor Commissioner’s ruling to post with the Labor Commissioner a bond equal to the unpaid wages, excluding penalties, in favor of the aggrieved employee.  This section would also specify the procedures for an appellant to pay any judgment as result of that hearing or the withdrawal of the writ.  It would also provide that if the employer fails to pay the amounts owed within 10 days after the proceedings are concluded, the portion of the bond need to cover the amount owed would be forfeited by the employer to the employee.

     

    Status:  This bill passed both Legislative chambers along a party-line vote and has been sent to Governor Brown.

     

    NEW LAWS ALREADY ENACTED IN 2016

     

    STATE LAWS

     

    California’s Minimum Wage to Increase to $15.00 by 2022 (SB 3)

     

    To preclude votes on two union-backed statewide initiatives regarding the minimum wage, Governor Jerry Brown and his Democratic caucus introduced, quickly passed and enacted this law increasing California’s minimum wage to $15.00 an hour by 2022.  For employers with more than 25 employees, the minimum wage will increase according to the following schedule:

     

    Increase Date

    New Rate

    New Salary Threshold

    January 1, 2017

    $10.50

    $43,680

    January 1, 2018

    $11.00

    $45,760

    January 1, 2019

    $12.00

    $49,920

    January 1, 2020

    $13.00

    $54,080

    January 1, 2021

    $14.00

    $58,240

    January 1, 2022

    $15.00

    $62,400

     

    For employers with 25 or fewer employees, the minimum wage will increase on a slightly slower schedule, as follows:

     

    Increase Date

    New Rate

    New Salary Threshold

    January 1, 2018

    $10.50

    $43,680

    January 1, 2019

    $11.00

    $45,760

    January 1, 2020

    $12.00

    $49,920

    January 1, 2021

    $13.00

    $54,080

    January 1, 2022

    $14.00

    $58,240

    January 1, 2023

    $15.00

    $62,400

     

    This new law also contemplates annual subsequent increases after the final scheduled increase, generally tied to consumer inflation, which the Director of Finance will determine by August 1st of each year with the increase, rounded to the nearest ten cents, to become effective the following January 1st.  Once this formula is applied, the minimum wage may increase or stay the same, but it will not decrease.

     

    Beginning in July 2017, the Director of Finance will be required to determine whether economic conditions can support the next scheduled minimum wage increase and, if not, the Governor would have the authority through a proclamation to temporarily suspend the next increase.  The Governor would not be permitted to temporarily suspend scheduled minimum wage increases more than two times, and if the Governor does temporarily suspend a scheduled minimum wage increase, all remaining scheduled increases shall be postponed by an additional year.

     

    As noted above, these increases to the hourly minimum wage will also impact the salary level needed for exempt employee purposes, with the salary level ultimately increasing to $62,400 when the $15.00 level is reached in 2022.

     

    Lastly, this new law amends Labor Code section 245.5 to remove the exemption from California’s Paid Sick Leave requirements for in-home supportive service employees.  Accordingly, beginning on July 1, 2018, in-home supportive service employee who work 30 or more days in California within a year from commencement of employment will be entitled to accrue and use paid sick leave, albeit on a slightly different schedule enumerated in new subsection (e) to Labor Code section 246.

     

    “Foreign Labor Contractor” Requirement Update (SB 477)

     

    As a reminder, in 2014, California enacted SB 477 to strengthen its regulations regarding “foreign labor contractors” who recruit foreign workers to relocate to California.  For purposes of SB 477, “foreign labor contracting activity” is defined as “recruiting or soliciting for compensation a foreign worker who resides outside of the United States in furtherance of that worker’s employment in California, including when that activity occurs wholly outside the United States.”  However, foreign labor contracting for purposes of SB 477 does not include recruiting activities undertaken directly by the employer to locate workers for the employer’s own use, and is also limited to the recruitment of non-agricultural employees (since farm labor contractors are subject to other regulations).

     

    In light of SB 477’s focus on unscrupulous traffickers, by July 1, 2016 all foreign labor contractors were required to register with the Labor Commissioner.  By August 1, 2016, the Labor Commissioner was required to post on its website the names of all registered foreign labor contractors, as well as a list of the labor contractors who were denied renewal or registration.

     

    Although this law focuses on foreign labor contractors rather than employers, it has several implications for employers.  First, new Business and Professions Code section 9998.2(c) precludes employers from knowingly entering into an agreement for the services of an unregistered foreign labor contractor.  While employers are not subject to these registration requirements for their direct recruitment efforts, and SB 477 specifically exempts from joint and several liability those employers who use a registered foreign labor contractor, this liability exemption for the contractor’s tortious activities only applies if the employer works with a registered foreign labor contractor.

     

    Second, new Business and Professions Code section 9998.2(a) requires by July 1, 2016, an employer using the services of a foreign labor contractor to disclose to the Labor Commissioner the contact information of the employer’s designated person to work with the foreign labor contractor, and submit a declaration consenting to jurisdiction if the employer’s contact person has left the jurisdiction or is unavailable.

     

    Lastly, the employer must be mindful that Business and Professions Code section 9998.6 precludes any person from discriminating or retaliating against a foreign worker or their family members because they have exercised any rights under this new law.

     

    PAGA Amendments

     

    As part of the 2016-2017 Fiscal Year Budget Change Proposal, the Governor passed several amendments to PAGA—purportedly intended to reduce litigation costs for employers and improve outcomes for employees.  The LWDA states on its website that the following procedural changes to PAGA are in effect as of June 27, 2016.

    • A $75 filing fee is required with new PAGA claim notices and any employer responses to an initial claim (including any employer cure).  This fee is waivable for those qualified as in forma pauperis.
    • PAGA claim notices must now be filed online to the LWDA, with written notice (certified mail) to the employer. Similarly, employer cure notices and/ or employer responses to a PAGA claim must also be filed online, with a copy sent to the aggrieved employee by certified mail.
    • The LWDA’s timeframe to review notices extends to 60 days. (Formerly 30 days.)
    • Alleged aggrieved employees filing in court must provide a file-stamped copy of their PAGA Complaint to the LWDA (for any case filed on or after July 1, 2016).
    • Court approval is required for any settlement of a PAGA civil action, whether or not the settlement includes an award of PAGA penalties.
    • Proposed PAGA settlements are to be submitted to the LWDA at the same time they are submitted to the court.
    • A copy of any court judgment, and any other order that awards or denies PAGA penalties, must be provided to the LWDA.

    These are essentially procedural changes and less-impactful than some of the broader, more substantive changes contained in the original proposal.  For example, the original proposed amendments included an amnesty program for invalidated “commonplace industry practices” and a provision allowing the LWDA to object-to or comment-on proposed PAGA settlements.  Nonetheless, the actual amendments may be a precursor to more sweeping reform, and the legislative environment surrounding PAGA actions deserves close attention.

     

    Increased Paid Family Leave Benefits (AB 908)

     

    Under California’s family temporary disability insurance program, employees may receive up to 6 weeks of wage replacement benefits when taking time off work to care for specified persons (e.g., child, spouse, parent, etc.) or to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption.  Citing a concern that the relatively low wage replacement rate dissuaded employees from using this benefit, this newly-enacted law amends Insurance Code section 3301 to increase the wage replacement benefits.  Specifically, it modifies the formula for calculating these benefits to ensure a minimum weekly benefit of $50, and to increase the wage replacement rate from the current 55% to 70% for most low-wage workers, and to 60% for higher wage earners.

     

    Beginning January 1, 2017, this bill also removes the 7-day waiting period for these family leave benefits.

     

    Status:  This bill has already been signed by Governor Brown and takes effect January 1, 2017.

     

    New Workplace Smoking Prohibitions Took Effect June 9th (ABx2 6 and SBx2 6)

     

    Labor Code section 6404.5 prohibits smoking of tobacco products inside an enclosed space at a place of employment and enumerates fines for violations of these protections.  ABx2 6 amends this section to use the new definition of “smoking” (contained in amended Business and Professions Code section 22950.5) that includes “the use of an electronic smoking device that creates an aerosol or vapor, in any manner or in any form, or the use of any oral smoking device for the purpose of circumventing the prohibition of smoking.”

     

    SBx2 6 also expands these prohibitions to include so-called “owner-operated businesses” (i.e., those with no employees and the owner-operator is the only employee).  It eliminates most of the specified exemptions that permit smoking in certain work environments, such as hotel lobbies, bars and taverns, banquet rooms, warehouse facilities, and employee break rooms.

     

    Status:  Governor Jerry Brown has already signed these bills and because of their unique procedural history and subject matter, they took effect June 9, 2016, rather than January 1, 2017.

     

    No Duty to Track “Hours Worked” on Itemized Wage Statements for Exempt Employees (AB 2535)

     

    While Labor Code section 226 requires employers to provide written wage statements containing specifically-enumerated information, including identifying the total hours worked, it contains an exception from the reporting the total hours worked for employees who are paid solely on salary and are exempt from overtime.  Responding to concerns that there are many employees who are exempt from overtime, in which case employers may not track hours worked, but whose compensation is not “solely based on a salary” (e.g., salespersons paid on commission, high-ranking executives partially compensated with stock options, etc.), this law amends section 226 to expand this exception.

     

    Specifically, in addition to the current language exempting tracking hours for those compensated solely on salary, new subsection (j) eliminates the need to show hours worked for employees exempt from minimum wage and overtime under a specified exemption for: (a) executive, administrative, or professional employees; (b) the “outside sales” exception; (c) salaried computer professionals; (d) parents, spouses, children, or legally-adopted children of the employer provided in applicable orders of the IWC; (e) directors, staff, and participants of a live-in alternative to incarceration rehabilitation program for substance abuse; (f) crew members employed on commercial passenger fishing boats; and (g) participants in national service programs.

     

    Increased Local Enforcement to Combat Wage Theft (SB 1342)

     

    Citing concerns about the continued prevalence of wage theft, especially for lower income workers, this law adds new Government Code section 53060.4 to authorize city or county legislative bodies to delegate subpoena-issuing authority for enforcing local laws or ordinances, including local wage laws, to officials or department heads.

     

    New Temporary Pay Rules Regarding Security Guards (AB 1311)

     

    Labor Code section 201.3 sets forth specific rules regarding wages for temporary service employers, including generally requiring such employees be paid weekly and not later than the regular payday of the following “calendar” week.  Responding to a recent court decision regarding security guards, this law enacts new subsection (b)(1)(B) and creates a new industry-specific rule for security guards employed by temporary service providers since that industry generally uses a different payday than other industries.  Under this new rule, registered security guards working for temporary service employers must be paid weekly, regardless of when the assignment ends, and must be paid no later than the regular payday of the following “workweek” (rather than “calendar week” for other industries).  This law was enacted on an urgency basis and is immediately effective.

     

    DFEH Authorized to Investigate and Prosecute Human Trafficking Complaints (AB 1684)

     

    Since 2005, Penal Code section 236.1 and Civil Code section 52.5 have authorized human trafficking victims to pursue civil and criminal claims against traffickers.  However, citing a concern these remedies are rarely utilized, this law amends Government Code section 12930 to authorize the DFEH to receive, investigate, conciliate, mediate and prosecute human trafficking complaints on behalf of a human trafficking victim.  The law further provides that any damages recovered will belong to the victim but costs and attorney’s fees awarded in such action will belong to the DFEH.  This law unanimously passed the Legislature without opposition.

     

    MUNICIPAL DEVELOPMENTS

     

    San Diego’s Minimum Wage and Paid Sick Leave Ordinance

     

    San Diego’s Proposition I—formally the “Referendum of Ordinance Regarding Earned Sick Leave and Minimum Wage” (the Ordinance)—received over 63 percent of the votes on the ballot measure on June 7, 2016.  To give some history, the City Council had previously approved the Ordinance on August 18, 2014, after which a referendum petition qualified the measure for the ballot, and the Council subsequently voted to place it on the ballot in 2016.

     

    Since San Diego voters passed the measure, the City passed and the Mayor approved an updated Implementing Ordinance modifying substantive portions of the new rule, as discussed below.  Based on the timing of the Mayor’s approval, this Ordinance will be formally effective on September 2, 2016.  However, the City Attorney’s Office has stated that employers acting under the Implementing Ordinance early will not suffer negative consequences. 

     

    Who is Affected?

     

    The Ordinance defines employers and employees broadly.

     

    Employers are defined as any “person or persons, including associations, organization, partnerships, business trusts, limited liability companies, or corporations, who exercise control over the wages, hours, or working conditions of any employee, engage an employee, or permit an employee to work.”  Note, a narrow exception to this definition includes aged, blind, or disabled people who receive in-home supportive services.

     

    Eligible employees are defined as “any person who, in one or more calendar weeks of the year, performs at least two hours of work within the geographic boundaries of the City for an employer, and who qualifies for the payment of minimum wage under the State of California minimum wage law.”  To determine if an employer is within the geographic boundaries of the city, visit here.

     

    San Diego’s New Minimum Wage

     

    Proposition I increases the current minimum wage from $10 per hour to $10.50 per hour.  Looking forward, starting January 1, 2017, the minimum wage will become $11.50 in the City of San Diego, and starting January 1, 2019, the minimum wage will increase “by an amount corresponding to the prior year’s increase, if any, in the cost of living, as defined by the Consumer Price Index.”

     

    Unlike the California minimum wage, these wage rates will not affect the exemption salary tests in California.  Rather, the minimum wage rate used to calculate this amount must be the state minimum wage and not municipal.

     

    San Diego’s New Sick Leave Entitlement

     

    California law currently requires employees who work in California for 30 or more days within a year from the beginning of employment to be entitled to use 3 days or 24 hours of sick leave per year, whichever is greater, with a possible cap and carry-over of that time at 48 hours.

     

    San Diego’s Ordinance requires these same employees, working within the boundaries of the City of San Diego (as discussed above), must receive up to five days or 40 hours of sick leave per year.

     

    Also in line with the California law, the San Diego Ordinance states that sick leave must begin to accrue when employment starts, but employers need not allow employees to use it until the employee’s 90th day of employment.

     

    Leave under the new Ordinance may be used under the following circumstances:

     

    (1)        if an employee is physically or mentally unable to work due to illness, injury, or a medical condition;

     

    (2)        for “Safe Time” defined as time away from work necessary to handle certain matters related to domestic violence, sexual assault, or stalking;

     

    (3)        for medical appointments;

     

    (4)        to care for or assist “certain family members” with an illness, injury, or medical injury; and

     

    (5)        a place of business is closed by order of a public official due to a Public Health Emergency, or an employee is providing care or assistance to a child, whose school or child care provider is closed by order of a public official due to a Public Health Emergency.

     

    Please note, the ability to use Paid Sick Leave for school/child-care-related closures and emergencies differs from the California law.

     

    Alternative Accrual Methods, Including “Frontloading,” and PTO Exception

     

    As with the California law, the default accrual rule under the San Diego Ordinance is that employees must receive one hour of paid sick leave for every 30 hours worked.

     

    While the San Diego Ordinance initially did not recognize any alternative accrual methods, the Implementation Ordinance amends this and allows “lump sum” or “frontloading” method that is allowed for under the general California sick leave law.

     

    Section 39.0105(b)-(c) of the Amended Ordinance now states:

     

    (b)        Employers must provide an Employee with one hour of Earned Sick Leave for every 30 hours worked by the Employee within the geographic boundaries of the City, but Employers are not required to provide an Employee with Earned Sick Leave in less than one-hour increments for a fraction of an hour worked. Employers may cap an Employee’s total accrual of Earned Sick Leave at 80 hours.

     

    (c)        An Employer may satisfy the accrual and carry-over provisions of this section if no less than 40 hours of Earned Sick Leave are awarded to an Employee at the beginning of each Benefit Year for use in accordance with this Division, regardless of the Employee’s status as full-time, part-time, or temporary.

     

    Employers utilizing the lump sum or frontloading method may not differentiate between classes of employees (e.g., part-time, full-time, temporary, etc.) with regard to the amount they bank at the beginning of the benefit year, as defined within the Ordinance.

     

    Unlike the California sick leave law, the San Diego Ordinance also initially did not make clear that employers providing so-called “personal time off” (PTO) plans would not be required to provide additional sick leave.  Responding to concerns this omission would create conflict with the state law and discourage PTO plans, Section 39.0105(g) of the Amended Ordinance specifies:

     

    (g)        An Employer who provides an Employee with an amount of paid leave, including paid time off, paid vacation, or paid personal days sufficient to meet the requirements of this section, and who allows this paid leave to be used for the same purposes and under the same conditions as the Earned Sick Leave required by this Division, is not required to provide additional Earned Sick Leave to the Employee.

     

    As a reminder, the San Diego Ordinance allows sick leave to be used for slightly different purposes than the state law, so employers wishing to rely upon this PTO exception from the San Diego Ordinance should compare their plan to ensure it allows PTO to be used “for the same purposes and under the same conditions” as the San Diego Ordinance.

     

    While the San Diego Ordinance initially did not allow employers to cap sick leave accrual, the amendments allow employers to cap accrual at 80 sick leave hours, the theory being that an employee may accrue enough to use the full amount in one year, and have enough ready to carry-over to the next year and begin using immediately.  (As reminder, under the California law, employees may accrue up to 48 hours, or double the 24 hours of usage allowed).

     

    Sick Leave Paid at Employee’s Regular Rate of Pay

     

    Similar to the California sick leave law, the rate of pay at which employers are charged with paying out sick leave is at the employee’s regular rate of pay, as opposed to their base rate of pay.  For employers with a non-exempt workforce who utilize different rates of pay, commissions, structured bonus plans, or any other wage that may require adjustment of their overtime rate, must be cognizant of this and revise their payment practices for sick leave or paid time off accordingly.

     

    Updated Posting and Notice Deadlines

     

    Under the Implementing Ordinance, the City is responsible for providing bulletin and notices, which can now be found here.  These include a bulletin announcing the adjusted minimum wage for the upcoming year and a notice for employers to post in the workplace informing employees of the minimum wage and sick leave entitlement.

     

    Employers are charged with disseminating this notice, which must include the employer’s name, contact information, and information on how the employer satisfies the requirements under the Ordinance, to all employees by October 1, 2016.  This differs slightly from the California sick leave law, which requires notice via the Wage Theft Prevention Act, and which is only required for non-exempt employees. There is nothing within the Ordinance which requires acknowledgment or signature of this notice.  However, employers are urged to keep a record of this for purposes of potential audits by the City’s Enforcement Office, as defined within the Ordinance.

     

    Recordkeeping Requirements and Enforcement

     

    Employers are required to create contemporaneous records documenting their employees’ wages paid and accrual and use of sick leave.  Employers are already required to provide such a record on their employees’ wage statements under the general California sick leave law.  Under the City’s Ordinance, employers must also “allow Enforcement Official[s] reasonable access to these records in furtherance of an investigation conducted” pursuant to the Ordinance.

     

    The lengthiest and most detailed update to the Ordinance is within section 39.0113, which outlines the authority and duties of the City’s newly developed Enforcement Office, including investigatory rights, access rights, the ability to promulgate regulations, and implementation of the complaint process.

     

    The Take Away

     

    Employers are urged to review and update their sick leave and/or paid time off policies and practices to ensure they are compliant, raise the minimum wage of anyone working within the City of San Diego to at least $10.50 per hour, watch for the notice and posting requirements from the City, and maintain appropriate records as discussed within the Ordinance.

     

    For more information on California’s state-wide sick leave law, see Wilson Turner Kosmo’s 2015 Special Alert here:  California Amends Recently-Enacted Paid Sick Leave Law, Effective Immediately.  You may also review the City’s Frequently Asked Questions, as well as updates regarding the Minimum Wage and Sick Leave Ordinance, here.

     

    Los Angeles’ Paid Sick Leave Law and Minimum Wage Increase

     

    Somewhat similar to the San Diego and California minimum wage increases, the minimum wage for Los Angeles employers with more than 25 employees increased to $10.50, and will continue to increase each July 1st, reaching $15.00 on July 1, 2020.  For employers with 25 or fewer employees the minimum wage will increase in a similar format, starting to $10.50 on July 1, 2017 and reaching $15.00 on July 1, 2021.

     

    On July 1, 2016, the Los Angeles Paid Sick law took effect for employers with more than 25 employees, and the law will take effect for employers with 25 or fewer employees on July 1, 2017.  While the Los Angeles version more closely tracks the California version than the San Diego version, there are several key differences, including that employees are entitled to use six days of paid sick leave and accrue up to 72 hours (compared to three days and 48 hours respectively), and there is no exemption for collective-bargaining level employees.

     

    The City of Los Angeles has issued the required poster providing a general overview of the minimum wage increase and sick leave law at:

    http://wagesla.lacity.org/sites/g/files/wph471/f/MW%20Sck%20Time%20poster_0.pdf

     

    San Francisco Enacts Paid Parental Leave Ordinance

     

    San Francisco enacted its Paid Parental Leave Ordinance (Ordinance No. 160065), which will require beginning on January 1, 2017, employers with 50 or more employees to pay to an employee on “parental leave” (as defined) the difference (so-called “supplemental compensation”) between their gross weekly wage and the Paid Family Leave Benefits paid from the state of California under its Paid Family Leave program.  (Employers with 35 or more employees would need to make such payments beginning July 1, 2017, and employers with 20 or more employees would need to make such payments beginning January 1, 2018).

     

    Please note also, in contrast with the pending bill that would require employers to provide unpaid parental leave to employees who worked 1,250 hours in the preceding 12 months (SB 654 [discussed above]), the San Francisco Ordinance applies to any employee who (1) began employment with the “Covered Employer” (as defined) at least 180 days prior to the leave period; (b) performs at least eight hours of work per week for the employer in San Francisco; (c) at least 40% of those total weekly hours worked for the employer are in San Francisco; and (d) who is eligible to receive paid family leave compensation under the California Paid Family Leave law for the purpose of bonding with a new child.

     

    As noted, the Ordinance requires the “Covered Employer” to provide “supplemental compensation” to an employee on leave representing the difference between the amount paid from the California Paid Family Leave fund and the employee’s “gross weekly wage.” Where the employee has multiple Covered Employers, this supplemental compensation can be apportioned between or among the employers based on the percentage of the employee’s gross weekly wages received from each employer.  However, in cases where an employee works for a Covered employer and a non-Covered Employer, the Covered Employer is responsible only for its percentage of the employee’s total gross weekly wages.

     

    The Ordinance also notes that an employer’s Supplemental Compensation obligation may also be proportionately capped by reference to the State maximum weekly benefit amount, depending on income levels.

     

    As with many recent statutes and ordinances, this Ordinance requires the employer to post a poster to be developed by the San Francisco Office of Labor Standards Enforcement, it requires the employer to retain “Supplemental Compensation” records for three years; it prohibits retaliation, and authorizes agency enforcement.

     

    More information about the San Francisco Ordinance can be found on the San Francisco’s Office of Labor Standards Enforcement website (sfgov.org/olse) or at sfgov.org/olse/paid-parental-leave-ordinance).[i]

     

     

     

     

     

     

     

     

     

     

     

     

     

    [i] The legislative content in this report is non-exhaustive, is for informational purposes only, and is not for the purpose of providing legal advice. You should always contact legal counsel to determine if this information, and your interpretation of it, is appropriate to your particular situation.

    CALSHRM LEGISLATIVE REPORT –  AUGUST 2016

    By: Michael S. Kalt, CalSHRM Government Affairs Director

    Wilson Turner Kosmo LLP

    mkalt@wilsonturnerkosmo.com

    Telephone:  619-236-9600

    Twitter:  @michaelkalt_law

    LEGISLATIVE SUMMARY

    July was a fairly inactive month as the Legislature enjoyed its summer vacation.  However, the Legislature has reconvened and will soon address a number of employment bills, including bills that would:

    • Expand California’s Equal Pay Act to target race and ethnicity-related wage differentials (SB 1063);

    • Require employers to provide double pay for work performed on Thanksgiving (AB 67);

    • Expand the prohibitions regarding “immigration-related practices” (SB 1001);

    • Prohibit hiring-related inquiries concerning juvenile convictions (AB 1843);

    • Preclude salary history from justifying gender-based waged differentials (AB 1676);

    • Expand California’s heat illness regulations to include indoor employees (SB 1167); and

    • Require employers to either provide or make available for inspection policies regarding sexual assault/domestic violence leave rights and an employer’s Illness and Injury Prevention Program (AB 2337 and AB 2895).

    Looking ahead, the deadline for bills to pass the second legislative chamber is August 31st, and Governor Brown will then have until September 30th to sign or veto any bills that make it to his desk.

    Since the last update, California enacted laws amending the requirement to list “hours worked” on itemized wage statements for certain employees (AB 2535), and authorizing the DFEH to investigate human trafficking violations (AB 1684).  The requirement to use only registered foreign labor contractors from a 2014 law (SB 477) also took effect on July 1, 2016.  At the municipal level, as expected, the Mayor of San Diego signed the amendments regarding San Diego’s Paid Sick Leave Ordinance.

    Discussed below are the key employment bills of potential general application that have already been enacted or have taken effect in 2016, followed by the bills that remain pending.

    NEW LAWS ALREADY ENACTED

    San Diego’s Minimum Wage and Paid Sick Leave Ordinance is Now in Effect, and the Related Implementing Ordinance Will be Formally Effective September 2, 2016

    San Diego’s Proposition I—formally the “Referendum of Ordinance Regarding Earned Sick Leave and Minimum Wage” (the Ordinance)—received over 63 percent of the votes on the ballot measure on June 7, 2016.  To give some history, the City Council had previously approved the Ordinance on August 18, 2014, after which a referendum petition qualified the measure for the ballot, and the Council subsequently voted to place it on the ballot in 2016.

    Since San Diego voters passed the measure, the City passed and the Mayor approved an updated Implementing Ordinance modifying substantive portions of the new rule, as discussed below.  Based on the timing of the Mayor’s approval, this Ordinance will be formally effective on September 2, 2016.  However, the City Attorney’s Office has stated that employers acting under the Implementing Ordinance early will not suffer negative consequences.  

    The original Ordinance definitions, as well as the use and eligibility sections within the sick leave portion of the law remain largely unchanged, as does the $10.50 minimum wage increase and the mandatory forty (40) hours of paid sick leave for employees, both of which were effective as of July 11, 2016.  What has changed are the ways in which employers may implement sick leave policies, the rate at which sick leave must be paid out, the posting and notice deadlines, as well as the way in which the City plans on enforcing these new rules, as discussed below.

    Who is Affected?

    The Ordinance defines employers and employees broadly.

    Employers are defined as any “person or persons, including associations, organization, partnerships, business trusts, limited liability companies, or corporations, who exercise control over the wages, hours, or working conditions of any employee, engage an employee, or permit an employee to work.”  Note, a narrow exception to this definition includes aged, blind, or disabled people who receive in-home supportive services.

    Eligible employees are defined as “any person who, in one or more calendar weeks of the year, performs at least two hours of work within the geographic boundaries of the City for an employer, and who qualifies for the payment of minimum wage under the State of California minimum wage law.”  To determine if an employer is within the geographic boundaries of the city, visit here.

    San Diego’s New Minimum Wage

    Proposition I increases the current minimum wage from $10 per hour to $10.50 per hour.  Looking forward, starting January 1, 2017, the minimum wage will become $11.50 in the City of San Diego, and starting January 1, 2019, the minimum wage will increase “by an amount corresponding to the prior year’s increase, if any, in the cost of living, as defined by the Consumer Price Index.”

    Unlike the California minimum wage, these wage rates will not affect the exemption salary tests in California.  Rather, the minimum wage rate used to calculate this amount must be the state minimum wage and not municipal.

    San Diego’s New Sick Leave Entitlement

    California law currently requires employees who work in California for 30 or more days within a year from the beginning of employment to be entitled to use 3 days or 24 hours of sick leave per year, whichever is greater, with a possible cap and carry-over of that time at 48 hours.

     

    San Diego’s Ordinance requires these same employees, working within the boundaries of the City of San Diego (as discussed above), must receive up to five days or 40 hours of sick leave per year.

     

    Also in line with the California law, the San Diego Ordinance states that sick leave must begin to accrue when employment starts, but employers need not allow employees to use it until the employee’s 90th day of employment.

     

    Leave under the new Ordinance may be used under the following circumstances:

     

    (1) if an employee is physically or mentally unable to work due to illness, injury, or a medical condition;

     

    (2) for “Safe Time” defined as time away from work necessary to handle certain matters related to domestic violence, sexual assault, or stalking;

     

    (3) for medical appointments;

     

    (4) to care for or assist “certain family members” with an illness, injury, or medical injury; and

     

    (5) a place of business is closed by order of a public official due to a Public Health Emergency, or an employee is providing care or assistance to a child, whose school or child care provider is closed by order of a public official due to a Public Health Emergency.

     

    Please note, the ability to use Paid Sick Leave for school/child-care-related closures and emergencies differs from the California law.

     

    Alternative Accrual Methods, Including “Frontloading,” and a PTO Exception are Now Appropriate

     

    As with the California law, the default accrual rule under the San Diego Ordinance is that employees must receive one hour of paid sick leave for every thirty hours worked.

     

    While the San Diego Ordinance initially did not recognize any alternative accrual methods, the Implementation Ordinance amends this and allows “lump sum” or “frontloading” method that is allowed for under the general California sick leave law.

     

    Section 39.0105(b)-(c) of the Amended Ordinance now states:

     

    (b) Employers must provide an Employee with one hour of Earned Sick Leave for every 30 hours worked by the Employee within the geographic boundaries of the City, but Employers are not required to provide an Employee with Earned Sick Leave in less than one-hour increments for a fraction of an hour worked. Employers may cap an Employee’s total accrual of Earned Sick Leave at 80 hours.

     

    (c) An Employer may satisfy the accrual and carry-over provisions of this section if no less than 40 hours of Earned Sick Leave are awarded to an Employee at the beginning of each Benefit Year for use in accordance with this Division, regardless of the Employee’s status as full-time, part-time, or temporary.

     

    Employers utilizing the lump sum or frontloading method may not differentiate between classes of employees (e.g., part-time, full-time, temporary, etc.) with regard to the amount they bank at the beginning of the benefit year, as defined within the Ordinance.

     

    Unlike the California sick leave law, the San Diego Ordinance also initially did not make clear that employers providing so-called “personal time off” (PTO) plans would not be required to provide additional sick leave.  Responding to concerns this omission would create conflict with the state law and discourage PTO plans, Section 39.0105(g) of the Amended Ordinance specifies:

     

    (g) An Employer who provides an Employee with an amount of paid leave, including paid time off, paid vacation, or paid personal days sufficient to meet the requirements of this section, and who allows this paid leave to be used for the same purposes and under the same conditions as the Earned Sick Leave required by this Division, is not required to provide additional Earned Sick Leave to the Employee.

     

    As a reminder, the San Diego Ordinance allows sick leave to be used for slightly different purposes than the state law, so employers wishing to rely upon this PTO exception from the San Diego Ordinance should compare their plan to ensure it allows PTO to be used “for the same purposes and under the same conditions” as the San Diego Ordinance.

     

    While the San Diego Ordinance initially did not allow employers to cap sick leave accrual, the amendments allow employers to cap accrual at 80 sick leave hours, the theory being that an employee may accrue enough to use the full amount in one year, and have enough ready to carry-over to the next year and begin using immediately.  (As reminder, under the California law, employees may accrue up to 48 hours, or double the 24 hours of usage allowed).

     

    Sick Leave Paid at Employee’s Regular Rate of Pay

     

    Similar to the California sick leave law, the rate of pay at which employers are charged with paying out sick leave is at the employee’s regular rate of pay, as opposed to their base rate of pay.  For employers with a non-exempt workforce who utilize different rates of pay, commissions, structured bonus plans, or any other wage that may require adjustment of their overtime rate, must be cognizant of this and revise their payment practices for sick leave or paid time off accordingly.

     

    Updated Posting and Notice Deadlines

     

    Under the Implementing Ordinance, the City is responsible for providing bulletin and notices, which can now be found here.  These include a bulletin announcing the adjusted minimum wage for the upcoming year and a notice for employers to post in the workplace informing employees of the minimum wage and sick leave entitlement.

     

    Employers are charged with disseminating this notice, which must include the employer’s name, contact information, and information on how the employer satisfies the requirements under the Ordinance, to all employees by October 1, 2016.  This differs slightly from the California sick leave law, which requires notice via the Wage Theft Prevention Act, and which is only required for non-exempt employees. There is nothing within the Ordinance which requires acknowledgment or signature of this notice.  However, employers are urged to keep a record of this for purposes of potential audits by the City’s Enforcement Office, as defined within the Ordinance.

     

    Recordkeeping Requirements and Enforcement

     

    Employers are required to create contemporaneous records documenting their employees’ wages paid and accrual and use of sick leave.  Employers are already required to provide such a record on their employees’ wage statements under the general California sick leave law.  Under the City’s Ordinance, employers must also “allow Enforcement Official[s] reasonable access to these records in furtherance of an investigation conducted” pursuant to the Ordinance.

     

    The lengthiest and most detailed update to the Ordinance is within section 39.0113, which outlines the authority and duties of the City’s newly developed Enforcement Office, including investigatory rights, access rights, the ability to promulgate regulations, and implementation of the complaint process.

     

    The Take Away

     

    Employers are urged to review and update their sick leave and/or paid time off policies and practices to ensure they are compliant, raise the minimum wage of anyone working within the City of San Diego to at least $10.50 per hour, watch for the notice and posting requirements from the City, and maintain appropriate records as discussed within the Ordinance.

     

    For more information on California’s state-wide sick leave law, see Wilson Turner Kosmo’s 2015 Special Alert here:  California Amends Recently-Enacted Paid Sick Leave Law, Effective Immediately.  You may also review the City’s Frequently Asked Questions, as well as updates regarding the Minimum Wage and Sick Leave Ordinance, here.

     

    Reminder:  Phase I of Los Angeles’ Paid Sick Leave Law and Minimum Wage Increase Took Effect July 1st

     

    Somewhat similar to the San Diego and California minimum wage increases, beginning July 1, 2016, the minimum wage for Los Angeles employers with more than 25 employees increased to $10.50, and will continue to increase each July 1st, reaching $15.00 on July 1, 2020.  For employers with 25 or fewer employees the minimum wage will increase in a similar format, starting to $10.50 on July 1, 2017 and reaching $15.00 on July 1, 2021.

     

    On July 1, 2016, the Los Angeles Paid Sick law took effect for employers with more than 25 employees, and the law will take effect for employers with 25 or fewer employees on July 1, 2017.  While the Los Angeles version more closely tracks the California version than the San Diego version, there are several key differences, including that employees are entitled to use six days of paid sick leave and accrue up to 72 hours (compared to three days and 48 hours respectively), and there is no exemption for collective-bargaining level employees.

     

    The City of Los Angeles has issued the required poster providing a general overview of the minimum wage increase and sick leave law at:

    http://wagesla.lacity.org/sites/g/files/wph471/f/MW%20Sck%20Time%20poster_0.pdf

     

    California’s Minimum Wage to Increase to $15.00 by 2022 (SB 3)

     

    To preclude votes on two union-backed statewide initiatives regarding the minimum wage, Governor Jerry Brown and his Democratic caucus introduced, quickly passed and enacted this law increasing California’s minimum wage to $15.00 an hour by 2022.  For employers with more than 25 employees, the minimum wage will increase according to the following schedule:

     

    Increase Date

    New Rate

    New Salary Threshold

    January 1, 2017

    $10.50

    $43,680

    January 1, 2018

    $11.00

    $45,760

    January 1, 2019

    $12.00

    $49,920

    January 1, 2020

    $13.00

    $54,080

    January 1, 2021

    $14.00

    $58,240

    January 1, 2022

    $15.00

    $62,400

     

    For employers with 25 or fewer employees, the minimum wage will increase on a slightly slower schedule, as follows:

     

    Increase Date

    New Rate

    New Salary Threshold

    January 1, 2018

    $10.50

    $43,680

    January 1, 2019

    $11.00

    $45,760

    January 1, 2020

    $12.00

    $49,920

    January 1, 2021

    $13.00

    $54,080

    January 1, 2022

    $14.00

    $58,240

    January 1, 2023

    $15.00

    $62,400

     

    This new law also contemplates annual subsequent increases after the final scheduled increase, generally tied to consumer inflation, which the Director of Finance will determine by August 1st of each year with the increase, rounded to the nearest ten cents, to become effective the following January 1st.  Once this formula is applied, the minimum wage may increase or stay the same, but it will not decrease.

     

    Beginning in July 2017, the Director of Finance will be required to determine whether economic conditions can support the next scheduled minimum wage increase and, if not, the Governor would have the authority through a proclamation to temporarily suspend the next increase.  The Governor would not be permitted to temporarily suspend scheduled minimum wage increases more than two times, and if the Governor does temporarily suspend a scheduled minimum wage increase, all remaining scheduled increases shall be postponed by an additional year.

     

    As noted above, these increases to the hourly minimum wage will also impact the salary level needed for exempt employee purposes, with the salary level ultimately increasing to $62,400 when the $15.00 level is reached in 2022.

     

    Lastly, this new law amends Labor Code section 245.5 to remove the exemption from California’s Paid Sick Leave requirements for in-home supportive service employees.  Accordingly, beginning on July 1, 2018, in-home supportive service employee who work 30 or more days in California within a year from commencement of employment will be entitled to accrue and use paid sick leave, albeit on a slightly different schedule enumerated in new subsection (e) to Labor Code section 246.

     

    “Foreign Labor Contractor” Requirement Update (SB 477)

     

    As a reminder, in 2014, California enacted SB 477 to strengthen its regulations regarding “foreign labor contractors” who recruit foreign workers to relocate to California.  For purposes of SB 477, “foreign labor contracting activity” is defined as “recruiting or soliciting for compensation a foreign worker who resides outside of the United States in furtherance of that worker’s employment in California, including when that activity occurs wholly outside the United States.”  However, foreign labor contracting for purposes of SB 477 does not include recruiting activities undertaken directly by the employer to locate workers for the employer’s own use, and is also limited to the recruitment of non-agricultural employees (since farm labor contractors are subject to other regulations).

     

    In light of SB 477’s focus on unscrupulous traffickers, by July 1, 2016 all foreign labor contractors were required to register with the Labor Commissioner.  By August 1, 2016, the Labor Commissioner was required to post on its website the names of all registered foreign labor contractors, as well as a list of the labor contractors who were denied renewal or registration.

     

    Although this law focuses on foreign labor contractors rather than employers, it has several implications for employers.  First, new Business and Professions Code section 9998.2(c) precludes employers from knowingly entering into an agreement for the services of an unregistered foreign labor contractor.  While employers are not subject to these registration requirements for their direct recruitment efforts, and SB 477 specifically exempts from joint and several liability those employers who use a registered foreign labor contractor, this liability exemption for the contractor’s tortious activities only applies if the employer works with a registered foreign labor contractor.

     

    Second, new Business and Professions Code section 9998.2(a) requires by July 1, 2016, an employer using the services of a foreign labor contractor to disclose to the Labor Commissioner the contact information of the employer’s designated person to work with the foreign labor contractor, and submit a declaration consenting to jurisdiction if the employer’s contact person has left the jurisdiction or is unavailable.

     

    Lastly, the employer must be mindful that Business and Professions Code section 9998.6 precludes any person from discriminating or retaliating against a foreign worker or their family members because they have exercised any rights under this new law.

     

    PAGA Amendments

     

    As part of the 2016-2017 Fiscal Year Budget Change Proposal, the Governor passed several amendments to PAGA—purportedly intended to reduce litigation costs for employers and improve outcomes for employees.  The LWDA states on its website that the following procedural changes to PAGA are in effect as of June 27, 2016.

    • A $75 filing fee is required with new PAGA claim notices and any employer responses to an initial claim (including any employer cure).  This fee is waivable for those qualified as in forma pauperis.

    • PAGA claim notices must now be filed online to the LWDA, with written notice (certified mail) to the employer. Similarly, employer cure notices and/ or employer responses to a PAGA claim must also be filed online, with a copy sent to the aggrieved employee by certified mail.

    • The LWDA’s timeframe to review notices extends to 60 days. (Formerly 30 days.)

    • Alleged aggrieved employees filing in court must provide a file-stamped copy of their PAGA Complaint to the LWDA (for any case filed on or after July 1, 2016).

    • Court approval is required for any settlement of a PAGA civil action, whether or not the settlement includes an award of PAGA penalties.

    • Proposed PAGA settlements are to be submitted to the LWDA at the same time they are submitted to the court.

    • A copy of any court judgment, and any other order that awards or denies PAGA penalties, must be provided to the LWDA.

    These are essentially procedural changes and less-impactful than some of the broader, more substantive changes contained in the original proposal.  For example, the original proposed amendments included an amnesty program for invalidated “commonplace industry practices” and a provision allowing the LWDA to object-to or comment-on proposed PAGA settlements.  Nonetheless, the actual amendments may be a precursor to more sweeping reform, and the legislative environment surrounding PAGA actions deserves close attention.

     

    Increased Paid Family Leave Benefits (AB 908)

     

    Under California’s family temporary disability insurance program, employees may receive up to 6 weeks of wage replacement benefits when taking time off work to care for specified persons (e.g., child, spouse, parent, etc.) or to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption.  Citing a concern that the relatively low wage replacement rate dissuaded employees from using this benefit, this newly-enacted law amends Insurance Code section 3301 to increase the wage replacement benefits.  Specifically, it modifies the formula for calculating these benefits to ensure a minimum weekly benefit of $50, and to increase the wage replacement rate from the current 55% to 70% for most low-wage workers, and to 60% for higher wage earners.

     

    Beginning January 1, 2017, this bill also removes the 7-day waiting period for these family leave benefits.

     

    Status:  This bill has already been signed by Governor Brown and takes effect January 1, 2017.

     

    New Workplace Smoking Prohibitions Take Effect June 9th (ABx2 6 and SBx2 6)

     

    Labor Code section 6404.5 prohibits smoking of tobacco products inside an enclosed space at a place of employment and enumerates fines for violations of these protections.  ABx2 6 amends this section to use the new definition of “smoking” (contained in amended Business and Professions Code section 22950.5) that includes “the use of an electronic smoking device that creates an aerosol or vapor, in any manner or in any form, or the use of any oral smoking device for the purpose of circumventing the prohibition of smoking.”

     

    SBx2 6 also expands these prohibitions to include so-called “owner-operated businesses” (i.e., those with no employees and the owner-operator is the only employee).  It eliminates most of the specified exemptions that permit smoking in certain work environments, such as hotel lobbies, bars and taverns, banquet rooms, warehouse facilities, and employee break rooms.

     

    Status:  Governor Jerry Brown has already signed these bills and because of their unique procedural history and subject matter, they took effect June 9, 2016, rather than January 1, 2017.

     

    San Francisco Enacts Paid Parental Leave Ordinance

     

    San Francisco recently enacted its Paid Parental Leave Ordinance (Ordinance no. 160065), which will require beginning on January 1, 2017, employers with 50 or more employees to pay to an employee on “parental leave” (as defined) the difference (so-called “supplemental compensation”) between their gross weekly wage and the Paid Family Leave Benefits paid from the state of California under its Paid Family Leave program.  (Employers with 35 or more employees would need to make such payments beginning July 1, 2017, and employers with 20 or more employees would need to make such payments beginning January 1, 2018).

     

    Please note also, in contrast with the pending bill that would require employers to provide unpaid parental leave to employees who worked 1,250 hours in the preceding 12 months (SB 1166 [discussed below]), the San Francisco Ordinance applies to any employee who (1) began employment with the “Covered Employer” (as defined) at least 180 days prior to the leave period; (b) performs at least eight hours of work per week for the employer in San Francisco; (c) at least 40% of those total weekly hours worked for the employer are in San Francisco; and (d) who is eligible to receive paid family leave compensation under the California Paid Family Leave law for the purpose of bonding with a new child.

     

    As noted, the Ordinance requires the “Covered Employer” to provide “supplemental compensation” to an employee on leave representing the difference between the amount paid from the California Paid Family Leave fund and the employee’s “gross weekly wage.” Where the employee has multiple Covered Employers, this supplemental compensation can be apportioned between or among the employers based on the percentage of the employee’s gross weekly wages received from each employer.  However, in cases where an employee works for a Covered employer and a non-Covered Employer, the Covered Employer is responsible only for its percentage of the employee’s total gross weekly wages.

     

    The Ordinance also notes that an employer’s Supplemental Compensation obligation may also be proportionately capped by reference to the State maximum weekly benefit amount, depending on income levels.

     

    As with many recent statutes and ordinances, this Ordinance requires the employer to post a poster to be developed by the San Francisco Office of Labor Standards Enforcement, it requires the employer to retain “Supplemental Compensation” records for three years; it prohibits retaliation, and authorizes agency enforcement.

     

    More information about the San Francisco Ordinance can be found on the San Francisco’s Office of Labor Standards Enforcement website (sfgov.org/olse) or at sfgov.org/olse/paid-parental-leave-ordinance).

     

    No Duty to Track “Hours Worked” on Itemized Wage Statements for Exempt Employees (AB 2535)

     

    While Labor Code section 226 requires employers to provide written wage statements containing specifically-enumerated information, including identifying the total hours worked, it contains an exception from the reporting the total hours worked for employees who are paid solely on salary and are exempt from overtime.  Responding to concerns that there are many employees who are exempt from overtime, in which case employers may not track hours worked, but whose compensation is not “solely based on a salary” (e.g., salespersons paid on commission, high-ranking executives partially compensated with stock options, etc.), this law amends section 226 to expand this exception.

     

    Specifically, in addition to the current language exempting tracking hours for those compensated solely on salary, new subsection (j) eliminates the need to show hours worked for employees exempt from minimum wage and overtime under a specified exemption for: (a) executive, administrative, or professional employees; (b) the “outside sales” exception; (c) salaried computer professionals; (d) parents, spouses, children, or legally-adopted children of the employer provided in applicable orders of the IWC; (e) directors, staff, and participants of a live-in alternative to incarceration rehabilitation program for substance abuse; (f) crew members employed on commercial passenger fishing boats; and (g) participants in national service programs.

     

    Increased Local Enforcement to Combat Wage Theft (SB 1342)

     

    Citing concerns about the continued prevalence of wage theft, especially for lower income workers, this law adds new Government Code section 53060.4 to authorize city or county legislative bodies to delegate subpoena-issuing authority for enforcing local laws or ordinances, including local wage laws, to officials or department heads.

     

    New Temporary Pay Rules Regarding Security Guards (AB 1311)

     

    Labor Code section 201.3 sets forth specific rules regarding wages for temporary service employers, including generally requiring such employees be paid weekly and not later than the regular payday of the following “calendar” week.  Responding to a recent court decision regarding security guards, this law enacts new subsection (b)(1)(B) and creates a new industry-specific rule for security guards employed by temporary service providers since that industry generally uses a different payday than other industries.  Under this new rule, registered security guards working for temporary service employers must be paid weekly, regardless of when the assignment ends, and must be paid no later than the regular payday of the following “workweek” (rather than “calendar week” for other industries).  This law was enacted on an urgency basis and is immediately effective.

     

    DFEH Authorized to Investigate and Prosecute Human Trafficking Complaints (AB 1684)

     

    Since 2005, Penal Code section 236.1 and Civil Code section 52.5 have authorized human trafficking victims to pursue civil and criminal claims against traffickers.  However, citing a concern these remedies are rarely utilized, this law amends Government Code section 12930 to authorize the DFEH to receive, investigate, conciliate, mediate and prosecute human trafficking complaints on behalf of a human trafficking victim.  The law further provides that any damages recovered will belong to the victim but costs and attorney’s fees awarded in such action will belong to the DFEH.  This law unanimously passed the Legislature without opposition.

     

    PENDING BILLS

     

    Double Pay on Thanksgiving (AB 67)

     

    Entitled the Double Pay on the Holiday Act of 2016, this bill would add Labor Code section 511.5 to require certain large employers (with more than 500 employees) to pay non-exempt employees twice their regular rate of pay for working on Thanksgiving.  Unlike last year’s version which would have applied to almost all employers, this law would only apply to employees working in “retail store” or “grocery store” establishments, and would not apply to “retail food facilities” as defined in Health and Safety Code section 113789.  “Retail store establishments” would be defined as those having a physical store within the state with more than 50 percent of its revenue generated from merchandise subject to the state’s sales and use tax, but specifically would not include stores located in a hotel, amusement park, movie theater or motor vehicle dealers.  “Grocery store establishments” would be defined as those having a physical store within the state that sells primarily household foodstuffs for offsite consumption.

     

    This requirement would only apply to non-exempt employees, and would not apply to employees covered by a collective bargaining agreement that expressly provides for the wages, hours of work, and working conditions of employees, and expressly provides for holiday premium pay, premium wage rates for overtime pay, and a regular rate of pay of not less than 30 percent above the state minimum wage.

     

    Status: This bill failed passage last year, but narrowly passed the Assembly despite bi-partisan opposition.  It is passed the Senate’s Labor and Industrial Relations Committee and is pending in the Appropriations Committee.

     

    Equal Pay Regardless of Race or Ethnicity (SB 1063)

     

    Following up on last year’s amendments to California’s Equal Pay Act regarding gender-based wage differentials (SB 358), the Wage Equality Act of 2016 would enact nearly identical language to preclude wage differentials based on race or ethnicity.  Specifically, it would amend Labor Code section 1197.5 to prohibit employers from paying an employee at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work when viewed as a composite of skill, effort, and responsibility and performed under similar working conditions.

     

    As with gender, the employer would bear the burden to demonstrate that the wage differential is based upon one or more of the following factors: (a) a seniority system; (b) a merit system; (c) a system that measures earnings by quantity or quality of production; or (d) a bona fide factor other than race or ethnicity, such as education, training, or experience.  As with the “bona fide factor” exception following SB 358’s enactment, the employer would be required to demonstrate that the factor is not derived from a race or ethnicity-based differential, is job-related to the position in question, and is consistent with a business necessity (i.e., an overriding legitimate business purpose that cannot be achieved through an alternative business practice).  The employer would be required to demonstrate that each factor relied upon is applied reasonably and the one or more factors relied upon account for the entire wage differential.

     

    Lastly, because SB 1163 amends section 1197.5 generally, it would also prohibit employers from discriminating against employees who report or assist with concerns about race/ethnicity-based wage differentials, it would provide the same enforcement mechanisms, and it would incorporate its protections for employees to disclose, inquire, or discuss wages.

     

    Status:  This bill passed the Senate on a party-line vote, and has passed the Assembly’s Labor and Employment Committee and is pending in the Appropriations Committee.

     

    Equal Pay Certifications for Certain State Contractors (AB 1890)

     

    Entitled the Equal Pay for Equal Work Act of 2016, this bill would amend Government Code section 12990 which presently identifies criteria for employers who wish to become a contractor for public works, including agreeing to California’s non-discrimination laws and submitting a non-discrimination program to the Department of Fair Employment and Housing (DFEH) for approval and certification.  For instance, while California presently states the DFEH “may require” a non-discrimination plan to be submitted, this bill would require employers with more than 100 employees in the state and a contract amounting to more than $50,000 to submit its non-discrimination program and to submit periodic reports, no more than annually on a schedule to be determined by the department, of its compliance with this program.  Employers with less than 100 employees in the state or a contract that amounts to less than $50,000 may also be required to submit a non-discrimination program and, if so required, to comply with the same requirements applicable to employers with more than 100 employees in the state.

     

    A non-discrimination program would need to include policies and procedures designed to ensure equal employment opportunities for applicants and employees, a description of employment selection procedures, and a workforce analysis.  This workforce analysis would need to include: (a) the total number of workers within a specified job category identified by race or national origin, and sex; (b) the total wages required to be reported on a W-2 for all workers within that job category identified by race, ethnicity, and sex; and (c) the total hours worked on an annual basis for all workers in a specific job category identified by race, ethnicity, and sex.  Exempt employees would be presumed to work 40 hours a week and part-time employees would be presumed to work 20 hours a week, unless the employers utilizes a different standard number of hours per week for exempt employees, in which case the employer shall report total hours worked on an annual basis by those employees based on that standard number.

     

    These proposed reporting changes appear similar to the August 2014 federal Department of Labor OFCCP’s Notice of Proposed Rulemaking to require covered federal contractors and subcontractors with more than 100 employees to submit an annual equal pay report on employee compensation.  As a reminder, the federal Equal Employment and Opportunity Commissioner is presently considering proposed changes to its EEO-1 Report, which would apply to all employers with more than 100 employees (not just federal contractors) and would require the submission of payroll data broken down by race/ethnicity, not just gender.

     

    Status:  This bill passed the Assembly and has passed the Senate’s Government Organization Committee and is pending in the Senate’s Appropriations Committee.  Governor Brown vetoed a very similar bill (AB 1354) in 2015.

     

    “Immigration-Related Practices” Protections Expanded (SB 1001)

     

    California has made immigration-related abuses a legislative priority, including last year’s bill enacting a new $10,000 penalty for E-Verify violations (AB 622), the 2014 amendment to FEHA prohibiting discrimination against drivers licenses issued to undocumented workers (AB 1660), and the 2013 bills prohibiting retaliation for “immigration-related practices” (AB 263 and SB 666).  This bill would add new Labor Code section 1019.1 to broaden the protections from “unfair immigration-related practices” beyond the retaliation context and extend them to any employee or applicant regardless of whether they have made a complaint.

     

    This bill would adopt the definition of “unfair immigration-related practice” currently contained in Labor Code section 1019, which includes (a) requesting more or different documents than required under federal law to verify eligibility or refusing to accept reasonably genuine documents; (b) using the federal E-Verify system to check the employment authorization status of an employee or an applicant at a time or in a manner not authorized by federal law; (c) threatening to file or the filing of a false police or government agency report; or (d) threatening to contact or contacting immigration authorities.

     

    New section 1019.1 would deem it unlawful to engage in, or to direct another to engage in, an “unfair immigration-related practice” against an employee or applicant.  It would also deem it unlawful for an employer or their agent to reinvestigate or re-verify an incumbent employee’s authorization to work using an unfair immigration-related practice.  In effect, while federal immigration laws already prohibit documentation abuses by employers, this bill would provide a state remedy intended to be less cumbersome.

     

    Lastly, the bill’s author has expressed concern that immigrant workers who have been provided temporary legal status and the ability to apply for work authorization under President Obama’s Executive Orders, including the Deferred Action for Parents of Americans of United States Citizens (DAPA) and the Deferred Action for Childhood Arrivals (DACA), may be subject to abuse.  Accordingly, this bill would deem it unlawful for an employer or their agent to discriminate against an applicant or an employee with authorization to work based upon the specific status, or term of status that accompanies the authorization to work.

     

    This bill would also authorize an employee or applicant to bring a civil action for equitable relief and any applicable damages or penalties, plus reasonable attorneys’ fees and costs (including expert witness costs) for any violations.

     

    Status:  This bill passed the Senate with some bi-partisan support and has passed the Assembly’s Labor and Employment and Judiciary Committees.  It is presently pending in the Assembly’s Appropriations Committee and passage appears likely.

     

    Prohibition on Inquiring About Juvenile Court Actions (AB 1843)

     

    Consistent with the “ban the box” trend advancing nationwide, Labor Code section 432.7 prohibits employers from requesting applicants to disclose, or from using as a factor in determining employment conditions, information concerning an arrest or detention that did not result in a conviction, or information concerning a referral to or participation in a pre- or post-trial diversion program.  Since 2014 (SB 530), California employers have also generally been prohibited from inquiring about or using information related to a conviction that has been judicially dismissed or ordered sealed.

     

    This bill would amend Labor Code section 432.7 to provide similar protection related to juvenile-related arrests as it currently provides for adult criminal histories.  Specifically, new subsection (a)(2) would preclude employers from requiring applicants to disclose, verbally or in writing, or from utilizing as a condition of employment, information concerning 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.

     

    New subsection (a)(3) would further provide that “conviction,” for both subsections (a)(1) dealing with adults and (a)(2) dealing with juvenile courts, shall not include any adjudication by a juvenile court or any other court or action taken with respect to a person who is under the process and jurisdiction of juvenile court law.

     

    Status:  This bill has passed the Assembly, and has passed the Senate’s Labor and Industrial Relations Committee, and is pending in the Senate’s Appropriations Committee.  It does not appear meaningfully opposed.

     

    Salary History by Itself not a Bona Fide Factor Justifying Gender-Based Wage Differential (AB 1676)

     

    In 2015, California enacted SB 358, substantially revising its Equal Pay Act protections, including materially revising the standard when attempting to justify a gender-related wage differential.  Citing a concern that salary history potentially institutionalizes prior discriminatory pay practices, this bill originally proposed to add new Labor Code section 432.3 to prohibit any employer from seeking salary history information about an applicant for employment.

     

    However, facing substantial opposition and since Governor Brown had vetoed a very similar bill in 2015 (AB 1017), this bill has recently been materially amended.  Specifically, rather than creating a new Labor Code provision prohibiting salary history discussions, this bill would instead amend California’s Equal Pay Act (Labor Code section 1197.5) to provide that “prior salary shall not, by itself justify any disparity in compensation.”

     

    Status:  This bill passed the Assembly on a party-line vote, but following amendment it passed the Senate Judiciary unanimously and is pending in the Appropriations Committee.  If it passes Appropriations, it will return to the Assembly for concurrence in the Senate amendments, which looks increasingly likely.

     

    Employers to Provide New Hires with Written Information about Time-Off Related to Sexual Assault, Domestic Violence or Stalking (AB 2337)

     

    Labor Code section 230.1 prohibits employers with more than 25 employees from discriminating or retaliating against employees who are victims of domestic violence, sexual assault, or stalking from taking time off from work for specified purposes to address the domestic violence, sexual assault, or stalking.  This bill would add new subsection (h) to require employers to provide written information regarding these rights under section 230.1 and rights under Labor Code section 230, subsections (c), (e) and (f) prohibiting retaliation and requiring employers to reasonably accommodate victims of domestic violence, sexual assault or stalking.  Employers will be required to provide this written information to new employees upon hire and to other employees upon request.

     

    The bill also requires the Labor Commissioner, by July 1, 2017, to develop a form employers could use and to post it on its website, and specifies that an employer need not comply with these notice requirements until the Labor Commissioner posts the form.  Alternatively, employer’s may develop and use its own notice provided it is “substantially similar in content and clarity” to the Labor Commissioner’s form.

     

    Status:  This bill unanimously passed the Assembly, and has passed the Senate’s Labor and Industrial Relations and Judiciary Committees, and is pending in the Senate Appropriations Committee.  It does not appear meaningfully opposed.

     

    Illness and Injury Prevention Program Disclosures (AB 2895)

     

    The California Occupational Safety and Health Act of 1973 establishes safety responsibilities for employers and employees and, amongst other things, requires every employer to establish and maintain an effective illness and injury prevention program (IIPP).  This IIPP must be in writing, except in certain circumstances, and must contain certain statutorily-enumerated items such as identifying the person responsible for the program, a training program, and specification of compliance and reporting methods.

     

    Responding to concerns that many employees, particularly non-English speaking employees, are unaware of an employer’s IIPP, this bill would amend Labor Code section 6417 and, beginning July 1, 2017, impose new disclosure requirements regarding these IIPPs.  For instance, new subsection (e)(1) would require employers to maintain an up-to-date copy of the written injury prevention program at each worksite where three or more employees worked.  New subsection (e)(2) would require the employer, beginning July 1, 2017, to inform each employee and each new hire in a language understood by the employee of the availability of the IIPP at the worksite, and of the employee’s right to inspect and receive a copy of it.

     

    If an employer receives a written request for a copy of the IIPP from a current employee or their authorized representative, the employer would be required to provide a copy at no cost within five business days, unless it can demonstrate impossibility of performance unrelated to a violation of section 6417’s recordkeeping requirements.  As with other statutes allowing employees to submit written inspection requests, the employer would be able to designate to whom such requests shall be made.  

     

    These copies are to be provided in English unless a majority of the employees at the worksite do not speak English, in which case the employer must provide the copies in the language spoken by the majority of the employees at the worksite.  If the records exceed 50 pages, the employer must provide a summary addressing those items required by section 6417 in English or the language spoken by the majority of the worksite’s employees.

     

    Employees would be entitled to recover injunctive relief from the employer for failure to comply with the employee’s written demand for compliance, unless the DLSE has cited the employer for failing to comply before the employee attempts to obtain injunctive relief.

     

    Status:  This bill narrowly passed the Assembly, and has passed the Senate’s Labor and Industrial Relations Committee and is pending in the Appropriations Committee.

     

    Heat Illness Prevention Regulations for Indoor Employees (SB 1167)

     

    Since 2006, California’s Division of Occupational Safety and Health (DOSH) has adopted and enforced regulations establishing a heat illness prevention standard for outdoor workers.  This bill would require DOSH, by July 1, 2018, to propose for adoption a heat illness and injury prevention standard applicable to indoor workers that provides equal or greater protection than those for outdoor workers.  The DOSH would have the authority to propose high heat provisions limited only to certain industry sectors.

     

    As a reminder, the Division of Occupational Safety and Health has previously produced a flyer entitled “Cal/OSHA Heat Illness Prevention for Indoor Working Environments” which focuses on five key areas of prevention: a written IIPP; frequent drinking of water; rest breaks; acclimation and weather monitoring; and emergency preparedness.

     

    Status:  This bill passed the Senate along a party-line vote, and has passed the Assembly’s Labor and Employment Committee and is pending in the Appropriations Committee.  The Legislature has previously passed two similar bills (AB 838 [2009] and AB 1054 [2007]), but both were vetoed by then-Governor Schwarzenegger.

     

    Expanded Labor Commissioner Powers (AB 2261)

     

    Labor Code section 98.7 authorizes the Labor Commissioner, in response to a complaint involving a violation of any law within the Labor Commissioner’s jurisdiction, to investigate this complaint.  This bill would amend section 98.7 to allow the Labor Commissioner to, with or without receiving a complaint of discrimination, to commence an investigation of an employer that it suspects has discharged or otherwise discriminated against an individual in violation of any law under the Labor Commissioner’s jurisdiction.

     

    It would also require the assigned investigator to prepare and submit an investigation report to the Labor Commissioners based on its findings.  It would also require the DLSE in investigating employers under this provision to follow the existing processes and requirements for employee initiated cases of unlawful discharge or discrimination.

     

    Status:  This bill has passed the Assembly, and the Senate’s Labor and Industrial Relations, Judiciary and Appropriations Committees but may have stalled on the Senate floor.

     

    Modified PAGA Deadlines (AB 2898)

     

    Labor Code section 2699.3 of the Private Attorneys General Act (PAGA) allows a private employee to pursue penalties on behalf of the Labor and Workforce Development Agency (LWDA) for alleged Labor Code violations.  This bill would amend section 2699.3 to allow employees 90 days (rather than the current 60 days) to amend their complaints to add additional causes of action.

     

    Status: The current version of this bill reflects a “gut and amend” of a prior bill, and so its prospects are unclear.  It was recently ordered to the inactive file.

     

    Bond Requirements for Minimum Wage Violations (AB 2899)

     

    Labor Code section 1194 prohibits employers from paying employees a wage less than the minimum wage, and allows aggrieved employees to recover lost wages, civil penalties, and liquidated damages for violations.  Labor Code section 1197.1 allows a party to contest a citation issued by the Labor Commissioner through the superior court.

     

    This bill would amend section 1197.1 and require a person seeking a writ of mandate contesting the Labor Commissioner’s ruling to post with the Labor Commissioner a bond equal to the unpaid wages, excluding penalties, in favor of the aggrieved employee.  This section would also specify the procedures for an appellant to pay any judgment as result of that hearing or the withdrawal of the writ.  It would also provide that if the employer fails to pay the amounts owed within 10 days after the proceedings are concluded, the portion of the bond need to cover the amount owed would be forfeited by the employer to the employee.

     

    Status:  This bill passed the Assembly along a party-line vote, and has passed the Senate’s Labor and Industrial Relations Committee and is pending in the Appropriations Committee.

     

    Overtime Provisions for Domestic Worker Employees (SB 1015)

     

    In 2013, California enacted the Domestic Worker Bill of Rights (AB 241) which added Labor Code section 1454 and amended Wage Order 15-2001 to entitle a domestic work employee working as a personal attendant (as defined) the right to daily overtime after nine hours worked and weekly overtime after 45 hours worked.  Entitled the Domestic Worker Bill of Rights of 2016, SB 1015 would remove the current January 1, 2017 sunset provision for section 1454, thus making those overtime provisions permanent.

     

    Status:  This bill passed the Senate, and has passed the Assembly’s Labor and Employment Committee and is pending in the Appropriations Committee.

     

    Assembly Passes Expedited Release of Prevailing Wage Escrowed Amounts (AB 326)

     

    Labor Code section 1742.1 presently provides that in prevailing wage proceedings, a contractor or subcontractor may avoid certain penalties by depositing the full amount of an assessment or notice with the Department of Industrial Relations (DIR).  Responding to concerns the DIR is not required to release these funds within any particular timeframe, this bill would amend section 1742.1 to specify the DIR must release the escrowed funds, plus any interest earned, to the person entitled to those funds “within 30 days” following either the conclusion of all administrative and judicial review, or upon receiving written notice from the Labor Commissioner of a settlement or a final disposition of an assessment issued, or from the authorized representative of the awarding body or a settlement or final disposition.

     

    Status:  This bill unanimously passed the Assembly, and has passed the Senate’s Labor and Industrial Relations Committee and is pending in the Appropriations Committee.

     

    Car Wash Disclosures (AB 2897)

     

    The California Labor Code enumerates a number of provisions specifically applicable to car washes given their history of violations.  This bill would add Labor Code section 2066.5 to require an existing car wash business to provide a successor with written notice of these requirements prior to the sale or transfer of the business.

     

    Status:  This bill unanimously passed the Assembly, and has passed the Senate’s Labor and Industrial Relations Committee.

     

    Expanded Protections for Janitorial Service Workers (AB 1978)

     

    Known as the Property Service Workers Protection Act, this bill would enact numerous measures to protect janitorial industry employees from sexual assault and other Labor Code violations.  Amongst other things, it would require the Department of Industrial Relations to develop by July 1, 2018 training materials, for both supervisors and workers, regarding sexual harassment and sexual violence, and to establish requirements for such training.  It would also direct Cal-OSHA to require janitorial industry employers to include this training as part of its injury and illness prevention plans.  Additionally, it would establish a system of janitorial contractor registration to encourage labor standards compliance and to establish prompt and effective sanctions for violating this part.

     

    Status:  This bill has passed the Assembly, and has passed the Senate’s Labor and Industrial Relations Committee and is pending in the Appropriations Committee.

     

    Whistleblower Protections for Legislative Employees (AB 1788)

     

    Entitled the Legislative Employee Whistleblower Protection Act, this bill would prohibit interference with the right of legislative employees to make protected disclosures of ethics violations and would prohibit retaliation against employees who have made such protected disclosures.  It would also establish a procedure for legislative employees to report violations of these prohibitions to the Legislature, and would impose civil and criminal liability on an individual violating these protections.

     

    Status:  This bill unanimously passed the Assembly, and has passed the Senate’s Judiciary Committee and is pending in the Senate’s Appropriations Committee.

     

    Elimination of Some Employment Verification Requirements (AB 2532)

     

    Unemployment Insurance Code sections 9601.5 and 9601.7 require any state or local government agency, and any private employer contracting with a state or local government agency, that provides specified employment services to verify an individual’s legal status or authorization to work prior to providing services to that individual in accordance with federal procedures.  This bill would repeal both of these sections and the requirements contained in them.

     

    Status:  This bill passed the Assembly along a party-line vote, and has passed the Senate’s Labor and Industrial Relations Committee, and is pending in the Senate’s Appropriations Committee.

     

    Non-California Venue Provisions in Employment Agreements (SB 1241)

     

    This bill would add new Labor Code section 925 prohibiting an employer from requiring an applicant or employee to agree to a provision that would require the employee to adjudicate outside California a dispute arising in California, or deprive the employee of the protection of California law with respect to a controversy arising in California.  Any such choice of law or venue provision would be voidable at the employee’s request if it required the employee to adjudicate outside California or deprive the employee of the protections of California law.  If the court invalidated such a provision, the matter would be adjudicated in California and under California law, and the prevailing employee would be entitled to recover reasonable attorneys’ fees incurred enforcing this provision.  If enacted, this section would apply to any contract entered into, modified or extended on or after January 1, 2017.

     

    This section would not apply to an employee who is individually represented by legal counsel in negotiating the terms of an agreement to designate either the choice of venue or law provisions.

     

    Status:  This bill passed the Assembly along a party-line vote and has passed the Senate’s Judiciary and Appropriations Committee along similar party-line votes.  Governor Brown vetoed a similar bill in 2011 (AB 267) citing a concern about not wanting to dissuade non-California companies from hiring California employees.

     

    CALSHRM LEGISLATIVE REPORT –  JULY 2016

    By: Michael S. Kalt, CalSHRM Government Affairs Director

    Wilson Turner Kosmo LLP

    mkalt@wilsonturnerkosmo.com

    Telephone:  619-236-9600

    Twitter:  @michaelkalt_law

    LEGISLATIVE SUMMARY

    There was a considerable amount of activity as legislators raced to meet the June 30th deadline for bills to pass policy committee votes, and to begin the July 4th weekend.  Accordingly, a number of employment bills advanced, including bills that would:

    • Expand California’s Equal Pay Act to target race and ethnicity-related wage differentials (SB 1063);
    • Require employers to provide double pay for work performed on Thanksgiving (AB 67);
    • Expand the prohibitions regarding “immigration-related practices” (SB 1001);
    • Prohibit hiring-related inquiries concerning juvenile convictions (AB 1843);
    • Preclude salary history from justifying gender-based waged differentials (AB 1676);
    • Expand California’s heat illness regulations to include indoor employees (SB 1167); and
    • Require employers to either provide or make available for inspection policies regarding sexual assault/domestic violence leave rights and an employer’s Illness and Injury Prevention Program (AB 2337 and AB 2895).

    However, a number of other bills failed passage, including bills that would require  almost all employers to provide 12 weeks of job-protected “parental leave” (SB 1166); allowed individual employees to obtain so-called “alternative workweek schedules” (SB 985); and allowed private employers to exercise a veterans hiring preference (AB 1383).

    Governor Brown was also fairly active, signing a budget amending the Private Attorneys’ General Act, but vetoing a bill that would have enabled employers and co-workers to obtain gun violence-related TRO’s (AB 2607).

     

    At the municipal level, minimum wage and paid sick leave ordinances remain popular, with the City of San Diego enacting Proposition I requiring up to five days of paid sick leave and immediately increasing its minimum wage to $10.50.  As discussed below, the San Diego Ordinance initially conflicted with the California Paid Sick Leave law in many respects, including as to accrual caps and accrual methods, but was substantively amended regarding those issues and became effective on July 11th.  On July 1, 2016, the first phase of Los Angeles’ Paid Sick Leave ordinance took effect for employers with more than 25 employees(the second phase for smaller employers takes effect July 1, 2017), requiring employers to provide up to six days of paid sick leave.

    Looking ahead, the deadline for bills to pass the second legislative chamber is August 31st, and Governor Brown will then have until September 30th to sign or veto any bills that make it to his desk.

    In the interim, discussed below are the key employment bills of potential general application that have already been enacted or have taken effect in 2016:

    NEW LAWS ALREADY ENACTED

    San Diego’s Minimum Wage and Paid Sick Leave Ordinance has been Amended and Has Now Taken Effect

    San Diego’s Proposition I—formally the “Referendum of Ordinance Regarding Earned Sick Leave and Minimum Wage” (the Ordinance)—received over 63 percent of the votes on the ballot measure on June 7, 2016.  To give some history, the City Council had previously approved the Ordinance on August 18, 2014, after which a referendum petition qualified the measure for the ballot, and the Council subsequently voted to place it on the ballot in 2016.

    Since San Diego voters passed the measure, the City drafted an updated Amended Ordinance modifying substantive portions of the new rule, as discussed below.  This final Ordinance was passed by the City Council on July 11, 2016, and much of the substantive portions of the law are effective as of this date.

    The original Ordinance definitions, as well as the use and eligibility sections within the sick leave portion of the law remain largely unchanged, as does the $10.50 minimum wage increase and the mandatory forty (40) hours of paid sick leave for employees, both of which are effective as of July 11, 2016.  What has changed are the ways in which employers may implement sick leave policies, the rate at which sick leave must be paid out, the posting and notice deadlines, as well as the way in which the City plans on enforcing these new rules, as discussed below.

    Who is Affected?

    The Ordinance defines employers and employees broadly.

    Employers are defined as any “person or persons, including associations, organization, partnerships, business trusts, limited liability companies, or corporations, who exercise control over the wages, hours, or working conditions of any employee, engage an employee, or permit an employee to work.”  Note, a narrow exception to this definition includes aged, blind, or disabled people who receive in-home supportive services.

    Eligible employees are defined as “any person who, in one or more calendar weeks of the year, performs at least two hours of work within the geographic boundaries of the City for an employer, and who qualifies for the payment of minimum wage under the State of California minimum wage law.”  To determine if an employer is within the geographic boundaries of the city, visit here.

    San Diego’s New Minimum Wage

    Proposition I increases the current minimum wage from $10 per hour to $10.50 per hour.  Looking forward, starting January 1, 2017, the minimum wage will become $11.50 in the City of San Diego, and starting January 1, 2019, the minimum wage will increase “by an amount corresponding to the prior year’s increase, if any, in the cost of living, as defined by the Consumer Price Index.”

    Unlike the California minimum wage, these wage rates will not affect the exemption salary tests in California.  Rather, the minimum wage rate used to calculate this amount must be the state minimum wage and not municipal.

     

    San Diego’s New Sick Leave Entitlement

     

    California law currently requires employees who work in California for 30 or more days within a year from the beginning of employment to be entitled to use 3 days or 24 hours of sick leave per year, whichever is greater, with a possible cap and carry-over of that time at 48 hours.

     

    San Diego’s Ordinance requires these same employees, working within the boundaries of the City of San Diego (as discussed above), must receive up to five days or 40 hours of sick leave per year.  

     

    Also in line with the California law, the San Diego Ordinance states that sick leave must begin to accrue when employment starts, but employers need not allow employees to use it until they have been employed for 90 days.

     

    Leave under the new Ordinance may be used under the following circumstances:

     

    (1)     if an employee is physically or mentally unable to work due to illness, injury, or a medical condition;

     

    (2)     for “Safe Time” defined as time away from work necessary to handle certain matters related to domestic violence, sexual assault, or stalking;

     

    (3)     for medical appointments;

     

    (4)     to care for or assist “certain family members” with an illness, injury, or medical injury; and

     

    (5)     a place of business is closed by order of a public official due to a Public Health Emergency, or an employee is providing care or assistance to a child, whose school or child care provider is closed by order of a public official due to a Public Health Emergency.

     

    Please note, the ability to use Paid Sick Leave for school/child-care-related closures and emergencies differs from the California law.

     

    Alternative Accrual Methods, Including “Frontloading,” and a PTO Exception are Now Appropriate

     

    As with the California law, the default accrual rule under the San Diego Ordinance is that employees must receive one hour of paid sick leave for every thirty hours worked.

     

    While the San Diego Ordinance initially did not recognize any alternative accrual methods, the Implementation Ordinance amends this and allows “lump sum” or “frontloading” method that is allowed for under the general California sick leave law.

     

    Section 39.0105(b)-(c) of the Amended Ordinance now states:

     

    (b)     Employers must provide an Employee with one hour of Earned Sick Leave for every 30 hours worked by the Employee within the geographic boundaries of the City, but Employers are not required to provide an Employee with Earned Sick Leave in less than one-hour increments for a fraction of an hour worked. Employers may cap an Employee’s total accrual of Earned Sick Leave at 80 hours.

     

    (c)     An Employer may satisfy the accrual and carry-over provisions of this section if no less than 40 hours of Earned Sick Leave are awarded to an Employee at the beginning of each Benefit Year for use in accordance with this Division, regardless of the Employee’s status as full-time, part-time, or temporary.

     

    Employers utilizing the lump sum or frontloading method may not differentiate between classes of employees (e.g., part-time, full-time, temporary, etc.) with regard to the amount they bank at the beginning of the benefit year, as defined within the Ordinance.

     

    Unlike the California sick leave law, the San Diego Ordinance also initially did not make clear that employers providing so-called “personal time off” (PTO) plans would not be required to provide additional sick leave.  Responding to concerns this omission would create conflict with the state law and discourage PTO plans, Section 39.0105(g) of the Amended Ordinance specifies:

     

    (g)     An Employer who provides an Employee with an amount of paid leave, including paid time off, paid vacation, or paid personal days sufficient to meet the requirements of this section, and who allows this paid leave to be used for the same purposes and under the same conditions as the Earned Sick Leave required by this Division, is not required to provide additional Earned Sick Leave to the Employee.

     

    As a reminder, the San Diego Ordinance allows sick leave to be used for slightly different purposes than the state law, so employers wishing to rely upon this PTO exception from the San Diego Ordinance should compare their plan to ensure it allows PTO to be used “for the same purposes and under the same conditions” as the San Diego Ordinance.

     

    While the San Diego Ordinance initially did not allow employers to cap sick leave accrual, the amendments allow employers to cap accrual at 80 sick leave hours, the theory being that an employee may accrue enough to use the full amount in one year, and have enough ready to carry-over to the next year and begin using immediately.  (As reminder, under the California law, employees may accrue up to 48 hours, or double the 24 hours of usage allowed).

     

    Sick Leave Paid at Employee’s Regular Rate of Pay

     

    Similar to the California sick leave law, the rate of pay at which employers are charged with paying out sick leave is at the employee’s regular rate of pay, as opposed to their base rate of pay.  For employers with a non-exempt workforce who utilize different rates of pay, commissions, structured bonus plans, or any other wage that may require adjustment of their overtime rate, must be cognizant of this and revise their payment practices for sick leave or paid time off accordingly.

     

    Updated Posting and Notice Deadlines

     

    Under the amended Ordinance, the City is responsible for providing bulletin and notices by September 1, 2016.  These will include a bulletin announcing the adjusted minimum wage for the upcoming year, a notice for employers to post in the workplace informing employees of the minimum wage and sick leave entitlement, and a “template notice” suitable for use by employers in compliance with this section.

     

    Employers are charged with disseminating this notice, which must include the employer’s name, contact information, and information on how the employer satisfies the requirements under the Ordinance, to all employees by October 1, 2016.  This differs slightly from the California sick leave law, which requires notice via the Wage Theft Prevention Act, and which is only required for non-exempt employees.  Theoretically, an updated and disseminated sick leave or paid time off policy, which also includes the requisite employer information, should suffice.  There is nothing within the Ordinance which requires acknowledgment or signature of this notice.  However, employers are urged to keep a record of this for purposes of potential audits by the City’s Enforcement Office, as defined within the Ordinance.

     

    Recordkeeping Requirements and Enforcement

     

    Employers are required to create contemporaneous records documenting their employees’ wages paid and accrual and use of sick leave.  Employers are already required to provide such a record on their employees’ wage statements under the general California sick leave law.  Under the City’s Ordinance, employers must also “allow Enforcement Official[s] reasonable access to these records in furtherance of an investigation conducted” pursuant to the Ordinance.

     

    The lengthiest and most detailed update to the Ordinance is within section 39.0113, which outlines the authority and duties of the City’s newly developed Enforcement Office, including investigatory rights, access rights, the ability to promulgate regulations, and implementation of the complaint process.

     

    The Take Away

     

    Employers are urged to review and update their sick leave and/or paid time off policies and practices to ensure they are compliant, raise the minimum wage of anyone working within the City of San Diego to at least $10.50 per hour, watch for the notice and posting requirements from the City, and maintain appropriate records as discussed within the Ordinance.

     

    Employers may also want to review the City’s Frequently Asked Questions, which likely will be updated further shortly.

     

    Reminder: Phase I of Los Angeles’ Paid Sick Leave Law and Minimum Wage Increase Took Effect July 1st

     

    Somewhat similar to the San Diego and California minimum wage increases, beginning July 1, 2016, the minimum wage for Los Angeles employers with more than 25 employees increased to $10.50, and will continue to increase each July 1st, reaching $15.00 on July 1, 2020.  For employers with 25 or fewer employees the minimum wage will increase in a similar format, starting to $10.50 on July 1, 2017 and reaching $15.00 on July 1, 2021.

     

    On July 1, 2016, the Los Angeles Paid Sick law took effect for employers with more than 25 employees, and the law will take effect for employers with 25 or fewer employees on July 1, 2017.  While the Los Angeles version more closely tracks the California version than the San Diego version, there are several key differences, including that employees are entitled to use six days of paid sick leave and accrue up to 72 hours (compared to three days and 48 hours respectively), and there is no exemption for collective-bargaining level employees. 

     

    The City of Los Angeles has issued the required poster providing a general overview of the minimum wage increase and sick leave law at:

    http://wagesla.lacity.org/sites/g/files/wph471/f/MW%20Sck%20Time%20poster_0.pdf

     

    California’s Minimum Wage to Increase to $15.00 by 2022 (SB 3)

     

    To preclude votes on two union-backed statewide initiatives regarding the minimum wage, Governor Jerry Brown and his Democratic caucus introduced, quickly passed and enacted this law increasing California’s minimum wage to $15.00 an hour by 2022.  For employers with more than 25 employees, the minimum wage will increase according to the following schedule:

     

     

    Increase Date

    New Rate

    New Salary Threshold

    January 1, 2017

    $10.50

    $43,680

    January 1, 2018

    $11.00

    $45,760

    January 1, 2019

    $12.00

    $49,920

    January 1, 2020

    $13.00

    $54,080

    January 1, 2021

    $14.00

    $58,240

    January 1, 2022

    $15.00

    $62,400

     

    For employers with 25 or fewer employees, the minimum wage will increase on a slightly slower schedule, as follows:

     

    Increase Date

    New Rate

    New Salary Threshold

    January 1, 2018

    $10.50

    $43,680

    January 1, 2019

    $11.00

    $45,760

    January 1, 2020

    $12.00

    $49,920

    January 1, 2021

    $13.00

    $54,080

    January 1, 2022

    $14.00

    $58,240

    January 1, 2023

    $15.00

    $62,400

     

    This new law also contemplates annual subsequent increases after the final scheduled increase, generally tied to consumer inflation, which the Director of Finance will determine by August 1st of each year with the increase, rounded to the nearest ten cents, to become effective the following January 1st.  Once this formula is applied, the minimum wage may increase or stay the same, but it will not decrease.

     

    Beginning in July 2017, the Director of Finance will be required to determine whether economic conditions can support the next scheduled minimum wage increase and, if not, the Governor would have the authority through a proclamation to temporarily suspend the next increase.  The Governor would not be permitted to temporarily suspend scheduled minimum wage increases more than two times, and if the Governor does temporarily suspend a scheduled minimum wage increase, all remaining scheduled increases shall be postponed by an additional year.

     

    As noted above, these increases to the hourly minimum wage will also impact the salary level needed for exempt employee purposes, with the salary level ultimately increasing to $62,400 when the $15.00 level is reached in 2022.

     

    Lastly, this new law amends Labor Code section 245.5 to remove the exemption from California’s Paid Sick Leave requirements for in-home supportive service employees.  Accordingly, beginning on July 1, 2018, in-home supportive service employee who work 30 or more days in California within a year from commencement of employment will be entitled to accrue and use paid sick leave, albeit on a slightly different schedule enumerated in new subsection (e) to Labor Code section 246.

     

    Status:  This bill has already been signed into law, and the first scheduled minimum wage increase, from $10.00 to $10.50 per hour for employers with more than 25 employees, will take effect January 1, 2017.

     

    PAGA Amendments

     

    As part of the 2016-2017 Fiscal Year Budget Change Proposal, the Governor proposed several amendments to PAGA—purportedly intended to reduce litigation costs for employers and improve outcomes for employees.  Wider sweeping changes were eventually whittled down, and although (as of this writing) the ‘16/17 budget has not been signed, the LWDA states on its website that the following procedural changes to PAGA are in effect as of June 27, 2016.

    • A $75 filing fee is required with new PAGA claim notices and any employer responses to an initial claim (including any employer cure).  This fee is waivable for those qualified as in forma pauperis.
    • PAGA claim notices must now be filed online to the LWDA, with written notice (certified mail) to the employer. Similarly, employer cure notices and/ or employer responses to a PAGA claim must also be filed online, with a copy sent to the aggrieved employee by certified mail.
    • The LWDA’s timeframe to review notices extends to 60 days. (Formerly 30 days.)
    • Alleged aggrieved employees filing in court must provide a file-stamped copy of their PAGA Complaint to the LWDA (for any case filed on or after July 1, 2016).
    • Court approval is required for any settlement of a PAGA civil action, whether or not the settlement includes an award of PAGA penalties. 
    • Proposed PAGA settlements are to be submitted to the LWDA at the same time they are submitted to the court.
    • A copy of any court judgment, and any other order that awards or denies PAGA penalties, must be provided to the LWDA.

    These are essentially procedural changes and less-impactful than some of the broader, more substantive changes contained in the original proposal.  For example, the original proposed amendments included an amnesty program for invalidated “commonplace industry practices” and a provision allowing the LWDA to object-to or comment-on proposed PAGA settlements.  Nonetheless, the actual amendments may be a precursor to more sweeping reform, and the legislative environment surrounding PAGA actions deserves close attention.

     

    Increased Paid Family Leave Benefits (AB 908)

     

    Under California’s family temporary disability insurance program, employees may receive up to 6 weeks of wage replacement benefits when taking time off work to care for specified persons (e.g., child, spouse, parent, etc.) or to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption.  Citing a concern that the relatively low wage replacement rate dissuaded employees from using this benefit, this newly-enacted law amends Insurance Code section 3301 to increase the wage replacement benefits.  Specifically, it modifies the formula for calculating these benefits to ensure a minimum weekly benefit of $50, and to increase the wage replacement rate from the current 55% to 70% for most low-wage workers, and to 60% for higher wage earners.

     

    Beginning January 1, 2017, this bill also removes the 7-day waiting period for these family leave benefits.

     

    Status:  This bill has already been signed by Governor Brown and takes effect January 1, 2017. 

     

    New Workplace Smoking Prohibitions Take Effect June 9th (ABx2 6 and SBx2 6)

     

    Labor Code section 6404.5 prohibits smoking of tobacco products inside an enclosed space at a place of employment and enumerates fines for violations of these protections.  ABx2 6 amends this section to use the new definition of “smoking” (contained in amended Business and Professions Code section 22950.5) that includes “the use of an electronic smoking device that creates an aerosol or vapor, in any manner or in any form, or the use of any oral smoking device for the purpose of circumventing the prohibition of smoking.”

     

    SBx2 6 also expands these prohibitions to include so-called “owner-operated businesses” (i.e., those with no employees and the owner-operator is the only employee).  It eliminates most of the specified exemptions that permit smoking in certain work environments, such as hotel lobbies, bars and taverns, banquet rooms, warehouse facilities, and employee break rooms.

     

    Status:  Governor Jerry Brown has already signed these bills and because of their unique procedural history and subject matter, they will take effect June 9, 2016, rather than January 1, 2017.

     

    San Francisco Enacts Paid Parental Leave Ordinance

     

    San Francisco recently enacted its Paid Parental Leave Ordinance (Ordinance no. 160065), which will require beginning on January 1, 2017, employers with 50 or more employees to pay to an employee on “parental leave” (as defined) the difference (so-called “supplemental compensation”) between their gross weekly wage and the Paid Family Leave Benefits paid from the state of California under its Paid Family Leave program.  (Employers with 35 or more employees would need to make such payments beginning July 1, 2017, and employers with 20 or more employees would need to make such payments beginning January 1, 2018). 

     

    Please note also, in contrast with the pending bill that would require employers to provide unpaid parental leave to employees who worked 1,250 hours in the preceding 12 months (SB 1166 [discussed below]), the San Francisco Ordinance applies to any employee who (1) began employment with the “Covered Employer” (as defined) at least 180 days prior to the leave period; (b) performs at least eight hours of work per week for the employer in San Francisco; (c) at least 40% of those total weekly hours worked for the employer are in San Francisco; and (d) who is eligible to receive paid family leave compensation under the California Paid Family Leave law for the purpose of bonding with a new child.

     

    As noted, the Ordinance requires the “Covered Employer” to provide “supplemental compensation” to an employee on leave representing the difference between the amount paid from the California Paid Family Leave fund and the employee’s “gross weekly wage.” Where the employee has multiple Covered Employers, this supplemental compensation can be apportioned between or among the employers based on the percentage of the employee’s gross weekly wages received from each employer.  However, in cases where an employee works for a Covered employer and a non-Covered Employer, the Covered Employer is responsible only for its percentage of the employee’s total gross weekly wages. 

     

    The Ordinance also notes that an employer’s Supplemental Compensation obligation may also be proportionately capped by reference to the State maximum weekly benefit amount, depending on income levels.

     

    As with many recent statutes and ordinances, this Ordinance requires the employer to post a poster to be developed by the San Francisco Office of Labor Standards Enforcement, it requires the employer to retain “Supplemental Compensation” records for three years; it prohibits retaliation, and authorizes agency enforcement.

     

    More information about the San Francisco Ordinance can be found on the San Francisco’s Office of Labor Standards Enforcement website (sfgov.org/olse) or at sfgov.org/olse/paid-parental-leave-ordinance).

     

    PENDING BILLS

     

    Double Pay on Thanksgiving (AB 67)

     

    Entitled the Double Pay on the Holiday Act of 2016, this bill would add Labor Code section 511.5 to require certain large employers (with more than 500 employees) to pay non-exempt employees twice their regular rate of pay for working on Thanksgiving.  Unlike last year’s version which would have applied to almost all employers, this law would only apply to employees working in “retail store” or “grocery store” establishments, and would not apply to “retail food facilities” as defined in Health and Safety Code section 113789.  “Retail store establishments” would be defined as those having a physical store within the state with more than 50 percent of its revenue generated from merchandise subject to the state’s sales and use tax, but specifically would not include stores located in a hotel, amusement park, movie theater or motor vehicle dealers.  “Grocery store establishments” would be defined as those having a physical store within the state that sells primarily household foodstuffs for offsite consumption. 

     

    This requirement would only apply to non-exempt employees, and would not apply to employees covered by a collective bargaining agreement that expressly provides for the wages, hours of work, and working conditions of employees, and expressly provides for holiday premium pay, premium wage rates for overtime pay, and a regular rate of pay of not less than 30 percent above the state minimum wage.

     

    Status: This bill failed passage last year, but narrowly passed the Assembly despite bi-partisan opposition.  It is presently pending in the Senate’s Labor and Industrial Relations Committee. 

     

    No Duty to Track “Hours Worked” on Itemized Wage Statements for Exempt Employees (AB 2535)

     

    While Labor Code section 226 presently requires employers to provide written wage statements containing specifically-enumerated information, including identifying the total hours worked, it contains an exception from the reporting the total hours worked for employees who are paid solely on salary and are exempt from overtime.  Responding to concerns that there are many employees who are exempt from overtime, in which case employers may not track hours worked, but whose compensation is not “solely based on a salary” (e.g., salespersons paid on commission, high-ranking executives partially compensated with stock options, etc.), this bill would amend section 226 to expand this exception.

     

    Specifically, in addition to the current language exempting tracking hours for those compensated solely on salary, new subsection (j) would eliminate the need to show hours worked for employees exempt from minimum wage and overtime under a specified exemption for: (a) executive, administrative, or professional employees; (b) the “outside sales” exception; (c) salaried computer professionals; (d) parents, spouses, children, or legally-adopted children of the employer provided in applicable orders of the IWC; (e) directors, staff, and participants of a live-in alternative to incarceration rehabilitation program for substance abuse; (f) crew members employed on commercial passenger fishing boats; and (g) participants in national service programs.

     

    Status:  This bill unanimously passed the Assembly and the Senate and has been returned to the Assembly to concur in some minor amendments.  It appears likely to be sent to Governor Brown shortly.

     

    Equal Pay Regardless of Race or Ethnicity (SB 1063)

     

    Following up on last year’s amendments to California’s Equal Pay Act regarding gender-based wage differentials (SB 358), the Wage Equality Act of 2016 would enact nearly identical language to preclude wage differentials based on race or ethnicity.  Specifically, it would amend Labor Code section 1197.5 to prohibit employers from paying an employee at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work when viewed as a composite of skill, effort, and responsibility and performed under similar working conditions.

     

    As with gender, the employer would bear the burden to demonstrate that the wage differential is based upon one or more of the following factors: (a) a seniority system; (b) a merit system; (c) a system that measures earnings by quantity or quality of production; or (d) a bona fide factor other than race or ethnicity, such as education, training, or experience.  As with the “bona fide factor” exception following SB 358’s enactment, the employer would be required to demonstrate that the factor is not derived from a race or ethnicity-based differential, is job-related to the position in question, and is consistent with a business necessity (i.e., an overriding legitimate business purpose that cannot be achieved through an alternative business practice).  The employer would be required to demonstrate that each factor relied upon is applied reasonably and the one or more factors relied upon account for the entire wage differential.

     

    Lastly, because SB 1163 amends section 1197.5 generally, it would also prohibit employers from discriminating against employees who report or assist with concerns about race/ethnicity-based wage differentials, it would provide the same enforcement mechanisms, and it would incorporate its protections for employees to disclose, inquire, or discuss wages.

     

    Status:  This bill passed the Senate on a party-line vote, and has passed the Assembly’s Labor and Employment Committee and is pending in the Appropriations Committee.

     

    Equal Pay Certifications for Certain State Contractors (AB 1890)

     

    Entitled the Equal Pay for Equal Work Act of 2016, this bill would amend Government Code section 12990 which presently identifies criteria for employers who wish to become a contractor for public works, including agreeing to California’s non-discrimination laws and submitting a non-discrimination program to the Department of Fair Employment and Housing (DFEH) for approval and certification.  For instance, while California presently states the DFEH “may require” a non-discrimination plan to be submitted, this bill would require employers with more than 100 employees in the state and a contract amounting to more than $50,000 to submit its non-discrimination program and to submit periodic reports, no more than annually on a schedule to be determined by the department, of its compliance with this program.  Employers with less than 100 employees in the state or a contract that amounts to less than $50,000 may also be required to submit a non-discrimination program and, if so required, to comply with the same requirements applicable to employers with more than 100 employees in the state.

     

    A non-discrimination program would need to include policies and procedures designed to ensure equal employment opportunities for applicants and employees, a description of employment selection procedures, and a workforce analysis.  This workforce analysis would need to include: (a) the total number of workers within a specified job category identified by race or national origin, and sex; (b) the total wages required to be reported on a W-2 for all workers within that job category identified by race, ethnicity, and sex; and (c) the total hours worked on an annual basis for all workers in a specific job category identified by race, ethnicity, and sex.  Exempt employees would be presumed to work 40 hours a week and part-time employees would be presumed to work 20 hours a week, unless the employers utilizes a different standard number of hours per week for exempt employees, in which case the employer shall report total hours worked on an annual basis by those employees based on that standard number.

     

    These proposed reporting changes appear similar to the August 2014 federal Department of Labor OFCCP’s Notice of Proposed Rulemaking to require covered federal contractors and subcontractors with more than 100 employees to submit an annual equal pay report on employee compensation.  As a reminder, the federal Equal Employment and Opportunity Commissioner is presently considering proposed changes to its EEO-1 Report, which would apply to all employers with more than 100 employees (not just federal contractors) and would require the submission of payroll data broken down by race/ethnicity, not just gender.

     

    Status:  This bill passed the Assembly and has passed the Senate’s Government Organization Committee and is pending in the Senate’s Appropriations Committee.  Governor Brown vetoed a very similar bill (AB 1354) in 2015.

     

    “Immigration-Related Practices” Protections Expanded (SB 1001)

     

    California has made immigration-related abuses a legislative priority, including last year’s bill enacting a new $10,000 penalty for E-Verify violations (AB 622), the 2014 amendment to FEHA prohibiting discrimination against drivers licenses issued to undocumented workers (AB 1660), and the 2013 bills prohibiting retaliation for “immigration-related practices” (AB 263 and SB 666).  This bill would add new Labor Code section 1019.1 to broaden the protections from “unfair immigration-related practices” beyond the retaliation context and extend them to any employee or applicant regardless of whether they have made a complaint.

     

    This bill would adopt the definition of “unfair immigration-related practice” currently contained in Labor Code section 1019, which includes (a) requesting more or different documents than required under federal law to verify eligibility or refusing to accept reasonably genuine documents; (b) using the federal E-Verify system to check the employment authorization status of an employee or an applicant at a time or in a manner not authorized by federal law; (c) threatening to file or the filing of a false police or government agency report; or (d) threatening to contact or contacting immigration authorities.

     

    New section 1019.1 would deem it unlawful to engage in, or to direct another to engage in, an “unfair immigration-related practice” against an employee or applicant.  It would also deem it unlawful for an employer or their agent to reinvestigate or re-verify an incumbent employee’s authorization to work using an unfair immigration-related practice.  In effect, while federal immigration laws already prohibit documentation abuses by employers, this bill would provide a state remedy intended to be less cumbersome.

     

    Lastly, the bill’s author has expressed concern that immigrant workers who have been provided temporary legal status and the ability to apply for work authorization under President Obama’s Executive Orders, including the Deferred Action for Parents of Americans of United States Citizens (DAPA) and the Deferred Action for Childhood Arrivals (DACA), may be subject to abuse.  Accordingly, this bill would deem it unlawful for an employer or their agent to discriminate against an applicant or an employee with authorization to work based upon the specific status, or term of status that accompanies the authorization to work.

     

    This bill would also authorize an employee or applicant to bring a civil action for equitable relief and any applicable damages or penalties, plus reasonable attorneys’ fees and costs (including expert witness costs) for any violations.

     

    Status:  This bill passed the Senate with some bi-partisan support and has passed the Assembly’s Labor and Employment and Judiciary Committees.  It is presently pending in the Assembly’s Appropriations Committee and passage appears likely.

     

    Prohibition on Inquiring About Juvenile Court Actions (AB 1843)

     

    Consistent with the “ban the box” trend advancing nationwide, Labor Code section 432.7 prohibits employers from requesting applicants to disclose, or from using as a factor in determining employment conditions, information concerning an arrest or detention that did not result in a conviction, or information concerning a referral to or participation in a pre- or post-trial diversion program.  Since 2014 (SB 530), California employers have also generally been prohibited from inquiring about or using information related to a conviction that has been judicially dismissed or ordered sealed.

     

    This bill would amend Labor Code section 432.7 to provide similar protection related to juvenile-related arrests as it currently provides for adult criminal histories.  Specifically, new subsection (a)(2) would preclude employers from requiring applicants to disclose, verbally or in writing, or from utilizing as a condition of employment, information concerning 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.

     

    New subsection (a)(3) would further provide that “conviction,” for both subsections (a)(1) dealing with adults and (a)(2) dealing with juvenile courts, shall not include any adjudication by a juvenile court or any other court or action taken with respect to a person who is under the process and jurisdiction of juvenile court law. 

     

    Status:  This bill has passed the Assembly, and has passed the Senate’s Labor and Industrial Relations Committee, and is pending in the Senate’s Appropriations Committee.  It does not appear meaningfully opposed.

     

    Salary History by Itself not a Bona Fide Factor Justifying Gender-Based Wage Differential (AB 1676)

     

    In 2015, California enacted SB 358, substantially revising its Equal Pay Act protections, including materially revising the standard when attempting to justify a gender-related wage differential.  Citing a concern that salary history potentially institutionalizes prior discriminatory pay practices, this bill originally proposed to add new Labor Code section 432.3 to prohibit any employer from seeking salary history information about an applicant for employment.

     

    However, facing substantial opposition and since Governor Brown had vetoed a very similar bill in 2015 (AB 1017), this bill has recently been materially amended.  Specifically, rather than creating a new Labor Code provision prohibiting salary history discussions, this bill would instead amend Labor Code section 1197.5 to provide that “prior salary shall not, by itself justify any disparity in compensation.”

     

    Status:  This bill passed the Assembly on a party-line vote, but following amendment it passed the Senate Judiciary unanimously and is pending in the Appropriations Committee.  If it passes Appropriations, it will return to the Assembly for concurrence in the Senate amendments, which looks increasingly likely.

     

    Employers to Provide New Hires with Written Information about Time-Off Related to Sexual Assault, Domestic Violence or Stalking (AB 2337)

     

    Labor Code section 230.1 prohibits employers with more than 25 employees from discriminating or retaliating against employees who are victims of domestic violence, sexual assault, or stalking from taking time off from work for specified purposes to address the domestic violence, sexual assault, or stalking.  This bill would add new subsection (h) to require employers to provide written information regarding these rights under section 230.1 and rights under Labor Code section 230, subsections (c), (e) and (f) prohibiting retaliation and requiring employers to reasonably accommodate victims of domestic violence, sexual assault or stalking.  Employers will be required to provide this written information to new employees upon hire and to other employees upon request.

     

    The bill also requires the Labor Commissioner, by July 1, 2017, to develop a form employers could use and to post it on its website, and specifies that an employer need not comply with these notice requirements until the Labor Commissioner posts the form.  Alternatively, employer’s may develop and use its own notice provided it is “substantially similar in content and clarity” to the Labor Commissioner’s form.

     

    Status:  This bill unanimously passed the Assembly, and has passed the Senate’s Labor and Industrial Relations and Judiciary Committees, and is pending in the Senate Appropriations Committee.  It does not appear meaningfully opposed. 

     

    Illness and Injury Prevention Program Disclosures (AB 2895)

     

    The California Occupational Safety and Health Act of 1973 establishes safety responsibilities for employers and employees and, amongst other things, requires every employer to establish and maintain an effective illness and injury prevention program (IIPP).  This IIPP must be in writing, except in certain circumstances, and must contain certain statutorily-enumerated items such as identifying the person responsible for the program, a training program, and specification of compliance and reporting methods.

     

    Responding to concerns that many employees, particularly non-English speaking employees, are unaware of an employer’s IIPP, this bill would amend Labor Code section 6417 and, beginning July 1, 2017, impose new disclosure requirements regarding these IIPPs.  For instance, new subsection (e)(1) would require employers to maintain an up-to-date copy of the written injury prevention program at each worksite.  The employer would also be required to inform each employee and each new hire in a language understood by the employee of the availability of the IIPP at the worksite, and of the employee’s right to inspect and receive a copy of it. 

     

    If an employer receives a written request for a copy of the IIPP from a current employee or their authorized representative, the employer would be required to provide a copy at no cost within five business days, unless it can demonstrate impossibility of performance unrelated to a violation of section 6417’s recordkeeping requirements.  As with other statutes allowing employees to submit written inspection requests, the employer would be able to designate to whom such requests shall be made. 

     

    These copies are to be provided in English unless a majority of the employees at the worksite do not speak English, in which case the employer must provide the copies in the language spoken by the majority of the employees at the worksite.  If the records exceed 50 pages, the employer must provide a summary addressing those items required by section 6417 in English or the language spoken by the majority of the worksite’s employees.

     

    Employees would be entitled to recover injunctive relief from the employer for failure to comply with the employee’s written demand for compliance, unless the DLSE has cited the employer for failing to comply before the employee attempts to obtain injunctive relief.

     

    Status:  This bill narrowly passed the Assembly, and has passed the Senate’s Labor and Industrial Relations Committee and is pending in the Appropriations Committee.

     

    Heat Illness Prevention Regulations for Indoor Employees (SB 1167)

     

    Since 2006, California’s Division of Occupational Safety and Health (DOSH) has adopted and enforced regulations establishing a heat illness prevention standard for outdoor workers.  This bill would require DOSH, by July 1, 2018, to propose for adoption a heat illness and injury prevention standard applicable to indoor workers that provides equal or greater protection than those for outdoor workers.  The DOSH would have the authority to propose high heat provisions limited only to certain industry sectors.

     

    As a reminder, the Division of Occupational Safety and Health has previously produced a flyer entitled “Cal/OSHA Heat Illness Prevention for Indoor Working Environments” which focuses on five key areas of prevention: a written IIPP; frequent drinking of water; rest breaks; acclimation and weather monitoring; and emergency preparedness.

     

    Status:  This bill passed the Senate along a party-line vote, and has passed the Assembly’s Labor and Employment Committee and is pending in the Appropriations Committee.  The Legislature has previously passed two similar bills (AB 838 [2009] and AB 1054 [2007]), but both were vetoed by then-Governor Schwarzenegger.

     

    Expanded Labor Commissioner Powers (AB 2261)

     

    Labor Code section 98.7 authorizes the Labor Commissioner, in response to a complaint involving a violation of any law within the Labor Commissioner’s jurisdiction, to investigate this complaint.  This bill would amend section 98.7 to allow the Labor Commissioner to, with or without receiving a complaint of discrimination, to commence an investigation of an employer that it suspects has discharged or otherwise discriminated against an individual in violation of any law under the Labor Commissioner’s jurisdiction.

     

    It would also require the assigned investigator to prepare and submit an investigation report to the Labor Commissioners based on its findings.  It would also require the DLSE in investigating employers under this provision to follow the existing processes and requirements for employee initiated cases of unlawful discharge or discrimination.

     

    Status:  This bill has passed the Assembly, and the Senate’s Labor and Industrial Relations and Judiciary Committees and is pending in the Appropriations Committee.

     

    Increased Local Enforcement to Combat Wage Theft (SB 1342)

     

    Citing concerns about the continued prevalence of wage theft, especially for lower income workers, this bill would add new Government Code section 53060.4 to authorize city or county legislative bodies to delegate subpoena-issuing authority for enforcing local laws or ordinances, including local wage laws, to officials or department heads.

     

    Status:  This bill unanimously passed the Senate and Assembly and has been sent to Governor Brown, who is expected to sign it.

     

    Modified PAGA Deadlines (AB 2898)

     

    Labor Code section 2699.3 of the Private Attorneys General Act (PAGA) presently identifies certain deadlines for the Labor and Workforce Development Agency (LWDA) to provide notices to the employer and the employee of whether it intends to investigate an employee’s complaint.  This bill would extend to 45 days (from 30 days) the period for the LWDA to notify the employer if it does not intend to investigate, and if no notice is provided within 48 days (rather than 33 days) the aggrieved employee may commence a civil action.  If the LWDA intends to investigate, it would be required to provide notice within 48 calendar days (rather than 33), and to allow an employee to initiate a civil action within 173 days (rather than 158 days) if the LWDA notifies the employee of no citation being issued or fails to provide such notice.

     

    Status: This bill unanimously passed the Assembly, and has passed the Senate’s Labor and Industrial Relations Committee and is pending in the Appropriations Committee.   The lack of opposition to AB 2898 coupled with Governor Brown’s call for various PAGA reforms in his 2016 budget suggests AB 2898 has a strong likelihood of being enacted.

     

    Bond Requirements for Minimum Wage Violations (AB 2899)

     

    Labor Code section 1194 prohibits employers from paying employees a wage less than the minimum wage, and allows aggrieved employees to recover lost wages, civil penalties, and liquidated damages for violations.  Labor Code section 1197.1 allows a party to contest a citation issued by the Labor Commissioner through the superior court.

     

    This bill would amend section 1197.1 and require a person seeking a writ of mandate contesting the Labor Commissioner’s ruling to post with the Labor Commissioner a bond equal to the unpaid wages, excluding penalties, in favor of the aggrieved employee.  This section would also specify the procedures for an appellant to pay any judgment as result of that hearing or the withdrawal of the writ.  It would also provide that if the employer fails to pay the amounts owed within 10 days after the proceedings are concluded, the portion of the bond need to cover the amount owed would be forfeited by the employer to the employee.

     

    Status:  This bill passed the Assembly along a party-line vote, and has passed the Senate’s Labor and Industrial Relations Committee and is pending in the Appropriations Committee.

     

    Overtime Provisions for Domestic Worker Employees (SB 1015)

     

    In 2013, California enacted the Domestic Worker Bill of Rights (AB 241) which added Labor Code section 1454 and amended Wage Order 15-2001 to entitle a domestic work employee working as a personal attendant (as defined) the right to daily overtime after nine hours worked and weekly overtime after 45 hours worked.  Entitled the Domestic Worker Bill of Rights of 2016, SB 1015 would remove the current January 1, 2017 sunset provision for section 1454, thus making those overtime provisions permanent.

     

    Status:  This bill passed the Senate, and has passed the Assembly’s Labor and Employment Committee and is pending in the Appropriations Committee.

     

    Assembly Passes Expedited Release of Prevailing Wage Escrowed Amounts (AB 326)

     

    Labor Code section 1742.1 presently provides that in prevailing wage proceedings, a contractor or subcontractor may avoid certain penalties by depositing the full amount of an assessment or notice with the Department of Industrial Relations (DIR).  Responding to concerns the DIR is not required to release these funds within any particular timeframe, this bill would amend section 1742.1 to specify the DIR must release the escrowed funds, plus any interest earned, to the person entitled to those funds “within 30 days” following either the conclusion of all administrative and judicial review, or upon receiving written notice from the Labor Commissioner of a settlement or a final disposition of an assessment issued, or from the authorized representative of the awarding body or a settlement or final disposition.

     

    Status:  This bill unanimously passed the Assembly, and has passed the Senate’s Labor and Industrial Relations Committee and is pending in the Appropriations Committee.

     

    Car Wash Disclosures (AB 2897)

     

    The California Labor Code enumerates a number of provisions specifically applicable to car washes given their history of violations.  This bill would add Labor Code section 2066.5 to require an existing car wash business to provide a successor with written notice of these requirements prior to the sale or transfer of the business.

     

    Status:  This bill unanimously passed the Assembly, and has passed the Senate’s Labor and Industrial Relations Committee.

     

    Expanded Protections for Janitorial Service Workers (AB 1978)

     

    Known as the Property Service Workers Protection Act, this bill would enact numerous measures to protect janitorial industry employees from sexual assault and other Labor Code violations.  Amongst other things, it would require the Department of Industrial Relations to develop by July 1, 2018 training materials, for both supervisors and workers, regarding sexual harassment and sexual violence, and to establish requirements for such training.  It would also direct Cal-OSHA to require janitorial industry employers to include this training as part of its injury and illness prevention plans.  Additionally, it would establish a system of janitorial contractor registration to encourage labor standards compliance and to establish prompt and effective sanctions for violating this part.

     

    Status:  This bill has passed the Assembly, and has passed the Senate’s Labor and Industrial Relations Committee and is pending in the Appropriations Committee.

     

    Whistleblower Protections for Legislative Employees (AB 1788)

     

    Entitled the Legislative Employee Whistleblower Protection Act, this bill would prohibit interference with the right of legislative employees to make protected disclosures of ethics violations and would prohibit retaliation against employees who have made such protected disclosures.  It would also establish a procedure for legislative employees to report violations of these prohibitions to the Legislature, and would impose civil and criminal liability on an individual violating these protections.

     

    Status:  This bill unanimously passed the Assembly, and has passed the Senate’s Judiciary Committee and is pending in the Senate’s Appropriations Committee.

     

    Elimination of Some Employment Verification Requirements (AB 2532)

     

    Unemployment Insurance Code sections 9601.5 and 9601.7 require any state or local government agency, and any private employer contracting with a state or local government agency, that provides specified employment services to verify an individual’s legal status or authorization to work prior to providing services to that individual in accordance with federal procedures.  This bill would repeal both of these sections and the requirements contained in them.

     

    Status:  This bill passed the Assembly along a party-line vote, and has passed the Senate’s Labor and Industrial Relations Committee, and is pending in the Senate’s Appropriations Committee.

     

    Non-California Venue Provisions in Employment Agreements (SB 1241)

            

    This bill would add new Labor Code section 925 prohibiting an employer from requiring an applicant or employee to agree to a provision that would require the employee to adjudicate outside California a dispute arising in California, or deprive the employee of the protection of California law with respect to a controversy arising in California.  Any such choice of law or venue provision would be voidable at the employee’s request if it required the employee to adjudicate outside California or deprive the employee of the protections of California law.  If the court invalidated such a provision, the matter would be adjudicated in California and under California law, and the prevailing employee would be entitled to recover reasonable attorneys’ fees incurred enforcing this provision.  If enacted, this section would apply to any contract entered into, modified or extended on or after January 1, 2017.

     

    This section would not apply to an employee who is individually represented by legal counsel in negotiating the terms of an agreement to designate either the choice of venue or law provisions.

     

    Status:  This bill passed the Assembly along a party-line vote and has passed the Senate’s Judiciary and Appropriations Committee along similar party-line votes.  Governor Brown vetoed a similar bill in 2011 (AB 267) citing a concern about not wanting to dissuade non-California companies from hiring California employees.

     

     

    CALSHRM LEGISLATIVE REPORT

    By: Michael S. Kalt, CalSHRM Government Affairs Director

    Wilson Turner Kosmo LLP

    mkalt@wilsonturnerkosmo.com

    Telephone:  619-236-9600

    LEGISLATIVE SUMMARY

    The California Legislature was very active in July, as the elected representatives scrambled to ensure bills passed key committee votes before the July 17th deadline to do so, and before the summer legislative recess commenced.  In fact, the California Legislature passed and Governor Jerry Brown has already signed into law several employment bills, including new laws that:

    • Amend California’s Paid Sick Leave law in many respects, including as to accrual methods, pre-existing paid time off plans, and calculating the pay rate for sick time (AB 304);
    • Amend California’s Fair Employment and Housing Act to extend retaliation protections to employees that request religious or disability accommodations (AB 987); and
    • Provide that cheerleaders are employees of sports teams (AB 202) and impose new post-merger hiring requirements in the grocery industry (AB 359). Not unexpectedly, a number of other bills survived this legislative hurdle, including bills that would:
    • Increase California’s minimum wage to $11.00 per hour in January 2016 (rather than to $10.00 as currently scheduled), and to $13.00 per hour by 2017 (SB 3);
    • Target gender-based wage differentials, including by preventing employers from obtaining or releasing salary history information (AB 1017 and SB 358);
    • Expand the California Family Rights Act to apply to employers with more than 25 employees (instead of 50) and expand the class of family members for whom leave may be taken because of a serious health condition (SB 406);
    • Allow employees to take time-off for “childcare or school emergencies” (SB 579);
    • Provide new enforcement powers to the Labor Commissioner for wage and hour violations (AB 970 and SB 588)
    • Prohibit advertisements discouraging the unemployed or public employees from applying (AB 676 and AB 883); and
    • Preclude employers from requiring that employees agree to arbitration as a condition of employment (AB 465).

     

    The Legislature will address these and other bills after it reconvenes on August 17th, and given its current composition, many of these bills are likely to pass their remaining respective chambers by the September 11th deadline to do so.  Those bills that pass the Legislature will be forwarded to Governor Jerry Brown for signature or veto by October 11, 2015.

     

    Lastly, while most employment-related bills passed, there were several bills that did not, including bills that would have allowed private employers to provide a hiring preference to veterans (AB 1383), and that would have expanded workplace prohibitions on smoking to electronic cigarettes (SB 140).

     

    Listed below, are the new laws that have already been enacted, followed by an overview (largely by subject matter), of the key employment bills of potential general application that remain pending.

    NEW LAWS

    California’s Paid Sick Leave Amendments Effective Immediately

    California’s Healthy Workplaces, Healthy Families Act of 2014 (Healthy Families Act—AB 1522, codified at Labor Code sections 245 to 249) took effect July 1, 2015, making California the second state to require employers to provide paid sick leave to employees.   Human resource professionals will hardly get a chance to rest since on July 13, 2015, Governor Jerry Brown signed “urgency” legislation (AB 304) that is immediately effective and amends many Paid Sick Leave-related provisions.   These amendments are as follows:

     

                Narrow Exemptions Modified, Including for CalPERS Retired Annuitants

     

    One of the more significant features of the Healthy Families Act is its scope in that it applies to all employers, regardless of size, and that it applies to almost every “employee” except for the four specifically-enumerated exceptions to the definition of employee contained in Labor Code section 245.5(a)(1)-(4) (e.g., CBA-covered employees, CBA-covered construction employees, in-home support service workers, and flight crew employees covered by the Federal Railway Labor Act).

     

    AB 304 creates a fifth exception (Labor Code section 245.5(a)(5)) for certain public sector employees who are a recipient of a retirement allowance and employed without reinstatement into his or her respective retirement system.   The Senate’s Committee analyses suggest this change is needed because CalPERS retired annuitants are prohibited from receiving compensation other than their pay, so this amendment would allow such retired annuitants to return to work while still receiving their pension annuity.

     

    AB 304 also amends the exemption for construction industry employees covered by a CBA (Labor Code section 245.5(a)(2)) to remove the “onsite work” referenced in the initial definition of “employee in the construction industry.”  This change is intended to clarify that “employees in the construction industry” for purposes of this exemption means an employee performing work.

     

    A bill (AB 11) that would have removed the exemption for in-home support service workers (Labor Code section 245.5(a)(3)) stalled in 2015 but may resurface in 2016.

     

                “Same Employer” Requirement

     

    While Labor Code section 246(a) initially provided that an employee need only work thirty  (30) or more days in California to be eligible, it did not specify whether this work must be performed for the same employer, or perhaps for prior employers, or a combination of employers.   AB 304 amends section 246 to specify the employee must work 30 or more days “for the same employer” to be eligible.

     

                Alternative Accrual Methods

     

    As originally enacted, the Healthy Families Act required a fairly rigid accrual method that did not necessarily correspond with the accrual methods employers used for providing paid sick leave in their pre-existing policies.  Specifically, the Healthy Families Act required non-exempt employees to accrue paid sick leave at the rate of one hour for every thirty hours worked, even though employers might have used another rate or an alternative method (i.e., per pay period rather than hours).  In response to these concerns, AB 304 amends Labor Code section 246(b) to enumerate two additional accrual methods.

     

    First, under new subsection (b)(3), an employer may utilize a different accrual method provided the accrual is on a regular basis so that the employee has no less than 24 hours of accrued sick leave or paid time off by the 120th calendar day of employment, or each calendar year, or each 12-month basis.

     

    Alternatively, new subsection (b)(4) states an employer may satisfy the accrual requirements by providing not less than 24 hours or three days of paid sick leave that is available to the employee to use by completion of his or her 120th calendar day of employment.  As a practical matter, this second new option means employers will not need to track hours worked for accrual purposes if they simply provide the statutorily-required minimum paid sick leave (24 hours/3 days) by the end of the fourth month of employment.

     

    Front-Loaded Policy Clarifications

     

    Labor Code section 246(d) initially provided that no accrual or carryover is required if the employer provides the full amount of leave at the “beginning of each year,” but it did not specify how “each year” is determined nor did it contain the language in other subsections allowing an employer to use a “calendar year, year of employment or 12-month basis.”  AB 304 cures this discrepancy and specifies that no accrual or carryover is required if the employer provides the full amount of leave “at the beginning of each calendar year, year of employment or 12-month basis.”  It also specifies that “full amount of leave” means three days or 24 hours.

     

                Grandfather Provision for Pre-2015 PTO Plans

     

    In response to employer concerns the new paid sick leave mandate would negatively impact pre-existing paid time off (PTO) plans, the Healthy Families Act initially created section 246(e) to state employers would not need to provide additional sick leave if their PTO plans allowed paid time off on the same conditions and for the same purposes as AB 1522 and met one of two specific conditions.  As initially enacted, the PTO plan either: (1) had to satisfy the accrual, carry-over and use requirements of section 246; or (2) it had to provide no less than 24 hours or three days of paid sick leave or PTO for each year of employment, calendar year or 12-month basis.  Notably, this second basis was silent as to when during the 12-month period the PTO needed to be provided, and AB 304’s initial proposal that the entire 24 hours of PTO had to be provided at “at the beginning” of each year (however defined) generated considerable protests this would require many employers to modify pre-existing PTO policies.

     

    AB 304 retains the first exception for PTO plans (i.e., those satisfying the accrual, carry over and use requirements of section 246) but substantially modifies the second exception, including providing a “grandfather” provision of sorts for PTO plans existing prior to January 1, 2015.  As amended, section 246(e)(2) approves PTO policies that provided paid time off to “a class of employees” before January 1, 2015 under an accrual method other than the one hour for 30 hours worked if the accrual is on a regular basis such that the employee (including employees hired into the class after January 1, 2015) has no less than one day/8 hours of accrued time off within three months of employment of each calendar year or each 12-month period, and the employee is eligible to earn at least three days/24 hours of paid time off within nine months of employment.  However, this new subsection also provides that if the employer subsequently modifies the pre-January 1, 2015 PTO policy, the modified policy must comply with any of the four accrual methods in subsection (b) or provide the full amount of PTO at the beginning of each year of employment, calendar year, or 12-month period.  It also states that this section will not prohibit the employer from increasing the accrual amount or rate for a class of employees covered by this section.

     

    As a practical matter, this new subsection means employers with PTO policies prior to January 1, 2015 need not ensure the entire amount of statutorily-required paid time off be provided “at the beginning” of each year provided the grandfathered PTO plan meets the newly-identified requirements (eight hours by 90 days, and 24 hours by nine months), but once any changes are made to the grandfathered PTO plans, they must either satisfy an alternative accrual method or provide the entire PTO amount “at the beginning” of each year.

     

    Reinstating Sick Leave for Returning Employees

     

    As initially enacted, Labor Code section 246(f)(2) stated an employer need not pay out unused sick time upon separation but must reinstate any prior balances if rehired within one year.  In response to questions of whether reinstatement would be required if the previously accrued balance had been paid regardless, AB 304 clarifies an employer need not reinstate accrued sick leave that was previously paid out upon cessation of employment.

     

    Since section 246(f)(2) initially stated that rehired employees would be entitled to use previously accrued paid sick days and to begin accruing additional sick time, it was ambiguous whether a rehired employee could begin using the previously accrued hours even if they had already exceeded the usage or accrual limits. AB 304 amends this subsection to clarify that a reinstated employee’s rights are “subject to the use and accrual limitations” of section 246.  As a practical matter, this means the employee would still have to satisfy any remaining portion of the 90-day employment period before usage, and could not exceed the usage (24 hours) or accrual amounts (48 hours) for the year in which the employee (provided the employer has a written policy establishing such usage and accrual limits).

     

    Notice Requirements for “Unlimited” Time-Off Policies

     

    Labor Code section 246(h) requires employers to provide written notice to employees of available paid sick leave balances, either through the itemized wage statements required under Labor Code section 226 or a separate writing provided on the designated pay date.  Responding to employer concerns about how to track balances and provide these notices if the employer provides “unlimited” paid sick time, AB 304 specifies such employers may satisfy this notice obligation by indicating “unlimited” on the notice or wage statement.

     

                Pay-Stub Notices Delayed for Motion Picture and Broadcasting Industries

     

    For employers covered by Wage Orders 11 and 12 of the Industrial Welfare Commission (i.e., motion picture and broadcasting industries), AB 304 delays the requirement to provide wage statements or other written notices identifying sick leave balances until January 21, 2016.  AB 304’s legislative history indicates this industry-specific amendment is needed because employers in these industries commonly use different third-party payroll companies for each production.

     

    Calculating Pay Rates

     

    The Healthy Families Act initially stated that paid sick leave shall be paid at the employee’s hourly wage, but then articulated a very confusing formula for determining this rate if the employee has received different hourly rates in the preceding 90 days before paid sick leave is used.  Somewhat helpfully, AB 304 substantially amends Labor Code section 246(k) to delete this formula, and identifies guidelines for paying paid sick leave, including distinguishing between exempt and non-exempt employees.

     

    As amended, paid sick time for exempt employees shall be calculated in the same manner as the employer calculates wages for other forms of paid leave time.

     

    For non-exempt employees, the employer may choose between two options.  First, the employer may calculate paid sick leave in the same manner as the regular rate of pay for the workweek in which the employee uses paid sick time, regardless of whether the employees actually works overtime in that workweek.  Alternatively, the employer may calculate paid sick leave by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.

     

                A Duty to Maintain Records, but No Duty to Inquire

     

    Section 247.5 requires employers to maintain for at least three years records documenting the hours worked and paid sick leave days accrued and used by the employee.  In response to employer concerns this might require employers to inquire about whether a PTO-related absence is due to sickness (as opposed to any other purpose), thus undercutting an administrative benefit of PTO plans, AB 304 adds language providing that an employer is not obligated to inquire into or record the purpose for which an employee uses paid leave or paid time off.

     

                Paid Sick Leave Provisions are Severable

     

    Perhaps anticipating legal challenges to the Healthy Families Act, or learning from the drafter’s mistake in not including a so-called “severability” provision in the Affordable Care Act, AB 304 adds language specifying the Healthy Families Act’s provisions are severable, such that if any are deemed invalid they will not affect the other provisions.

     

    Accommodation Requests Constitute Protected Legal Activity for Retaliation Purposes (AB 987)

     

    California’s Fair Employment and Housing Act (FEHA, Gov. Code section 12940 et seq.) prohibits harassment and discrimination based on various protected classifications, and prohibits retaliation against employees who protest or oppose such unlawful employment practices.  The FEHA also requires employers to reasonably accommodate an employee’s medical condition or religious beliefs.  However, it had been unclear whether an individual who requests such accommodation may state a FEHA retaliation claim in addition to a failure to accommodate claim based upon such requests.

     

    Several recent California appellate court decisions had held an accommodation request does not constitute a “protected legal activity” for FEHA retaliation purposes, reasoning that treating accommodation requests as protected legal activities would blur the distinctions between two conceptually different FEHA theories of recovery.  (See e.g., Rope v. Auto-Chlor Sys. of Washington, Inc. (2013) 220 Cal.App.4th 635; Nealy v. City of Santa Ana (2015) 234 Cal.App.4th 359.)  This new law responds to these cases and amends the FEHA to prohibit an employer or covered entity from retaliating or otherwise discriminating against a person for requesting accommodation for a disability or religious beliefs, regardless of whether the accommodation request was granted.

     

    Cheerleaders to be Considered Employees of Professional Sports Teams (AB 202)

     

    There have recently been several high-profile wage and hour class actions filed by cheerleaders or dance teams of professional sports franchises.  This new law adds Labor Code section 2754 to provide that for purposes of state law governing employment, including the Labor Code, the Unemployment Insurance Code and the FEHA, a cheerleader utilized by a California-based professional sports team, directly or through a labor contractor, will be deemed an employee.  The professional sports team will also be required to ensure the cheerleader is classified and treated as an employee, thus preventing them from being treated as independent contractors.

     

    For purposes of this new law, “cheerleader” is defined as “an individual who performs acrobatics, dance, or gymnastic exercises on a recurring basis, but will not include individuals utilized no more than one time in a calendar year.”  “Professional sports teams” is defined as teams at either a minor or major league level for baseball, basketball, football, ice hockey or soccer.

     

    New “Change of Control” Requirements for Grocery Workers (AB 359)

     

    This industry-specific bill implements a number of new requirements upon the sale of “grocery establishments” (as defined).  Among other things, it requires that upon a “change in control” (as defined), the incumbent grocery employer shall prepare a list of specified eligible grocery workers for the successor grocery employer, and requires the successor hire from this list during a 90-day transition period.  The successor grocery employer will also be required to retain eligible grocery workers for a 90-day period, during which they could not be discharged without cause, and upon the close of that period, the successor grocery employer must consider offering continued employment to those workers.

     

    PENDING BILLS

     

    Additional Minimum Wage Increase (SB 3)

     

    Even though California’s minimum wage is already scheduled to increase to $10.00 per hour on January 1, 2016, SB 3 proposes several additional increases.  Specifically, California’s minimum wage would increase to $11.00 per hour on January 1, 2016, and to $13.00 per hour on July 1, 2017.  After January 1, 2019, the minimum wage would also be annually adjusted based on the California Consumer Price Index (CPI) and rounded to the nearest five cents.  This bill also provides that it would not preclude the Industrial Welfare Commission (IWC) from increasing the minimum wage beyond that required by the CPI formula, but would preclude the IWC from adjusting it downwards even if the CPI was negative for the preceding year.

     

    Status:  SB 3 passed the Senate along a party-line vote, and passed the Assembly’s Labor and Employment Committee along a similar party-line vote, and will soon be heard by the Assembly’s Appropriations Committee.  While California overwhelmingly approved a two-step minimum wage increase in 2013 (AB 10), that increase had specifically omitted annual CPI-based increases, and a very similar bill to SB 3 (SB 935) stalled last year.

     

    Arbitration Agreements Targeted (AB 465)

     

    This bill would create a new Labor Code section (section 925) to provide that any waiver of rights, penalties, remedies, forums and procedures established by the Labor Code, including the right to file a claim with the Labor Commissioner or a civil action in court, may not be required as a condition of employment.  It would also preclude the waiver of any rights that cannot be waived under state or federal law, and require that any waiver be knowing and voluntary, in writing, and expressly not made as a condition of employment.  It would also require the party seeking to enforce the waiver to prove that it was made voluntarily and knowingly and not as a condition of employment.  Otherwise, any such waiver will be deemed involuntary, unconscionable, against public policy and unenforceable.

     

    It would further prohibit employers from threatening, retaliating or discriminating against any person who refuses to waive such rights, and, in addition to any other legal remedy, would impose a civil penalty of up to $10,000 per each individual for each violation of this section, plus reasonable attorney’s fees.

     

    This bill would apply to any such waivers, including private arbitration agreements, entered into, altered, modified, renewed or extended on or after January 1, 2016.

     

    Status:  This bill narrowly passed the Assembly despite bi-partisan opposition, and recently passed the Senate’s Labor and Industrial Relations Committee and is pending in the Senate’s Appropriations Committee.  Although loosely modeled on a similar bill that was enacted last year (AB 2617 [imposing limits on contractual waivers regarding the Unruh Act]), even if enacted, AB 465 will almost certain face judicial challenge on the grounds is preempted by the Federal Arbitration Act.

     

    Limited “Cure Period” for Wage Statement Violations (AB 1506)

     

    California’s Private Attorneys General Act of 2004 (PAGA, Labor Code section 2699 et seq.) authorizes employees to file civil actions against employers for Labor Code violations to recover civil penalties otherwise assessed or collected by the Labor and Workforce Development Agency.  PAGA specifically enumerates Labor Code violations for which the employer is afforded an opportunity to cure a violation before suit may be filed, and also enumerates Labor Code violations for which no cure period exists.  One provision for which no cure period is currently allowed is Labor Code section 226, which requires employers provide an itemized wage statement containing nine specifically-enumerated items, including gross wages earned, employee name, etc.

     

    Responding to employer concerns of frivolous class actions based on hyper-technical violations (i.e., an employer’s name was misspelled) that caused no actual injury to an employee, this bill would amend PAGA to provide a limited ability to cure certain wage statement violations before a PAGA civil action may be filed.  Specifically, this bill would allow an employer 33 days to cure any alleged violation of wage statement requirements concerning “the inclusive dates of the period for which the employee is paid” or “the name and address of the legal entity that is the employer.”  (Labor Code sections 226(a)(6) and (8) respectively).  However, the bill specifies that “cure” means that the employer must issue fully compliant wage statements to employees for the entire statutory period (three years), and it limits an employer’s ability to cure these pay statement violations to one time in a 12-month period.

     

    A similar but broader bill (AB 558) that would have amended PAGA to provide a cure period for any wage statement violations stalled in committee.

     

    Status:  This narrower version of AB 558 has passed the Assembly and the Senate’s Judiciary Committee, and is pending in the Senate’s Appropriations Committee.  It appears to have considerable bi-partisan support and likely will pass the Senate and be forwarded to Governor Brown for signature or veto.

     

    Labor Commissioner Judgment Enforcement (SB 588)

     

    Citing a concern that employees are often unable to collect upon judgments for unpaid wages, this bill would provide the Labor Commissioner a number of additional mechanisms to enforce judgments.  For instance, it would enable the Labor Commissioner, on behalf of an aggrieved employee, to file a levy against any credits, money or other property of an employer to collect on a judgment for unpaid wages.  As another example, if an employer failed to satisfy a judgment within 20 days of receiving a notice of levy, the employer may be required to cease business operations in California or obtain a surety bond of $150,000.  Third, businesses that contract for certain “property services” may be jointly and severally liable for the wage violations of the service contractor, so long as the business was named in the underlying complaint.

     

    The bill’s author states that it materially differs in several respects from two bills (AB 1164 and 2416) that also proposed wage enforcement measures but stalled in 2013 and 2014.  First, according to the author, while those earlier bills would have permitted pre-judgment liens (i.e., an ability to tie up an employer’s assess before any finding of wrongdoing), this bill authorizes a levy or lien only after a judgment has been rendered against the employer.  Second, while the earlier bills proposed a lien against the real or personal property of an offending employer, this bill only authorizes a levy against the employer’s credit, money or related property (other than real property).  (Even under the current version (SB 588) a lien can be obtained against real property but only after the employer fails to satisfy a notice of judgment and continues to operate without complying with the surety bond requirement).  Third, while the earlier bills would have authorized the employees to directly file a lien, this bill vests that ability in the Labor Commissioner acting on behalf of the employees.

     

    In light of these changes, SB 588 does not appear to face the significant opposition that ultimately defeated AB 1164 and AB 2416, although there may be additional amendments forthcoming to address concerns SB 588 imposes personal liability upon managers lacking authority to direct wage violations or that the surety bond requirement is too high.

     

    Status:  This bill passed the Senate on a party-line vote, and has similarly passed the Assembly’s Labor and Employment and Judiciary Committees on party-line votes.  It is presently pending in the Assembly’s Appropriations Committee.

     

    Expanded Labor Commissioner Enforcement Powers (AB 970)

     

    This bill would amend several Labor Code provisions to expand the citation authority of the Labor Commissioner.  For instance, while Labor Code section 558 presently authorizes the Labor Commissioner to investigate Labor Code or Industrial Welfare Commission (IWC) orders regarding wages, this bill would also authorize the Labor Commissioner to issue a citation for violations of applicable “local” overtime laws.  Similarly, it would amend Labor Code sections 1197 and 1197.1, which presently authorize the Labor Commissioner to investigate violations of the minimum wage set by the IWC to issue a citation for violations of any state or local minimum wage laws.

     

    This bill would also amend Labor Code section 2802 to authorize the Labor Commissioner to issue citations and penalties against employers who fail to properly indemnify employees for expenses incurred in employment.  The bill’s author indicates the amendment to section 2802 is intended to address concerns employers are improperly deducting charges for tools or equipment necessary to perform the job, but the amendments are worded more broadly to any violation of section 2802.

     

    In each instance, the Labor Commissioner may cite the employer if the local agency has not done so, and if the Labor Commissioner does issue a citation, the local agency shall not cite the employer for the same violation.

     

    Status:  This bill passed the Assembly, and has passed the Senate’s Labor and Industrial Relations Committee and is now pending in the Senate’s Appropriations Committee.

     

    Amendments to the Family-School Partnership Act and to Kin Care Leave (SB 579)

     

    This bill expands the reasons for which an employee may take job-protected leave under the Family School Partnership Act, currently codified at Labor Code section 230.8.  Presently, section 230.8  requires employers with 25 or more employees to allow employees to use up to 40 hours of unpaid time (limited to eight hours in any calendar month) to participate in school or childcare related activities.  This bill would expand this provision to also allow employees to take job-protected time off to find, enroll or reenroll their children in a school or with a licensed child care provider.  More significantly, it would also allow employees to take time off to address a “child care provider or school emergency.”  New subsection (e) would define this as meaning a child cannot remain in a school or with a child care provider due to one of the following: (1) the school or child care provider has requested the child be picked up, or it has an attendance policy (excluding planned holidays) that prohibits the child from attending or requires the child be picked up; (2) behavioral or discipline problems; (3) closure or unexpected unavailability of the school or child care provider, excluding planned holidays; or (4) a natural disaster, including but not limited to, fire, earthquake or flood.

     

    While section 230.8 presently provides such job-protected leave to parents, guardians and grandparents, this bill would re-define parent in new subsection (e)(1) to extend these protections to stepparents, foster parents or an employee who stands in loco parentis to a child.

     

    This bill would also amend California’s “kin care” provision (Labor Code section 233), which requires employers to allow employees to use one-half of their accrued sick leave to care for a “family member” (as defined), to permit an employee to use sick leave for the purposes specified in the Paid Sick Leave law (Labor Code section 245 et seq.).  In other words, rather than attempting to copy over a number of the Paid Sick Leave law’s provisions and definitions into the kin care law, this much simpler approach would modify the kin care law to specify that its definition of “family member” and grounds for sick leave is consistent with the Paid Sick Leave law.  This means that employee’s would be able to use kin-care leave for the illness or preventative care for a child, parent, spouse, registered domestic partner, grandparent, grandchild or sibling.

     

    Status:  This bill almost unanimously passed the Senate, and has passed the Assembly’s Labor and Employment Committee and is pending in the Assembly’s Appropriations Committee.   It appears to be largely unopposed with bipartisan support so likely will pass the Assembly.

     

    Expansions to the California Family Rights Act (SB 406)

     

    This bill proposes to materially expand the number of employers subject to California’s Family Rights Act (CFRA, Gov. Code section 12945.2 et seq.), and to expand the bases for employee leave, thus potentially creating further differences between CFRA and the federal Family Medical Leave Act (FMLA).  For instance, while CFRA presently defines “employer” as a person employing 50 or more employees, this bill would redefine employer to include any person employing 25 or more persons.  Similarly, while CFRA presently authorizes even covered employers (i.e., 50 or more employees) to deny a qualifying leave if the employer has fewer than 50 employees within 75 miles of the employee’s worksite, this bill would restrict this small employer exemption to employers that employ fewer than 25 employees within 75 miles of the employee’s worksite.

     

    This bill would also alter the definitions regarding the circumstances for which CFRA leave may be taken.  For example, it would expand the definition of “child” to include children of a domestic partner or for persons to whom the employee stands in loco parentis, and would remove the current age (i.e., under 18 years old) and dependent status restrictions.  If adopted, CFRA leave would be permitted for the serious health condition of a “child,” as defined, regardless of age and for adult children regardless of whether that child is dependent upon the employee.  It would also expand the definition of “parent” to include “parents-in-law.”

     

    While CFRA presently authorizes employees to take leave for the serious health condition of a child, parent or spouse, this bill would expand this entitlement to include leaves for the serious health condition of a grandparent, grandchild, sibling or domestic partner.

     

    Lastly, under Government Code section 12945.2(q)’s current language, where both parents are employed by the same employer, the employer may limit their combined leave rights in connection with the birth, adoption or foster care placement of a child to 12 weeks.  This bill would delete this subsection in its entirety, suggesting both employees employed by the same employer would each be entitled to 12 weeks of leave, assuming they are otherwise eligible.  As a reminder, although completely deleting this aggregation ability would create a material difference between CFRA and FMLA (since FMLA would still permit aggregation), these two statutes already currently differ in that FMLA permits aggregation only if both the “husband and wife” work for the same employer, while CFRA permits aggregation where both parents (whether married or not) work for the same employer.

     

    Status:  This bill passed the Senate along a party-line vote, and has passed the Assembly’s Labor and Employment Committee and is pending in the Assembly’s Appropriations Committee.

     

    Extension of California’s Paid Family Leave Benefit from 6 to 10 Weeks (AB 908)

     

    Under California’s family temporary disability insurance program, employees may receive up to 6 weeks of wage replacement benefits when taking time off work to care for specified persons (e.g., child, spouse, parent, etc.) or to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption.  This bill would amend Insurance Code section 3301 to allow employees to receive up to ten weeks of wage replacement benefits, rather than six.  It would also modify the formula for calculating these benefits to ensure a minimum weekly benefit of $250, and to increase the wage replacement rate from the current 55% to either 65%, 75% or 80% depending on an individual’s wage level.  These increases in the level and duration of benefits would be funded by adjusting the worker contribution rate from 1.0 % to 1.3% (and potentially higher but capped at 1.5%) of worker income depending on utilization levels.

     

    Status:  This bill passed the Assembly with bipartisan support and by a wide-margin, and has passed the Senate’s Labor and Industrial Relations Committee.  It is currently pending in the Senate’s Appropriations Committee and has been placed on the suspense file to examine the potential fiscal costs of these increases.

     

    Amendments to California’s Equal Pay Act (SB 358)

     

    Echoing the Paycheck Fairness Act (S. 84) pending at the federal level, this bill proposes to amend California’s Equal Pay Act to target gender-based wage gaps, including by incorporating many provisions proposed in the federal version.

     

    For instance, Labor Code section 1197.5 presently prohibits employers from paying less to members of the opposite sex who perform equal work in the same establishment.  This bill would eliminate the “same establishment” requirement, and revise the “equal work” requirement to instead prohibit paying less for “substantially similar work, when viewed as a composite of skill, effort and responsibility” performed under similar working conditions.  The bill’s author indicates this change is intended to reflect the fact it is difficult to demonstrate any two positions are completely equal “in the modern, highly differentiated workplace.”

     

    It would also amend the statutorily-enumerated exceptions in section 1197.5, which presently are a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a differential based on any bona fide factor other than sex.  Specifically, while it would retain the first three exceptions, it would significantly revise the “bona fide factor other than sex” exception to require the employer prove a wage-differential is not based on or derived from a sex-based differential and is consistent with a “business necessity,” such as a difference in education, training or experience that is job-related with the position in question.  It would also specify that “business necessity” means “an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purposes it is supposed to serve.”  However, this bill would also provide that this defense shall not apply if the employee demonstrates that an alternative employment practice exists that would serve the same business purpose without producing the wage differential.

     

    In addition to demonstrating at least one of those factors, the employer must also satisfy two new criteria: (a) that each factor relied upon is applied reasonably; and (b) the one or more factors relied upon accounts for the entire wage difference.  While the bill’s author contends the current law implicitly requires the employer to prove a wage differential is justified rather than an employing having to prove a wage differential is unjustified, this bill clarifies the burden of proof is on the employer to demonstrate the existence of legitimate factors, other than the sex of the employee, for any wage disparity.

     

    This bill would also amend section 1197.5(d) to expand from two years to three years an employer’s obligation to retain records of the wages and wage rates, job classifications and other terms and conditions of employment for employees.

     

    This bill would also add new subsection (j) to prohibit employers from discharging, or in any way discriminating or retaliating against, any employee who takes action to invoke or assist in any manner the enforcement of California’s Equal Pay Act.  Under this new subsection, employers would also not be able to prohibit an employee from discussing the employee’s own wages, discussing the wages of others, or inquiring about another employee’s wages, or aiding or encouraging any other employee to exercise his or her rights under this section.

     

    The bill would extend the existing enforcement mechanisms for wage discrimination to claims for retaliation and would provide a one-year statute of limitations for retaliation claims.  In addition to Labor Commissioner enforcement, this bill would also authorize an employee who has been discharged, discriminated or retaliated against to pursue a civil action for reinstatement and reimbursement of lost wages, and would require that such civil actions be commenced no later than one-year after the cause of action accrues.

     

    Status:  This bill unanimously passed the Senate, and has passed the Assembly’s Judiciary and Labor and Employment Committees and is pending in in the Assembly’s Appropriations Committee.  It appears to be unopposed and thus likely to also pass the Assembly and to be sent to Governor Brown for signature or veto.

     

    Limits on Salary-Related Discussion during Hiring Process (AB 1017)

     

    Citing a concern that prior salary history information perpetuates gender-based inequality, this bill would impose new limits on an employer’s ability to obtain salary history information.  Specifically, this bill would enact new Labor Code section 432.3 and prohibit employers from seeking salary history information, including compensation and benefits, from an applicant for employment during an interview or as a condition of employment.

     

    It would also prohibit an employer from releasing the salary history of any current or former employee to any prospective employer in response to a request as part of an interview or hiring process without written authorization from the current or former employee, or without first obtaining certification from the prospective employer that the prospective employer has obtained written authorization from the current or former employee to disclose that information.

     

    A recent amendment clarifies that Labor Code section 433, which makes any violation of “this article” (Article 3 – Contracts and Applications for Employment) a misdemeanor, would not apply to any violation of new Labor Code section 432.2.

     

    Status:  This bill narrowly passed the Assembly despite bipartisan opposition, and has passed the Senate’s Labor and Industrial Relations Committee and is pending in the Senate’s Appropriations Committee.

     

    Equal Pay Certifications for Certain State Contractors (AB 1354)

     

    Entitled the Equal Pay for Equal Work Act of 2015, this bill would amend Government Code section 12990, which presently identifies criteria for employers who wish to become a contractor for public works, including agreeing to California’s non-discrimination laws and submitting a non-discrimination program to the Department of Fair Employment and Housing (DFEH) for approval and certification.  This bill would require employers with more than 100 employees, prior to becoming a contractor or subcontractor with the state, to submit a nondiscrimination program to the DFEH, and to submit periodic reports, but not more than annually, of its compliance with that program.  Employers with fewer than 100 employees may also be required to submit a non-discrimination program, and if so, would be required to comply with the same requirements applicable to employers with more than 100 employees.  The DFEH would be allowed to require approval and certification of the nondiscrimination program and to audit programs for compliance.  The DFEH will be responsible for defining the term “employee” for purposes of these new requirements.

     

    The nondiscrimination program would need to include policies and procedures designed to ensure equal employment opportunities for all applicants and employees, an analysis of employment selection procedures, and work force analysis.  This work force analysis would include: (a) an equal pay report that includes the total number of workers with a specific job category identified by worker race, ethnicity and gender; (b) total wages required to be reported on the Internal Revenue Service Form W-2 for all workers in a specific job category identified by worker race, ethnicity and gender; and (c) the total hours worked on an annual basis for all workers in a specific job category identified by worker race, ethnicity, and gender.  A recent amendment clarifies that exempt employees shall be presumed to work 40 hours a week for purposes of this reporting requirement.

     

    Status:  This bill passed the Assembly on a party-line vote, and has passed the Senate’s Governmental Organizational Committee and is pending in the Senate’s Appropriations Committee.

     

    Retaliation Protections for Family Members (AB 1509)

     

    While California law presently prohibits retaliation against employees who engage in protected legal activities (i.e., filing a wage-related complaint), this bill would extend these protections to address several perceived gaps in coverage, particularly for low wage earners.  For instance, to address the situation where multiple family members work for the same employer, it would prohibit an employer or a person acting on their behalf from retaliating against an employee because they are a family member of someone who has engaged in or was perceived to have engaged in protected activity.

     

    Another cited concern involves retaliation in the temporary staffing context or in the construction/contractor context, where the entity ordering the alleged retaliation is not the direct employer (e.g., the general contractor ordering the subcontractor to dismiss a complaining employee).   Accordingly, this will would provide that “employer” or “person acting on their behalf” includes “client employers” or a “controlling employer” (as defined in the Wage Theft Prevention Act [Labor Code section 2810.3]) and in Labor Code section 6400(b) regarding multi-employer worksite obligations to provide a safe place of employment.

     

    These specific changes would be made to the following Labor Code provisions regarding whistle-blowing: (1) Labor Code section 98.6 (regarding complaints made to the Labor Commissioner); (2) Labor Code section 1102.5 (regarding complaints made about legal violations); and (3) Labor Code section 6310 (regarding complaints made about unsafe working conditions).

     

    For purposes of the amendments to section 98.6 relating to Labor Commissioner complaints, it would also specify that it would not apply to claims arising under Labor Code section 96(k), which prohibits employers from retaliating against employees who engage in lawful off-duty conduct, unless the activity involved the exercise of employee rights otherwise covered by section 98(a).

     

    Status:  This bill passed the Assembly on a largely party-line vote, and has passed the Senate’s Labor and Industrial Relations and Judiciary Committees and is pending in the Senate’s Appropriations Committee.

     

    Prohibition against Employers Advertising that Unemployed Applicants “Need Not Apply” (AB 676)

     

    This bill responds to concerns about discrimination against the unemployed by limiting an employer’s ability to screen applicants based on “employment status,” which would be defined as an “individual’s present unemployment, regardless of length of time that the individual has been unemployed.”  Specifically, beginning July 1, 2016, this bill would add new Labor Code sections 1045 to 1048 to prohibit an employer, unless based upon a bona fide occupational qualification, from: (1) publishing advertisements suggesting an individual’s current employment is a job requirement; or (2) affirmatively asking an applicant to disclose orally or in writing his or her current employment status until the employer has determined that the applicant meets the minimum employment qualifications for the position, as stated in the published notice for the job.  The law would impose fairly similar prohibitions upon employment agencies or persons who operate Internet websites for posting positions in California.

     

    The proposed bill would not prohibit employers or employment agencies from publishing job advertisements setting forth the lawful qualifications for the job including, but not limited to, the holding of a current and valid professional or occupational license.  It also would not prohibit advertisements for job vacancies stating that only applicants who are currently employed by that employer will be considered (so-called “internal” hiring).

     

    In addition, the bill would not prohibit employers, employment agencies or website operators from: (1) obtaining information regarding an individual’s employment, including recent relevant experience; (2) having knowledge of a person’s “employment status,” or from inquiring about the reasons for an individual’s unemployment; or (3) refusing to offer employment to a person because of the reasons underlying an individual’s employment status.  In other words, this bill seems to allow employers to consider the reasons for an individual’s unemployment but prohibits them from initially screening out applicants simply because they are unemployed.

     

    This bill would not create a private right of action, but would authorize the Labor Commissioner to enforce and seek penalties of $1,000 for the first violation, $5,000 for the second violation, and $10,000 for each subsequent violation.

     

    Status:  This bill passed the Assembly along a party line vote, and has also passed the Senate’s Judiciary and Labor and Industrial Relations Committees, and is pending in the Senate’s Appropriations Committee.  While it seems likely to pass the Senate, Governor Brown vetoed very similar versions of this bill in 2012 and 2014 (AB 1450 and AB 2271, respectively).

     

    FEHA to Protect Reserve or Auxiliary Public Safety Officers (AB 272)

     

    California’s Fair Employment and Housing Act (Gov. Code section 12940, et seq.) prohibits specified discriminatory practices in employment or housing accommodations on the basis of certain specified characteristics (e.g., race, creed, national origin, etc.).  This bill would amend Penal Code section 830.6 to specify that individuals constituting peace officers, including reserve police offers, will be deemed an employee for FEHA purposes.  This bill is intended to address some ambiguity whether reserve police officers are employees or volunteers, the latter potentially not included within FEHA’s protections.

     

    Status: This bill unanimously passed the Assembly, and has passed the Senate Labor and Industrial Relations Committee and is pending in the Senate’s Appropriations Committee.

     

    Discrimination Based on Public Employee Status (AB 883)

     

    Citing a concern about discrimination against applicants who participate in a governmental retirement plan, this bill would add new Labor Code section 432.6 to ensure private and public employers do not discriminate in hiring decisions against “current or former public employees,” including participants in a government retirement plan.  Specifically, this bill would prohibit any employer from advertising or communicating in such a manner to suggest that an applicant’s former or current public employee status would disqualify them from the position sought.  It would also prohibit employers from making an employment decision based on an applicant’s current or former employment as a public employee.  The bill would similarly prohibit persons that operate an Internet website for posting jobs to publish a job announcement that includes provisions suggesting public employees need not apply.

     

    However, it would not prohibit an employer or a website from publishing the requirements for a position or limiting a position to only internal applicants, nor would it prohibit employers from having or obtaining information about an applicant’s or employee’s public employment history provided it did not make decisions based simply upon that public employment history.

     

    A recent amendment clarifies that Labor Code section 433, which makes any violation of “this article” (Article 3 – Contracts and Applications for Employment) a misdemeanor, would not apply to any violation of new Labor Code section 432.6.

     

    Status:  This bill passed the Assembly on a party-line vote, and has passed the Senate’s Judiciary Committee and is pending in the Senate’s Appropriations Committee.

     

    E-Verify Misuse Targeted (AB 622)

     

    Administered by the United States Citizenship and Immigration Services, the federal
    E-Verify Program enables participating employers to verify that the employees they hire are authorized to work in the United States.  This bill attempts to address a concern that employers might misuse E-Verify by adding Labor Code section 2814 to prohibit employers, except as required by federal law or as a condition of receiving federal funds, from using E-Verify to check the employment authorization status of an existing employee or an applicant who has not been offered employment in a manner or at a time not required by federal law or by an applicable memorandum of understanding.

     

    However, it also specifies that it would not prohibit an employer from using E-very in accordance with federal law to check the employment authorization status of a person who has been offered employment.  The bill also states that it is intended to prevent discrimination in employment rather than to condone the potential hiring and employment of persons not authorized for employment under federal law.

     

    It would further require employers who use E-Verify to comply with the applicable employee notification procedures if the employer receives a tentative non-confirmation issued by the Social Security Administration or the Department of Homeland Security. Employers would also be required to furnish to the employee any notification issued by these agencies containing information specific to the employee’s E-Verify case or any tentative non-confirmation notice “as soon as practicable.”

     

    This bill would also authorize civil penalties up to $10,000 per violation of this new section, and specifies that each unlawful use of the E-Verify system on an employee or application constitutes a separate violation.

     

    Status:  This bill passed the Assembly along a largely party-line vote, and has also passed the Senate’s Labor and Industrial Relations Committees, and a full Senate floor vote is expected shortly.

     

    Expanded Powers for Agricultural Relations Board (AB 561)

     

    The Alatorre-Zenovich-Dunlap-Berman Agricultural Labor Relations Act of 1975 (Labor Code section 1141, et seq.) regulates employer-employee relations in agriculture, including prohibiting agricultural employers and employees from engaging in “unfair labor practices,” as defined, and empowers the Agricultural Labor Relations Board (ALRB) to prevent such practices.  This bill would amend Labor Code section 1149 to require the Board to process to final board order all decisions concerning make-whole awards, back pay, and other monetary awards to employees within one year of any board order finding liability for any award.

     

    It would also add new Labor Code section 1164.6 to require any employer who appears or petitions for review of any ALRB order to post a bond in the amount of the entire economic value of the order.  This new section would also require that, for an ALRB order regarding mandatory mediation and conciliation procedures, the ALRB must fix the bond amount by reasonably determining the entire economic value of the terms, conditions and benefits of the ordered collective bargaining agreement based upon submissions from the parties and a recommended finding from the assigned mediator in the case.

     

    Status:  This bill passed the Assembly by a fairly narrow margin, and has passed the Senate’s Labor and Industrial Relations Committee and is pending in the Senate’s Appropriations Committee.

     

    Developing a Framework for Undocumented Agricultural Employees to Obtain Permits to Work and Live (AB 20)

     

    Since state-level immigration laws are generally preempted by federal law, this bill would require California’s Employment Development and its Food and Agricultural Department to convene a working group to consult with federal agencies to determine the legal roles and responsibilities of federal and state agencies in implementing a program to provide undocumented agricultural employees with a permit to work and live in the United States.  It would also require California’s Governor to use this report to make a formal request to the federal government to implement a program to provide such agricultural employees permits to work and live in the United States, and to make recommendations to the California Legislature on how to structure such a program.

     

    Status: This bill passed the Assembly on a near unanimous basis, and has also passed the Senate’s Labor and Industrial Relations Committee and is pending in the Senate’s Appropriations Committee.

     

    Workers’ Compensation Coverage Expansion for Immigrants (SB 623)

     

    Under California’s Workers’ Compensation laws, if an employer fails to pay required compensation, an injured employee may apply for recovery from the Uninsured Employers Benefits Trust.  If a permanently, partially disabled employee receives a later, compensable injury resulting in additional permanent disability, then that employee may recover compensation from the Subsequent Injuries Benefits Trust Fund.  This bill would add new Labor Code sections 3733 and 4756 to ensure that regardless of their citizenship or immigration status, an injured employee is not precluded from receiving benefits under the Uninsured Employers Benefits Trust Fund or the Subsequent Injuries Benefits Trust Fund.

     

    This bill states it is declaratory of existing law, meaning it would apply retroactively if enacted.

     

    Status:  This bill overwhelmingly passed the Senate on a bi-partisan basis, and unanimously passed the Assembly’s Insurance Committee and overwhelmingly passed the Assembly’s Appropriations Committee.  It appears largely unopposed and will likely soon pass an Assembly floor vote and be forwarded to Governor Brown for signature or veto.

     

    No Permanent Disability Apportionment for Sexual Harassment or other Gender-Related Characteristics (AB 305)

     

    California’s Workers’ Compensation system requires employers to maintain coverage to compensate employees for injuries occurred in the course and scope of employment.  For permanent disability purposes, a treating physician must prepare a report assessing causation, including making an apportionment determination as to what percentage of the permanent disability is work-related and non-work-related.

     

    This bill would, for injuries occurring on or after January 1, 2016, modify Labor Code section 4663 to prevent apportionment based on certain specific conditions (e.g., pregnancy, menopause or osteoporosis) if the condition is contemporaneous with the claimed physical injury.  It would also prohibit apportionment of permanent disability in cases of psychiatric injury caused by sexual harassment based on pregnancy, menopause or osteoporosis if the condition is contemporaneous with the claimed injury.

     

    It would also add new Labor Code section 4660.2 to state that for injuries occurring on or after January 1, 2016, the impairment ratings for breast cancer and its aftereffects (i.e., sequelae) shall also not be less than comparable ratings for prostate cancer and its aftereffects.

     

    Status:  This bill passed the Assembly with bipartisan support, and has passed the Senate’s Labor and Industrial Relations Committee and is pending in the Senate’s Appropriations Committee.

     

    Additional Sick Pay for Public Employees who are Veterans with Service-Related Disabilities (SB 221)

     

    California law presently allows state officers or employees employed on a full-time basis to accrue paid sick leave at the rate of one day for each calendar month of service.  Entitled the California Wounded Warriors Transitional Leave Act, this bill would amend Government Code section 19859 to provide additional paid sick time to state officers or employees hired after January 1, 2016, who are military veterans with a military service-connected disability rated at 30% or more by the United States Department of Veterans Affairs.  Specifically, such employees would receive an additional credit for paid sick leave of up to 96 hours for the purpose of undergoing medical treatment for his or her service-related disability.

     

    In contrast to generally available paid sick leave for public employees that accrues at one day for each calendar month worked, this entire credit would be available on the first day of employment and would remain available for use for the following 12 months of employment.  However, this additional paid sick leave credit would not carry over after 12 months.  Public employers would also be permitted to require submission of satisfactory proof that such sick leave is being used for treatment of a service-related disability.

     

    Status:  This bill unanimously passed the Senate, and unanimously passed several Assembly Committee votes, and is pending in the Assembly’s Appropriations Committee.  It appears unopposed and is likely to pass the Assembly and be forwarded to Governor Brown for signature or veto.

     

    CALSHRM LEGISLATIVE REPORT

    By: Michael S. Kalt, CalSHRM Government Affairs Director

    Wilson Turner Kosmo LLP

    mkalt@wilsonturnerkosmo.com

    Telephone:  619-236-9600

     

    California’s Paid Sick Leave Amendments Effective Immediately

    California’s Healthy Workplaces, Healthy Families Act of 2014 (Healthy Families Act—AB 1522, codified at Labor Code sections 245 to 249) took effect July 1, 2015, making California the second state to require employers to provide paid sick leave to employees.   Human resource professionals will hardly get a chance to rest since on July 13, 2015, Governor Jerry Brown signed “urgency” legislation (AB 304) that is immediately effective and amends many Paid Sick Leave-related provisions.   These amendments are as follows:

             Narrow Exemptions Modified, Including for CalPERS Retired Annuitants

    One of the more significant features of the Healthy Families Act is its scope in that it applies to all employers, regardless of size, and that it applies to almost every “employee” except for the four specifically-enumerated exceptions to the definition of employee contained in Labor Code section 245.5(a)(1)-(4) (e.g., CBA-covered employees, CBA-covered construction employees, in-home support service workers, and flight crew employees covered by the Federal Railway Labor Act). 

    AB 304 creates a fifth exception (Labor Code section 245.5(a)(5)) for certain public sector employees who are a recipient of a retirement allowance and employed without reinstatement into his or her respective retirement system.   The Senate’s Committee analyses suggest this change is needed because CalPERS retired annuitants are prohibited from receiving compensation other their pay, so this amendment would allow such retired annuitants to return to work while still receiving their pension annuity.

    AB 304 also amends the exemption for construction industry employees covered by a CBA (Labor Code section 245.5(a)(2)) to remove the “onsite work” referenced in the initial definition of “employee in the construction industry.”  This change is intended to clarify that “employees in the construction industry” for purposes of this exemption means an employee performing work. 

    A bill (AB 11) that would have removed the exemption for in-home support service workers (Labor Code section 245.5(a)(3)) stalled in 2015 but may resurface in 2016.

             “Same Employer” Requirement

    While Labor Code section 246(a) initially provided that an employee need only work thirty  (30) or more days in California to be eligible, it did not specify whether this work must be performed for the same employer, or perhaps for prior employers, or some combination.   As amended by AB 304, section 246 now specifies the employee must work 30 or more days “for the same employer” to be eligible.

             Alternative Accrual Methods

    As originally enacted, the Healthy Families Act required a fairly rigid accrual method that did not necessarily correspond with the accrual methods employers used for providing paid sick leave in their pre-existing policies.  Specifically, the Healthy Families Act required non-exempt employees to accrue paid sick leave at the rate of one hour for every thirty hours worked, even though employers might have used another rate or an alternative method (i.e., per pay period rather than hours).  In response to these concerns, AB 304 amends Labor Code section 246(b) to enumerate two additional accrual methods. 

     

    First, under new subsection (b)(3), an employer may utilize a different accrual method, provided the accrual is on a regular basis so that the employee has no less than 24 hours of accrued sick leave or paid time off by the 120th calendar day of employment, or each calendar year, or each 12-month basis.

     

    Alternatively, new subsection (b)(4) states an employer may satisfy the accrual requirements by providing not less than 24 hours or three days of paid sick leave that is available to the employee to use by completion of his or her 120th calendar day of employment.  As a practical matter, this second new option means employers will not need to track hours worked for accrual purposes if they simply provide the statutorily-required minimum paid sick leave (24 hours/3 days) by the end of the fourth month of employment.  

     

    Front-Loaded Policy Clarifications

     

    Labor Code section 246(d) initially provided that no accrual or carryover is required if the employer provides the full amount of leave at the “beginning of each year,” but it did not specify how “each year” is determined nor did it contain the language in other subsections allowing an employer to use a “calendar year, year of employment or 12-month basis.”  AB 304 cures this discrepancy and specifies that no accrual or carryover is required if the employer provides the full amount of leave “at the beginning of each calendar year, year of employment or 12-month basis.”  It also specifies that “full amount of leave” means three days or 24 hours.

     

             Grandfather Provision for Pre-2015 PTO Plans

     

    In response to employer concerns the new paid sick leave mandate would negatively impact pre-existing paid time off (PTO) plans, the Healthy Families Act initially created section 246(e) to state employers would not need to provide additional sick leave if their PTO plans allowed paid time off on the same conditions and for the same purposes as AB 1522 and met one of two specific conditions.  As initially enacted, the PTO plan either: (1) had to satisfy the accrual, carry-over and use requirements of section 246; or (2) it had to provide no less than 24 hours or three days of paid sick leave or PTO for each year of employment, calendar year or 12-month basis.  Notably, this second basis was silent as to when during the 12-month period the PTO needed to be provided, and AB 304’s initial proposal that the entire 24 hours of PTO had to be provided at “at the beginning” of each year (however defined) generated considerable protests this would require many employers to modify pre-existing PTO policies. 

     

    AB 304 retains the first exception for PTO plans (i.e., those satisfying the accrual, carry over and use requirements of section 246) but substantially modifies the second exception, including providing a “grandfather” provision of sorts for PTO plans existing prior to January 1, 2015.  As amended, section 246(e)(2) approves PTO policies that provided paid time off to “a class of employees” before January 1, 2015 under an accrual method other than the one hour for 30 hours worked if the accrual is on a regular basis such that the employee (including employees hired into the class after January 1, 2015) has no less than one day/8 hours of accrued time off within three months of employment of each calendar year or each 12-month period, and the employee is eligible to earn at least three days/24 hours of paid time off within nine months of employment.  However, this new subsection also provides that if the employer subsequently modifies the pre-January 1, 2015 PTO policy, the modified policy must comply with any of the four accrual methods in subsection (b) or provide the full amount of PTO at the beginning of each year of employment, calendar year, or 12-month period.  It also states that this section will not prohibit the employer from increasing the accrual amount or rate for a class of employees covered by this section.

     

    As a practical matter, this new subsection means employers with PTO policies prior to January 1, 2015 need not ensure the entire amount of statutorily-required paid time off be provided “at the beginning” of each year provided the grandfathered PTO plan meets the newly-identified requirements (eight hours by 90 days, and 24 hours by nine months), but once any changes are made to the grandfathered PTO plans, they must either satisfy an alternative accrual method or provide the entire PTO amount “at the beginning” of each year.  

     

    Reinstating Sick Leave for Returning Employees

     

    As initially enacted, Labor Code section 246(f)(2) stated an employer need not pay out unused sick time upon separation but must reinstate any prior balances if rehired within one year.  In response to questions of whether reinstatement would be required if the previously accrued balance had been paid regardless, AB 304 clarifies an employer need not reinstate accrued sick leave that was previously paid out upon cessation of employment. 

     

    Since section 246(f)(2) initially stated that rehired employees would be entitled to use previously accrued paid sick days and to begin accruing additional sick time, it was ambiguous whether a rehired employee could being using the previously accrued hours even if they had already exceeded the usage or accrual limits. AB 304 amends this subsection to clarify that a reinstated employee’s rights are “subject to the use and accrual limitations” of section 246.  As a practical matter, this means the employee would still have to satisfy any remaining portion of the 90-day employment period before usage, and could not exceed the usage (24 hours) or accrual amounts (48 hours) for the year in which the employee (provided the employer has a written policy establishing such usage and accrual limits).

     

    Notice Requirements for “Unlimited” Time-Off Policies

     

    Labor Code section 246(h) requires employers to provide written notice to employees of available paid sick leave balances, either through the itemized wage statements required under Labor Code section 226 or a separate writing provided on the designated pay date.  Responding to employer concerns about how to track balances and provide these notices if the employer provides “unlimited” paid sick time, AB 304 specifies an employer may satisfy this notice obligation by indicating “unlimited” on the notice or wage statement.

     

             Pay-Stub Notices Delayed for Motion Picture and Broadcasting Industries

     

    For employers covered by Wage Orders 11 and 12 of the Industrial Welfare Commission (i.e., motion picture and broadcasting industries), AB 304 delays the requirement to provide wage statements or other written notices identifying sick leave balances until January 21, 2016.  AB 304’s legislative history indicates this industry-specific amendment is needed because employers in these industries commonly use different third-party payroll companies for each production. 

     

    Calculating Pay Rates

     

    The Healthy Families Act initially stated that paid sick leave shall be paid at the employee’s hourly wage, but then articulated a very confusing formula for determining this rate if the employee has received different hourly rates in the preceding 90 days before paid sick leave is used.  Somewhat helpfully, AB 304 substantially amends Labor Code section 246(k) to delete this formula, and identifies guidelines for paying paid sick leave, including distinguishing between exempt and non-exempt employees.

     

    As amended, paid sick time for exempt employees shall be calculated in the same manner as the employer calculates wages for other forms of paid leave time.

     

    For non-exempt employees, the employer may choose between two options.  First, the employer may calculate paid sick leave in the same manner as the regular rate of pay for the workweek in which the employee uses paid sick time, regardless of whether the employees actually works overtime in that workweek.  Alternatively, the employer may calculate paid sick leave by dividing the employee’s total wages, not including overtime premium pay, but the employee’s total hours worked in the full pay periods of the prior 90 days of employment. 

     

             A Duty to Maintain Records, but No Duty to Inquire

     

    Section 247.5 requires employers to maintain for at least three years records documenting the hours worked and paid sick leave days accrued and used by the employee.  In response to employer concerns this might require employers to inquire about whether a PTO-related day is due to sickness (as opposed to any other purpose), thus undercutting an administrative benefit of PTO plans, AB 304 adds language providing that an employer is not obligated to inquire into or record the purpose for which an employee uses paid leave or paid time off. 

     

             Paid Sick Leave Provisions are Severable

     

    Perhaps anticipating legal challenges to the Healthy Families Act, or learning from the drafter’s mistake in not including a so-called “severability” provision in the Affordable Care Act, AB 304 adds language specifying the Healthy Families Act’s provisions are severable, such that if any are deemed invalid they will not affect the other provisions.

     

    CALSHRM LEGISLATIVE REPORT

    By: Michael S. Kalt, CalSHRM Government Affairs Director

    Wilson Turner Kosmo LLP

    mkalt@wilsonturnerkosmo.com

    Telephone:  619-236-9600

    LEGISLATIVE SUMMARY

    The June 5th deadline for bills to pass their house of origin has expired, thus providing a much clearer picture of the employment bills to potentially consider in 2015.  Not unexpectedly, a number of bills survived this initial hurdle, including bills that would:

    • Increase California’s minimum wage to $11.00 per hour in January 2016 (rather than to $10.00 as currently scheduled), and to $13.00 per hour by 2017 (SB 3);
    • Target gender-based wage differentials, including by preventing employers from obtaining or releasing salary history information (AB 1017 and SB 358);
    • Expand the California Family Rights Act to apply to employers with more than twenty-five employees (instead of 50) and expand the class of family members for whom leave may be taken because of a serious health condition (SB 406);
    • Allow employees to take time-off for “childcare or school emergencies” (SB 579);
    • Prohibit advertisements discouraging the unemployed or public employees from applying (AB 676 and AB 883);
    • Allow employers to provide a preference to veterans during hiring decisions (AB 1383);
    • Amend the Fair Employment and Housing Act (FEHA) to treat accommodation requests as protected legal activities for retaliation purposes (AB 987);
    • Amend the FEHA to prohibit employers from engaging in work eligibility-related violations and to limit when employers may use
      E-Verify (AB 1065 and AB 622); and
    • Preclude employers from requiring that employees agree to arbitration as a condition of employment (AB 465).

    Given the overwhelming single party rule in Sacramento, most of these bills have a significant likelihood of making it to Governor Jerry Brown’s desk.

    Since many provisions of California’s Paid Sick Leave law (AB 1522) are scheduled to take effect July 1, 2015, a particularly interesting bill is AB 304, which would amend the Paid Sick Leave law in multiple respects, including permissible accrual methods.  Perhaps recognizing the practical problems of having these alleged clarifying amendments take effect on January 1, 2016, six months after the Paid Sick Leave law takes effect, AB 304 has recently been amended to deem it urgency legislation to take effect immediately upon the Governor’s signature.  Whether such urgency legislation can attract the requisite two-thirds support in both chambers, or whether these realities may result in a brief delay of the Paid Sick Leave law’s effective date (as in Massachusetts) remains to be seen.

    There were also several significant employment bills that failed passage, including bills that would have required employers provide “double pay” on Thanksgiving and Christmas (AB 67) and would have required food and retail establishments to provide two weeks notice of schedules or pay additional compensation (AB 357).

    Listed below, and largely by subject matter, are the key employment bills of potential general application that remain pending, followed by a brief discussion of the employment bills that failed passage, but may be reconsidered in 2016.

    PENDING BILLS

    Additional Minimum Wage Increase (SB 3)

    Even though California’s minimum wage is already scheduled to increase to $10.00 per hour on January 1, 2016, SB 3 proposes several additional increases.  Specifically, California’s minimum wage would increase to $11.00 per hour on January 1, 2016, and to $13.00 per hour on July 1, 2017.  After January 1, 2019, the minimum wage would also be annually adjusted based on the California Consumer Price Index (CPI) and rounded to the nearest five cents.  This bill also provides that it would not preclude the Industrial Welfare Commission (IWC) from increasing the minimum wage beyond that required by the CPI formula, but would preclude the IWC from adjusting it downwards even if the CPI was negative for the preceding year.

    Status:  SB 3 passed the Senate along a party-line vote and is pending in the Assembly but has not yet been referred to a committee.  While California overwhelmingly approved a two-step minimum wage increase in 2013 (AB 10), that increase had specifically omitted annual CPI-based increases, and a very similar bill to SB 3 (SB 935) stalled last year.

    (As a reminder, San Francisco’s minimum wage increased to $12.25 per hour on May 1, 2015, and will increase to $15.00 per hour by 2018, while Los Angeles recently voted to increase its minimum wage to $15.00 per hour by 2020.)

     

    Paid Sick Leave Amendments (AB 304)

     

    This bill states it is intended to “clarify” several provisions of last year’s Paid Sick Leave law (AB 1522), for which a number of substantive provisions are scheduled to take effect July 1, 2015.  For instance, while Labor Code section 246 currently provides that an employee need only work 30 or more days in California to be eligible, it does not specify whether this work must be performed for the same employer.  Accordingly, this bill would specify that the employee must work 30 or more days “for the same employer” to be eligible.

     

    It would also attempt to address employer concerns that the statutorily-enumerated accrual method of “one hour for every 30 hours worked” (section 246(b)) conflicts with existing methods by which employers currently provide paid sick leave, but the attempted fix may be controversial.  For instance, it would amend section 246(b) to specifically authorize employers to use a different accrual method other than providing one hour for every 30 hours worked.  Proposed subsection (b)(3) would allow an employer to utilize a different accrual method, provided the accrual is on a regular basis so that the employee has no less than 24 hours of accrued sick leave or paid time off by the 120th calendar day of employment, or each calendar year, or each 12-month basis.

     

    Alternatively, proposed subsection (b)(4) would specify that an employer may satisfy the accrual requirements of this section by providing not less than 24 hours or three days of paid sick leave that is available to the employee to use by completion of his or her 120th calendar day of employment.

     

    However, some concern has been expressed that by requiring the employer to provide at least the statutorily-required minimums (i.e., 24 hours/3 days) by the 120th day, employers may still be in violation if their current policies do not do so even if they otherwise provide for more than 24 hours or 3 days of paid sick leave in a year.  Thus, a concern is that rather than providing an alternative mechanism reflective of more generous employer policies, the “by the 120th calendar day” requirement may statutorily invalidate these otherwise more generous policies.

     

    While Labor Code section 246(d) currently specifies that no accrual or carryover is required if the employer provides the full amount of leave at the “beginning of each year,” it does not specify how “each year” is determined nor does it contain the language in other subsections allowing an employer to use a “calendar year, year of employment or 12-month basis.”  AB 304 would cure this discrepancy and specify that no accrual or carryover is required if the employer provides the full amount of leave “at the beginning of each calendar year, year of employment or 12-month basis.”  It also would specify that “full amount of leave” means three days or 24 hours.

     

    The bill also amends section 246(e), which presently relieves an employer from providing additional paid sick leave if it has a paid sick leave or paid time off (PTO) policy that may be used for the same purposes and under the same conditions as the paid sick leave required under AB 1522, and meets one of two requirements: (1) it satisfies the accrual, carry-over and use requirements of section 246; or (2) it provides no less than 24 hours or three days of paid sick leave or PTO for each year of employment, calendar year or 12-month basis.  This bill would amend this second basis and require the employer provide the 24-hours or three days of paid sick leave “at the beginning” of each year of employment, calendar year or 12-month basis. 

     

    Labor Code section 246(f)(2) presently states that an employer need not pay out unused sick time upon separation but must reinstate any prior balances if rehired within one year.  This bill clarifies an employer need not reinstate accrued sick leave that was previously paid out upon cessation of employment.  It would also amend this section to clarify that any reinstated balances would be “subject to the use and accrual limitations” of this section, meaning the employee would still have to satisfy any remaining portion of the 90-day period before usage, and could not exceed the accrual amounts for the year in which the employee is re-hired.

     

    Labor Code section 246(h) presently requires employers to provide written notice to employees of available paid sick leave balances, either through the itemized wage statements required under Labor Code section 226 or a separate writing provided on the designated pay date.  Responding to employer concerns about how to track balances and provide these notices if the employer provides “unlimited” paid sick time, this bill would specify that an employer may satisfy this notice obligation by indicating “unlimited” on the notice or wage statement.  For employers in the broadcasting and motion picture industries, AB 304 would delay this requirement of identifying sick leave balances on wage statements or other written notices until January 21, 2016.

     

    Labor Code section 246(k) presently states that paid sick leave shall be paid at the employee’s hourly wage, but articulates a very confusing formula for determining this rate if the employee has received different hourly rates in the preceding 90 days before paid sick leave is used.  AB 304 deletes this formula, and for non-exempt employees would instead provide that paid sick time “shall be calculated in the same manner as the regular rate of pay for the workweek in which the employee uses paid sick time, whether or not the employee actually works overtime in that workweek.”  For exempt employees, paid sick time “shall be calculated in the same manner as the employer calculates wages for other forms of paid leave time.”

     

    While section 247.5 requires employers to document the paid sick days accrued and used by an employee for three years, this bill would also add language providing that an employer is not obligated to inquire into or record the purpose for which an employee uses paid leave or paid time off. 

     

    This bill would slightly expand the otherwise narrow exemptions from this paid sick leave mandate set forth in section 245.5(a).  For instance, in addition to the four current exemptions, it would also exempt a retired annuitant of a public entity and a worker covered by the Railroad Unemployment Insurance Act.  (A bill that would have amended section 245.5(a) to remove the current exemption for in-home support workers (AB 11) stalled during this legislative session).

     

    Lastly, it would add a provision specifying that the Paid Sick Leave law’s provisions are severable, such that if any are deemed invalid they will not affect the other provisions.

     

    Status: This bill passed the Assembly’s Labor and Employment and Appropriations committees, but has not yet passed the Assembly.  However, it was recently amended to identify itself as an urgency bill, meaning that although passage now requires a two-thirds vote (rather than a majority), it is not subject to the normal timing rules and would take effect immediately upon being signed by the Governor.

     

    Cheerleaders to be Considered Employees of Professional Sports Teams (AB 202)

     

    There have recently been several high-profile wage and hour class actions filed by cheerleaders or dance teams of professional sports franchises.  This bill would add new Labor Code section 2754 to provide that for purposes of state law governing employment, including the Labor Code, the Unemployment Insurance Code and the FEHA, a cheerleader utilized by a California-based professional sports team, directly or through a labor contractor, will be deemed an employee.  The professional sports team will also be required to ensure the cheerleader is classified and treated as an employee, thus preventing them from being treated as independent contractors.

     

    Cheerleader will be defined as “an individual who performs acrobatics, dance, or gymnastic exercises on a recurring basis, but will not include individuals utilized no more than one time in a calendar year.”  “Professional sports teams” will be defined as teams at either a minor or major league level for baseball, basketball, football, ice hockey or soccer.

     

    Status:  This bill passed the Assembly along a largely party-line vote and is pending in the Senate’s Labor and Industrial Relations committee.

     

    Arbitration Agreements Targeted (AB 465)

     

    This bill would create a new Labor Code section (section 925) to provide that any waiver of rights, penalties, remedies, forums and procedures established by the Labor Code, including the right to file a claim with the Labor Commissioner or a civil action in court, may not be required as a condition of employment.  It would also require that any such waiver be knowing and voluntary, in writing, expressly not made as a condition of employment, and require the party seeking to enforce the waiver to prove that it was made voluntarily and knowingly and not as a condition of employment.  Otherwise, any such waiver will be deemed involuntary, unconscionable, against public policy and unenforceable.

     

    It would further prohibit employers from threatening, retaliating or discriminating against any person who refuses to waive such rights, and, in addition to any other legal remedy, would impose a civil penalty of up to $10,000 per each individual for each violation of this section, plus reasonable attorney’s fees.

     

    This bill would apply to any such waivers, including private arbitration agreements, entered into, altered, modified, renewed or extended on or after January 1, 2016.

     

    Status:  This bill narrowly passed the Assembly despite bi-partisan opposition, and is presently pending in the Senate’s Labor and Industrial Relations Committee.  Although loosely modeled on a similar bill that was enacted last year (AB 2617 [imposing limits on contractual waivers regarding the Unruh Act]), even if enacted, AB 465 will almost certain face judicial challenge on the grounds it conflicts with the Federal Arbitration Act.

     

    Expanded Labor Commissioner Enforcement Powers (AB 970)

     

    This bill would amend several Labor Code provisions to expand the citation authority of the Labor Commissioner.  For instance, while Labor Code section 558 presently authorizes the Labor Commissioner to investigate Labor Code or Industrial Welfare Commission (IWC) orders regarding wages, this bill would also authorize the Labor Commissioner to issue a citation for violations of applicable “local” overtime laws.  Similarly, it would amend Labor Code sections 1197 and 1197.1, which presently authorize the Labor Commissioner to investigate violations of the minimum wage set by the IWC to issue a citation for violations of any state or local minimum wage laws.

     

    This bill would also amend Labor Code section 2802 to authorize the Labor Commissioner to issue citations and penalties against employers who fail to properly indemnify employees for expenses incurred in employment.

     

    Status:  This bill passed the Assembly, and is pending in the Senate’s Labor and Industrial Relations Committee.

     

    Amendments to the Family-School Partnership Act and to Kin Care Leave (SB 579)

     

    This bill expands the reasons for which an employee may take job-protected leave under the Family School Partnership Act, codified at Labor Code section 230.8.  Presently, section 230.8  requires employers with 25 or more employees to allow employees to use up to 40 hours of unpaid time (limited to eight hours in any calendar month) to participate in school or childcare related activities.  This bill would expand this provision to also allow employees to take job-protected time off to find, enroll or reenroll their children in a school or with a licensed child care provider.  More significantly, it would also allow employees to take time off to address a “child care provider or school emergency.”  New subsection (e) would define this as meaning a child cannot remain in a school or with a child care provider due to one of the following: (a) the school or child care provider has requested the child be picked up, or it has an attendance policy (excluding planned holidays) that prohibits the child from attending or requires the child be picked up; (b) behavioral or discipline problems; (c) closure or unexpected unavailability of the school or child care provider, excluding planned holidays; or (d) a natural disaster, including but not limited to, fire, earthquake or flood.

     

    While section 230.8 presently provides such job-protected leave to parents, guardians and grandparents, this bill would extend these protections to stepparents, foster parents or an employee who stands in loco parentis to a child.

     

    This bill would also amend California’s “kin care” provision (Labor Code section 233), which requires employers to allow employees to use one-half of their accrued sick leave to care for a “family member” (as defined), to permit an employee to use sick leave for the purposes specified in the Paid Sick Leave law (Labor Code section 245 et seq.).  In other words, rather than attempting to copy over a number of the Paid Sick Leave law’s provisions and definitions into the kin care law, this much simpler approach would modify the kin care law to specify that its definition of “family member” and grounds for sick leave is consistent with the Paid Sick Leave law.

     

    Status:  This bill almost unanimously passed the Senate, and is pending in the Assembly and will soon be referred to a committee.  It appears to be largely unopposed with bipartisan support so likely will pass the Assembly.

     

    Expansions to the California Family Rights Act (SB 406)

     

    This bill proposes to materially expand the number of employers subject to California’s Family Rights Act (CFRA, Gov. Code section 12945.2 et seq.), and to expand the bases for employee leave, thus potentially creating further differences between CFRA and the federal Family Medical Leave Act (FMLA).  For instance, while CFRA presently defines “employer” as a person employing 50 or more employees, this bill would redefine employer to include any person employing 25 or more persons.  Similarly, while CFRA presently authorizes even covered employers (i.e., 50 or more employees) to deny a qualifying leave if the employer has less than 50 employees within 75 miles of the employee’s worksite, this bill would restrict this small employer exemption to employers that employ fewer than 25 employees within 75 miles of the employee’s worksite.

     

    This bill would also alter the definitions regarding the circumstances for which CFRA leave may be taken.  For example, it would expand the definition of “child” to include children of a domestic partner or for persons to whom the employee stands in loco parentis, and would remove the current age (i.e., under 18 years old) and dependent status restrictions.  If adopted, CFRA leave would be permitted for the serious health condition of a “child,” as defined, regardless of age and for adult children regardless of whether that child is dependent upon the employee.  It would also expand the definition of “parent” to include “parents-in-law.”

     

    While CFRA presently authorizes employees to take leave for the serious health condition of a child, parent or spouse, this bill would expand this entitlement to include leaves for the serious health condition of a grandparent, grandchild, sibling or domestic partner.

     

    Lastly, presently under Government Code section 12945.2(q), where both parents are employed by the same employer, the employer may limit their combined leave rights in connection with the birth, adoption or foster care placement of a child to 12 weeks.  This bill would delete this subsection in its entirety, suggesting both employees employed by the same employer would each be entitled to 12 weeks of leave, assuming they are otherwise eligible.  As a reminder, although completely deleting this aggregation ability would create a material difference between CFRA and FMLA (since FMLA would still permit aggregation), these two statutes already currently differ in that FMLA permits aggregation only if both the “husband and wife” work for the same employer, while CFRA permits aggregation where both parents (whether married or not) work for the same employer.

     

    Status:  This bill passed the Senate along a party-line vote, and is pending in the Assembly and will soon be referred to a committee.

     

    Extension of California’s Paid Family Leave Benefit from 6 to 10 Weeks (AB 908)

     

    Under California’s family temporary disability insurance program, employees may receive up to 6 weeks of wage replacement benefits when taking time off work to care for specified persons (e.g., child, spouse, parent, etc.) or to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption.  This bill would amend Insurance Code section 3301 to allow employees to receive up to ten weeks of wage replacement benefits, rather than six.  It would also modify the formula for calculating these benefits to ensure a minimum weekly benefit of $250, and to increase the wage replacement rate from the current 55% to either 65%, 75% or 80% depending on an individual’s wage level.

     

    Status:  This bill passed the Assembly with bipartisan support and by a wide-margin, and is now pending in the Senate and will soon be referred to a committee.

     

    Equal Pay Act Amendments (SB 358)

     

    Echoing the Paycheck Fairness Act (S. 84) pending at the federal level, this bill proposes to amend California’s Equal Pay Act to target gender-based wage gaps.

     

    For instance, Labor Code section 1197.5 presently prohibits employers from paying less to members of the opposite sex who perform equal work in the same establishment.  This bill would eliminate the “same establishment” requirement, and revise the “equal work” requirement to instead prohibit paying less for “substantially similar work, when viewed as a composite of skill, effort and responsibility” performed under similar working conditions.

     

    It would also amend the statutorily-enumerated exceptions in section 1197.5, which presently are a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a differential based on any bona fide factor other than sex.  Specifically, while it would retain the first three exceptions, it would significantly revise the “bona fide factor” to require the employer to prove that a wage-differential is not based on or derived from a sex-based differential and is consistent with a “business necessity,” such as a difference in education, training or experience that is job-related with the position in question.  It would also specify that “business necessity” means “an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purposes it is supposed to serve.”  However, this bill would also provide that this defense shall not apply if the employee demonstrates that an alternative employment practice exists that would serve the same business purpose without producing the wage differential.

     

    In addition to demonstrating at least one of those factors, the employer must also satisfy two new criteria: (a) that each factor relied upon is applied reasonably; and (b) the one or more factors relied upon accounts for the entire wage difference.

     

    This bill would also amend section 1197.5(d) to expand from two years to three years an employer’s obligation to retain records of the wages and wage rates, job classifications and other terms and conditions of employment for employees.

     

    This bill would also add new subsection (j) to prohibit employers from discharging, or in any way discriminating or retaliating against, any employee who takes action to invoke or assist in any manner the enforcement of California’s Equal Pay Act.  Under this new subsection, employers would also not be able to prohibit an employee from discussing the employee’s own wages, discussing the wages of others, or inquiring about another employee’s wages, or aiding or encouraging any other employee to exercise his or her rights under this section.

     

    The bill would extend the existing enforcement mechanisms for wage discrimination to claims for retaliation and would provide a one-year statute of limitations for retaliation claims.  In addition to Labor Commissioner enforcement, this bill would also authorize an employee who has been discharged, discriminated or retaliated against to pursue a civil action for reinstatement and reimbursement of lost wages, and would require that such civil actions be commenced no later than one-year after the cause of action accrues.

     

    Status:  This bill unanimously passed the Senate, and is pending in the Assembly and will soon be referred to a committee.  It appears to be unopposed and thus likely to also pass the Assembly.

     

    Limits on Salary-Related Discussion during Hiring Process (AB 1017)

     

    Citing a concern that prior salary history information perpetuates gender-based inequality, this bill would impose new limits on an employer’s ability to obtain salary history information.  Specifically, this bill would enact new Labor Code section 432.3 and prohibit employers from seeking salary history information, including compensation and benefits, from an applicant for employment during an interview or as a condition of employment.  It would also prohibit an employer from releasing the salary history of any current or former employee to any prospective employer without written authorization from the current or former employee.

     

    Status:  This bill narrowly passed the Assembly despite bipartisan opposition, and is pending in the Senate’s Labor and Industrial Relations committee.

     

    Equal Pay Certifications for Certain State Contractors (AB 1354)

     

    Entitled the Equal Pay for Equal Work Act of 2015, AB 1354 would amend Government Code section 12990, which presently identifies criteria for employers who wish to become a contractor for public works, including agreeing to California’s non-discrimination laws and submitting a non-discrimination program to the Department of Fair Employment and Housing (DFEH) for approval and certification.  This bill would require employers with more than 100 employees, prior to becoming a contractor or subcontractor with the state, to submit a nondiscrimination to the DFEH, and to submit periodic reports of its compliance with that program.  Employers with fewer than 100 employees may also be required to submit a non-discrimination program, and if so, would be required to comply with the same requirements applicable to employers with more than 100 employees.  The DFEH would be allowed to require approval and certification of the nondiscrimination program and to audit programs for compliance.

     

    The nondiscrimination program would need to include policies and procedures designed to ensure equal employment opportunities for all applicants and employees, an analysis of employment selection procedures, and work force analysis.  This work force analysis would include: (a) an equal pay report that includes the total number of workers with a specific job category identified by worker race, ethnicity and gender; (b) total wages required to be reported on the Internal Revenue Service Form W-2 for all workers in a specific job category identified by worker race, ethnicity and gender; and (c) the total hours worked for all workers in a specific job category identified by worker race, ethnicity, and gender.

     

    Status:  This bill passed the Assembly on a party-line vote and is pending in the Senate and will soon be referred to a committee.

     

    Retaliation Protections for Family Members (AB 1509)

     

    While California law presently prohibits retaliation against employees who engage in protected legal activities (i.e., file a complaint), this bill would extend these protections to prohibit an employer or a person acting on their behalf from retaliating against an employee because they are a family member of someone who has engaged in or was perceived to have engaged in protected activity.  It would also provide that “employer” or “persons acting on their behalf” include “client employers” (as defined in the Wage Theft Prevention Act [Labor Code section 2810.3]) and in Labor Code section 6400(b) regarding multi-employer worksite obligations to provide a safe place of employment.  These specific changes would be made to the following Labor Code provisions regarding whistle-blowing: (1) Labor Code section 98.6 (regarding complaints made to the Labor Commissioner); (2) Labor Code section 1102.5 (regarding complaints made about legal violations); and (3) Labor Code section 6310 (regarding complaints made about unsafe working conditions).

     

    For purposes of the amendments to section 98.6 relating to Labor Commissioner complaints, it would also specify that it would not apply to claims arising under Labor Code section 96(k), which prohibits employers from retaliating against employees who engage in lawful off-duty conduct, unless the activity involved the exercise of employee rights otherwise covered by section 98(a).

     

    Status:  This bill passed the Assembly on a largely party-line vote, and is pending in the Senate’s Labor and Industrial Relations and Judiciary committees.

     

    Prohibition Against Employers Advertising that Unemployed Applicants “Need Not Apply” (AB 676)

     

    This bill responds to concerns about discrimination against the unemployed by limiting an employer’s ability to screen applicants based on “employment status,” which would be defined as an “individual’s present unemployment, regardless of length of time that the individual has been unemployed.”  Specifically, beginning July 1, 2016, this bill would add new Labor Code sections 1045 to 1048 to prohibit an employer, unless based upon a bona fide occupational qualification, from: (1) publishing advertisements suggesting an individual’s current employment is a job requirement; or (2) affirmatively asking an applicant to disclose orally or in writing his or her current employment status until the employer has determined that the applicant meets the minimum employment qualifications for the position, as stated in the published notice for the job.  The law would impose fairly similar prohibitions upon employment agencies or persons who operate Internet websites for posting positions in California.

     

    The proposed bill would not prohibit employers or employment agencies from publishing job advertisements setting forth the lawful qualifications for the job including, but not limited to, the holding of a current and valid professional or occupational license.  It also would not prohibit advertisements for job vacancies stating that only applicants who are currently employed by that employer will be considered (so-called “internal” hiring).

     

    In addition, the bill would not prohibit employers, employment agencies or website operators from: (1) obtaining information regarding an individual’s employment, including recent relevant experience; (2) having knowledge of a person’s “employment status,” or from inquiring about the reasons for an individual’s unemployment; or (3) refusing to offer employment to a person because of the reasons underlying an individual’s employment status.  In other words, this bill seems to allow employers to consider the reasons for an individual’s unemployment but prohibits them from initially screening out applicants simply because they are unemployed.

     

    This bill would not create a private right of action, but would authorize the Labor Commissioner to enforce and seek penalties of $1,000 for the first violation, $5,000 for the second violation, and $10,000 for each subsequent violation.

     

    Status:  This bill passed the Assembly along a party line vote, and is pending in the Senate and will soon be referred to a committee.  While it seems likely to pass the Senate, Governor Brown vetoed very similar versions of this bill in 2012 and 2014 (AB 1450 and AB 2271, respectively).

     

    FEHA to Protect Reserve or Auxiliary Public Safety Officers (AB 272)

     

    California’s Fair Employment and Housing Act (Gov. Code section 12940, et seq.) prohibits specified discriminatory practices in employment or housing accommodations on the basis of certain specified characteristics (e.g., race, creed, national origin, etc.).  This bill would amend Penal Code section 830.6 to specify that individuals constituting peace officers, including reserve police offers, will be deemed an employee for FEHA purposes.

     

    Status: This bill unanimously passed the Assembly, and is pending in the Senate and will soon be assigned to a committee.

     

    FEHA to Permit Voluntary Veterans’ Preference in Hiring Decisions (AB 1383)

     

    Entitled the Voluntary Veterans’ Preference Employment Policy Act, this bill attempts to address the higher-than-normal unemployment rate for returning veterans.  Accordingly, new Government Code section 12958 would authorize employers to extend a preference during hiring decisions to honorably discharged veterans.  Employers would be permitted to require a veteran to submit United States Department of Defense Form 214 to confirm eligibility for this preference.  Section 12958 further specifies that such a preference shall be deemed not to violate any state or local equal employment opportunity law, including the FEHA.

     

    Government Code section 12940(a)(4) presently provides that using veteran status in favor of Vietnam-era veterans shall not constitute sex discrimination (likely in response to EEOC Guidance which had suggested that a veterans’ preference might create a disparate impact in favor of men given the then-existing composition of the United States military).  This bill would broaden this exemption by removing the references to “sex” and to “Vietnam-era veterans,” and provide that FEHA’s discrimination provisions would not affect an employer’s ability to use veteran status as a factor in hiring decisions if the employer maintains a veterans’ preference policy in accordance with new section 12958.

     

    Status:  This bill unanimously passed the Assembly, and is pending in the Senate and will soon be referred to a committee.  Given its bipartisan support and lack of any opposition, coupled with the fact similar bills have recently passed in over a dozen states and are pending in a dozen more, this bill seems likely to pass the Senate and to be enacted into law.

     

    Discrimination Based on Public Employee Status (AB 883)

     

    This bill would add new Labor Code section 432.6 to ensure private and public employers do not discriminate in hiring decisions against current or former public employees.  Specifically, this bill would prohibit any employer from advertising or communicating in such a manner to suggest that an applicant’s former or current public employee status would disqualify them from the position sought.  It would also prohibit employers from making an employment decision based on an applicant’s current or former employment as a public employee.  The bill would similarly prohibit persons that operate an Internet website for posting jobs to publish a job announcement that includes provisions suggesting public employees need not apply.

     

    However, it would not prohibit an employer or a website from publishing the requirements for a position or limiting a position to only internal applicants, nor would it prohibit employers from having or obtaining information about an applicant’s or employee’s public employment history provided it did not make decisions based simply upon that public employment history.

     

    Status:  This bill passed the Assembly on a party-line vote and is pending in the Senate and will soon be referred to a committee.

     

    Accommodation Requests to Constitute Protected Legal Activity for Retaliation Purposes (AB 987)

     

    California’s Fair Employment and Housing Act (FEHA, Gov. Code section 12940 et seq.) prohibits harassment and discrimination based on various protected classifications, and prohibits retaliation against employees who protest or oppose such unlawful employment practices.  The FEHA also requires employers to reasonably accommodate an employee’s medical condition or religious beliefs.  However, it has been unclear whether an individual who requests such accommodation may state a FEHA retaliation claim in addition to a failure to accommodate claim based upon such requests.

     

    Several recent California appellate court decisions have held an accommodation request does not constitute a “protected legal activity” for FEHA retaliation purposes, reasoning that treating accommodation requests as protected legal activities would blur the distinctions between two conceptually different FEHA theories of recovery.  (See e.g., Rope v. Auto-Chlor Sys. of Washington, Inc. (2013) 220 Cal.App.4th 635; Nealy v. City of Santa Ana (2015) 234 Cal.App.4th 359.)  This bill responds to these cases and would amend the FEHA to prohibit an employer or covered entity from retaliating or otherwise discriminating against a person for requesting accommodation for a disability or religious beliefs, regardless of whether the accommodation request was granted.

     

    Status:  This bill unanimously passed the Assembly, and is pending in the Senate’s Judiciary Committee.

     

    E-Verify Misuse Targeted (AB 622)

     

    Administered by the United States Citizenship and Immigration Services, the federal
    E-Verify Program enables participating employers to verify that the employees they hire are authorized to work in the United States.  This bill attempts to address a concern that employers might misuse E-Verify by adding Labor Code section 2814 to prohibit employers, except as required by federal law or as a condition of receiving federal funds, from using E-Verify to check the employment authorization status of an existing employee or an applicant who has not been offered employment in a manner or at a time not required by federal law or by an applicable memorandum of understanding.

     

    However, it also specifies that it would not prohibit an employer from using E-very in accordance with federal law to check the employment authorization status of a person who has been offered employment.  The bill also states that it is intended to prevent discrimination in employment rather than to condone the potential hiring and employment of persons not authorized for employment under federal law.

     

    It would further require employers who use E-Verify to comply with the applicable employee notification procedures if the employer receives a tentative non-confirmation issued by the Social Security Administration or the Department of Homeland Security. Employers would also be required to furnish to the employee any notification issued by these agencies containing information specific to the employee’s E-Verify case or any tentative non-confirmation notice “promptly” and within the time frame provided in the Referral Date Confirmation Notice.

     

    This bill would also authorize civil penalties up to $10,000 per violation of this new section, and specifies that each unlawful use of the E-Verify system on an employee or application constitutes a separate violation.

     

    Status:  This bill passed the Assembly along a largely party-line vote, and is pending in the Senate’s Labor and Industrial Relations committee.

     

    Expanded Powers for Agricultural Relations Board General Counsel (AB 561)

     

    The Alatorre-Zenovich-Dunlap-Berman Agricultural Labor Relations Act of 1975 (Labor Code section 1141, et seq.) regulates employer-employee relations in agriculture, including prohibiting agricultural employers and employees from engaging in “unfair labor practices,” as defined, and empowers the Agricultural Labor Relations Board (ALRB) to prevent such practices.  This bill would amend Labor Code section 1149 to require the Board and general counsel, within one year of a Board order finding liability for a make-whole or monetary award, to process any compliance decision concerning the award to final Board order.  It would also add new Labor Code section 1164.6 to require any employer who appears or petitions for review of any ALRB order to post a bond in the amount of the entire economic value of the order.

     

    Status:  This bill passed the Assembly by a fairly narrow margin, and is pending in the Senate and will soon be referred to a committee.

     

    Developing a Framework for Undocumented Agricultural Employees to Obtain Permits to Work and Live (AB 20)

     

    Since state-level immigration laws are generally preempted by federal law, this bill would require California’s Employment Development and its Food and Agricultural Department to convene a working group to consult with federal agencies to determine the legal roles and responsibilities of federal and state agencies in implementing a program to provide undocumented agricultural employees with a permit to work and live in the United States.  It would also require California’s Governor to use this report to make a formal request to the federal government to implement a program to provide such agricultural employees permits to work and live in the United States, and to make recommendations to the California Legislature on how to structure such a program.

     

    Status: This bill passed the Assembly on a near unanimous basis, and is pending in the Senate and will soon be referred to a committee.

     

    Workers’ Compensation Coverage Expansion for Immigrants (SB 623)

     

    Under California’s Workers’ Compensation laws, if an employer fails to pay required compensation, an injured employee may apply for recovery from the Uninsured Employers Benefits Trust.  If a permanently, partially disabled employee receives a later, compensable injury resulting in additional permanent disability, then that employee may recover compensation from the Subsequent Injuries Benefits Trust Fund.  This bill would add new Labor Code sections 3733 and 4756 to ensure that regardless of their citizenship or immigration status, an injured employee is not precluded from receiving benefits under the Uninsured Employers Benefits Trust Fund or the Subsequent Injuries Benefits Trust Fund.

     

    This bill states it is declaratory of existing law, meaning it would apply retroactively if enacted.

     

    Status:  This bill overwhelmingly passed the Senate on a bi-partisan basis, and is pending in the Assembly’s Insurance Committee.

     

    No Permanent Disability Apportionment for Sexual Harassment or other Gender-Related Characteristics (AB 305)

     

    California’s Workers’ Compensation system requires employers to maintain coverage to compensate employees for injuries occurred in the course and scope of employment.  For permanent disability purposes, a treating physician must prepare a report assessing causation, including making an apportionment determination as to what percentage of the permanent disability is work-related and non-work-related.  This bill would modify Labor Code section 4663 to prevent apportionment based on certain specific conditions (e.g., pregnancy, menopause or osteoporosis) if the condition is contemporaneous with the claimed physical injury.  It would also prohibit apportionment of permanent disability in cases of psychiatric injury from being based on psychiatric disability or impairment caused by sexual harassment, pregnancy, menopause or osteoporosis if the condition is contemporaneous with the claimed injury.  It also states that the impairment ratings for breast cancer and its aftereffects (i.e., sequelae) shall also not be less than comparable ratings for prostate cancer and it aftereffects.

     

    Status:  This bill passed the Assembly with bipartisan support, and is pending in the Senate’s Labor and Industrial Relations committee.

     

    Workplace Prohibition on Smoking to Include Electronic Cigarettes (SB 140)

     

    Labor Code section 6404.5 presently prohibits smoking of “tobacco products” in all enclosed areas of employment.  This wide-ranging bill would amend California’s definition of “tobacco product” in Business and Professions Code section 22950.5(c) to include various different types of tobacco, regardless of how consumed, including chewing tobacco, snuff, or “electronic devices that deliver nicotine or other substance to the person inhaling the device, including but not limited to any electronic cigarette, cigar, pipe or hookah.”  This new definition of “tobacco product” would not include products approved by the United States Food and Drug Administration for sale as tobacco cessation products where the product is marketed and sold solely for such an approved purpose.

     

    A similar bill introduced in 2013 stalled (SB 648), and in the interim, several municipalities (including San Diego) have enacted ordinances prohibiting “electronic cigarettes” in the workplace.

     

    Status:  This bill passed the Senate, and is pending in the Assembly and will soon be referred to a committee.

     

    Additional Sick Pay for Public Employees who are Veterans with Service-Related Disabilities (SB 221)

     

    California law presently allows state officers or employees employed on a full-time basis to accrue paid sick leave at the rate of one day for each calendar month of service.  This bill would amend Government Code section 19859 to provide additional paid sick time to state officers or employees hired after January 1, 2016, who are military veterans with a military service-connected disability rated at 30% or more by the United States Department of Veterans Affairs.  Specifically, such employees would receive an additional credit for paid sick leave of up to 96 hours for the purpose of undergoing medical treatment for his or her service-related disability.

     

    In contrast to generally available paid sick leave for public employees that accrues at one day for each calendar month worked, this entire credit would be available on the first day of employment and would remain available for use for the following 12 months of employment.  However, this additional paid sick leave credit would not carry over after 12 months.  Public employers would also be permitted to require submission of satisfactory proof that such sick leave is being used for treatment of a service-related disability.

     

    Status:  This bill unanimously passed the Senate, and is pending in the Assembly and will soon be referred to a committee.

     

    New “Change of Control” Requirements for Grocery Workers (AB 359)

     

    This industry-specific bill would implement a number of new requirements upon the sale of “grocery establishments” (as defined).  Among other things, it would require that upon a “change in control” (as defined), the incumbent grocery employer shall prepare a list of specified eligible grocery workers for the successor grocery employer, and would require the successor hire from this list during a 90-day transition period.  The successor grocery employer would also be required to retain eligible grocery workers for a 90-day period, during which they could not be discharged without cause, and upon the close of that period, the successor grocery employer would be required to consider offering continued employment to those workers.

     

    Status:  This bill passed the Assembly by a fairly narrow margin, and is pending in the Senate’s Labor and Industrial Relations committee.

     

    BILLS THAT FAILED PASSAGE

     

    Double Pay on Certain Holidays (AB 67)

     

    Entitled the Double Pay on the Holiday Act of 2015, this bill would have required employers to pay employees at least twice the employee’s regular rate of pay for any work on any “family holiday” (essentially defined as Christmas Day and Thanksgiving).

     

    Scheduling Predictability for Food and General Retail Establishments (AB 357)

     

    Entitled the Fair Scheduling Act of 2015, this bill would have required “food and general retails establishments” (as defined) to provide employees with at least two weeks’ notice of their schedules, or provide additional compensation depending on the nature of the violation or subsequent scheduling change.  It would also have required employers to provide additional compensation for each “on-call” shift an employee is required to be available, but is not actually called in to work.

     

    As a reminder, San Francisco’s Retail Worker Bill of Rights, upon which AB 357 was modeled, is scheduled to take effect on July 3, 2015.

     

    Expansion of Paid Sick Leave to Include In-Home Support Service Workers (AB 11)

     

    In a last-minute amendment to avoid a potential veto by Governor Brown, “in-home support services” (IHSS) employees were specifically excluded from the definition of employee from last year’s Paid Sick Leave bill (AB 1522).  This bill would have revised the definition of employee in Labor Code section 245.5, as of July 1, 2016, to include providers of in-home support services employees, as defined in the Welfare and Institutions Code.

     

    New Age-Related Protections Related to Publicly-Posted Information (AB 984)

     

    Although California’s Fair Employment and Housing Act (Gov. Code section 12940(a)) prohibits age discrimination, this bill would have added Labor Code section 990 to prohibit employers from using information obtained on an Internet website regarding a person’s age in making any employment decision regarding any applicant or current employee.

     

    FEHA Prohibition on Work Eligibility Violations (AB 1065)

     

    This bill would have added Government Code section 12952 to make it an unlawful employment practice for an employer to request more or different documents than are required under federal law to verify work eligibility, or to refuse such documents that on their face reasonably appear to be genuine.  It would also have prohibited discrimination against an immigrant with authorization to work based upon the specific status or term of status that accompanies the authorization to work, and prohibited reinvestigating or re-verifying an incumbent employee’s authorization to work unless legally required to do so.

    CALSHRM LEGISLATIVE REPORT -May 2015

    By: Michael S. Kalt, CalSHRM Government Affairs Director

    Wilson Turner Kosmo LLP

    mkalt@wilsonturnerkosmo.com

    Telephone:  619-236-9600

    LEGISLATIVE SUMMARY

    With the June 5th deadline for bills to pass their house of origin fast approaching, the California legislative session is heating up, with a clearer picture emerging of the bills likely to continue advancing.  Indeed, a number of significant employment bills have already passed initial key committee votes, including bills that would:

    • Increase California’s minimum wage beyond the already contemplated 2016 increase, and to $13.00 per hour by 2017 (SB 3);
    • Amend the Paid Sick Leave bill passed in 2014, including to allow employees to use paid sick leave for “childcare or school emergencies” (AB 304 and SB 579);
    • Require employers provide double pay on Thanksgiving and Christmas (AB 67);
    • Require food and retail establishments provide two weeks’ notice of schedules or pay additional compensation (AB 357);
    • Target gender-based wage differentials, including by preventing employers from obtaining or releasing salary history information (AB 1017 and SB 358);
    • Expand the California Family Rights Act to apply to employers with more than five employees (instead of 50) and expand the class of family members for whom leave may be taken because of a serious health condition (SB 406);
    • Prohibit advertisements discouraging the unemployed or public employees from applying (AB 676 and AB 883);
    • Allow employers to provide a preference to veterans during hiring decisions (AB 1383);
    • Amend the Fair Employment and Housing Act (FEHA) to treat accommodation requests as protected legal activities for retaliation purposes (AB 987);
    • Amend the FEHA to prohibit employers from engaging in work eligibility-related violations and to limit when employers may use
      E-Verify (AB 1065 and AB 622); and
    • Preclude employers from requiring employees agree to arbitration as a condition of employment (AB 465).

    Of these, several have already passed their original legislative chamber, while most others are pending in the Appropriations Committee’s suspense file to resolve any fiscal concerns.  Given the overwhelming single party rule in Sacramento, most bills that emerge from the Appropriations Committee will pass their house of origin and have a significant likelihood of making it to Governor Jerry Brown’s desk.

    There were also several significant employment bills that failed passage, including bills that would have allowed individual employees to elect an alternative workweek schedule (AB 1038), or would have created an overtime exemption for certain highly-compensated employees (AB 1480) or would have created a “tip credit” against an employer’s minimum wage obligation (AB 669).

    Listed below, and largely by subject matter, are the key employment bills of potential general application that remain pending, followed by a brief discussion of the employment bills that failed passage but may be reconsidered in 2016.

    PENDING BILLS

    Additional Minimum Wage Increase (SB 3)

    Even though California’s minimum wage is already scheduled to increase to $10.00 per hour on January 1, 2016, SB 3 proposes several additional increases.  Specifically, California’s minimum wage would increase to $11.00 per hour on January 1, 2016, and to $13.00 per hour on July 1, 2017.  After January 1, 2019, the minimum wage would also be annually adjusted based on the California Consumer Price Index (CPI) and rounded to the nearest five cents.  This bill also provides that it would not preclude the Industrial Welfare Commission (IWC) from increasing the minimum wage beyond that required by the CPI formula, but would preclude the IWC from adjusting it downwards even if the CPI was negative for the preceding year.

     

    While California overwhelmingly approved a two-step minimum wage increase in 2013 (AB 10), that increase had specifically omitted annual CPI-based increases, and a very similar bill to SB 3 (SB 935) stalled in committee last year.

     

    Status:  SB 3 passed the Senate’s Labor and Industrial Relations Committee and is pending in the Senate’s Appropriations Committee where it has been referred to the suspense file to further analyze its potential costs to California and the economy.  (As a reminder, San Francisco’s minimum wage increased to $12.25 per hour on May 1, 2015, and will increase to $15.00 per hour by 2018, while Los Angeles is presently considering increasing its minimum wage to $15.00 per hour by 2020, and the minimum wage for hotel industry employees in Los Angeles will soon increase to $15.37 per hour.)

     

    Double Pay on Certain Holidays (AB 67)

     

    Entitled the Double Pay on the Holiday Act of 2015, this bill would require employers to pay employees at least twice the employee’s regular rate of pay for any work on any “family holiday.”  New Labor Code section 511.5 would define “family holiday” as December 25th (Christmas Day) or the fourth Thursday of November of each year (Thanksgiving).  While “employer” is broadly defined to include any person employing another under any arrangement or contract of hire, including public entities, it would exclude employees covered by a collective bargaining agreement containing specifically-enumerated provisions, including a minimum wage 30 percent higher than the state minimum wage.

     

    Status:  This bill has passed the Assembly’s Labor and Employment Committee and is pending in the Assembly’s Appropriations Committee, where it has been referred to the suspense file to assess its financial impact to the state of California (primarily for increased wages to in-home support services employees).

     

    Scheduling Predictability for Food and General Retail Establishments (AB 357)

     

    Entitled the Fair Scheduling Act of 2015, this bill would require that “food and general retails establishments” provide employees with at least two weeks’ notice of their schedules, and would entitle employees who do not receive such advance notice to additional pay.  Under proposed new Labor Code section 518, “food and general retail establishments” would be defined as a retail sales establishment with a physical location with in-person sales that has 500 or more employees in California, 10 or more retail sales establishments located in the United States and two or more of the following: (1) a standardized array of merchandise; (2) a standardized façade; (3) a standardized décor and color scheme; (4) uniform apparel; (5) standardized signage; and (6) a trademark or a service mark.  Such food and general retail establishments would include food retail stores, grocery stores, general merchandise stores, department stores, and a health or personal care store, but would not include on-line retailers without a physical location in California, or a franchise that does not meet the specified criteria.

     

    Covered establishments would also be required to provide an employee with additional compensation per shift for each previously scheduled shift that is moved to another date or time or is cancelled, and for each previously unscheduled shift the employer requires an employee to work.  The amount of additional compensation owed will depend upon the amount of notice provided and the number of hours worked as follows:

     

    • One hour of pay at the employee’s regular hourly rate if less than seven days’ notice but at least 24 hours’ notice is given to the employee;
    • Two hours of pay at the employee’s regular hourly rate for each shift of four hours or less if less than 24 hours’ notice is given to the employee; and
    • Four hours of pay at the employee’s regular hourly rate for each shift of more than four hours if less than 24 hours’ notice is given to the employee.

     

    Recent amendments state this additional compensation requirement would not apply to shifts for which the employee is compensated with reporting time pay as required by any Industrial Welfare Commission wage order.  Employers would also not be required to provide additional compensation for changes in the scheduling of rest periods, recovery periods or meal periods.

     

    Food and retail establishments would also be required to provide compensation for each “on-call shift” the employee is required to be available but is not called in to work as follows:

     

    • Two hours of pay at the employee’s regular hourly rate for each on-call shift of four hours or less; and
    • Four hours of pay at the employee’s regular hourly rate for each on-call shift of more than four hours.

     

    Recent amendments further clarify that no additional “on-call” compensation is required if such on-call time is already required to be compensated as hours worked and the employee is in fact compensated under existing law.

     

    Employers would not be required to pay additional compensation nor will the employer have violated this new law, under certain specified circumstances, including where: (1) the change results from an unexpected absence (i.e., less than seven days’ notice) of an employee previously scheduled to work; (2) where an employee scheduled to work has not reported on time, or is terminated or sent home from work for disciplinary reasons; (3) an employee trades shifts with another employee or requests a change in his or her work schedule; or (4) where the employer requires the employee to work overtime, such as mandatory overtime.  Additional compensation would also not be required where operations cannot begin or continue due to: (1) threats to employees or property, or when civil authorities recommend work not begin or continue; (2) a failure of public utilities or sewer system; or (3) acts of God or other emergencies (e.g., earthquakes) beyond the employer’s control.

     

    This bill would also require the Labor Commissioner to promulgate regulations and rules necessary to carry out its provisions.  It also specifies that it would not prohibit employers from providing greater advance knowledge of an employee’s work schedule or changes in that schedule than required by this bill.

     

    New Labor Code section 519 would also require “food and general retail establishments” to allow employees to take unpaid time off up to eight hours twice per year to attend required appointments at the county human resources agency related to public benefits.  Employees would be required to provide reasonable advance notice to take time off, unless unfeasible to do so.  Employers would also be prohibited from taking any actions against employees due to unscheduled absences because of a required appointment if the employee provides documentation of the required meeting within a reasonable period.

     

    Status:  This bill narrowly passed the Assembly’s Labor and Employment Committee, and is pending in the Assembly’s Appropriations Committee where it has been referred to the suspense file.  As a reminder, San Francisco’s Retail Worker Bill of Rights, upon which AB 357 is modeled, is scheduled to take effect on July 3, 2015.

     

    Cheerleaders to be Considered Employees of Professional Sports Teams (AB 202)

     

    Recently, there have been several high-profile wage and hour class actions filed by cheerleaders or dance teams of professional sports franchises.  This bill would add new Labor Code section 2754 to provide that for purposes of state law governing employment, including the Labor Code, the Unemployment Insurance Code, and the FEHA, a cheerleader utilized by a California-based professional sports team, directly or through a labor contractor, will be deemed an employee.  The professional sports team will also be required to ensure the cheerleader is classified and treated as an employee.

     

    Cheerleader will be defined as “an individual who performs acrobatics, dance, or gymnastic exercises on a recurring basis, but will not include individuals utilized no more than one time in a calendar year.  “Professional sports teams” will be defined as teams at either a minor or major league level for baseball, basketball, football, ice hockey or soccer.

     

    Status:  This bill passed the Assembly along a largely party-line vote and is pending in the Senate but has not yet been referred to a committee.

     

    Arbitration Agreements Targeted (AB 465)

     

    This bill would create a new Labor Code section (section 925) to provide that any waiver of rights, penalties, remedies, forums and procedures established by the Labor Code, including the right to file a claim with the Labor Commissioner or a civil action in court, may not be required as a condition of employment.  It would also require that any such waiver be knowing and voluntary and in writing, and expressly not made as a condition of employment, and require the party seeking to enforce the waiver to prove that it was made voluntarily and knowingly and not as a condition of employment.  Otherwise, any such waiver will be deemed involuntary, unconscionable, against public policy and unenforceable.

     

    It would further prohibit employers from threatening, retaliating or discriminating against any person who refuses to waive such rights, and, in addition to any other legal remedy, would impose a civil penalty of up to $10,000 per each individual for each violation of this section, plus reasonable attorney’s fees.

     

    This bill would apply to any such waivers, including private arbitration agreements, entered into, altered, modified, renewed or extended on or after January 1, 2016.

     

    Status:  This bill passed the Assembly on a fairly narrow basis, and is presently pending in the Senate and will soon be assigned to a committee.

     

    Expanded Labor Commissioner Enforcement Powers (AB 970)

     

    This bill would amend several Labor Code provisions to expand the citation authority of the Labor Commissioner.  For instance, while Labor Code section 558 presently authorizes the Labor Commissioner to investigate Labor Code or Industrial Welfare Commission (IWC) orders regarding wages, this bill would also authorize the Labor Commissioner to issue a citation for violations of applicable “local” overtime laws.  Similarly, it would amend Labor Code sections 1197 and 1197.1, which presently authorize the Labor Commissioner to investigate violations of the minimum wage set by the IWC, and to issue a citation for violations of any state or local minimum wage laws.

     

    This bill would also amend Labor Code section 2802 to authorize the Labor Commissioner to issue citations and penalties against employers who fail to properly indemnify employees for expenses incurred in employment.

     

    Status:  This bill passed the Assembly, and is pending in the Senate and will soon be assigned to a committee.

     

    Paid Sick Leave Amendments (AB 304)

     

    This bill amends several provisions of last year’s paid sick leave bill (AB 1522), which takes effect July 1, 2015.

     

    For instance, section 246(e) exempts employers who have “paid time off” (PTO) policies from providing additional paid sick leave if they either:  (a) satisfy the accrual, carry over and use requirements of this section; or (b) provide no less than 24 hours or three days of paid sick leave or paid time off for each year of employment.  As presently worded, this second option is not clear as to whether employers must provide this PTO at the beginning of each year, or simply at any point during the year.  This bill resolves this ambiguity by amending this second option to require the PTO be provided “at the beginning” of each year of employment, calendar year or 12-month period.

     

    Labor Code section 246(h) requires employers to provide written notice to employees of available paid sick leave balances, either through the itemized wage statements required under Labor Code section 226 or a separate writing provided on the designated pay date.  Responding to employer concerns about how to track balances and provide these notices if the employer provides “unlimited” paid sick time, this bill would specify that an employer may satisfy this notice obligation by indicating “unlimited” on the notice or wage statement.  Notably, this bill also delays this notice requirement until January 21, 2016 for employers covered by Wage Orders 11 and 12 (e.g., motion picture and broadcasting employers).

     

    Lastly, it clarifies that for purposes of the Paid Sick Leave law, the term “health care provider” has the same meaning as defined in California’s Family Rights Act (Government Code section 12945.2(c)(6).)

     

    Status: This bill passed the Assembly’s Labor and Employment Committee and is pending in the Assembly’s Appropriations Committee.  As a reminder, the Division of Labor Standards Enforcement has published the poster and updated Wage Theft Prevention Act Notices (including in multiple languages) employers may use, plus several sets of “Frequently Asked Questions.”  These items and other resources related to AB 1522 are available at www.dir.ca.gov/dlse/ab1522.htm.

     

    Paid Sick Leave Usage for Childcare or School Emergencies (SB 579)

     

    This bill would expand the bases for which the not-yet-effective Paid Sick Leave law could be used, as well as expand the discrimination/retaliation protections originally enacted under the Family School Partnership Act.

     

    For instance, this bill would amend Labor Code section 245.5 and authorize employees to utilize the paid sick leave mandated under the Healthy Workplace and Healthy Families Act of 2014 for a “childcare or school emergency.”  A childcare or school emergency would be defined as meaning a child cannot remain in a school or childcare facility due to:  (a) the illness of, or injury to, the child; (b) behavioral or discipline problems; (c) closure of the facility; or (d) a disaster or extreme weather conditions, including, but not limited to, fire, earthquake or flood.

     

    It would also modify California’s Kin Care law (Labor Code section 233) to align it more closely with the Paid Sick Leave law by authorizing employees to use sick leave to attend to any “preventative care” needs (as well as the illness) of a worker’s child, parent, spouse or domestic partner.

     

    Presently, the Family School Partnership Act (Labor Code section 230.8) requires employers with 25 or more employees to allow employees to use up to 40 hours of unpaid time (limited to eight hours in any calendar month) to participate in school or childcare related activities.  Accordingly, this bill would expand this provision to also allow employees to take job-protected time off to find, enroll or reenroll their children in a school or licensed day care facility.

     

    Status:  This bill passed the Senate’s Labor and Industrial Relations Committee and is pending in the Senate’s Appropriations Committee.

     

    Paid Sick Leave to Include In-Home Support Service Workers (AB 11)

     

    In a last-minute amendment to avoid a potential veto by Governor Brown, “in-home support services” (IHSS) employees were specifically excluded from the definition of employee from last year’s Paid Sick Leave bill (AB 1522).  While this amendment avoided imposing certain costs upon the State of California and helped AB 1522 become enacted, several lawmakers were upset that in-home support services employees were not entitled to paid sick leave under this new law.  Accordingly, this bill would revise the definition of employee in Labor Code section 245.5, as of July 1, 2016, to include providers of in-home support services employees, as defined in the Welfare and Institutions Code.

     

    Status:  This bill has passed the Assembly’s Labor and Employment Committee and is pending in the Assembly’s Appropriations Committee.  The bill is presently on the suspense file because of the potential costs of expanding Paid Sick Leave to IHSS employees.

     

    Expansions to the California Family Rights Act (SB 406)

     

    This bill proposes to materially expand the number of employers subject to California’s Family Rights Act (CFRA, Gov. Code section 12945.2 et seq.), and to expand the bases for employee leave, thus potentially creating further differences between CFRA and the federal Family Medical Leave Act (FMLA).  For instance, while CFRA presently defines “employer” as a person employing 50 or more employees, this bill would redefine employer to include any person employing five or more persons.  Similarly, while CFRA presently authorizes even covered employers (i.e., 50 or more employees) to deny a qualifying leave if the employer has less than 50 employees within 75 miles of the employee’s worksite, this bill would restrict this small employer exemption to employers that employ fewer than 25 employees within 75 miles of the employee’s worksite.

     

    This bill would also alter the definitions regarding the circumstances for which CFRA leave may be taken.  For example, it would expand the definition of “child” to include children of a domestic partner or for persons to whom the employee stands in loco parentis, and would remove the current age (i.e., under 18 years old) and dependent status restrictions.  If adopted, CFRA leave would be permitted for the serious health condition of a “child,” as defined, regardless of age and, for adult children regardless of whether that child is dependent upon the employee.  It would also expand the definition of “parent” to include “parents-in-law.”

     

    While CFRA presently authorizes employees to take leave for the serious health condition of a child, parent or spouse, this bill would expand this entitlement to include leaves for the serious health condition of a grandparent, grandchild, sibling or domestic partner.

     

    Lastly, under Government Code section 12945.2(q), where both parents are employed by the same employer, the employer may presently limit their combined leave rights in connection with the birth, adoption or foster care placement of a child to 12 weeks.  This bill would delete this subsection in its entirety, suggesting both employees employed by the same employer would each be entitled to 12 weeks of leave, assuming they are otherwise eligible.  As a reminder, although completely deleting this aggregation ability would create a material difference between CFRA and FMLA (since FMLA would still permit aggregation), these two statutes already currently differ in that FMLA permits aggregation only if both the “husband and wife” work for the same employer, while CFRA permits aggregation where both parents (whether married or not) work for the same employer.

     

    Status:  This bill passed the Senate’s Labor and Industrial Relations Committee, and is pending in the Senate’s Appropriations Committee where it has been placed on the suspense file.

     

    Extension of California’s Paid Family Leave Benefit from 6 to 10 Weeks (AB 908)

     

    Under California’s family temporary disability insurance program, employees may receive up to 6 weeks of wage replacement benefits when taking time off work to care for specified persons (e.g., child, spouse, parent, etc.) or to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption.  This bill would amend Insurance Code section 3301 to allow employees to receive up to ten weeks of wage replacement benefits, rather than six.  It would also modify the formula for calculating these benefits to ensure a minimum weekly benefit of $250, and to increase the wage replacement rate from the current 55% to either 65%, 75% or 80% depending on an individual’s wage level.

     

    Status:  This bill passed the Assembly’s Insurance Committee, and is pending in the Assembly’s Appropriations Committee where it has been placed on the suspense file.

     

    Gender Wage Differentials Targeted (SB 358)

     

    Echoing the Paycheck Fairness Act (S. 84) pending at the federal level, this bill proposes to amend California’s Equal Pay Act to address perceived gender-based wage gaps.

     

    For instance, Labor Code section 1197.5 presently prohibits employers from paying less to members of the opposite sex who perform equal work in the same establishment.  This bill would eliminate the “same establishment” requirement, and revise the “equal work” requirement to instead prohibit paying less for “substantially similar work, when viewed as a composite of skill, effort and responsibility” performed under similar working conditions.

     

    It would also significantly amend the statutorily-enumerated exceptions in section 1197.5, which presently are a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a differential based on any bona fide factor other than sex.  Specifically, while it would retain the first three exceptions, it would significantly revise the “bona fide factor” to require the employer to prove that a wage-differential is not based on or derived from a sex-based differential and is consistent with a “business necessity,” such as a difference in education, training or experience that is job-related with the position in question.  It would also specify that “business necessity” means “an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purposes it is supposed to serve.”  However, this bill would also provide that this defense shall not apply if the employee demonstrates that an alternative employment practice exists that would serve the same business purpose without producing the wage differential.

     

    In addition to demonstrating at least one of those factors, the employer must also satisfy two new criteria:  (a) that each factor relied upon is applied reasonably; and (b) the one or more factors relied upon accounts for the entire wage difference.

     

    This bill would also amend section 1197.5(d) to expand from two years to three years an employer’s obligation to retain records of the wages and wage rates, job classifications and other terms and conditions of employment for employees.

     

    This bill would also add new subsection (j) to prohibit employers from discharging, or in any way discriminating or retaliating against, any employee who takes action to invoke or assist in any manner the enforcement of California’s Equal Pay Act.  Under this new subsection, employers would also not be able to prohibit an employee from discussing the employee’s own wages, discussing the wages of others, or inquiring about another employee’s wages, or aiding or encouraging any other employee to exercise his or her rights under this section.

     

    The bill would extend the existing enforcement mechanisms for wage discrimination to claims for retaliation and would provide a one-year statute of limitations for retaliation claims.  In addition to Labor Commissioner enforcement, this bill would also authorize an employee who has been discharged, discriminated or retaliated against to pursue a civil action for reinstatement and reimbursement of lost wages, and would require that such civil actions be commenced no later than one-year after the cause of action accrues.

     

    Status:  This bill has passed the Senate’s Labor and Industrial Relations, Judiciary and Appropriations Committees.  A full Senate floor vote is expected shortly.

     

    Limits on Salary-Related Discussion during Hiring Process (AB 1017)

     

    Citing a concern that prior salary history information perpetuates gender-based inequality, this bill would impose new limits on an employer’s ability to obtain salary history information.  Specifically, this bill would enact new Labor Code section 432.3 and prohibit employers from seeking salary history information, including compensation and benefits from an applicant for employment during an interview or as a condition of employment.  It would also prohibit an employer from releasing the salary history of any current or former employee to any prospective employer without written authorization from the current or former employee.

     

    Status:  This bill has passed the Assembly’s Labor and Employment and Appropriations Committees, and a full floor vote is expected shortly.

     

    Equal Pay Certifications for Certain State Contractors (AB 1354)

     

    Entitled the Equal Pay for Equal Work Act of 2015, AB 1354 would amend Government Code section 12990 which presently identifies criteria for employers who wish to become a contractor for public works, including agreeing to California’s non-discrimination laws and submitting a non-discrimination program to the Department of Fair Employment and Housing (DFEH) for approval and certification.  This bill would require employers with more than 100 employees, prior to becoming a contractor or subcontractor with the state, to submit an income equality program to the DFEH for approval and certification, and to submit periodic reports of its compliance with that program.  The income equality program to be submitted would include the collection of summary data on the compensation paid to employees, including data sorted by race and gender, and policies designed to insure income equality and prevent unlawful discrimination.

     

    These proposed reporting changes appear similar to the August 2014 federal Department of Labor OFCCP’s notice of proposed rulemaking to require covered federal contractors and subcontractors with more than 100 employees to submit an annual equal pay report on employee compensation.

     

    Status:  This bill has passed the Assembly’s Labor and Employment Committee, and is pending in the Appropriations Committee where it has been placed on the suspense file.

     

    Retaliation Protections for Family Members (AB 1509)

     

    While California law presently prohibits retaliation against employees who engage in protected legal activities (i.e., file a complaint), this bill would extend these protections to prohibit an employer or a person acting on their behalf from retaliating against an employee because they are a family member of someone who has engaged in or was perceived to have engaged in protected activity.  It would also provide that “employer” or “persons acting on their behalf” include “client employers” (as defined in the Wage Theft Prevention Act [Labor Code section 2810.3]) and in Labor Code section 6400(b) regarding multi-employer worksite obligations to provide a safe place of employment.  These specific changes would be made to the following Labor Code provisions regarding whistle-blowing: (1) Labor Code section 98.6 (regarding complaints made to the Labor Commissioner); (2) Labor Code section 1102.5 (regarding complaints made about legal violations); and (3) Labor Code section 6310 (regarding complaints made about unsafe working conditions).

     

    For purposes of the amendments to section 98.6 relating to Labor Commissioner complaints, it would also specify that it would not apply to claims arising under Labor Code section 96(k), which prohibits employers from retaliating against employees who engage in lawful off-duty conduct, unless the activity involved the exercise of employee rights otherwise covered by section 98(a).

     

    Status:  This bill passed the Assembly on a largely party-line vote, and is pending in the Senate where it will soon be assigned to a committee.

     

    Prohibition Against Employers Advertising that Unemployed Applicants “Need Not Apply” (AB 676)

     

    This bill responds to concerns about discrimination against the unemployed by limiting an employer’s ability to screen applicants based on “employment status,” which would be defined as an “individual’s present unemployment, regardless of length of time that the individual has been unemployed.”  Specifically, beginning July 1, 2016, this bill would add new Labor Code sections 1045 to 1048 to prohibit an employer, unless based upon a bona fide occupational qualification, from: (1) publishing advertisements suggesting an individual’s current employment is a job requirement; or (2) affirmatively asking an applicant to disclose orally or in writing his or her current employment status until the employer has determined that the applicant meets the minimum employment qualifications for the position, as stated in the published notice for the job.  The law would impose fairly similar prohibitions upon employment agencies or persons who operate Internet websites for posting positions in California.

     

    The proposed bill would not prohibit employers or employment agencies from publishing job advertisements setting forth the lawful qualifications for the job, including but not limited to, the holding of a current and valid professional or occupational license.  It also would not prohibit advertisements for job vacancies stating that only applicants who are currently employed by that employer will be considered (so-called “internal” hiring).

     

    In addition, the bill would not prohibit employers, employment agencies or website operators from: (1) obtaining information regarding an individual’s employment, including recent relevant experience; (2) having knowledge of a person’s “employment status,” or from inquiring about the reasons for an individual’s unemployment; or (3) refusing to offer employment to a person because of the reasons underlying an individual’s employment status.  In other words, this bill seems to allow employers to consider the reasons for an individual’s unemployment but prohibits them from initially screening out applicants simply because they are unemployed.

     

    This bill would not create a private right of action, but would authorize the Labor Commissioner to enforce and seek penalties of $1,000 for the first violation, $5,000 for the second violation, and $10,000 for each subsequent violation.

     

    Status:  This bill passed the Assembly’s Labor and Employment Committee, and is pending in the Assembly’s Appropriations Committee where it has been placed on the suspense file.  However, Governor Brown vetoed very similar versions of this bill in 2012 and 2014 (AB 1450 and AB 2271, respectively).

     

    New Age-Related Protections Related to Publicly-Posted Information (AB 984)

     

    Although California’s Fair Employment and Housing Act (Gov. Code section 12940(a)) prohibits discrimination based upon an employee’s age, concerns have arisen that age discrimination persists and is facilitated through public distribution of a job applicant’s or potential applicant’s birth and age information.  To address this concern, this bill would add Labor Code section 990 to prohibit employers from using information obtained on an Internet website regarding a person’s age in making any employment decision regarding any applicant or current employee.  It would also provide that a “commercial online entertainment employment service provider” (as defined) who accepts payment from persons in California to post resumes and other information online is subject to California’s anti-discrimination laws.

     

    Status:  This bill passed the Assembly’s Labor and Employment Committee, and is pending in the Assembly’s Appropriations Committee where it has been placed on the suspense file.

     

    FEHA to Protect Reserve or Auxiliary Public Safety Officers (AB 272)

     

    California’s Fair Employment and Housing Act (Gov. Code section 12940, et seq.) prohibits specified discriminatory practices in employment or housing accommodations on the basis of certain specified characteristics (e.g., race, creed, national origin, etc.).  This bill would amend Penal Code section 830.6 to specify that individuals constituting peace officers, including reserve police offers, will be deemed an employee for FEHA purposes.

     

    Status: This bill unanimously passed the Assembly, and is pending in the Senate and will soon be assigned to a committee.

     

    FEHA to Permit Voluntary Veterans’ Preference in Hiring Decisions (AB 1383)

     

    Entitled the Voluntary Veterans’ Preference Employment Policy Act, this bill attempts to address the higher-than-normal unemployment rate for returning veterans.  Accordingly, new Government Code section 12958 would authorize employers to extend a preference during hiring decisions to honorably discharged veterans.  Employers would be permitted to require a veteran to submit United States Department of Defense Form 214 to confirm eligibility for this preference.  Section 12958 further specifies that such a preference shall be deemed not to violate any state or local equal employment opportunity law, including the FEHA.

     

    Government Code section 12940(a)(4) presently provides that using veteran status in favor of Vietnam-era veterans shall not constitute sex discrimination (likely in response to EEOC Guidance which had suggested that a veterans’ preference might create a disparate impact in favor of men given the then-existing composition of the United States military).  This bill would broaden this exemption by removing the references to “sex” and to “Vietnam-era veterans,” such that hiring decisions made pursuant to section 12958 would not constitute unlawful discrimination based on any FEHA-protected classification.

     

    Similar veterans’ preference bills have recently passed in approximately a dozen states and are pending in a dozen more.

     

    Status:  This bill unanimously passed the Assembly’s Labor and Employment Committee, and is presently pending in the Assembly’s Appropriations Committee where it has been placed on its suspense file.

     

    Discrimination Based on Public Employee Status (AB 883)

     

    This bill would add new Labor Code section 432.6 to ensure private and public employers do not discriminate in hiring decisions against current or former public employees.  Specifically, this bill would prohibit any employer from advertising or communicating in such a manner to suggest that an applicant’s former or current public employee status would disqualify them from the position sought.  It would also prohibit employers from making an employment decision based on an applicant’s current or former employment as a public employee.  The bill would similarly prohibit persons that operate an Internet website for posting jobs to publish a job announcement that includes provisions suggesting public employees need not apply.

     

    However, it would not prohibit an employer or a website from publishing the requirements for a position or limiting a position to only internal applicants, nor would it prohibit employers from having or obtaining information about an applicant’s or employee’s public employment history provided it did not make decisions based simply upon that public employment history.

     

    It would also authorize job applicants or prospective applicants to bring a civil action to recover actual damages or two hundred dollars ($200), whichever is greater, plus reasonable attorney’s fees and costs.  For intentional violations, the applicant or prospective applicant would be entitled to recover treble actual damages or five hundred dollars ($500), whichever is greater, plus reasonable attorney’s fees and costs.

     

    Status:  This bill passed the Assembly’s Labor and Employment Committee, and is pending in the Assembly’s Appropriations Committee where it has been placed on the suspense file.

     

    Accommodation Requests to Constitute Protected Legal Activity for Retaliation Purposes (AB 987)

     

    California’s Fair Employment and Housing Act (FEHA, Gov. Code section 12940 et seq.) prohibits harassment and discrimination based on various protected classifications, and prohibits retaliation against employees who protest or oppose such unlawful employment practices.  The FEHA also requires employers to reasonably accommodate an employee’s medical condition or religious beliefs.  However, it has been unclear whether an individual who requests such accommodation may state a FEHA retaliation claim in addition to a failure to accommodate claim based upon such requests.

     

    Several recent California appellate court decisions have held an accommodation request does not constitute a “protected legal activity” for FEHA retaliation purposes, reasoning that treating accommodation requests as protected legal activities would blur the distinctions between two conceptually different FEHA theories of recovery.  (See e.g., Rope v. Auto-Chlor Sys. of Washington, Inc. (2013) 220 Cal.App.4th 635; Nealy v. City of Santa Ana (2015) 234 Cal.App.4th 359.)  This bill responds to these cases and would amend the FEHA to prohibit an employer or covered entity from retaliating or otherwise discriminating against a person for requesting accommodation for a disability or religious beliefs, regardless of whether the accommodation request was granted.

     

    Status:  This bill unanimously passed the Assembly, and is pending in the Senate’s Judiciary Committee.

     

    FEHA to Prohibit Work Eligibility Violations (AB 1065)

     

    While immigration reform has seemingly stalled at the federal level, the California legislature has recently enacted several immigration-related protections in the employment context.  For instance, in 2013, California enacted a law (AB 263) prohibiting employers from engaging in “unfair immigration-related practices” (i.e., contacting immigration-related authorities following an employee’s complaint).  In 2014, California enacted AB 1660, which amended the FEHA to prevent discrimination against individuals that possess drivers licenses issued to undocumented workers.

     

    This bill would add Government Code section 12952 to make it an unlawful employment practice for an employer to request more or different documents than are required under federal law to verify work eligibility, or to refuse such documents that on their face reasonably appear to be genuine.  It would also prohibit discrimination against an immigrant with authorization to work based upon the specific status or term of status that accompanies the authorization to work, or to attempt to reinvestigate or re-verify an incumbent employee’s authorization to work unless legally required to do so.

     

    Status:  This bill has passed the Assembly’s Labor and Employment Committee, and is pending in the Assembly’s Appropriations Committee where it has been placed on its suspense file.

     

    E-Verify Misuse Targeted (AB 622)

     

    Administered by the United States Citizenship and Immigration Services, the federal
    E-Verify Program enables participating employers to verify that the employees they hire are authorized to work in the United States.  This bill attempts to address a concern that employers might misuse E-Verify by adding Labor Code section 2814 to prohibit employers, except as required by federal law or as a condition of receiving federal funds, from using E-Verify to check the employment authorization status of an existing employee or an applicant who has not been offered employment in a manner or at a time not required by federal law or by an applicable memorandum of understanding.

     

    However, it also specifies that it would not prohibit an employer from using E-very in accordance with federal law to check the employment authorization status of a person who has been offered employment.  The bill also states that it is intended to prevent discrimination in employment rather than to condone the potential hiring and employment of persons not authorized for employment under federal law.

     

    It would further require employers who use E-Verify to comply with the applicable employee notification procedures if the employer receives a tentative non-confirmation issued by the Social Security Administration or the Department of Homeland Security. Employers would also be required to furnish to the employee any notification issued by these agencies containing information specific to the employee’s E-Verify case or any tentative non-confirmation notice “promptly” and within the time frame provided in the Referral Date Confirmation Notice.

     

    This bill would also authorize civil penalties up to $10,000 per violation of this new section, and specifies that each unlawful use of the E-Verify system on an employee or application constitutes a separate violation.

     

    Status:  This bill has passed the Assembly’s Labor and Employment and Appropriations Committees and a full Assembly floor vote is expected shortly.

     

    Expanded Powers for Agricultural Relations Board General Counsel (AB 561)

     

    The Alatorre-Zenovich-Dunlap-Berman Agricultural Labor Relations Act of 1975 (Labor Code section 1141, et seq.) regulates employer-employee relations in agriculture, including prohibiting agricultural employers and employees from engaging in “unfair labor practices,” as defined, and empowers the Agricultural Labor Relations Board (ALRB) to prevent such practices.  This bill would amend Labor Code section 1149 to require the Board and general counsel, within one year of a Board order finding liability for a make-whole or monetary award, to process any compliance decision concerning the award to final Board order.  It would also add new Labor Code section 1164.6 to require any employer who appears or petitions for review of any ALRB order to post a bond in the amount of the entire economic value of the order.

     

    Status:  This bill passed the Assembly’s Labor and Employment Committee, and is pending in the Assembly’s Appropriations Committee where it has been placed on the suspense file.

     

    Developing a Framework for Undocumented Agricultural Employees to Obtain Permits to Work and Live (AB 20)

     

    Since state-level immigration laws are generally preempted by federal law, this bill would require California’s Employment Development and its Food and Agricultural Department to convene a working group to consult with federal agencies to determine the legal roles and responsibilities of federal and state agencies in implementing a program to provide undocumented agricultural employees with a permit to work and live in the United States.  It would also require California’s Governor to use this report to make a formal request to the federal government to implement a program to provide such agricultural employees permits to work and live in the United States, and to make recommendations to the California Legislature on how to structure such a program.

     

    Status: This bill has passed the Assembly’s Labor and Employment and Judiciary Committees, and is pending in the Assembly’s Appropriations Committee where it has been placed on its suspense file.

     

    Workers’ Compensation Coverage Expansion for Immigrants (SB 623)

     

    Under California’s Workers’ Compensation laws, if an employer fails to pay required compensation, an injured employee may apply for recovery from the Uninsured Employers Benefits Trust.  If a permanently, partially disabled employee receives a later, compensable injury resulting in additional permanent disability, then that employee may recover compensation from the Subsequent Injuries Benefits Trust Fund.  This bill would add new Labor Code sections 3733 and 4756 to ensure that regardless of their citizenship or immigration status, an injured employee is not precluded from receiving benefits under the Uninsured Employers Benefits Trust Fund or the Subsequent Injuries Benefits Trust Fund.

     

    This bill states it is declaratory of existing law, meaning it would apply retroactively if enacted.

     

    Status:  This bill overwhelmingly passed the Senate on a bi-partisan basis, and is pending in the Assembly’s Insurance Committee.

     

    No Permanent Disability Apportionment for Sexual Harassment or other Gender-Related Characteristics (AB 305)

     

    California’s Workers’ Compensation system requires employers to maintain coverage to compensate employees for injuries occurred in the course and scope of employment.  For permanent disability purposes, a treating physician must prepare a report assessing causation, including making an apportionment determination as to what percentage of the permanent disability is work-related and non-work-related.  This bill would modify Labor Code section 4663 to prevent apportionment based on certain specific conditions (e.g., pregnancy, menopause or osteoporosis) if the condition is contemporaneous with the claimed physical injury.  It would also prohibit apportionment of permanent disability in cases of psychiatric injury from being based on psychiatric disability or impairment caused by sexual harassment, pregnancy, menopause or osteoporosis if the condition is contemporaneous with the claimed injury.  It also states that the impairment ratings for breast cancer and its aftereffects (i.e., sequelae) shall also not be less than comparable ratings for prostate cancer and it aftereffects.

     

    Status:  This bill has passed the Assembly, and is pending in the Senate where it will soon be referred to a committee.

     

    Workplace Prohibition on Smoking to Include Electronic Cigarettes (SB 140)

     

    Labor Code section 6404.5 presently prohibits smoking of “tobacco products” in all enclosed areas of employment.  This wide-ranging bill would amend California’s definition of “tobacco product” in Business and Professions Code section 22950.5(c) to include various different types of tobacco, regardless of how consumed, including chewing tobacco, snuff, or “electronic devices that deliver nicotine or other substance to the person inhaling the device, including but not limited to any electronic cigarette, cigar, pipe or hookah.”  This new definition of “tobacco product” would not include products approved by the United States Food and Drug Administration for sale as tobacco cessation products where the product is marketed and sold solely for such an approved purpose.

     

    A similar bill introduced in 2013 stalled (SB 648), and in the interim, several municipalities (including San Diego) have enacted ordinances prohibiting “electronic cigarettes” in the workplace.

     

    Status:  This bill passed the Senate’s Health Committee, and is pending in the Senate’s Appropriations Committee.

     

    Post-Military Leave Reinstatement Rights for State Employees (AB 64)

     

    California’s State Civil Service Act requires the reinstatement of a permanent, probationary, or exempt employee who returns from active duty military service to his or her former position, as specified.  Such reinstatement to an employee’s former exempt position reestablishes the employee’s tenure and civil reinstatement rights, if any, as they existed prior to the military leave.  This bill would amend Government Code section 19780 to also require that reinstated civil service employees who are paid hourly be given the same shift and number of hours worked per week as they worked immediately prior to going on military leave.

     

    Status:  This bill passed the Assembly’s Committee on Public Employees, Retirement and Social Security and is pending in the Assembly’s Appropriations Committee.

     

    Additional Sick Pay for Public Employees who are Veterans with Service-Related Disabilities (SB 221)

     

    California law presently allows state officers or employees employed on a full-time basis to accrue paid sick leave at the rate of one day for each calendar month of service.  This bill would amend Government Code section 19859 to provide additional paid sick time to state officers or employees hired after January 1, 2016, who are military veterans with a military service-connected disability rated at 30% or more by the United States Department of Veterans Affairs.  Specifically, such employees would receive an additional credit for paid sick leave of up to 96 hours for the purpose of undergoing medical treatment for his or her service-related disability.

     

    In contrast to generally available paid sick leave for public employees that accrues at one day for each calendar month worked, this entire credit would be available on the first day of employment and would remain available for use for the following 12 months of employment.  However, this additional paid sick leave credit would not carry over after 12 months.  Public employers would also be permitted to require submission of satisfactory proof that such sick leave is being used for treatment of a service-related disability.

     

    Status:  This bill has passed the Senate’s Veterans’ Affairs Committee and is pending in the Senate’s Appropriations Committee.

     

    New “Change of Control” Requirements for Grocery Workers (AB 359)

     

    This industry-specific bill would implement a number of new requirements upon the sale of “grocery establishments” (as defined).  Among other things, it would require that upon a “change in control” (as defined), the incumbent grocery employer shall prepare a list of specified eligible grocery workers for the successor grocery employer, and would require the successor hire from this list during a 90-day transition period.  The successor grocery employer would also be required to retain eligible grocery workers for a 90-day period, during which they could not be discharged without cause, and upon the close of that period, the successor grocery employer would be required to consider offering continued employment to those workers.

     

    Status:  This bill remains pending in the Assembly’s Judiciary Committee to consider recent amendments.

     

    BILLS THAT FAILED PASSAGE

     

    Proposed Tip-Credit Stalls (AB 669)

     

    While many states authorize a “tip credit” against an employer’s minimum wage obligations for certain employees, California presently does not.  Accordingly, this bill would have established the minimum wage for a “qualifying tipped employee,” on or after January 1, 2016, at $9.00 per hour (rather than the $10.00 per hour currently scheduled), provided that the employee received overall income from “wages” (as defined, but including tips) of at least $15.00 per hour.

     

    Status:  This bill faced significant opposition and stalled before reaching a vote in the Assembly’s Labor and Employment Committee.

     

    Bill Proposing Individual Alternative Workweek Schedules Stalls (AB 1038).

     

    While California authorizes “alternative workweek schedules” whereby non-exempt employees can work up to ten hours daily without receiving overtime, it is often difficult to obtain the two-thirds work-unit approval required under Labor Code section 510.   Known as the Workplace Flexibility Act of 2015, this bill would have permitted an individual non-exempt employee to request an “employee-selected flexible work schedule” providing for workdays up to ten hours within the forty-hour workweek, and would have allowed employers to implement this schedule without the obligation to pay overtime compensation for those additional hours in a workday.  This bill would also have retained the general daily overtime rule for employees who did not elect such schedules, and would also have retained daily and weekly overtime for work performed beyond the hours contemplated in the schedule.

     

    Status:  Despite the fact that many hourly employees would prefer such an option, this bill stalled in the Assembly’s Labor and Employment Committee due to opposition from unions who, interestingly enough, already provide such options to their members.

     

    Equivalent of Federal “Highly Compensated” Exemption Rejected in California (AB 1470)

     

    This bill proposed to make California wage and hour law more consistent with federal law by proposing a rebuttable presumption of exempt status for individuals who receive an annual gross compensation of $100,000 and who “customarily and regularly” (rather than primarily) perform exempt duties.  Under the federal Fair Labor Standards Act, in addition to the three so-called “white collar” exemptions (administrative, professional and executive) an exemption is recognized for specified “highly compensated” employees whereas California law presently contains no “highly compensated” exemption.

     

    Status:  Despite the fact that this bill closely tracked federal law and was introduced by four Democrats, this bill stalled in the Assembly’s Labor and Employment Committee due to opposition from the plaintiff’s bar and many unions.

     

    Bill Proposing Changes for Wage Theft Prevention Act Notices Issued by Temporary Service Providers Stalls (SB 702)

     

    Labor Code section 2810.5 requires employers to provide written notices to new hires containing specifically-enumerated items (e.g., pay rate, regular payday, etc.), and requires “temporary service providers” to provide additional specific information, including the name, physical address and telephone number of the legal entity for whom the employee will work.  This bill would have amended section 2810.5 to require temporary service providers to also provide in their Wage Theft Prevention Act Notices the email address the temporary service provider has on file of the legal entity for which the employee will work.

     

    Status:  This bill stalled in the Senate’s Labor and Industrial Relations Committee.

     

    Assembly Again Rejects a Cure Period under PAGA for Wage Statement Violations (AB 588)

     

    This bill would have amended California’s Private Attorneys General Act of 2004 (PAGA, Labor Code section 2699 et seq.) to allow employers to cure an alleged violation of Labor Code section 226 related to wage statement requirements before a civil action could be filed.  This bill was intended to address situations involving a technical violation of section 226 (e.g., a minor mistake regarding the legal employer’s name, etc.)

     

    Status:  As with prior versions, this bill stalled in the Assembly’s Labor and Employment Committee due to opposition from the plaintiff’s bar.