United States: California's Employment Law Class Of 2017 (Part I): The Laws, Their Effects And Some Recommendations For Compliance

Co-authored by Ariana Goodell* (Not yet admitted to practice, on 26 October 2016)

Amend, extend and clarify: the 2016 legislative session was not so much about creating new rights and responsibilities under California employment law, but more about expanding and addressing lingering questions that stem from existing workplace mandates. However, don't be fooled by the lack of "new" regulations. By amending many of California's complex existing laws, the legislature certainly placed HR departments and employment counsel in a difficult position to prepare for compliance by the looming January 2017 implementation date (for most of these laws). With a full plate of issues, such as workplace health and safety, pay equity, hiring, leave laws, harassment and discrimination, and, of course, wage and hour updates (no big surprise there), the class of 2017 will make an impact that will last for years and spur on dramatic change.

In this first portion of our two-part review of the employment law class of 2017, we will focus on developments in discrimination, anti-Retaliation and discharge, hiring and background checks, and workplace health and safety. In part II we will focus on developments in wage and hour law, leave laws, industry-specific regulations, and California's recent legislation affecting choice-of-law in employment contracts.


Pay Equity Based On Race And Ethnicity (SB 1063)

Last year's gender-based Fair Pay Act, which amended Labor Code section 1197.5, is now being extended to make it unlawful to pay employees less than employees of another race or ethnicity for "substantially similar work." The law also prohibits employers from preventing employees from disclosing their own wages, disclosing or asking about the wages of others; provides significant penalties for discrimination, termination and retaliation based on employees exercising their rights to wage transparency; and requires employers to maintain past records of employee wages and job classifications for three years.

Effect: (Effective January 1, 2017) SB 1063 requires employers to be prepared to demonstrate that reasonably applied factors such as a merit system, a seniority system, or some other combination of objective criteria accounts for the entire pay differential between similarly situated employees of different races or ethnicities.

Reed Smith RECOMMENDS:  With the Fair Pay Act now giving a right of action to employees, based on pay gaps between persons of different races and ethnicities performing "substantially similar work" for the same employer, it has become even more important for employers to take action and audit employee pay.  An effective audit will allow employers to identify employees doing similar job duties and responsibilities, and allow employers to take note of whether pay discrepancies exist between employees of different genders, races or ethnicities.  Regardless of an audit's outcome, employers should review all compensation-related policies and procedures to ensure that the criteria for base compensation, bonuses, and raises are as objective as possible.  Additionally, this new legislation should serve as a reminder to all employers to review their confidentiality policies related to discussion of wages to ensure their policies comply with the wage transparency aspects of California's equal pay law.

Salary History As Justification For Pay Discrepancy (AB 1676)

In a second bill modifying the 2016 California Fair Pay Act, AB 1676 will expand the law to further specify that an employer cannot use an individual's prior salary, by itself, to justify a wage differential.

Effect: (Effective January 1, 2017) This legislation states that the bill is meant to clarify that prior salary, by itself, does not amount to a bona fide factor justifying a pay discrepancy between similarly situated employees.  The original bill prohibited employers from asking job applicants about their compensation history.  However, that provision was vetoed, and replaced with "[p]rior salary shall not, by itself, justify any disparity in compensation."  Thus, an employer cannot rely on the fact that an employee was paid less by past employers in order to continue paying that person less.

Reed Smith RECOMMENDS:  When determining starting pay for a new employee, employers should not look to what the employee made at a previous job, but should evaluate and record reasons why the employee was paid the amount at his/her previous job.  Employers should establish guidelines for employee pay based on relevant experience, education, and expertise.  Such factors are clear justifications for why certain employees are paid more or less.  Employers should be careful not to let subjectivity and bias affect their application of the factors, but should establish ongoing procedures for comparisons and review of both employee pay and the factors to ensure objective treatment of all.  Employers should be sure to document those factors so as to support their salary decisions, rather than the amount itself as the sole basis for an employee's starting pay.

Sexual Harassment Prevention Training (AB 1661)

Under AB 1661, local government agency officials are required to receive two hours of training and education on sexual harassment prevention within the first six months of taking office or commencing employment. Thereafter, agency officials, legislators, electeds of cities, counties, and special districts, must receive this training once every two years. AB 1661, which was passed in reaction to several sexual harassment cases against elected officials, is similar to 2004's AB 1825, which required the same basic requirements for private employers.

Effect: (Effective January 1, 2017) Existing law does not explicitly state that city elected officials are required to take a sexual harassment prevention training and education course, which has allowed each city to interpret the law differently.  Newly passed AB 1661 clarifies that local agency officials must complete sexual harassment training, just like any other public employee.

AB 1661 aims to create uniformity, to improve health and safety, and to establish clear rules regarding appropriate conduct in the workplace. The drafters of the bill also hope it will minimize loss in revenue to local agencies associated with settlement claims for sexual harassment.

Reed Smith RECOMMENDS:  All employers, including local agencies, should ensure that they organize the appropriate trainings at least every six months for new people joining their ranks, and carefully record attendance from those trainings to have clear records supporting that all applicable employees are in compliance with this regulation regarding sexual harassment prevention training.

Employment Discrimination In Sheltered Workshops (AB 488) – Non-Profit Sheltered Workshop Or Rehabilitation Facility Operators

Certain licensed individuals working in nonprofit sheltered workshop and rehabilitation facilities may bring an action under the Fair Employment and Housing Act (FEHA) for prohibited harassment or discrimination. This bill also extends FEHA's protections to workers with disabilities. This bill expands AB 1443, enacted in 2014, which extended FEHA's protections to unpaid interns and volunteers.

Effect: (Effective January 1, 2017) This law strengthens the rights and protections for sheltered workshop employees who work in highly restrictive environments and currently are not afforded the same protections against discrimination as other employees, including interns.

Reed Smith RECOMMENDS:  Employers who operate nonprofit sheltered workshops or rehabilitation facilities should be sure to update all employment policies and procedures to be FEHA compliant.


Background Checks By "Transportation Network Companies" (AB 1289)

Transportation network companies, such as Uber or Lyft, which use online platforms to match passengers with drivers that use their personal vehicles, are now required to have local and national criminal background checks done on each driver. The check can be performed by a third-party vendor or the company itself.  If a driver is currently or within the last seven years has been registered on the U.S. Department of Justice's National Sex Offender Public Website, convicted of terrorism-related or violent felonies, or has been convicted of misdemeanor assault or battery, domestic violence, or driving under the influence within the previous 7 years, the companies would be barred from contracting and using that driver.

Effect: (Effective January 1, 2017) This new law requires both local and national background checks to be completed by transportation network companies. Failure to do so can subject the company to fines up to $5,000 per offense.  The new requirements should ease any concerns ride-sharing customers may have about driver safety.

Reed Smith RECOMMENDS:  While the focus of this law is on "transportation network companies," it may indicate the beginning of increased regulation of all companies actively engaged in the sharing economy.  Such employers should keep abreast of legislation in this next year that may place restrictions on how they hire and manage employees and independent contractors.  Further, companies should be sure to comply with all laws giving notice to those for whom background checks are performed, so as to allow permission, response and individualized consideration of any issue.

Juvenile Criminal History (AB 1843)

Labor Code section 432.7 prohibits employers from asking an applicant to disclose juvenile convictions. AB 1843 expands the prohibition to prevent requests and disclosure demands related to: 1) disclosing information about a juvenile court related arrest, detention, processing, diversion, supervision, adjudication, or court disposition; 2) seeking out and using any sources that provide information concerning or related to an arrest, detention, processing, diversion, supervision, adjudication, or court while the applicant was a juvenile; or 3) using such information as a factor to determine any condition of employment. Health facilities are exempted to the extent an inquiry into an applicant's juvenile background is to determine if the applicant had committed a felony or misdemeanor relating to certain sex or controlled substances crimes within five years preceding the employment application.  But inquiries regarding sealed juvenile criminal records are prohibited.  An employer at a health facility must disclose any juvenile offense to the applicant, if disclosure is sought.

Effect: (Effective January 1, 2017) The stated purpose behind AB 1843 was to give young people the same protections as adults and reduce the chances of young people falling back into the justice system, as studies show criminal history can prevent candidates from getting hired or called back after an interview. This bill slightly expands California law to also prohibit employers from inquiring about or using information related to specific juvenile court actions or custodial detentions.

Reed Smith RECOMMENDS:  Employers should review the information requested on their job applications and update interviewers that they may not inquire into an applicant's involvement with the juvenile justice system.

Work Experience Education Programs (AB 2063) 

This bill allows for greater opportunity for students to participate in work experience education programs for credit, if the student is at least 14 years old, amending the law from the former requirement that students be at least 16 years old to participate.  The bill enhances students' ability to now participate in a job shadowing experience for up to 40 hours rather than 25 hours, if the school principal certifies that it is necessary for the pupil's participation in a career technical education program.

Effect: (Effective January 1, 2017) AB 2063 expands access to Career Technical Education (CTE) and will make it easier for high school students to participate in CTE. Work-experience-education programs teach valuable life skills like financial literacy, business operations, and time management.  Additionally, this type of "linked learning" can reduce drop-out rates by showing students the relevancy of what they are learning in the classroom.

Reed Smith RECOMMENDS:  Thanks to this new law, employers may have the opportunity to give back to their community, while at the same time training future employees, but it will be extremely important that employers ensure that all the appropriate paperwork is in order before engaging these young individuals.  Furthermore, with the potential of greater student participation in these programs, employers should be sure to communicate to their workforce about the appropriate way to interact with the students participating in this program.

Unfair Immigration-Related Practices (SB 1001)

SB 1001 establishes the new Labor Code Section 1019.1, creating an "unfair immigration-related practice" to verify authorization to work by: 1) requesting more or different documents than required under federal law, I-9 process to verify authorization to work); 2) refusing to honor documents tendered that on their face reasonably appear to be genuine; 3) refusing to honor documents or work authorization based on the specific status or term that accompanies the authorization to work; or 4) attempting to reinvestigate or re-verify an incumbent employee's work authorization using an unfair immigration-related practice.  Individuals who suffer an unfair immigration-related practice can file a complaint with the DLSE for enforcement, and violations carry a penalty of up to $10,000.  

Effect: (Effective January 1, 2017) This is yet another law demonstrating how California has made immigration-related abuses a legislative priority (see also AB 622 imposing a $10,000 penalty for E-Verify violations, AB 1660 amending FEHA by prohibiting discrimination against drivers licenses issued to undocumented workers, and AB 263 and SB 666, both of which prohibit retaliation for "immigration-related practices).  SB 1001 is meant to address the issue of document abuse in California.  It prohibits an employer from requiring additional or other documents that are already required under the I-9 process—a practice known as document abuse. SB 1001 creates a state remedy for this unfair labor practice that targets immigrant workers.

Reed Smith RECOMMENDS:  Employers should take this new legislation as a directive to review their hiring processes, especially as related to work-eligibility verification.  Employers need to ensure that they have a legally valid practice that can be consistently applied, and allows prospective workers to use any legally acceptable form of proof of eligibility to work in California.


Single-User Restrooms Must Be "All Gender" (AB 1732)

Just as signs identify which gender a restroom is designated for, AB 1732 requires that single-occupancy restroom facilities in any business establishment must also have signage that identifies the facility as "all gender," rather than designated as male or female. A single-user restroom is defined as one which has only one urinal and one water closet, with a lock that is controlled by the person using the facility.  Although the text of the bill says nothing about gender equality, transgender rights, or other motivations based on civil rights, it is clearly a step toward embracing the call of such 21st century demands on lawmaking.  It is important to note that the bill currently does not require businesses to remodel existing gender-specific restrooms or to add single-gender restrooms.

Effect: (Effective March 1, 2017) This is arguably the nation's most inclusive restroom access law. It is a relatively simple measure to comply with, and will enable all Californians to use restrooms in a way that is more safe, fair, and convenient.

Reed Smith RECOMMENDS:  While this law is rather simple to comply with, it is important that all employees are educated on the law and understand its implications on how employees should direct customers with regard to restroom usage.  Furthermore, employers with multiple locations should carefully inspect all locations to identify the applicable bathrooms and ensure the appropriate signage is in place by March 1, 2017.

Employment Heat Safety (SB 1167)

The Division of Occupational Safety and Health, under SB 1167, shall propose to the OSHA Standards Board, a standard that minimizes heat-related illness and injury among workers working in indoor places of employment by January 1, 2019. This bill is in response to a 2012 OSHA decision, which affirmed fines against a staffing company and warehouse operator because they caused illness to an employee who was working inside a metal freight, with temperatures over100 degrees.

Effect: (Effective January 1, 2019) SB 1167 creates more heat illness prevention regulations by directing Cal/OSHA to adopt a regulation for indoor workers to prevent heat illness.  This law will mostly affect larger companies with inland warehouses, factories, and distribution centers, such as Amazon.

Reed Smith RECOMMENDS:  While this legislation doesn't place immediate regulations on employers, employers should proactively review the heat-control procedures they have in place at existing locations, and carefully evaluate if any updates will be necessary to ensure they are operating safe, compliant workplace facilities.

Smoking in the Workplace (AB 7)

ABX2-7 expands California's prohibition on smoking of tobacco products in all enclosed places of employment to all employers of any size. Additionally, the bill eliminates some of the previous exempted smoking areas.  Specifically, smoking will now be prohibited in all covered parking lots, breakrooms designated by employers, warehouse facilities, and gaming clubs.

Effect: (Effective June 9, 2016) California law has prohibited smoking of tobacco products inside all enclosed places of employment for several years now; however, this bill expands the prohibition to employers of all sizes, including places of employment where the owner-operator is the only employee.

Reed Smith RECOMMENDS:  Employers of all sizes, particularly in industries where there are certain exceptions, such as theatrical production sites and the trucking industry, should ensure that they update company postings and policies about where, if anywhere, smoking is allowed.

"Safe Harbor" Period For Construction-Related Accessibility Violations Under California Law (SB 269)

SB 269 addresses the "safe harbor" period of time that small businesses (25 employees or fewer) are provided to correct construction-related accessibility violations under the Unruh Act.  The new and amended statutes establish a rebuttable presumption that certain technical violations of the Unruh Act do not cause a plaintiff to experience difficulty, discomfort, or embarrassment, if specified conditions are met. 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 also provides employers of 50 or fewer employees with a "safe harbor" from liability for accessibility claims raised in the 120-day period following an inspection by a California certified access specialist (CASp).

Effect: (Effective May 10, 2016 as urgency measure) This bill provides small businesses a short time period to implement immediate changes to update their facilities based on technical violations (such as the location and condition of required signage) without needing to pay the legal fees and statutory damages that would otherwise be required.  This bill also incentivizes employers to take advantage of CASp inspections to learn about what alterations need to be made to make their facilities fully compliant.

Reed Smith RECOMMENDS:  Employers should take immediate action when receiving notice of accessibility violations, as a quick response greatly reduces the costs imposed by any technical violation.  Furthermore, employers should take advantage of  the "safe harbor" period following CASp inspections by scheduling CASp inspections to determine what updates and alterations are necessary to bring a facility into full compliance.  Finally, employers should note that while California has passed several urgency measures in an attempt to slow the onslaught of frivolous accessibility lawsuits against California businesses, plaintiffs' attorneys can often avoid the implications of these California measures by including associated ADA-accessibility claims in their complaint and filing these claims in federal court.  Therefore, it is a best practice to schedule CASp inspections as soon as possible upon opening up a facility and on a regular basis thereafter to ensure accessibility compliance, and diminish the chances of having to deal with one of these frivolous lawsuits.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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