California Governor Edmund G. Brown has recently signed into law
a variety of important new employment and labor-related statutes.
Gov. Brown vetoed two controversial measures as well. The following
are the most significant of the measures signed and vetoed by
Governor Brown. Most of the new statutes are effective January 1,
2013. The effective date of each statute is included below.
Employers May Not Require Employees or Applicants to Disclose Social Media Access Information (AB 1844)
Effective January 1, 2013, this law prohibits an employer from
requiring or requesting an employee or employment applicant to
disclose his or her social media username or password, to access
his or her personal social media in the presence of the employer,
or to divulge any personal social media. It defines "social
media" as an electronic service or account, or electronic
content, including, but not limited to, videos, still photographs,
blogs, video blogs, podcasts, instant and text messages, email,
online services or accounts, or internet web site profiles or
locations. This bill also prohibits an employer from discharging,
disciplining, threatening to discharge or discipline, or otherwise
retaliating against an employee or applicant for not complying with
a request or demand for access to the employee's personal
social media.
An employer can request an employee to divulge personal social
media reasonably believed to be relevant to an investigation of
allegations of employee misconduct or violation of laws and
regulations, and an employer can also require or request an
employee to disclose a username, password, or other method of
accessing an employer-issued electronic device. The bill contains
no definition of an "investigation of allegations of employee
misconduct."
The new law contains no enforcement provision. Potentially, an
employee terminated for refusing to provide access to a social
media username or password could bring a claim for wrongful
termination. Additionally, it is possible that a violation of the
new statute could result in a claim for penalties under the
California Labor Code Private Attorneys General Act
("PAGA"), Cal. Labor Code section 2698 et
seq.
Bill Amends Fair Employment and Housing Act to Include Breastfeeding and Related Medical Conditions under the Definition of "Sex" (AB 2386)
Under the California FEHA, it is unlawful to engage in specified
discriminatory employment practices on the basis of sex. Under
existing law, "sex" includes gender, pregnancy,
childbirth, and medical conditions related to pregnancy or
childbirth. Assembly Bill 2386 amends the FEHA so that the term
"sex" also includes breastfeeding or medical conditions
related to breastfeeding. This bill is effective January 1, 2013,
and amends Section 12926 of the California Government Code.
Employment Agreements Involving Commissions Must Be in Writing (AB 1396)
Adopted in 2011 but effective January 1, 2013, this bill requires
employers who establish commission plans to reduce commission
agreements to writing. The written agreement must set forth the
method by which commissions are computed and paid and must be
signed by both the employer and employee. A signed copy must be
provided to each employee who is a party to it. The law applies to
all employers with commissioned employees in California, whether or
not the employer is located in California.
If the contract expires but the parties continue to perform under
its terms, the contract's terms are presumed to remain in full
force until a new contract superseding its terms is executed or
either party terminates the employment relationship.
The law excludes from the definition of "commissions"
short-term productivity bonuses and bonus and profit-sharing plans,
unless the employer offers to pay a fixed percentage of sales or
profits as compensation for work performed.
New Limitations on Amount of Garnishment of Employees' Wages (AB 1775)
Existing law limits the amount of employee earnings subject to
an earnings withholding order to the amount specified by federal
law, unless an exception applies. Federal law prohibits the amount
of earnings subject to garnishment from exceeding 25 percent of an
individual's weekly "disposable earnings" or the
amount by which the individual's disposable earnings for the
week exceeds 30 times the federal minimum hourly wage in effect at
the time the earnings are payable.
This bill, which is effective July 1, 2013, defines
"disposable earnings" as the portion of an
individual's earnings that remains after deducting all amounts
required to be withheld by law. The bill limits the amount of an
individual's weekly disposable earnings subject to garnishment
to the lesser of 25 percent of the individual's weekly
disposable earnings or the amount by which the individual's
disposable earnings for the week exceeds 40 times the state minimum
hourly wage (currently, $8.00 per hour).
Fair Employment and Housing Act Protects Religious Dress and Grooming Practices (AB 1964)
Under the California Fair Employment and Housing Act
("FEHA"), an employer is required to reasonably
accommodate the religious belief or observance of an employee
unless the accommodation would constitute an undue hardship on the
business of the employer or other entity.
Signed by Gov. Brown on September 8, 2012, AB 1964 clarifies that a
religious dress practice or a religious grooming practice is
included within the FEHA's protections against religious
discrimination. The new law also specifies that it is not
a reasonable accommodation to require that the person be segregated
from the public or other employees due to the employee's
religious dress or grooming practice.
This bill amends Section 12926 of the California Government Code
and is effective January 1, 2013.
Expansion of an Employee's Right to Inspect or Copy Personnel Records (SB 2674)
Labor Code Section 1198.5 currently grants employees the right
to inspect the personnel records that the employer maintains
relating to an employee's performance or to any grievance
concerning the employee. This bill substantially amends Section
1198.5.
Effective January 1, 2013, Senate Bill 2674 requires an employer to
provide a current or former employee, or his or her representative,
an opportunity to inspect and receive a copy of those records
within 30 calendar days after the employer receives a written
request to inspect or copy the records. The employer and employee
can agree, in writing, to extend this deadline beyond 30 calendar
days, but the maximum extension is 35 calendar days. If the
employee requests a copy of the records, the employer can provide
the copy at a charge, not to exceed the actual cost of copying the
records. If the requestor is a current employee, the employer is
not required to make the personnel records available during the
employee's working hours.
A request to inspect or receive a copy of personnel records can be
made in writing or by completing an employer-provided form. An
employee can verbally request a form from his or her supervisor. An
employee or an employee's representative can also verbally
submit a request to an individual specially designated by the
employer.
An employer must make a current employee's records available
for inspection, or provide copies, at the request of the employee.
The records must be available at the employee's workplace or
another location agreeable to the employer and the requestor. This
bill establishes similar provisions for former employees. The
employer is required to make the records available at the location
where they are stored, unless the parties agree in writing to a
different location. Prior to making personnel records available, an
employer may redact the name of any nonsupervisory employee
contained in the personnel records.
An employer is required to maintain a copy of all personnel records
for a minimum of three years after an employee is terminated.
An employer is not required to comply with more than 50 requests to
inspect or receive a copy of personnel records filed by a
representative or representatives of employees in one calendar
month. The provisions do not apply to an employee covered by a
valid collective bargaining agreement if the agreement provides for
a procedure for inspection and copying of personnel records.
If an employee or former employee files a lawsuit that relates to a
personnel matter against his or her employer or former employer,
the right of the employee, former employee, or his or her
representative to inspect or copy personnel records ceases during
the pendency of the lawsuit.
Under existing law, an employer who fails to permit an employee to
inspect the employee's personnel records is guilty of a
misdemeanor. This bill changes that to an infraction. This bill
authorizes an employer to assert impossibility of performance (not
caused by or resulting from a violation of law) as an affirmative
defense.
Labor Code Section 226 currently requires an employer to keep a
copy of each employee's itemized wage statements and records of
deductions on file for at least three years at the place of
employment or at a central location within the State of California.
This bill provides that the term "copy" includes a
duplicate of the itemized statement provided to an employee or a
computer-generated record that accurately shows all of the
information required in the itemized statement.
An employer who violates Sections 226 or 1198.5 may be liable to
the employee or Labor Commissioner for a penalty of $750, and a
current or former employee may obtain injunctive relief and
attorneys' fees.
An Employee Is Deemed to "Suffer Injury" if an
Employer Fails to Provide an Itemized Wage Statement or if the
Employee Cannot Promptly and Easily Determine Certain Information
(SB 1255)
The California statute requiring itemized wage statements
(California Labor Code section 226(a)) also provides that an
employee may recover a penalty not to exceed $4,000 where the
employee "suffers injury" as the result of a
"knowing and intentional failure" by the employer to
provide a proper wage statement. Effective January 1, 2013, this
bill defines "suffer injury" to include (i) if the
employer fails to provide a wage statement, or (ii) if an employer
fails to provide accurate and complete information and the employee
cannot promptly and easily determine from the wage statement alone
the amount of the gross or net wages paid to the employee during
the pay period, the deductions the employer made from the gross
wages to determine the net wages paid to the employee during the
pay period, the name and address of the employer or legal entity
that secured the services of the employer, and the name of the
employee and either the last four digits of the employee's
Social Security number or an employee identification number other
than a Social Security number.
Temporary Services Employers Must Provide Specific
Information in Itemized Wage Statements to Employees (AB
1744)
Existing law requires every employer, semimonthly or at the time of
each payment of wages, to furnish each employee with an accurate
itemized statement in writing showing specified information. This
bill additionally requires temporary service employers, on and
after July 1, 2013, to include in the itemized wage statement the
rate of pay and the total hours worked for each assignment.
In addition to the itemized wage statement requirement, California
also currently requires that all newly hired, nonexempt employees
receive a written notice, at the time of hiring, including
information such as the rate of pay and its basis (hourly,
salaried, commissioned, or otherwise) among other items of
information. This bill additionally requires that, if the employer
is a temporary services employer, the notice include the name, the
physical address of the main office, the mailing address if
different from the physical address of the main office, and the
telephone number of the legal entity for which the employee will
perform work.
Assembly Bill 1744 is effective January 1, 2013. Knowing and
intentional violations of the itemized wage statement requirement
can result in penalty claims by aggrieved employees. The statute
requiring written notification at the time of hire of pay/wage
information does not contain a specific enforcement provision, but
violations could result in claims for penalties under the
California Labor Code PAGA.
Payment of a Fixed Salary to a Nonexempt Employee is
Compensation Only for the Employee's Regular, Non-Overtime
Hours, Notwithstanding Any Private Agreement to the Contrary (AB
2103)
Assembly Bill 2103 is intended to overturn the California Court of
Appeal's decision in Arechiga v. Dolores Press (2011)
192 Cal.App.4th 567. This law amends Section 515 of the California
Labor Code to state that payment of a fixed salary to a nonexempt
employee provides compensation only for the employee's
regular, non-overtime hours, notwithstanding any private agreement
to the contrary. The Arechiga case had been used by some
employers to reduce overtime obligations to employees whose regular
hours fluctuate from week to week. In Arechiga, the court
held that Section 515 of the California Labor Code, which pertains
to overtime rates of compensation, permits an employer and a
nonexempt employee to enter into an explicit mutual wage agreement.
Under such an agreement, an employer and employee agree before the
employee starts work to pay the employee a guaranteed salary,
including all pay for non-overtime and overtime hours
worked, as long as the employee receives at least one-and-one-half
times his basic rate for any hours worked beyond the statutorily
defined workday of eight hours. Such agreements are now
unenforceable. This bill goes into effect on January 1, 2013.
California Extends Whistleblower Protections under False Claims Act (AB 2492)
Assembly Bill 2492 makes California the first in the nation to
update its state false claims statute to align with the federal
False Claims Act. The bill amends the current version of the
California False Claims Act, adding whistleblower protections
covering employees, contractors, and agents; allowing for awards of
legal fees and costs; and raising civil penalties for violations of
the state law from $5,000 to $10,000 per false claim to between
$5,500 and $11,000. The California False Claims Act applies to
persons who knowingly make or use a false statement or document to
either obtain money or property from the State or avoid paying or
transmitting money or property to the State.
The greater protections may encourage employees to disclose
fraudulent activities involving the State, but they may also lead
to an increase in retaliation claims. This bill could encourage
more current and former employees to assert claims against their
employers because there are financial incentives to do so. False
claims cases may also become more attractive to attorneys because
the bill allows qui tam relators to recover their attorneys'
fees if they prevail. This bill goes into effect on January 1,
2013.
California Places Limitations on Disability Access Claims (SB 1186)
Senate Bill 1186 is designed to curb abusive Americans with
Disabilities Act construction-related access lawsuits "by a
small minority of disability rights lawyers and plaintiffs" in
the State of California. The bill, which received broad bipartisan
support and went into effect immediately upon signing by the
Governor on September 19, 2012, places limitations on the procedure
for bringing disability access suits and on the damages that
claimants collect from these lawsuits.
SB 1186 requires attorneys to send a copy of prelitigation demand
letters or civil complaints alleging construction-related
disability access violations to the California Commission on
Disability Access or to the State Bar of California for review. The
bill also prohibits prelitigation letters from including a request
or demand for money or an offer to accept money.
The bill also requires that prelitigation demand letters and
complaints alleging construction-related disability claims contain
language allowing defendants to determine the basis of the
violations supporting the claim, including the "date or dates
of each particular occasion on which the claimant encountered the
specific access barrier."
The bill caps statutory minimum damages for construction-related
violations at $1,000 per offense (rather than $4,000) where a
defendant corrects all access violations within 60 days of
receiving a civil complaint and the business can show that the
property had previously been Certified Access Specialist Program
("CASp") inspected. Alternatively, the bill caps
statutory damages at $2,000 where a defendant corrects all
violations within 30 days and the defendant is a small business.
For properties leased after January 1, 2013, the bill also requires
landlords to disclose to tenants whether their buildings are CASp
certified to comply with ADA access regulations.
Vetoed Bills
The following bills were vetoed by Governor Brown:
Discrimination on the Basis of Unemployment Status Would Have Been Prohibited (AB 1450)
AB 1450 would have prohibited employers, employment agencies,
and persons who operate web sites from posting jobs in California,
from publishing a job advertisement or announcement for any job
that includes either a provision stating that an individual's
current employment is a requirement for a job or that an employer
will not consider an applicant for employment based on an
individual's employment status. Employers could still publish
ads or announcements that set forth other lawful job qualifications
or state that only applicants who are currently employed by that
employer would be considered.
Regulations for Domestic Worker Employees (AB 889)
Assembly Bill 889 would have required the Department of Industrial Relations to adopt regulations, by January 14, 2014, governing the working conditions of domestic workers (including persons employed in the home who provide supervision or assistance to an elderly or disabled person). Due to Governor Brown's veto, domestic workers will continue to be governed by the existing provisions of the California Industrial Welfare Commission Wage Orders (notably, Wage Orders 15 and 5). Historically, most domestic workers in California have not been subject to the overtime and meal/rest period provisions applicable to most other private-sector, nonagricultural employees.
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