United States: California Employers: What You Need To Know For 2014

Last Updated: January 2 2014
Article by Kate S. Gold and Alexis Burgess

All employers with operations in California should be aware of the following new legislation, which, unless otherwise noted, goes into effect in California on January 1, 2014:

Wage and Hour Laws and Penalties

Minimum wage increase. AB 10 raises the state-wide minimum wage from the current $8 per hour to $9 per hour, effective July 1, 2014, and then to $10 per hour, effective January 1, 2016. Employers should note that employees currently classified as exempt must still meet the salary basis test to qualify for the particular exemption claimed.

Minimum wage penalties. Under Labor Code section 1194.2, employees who have not been paid minimum wages may recover liquidated damages through civil actions or administrative wage hearings before the Labor Commissioner. AB 442 extends the authority of the Labor Commissioner to award liquidated damages to affected employees through the labor commissioner citations process. Thus, affected employees will be able to recover liquidated damages in an amount equal to the wages unlawfully unpaid plus interest thereon through either a civil action, an administrative hearing, or a citation issued by the Labor Commissioner.

Wage claim attorneys' fees. Labor Code section 218.5 awards attorneys' fees and costs to the prevailing party in any action for nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions, regardless of whether the prevailing party is the employer or employee. Under SB 462, a prevailing employer may only recover attorneys' fees and costs if the court determines that the employee filed suit in bad faith.

Domestic worker overtime. AB 241 enacts the Domestic Worker Bill of Rights, which provides that a "domestic work employee who is a personal attendant" will be eligible for overtime at 1.5 times his or her regular rate of pay if he or she works more than nine hours in any workday or more than 45 hours in the workweek. Individuals and entities employing in-home help should determine whether they or their employees qualify for an exemption.

Heat illness recovery periods. Under Cal/OSHA regulations, employees that work outdoors in temperatures exceeding 85 degrees Fahrenheit must be allowed, and encouraged, to take a cool-down rest for at least five minutes when they feel the need to do so in order to avoid overheating. SB 435 now adds this "heat illness recovery period" to the requirement in Labor Code section 226.7 that employers provide employees with meal and rest breaks. Thus, an employer's failure to provide a heat illness recovery period to non-exempt employees will now result in penalties under Labor Code section 226.7 amounting to one additional hour of pay at the employee's regular rate of compensation for each workday that the recovery period is not provided.

Criminal withholding. Labor Code section 218.5 makes it a crime for an employer to willfully fail to remit agreed-upon payments to health and welfare funds, pension funds, or other various benefit plans, with failure to remit more than $500 constituting a felony. SB 390 amends section 218.5 to include an employer's failure to remit withholdings from an employee's wages made for state, local, or federal tax purposes.

Prevailing wages. Employers who provide services or construction work for any public entities must pay current prevailing wages, which are usually significantly higher than the minimum wage. Prevailing wage laws have been updated for 2014 in the following ways:

a. AB 1336 and SB 377 amend the process and timeline for assessing prevailing wage violations. Under these provisions, a notice of completion of a public work filed with a county recorder must also be given to the Labor Commissioner, and the awarding body or political subdivision which accepts a public work must also provide notice of that acceptance to the Labor Commissioner. The new laws then extend the deadline for the Labor Commissioner to serve a civil wage and penalty assessment alleging a violation of the prevailing wage law from 180 days (roughly six months) to eighteen months after the filing of a valid notice of completion with the applicable county recorder, or after acceptance of the public work, whichever occurs last. Moreover, if notice is not given in a timely manner to the Labor Commissioner, the deadline to serve an assessment shall be tolled for the length of the delay.

b. AB 1336 also amends prevailing wage law to allow a court to award liquidated damages and civil penalties, whereas such relief was previously recoverable only in an administrative action brought by the Labor Commissioner.

c. Existing law requires affected contractors to keep detailed payroll records relating to public works and produce these as necessary, with names and social security numbers redacted, to a joint labor-management committee. AB 1336 amends this rule to require redaction of social security numbers only.

d. SB 377 also establishes specific deadlines for the Director of the Department of Industrial Relations to respond to a request for a determination of whether a specific project or type of work is a public work within the meaning of the prevailing wage law.

e. SB 7 prohibits a charter city from receiving or using state funding or financial assistance for a construction project if the city has awarded, within the prior 2 years, a public works contract without requiring the contractor to comply with prevailing wage provisions. Small project exemptions apply. SB 7 was enacted on the heels of a decision by the California Supreme Court holding that, under the California Constitution, the wage levels of workers employed by charter cities on locally funded public works projects are a municipal affair not subject to state regulation. Thus, the constitutionality of this new law may be the subject of future litigation.

f. SB 54 extends prevailing wage requirements to privately financed refinery construction projects.

g. SB 776 prohibits contractors from counting payments for monitoring and enforcing prevailing wage laws towards their obligation to pay prevailing wages.

Discrimination and Retaliation

Retaliation. AB 263 expands employer liability for violating Labor Code 98.6, which currently protects employees from discharge or discrimination when they have asserted their rights under the Labor Code. As amended, the law will:

a. Prohibit any retaliation or adverse action against employees who have asserted any right under the Labor Code or who have updated or attempted to update their "personal information" in a manner unrelated to their skill set, qualifications, or knowledge required for the job;

b. Expand protected activity to include a written or oral complaint by an employee that they are owed unpaid wages; and

c. Provide a civil penalty to employers of up to $10,000 per employee per instance of retaliation.

New protected class. AB 556 adds "military or veteran status" to the list of classes protected from employment discrimination under the Fair Employment and Housing Act.

Sexual harassment. SB 292 clarifies that sexually harassing conduct is unlawful under FEHA regardless of whether the conduct is motivated by any sexual desire.

Whistleblower protections. Labor Code 1102.5 prohibits employers from retaliating against employees who report violations of a state or federal rule or regulation to a government agency, except for employees with duties related to company compliance. SB 496 extends whistleblower protections to employees with compliance duties and expands protected activity to include:

a. Reports alleging a violation of a local rule or regulation; and

b. Internal complaints to "a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or non-compliance."

The new law also clarifies that retaliation is prohibited when the employer "believes the employee disclosed or may disclose information."

Immigrant Protections

Retaliation. AB 263 prohibits an employer from using immigration law to retaliate against employees who assert protected rights under the Labor Code. Employers who do so, e.g., by contacting or threatening to contact immigration authorities about the immigration status of a current, former, or prospective employee or their family members, will face various penalties, including suspension of certain business licenses, and may face civil action from affected employees.

Extortion. Similarly, AB 524 clarifies that any person that threatens to report the known or suspected immigration status of an individual may be guilty of criminal extortion.

Despite both laws however, employers may still require employees to verify eligibility for employment under Form I-9 without becoming subject to any penalties.

Leaves, Accommodations, and Benefits

Leave for serious crime victims. Under SB 288, an employee who has been a victim of certain serious crimes may not be discriminated or retaliated against for taking time off from work to appear in any legal proceeding in which his or her right as a victim is at issue. The law defines "victim" to include any person who "suffers direct or threatened physical, psychological, or financial harm as a result of the commission or attempted commission of a crime or delinquent act," as well as that person's spouse, parent, child, sibling, or guardian. Employees must, however, comply with specific requirements for requesting the leave.

Leave for stalking victims. SB 400 extends existing leave protections for victims of domestic violence or sexual assault to victims of stalking. All employers must provide time off to these victims to appear at legal proceedings, and employers with 25 or more employees must also provide time off to deal with medical/psychological treatment, including safety planning.

Leave for volunteer firefighters, peace officers, and rescue personnel. Existing law requires an employer with 50 or more employees to permit an employee who is a volunteer firefighter to take temporary leaves of absence, not to exceed an aggregate of 14 days per calendar year, for the purpose of engaging in firefighting or law enforcement training. AB 11 extends these leave provisions to reserve peace officers or emergency rescue personnel pursuing firefighting, law enforcement, or emergency rescue training.

Wage replacement. Effective July 1, 2014, SB 770 extends paid family leave benefits to employees taking time off to care for a seriously ill grandparent, grandchild, sibling, or parent-in-law. The law previously only covered time spent caring for a seriously ill child, spouse, domestic partner, or parent or to bond with a child within one year of birth, adoption, or foster care placement. Note, however, that the law does not create the right to a leave of absence, but only to compensation/wage replacement during a qualifying absence.

"Family friendly" work arrangements in San Francisco. According to the Family-Friendly Workplace Ordinance, employers with twenty or more full and part-time employees working within the geographic boundaries of San Francisco must consider employee requests for "flexible or predictable working arrangements to assist with care giving responsibilities," provided that the employee has worked more than six months for the employer, works at least eight hours per week on a regular basis, and complies with guidelines set by the San Francisco Office of Labor Standards Enforcement in making the request. The ordinance also requires applicable employers to post a notice on the premises informing employees of their rights, and protects employees from retaliation for making a request or from adverse action based on "caregiver" status.

Small business health insurance. Small business owners with one to fifty eligible employees may now enroll for health care coverage online at the Small Business Health Options ("SHOP") segment of the Covered California website. In fact, beginning on January 1, purchasing insurance through SHOP will be the only way for small business owners to access federal tax credits helping to offset contributions toward employee premiums. Small businesses will be eligible for such tax credits if they have fewer than twenty-five full-time-equivalent employees for the tax year, pay employees an average of less than $50,000 per year and contribute at least fifty percent of their employees' premium cost. Maximum tax credits will go to employers with ten or fewer full-time-equivalent employees with wages averaging $25,000 or less per year.

Miscellaneous

Criminal conviction history. Existing law prohibits all employers from asking job applicants to disclose, orally or in writing, any information related to an arrest or detention that did not result in a conviction. Effective July 1, 2014, AB 218 will further prohibit any state or local agency from asking an applicant to disclose information regarding a criminal conviction until after determining that the applicant meets minimum employment qualifications. Positions for which a criminal background check is otherwise required by law are exempt.

Business mileage deduction. The IRS has issued new optional standard mileage rates which may be used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes. The standard mileage rates for 2014 for business driving is $.56 per mile. Of course, taxpayers still have the alternative option of calculating the actual costs of using a business vehicle.

Labor Commissioner liens on real property. Under current law, the Labor Commissioner is authorized to issue orders, decisions, or awards in connection with employee complaints governed by the Labor Code. AB 1386 provides that the amount due under a final Labor Commissioner order, decision, or award shall create a lien upon the employer's real property, recordable by the Labor Commissioner.

Garment manufacturer registrations. AB 1384 creates a civil penalty for a garment manufacturer's failure to display its name, address, and registration number at the front entrance of the premises. The penalty for an initial citation is $100 per calendar day of non-compliance, and the fine increases to $200 per calendar day for subsequent violations.

These summaries are not exhaustive, so employers who may be affected by California's new laws should contact their attorneys to ensure that they are prepared for compliance and to update their employee policies and manuals as appropriate.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.