United States: California Legislative Update - May 2016

Last Updated: May 19 2016
Article by Christopher E. Cobey

The California legislature has reached the midpoint of its 2016 legislative session.  The Governor has signed four bills of significance to California private sector employers. In addition, a few dozen workplace-related bills have moved beyond their initial policy committees, and many have passed their house of origin and proceeded to consideration in the other legislative chamber.  Major bills still in process would change private arbitration of employment disputes, and would create predictive scheduling requirements for some employees working on a shift basis. 

This report summarizes the new laws and key bills still in process, and identifies other bills that still could make it to the finish line this year. The Legislature is required to complete its work for this year's session no later than August 31, 2016.  After the Legislature enters its final recess, Governor Brown will have until September 30, 2016 to sign or veto bills passed by the Legislature at the end of the session.

New Laws

In an eight-day period last month, a bill on California's minimum wage went from stalled to signed. The state's minimum wage is headed to $15 an hour over six years, with the first step occurring on January 1, 2017.  A full description of the amended minimum wage law is available here.

Governor Jerry Brown also signed a bill expanding workplace prohibitions on smoking in the workplace.  The bill extends the prohibition on smoking in a place of employment to include an owner-operated business, and 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. (ABX2-7; amends Labor Code section 6404.5.)  A companion bill signed by Brown increases the minimum age for smoking from 18 to 21, with some exceptions. (SBX2-7; amends various sections to the Business and Professions, and Penal, Codes.)

The last bill addresses the "safe harbor" period of time that certain companies are provided to correct construction-related accessibility violations under the Unruh Act .  The new and amended statutes establish a presumption that certain "technical violations" are presumed to not cause a person "difficulty, discomfort or embarrassment" for the purpose of an award of minimum statutory damages in a construction-related accessibility claim. The changes apply to small businesses (defined as employing 25 or fewer employees on average over the past three years, and having average annual gross receipts of less than $3,500,000 over the previous three years). The "safe harbor" is only applied where: (1) the claim is based on specific violations listed in the statutes; and (2) the small business corrects all of the technical violations included in the claim within 15 days of receiving written notice or the service of a summons and complaint regarding the accessibility claim, whichever is earlier.  The bill took effect on May 10, 2016, as an urgency measure. (SB 269; amends Civil Code sections 55.53 and 55.56, and Government Code sections 4459.7, 4459.8, and 8299.06; adds Government Code sections 65941.6 and 65946 et seq.)

Key Pending Bills

The following outlines the current status of key pending bills. The measure's latest committee or house location is noted in italics.

Fair Scheduling

SB 878 is part of the "fair scheduling" trend. This legislation would require restaurants, grocery, and retail store establishments to provide a 21-day work schedule listing all shifts for employees at least seven days prior to the first shift on that work schedule. If changes were made to the schedule with less than seven days' notice, an employer would have to pay modification pay to the affected employee(s). The bill would also authorize the Labor Commissioner  to order appropriate relief to aggrieved employees that could include reinstatement, backpay, the payment of modification pay withheld, and the payment of an additional sum up to $4,000 in the form of an administrative penalty. Aggrieved employees would also be allowed to bring a civil action against an employer for schedule shift change violations and be entitled to collect legal or equitable relief and reasonable attorneys' fees and costs.  Senate Appropriations.

Three pending bills seek to limit arbitration as a dispute-resolution device in private employment.  The legislators sponsoring these bills have stated publicly that, in light of Governor Brown's veto last year of AB 465,1 they want to legislate incrementally to attack pre-dispute binding arbitration agreements as a dispute resolution tool in non-union California workplaces.

AB 2667 would require a waiver of a legal right, penalty, remedy, forum, or procedure for a violation of the Unruh Civil Rights Act, including the right to file, notify, and pursue a civil action or complaint with the California Attorney General, the Department of Fair Employment and Housing, or any other governmental entity, to be: (1) knowing and voluntary; (2) in writing; and (3) not made as a condition of entering into a contract for goods or services or as a condition of providing or receiving goods and services. This bill would also require a person who seeks to enforce the waiver to have the burden of proving that the waiver was knowing and voluntary and not made as a condition of the contract or of providing or receiving the goods or services. This bill would apply to any agreement to waive a legal right, penalty, remedy, forum, or procedure for a violation of the act, including an agreement to accept private arbitration, made, modified, or renewed on or after January 1, 2017. Assembly Floor.

AB 2879's key provision would prohibit pre-dispute mandatory arbitration agreements, which was the substance of AB 465, vetoed by the Governor last fall.  The bill would amend Section 394 of the Military and Veterans Code to prohibit a person from requiring a waiver of the protections afforded members of the military forces because of his or her membership or service as a condition of employment, including the right to file and pursue a civil action or complaint. The bill would prohibit a person from retaliating against a person who refuses to waive these protections. The bill would require any waiver to be knowing and voluntary, in writing, and expressly not made as a condition of employment. The bill would require a person seeking to enforce such a waiver to have the burden of proving that the waiver was knowing and voluntary, and not made as a condition of employment. The bill would apply its provisions to any agreement entered into on or after January 1, 2017, including an agreement that requires private arbitration.  Assembly Floor.

SB 1241 would provide, for contracts entered into, modified, or extended on or after January 1, 2017, that a provision in a consumer contract that purports to designate the venue in which a controversy arising from the consumer contract is litigated, or the choice of law to be applied, is voidable by the consumer, with respect to a controversy arising in California, if the provision would deprive the consumer of the protection of California law or require the consumer to litigate the controversy out of state. The bill would also prohibit a seller from requiring a consumer to agree to these voidable provisions as a condition of entering into a contract regulated by the act, and would provide that such provisions, if required, are inoperative and California law applies in its place. Injunctive relief would be available in this context, and a court may award a plaintiff reasonable attorneys' fees. The legislation would include arbitration with litigation for purposes of these provisions, and would create an analogous set of rights, prohibitions, and requirements in connection with employment contracts.  Passed Senate; pending assignment in Assembly.

Salary History

AB 1676 would prohibit an employer, including state and local government employers, from seeking salary history information about an applicant for employment, and would require an employer (not including state and local government employers), upon reasonable request, to provide the pay scale for a position to an applicant. Assembly Appropriations.

Janitorial Industry

AB 1978 expands certain employer requirements to those in the janitorial industry. The provisions of the bill would apply to an estimated 220,000 California employees in the janitorial industry. The measure expands existing employee protections concerning workplace sexual violence and sexual harassment; requires all covered workers and supervisors to, at least annually, receive comprehensive, accurate and appropriate in-person training lasting at least four hours regarding sexual harassment and sexual assault that provides an opportunity for interactive questions and answers. The bill also establishes minimum qualification standards for trainers who may deliver such training, including but not limited to, a minimum of five years of experience conducting adult education with the demographics of the janitorial workforce (the collective bargaining agent that represents the employer's covered workers or the designee of the collective bargaining agent may deliver such trainings). In addition, the bill requires that, on and after January 1, 2018, no employer may conduct any janitorial business without a valid registration and all employers must be registered with state Department of Industrial Relations and  requires the online posting of janitorial contractor registry and database.  The bill is sponsored by SEIU California. Assembly Appropriations.

Equal Pay

SB 1063 would expand the state's equal pay statute, prohibiting discrimination in compensation based on sex, to also prohibit an employer from paying any of its employees at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work.  Senate Appropriations Suspense File.

Other Pending Bills

While the previously mentioned bills are likely of the most interest to employers, there are other pending bills that would also affect some private sector employers.

Apprenticeship

AB 1926.  If a contractor requests the dispatch of an apprentice to perform work on a public works project, this law would require that the apprentice be paid the prevailing rate for the time spent on a required activity.  Assembly Floor.

AB 2288 would require pre-apprenticeship programs in the building and construction trades to include a plan for outreach, recruitment, and retention of women and require the use of the Multi-Craft Core Curriculum developed for the purpose of preparing students and pre-apprenticeship participants for labor-management apprenticeship programs.  The bill is sponsored by the State Building and Construction Trades Council of California. Assembly Floor.

Agricultural Industry

AB 2574 would require, by July 1, 2017, a collaboration of state departments, including, but not limited to, the Department of Food and Agriculture, the Labor and Workforce Development Agency, and the Department of Veterans Affairs, to develop a New Veteran Farmer and Rancher Outreach and Assistance Plan to disseminate information to veterans in California about, among other things, federal and state veteran agricultural education, training, and other assistance programs. Senate Agriculture Committee.

AB 2757 would remove the exemption for agricultural employees regarding hours, meal breaks, and other working conditions, including specified wage requirements, and would create a schedule that would phase in overtime requirements for agricultural workers, over the course of four years, from 2017 to 2020. Beginning January 1, 2020, the law would require that a person employed in an agricultural occupation for more than 12 hours in one day to be compensated at the rate of no less than twice the employee's regular rate of pay, and would require the Department of Industrial Relations to update a specified wage order for consistency with these provisions. Assembly Appropriations Suspense File.

SB 702 would extend a Lake County-specific exemption of child labor law that allows minors to work during the peak agricultural season when school is not in session. Assembly Labor and Employment Committee.

Arbitration

SB 1007 would provide that a party to an arbitration has the right to have a certified shorthand reporter transcribe any deposition, proceeding, or hearing as the official record. The party requesting the transcript would be required to request the report upon the initiation of the arbitration or at the time that any deposition, proceeding, or hearing is being calendared and would also be required to incur the expense of the reporter, except as specified in a consumer arbitration. A party whose request has been refused by the arbitrator would be allowed to petition the court for an order to compel the arbitrator to grant the party's request. Senate Floor.

SB 1078 would prohibit an arbitrator from entertaining or accepting, from the time of appointment until the conclusion of the arbitration, any offers of employment as a dispute resolution neutral in another case involving a party or lawyer for a party in the pending arbitration without the prior written consent of the parties. The measure authorizes a party to recover costs incurred in an arbitration proceeding from a private arbitration company if the arbitration award is vacated or the arbitrator is dismissed during the pendency of the arbitration because of a violation of the specified ethical standards or disclosure requirements, and adds specified prohibitions and disclosure requirements relating to solicitations made by, or at the direction of, a private arbitration company to a party or a lawyer for a party in a pending arbitration. Senate Floor.

SB 1065 would provide that if a party has filed a claim pursuant to the Elder and Dependent Adult Civil Protection Act and has been granted a preference, no appeal may be taken by an opposing party from an order dismissing or denying a petition to compel arbitration. Assembly Judiciary Committee.

Background Checks

AB 1843 would prohibit an employer from asking an applicant for employment to disclose, or from utilizing as a factor in determining any condition of employment, information concerning specific juvenile court actions or custodial detentions.  Senate Labor and Industrial Relations Committee.

Collective Bargaining Agreements

SB 954 requires per diem wages to include industry advancement and collective bargaining agreements' administrative fees, provided the employer is required by a collective bargaining agreement to make those payments. The bill would exclude from per diem wages employer payments related to certain apprenticeship or training programs, worker protection and assistance programs or committees established under the federal Labor Management Cooperation Act of 1978, and industry advancement and collective bargaining agreements' administrative fees. Finally, the measure would prohibit credit for payments for industry advancement if those payments are not required by a collective bargaining agreement. Assembly Labor and Employment Committee.

Commuter Benefits

SB 1128 would remove the sunset provision from a program requiring certain employers in the San Francisco Bay Area to offer alternative-commute benefits to their employees. Assembly Transportation Committee.

Domestic Worker Bill of Rights

SB 1015 would delete the January 1, 2017 repeal date of the Domestic Worker Bill of Rights. Assembly Labor and Employment Committee.

Equal Pay

AB 1890 would enact the Equal Pay for Equal Work Act of 2016. This law would require an employer that has 100 or more employees in the state and a contract with the state of 30 days or more to submit a description of its nondiscrimination program to the department and to submit periodic reports, no more than annually, on a schedule to be determined by the department, of its compliance with that program. The bill would authorize the department to require approval and certification of the program, and require the nondiscrimination program to include policies and procedures designed to ensure equal employment opportunities for all applicants and employees, an analysis of employment selection procedures, and a workforce analysis. Assembly Appropriations Suspense File.

Health & Safety

SB 1167 would require the Division of Occupational Safety and Health, by July 1, 2017, to propose a heat illness and injury prevention standard applicable to indoor workers that provides equal or greater protection than existing outdoor heat regulations. Senate Appropriations Suspense File.

Human Trafficking

AB 1595 would require a private or public employer that provides mass transportation services in the state to train its employees, who are likely to interact or come into contact with victims of human trafficking, in recognizing the signs of human trafficking and how to report those signs to the appropriate law enforcement agency. The bill would require the Department of Justice to develop guidelines for the training, including, but not limited to, guidance on how to report human trafficking. By January 1, 2018, the training must be incorporated into the initial training process for all new employees. All existing employees would also need to receive this training. Assembly Appropriations Suspense File.

AB 1942 would require hotel and motel employees who are likely to come into contact with victims of human trafficking to be trained on how to recognize the signs of human trafficking and how to report those signs to an appropriate law enforcement agency.  Assembly Appropriations.

AB 2532 would repeal the verification requirement of an individual's legal status or authorization to work prior to providing employment services by state or local government agencies or any private organization contracting with the those agencies that provide employment services, and would repeal the specified workplace posting requirement for employment services being provided by the agencies. Assembly Floor.

SB 1001 would prohibit an employer or any other person or entity from discriminating against or engaging in unfair immigration-related practices against an applicant or employee or from reinvestigating or re-verifying an incumbent employee's authorization to work unless required to do so by federal law. Senate Appropriations.

AB 2261 would authorize the Division of Labor Standards Enforcement to, with or without receiving a complaint from an employee, commence an investigation, issue a citation, or bring an action against an employer who discharges or otherwise discriminates against an individual in violation of any law under the jurisdiction of the Labor Commissioner. Assembly Appropriations.

SB 1342 would allow localities to confer on officials or department heads the authority to issue subpoenas to enforce local wage laws. Assembly Judiciary Committee.

SB 1442 would require the Department of Fair Employment and Housing (DFEH) (instead of the Secretary of the Health and Human Services Agency) to investigate and enforce the laws prohibiting discrimination in the conduct, operation, or administration of state or state-funded programs or activities on the basis of race, national origin, ethnic group identification, religion, age, sex, sexual orientation, color, genetic information, or disability, and to issue rules and regulations. Senate Appropriations Committee.

Labor Commissioner Rulings

AB 2899 would require a person seeking a writ of mandate contesting the Labor Commissioner's ruling on an employer's non-payment of a minimum wage to post a bond with the Labor Commissioner, in an amount equal to the unpaid wages assessed under the citation, excluding penalties. The bill would require that the bond be issued in favor of the unpaid employees and ensure that the person seeking the writ makes prescribed payments pursuant to the proceedings.  The proceeds of the bond, sufficient to cover the amount owed, would be forfeited to the employee if the employer fails to pay the amounts owed within 10 days from the conclusion of the proceedings.  Assembly Appropriations.

Licensing

AB 2539 would require a person operating a modeling agency to be licensed by the Labor Commissioner under the licensing provisions that apply to talent agencies. Moreover, the bill would: (1) require a model to be classified as an employee of the person for whom the model's services are directly provided; (2) require the Occupational Safety and Health Standards Board to, no later than December 1, 2017, and in consultation with accredited specialists in the prevention and treatment of eating disorders, adopt an occupational safety and health standard for models; and (3) exempt a person covered by certain wage orders by the Industrial Welfare Commission from these provisions. Assembly Appropriations Suspense File.

SB 1125 would require license applications for establishments offering or proposing to offer nail care services to include a signed acknowledgment that the applicant understands it is responsible for compliance with any applicable state labor laws.  Senate Floor.

AB 2337 would require employers to inform each employee of his or her rights as a possible victim of domestic violence, sexual assault, or stalking by providing that information in writing to new employees upon hire and to other employees upon request. The bill would also require the Labor Commissioner to develop a form that employers could use to comply with these provisions and to post it on the commissioner's website. Assembly Floor.

AB 2437 would require the Labor Commissioner, by June 1, 2017, to develop a model notice pertaining to workplace rights and wage and hour laws for employees of establishments licensed under the Board of Barbering and Cosmetology.  Assembly Appropriations.

AB 2895 would provide for employee access to written injury and illness prevention programs (IIPPs) and remedies to an employee for an employer's failure reasonably to provide a copy on request of an employee.  Assembly Appropriations.

AB 2897 would require a car wash employer to provide written notice to a successor employer regarding the requirements of existing law prior to the sale or other transfer of the business. Assembly Labor and Employment Committee.

AB 2898 would extend some existing time periods in the Labor Code Private Attorneys General Act of 2004 (PAGA) by requiring the agency, when it does not intend to investigate an alleged violation, to notify the employee and the employer within 45 days, and by authorizing the aggrieved employee to commence a civil action 48 days after having sent notice of the alleged violation. The measure would require the agency to send notification within 48 days if it intends to investigate an alleged violation, and would authorize an aggrieved employee to commence a civil action after 173 days if, after having received notice of the agency's intent to investigate, no citation is issued or no further notification is received from the agency.  Assembly Appropriations.

AB 2068 requires talent services that post information about artists under contract via specified online and mobile platforms to remove photographs and other artist information from those locations upon an artist's request within 10 days. Assembly Floor.

Protected Time Off

AB 2405 would require an employers of 25 or more employees to annually provide an employee at least 24 hours of paid time off for the purposes of a planned absence for taking off up to 40 otherwise unpaid hours each year to find, enroll, or reenroll their child in a school, to participate in school activities, or address emergency situations at school. The bill would authorize an employee to use vacation or paid time off, or use unpaid time off, if available, when taking time off under these provisions. The measure would also provide a remedy to an employee whose request for time off under these provisions is denied by the employer, and require the Labor Commissioner to create a poster listing the protections available to employees and require an employer to post it at the workplace.  Assembly Appropriations Suspense File.

SB 1166 would create the "New Parent Leave Act," which would make it an unlawful employment practice for an employer who directly employs 10 or more persons to perform services for a wage or salary (compared to the federal Family and Medical Leave Act's definition of employer as an entity employing 50 or more employees) to refuse to allow an employee with more than 12 months of service with the employer, and who has at least 1,250 hours of service with the employer during the previous 12-month period, to take up to 12 weeks of parental leave to bond with a new child within one year of the child's birth, adoption, or foster care placement. This bill would also prohibit an employer from refusing to maintain and pay for coverage under a group health plan for an employee who takes this leave. Senate Appropriations.

Security Guards

AB 1311 would make the weekly pay requirement applicable to a security guard employed by a private patrol operator who is a temporary services employee.  The bill has received no votes in opposition so far. Senate Labor and Industrial Relations Committee.

Service Contractors

AB 1669.  Existing law already establishes a 10% bidding preference for public transit service contractors and subcontractors who agree to retain employees of the previous contractor for a period of at least 90 days. This bill would extend those requirements to contractors and subcontractors who submit bids for contracts for the collection and transportation of solid waste. The bill is sponsored by the California Teamsters Public Affairs Council. Assembly Floor.

Wage Statements

AB 2535 would provide that itemized wage statements required under current law do not need to show total hours worked for specified exempt employees for whom employers are not required to track hours. Assembly Appropriations.

Stalled Bills

Some California bills lost steam in recent weeks. Those bills that have been sidetracked, at least for the moment, include:

  • AB 1727, which would have, among other actions, established for eligible groups of independent contractors the right to organize and negotiate with hosting platforms. Disputes arising from this activity would have been deemed a "labor dispute" for the purpose of obtaining injunctive relief.  Surprisingly, after passing the Assembly, this "gig economy" bill allowing worker organizing stalled in the Assembly Judiciary Committee at the April 22nd deadline for consideration, with the author indicating the issue needed more study.
  • AB 1948 would have amended the penalties for meal or rest period violations. Failed Passage in Assembly Labor and Employment Committee.

What's Next?

Of all pending legislation, the "key" bills identified above will be the ones to watch most closely. As for the November elections, California will once again play no critical role in selecting the presidential nominees with its June 7th primary, and there will be only one statewide proposition (Proposition 50, concerning suspension of members of the Legislature without pay) on the ballot for that election. 

The general election ballot in November will be finalized this summer, however, and it promises to have several ballot propositions on it, as well as the selection of California's new U.S. Senator, 53 members of the House of Representatives, and 20 state senators and 80 assemblypersons.

Footnotes

1. See Christopher E. Cobey and Marina C. Gruber, A Legislative El Niño for California?: New 2016 Employment Laws for the State's Private Sector Employers, Littler Insight (Oct. 12, 2015), p. 5.

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