United States: New California Labor And Employment Laws For 2017

Linda Auerbach Allderdice is a Partner and John Haney is an Associate in the Los Angeles office

HIGHLIGHTS:

  • The California Legislature passed numerous labor and employment bills that Gov. Jerry Brown signed into law in 2016.
  • Many of the new laws relate to wage and hour, leave and benefits, hiring practices, health and safety, and various other workplace protections. A number of these laws become effective on Jan. 1, 2017.
  • Employers should take note of these new laws so that they can ensure compliance.

Continuing a trend from recent years, the California Legislature passed, and Gov. Jerry Brown signed into law, numerous labor and employment bills in 2016.

Each becomes effective on Jan. 1, 2017, unless otherwise stated. This alert highlights the following select, significant new laws in further detail below:

  • SB 3 – California's Minimum Wage Increase in 2017
  • SB 836 – Amendments to the Labor Code Private Attorneys General Act of 2004 (PAGA)
  • AB 2535 – Itemized Wage Statements for Employees Exempt from Overtime Need Not Provide Total Hours Worked
  • SB 1015 – Extension of the Domestic Worker Bill of Rights
  • AB 2899 – New Bond Requirement for Seeking Writ Relief for a Labor Commissioner Citation
  • SB 1342 – Increased Subpoena Enforcement Authority for California Counties and Cities
  • SB 1063 – Equal Pay for Employees of All Races and Ethnicities
  • AB 1066 – Additional Overtime Rules for Agricultural Workers to Be Phased In
  • AB 1311 – Expanded Pay Protections for Security Guards
  • AB 2230 – Revised Overtime Exemption Requirements for Teachers at Private Elementary or Secondary Academic Institutions
  • AB 908 – Expanded California Disability Insurance and Paid Family Leave Benefits Beginning Jan. 1, 2018
  • SB 3 – California Paid Sick Leave Extended to In-Home Supportive Services Employees Beginning July 1, 2018
  • AB 488 – California Fair Employment and Housing Act (FEHA) Protections Expanded to Employees of Nonprofit Sheltered Workshops, Day Programs or Rehabilitation Facilities
  • AB 1676 – Prior Salary Cannot, By Itself, Justify Gender Pay Inequality
  • AB 1843 – Employer Restrictions on Requesting or Using Criminal Background Information
  • SB 1001 – Expanded Prohibitions for Employers Regarding Verification of Employment Authorization
  • SB 1167 – New Cal-OSHA Standards to Be Proposed by Jan. 1, 2019
  • SB 1241 – Prohibition against Choice of Law and Forum Clauses in Employer-Employee Agreements
  • AB 2337 – Employer Notice Requirements Regarding Rights of Domestic Violence, Sexual Assault and Stalking Victims
  • AB 1687 – Prohibition on Publishing Age Information
  • SB 1234 – Retirement Savings Program Requirement for Employers
  • AB 1887 – Prohibition Against Requiring State Employees to Travel to States That Have Enacted Laws Voiding or Repealing State or Local Protections against Discrimination against Sexual Orientation, Gender Identity or Gender Expression
  • AB 1732 – All Single-User Toilet Facilities Must Be Identified as All-Gender Toilet Facilities
  • SB 1007 – Right to Transcripts at Arbitration Proceedings
  • ABX2-7 – Expanded Prohibitions for Smoking at the Workplace

WAGE AND HOUR

SB 3 – California's Minimum Wage Increase in 2017

Beginning Jan. 1, 2017, the minimum wage will increase from $10 per hour to $10.50 per hour for California employees of employers with 26 employees or more. For employees of employers with 25 employees or less, the minimum wage will remain at $10 per hour in 2017, and will not increase to $10.50 per hour until Jan. 1, 2018. SB 3 sets forth a schedule for minimum-wage increases through 2023, which increases are subject to temporary suspension by the governor, based on certain determinations.

SB 836 – Amendments to the California Labor Code Private Attorneys General Act of 2004 (PAGA)

SB 836 made numerous amendments to the PAGA statute, effective June 27, 2016. Many of the amendments are procedural but ultimately increase the Labor Workforce Development Agency's (LWDA) general oversight over PAGA investigations and civil actions. Overall, it is unclear what effect these amendments will have on the frequency and settlement of PAGA actions. These amendments are more limited than the several other, more substantive amendments that were introduced but not passed by the California legislature in 2016. A summary of SB 836's amendments are set forth below:

  1. The LWDA now has 60 days to review PAGA notice letters and determine if the LWDA will investigate (and 65 days to notify the parties whether the LWDA will investigate). Before SB 836, the LWDA had only 30 days to review PAGA letters (and 33 days to notify the parties whether the LWDA would investigate).
  2. Alleged aggrieved employees must now wait 65 days after sending the PAGA notice letter to the LWDA (assuming that the LWDA does not send an earlier notice of its intention not to investigate, and assuming that the LWDA provides no notice of its intention to investigate either way) before filing a PAGA complaint (i.e., exhaustion of administrative remedies). Before SB 836, employees had to wait only 33 days after sending the PAGA notice letter to the LWDA (assuming that the LWDA did not send an earlier notice of its intention not to investigate, and assuming that the LWDA provided no notice of its intention to investigate either way) before filing a PAGA complaint.
  3. For PAGA notice letters filed on or after July 1, 2016, the LWDA may decide to extend its 120-day deadline to issue citations up to 180 days. Before SB 836, the LWDA still had 120 days to issue citations but had no authority to extend the deadline.
  4. Within 10 days following commencement of a PAGA action, PAGA plaintiffs must now provide the LWDA with a file-stamped copy of the complaint that includes the case number assigned by the court.
  5. Within 10 days following the entry of a court judgment or order awarding or denying PAGA penalties, PAGA plaintiffs must now provide such judgment or order to the LWDA.
  6. There is now a $75 filing fee for the PAGA notice letter and a $75 filing fee for an employer response to a PAGA notice letter.
  7. PAGA notice letters and cure notices must be filed with the LWDA through an online system and sent to the employer and employee via certified mail.
  8. PAGA settlements must still be court-approved, but effective June 27, 2016, any proposed PAGA settlement must be submitted to the LWDA.

AB 2535 – Itemized Wage Statements for Employees Exempt from Overtime Need Not Provide Total Hours Worked

This law provides that itemized wage statements required to be provided to employees need not include the total hours worked by an employee that is exempt from overtime under California law.

SB 1015 – Extension of the Domestic Worker Bill of Rights

This law eliminates the Jan. 1, 2017, sunset provision of the Domestic Worker Bill of Rights, thereby extending its wage and hour protections for specified domestic work employees.

AB 2899 – New Bond Requirement for Seeking Writ Relief for a Labor Commissioner Citation

This law requires that an employer or person seeking a writ of mandate to contest a Labor Commissioner citation to post a bond in an amount equal to the dollar amount assessed under the citation, excluding penalties.

SB 1342 – Increased Subpoena Enforcement Authority for California Counties and Cities

This law provides that a legislative body of a city or county is authorized to delegate that body's authority to issue subpoenas, and to report noncompliance thereof, to the judge of the superior court of the county, to a county or city official, or department head in order to enforce any local law or ordinance, which includes local wage laws.

SB 1063 – Equal Pay for Employees of All Races and Ethnicities

This law prohibits 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.

AB 1066 – Additional Overtime Rules for Agricultural Workers to Be Phased In

This law creates a schedule that would phase in specified overtime requirements for agricultural workers from 2019 to 2022. Employers who employ 25 or fewer employees have an additional three years to comply with the phasing in of these overtime requirements. The governor has the authority to delay the implementation of these new overtime requirements if the governor also suspends the implementation of the scheduled state minimum-wage increases.

AB 1311 – Expanded Pay Protections for Security Guards

Currently, an employee of a temporary services employer must be paid weekly. The new law, with certain exceptions, makes the weekly pay requirement applicable to security guards employed by a private patrol operator who is a temporary services employer, as provided. This law became effective on July 22, 2016.

AB 2230 – Revised Overtime Exemption Requirements for Teachers at Private Elementary or Secondary Academic Institutions

Starting July 1, 2017, the salary threshold for the overtime exemption of an individual employed as a teacher at a private elementary or secondary academic institution will require that the employee earn no less than the lowest salary offered by any school district or the equivalent of no less than 80 percent of the lowest schedule salary offered by the school district or county in which the private elementary or secondary institution is located.

LEAVE AND BENEFITS

AB 908 – Expanded California Disability Insurance and Paid Family Leave Benefits Beginning Jan. 1, 2018

Beginning Jan. 1, 2018, this law revises the current formula for determining disability insurance and paid family leave benefits for eligible persons, to provide a weekly benefit amount minimum of $50 and to increase the wage replacement rate to specified percentages, not to exceed the maximum workers' compensation temporary disability indemnity weekly benefit amount.

Additionally, the current seven-day waiting period for benefit payout will be removed beginning Jan. 1, 2018.

SB 3 – California Paid Sick Leave Extended to In-Home Supportive Services Employees Beginning July 1, 2018

Employees that are providers of in-home supportive services are currently not entitled to paid sick leave under the Healthy Workplaces, Healthy Families Act of 2014. This law, beginning July 1, 2018, entitles a provider of in-home supportive services who works in California for 30 or more days within a year from the commencement of employment to specified paid sick leave.

AB 488 – California Fair Employment and Housing Act (FEHA) Protections Expanded to Employees of Nonprofit Sheltered Workshops, Day Programs or Rehabilitation Facilities

This law authorizes an employee under a special license in a nonprofit sheltered workshop, day program or rehabilitation facility to bring an action under the act for any form of harassment or discrimination prohibited by the FEHA.

AB 1676 – Prior Salary Cannot, By Itself, Justify Gender Pay Inequality

Current law prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort and responsibility, and which are performed under similar working conditions. There are, however, exceptions to this prohibition, including when the payment is made based on any bona fide factor other than sex, such as education, training or experience.

This law specifies that an employee's prior salary cannot, by itself, justify any disparity in compensation under the bona fide factor exception to the above prohibition.

HIRING PRACTICES

AB 1843 – Employer Restrictions on Requesting or Using Juvenile Background Information

This law prohibits an employer from asking an applicant for employment to disclose – or from utilizing as a factor in determining any condition of employment – information concerning or related to an arrest, detention, processing, diversion, supervision, adjudication or court disposition that occurred while the person was subject to the process and jurisdiction of juvenile court law. This law also provides that the word "conviction", for purposes of permissible employer requests and uses of certain conviction information, does not include any adjudication by a juvenile court or any other court order or action taken with respect to a person who is under the process and jurisdiction of the juvenile court law. Thus, employers may not request or consider such adjudications, court orders, or actions.

Also, health facility employers are prohibited from inquiring into specific events that occurred while the applicant was subject to juvenile court law and from inquiring into information concerning or related to an applicant's juvenile offense history that has been sealed by the juvenile court. Health facility employers may, however, seek disclosure of juvenile offense history if they provide the applicant with a list describing offenses for which disclosure is sought.

SB 1001 – Expanded Prohibitions for Employers Regarding Verification of Employment Authorization

This law makes it unlawful for an employer to request more or different documents than are required under federal law, to refuse to honor documents tendered that on their face reasonably appear to be genuine, to refuse to honor documents or work authorization based upon the specific status or term of status that accompanies the authorization to work, or to re-investigate or re-verify an incumbent employee's authorization to work.

HEALTH AND SAFETY

SB 1167 – New Cal-OSHA Standards to Be Proposed by Jan. 1, 2019

This law requires the Division of Occupational Safety and Health, by Jan. 1, 2019, to propose to the Occupational Safety and Health Standards Board, for the board's review and adoption, a heat illness and injury prevention standard applicable to workers working in indoor places of employment.

OTHER WORKPLACE PROTECTIONS

SB 1241 – Prohibition against Choice of Law and Forum Clauses in Employer-Employee Agreements

For contracts entered into, modified or extended on or after Jan. 1, 2017, this law prohibits an employer from requiring an employee who primarily resides and works in California, as a condition of employment, to agree to a provision that would require the employee to adjudicate outside of California a claim arising in California or deprive the employee of the substantive protection of California law with respect to a controversy arising in California. Any provision violating this law is voidable upon request of the employee. The law also requires that a dispute over a voided provision be adjudicated in California under California law. An employee may pursue injunctive relief, and a court is authorized to award reasonable attorneys' fees to the enforcing employee. This new law does not apply to contracts in which an employee is represented by legal counsel.

AB 2337 – Employer Notice Requirements Regarding Rights of Domestic Violence, Sexual Assault and Stalking Victims

On or before July 1, 2017, employers must inform employees, upon hire and upon request, of their rights under California law when they are victims of domestic violence, sexual assault or stalking. The Labor Commissioner, on or before July 1, 2017, must develop a form that an employer may elect to use to comply with these provisions and to post it on the commissioner's internet website. Employers are not required to comply with this notice requirement until the Labor Commissioner posts the form.

AB 1687 – Prohibition on Publishing Age Information

This law prohibits a commercial online entertainment employment service provider that enters into a contractual agreement to provide specified employment services to an individual paid subscriber from publishing information about the subscriber's age in an online profile of the subscriber and requires the provider, within five days, to remove from public view in an online profile of the subscriber certain information regarding the subscriber's age on any companion internet website under the provider's control if requested by the subscriber. Also, a provider that permits the public to upload or modify content on its own internet website or any internet website under its control without prior review by that provider is not in violation of these provisions unless the subscriber first requested the provider to remove age information.

SB 1234 – Retirement Savings Program Requirement for Employers

This law requires eligible employers that do not offer specified retirement plans or accounts to offer a payroll deposit retirement savings arrangement so that employees may participate in the California Secure Choice Retirement Savings Program within specified time periods based on the number of eligible employees that the employer has.

AB 1887 – Prohibition Against Requiring State Employees to Travel to States That Have Enacted Laws Voiding or Repealing State or Local Protections against Discrimination against Sexual Orientation, Gender Identity or Gender Expression

Under this law, state agencies and the California Legislature are prohibited from requiring any of its employees, officers or members to travel to, or approve a request for, state-funded or state-sponsored travel to any state that, after June 26, 2015, has enacted a law voiding or repealing existing state or local protections against discrimination on the basis of sexual orientation, gender identity or gender expression, or has enacted a law that authorizes or requires discrimination against same-sex couples or their families, or on the basis of sexual orientation, gender identity or gender expression.

AB 1732 – All Single-User Toilet Facilities Must Be Identified as All-Gender Toilet Facilities

Beginning March 1, 2017, all single-user toilet facilities in any business establishment, place of public accommodation or government agency must be identified as all-gender toilet facilities.

SB 1007 – Right to Transcripts at Arbitration Proceedings

This law entitles a party to an arbitration the right to have a certified shorthand reporter transcribe any deposition, proceeding or hearing as the official record in the arbitration.

ABX2-7 – Expanded Prohibitions for Smoking at the Workplace

Currently, California law prohibits smoking tobacco products inside an enclosed space at a place of employment. A violation of this prohibition is punishable by a fine. This law expands the prohibition on smoking in a place of employment to owner-operated businesses. It also eliminates the specified exemption that permits smoking in certain work environments. For example, smoking tobacco products will now be prohibited in hotel lobbies, bars, taverns, banquet rooms, warehouse facilities and employee break rooms.

Many California municipalities have enacted their own requirements affecting the workplace, particularly in the areas of minimum wage, paid sick leave, paid family leave and "ban the box" provisions. Employers must also comply with these local laws that affect their applicants, employees and workplace issues.

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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