United States: "A To Z" Of What California Employers Need To Know For 2017

Last Updated: January 16 2017
Article by Miriam Schimmel

With the new year come new laws that affect California employers. The following is the "A to Z" of changes in the law that may affect your business in 2017.

All-Gender/Single-User Restrooms

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

Ban the Box

The Los Angeles Fair Chance Initiative for Hiring ("Ban the Box") takes effect on January 1 prohibiting employers from asking about past convictions until a conditional offer of employment has been made. Employers must remove any question on an employment application which requires applicants to state whether they have prior criminal convictions. Employers may inquire about an applicant's criminal history only after the employer has made a conditional offer of employment. The only exception to this requirement is if the employer is required by law to obtain such information.

A covered employee is any individual who performs at least two hours of work on average each week within the geographic boundaries of the city of Los Angeles. This "Fair Chance Process" specifically requires the employer to do the following before withdrawing or canceling a conditional employment offer:

(1) The employer must provide a written assessment that effectively links the specific criminal history with risks inherent in the duties of the position. Employers are advised to consider, at a minimum, the factors identified by the U.S. Equal Employment Opportunity Commission (see https://www.eeoc.gov/laws/guidance/arrest_conviction.cfm), as well as other factors that may be required by any local rules or guidelines.

(2) The applicant must be allowed five business days to provide information or documentation about the accuracy of the applicant's criminal history, including information and documentation regarding rehabilitation or other mitigating factors, which should be considered in the employer's written assessment.

(3) If the applicant provides information or documentation, the employer must consider it and prepare a written reassessment. If the employer subsequently decides not to hire the applicant, the employer must notify the applicant and provide him/her with a copy of the written reassessment.

Employers must maintain these documents for three years.

Employers are required to indicate that the employer will consider applicants in a manner consistent with the requirements of the Fair Chance Initiative in all job solicitations, postings and advertisements. Employers are also required to post a notice at every workplace, job site or other location within the city of Los Angeles that is visited by applicants, informing applicants of their rights under the ordinance. If the employer has a collective bargaining or other agreement with its workers, the notice must also be sent to each labor union or workers' representative. Penalties for violating this ordinance do not apply until July 1. Administrative fines for violations range from $500 to $2,000 per violation. Click here for more details.

Cell Phone Use While Driving

Drivers are prohibited from holding and operating a handheld wireless telephone (and some other wireless electronic communication devices) except that under AB 1785, drivers may use their hand to activate or deactivate a feature or function of the device with a single swipe or tap, as long as the device is mounted so that it does not hinder the driver's view of the road.

Domestic Violence, Sexual Assault and Stalking Protections

Covered employers must provide employees with written notice about the rights of victims of domestic violence, sexual assault and stalking to take protected time off for medical treatment or legal proceedings. The Labor Commissioner's Office is required to develop a form by July 1 which must be given to all new employees when hired and to current employees upon request. However, employers are not required to comply with this notice requirement until the Labor Commissioner's Office posts the new form on its website.

Earned Income Tax Credit Form

Employers are now required to provide an Earned Income Tax Credit form to employees along with their W-2 or 1099 to notify them of their rights under the federal and California Earned Income Tax Credit (EITC) program.

'Employee' Definition for FEHA Protection

The definition of "employee" under California's Fair Employment and Housing Act (FEHA) has been revised to include an individual employed under a special license in a nonprofit sheltered workshop, day program or rehabilitation facility. This change permits those employees to bring an action under the FEHA for any form of prohibited harassment or discrimination.

Fair Pay

In addition to last year's law to address gender wage inequality, California's Fair Pay Act now prohibits an employer from paying any of its employees wage rates that are less than those paid to employees of another race or ethnicity for substantially similar work. http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160SB1063

Further, employers cannot use an employee's prior salary, by itself, to justify any disparity in compensation between employees doing substantially similar work. http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB1676

Granting Protected Leave?

Let us help you navigate the do's and don'ts to avoid incurring liability.

Harassment Training

Don't forget to conduct your annual harassment training!

Immigration Protection

Starting January 22, you must use the newly revised version of Form I-9 - Employment Eligibility Verification (rev. 11/14/2016 N). Federal law already requires employers to verify an employee's eligibility to work using the Form I-9 process. The I-9 process also makes it unlawful for employers to ask for more or different documentation than is required by the Form I-9, refuse to accept documents that appear genuine on their face, or engage in other types of document abuse. Now, California law makes this type of conduct unlawful as well, and violators may be subject to a penalty of up to $10,000. http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160SB1001

Indoor Heat Illness

By January 1, 2019, Cal/OSHA is required to propose a heat-illness and injury prevention standard for indoor workers. However, this law does not specify what provisions will be included in the new rule or what types of workplaces will be covered; but potentially, the new rule could include all indoor workplaces.

Janitorial/Property Service Workers

There are new record-keeping, registration and training requirements for property service employees (i.e., the janitorial industry). The intent is to protect janitorial workers from wage theft and sexual violence or harassment.

Effective January 1, AB 1978 requires property service employers to keep accurate records of the following information regarding employees for three years: (a) the names and addresses of all employees engaged in rendering actual services for any business of the employer, (b) the hours worked daily by each employee, including the times the employee begins and ends each work period, (c) the wage and wage rate paid each payroll period, (d) the age of all minor employees and (e) any other conditions of employment.

Effective July 1, 2018, as a condition of doing business, employers must register annually with the Labor Commissioner's Office and provide certain specified information. The Division of Labor Standards Enforcement will develop sexual violence and harassment prevention training for covered employers by January 1, 2019. However, beginning July 1, 2018, employers must begin giving employees the sexual harassment prevention pamphlet available from the Department of Fair Employment and Housing (DFEH).

For more information concerning the details of these requirements, please see http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB1978.

[Don't] Kill the Messenger

Be sure to train managers and supervisors not to retaliate against any employee who reports discrimination, harassment or any other actionable complaint.

Litigation of Employment Agreements

An employer cannot require an employee who primarily works and resides in California to agree, as a condition of employment, to (a) adjudicate a claim in another state when the claim arises in California (prohibiting choice of forum) or (b) apply another state's law to a controversy that arises in California (prohibiting choice of law).

Under Labor Code Section 925, all employment agreements – including, arbitration agreements – that are entered into, modified or extended on or after January 1 are voidable if they include the prohibited choice of law or venue provisions. However, this section shall not apply to a contract with an employee who is in fact individually represented by legal counsel in negotiating the terms of an agreement to designate either the venue or forum in which a controversy arising from the employment contract may be adjudicated or the choice of law to be applied.

Meal and Lodging Credit

The increase in minimum wage increased the amount of credit employers may take for meals and lodging supplied as part of an employee's compensation against state minimum wage obligations. Additional requirements regarding the meals and lodging must be met in order to take the credit, and as with any deduction from wages, it cannot be taken unless the employee authorizes it in writing and actually uses the meals and lodging.

Minimum Wage – California

As of January 1, businesses with 26 or more employees must pay a minimum wage of $10.50 per hour and must post the new Minimum Wage Order, which can be found at http://www.dir.ca.gov/Iwc/MW-2017.pdf.

As a result of this increase, the minimum monthly salary test for exempt employees will be $3,640 per month ($43,680 per year) for 2017. Be advised that other pay practices, such as overtime rates of pay, meal and lodging credits, commission issues, and notice requirements, should be reviewed.

Effective January 1, the minimum hourly rate of pay for computer software employee exemption increased to $42.35, the minimum monthly salary increased to $7,352.62 and the minimum annual salary exemption increased to $88,231.36.

The minimum hourly pay for licensed physicians and surgeons also increased to $77.15.

Minimum Wage – City-Specific Ordinances

Please see the chart detailing new minimum wage ordinances passed by a number of California cities.

No Drugs in the Workplace

Despite the passage of Proposition 64, legalizing the recreational use of marijuana in California, employers may still maintain a drug- and alcohol-free workplace. Policies related to drug possession, use and impairment as well as testing were not compromised by the legalization of marijuana use under Proposition 64. Because marijuana is still illegal under federal law, employers may continue to prohibit use, possession and impairment at work, and may continue to test for use when appropriate. Additionally, both state and federal law impose strict drug-testing and other related requirements on employers and operators engaged in commercial transportation. These employers must continue to comply with these drug-free workplace laws.

Employers may also continue to conduct pre-employment drug testing of all applicants and deny employment if the drug test comes back positive, even if the applicant was legally using marijuana under the state's Compassionate Use Act, as set forth by California Supreme Court in the 2008 decision of Ross v. RagingWire, 42 Cal. 4th 920 (2008).

OMG – There's More!

Paid Family Leave Benefits

Although not effective until Jan 1, 2018, the amount of paid family leave (PFL) benefits that an employee can receive will be increased from 55 percent of earnings to either 60 percent or 70 percent of earnings, depending on the employee's income. There still will be a maximum weekly benefit on the amount received. The new law also will remove the seven-day waiting period before an employee is eligible to receive PFL benefits that currently exists. http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB908

Paid Parental Leave Ordinance – San Francisco

Effective January 1, the Paid Parental Leave Ordinance (PPLO) requires San Francisco employers with 50 or more employees as of January 1 to provide supplemental compensation to employees who receive Paid Family Leave benefits for taking time off to bond with a new child. The PPLO is a wage replacement program, not a form of protected leave.

Under the ordinance, an employee is entitled to supplemental compensation if the employee meets certain specified criteria. If an employee meets the eligibility requirements, the employer is required to provide supplemental compensation in an amount equal to 100 percent of the employee's gross weekly wages, less the amount of the PFL benefits the employee receives, for up to a total of six weeks.

The ordinance will apply to employers with 35 or more employees starting July 1 and to employers with 20 or more employees starting on Jan 1, 2018.

Paid Sick Leave – City Ordinances

Please see the chart detailing new paid sick leave ordinances for 2017.

Payroll

Employers are now required to notify employees of their eligibility for the federal Earned Income Tax Credit and that they may be eligible for the California Earned Income Tax Credit. The bill updates the required notice that must be given to employees. http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB1847

Posters

Make sure all of the required employment posters are correct and current. Specifically, revised posters are required for compliance with Workers' Compensation and Sexual Harassment laws.

Questions?

Call us for help!

Rest Breaks

California employers in certain industries should re-examine their rest-break policies and practices following the California Supreme Court's decision in Augustus, et al. v. ABM Security Services, Inc., which concluded that "state law prohibits on-duty and on-call rest periods." The court clarified that even though rest breaks are compensable time (unlike meal breaks, which are taken off the clock), employers must relieve their employees of all duties and relinquish any control over how employees spend their break time. Employers violate rest period obligations if employees are required to remain on call. Employers are able, however, to reasonably reschedule a rest period when the need arises, but that should be "the exception, rather than the rule." If a rest period needs to be interrupted for any reason, an employer can also provide another rest period to replace the interrupted one, or pay the premium pay for the missed rest break.

In the Augustus case, security guards sued their employer for failure to provide them with uninterrupted, 10-minute rest periods because they were required to keep their radios and pagers on during rest breaks, remain vigilant, and respond to emergencies. While the guards presented no evidence that anyone's rest break was ever actually interrupted, the fact that the company's policy required them to remain on call was the basis for the court's ruling.

Scheduling Ordinance – San José

Effective March 8, San José's "Opportunity to Work" ordinance requires that before employers hire new employees, including through a staffing or temporary agency, they must offer available hours to existing employees who, in the employers' good faith and reasonable judgment, have the skills and experience to perform the work. However, employers will not be required to provide additional hours if doing so will put an employee into overtime hours. The ordinance provides a carve-out for CBA scheduling provisions.

Businesses with 35 or fewer employees are exempt from this ordinance. For chain businesses, the ordinance counts every employee of the business, whether or not located in San José. For franchisees, the ordinance counts all employees of the franchisee – again, without regard for where the employees work.

Employers are required to post a notice to their employees about their rights under the new ordinance and retain records for four years showing their efforts to first offer additional work to existing part-time employees and also preserve employee work schedules and "any other records the City requires for employers to demonstrate compliance with the ordinance." Failure to comply will create a presumption that the employee's account as to scheduling practices is accurate.

Smoke-Free Workplace

The exemptions that permitted smoking in certain work environments, such as bars, hotel lobbies, warehouse facilities and employer-designated smoking break rooms, have been eliminated (Labor Code Section 6404.5). E-cigarettes and vaping devices that contain nicotine are now treated as "smoking" – thus extending existing smoking bans to cover such products. Additionally, the legal minimum smoking age is raised from 18 to 21, except for active military personnel.

Training

New hires or promotions in 2017? Ensure your supervisors and managers are up to date with all necessary training. Newly hired or promoted supervisors must receive training within six months of assuming supervisory responsibilities and every two years thereafter.

Remember, state law requires employers with 50 or more employees or contractors (full-time, part-time or temporary employees in any 20 consecutive weeks in the current or preceding calendar year) to provide supervisory employees in California with two hours of interactive sexual harassment training and education every two years.

Underpayment of Wages

Make sure you know all applicable minimum wage laws for every city where you have the requisite number of employees. See chart for details.

Vacation or PTO?

There are pros and cons to providing one versus the other. Let us know if you have questions.

Wage Statements

Labor Code Section 226, which requires employers to provide employees with itemized wage statements (i.e., pay stubs), has been amended and clarified to state that employers DO NOT have to include hours of employees exempt from minimum wage and overtime on an itemized wage statement. http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB2535

Xtra Hours?

Be sure to review your overtime calculations to ensure you are paying employees correctly.

Yes, You're in California

There are a lot of employment laws.

Zzzz...Don't Fall Asleep Before You've Reviewed Your Practices and Policies!

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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