United States: 5 New Laws: California Governor Approves Employee-Friendly Laws

The 2017 California Legislature adjourned on September 15, 2017, and resulted in more than 700 bills being sent to Governor Jerry Brown's desk for approval. Although the deadline for the Governor to sign new bills into law does not officially expire until October 15, the Governor has already given his stamp of approval to a handful of new employment laws that will take effect on January 1, 2018, including one from the California Chamber of Commerce's annual list of "Job Killers." Below is a summary of the major bills recently signed into law.

  1. Prohibition on Salary History Inquiries and a New Duty to Disclose "Pay Scales" (AB 168)

Effective January 1, 2018, employers are barred from seeking or inquiring into a job applicant's salary history, compensation and benefits. Further, employers must now disclose pay scales for a position upon request from an applicant.

As we noted in August while reporting on San Francisco's recently-enacted Parity in Pay Ordinance, a growing number of state and municipal governments have attempted to combat race and gender pay disparities by prohibiting inquiries into job applicants' prior salary or limiting the circumstances under which employers may use salary history information. Furthering this trend, AB 168 will add section 432.3 to the California Labor Code and bar employers from directly or indirectly seeking, or inquiring into, a job applicant's salary history information (including compensation and benefits). It will also make it unlawful for employers to use an applicant's salary history information to determine whether to extend a job offer or to decide what salary to offer an applicant. Supporters of the law believe that the measure will help erode the gender wage gap impacting several industries, including the tech industry.

AB 168 does not encompass obtaining or using salary history information disclosable to the public under federal or state law. Additionally, the law does not prohibit applicants from disclosing their salary history information "voluntarily and without prompting." In such circumstances, AB 168 permits a prospective employer to consider or rely upon the voluntarily-disclosed information when determining an applicant's compensation, subject to the Equal Pay Act's caveat that prior salary cannot, by itself, be used as a justification for any disparity in compensation between employees of difference races, sexes, or ethnicities.

Significantly, while AB 168 deals primarily with prohibitions against seeking out or using salary history information, it also requires companies to disclose the "pay scale" for a position to any applicant for employment, "upon reasonable request."

  1. New Parental Leave Mandates for Small Employers (SB 63)

On January 1, 2018, employers with 20+ employees must provide child bonding leave under the New Parent Leave Act.

Under the California Family Rights Act (the "CFRA"), companies with 50 or more employees must provide eligible employees with up to 12 weeks of unpaid, job protected leave during a 12-month period:

  • To care for a parent, a spouse, or a child with a serious health condition;
  • Because an employee's own serious health condition prevents the employee from performing the functions of his or her job; and/or
  • For the purpose of bonding with their child within one year of the child's birth or placement of the child with the employee through adoption or foster care, i.e., "child bonding leave."

To be eligible for leave under CFRA, an employee must have 12 months of service with a covered employer, at least 1,250 hours of service with the employer during the 12-month period preceding their leave, and be employed at a location where the employer has at least 50 employees within a 75 mile radius.

SB 63, otherwise known as the New Parent Leave Act, extends the obligation to provide child bonding leave to employers with 20 or more employees by adding Section 12945.6 to the California Government Code. Beginning on January 1, 2018, employers with 20 to 49 employees must provide child bonding leave to employees working at locations with at least 20 employees within a 75 mile radius. As with "child bonding" provided under the CFRA, an employee must have 12 months of service with a covered employer and at least 1,250 hours of service during the 12-month period prior to his/her leave in order to be eligible for leave. The law explicitly prohibits employers from interfering with, restraining, or denying the exercise of, or the attempt to exercise, any right provided under the law.

Last year, Governor Brown vetoed a largely identical bill introduced as SB 654. In his veto message, the Governor encouraged the Legislature to explore options that encouraged employees to mediate before bringing a lawsuit. Responding to that suggestion, SB 63 requires the Department of Fair Employment and Housing to create a parental leave mediation program allowing an employer to demand mediation within 60 days of receiving a right-to-sue notice. Until January 1, 2020, an employer's demand for mediation under this program will prevent an employee from pursuing a civil action until the mediation is "complete" or until the employee affirmatively elects not to participate in a mediation. On January 1, 2020, SB 63's mediation provisions will expire.

SB 63 was one of several bills identified as a "Job Killer" by the California Chamber of Commerce this year.

  1. The Immigrant Worker Protection Act (AB 450)

On October 5, Governor Brown officially made California a so-called "sanctuary state" by signing legislation that limits coordination between local and state law enforcement and federal immigration officials. Echoing that move, AB 450—also known as the Immigrant Worker Protection Act—prohibits employers from allowing immigration enforcement agents to access non-public areas of a workplace without a judicial warrant. It also bars employers from voluntarily allowing an immigration enforcement agent to access, review, or obtain employee records without a subpoena or court order, except for:

  • I-9 Employment Eligibility Verification forms and other documents for which a Notice of Inspection has been provided to the employer; or
  • Instances where federal law requires employers to provide access to records.

Employers who violate those provisions will be subject to civil penalties in amounts between $2,000 and $5,000 for an initial violation and between $5,000 to $10,000 per violation for subsequent violations.

Except as otherwise required by federal law, AB 450 requires employers to provide current employees with notice of an immigration agency's records inspection by posting a notice of an inspection within 72 hours of the immigration agency providing the employer with written notice of its intent to conduct an inspection. The notice must contain the name of the agency conducting the inspection, the date the employer received notice of the inspection, the nature of the inspection (if known), and a copy of the official "Notice of Inspection" provided by the immigration agency.

Covered employers must also provide affected employees with a copy of an agency's notice of inspection of I-9 Employment Eligibility Verification forms "upon reasonable request." And unless otherwise required by federal law, AB 450 requires employers to provide affected employees and their collective bargaining representatives with a copy of any written notice from an immigration agency providing the results of an I-9 inspection and the obligations of the employer and the affected employee(s) arising from the agency's action within 72 hours of receiving notice from the agency.

Although AB 450 does not prohibit compliance with any federal E-Verify system or a memorandum of understanding governing the use of the federal E-Verify system, AB 450 explicitly forbids employers from reverifying the employment eligibility of a current employee at a time or in a manner not required by 8 U.S.C § 1324a(b). Doing so may result in a civil penalty of up to $10,000 per violation.

  1. New Sexual Harassment Training Rules for Farm Labor Contractors (SB 295)

Labor Code section 1684 currently imposes various conditions upon the issuance of a farm labor contractor license. One of those conditions is an applicant's written attestation that supervisorial and non-supervisorial employees have received required training about identifying, preventing, and reporting sexual harassment in the workplace.

SB 295 amends Section 1684 to require license applicants to provide sexual harassment training to each agricultural employee in "the language understood by that employee." SB 295 also requires license applicants to provide the Labor Commissioner with a complete list of all materials and resources used to provide sexual harassment prevention training to agricultural employees and the total number of agricultural employees trained in sexual harassment prevention during the calendar year preceding an application. The Labor Commissioner will aggregate the data provided by licensees and will publish information on its website about the total number of agricultural employees trained in the previous calendar year.

In furtherance of the sexual harassment training rules, SB 295 adds Section 1697.5 to the Labor Code to authorize the Labor Commissioner to levy civil penalties against any farm labor contractor licensee who fails to:

  • Provide sexual harassment training to an agricultural employee at the time of hire;
  • Provide sexual harassment training in a language understood by an agricultural employee;
  • Provide an agricultural employee with sexual harassment training satisfying Section 1684's minimum requirements;
  • Provide an agricultural employee with a record of his or her training or a copy of the Department of Fair Employment and Housing's "Sexual Harassment" pamphlet;
  • Keep a record of training for each agricultural employee who receives sexual harassment training.

Penalties may also be imposed for providing a false record of completion of sexual harassment training. The penalties may be assessed at a rate of $100 per violation.

  1. Expanded Labor Commissioner Powers to Enforce Anti-Retaliation Laws (SB 306)

The California Labor Code prohibits employers from discharging, or otherwise discriminating or retaliating against, employees or job applicants for engaging in various protected activities. Under existing law, an aggrieved applicant or employee may file a complaint with the Division of Labor Standard Enforcement (the "DLSE") to seek employment or reinstatement and/or the recovery wages and work benefits lost as a result of unlawful retaliation.

SB 306 enhances the DLSE's authority to investigate and enforce compliance with the Labor Code's various anti-retaliation laws in several ways. Most notably, SB 306 authorizes the DLSE to investigate an employer without receiving a complaint of retaliation, if the DLSE "suspects" that retaliation has occurred during the course of adjudicating a wage claim, a field inspection, or in instances of suspected immigration-related threats in violation of the Labor Code. Additionally, SB 306 authorizes the DLSE to petition a Superior Court for temporary or preliminary injunctive relief when the DLSE finds "reasonable cause" to believe that an employer has engaged, or is engaging in, unlawful retaliation.

SB 306 also provides an accelerated method for the DLSE to enforce violations. If the DLSE determines that an employer violated, or is violating, an anti-retaliation law within its jurisdiction, the law currently requires the DLSE to issue a "determination" directing the violating party to take remedial action, and the DLSE must bring a civil action to enforce the determination if the employer refuses to comply with it. SB 306 streamlines this process and relieves the DLSE of the burden to affirmatively initiate civil actions. As a result of SB 306's amendments, if the Labor Commissioner determines that an employer engaged (or is engaging) in unlawful retaliation, the Labor Commissioner will be authorized to issue a citation directing an employer to take various remedial actions. If the employer disagrees with the citation or the relief ordered, the employer will have the burden to seek review of the citation through an administrative hearing before the Labor Commissioner within 30 days of the citation. Any decision by the Labor Commissioner will be subject to review by a Superior Court through an administrative writ of mandate. This procedure parallels the process used for unpaid wage claims handled by the Labor Commissioner, and it is designed to relieve the DLSE of the obligation to pursue "lengthy" lawsuits.

Adding to the DLSE's enforcement arsenal, SB 306 subjects employers to penalties of $100 per day (up to a maximum of $20,000) for any "willful" refusal to comply with a court order to cease and desist a retaliation violation, to post a notice to employees, or to hire, promote, or otherwise restore a current or former employee to a position.

Finally, SB 306 authorizes any employee bringing a civil action for retaliation in violation of Labor Code section 1102.5 to petition a Superior Court for temporary or preliminary injunctive relief, which the Superior Court must issue when "reasonable cause exists to believe a violation has occurred."

More Employment Laws on the Horizon

While each of the above laws is significant, several other bills are still awaiting a decision by the Governor, including:

  • SB 396, which proposes to expand the sexual harassment posting and training requirements under the Fair Employment and Housing Act to encompass issues relating to gender identity, gender expression, and sexual orientation;
  • AB 569, which would add a new provision to the Labor Code to prohibit discrimination against employees (and their dependents or family members) for "reproductive health decisions."
  • AB 1008, which proposes a Statewide "Ban the Box" law to restrict employers' use of, and inquiry into, applicants' conviction histories;
  • AB 1209, which would require large California companies biennially collect and report data on gender wage differentials amongst their workforce and board members; and
  • AB 1701, which would make building contractors jointly and severally liable with their subcontractors for any failure to pay wages, fringe benefits, or other benefit payments or contributions on any building contract entered into on or after January 1, 2018.

Governor Brown has until this Sunday, October 15, to sign these bills into law. Stay tuned.

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