United States: California's Employment Law Class of 2017: The Summarized Laws and Recommendations for Compliance

Co-author: Jamie Knauer

Note: All bills become effective January 1, 2018 unless stated otherwise.

AB 168 – Ban on Salary History Inquiries

NEW LAW:  Effective January 1, 2018, California employers cannot ask a job applicant about his or her prior salary or seek out an applicant's salary history through a third party. Employers may consider prior salary information that an applicant voluntarily discloses (but don't forget that under Labor Code Section 1197.5, employees may not use an applicant's salary history alone to justify a pay disparity). Furthermore, employers will now be required to provide a pay scale for a position whenever a job applicant inquires.

The intent of this law is to narrow the gender wage gap by preventing employers from basing offers on prior salary information and, thus, perpetuating historical lower pay for female employees. In that regard, California has followed a recent trend of "salary history ban" legislation; San Francisco banned salary history questions earlier this year and other jurisdictions, including New York City, Philadelphia, Puerto Rico, Delaware, Oregon, and Massachusetts, have all adopted similar laws.

REED SMITH RECOMMENDS: All recruiters and interviewers should be informed of the ban on salary history inquiries, and any job application materials or interview scripts which ask for such information should be revised immediately. Employers may still ask an applicant how much he or she would like to be paid or expects to be paid, which will provide a sense of the employment market and an applicant's salary expectations without violating this new law. Employers should also prepare basic informational forms providing the pay scale for open positions or positions that may become open within the next few years so that this information is readily available if requested by job applicants. Finally, given the pay scale requirement of AB 168 and the potential liability facing employers for any gender wage gap following the passage of California's Fair Pay Act in 2016, employers should seriously consider conducting a compensation audit to internally evaluate whether any gender-based wage discrepancies exist.

 AB 1008 – California's Ban the Box Law Arrives

NEW LAW: Following years of discussion and debate, a statewide "Ban the Box" law has finally arrived in California. Effective January 1, 2018, employers must wait until extending a conditional offer to an applicant before making any inquiry into an applicant's criminal history.

Under the amended law, an employer cannot deny any applicant a position because of his or her conviction history until the employer makes an individualized assessment of whether the applicant's conviction history would have a direct and adverse impact on the specific job duties. The individualized assessment should consider the nature and severity of the offense, the time that has elapsed since the offense or completion of the sentence, and the nature of the job.

If an employer decides an applicant's conviction history disqualifies the applicant, it must provide the applicant written notice of the disqualifying conviction that led to the rescinded offer, a copy of the conviction history report, and an explanation that the applicant has the right to challenge the accuracy of the conviction record or offer evidence of rehabilitation and/or mitigating circumstances. If the applicant timely notifies the employer in writing that he or she is disputing the preliminary decision by providing written notice of an intention to challenge or provide additional information within five days, then the employer must provide the applicant five additional business days to respond to the notice. Only after considering any additional evidence from the applicant can the employer make a final decision of whether to offer the applicant employment. If the employer still decides to deny the applicant, it must notify the applicant in writing and also notify the applicant of any additional procedures he or she has to challenge the decision, including the right to file a complaint with the Department of Fair Employment and Housing.

REED SMITH RECOMMENDS: While many California employers may already have "Ban-the-Box" compliant policies in place due to the increasing number of local jurisdictions that have passed such ordinances, all California employers will now need to review and potentially revise their employment applications to ensure they are not seeking information related to an applicant's criminal history. Furthermore, employers should update all managerial employees, recruiters, hiring directors, and human resources personnel regarding the individual assessment and notice provisions of this law. So that an employer is prepared to perform efficient individualized assessments, it should review the profiles for each job position and include all necessary updates to ensure an accurate reflection of the duties and responsibilities for each position.

SB 63 – New Parent Leave Act extends Parental Leave to Small Businesses

NEW LAW:  The California Family Rights Act (the "CFRA"), which took effect in 2012, requires companies with at least 50 employees to provide eligible employees with up to 12 weeks of unpaid child bonding leave, upon request, within one year of the child's birth, adoption, or foster placement. Starting January 1, 2018, the "New Parent Leave Act" will extend this requirement to companies with as few as 20 employees within a 75-mile radius.

The New Parent Leave Act also requires employers to maintain an eligible employee's coverage under a group health plan throughout the duration of their parental leave.

REED SMITH RECOMMENDS: Employers with 20-49 employees should use the next few months to analyze and update their current policies and address any issues they anticipate that this extension of CFRA leave may have on their operations.

AB 450 – Immigrant Worker Protection Act

NEW LAW: AB 450, known as the "Immigrant Worker Protection Act," prohibits employers from allowing immigration enforcement agents to enter non-public areas of a workplace without a judicial warrant. Employers are also prohibited from allowing an immigration enforcement agent to access, review, or obtain most employee records without a subpoena or judicial warrant. Employers who violate either of these prohibitions are subject to a civil penalty of $2,000-5,000 for their first violation and $5,000-10,000 for each subsequent violation.

Furthermore, employers will now be required to provide a notice to current employees of any inspections conducted by an immigration agency of I-9 Employment Eligibility Verification forms or other employment records within 72 hours of receiving notice of the inspection. The notice must contain the name of the immigration agency conducting the inspections; the date that the employer received notice of the inspection; the nature of the inspection, if known; and a copy of the Notice of Inspection provided by the immigration agency conducting the inspection.

Employers must also provide each affected employee and the employee's authorized representative (if any) with a copy of the written immigration agency notice that provides the results of the inspection within 72 hours of the employer's receipt of the notice. The employer must also, within 72 hours of its receipt of the notice, provide to each affected employee and the employee's authorized representative (if any) written notice of the obligations of the employer and affected employee resulting from the inspection.

Finally, AB 450 prohibits employers from unnecessarily re-verifying the employment eligibility of a current employee, lest the employer face a civil penalty of up to $10,000. AB 450 does not prohibit compliance with any federal E-Verify system or any other memorandum of understanding governing the use of that system.

REED SMITH RECOMMENDS: To ensure compliance with the "Immigration Worker Protection Act," employers should immediately designate a managerial employee to serve as the lead in dealing with any inquiry from an immigration enforcement agency. In addition to appointing one employee to take on lead responsibilities in dealing with immigration enforcement agencies, employers should update all managerial employees regarding the employer's responsibility regarding any inquiry from an immigration enforcement agency, as well as creating or revising any current company policies about what action to take in the case of an inquiry from an immigration enforcement agency.

SB 306 – Expanded Authority for DLSE Investigations and Enforcement

NEW LAW:  SB 306 increases the Division of Labor Standards Enforcement's authority to investigate any employer for potential discrimination or retaliation violations. Under the new law, the DLSE can conduct investigations, even if no employee has filed a discrimination or retaliation complaint against the employer, so long as the DLSE has reason to suspect retaliation or discrimination while investigating a wage claim, a field inspection, or instances of suspected immigration-related threats. The Labor Commissioner may now petition a superior court for temporary or preliminary injunctive relief upon finding "reasonable cause" to believe an employer has retaliated against an employee unlawfully.

SB 306 also accelerates the process by which the Division may enforce retaliation violations by allowing the Labor Commissioner to directly issue a citation directing an employer to cease and desist and take necessary actions to remedy the violation. Employers who willfully refuse to comply with a final order to hire, promote, or restore an eligible employee, to post a notice to employees, or to otherwise cease and desist from an anti-retaliation violation may now be fined a $100 penalty per day of noncompliance, up to a maximum of $20,000, to be paid to the affected employee.

REED SMITH RECOMMENDS: For the second year in a row, the legislature has bolstered the DLSE's authority. Whereas the DLSE previously would need to file a civil action to enforce a cease and desist, the DLSE's expanded and streamlined capabilities mean that DLSE complaints of any kind need to be taken very seriously and dealt with immediately in order to prevent unnecessary expenses and administrative headaches.

SB 396 – Transgender Rights Poster and Training Requirements

NEW LAW: The California Fair Employment and Housing Act ("FEHA") makes it unlawful for an employer or agent of the employer to harass an employee and requires employers with 50 or more employees to provide at least 2 hours of sexual harassment training and education once every two years to all supervisory employees within 6 months of becoming supervisors. SB 396 will now require these supervisor trainings to include discussion of harassment based on gender identity, gender expression, and sexual orientation.

SB 396 also adds another workplace poster requirement for employers. Employers will now need to post a DFEH-created poster regarding transgender rights in a prominent and accessible location in the workplace.

REED SMITH RECOMMENDS: This legislation reflects the increased attention the legislature is paying to transgender issues in the workplace. While employers will need to revise their harassment trainings and keep an eye out for the upcoming DFEH poster, employers should also use this opportunity to review any other workplace policies that they have in place to address transgender issues, such as practices and policies to support transitioning employees.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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