United States: Trick Or Treat For California Employers

As we approach Halloween, the California Legislature and Governor Jerry Brown have been busy on the employment front. The results of this activity are a "mixed bag" for California employers.

First, the "treats."

On October 11, 2015, Governor Brown vetoed two bills which were labeled by the California Chamber of Commerce as "job killer" bills.

Governor Brown vetoed AB 465, which essentially would have precluded mandatory employment arbitration agreements. The legislation would have required that any waiver of any legal right by an employee would have to be knowing and voluntary, in writing, and could not be an express condition of employment.

Governor Brown also vetoed another "job killer" bill, SB 406. SB 406 would have expanded the California Family Rights Act significantly and created inconsistencies with Federal law by allowing workers to take leave for additional family members.

And, on October 2, 2015, Governor Brown signed AB 1506 into law. AB 1506 provides employers with a limited opportunity to cure technical violations in itemized wage statements before being subject to litigation. Specifically, an employer will have 33 days to cure any alleged technical wage statement violation. If the employer cannot cure the violation, then the employee is still able to file a Private Attorney General Act (PAGA) action and obtain any unpaid wages, penalties and attorneys' fees.

Now, for the "tricks."

Governor Brown signed SB 588 into law on October 11, 2015. This law appears to allow for personal liability from many wage and hour violations, contrary to the holdings of several California court cases rejecting individual liability. Under the new law, any employer or "other person acting on behalf of an employer" may be held liable for violating or causing to be violated any provision regulating the minimum wages or hours and days of work, the timing of payment of wages, wage statements, meal and rest periods, minimum wage and overtime, and expense reimbursement. This statute expressly defines "other person acting on behalf of an employer" to mean a natural person who is an owner, director, officer or managing agent of the employer. SB 588 also grants to the Labor Commissioner the power to enforce judgments for non-payment of wages against California employers by giving the Commission the power to issue levies and liens against employer property and to issue stop orders requiring the cessation of business operations by employers who have judgments against them for non-payment of wages that are outstanding for more than 30 days.

On October 10, 2015, Governor Brown signed AB 1513 into law, thus rewriting the definition of rules governing piece-rate compensation in California. AB 1513 creates new California Labor Code section 226.2, setting forth requirements for payment of a separate hourly rate for "non-productive" time, i.e., rest and recovery breaks documented by piece-rate employees. The new law, which applies to all employees compensated on a piece-rate basis, becomes effective January 1, 2016. This will materially impact the way piece workers are compensated in California, and employers who pay employees on a piece-rate basis should carefully review their procedures to make sure they are in compliance with the new law or even if they should continue paying employees on a piece-rate basis.

Finally, Governor Brown signed SB 579, which expands Labor Code § 230.8, requiring employers with 25 or more employees to provide up to 40 hours of leave per year to employees who are the parent, guardian or grandparent of a child enrolled in a licensed daycare facility or in grades K-12, for purposes of participating in school activity. Under the new law, the scope of covered employees now includes step-parents and foster parents, and expands coverage for absences to exclude activities relating to finding, enrolling and/or re-enrolling a child in school or in daycare, and/or attending to child care emergencies and school emergencies.

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.

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