United States: Charting The Future: What's Coming In 2017 In California Employment Law?

Seyfarth Synopsis: 2016 brought a wave of new protections for California employees and scant protection for employers. In this week's post, we anticipate changes for 2017, in the ever-peculiar world of California employment law.

True to our tradition, we pause at the beginning of the New Year to reflect on last year's California employment law changes, and consider possible trends. On the good ship Cal-Pecs, our contributors take turns keeping lookout in the crow's nest. Where, we ask, is the wandering bark of employment law heading in California? What shoals loom ahead?

Despite the sea change that the election of Donald J. Trump represents, including expected changes favoring employers at the federal level, California remains (with apologies to Carey McWilliams) its own "island on the land." An island of employees who know their rights. While lawmakers in Illinois, New York, New Jersey, and Massachusetts are doing whatever they can to catch up, all three branches of California's government—legislative, executive, and judicial—continue to tack toward expanding employee rights.

To pick just a few examples: in 2016, California judges, legislators, and municipalities

  • extended the protections of pay equity laws beyond gender, to also prohibit unjustified disparities based on race and ethnicity,
  • shielded applicants from being haunted by juvenile conviction histories,
  • provided that all contracts with California employees will be governed by California law, unless the employee is represented by a lawyer,
  • increased the number of jurisdictions where minimum wage and paid sick time rights exceed state norms,
  • required employers, upon pain of penalty, to schedule work time for certain employees well in advance.

The above developments—which we've discussed in more detail here, here, and here—are part of a continuing trend in recent years that emphasizes equal pay, expansion of paid sick and small-necessity leave rights, prevention of "wage theft," and increasing work opportunities for historically underprivileged or disenfranchised groups such as immigrants and those with criminal histories.

Against this ever more employee-friendly backdrop, one can only wonder how California will grapple with the challenges of a modern economy, such as job eliminations (caused by more work automation), the increasingly "gig" nature of our state's economy (resulting in more independent contractors and fewer employees), and the impact of legalization of recreational marijuana (employees can't be impaired in the workplace, but attempts to limit non-work time use could implicate employee privacy, among other things). One particularly bold effort came in 2016: proposed bill AB 1727 would have given independent contractors the right to organize and negotiate with work providers through "group activities" such as withholding work, boycotting, or critiquing labor practices. That effort died in the Assembly Judiciary Committee. But hear this fearless prediction: we will hear of this again. And we can expect other bold efforts to empower the growing numbers of gig economy workers.

Meanwhile, we anticipate answers on the following workplace issues now pending before the California Supreme Court:

  • Which "employee" test determines whether a class should be certified to determine whether a group independent contractors was misclassified? The IWC definition of "employee" (as construed in Martinez v. Combs, 49 Cal. 4th 35 (2020), or the common law test set forth in S.G. Borello & Sons, Inc., 48 Cal. 3d 341 (1989)? [Dynamex Operations West, Inc., v. Superior Court, S222732]
  • What does it mean that a California employer is to provide "one's day rest in seven"? [Mendoza v. Nordstrom, S224611]
  • Does the federal de minimis doctrine apply to claims for unpaid wages under California Labor Code Sections 510, 1194 and 1997 (minimum wage and overtime)? [Troester v. Starbucks Corp., S234969]
  • What is the correct way to calculate the rate of overtime pay when a non-exempt employee receives a flat sum bonus? [Alvarado v. Dart Container Corp of California, S232607].

If we can take any guidance from the Supreme Court's latest wage-hour decision (Augustus v. ABM Security, rewriting the law on required rest breaks [see links to our OMM and prior post on the case here]), the results in the above cases will continue the tide of worker rights that will swamp more than a few employer boats, making management of California employees even more complicated, and increasing the risks of employers incurring inadvertent violations.

As in past years, we invite you to contact us with any comments, suggestions, or disagreements you may have regarding any of our posts, or if you would like to be a guest author.

We look forward to keeping you apprised of continuing ebbs and flows in California employment law during the year to come.

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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