United States: New Employment Laws Will Require Changes For Most Employers In 2018

Last Updated: November 27 2017
Article by Holly L. Sutton and Chandra S. Russell

The 2017 California legislative session resulted in several new laws that will affect employers' day-to-day operations and policies in 2018. Some of these new laws, including bans on criminal history and salary history inquiries, apply to all employers and are likely to require immediate changes to recruiting and new-hire practices. Others, such as general contractor joint liability and food handler certification requirements, are more industry-specific. Unless otherwise stated, these laws take effect January 1, 2018, so now is the time to begin implementing any necessary policy changes.

Expanding Ban-the-Box Prohibitions to Private Employers (AB 1008)

Existing state law has prohibited state or local agency employers from asking an applicant for conviction history information until the employer determines that the applicant meets the minimum qualifications stated in the position notice. AB 1008 repeals the public-employer law and codifies a similar "ban-the-box" prohibition applicable to all employers in California with five or more employees, including employees outside California. These employers may no longer include questions on employment applications about an applicant's conviction history, or inquire into or consider an applicant's conviction history via other means. Only upon making a conditional offer of employment may an employer obtain and consider the applicant's conviction history information. Moreover, an employer is prohibited from considering, distributing, or disseminating certain information, such as arrests not leading to conviction, while conducting a background check.

The law also requires an employer who declines to hire an applicant due to a conviction history to make an individualized assessment of whether the conviction history directly and adversely impacts the duties of the specific position, justifying the hiring decision. The employer must advise the applicant of its preliminary decision in a notice meeting specific statutory requirements, and allow the applicant at least five business days to respond and offer evidence for reconsideration. An applicant who notifies the employer within those five business days that he or she will dispute the conviction history and is taking specific steps to gather evidence, will be afforded five additional days to respond to the employer's original notice. The employer must consider any evidence provided by the applicant before making a final decision. If an employer makes a final decision to reject the application for employment, it must provide written notice and information on the employer's existing appeals process, if any, or filing a complaint with the Department of Fair Employment and Housing (DFEH).

Private employers are encouraged to review their applications and hiring processes to ensure compliance with the new statewide ban-the-box rules taking effect January 1, 2018. Private employers should also prepare to implement a consistent and neutral individualized assessment policy that also complies with the California Fair Employment Housing Act (FEHA) regulations on adverse impact due to consideration of criminal history in employment decisions.

Applicant Salary Questions Are Now Prohibited (AB 168)

Employers may no longer rely on an applicant's prior salary history, including benefits, in determining whether to offer employment, or what salary to offer. The new ban on requesting salary information does not prohibit employers from accessing and considering salary information made publicly available by federal or state law, or information that an applicant provides "voluntarily and without prompting." Additionally, if an applicant requests information on the pay scale for the position, employers must provide that information.

In preparation for the new year, California employers should be sure their job applications and recruitment processes do not seek salary information, and train all hiring personnel on the new rules. In addition, employers will need to begin developing wage ranges for open positions to provide upon request.

Expanded Parental Leave Protection (SB 63)

The New Parent Leave Act (NPLA) provides expanded parental leave protection to employees of smaller employers. The NPLA applies to employers with 20 to 49 employees within 75 miles, and to those employed for more than 12 months with at least 1,250 hours of service during the previous 12 month period. The new law provides up to 12 weeks of parental leave to bond with a new child within one year of the child's birth, adoption, or foster care placement. The employer must also maintain and pay for coverage for such an employee under a group health plan. This law is similar to the Family and Medical Leave Act and the California Family Rights Act requirements for protected parental leave, which only apply to employers with 50 or more employees. Thus, the NPLA is specifically designed to target and provide protected parental leave to employers with smaller employee populations.

In addition, the NPLA requires the DFEH to create a parental leave mediation pilot program from January 1, 2018 to January 1, 2020. Under this program, an employer may request within 60 days of receipt of a right-to-sue notice bringing claims under NPLA that all parties participate in the DFEH's mediation program. Upon making such a request, the employee would be prohibited from pursuing any civil action until the mediation is complete. The mediation is considered complete when either party notifies the DFEH and all other parties that it is electing not to participate in or is withdrawing from the program, or the DFEH notifies the parties that it believes further mediation would be "fruitless." The employee's statute of limitations is tolled during the course of the mediation. Any employer wishing to take advantage of this parental leave mediation pilot program should promptly contact an attorney.

Expanded Scope of Sexual Harassment Training for Employers With 50 or More Employees (SB 396)

Existing California law has required that employers with 50 or more employees provide two hours of sexual harassment prevention training to all supervisors every two years or within six months of assuming a supervisory position. Senate Bill 396 expands the topics covered by this training to include harassment based on gender identity, gender expression, and sexual orientation. The training must include specific examples of harassment based on gender identity, gender expression, and sexual orientation and must be delivered by a trainer with knowledge and expertise in these areas. In addition, employers must display in a prominent and accessible location a new poster regarding transgender rights which was developed by the DFEH.

This law follows the adoption earlier this year of FEHA transgender regulations that require employers to honor an employee's request to be identified by a preferred gender, name or pronoun, including gender-neutral pronouns.

To comply with the new law, employers with 50 or more employees should ensure that their sexual harassment prevention training now includes harassment based on gender identity, gender expression, and sexual orientation and provides specific examples of this kind of harassment. Further, employers should select a trainer that has knowledge and expertise in this area. Finally, employers should ensure that they have a copy of the DFEH's poster regarding transgender rights and that it is displayed in a prominent, accessible location.

DLSE's Expanded Authority to Investigate Retaliation and Pursue Injunctive Relief (SB 306)

The Department of Labor Standards Enforcement (DLSE) is authorized to initiate (based on its own suspicion) a retaliation or discrimination investigation during a wage claim or other investigation. Previously, the DLSE's investigation authority arose only in response the employee's formal retaliation complaint.

SB 306 also authorizes the DLSE, upon finding "reasonable cause" to believe that any person has engaged in a violation, to petition a Superior Court for temporary and/or preliminary injunctive relief. Upon a mere showing that "reasonable cause exists to believe" an employee has experienced a retaliatory adverse action (such as termination), the Court must order appropriate injunctive relief. This is a lower standard for injunctive relief than would be applied in private civil actions.

The new law also establishes a new citation process for the enforcement of retaliation and discrimination claims. It authorizes the DLSE to issue a citation directing an employer to cease, and to take actions necessary to remedy, the violation. The burden then falls on the employer to challenge the citation through an administrative and court appeal process. SB 306 also provides that an employer that willfully refuses to comply with a court order will be subject to a steep civil penalty, payable to the affected employee, of $100 per day of noncompliance up to $20,000. The court can also award attorneys' fees incurred by the Labor Commissioner.

SB 306 reinforces the need for employers to act vigilantly in responding to claims that fall within the DLSE's jurisdiction, and avoid taking actions that could be perceived as retaliatory.

No More Voluntary Consent to Immigration Agency Inspections (AB 450)

AB 450 prohibits public and private employers from voluntarily consenting to immigration enforcement agents (IEA) entering nonpublic areas of an employer's workplace without a warrant.

The new law also imposes the following other requirements, subject to narrow exceptions:

  • Employers cannot voluntarily provide employee records without a subpoena or court order;
  • Employers must promptly notify employees upon receiving a notice of inspection by an immigration agency, and must provide an affected employee with a copy of the inspection results; and
  • Employers cannot re-verify a current employee's employment eligibility.

Employers are subject to penalties of $2,000 up to $5,000 for a first violation and $5,000 up to $10,000 for each subsequent violation. California employers should train personnel handling these new requirements, and consider whether to have a documented policy in place for responding to inspection requests. Employers should also pay close attention to the bill's strict notice requirements.

General Contractors Jointly Liable for Unpaid Wages Owed by Subcontractors (AB 1701)

General or direct contractors will be held jointly liable for unpaid wages, benefits, or contributions that are owed by the subcontractor for labor related to a construction contract. A wage claimant may bring a civil action directly against the direct contractor for unpaid wages, as well as attorneys' fees and costs. Direct contractors will also be able to request payroll records from the subcontractor, as stated in Labor Code § 226. However, the subcontractor's failure to comply with the payroll records request will not relieve a direct contractor from liability under this new law.

To prepare for the implementation of AB 1701, general contractors should seek counsel to review its contracts' indemnification and contribution obligations. The general contractor should also consider establishing methods for regular access to a subcontractor's payroll records. Since Governor Brown issued a memo noting that the legislation would be clarified if any confusion were to arise, general contractors should be vigilant of future changes to this law.

Food Handler Cards for Food Delivery Enterprises (AB 1461)

AB 1461 aims to expand health and sanitation standards for retail food facilities to for-profit businesses that offer meal subscription plans. This law requires any employee of a food facility that offers meal subscription plans and who handles unpackaged food to obtain a food handler card. The bill defines a food facility as any operation that stores, prepares, packages, serves, vends, or otherwise provides food for human consumption at the retail level. A meal subscription plan is defined as a "subscription-based meal delivery service that provides customers with original recipes and preportioned ingredients needed to prepare those recipes at home." This law does not apply to employees or independent contractors who work for an online or mobile food delivery service that is not a food facility. A food handler must maintain their card for the duration of his or her employment as a food handler.

This law was proposed with the intent to regulate companies that offer meal subscription plans, like Blue Apron. Any business that believes they qualify should enroll food handling employees in a certified Food Handler Card training course.

Expanded Sexual Harassment Training Requirements for Agricultural Employees (SB 295)

Existing California law has required farm labor contractors to provide supervisors at least two hours of sexual harassment prevention training per calendar year, and to provide other employees with sexual harassment prevention training upon hire. Senate Bill 295 adds that this training must be in the language understood by each employee. Further, all applicants for a farm labor contractor license renewal must provide the Division of Labor Standards Enforcement (DLSE) with a complete list of materials and resources used in the sexual harassment prevention training, and the total number of employees trained in sexual harassment prevention during the calendar year preceding the application. The contractor must certify that all employees have received the mandated sexual harassment prevention training.

An employer's sexual harassment prevention training must include the illegality of sexual harassment, the definition of sexual harassment under state and federal law, a description of sexual harassment using examples, the employer's internal complaint process, legal remedies available through the DFEH, contact information for the DFEH, and legal protections against retaliation.

To comply with the new law, farm labor contractors should determine which language is understood by each of its supervisorial employees and new hires and ensure that training is provided in the appropriate language. Further, farm labor contractors should ensure that they have a system in place to document and report to the DLSE (1) the materials and resources used in the sexual harassment prevention training, and (2) the total number of employees trained in sexual harassment prevention for the previous year.

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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