United States: California Legislative Round-Up: Which Bills Survived The Governor's Desk

Last Updated: October 25 2017
Article by Christopher Olmsted

In the days leading up the October 15 deadline, Governor Brown signed and vetoed a number of California labor and employment law bills that had recently passed by the September legislative deadline. Here is an overview on the newest laws and the bills that are gone for now.

Signed Bills 

1. Ban the Box

Governor Brown signed Assembly bill (AB) 1008, which bans questions about job applicants' criminal histories, on October 14. As a result, effective January 1, 2018, employers are prohibited from asking job applicants about their criminal records. The law also prohibits employers from asking similar questions on job applications. Employers can consider applicants' criminal record only after making a conditional job offer.

Under the law, an employer that refuses to hire an applicant due to his or her conviction history, will be required to conduct an individualized assessment of whether the applicant's conviction history has a direct and adverse relationship with the specific duties of the job that justifies denying the applicant the position.

Employers that decline to hire an applicant with a criminal history will be required to provide written notice to the employee identifying the disqualifying conviction. However, if an employer makes a final decision to deny an application solely or in part because of the applicant's conviction history, the employer would be required to notify the applicant in writing of the final denial or disqualification. The employer will also be required to notify the applicant of any existing procedure the employer has for the applicant to challenge the decision or request reconsideration and of the applicant's right to file a complaint with the California Department of Fair Employment and Housing.

By passing this law, California joins a national trend of passing ban-the-box laws. Locally, both Los Angeles and San Francisco have ban-the-box ordinances. A dozen other cities (e.g., Austin, Philadelphia, and Portland) and several states (e.g., Colorado, Connecticut, and Vermont ) have also adopted ban-the-box laws.

Further details on the law's requirements are covered in our recent article, " California Governor Signs Ban the Box Law to Go Into Effect in the New Year."

2. Prohibition on Salary History Inquiries

On October 12, 2017, the governor signed AB 168, which will prohibit an employer from asking for a job applicant's salary history information The new law will also prohibit consideration of salary history as a factor in making a hiring decision (even if volunteered by the applicant). Despite the law, employers may consider an applicant's prior salary information in determining salary for that applicant if the applicant voluntarily discloses the information. The law, which goes into effect on January 1, 2018, will also require an employer, upon reasonable request, to provide a pay scale for a position to an applicant.

The new law follows on the heels of AB-1676, which amended the California Fair Pay Act to provide that prior salary cannot, by itself, be a "bona fide factor other than sex" justifying a pay disparity between employees of different genders. It also follows a trend established by other jurisdictions, such as Massachusetts, that have banned salary history inquiries.

Further details on the law's requirements are covered in our recent article, " California Governor Signs Law Banning Salary History Inquiries."

3. Small Business Parental Leave

On October 12, 2017, Governor Brown signed Senate bill (SB) 63, which will require small employers to provide unpaid parental leave for the purpose bonding with a new child. The law applies to employers with 20–49 employees in a 75-mile radius, imposing a new leave law requirement on employers that were previously exempt from the California Family Rights Act (which applies to businesses with 50 or more workers).

Employees are eligible for leave provided that they have worked for the employer for at least 12 months and have worked at least 1,250 hours in the past 12 months for the employer. Where both parents work for the same company, the employer would be able to require the parents to take no more than a combined 12-week leave.

Employers will be required to continue to pay their regular share of healthcare premiums while employees are on parental leave. Under certain circumstances, employers may be able to recover the premiums when the parent-employee does not return to work following the leave.

Further details on the new parental leave law's requirements are covered in our recent article, " New California Law Mandates Small Businesses Provide Parental Leave."

4. Immigration Enforcement

On October 5, 2017, Governor Brown signed Assembly bill (AB) 450, which will prohibit employers from providing voluntary consent to an immigration enforcement agent to enter nonpublic areas of a place of labor unless the agent were to provide a judicial warrant. The law does not prohibit inviting immigration officers into nonpublic areas, where no employees are present, in order to verify the existence of a warrant.

Except as required by federal law, the law will also prohibit an employer from providing voluntary consent to an immigration enforcement agent to access, review, or obtain the employer's employee records without a subpoena or court order. This prohibition would not apply to I-9 Employment Eligibility Verification forms and other documents for which a notice of inspection has been provided to the employer.

If enacted, the law would also require employers provide a notice to each current employee of any inspections of I-9 Employment Eligibility Verification forms or other employment records conducted by an immigration agency within 72 hours of receiving notice of the inspection.

The bill would grant the state labor commissioner or the attorney general the exclusive authority to enforce these provisions. The bill would prescribe penalties for failure to satisfy the prohibitions described above of $2,000–5,000 for a first violation and $5,000–10,000 for each subsequent violation.

Further details on the new immigration law's requirements are covered in our article, "New California Law Restricts Employers From Giving Access to Immigration Agents."

5. Sexual Harassment Prevention Training

On October 15, 2017, Governor Brown signed Senate Bill (SB) 396, which expands the requirement that employers provide sexual harassment training to supervisors. Current law requires employers with 50 or more employees to provide sexual harassment and abusive conduct prevention training every two years, or within six months of an individual's assumption of supervisory duties. This bill would require covered employers to include training on harassment based on gender identity, gender expression, and sexual orientation.

Further details on the new training requirements are covered in our articles, "How to Comply With California's New Requirement to Provide Anti-Harassment Training on Gender Identity, Gender Expression, and Sexual Orientation" and "California Expands Harassment Training Requirements."

6. Construction Contractor Wage Liability for Subcontractors

On October 14, 2017, Governor Brown signed AB 1701, which will hold construction contractors liable for the wage and hour violations of their subcontractors. As a result, a direct contractor making or taking a contract (entered into on or after January 1, 2018) in California for the erection, construction, alteration, or repair of a building, structure, or other private work will be liable for any debt owed to a wage claimant incurred by a subcontractor at any tier acting under the contractor. The law gives contractors the right to demand inspection of a subcontractor's payroll data in order to ensure compliance with wage and hour obligations.

The contractor's liability will extend only to any unpaid wage and fringe or other benefit payments or contributions, including interest owed, but would not extend to penalties or liquidated damages. Either the state labor commissioner or a wage claimant may bring a civil action against a direct contractor to collect wages owed.

7. Labor Commissioner Retaliation Investigations

On October 3, 2017, Governor Brown signed SB-306, which will authorize the state labor department "to commence an investigation of an employer, with or without a complaint being filed, when specified retaliation or discrimination is suspected during the course of a wage claim or other specified investigation being conducted by the Labor Commissioner." Previously, the agency could take action only upon receipt of an employee complaint.

The law authorizes the labor commissioner, upon finding reasonable cause to believe that any person has engaged in or is engaging in a violation, to petition a superior court for injunctive relief. If an employer discharges or imposes adverse action on an employee for claiming that the employer retaliated because the employee asserted his or her rights, the law would require courts "to order appropriate injunctive relief on a showing that reasonable cause exists to believe a violation has occurred." The injunctive relief remains in force until the agency completes its review or issues a citation. The injunctive relief would not prohibit the employer from disciplining or discharging the employee for conduct that is unrelated to the claim for retaliation.

The labor commissioner would be vested with the authority to issue monetary and other relief, including an order to reinstate the employee and pay back wages.

Vetoed Bills

1. Publication of Gender Pay Differentials

On October 15, Governor Brown vetoed AB 1209, which would have required employers with 500 or more employees in California to collect data regarding gender pay differentials for exempt employees and board of director members by July 1, 2019, and every two years thereafter. Governor Brown cited the bill's "ambiguous wording" as reason to doubt that the bill "will meaningfully contribute to efforts to close the gender wage gap."

2. Reproductive Health Discrimination

On October 15, Governor Brown vetoed AB 569, which would have prohibited employers from discriminating against employees based on their reproductive health decisions. According to Brown, "[t]he California Fair Employment and Housing Act has long banned such adverse actions," and "these types of claims should remain within the jurisdiction of the Department of Fair Employment and Housing." The bill appears to be aimed at religious organizations, although not expressly so.

3. Copies of Injury and Illness Prevention Programs

On October 14, Governor Brown vetoed AB 978, which would have required an employer to provide a copy of its Injury and Illness Prevention Program to a current employee or his or her authorized representative. Upon request, employers would have been required to provide the document at no charge as soon as practicable, but no later than 10 business days from the date the employer receives the request. According to Brown, this bill "is unnecessary and duplicative of an existing regulatory proposal that is already underway at the Occupational Safety and Health Standards Board."

Stay tuned for our forthcoming webinar on these and other new laws that recently went effect in California. Join our speakers, Christopher W. Olmsted (shareholder, San Diego) and Charles L. Thompson, IV (shareholder, San Francisco) for a discussion of the legislation passed in 2017, an overview of the significant cases decided by California courts, practical tips for compliance, and guidance on what to expect in 2018.

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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