United States: California Legislative Update – It’s That Time Of Year Again

While the federal government ground to a halt, the California Governor and Legislature have been busy voting on and signing a flurry of new legislation at the end of this year's legislative session. The following is a survey of new laws of interest to California employers, as well as some notable bills that were not signed into law. Unless otherwise noted, the following pieces of legislation are effective January 1, 2014.

Bills Signed Into Law


AB 10 – Minimum Wage Increase. AB 10 increases the minimum wage to $9 an hour effective July 1, 2014, and to $10 an hour as of January 1, 2016. This marks the first increase to California's minimum wage law since 2008. Provisions that would have indexed future minimum wage increases to the rate of inflation were removed from the bill before it passed the Legislature. Note that this increase will increase the salary requirement for exempt employees to $37,440 in July 2014 under Labor Code § 515(a).

AB 442 – Liquidated Damages for Certain Wage Violations. AB 442 expands the Labor Commissioner's authority, after a citation from a field investigation is issued to an employer for failure to pay minimum wages to workers, to also recover and pay to the workers the unpaid minimum wage liquidated damages provided for in Labor Code § 1194.2. Under current law, the Labor Commissioner could only remedy wage violations in connection with field investigations by recovering unpaid wages and assessing civil penalties.

SB 435 – Paid "Heat Breaks." SB 435 amends the Labor Code to add a "recovery period" to meal and rest breaks that employers must provide to employees or pay an additional hour's pay. "Recovery period" is defined as a cool down period offered an employee to prevent heat illness as required in a Cal/OSHA regulation. The regulation, as currently drafted, permits employees to take a five minute cool down rest break.

AB 462 – Employer Right to Attorneys' Fees. AB 462 amends Labor Code § 218.5 which provides for recovery of attorneys' fees by the prevailing party in wage hour lawsuits. Under the amendment to the statute, employers can now only recover attorneys' fees if the court finds that the employee brought the court action in "bad faith."

AB 241 – Overtime for Domestic Workers. AB 241 creates a "Domestic Worker Bill of Rights" to regulate certain domestic workers' work hours and provide an overtime compensation rate for those employees who work in excess of nine hours in a workday or 45 hours in a workweek. The Domestic Worker Bill of Rights, commencing with new Labor Code section 1450, will remain in effect until January 1, 2017.

SB 7 – Prevailing Wages for Charter Cities. SB 7 authorizes the state to withhold state funds on all public works projects in charter cities that have local ordinances that prevailing wages do not have to be paid on purely municipal projects paid for with local funds.


AB 1173 – Income Tax for IRS Code 409A Noncompliance. Section 409A of the Internal Revenue Code regulates the treatment for federal income tax purposes in the United States of certain nonqualified deferred compensation, including traditional deferred compensation plans, payments under severance agreements, employment agreements, change in control and retention agreements, discounted stock options, and other forms of equity compensation such as restricted stock units or "phantom" stock. Any such arrangements that are not in compliance with Section 409A's draconian restrictions may cause the underlying compensation to be taxed before it is paid and cause the individual to incur an additional 20 percent federal tax. Current state law imposes additional taxes of 20 percent for noncompliance with Section 409A. AB 1173 reduces this additional state tax on income from 20 percent to 5 percent for taxable years beginning January 1, 2013.


SB 770 – Expansion of Qualifying Relatives Under Paid Family Leave Act. California's Paid Family Leave Act currently provides benefits to workers who are absent from work to care for seriously ill children, spouses, domestic partners and parents, or to bond with newly born, adopted or fostered children. SB 770 expands the definition of qualifying ill family members to include siblings, grandparents, grandchildren, and parents-in-law. As has always been the case, this bill does not affect the circumstances under which employers must allow employees to take a leave of absence from work, but simply provides that employees who are otherwise entitled to be absent from work to care for an ailing sibling, grandparent, grandchild, or parent-in-law are eligible to receive paid family leave benefits from the state.


AB 556 – Military/Veteran Status Protected Under FEHA. California's Fair Employment and Housing Act ("FEHA") makes it unlawful to discriminate against certain protected categories. AB 556 adds "military and veteran status" to this list. It also permits employers to make inquiries regarding an employee's or applicant's military or veteran status for the purpose of awarding a veteran's preference as permitted by law.


SB 496 – Expansion of Whistleblower Protections. This bill, as it pertains to private sector employers, amends section 1102.5 of the Labor Code to expand existing whistleblower protections and rights that prohibit an employer from (a) making, adopting, or enforcing any rule, regulation, or policy preventing an employee from disclosing violations of, or noncompliance with, laws or regulation, and (b) retaliating against an employee because the employer believes that the employee disclosed or may disclose information related to the potential violation or noncompliance. The amendments expand existing law by (1) including violations of and noncompliance with local laws and regulations, in addition to state and federal ones; (2) protecting disclosures not only to government and law enforcement agencies, but also to employees with authority over the disclosing employee or authority to investigate, discover or collect the potential violation or noncompliance; and (3) prohibiting retaliation based on potential disclosures made in good faith, in addition to actual disclosures.

SB 666 – Anti-Retaliation for Complaining of Unpaid Wages; Restrictions on Reporting Immigration Status. SB 666 adds new section 244 to the Labor Code, providing that reporting or threatening to report an employee's, former employee's, or prospective employee's suspected citizenship or immigration status, or the suspected citizenship or immigration status of the employee's or former employee's family member, as defined, to a federal, state, or local agency because the employee, former employee, or prospective employee exercises a designated right would constitute an adverse action for purposes of establishing a violation of the designated right. For the purposes of this new statute, a "family member" includes a spouse, parent, sibling, child, uncle, aunt, niece, nephew, cousin, grandparent, or grandchild related by blood, adoption, marriage, or domestic partnership. Upon application, a court will have discretion to order the appropriate government entity to suspend or revoke the business license of employers found to have violated new Labor Code section 244 by retaliating or taking an adverse action against an employee, former employee or applicant on the basis of their citizenship and immigration status. The bill also expands the antiretaliation provisions of Labor Code section 98.6 to protect employees who complain of unpaid wages, among other things. Such violations carry a $10,000 civil penalty in addition to other remedies available at law.

AB 263 – Anti-Retaliation for Complaining of Unpaid Wages; Restrictions on Reporting Immigration Status. Like SB 666, AB 263 expands the anti-retaliation provisions of Labor Code section 98.6 to protect employees who complain of unpaid wages, among other things. AB 263 also adds Labor Code section 1019 to prohibit specified "unfair immigrationrelated practices." The bill provides for civil penalties of up to $10,000 per employee per violation for any retaliation against an employee and authorizes a private right of action for equitable relief, damages, and penalties, including a court order directing the appropriate government entity to suspend or revoke an offending employer's business license. The bill also expands the employer conduct prohibited by Labor Code section 1102.5 to include preventing an employee from, or retaliating against an employee for, providing information to, or testifying before, any public body conducting an investigation, hearing, or inquiry.


AB 218 – Criminal Background Checks for Government Employees. AB 218 adds a new provision to the Labor Code prohibiting state and local government agencies from inquiring about an applicant's criminal conviction history until after the agency has determined that the applicant already meets the requirements for the position. This law will take effect on July 1, 2014, and it excludes criminal justice agencies and positions for which criminal background checks are required by law.


SB 400 – Prohibition on Adverse Actions Against Stalking Victims. SB 400 amends sections 230 and 230.1 of the Labor Code to extend current protections (including taking time off and non-retaliation) for employees who are victims of domestic violence and sexual assault to employees who are known or suspected victims of stalking; the legislation requires reasonable accommodations that may include the implementation of safety measures or procedures for a victim of domestic violence, sexual assault or stalking.

AB 633 – Good Samaritan Employer. This bill adds a new section to the Health and Safety Code prohibiting employers from adopting a policy prohibiting employees from providing emergency medical services, including cardiopulmonary resuscitation, in the workplace. Employers may adopt a policy requiring only employees trained in such services to provide emergency care but if none are available, any employee must be allowed to voluntarily provide emergency care. Employers may adopt a policy prohibiting such emergency services on a person if that person has a Do Not Resuscitate, or similar order, in effect.

Significant Unpassed and Vetoed Bills SB 404 would have added "familial status" to the various protected categories under California's antidiscrimination statute, the Fair Employment and Housing Act. There was no floor vote on the bill this legislative session, but it is likely to be revived in the 2014 session.

SB 655, vetoed by Governor Brown, would have lowered the standard of proof and allowed employees to seek greater recoveries in mixed-motive discrimination cases. In response to the recent California Supreme Court ruling in Harris v. City of Santa Monica which held that plaintiffs must show that discrimination was a "substantial" motivating factor in their firing to recover in mixed-motive cases, SB 655 would have defined "substantial" in this context to mean "more than a remote or trivial factor, but need not be the only or main cause of the employment action."

AB 729 – Evidentiary Privilege for Union Agents and Represented Workers. AB 729, vetoed by Governor Brown, would have added section 1048 to the Evidence Code to create a new evidentiary privilege making confidential most communications between a union agent and a union member.


Employers should update their policies to ensure they are in compliance with the new statutes, especially the new minimum wage with its ramifications for exempt status under California wage/hour law.

To view prior issues of the ELC, click here.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions