United States: 2018 California Legislative Update: What Survived The House Of Origin Deadline?

Seyfarth Synopsis: Several bills of concern to California employers failed to receive the house of origin blessing and passage by the June 1 deadline, including this year's attempts at PAGA reform, criminal history inquiries, and medical marijuana accommodations, while a boatload of others, most notably sexual harassment-related bills, sail on. The measures being passed to their opposite house for consideration are described below.

Friday, June 1, marked the deadline for the state Senate and Assembly to pass bills introduced in their respective houses to the other house. Several employment-related bills (see links at the end of this post) failed to make it out of the house of origin. Many others, detailed below, continue their onward progress toward possible enactment into law. Most notable in number and publicity are the many pending sexual harassment bills. Here's what is still alive, that we are watching:

Sexual Harassment

AB 1867 would require employers with 50 or more employees to retain records of all internal employee sexual harassment complaints for ten years, and would allow the Department of Fair Employment and Housing (DFEH) to seek an order compelling non-compliant employers to do so. The bill, which would add Section 12950.5 to the Government Code, is scheduled for hearing in the Senate Labor and Industrial Relations Committee on June 13.

SB 1300 would amend the Fair Employment and Housing Act (FEHA) to require a plaintiff who alleges the employer failed to take all reasonable steps necessary to prevent discrimination and harassment to show: (1) the employer knew the conduct was unwelcome, (2) the conduct would meet the legal standard for harassment or discrimination if it increased in severity or became pervasive, and (3) the employer failed to take all reasonable steps to prevent the same or similar conduct from recurring.

This bill would also (a) prohibit an employer from requiring a release of claims or rights under FEHA, or a nondisclosure agreement or other agreement not to disclose unlawful acts in the workplace, in exchange for a raise or a bonus or as a condition of employment or continued employment, (b) require employers, with five or more employees, to provide two hours of sexual harassment prevention training, including bystander intervention training, within six months of hire and every two years thereafter to all California employees—not just supervisors, and (c) prohibit a prevailing defendant from being awarded fees and costs unless the court finds the action was frivolous, unreasonable, or totally without foundation when brought or that the plaintiff continued to litigate after it clearly became so.

SB 1343, which closely resembles SB 1300, would require employers with five or more employees—including temporary or seasonal employees—to provide at least two hours of sexual harassment training to all employees by 2020 and then once every two years thereafter. SB 1343 would also require the DFEH to develop (or obtain) and publish on its website a two-hour interactive online training course on prevention of sexual harassment in the workplace. The bill would also require the DFEH to make the training course, as well as posters, and fact sheets, available in multiple languages (i.e., English, Spanish, Simplified Chinese, Tagalog, Vietnamese, Korean and any other language spoken by "a substantial number of non-English speaking people").

AB 3080 would prohibit (1) a person from, as a condition of employment or as a condition of entering into a contractual agreement, prohibiting a job applicant, an employee, or independent contractor from disclosing to any person instances of sexual harassment suffered, witnessed, or discovered in the work place; (2) mandatory arbitration of sexual harassment claims; and (3) retaliation against an applicant or an employee who refuses to sign an arbitration agreement. Governor Brown vetoed AB 465 in 2015, which would have prohibited the use of mandatory arbitration agreements as a condition of employment. In his veto message, Governor Brown said he was "not prepared to take the far-reaching step proposed by this bill" and that this sort of blanket ban on mandatory arbitration "has been consistently struck down in other states as violating the Federal Arbitration Act" (FAA). Supporters of AB 3080 have attempted to "preemptively" address such arguments: Floor Analyses cite the ACLU as citing the California Supreme Court's 2000 Armendariz decision, as well as Civil Code sections 1668 and 3513, to argue that the FAA does not exempt arbitration clauses from general principles that apply to all contracts, and that contracts attempting to exempt people from fraud or illegal activity are unenforceable and against public policy.

AB 3081 would: (1) extend Labor Code prohibitions on discrimination against employees who are victims of domestic violence, sexual assault, or stalking to include employees who are victims of sexual harassment, as well as employees who take time off to assist a family member who is a victim of domestic violence, sexual assault, sexual harassment or stalking; (2) create a rebuttable presumption of unlawful retaliation against an employee if any adverse job action occurs within 90 days of reporting sexual harassment, participating in an investigation, or similar acts; (3) increase the time an employee has to file a complaint with the DLSE for violation of Labor Code section 230 (provides protected time off for jury duty and victims) from one year to three years; (4) require an employer, at the time of hiring and regularly on an annual basis thereafter, to provide to each employee a written notice that includes prescribed information about sexual harassment; (5) require an employer with 25 or more employees to provide sexual harassment prevention training to all nonsupervisory employees at the time of hire and once every two years thereafter. The bill would also require the Labor Commissioner to create a means for employees to report sexual harassment or assault that occurs in the workplace.

AB 3082 would require the state Department of Social Services (DSS) to develop a policy addressing sexual harassment of in-home supportive services (IHSS) providers and to provide the Legislature with a summary by September 30, 2019. AB 2872 would require the DSS to adopt a peer-to-peer training course for IHSS providers and to ensure that every authorized provider has received at least two hours of peer-to-peer training by December 31, 2019. Beginning January 1, 2020, the bill would require all new or returning IHSS providers to receive at least two hours of peer-to-peer training within their first year of employment.

SB 1038 would make an employee who intentionally retaliates against a person who has filed a complaint, testified, assisted in any proceeding, or opposed any prohibited practice, under FEHA, jointly and severally liable, regardless of whether the employer knew or should have known of that employee's retaliatory conduct. Previous versions of this bill would have extended personal liability for retaliation, similarly to the liability that already exists for harassment.

AB 2770 would include as "privileged" communications for: (1) complaints of sexual harassment made without malice by an employee to an employer based upon credible evidence; (2) communications between the employer and "interested persons" made without malice regarding the complaint; (3) non-malicious statements made to prospective employers as to whether a decision to not rehire would be based on a determination that the former employee had engaged in sexual harassment. The bill is scheduled for hearing in the Senate Committee on Judiciary on June 12.

AB 1870 would extend the time an employee has to file an administrative charge with the DFEH alleging an unlawful practice under the FEHA, including, but not limited to, allegations of a sexual harassment, from one year to three years from the alleged incident.

SB 820, the "Stand Together Against Non-Disclosure" (STAND) Act, would make void as a matter of law and public policy provisions in settlement agreements, entered into on or after January 1, 2019, that prevent the disclosure of factual information related to cases involving sexual assault, sexual harassment, sex discrimination, and failure to prevent sex-based harassment and discrimination. The bill would, however, allow such a confidentiality provision to be included upon the request of the claimant unless the opposing party is a government agency or public official; and would allow a provision requiring the monetary settlement payment be kept confidential. Senator Leyva thanked her colleagues when this bill passed the Senate on May 21: "SB 820 shreds the curtain of secrecy that has forced victims to remain silent and empowers them to speak their truth so that we can hopefully protect other victims moving forward." SB 820 would build on AB 1682, signed into law in 2016, which prohibits confidentiality provisions in settlement agreements in cases involving child sexual abuse or sexual assault against an elderly or dependent adult.

AB 3109 would make void and unenforceable a provision in a contract or settlement agreement, entered into on or after January 1, 2019 that: either (1) waives a party's right to testify regarding an alleged criminal conduct or sexual harassment by the other party to the contract or agreement in an administrative, legislative, or judicial proceeding; or (2) substantially restrains a party's right to seek employment or reemployment in any lawful occupation or industry, unless the other party to the contract or agreement is the current or prior employer (except for public employers and a private employer that "so dominates the labor market" so as to effectively restrict the employee from being able to secure employment). The bill is scheduled to be heard in the Senate Committee on Judiciary on June 17.

SB 224 would extend liability for claims of sexual harassment where a professional relationship exists between a complainant and an elected official, lobbyist, director, or producer. This bill (a two year bill introduced in February 2017) has been held at the Assembly desk since January 23, 2018. AB 2338 would require talent agencies to provide to employees and artists, and the Labor Commissioner to provide minors and their parents (prior to issuing the minor a work permit), training and materials on sexual harassment prevention, retaliation, nutrition, reporting resources, and eating disorders. This bill would authorize the Labor Commissioner to charge up to a $25 fee to train each minor, and to impose a $100 fine each time a talent agency fails to provide training, education, or fails to retain specified records. The bill would require a talent agency to request and retain a copy of the minor's work permit prior to representing a minor.

AB 2079—the "Janitor Survivor Empowerment Act"— would: (1) prohibit the Division of Industrial Relations (DIR) from approving a janitorial service employer's registration or a renewal that has not fully satisfied a final judgment for certain unlawful employment practices; (2) require the DIR to convene an advisory committee to develop requirements for qualified organizations and peer trainers that janitorial employers must use to provide sexual harassment prevention training; (3) require the DIR maintain a list of qualified organizations and qualified peer trainers and employers to use a qualified organization from the list; and (4) require employers, upon request, to provide an employee a copy of all training materials. AB 2079 builds upon AB 1978 (2016)—the Property Services Workers Protection Act, effective July 1, 2018—which established requirements to combat wage theft and sexual harassment for the janitorial industry.

AB 1761 would require hotel employers to: (1) provide employees with a free "panic button" to call for help when working alone in a guest room that the employee may use, and allow the employee to cease work, if the employee reasonably believes there is an ongoing crime, harassment, or other emergency happening in the employee's presence; (2) post a notice on the back of each guestroom door informing guests of the panic buttons entitled, "The Law Protects Hotel Housekeepers and Other Employees from Sexual Assault and Harassment"; and (3) provide an employee subjected to an act of violence, sexual harassment or assault, upon request, with time off to seek assistance from law enforcement, legal or medical assistance, and/or reasonable accommodation. The bill would prohibit employers from taking action against any employee who exercises the protections afforded by this bill, and impose a $100 per day penalty, up to $1,000, for a violation of these proposed provisions.

Pay Equity

SB 1284, as presently drafted, is a less onerous version of last year's effort to mandate annual reporting of pay data a la EEO-1. The bill would require, on or before September 30, 2019, and each year thereafter, that private employers with 100 or more employees submit a pay data report to the DIR. If enacted, the law would require employers to include in the report the following for each establishment, and a consolidated report for all establishments:

(1) the number of employees by race, ethnicity, and sex in the following categories: all levels of officials and managers, professionals, technicians, sales workers, administrative support workers, craft workers, operatives, laborers and helpers, and service workers; and

(2) the number of employees by race, ethnicity and sex whose earnings fall within each of the pay bands used by the US Bureau of Labor Statistics Occupation Employment Statistics Survey, determined by each employee's total earnings for a 12-month look-back period, including total hours worked by each employee for part-time/partial-year employment.

Employers that are required to submit the EEO-1 Report could instead submit that report to the DIR. The DIR would maintain the reports for 10 years and make the report available to the DFEH upon request. Non-compliant employers would be subject to a $500 civil penalty for the initial violation and $5,000 for each subsequent violation as well as citation by the Labor Commissioner. The bill would prohibit the DIR and DFEH from publicizing any individually identifiable information obtained through this process but authorize the DIR or the DFEH to develop and publicize aggregate reports based on the information received that are reasonably calculated to prevent association of any data with any business or person.

This year's Fair Pay Act bill, AB 2282, attempts to clarify some ambiguities in Labor Code sections 432.3 and 1197.5 created by prior pay equity legislation, AB 1676 (2016) and AB 168 (2017). AB 2282 would clarify that "pay scale" means a "salary or hourly wage range", that "reasonable request" by an employee for a position's pay scale means "a request made after an applicant has completed an initial interview with the employer," and that "applicant" or "applicant for employment" means an individual who is seeking employment with the employer and is currently not employed with that employer in any capacity or position. The bill provides that nothing in section 432.3 prohibits an employer from asking an applicant about his/her salary expectation, and that nothing in section 1197.5 should be interpreted to prohibit an employer from making a compensation decision based on a current employee's existing salary as long as any wage differential resulting from that compensation decision is justified by one or more of the factors specified in the statute. AB 2282 is scheduled for hearing in the Senate Committee on Labor and Industrial Relations on June 13.

Pay Statements: SB 1252 would amend Labor Code section 226 to grant employees the right "to receive" a copy of (not just inspect) their pay statements. This bill is scheduled for hearing on June 20 in the Assembly Committee on Labor and Employment.

Port Drayage Carriers: SB 1402 would require the DLSE to create and post a list on its website of "bad actor" port drayage motor carriers, i.e., companies with any unsatisfied judgments or assessments, or any "order, decision, or award" finding illegal conduct as to various wage/hour issues, including independent contractor misclassification and derivative claims. This bill would extend joint and severable liability to those companies' customers for future wage violations of the same nature by those drayage motor carriers. This bill is part of a very broad and multi-pronged attack on port drayage motor carriers serving the LA and Long Beach ports, mainly regarding alleged independent contractor misclassification of drivers.

Lactation Accommodations: AB 1976 would ensure employers' already-required reasonable efforts to provide a room or location for lactation consists of providing something other than a toilet stall or bathroom (by deleting "toilet stall" and inserting "bathroom" in the statute). This bill is scheduled for hearing in the Senate Committee on Labor and Industrial Relations on June 13. SB 937 would more substantively change existing lactation accommodation requirements, by requiring a lactation room to be safe, clean, and free of toxic or hazardous materials, contain a surface to place a breast pump and personal items, contain a place to sit, and have access to electricity. The bill would exempt employers with fewer than 50 employees that can show that the requirement would impose an undue hardship by causing significant expense or operational difficulty when considered in relation to the employer's size, financial resources, or structure. SB 937 would allow employers to designate a temporary lactation location, instead of providing a dedicated room, due to operational, financial, or space limitations. SB 937 would require employers to develop and implement a new lactation accommodation policy describing an employee's right to a lactation accommodation, how to request an accommodation, the employer's obligation to respond to the request, and the employee's right to file a complaint with the Labor Commissioner. The bill would also require employers to maintain accommodation request records for three years and to allow the Labor Commissioner access to the records. The bill would require the DLSE to create and make available a model lactation policy and model lactation accommodation request form on the DLSE website, as well as lactation accommodation best practices. The bill would deem a denial of reasonable break time or adequate lactation space a failure to provide a rest period in accordance with Labor Code section 226.7.

Paid Family Leave. 2017 legislation effective January 1, 2018, removed the seven-day waiting period before an eligible employee may receive family temporary disability benefits (under the paid family leave program, which provides wage replacement benefits to workers who take time off work to care for a seriously ill family member or to bond with a minor child within one year of birth or placement). AB 2587 would remove the requirement that up to one week of vacation leave be applied to the waiting period, consistent with the removal of the seven-day waiting period for these benefits. This bill is scheduled for hearing in the Senate Committee on Labor and Industrial Relations on June 13.

Criminal History. SB 1412, the sole criminal history bill of four still alive, would allow employers to inquire into a job applicant's particular conviction, regardless of whether that conviction has been judicially dismissed or sealed, under these specified conditions: (1) the employer is required by federal law, federal regulation, or state law to obtain information about the particular conviction, (2) the job applicant would carry or use a firearm as part of the employment, (3) the job applicant with that particular conviction would be ineligible to hold the position sought, or (4) the employer is prohibited from hiring an applicant who has that particular conviction.

Mediation Confidentiality. SB 954 would require that, except in the case of a class action, before engaging in a mediation or mediation consultation, an attorney representing a client participating in a mediation or a mediation consultation must provide the client with a written disclosure containing the mediation confidentiality restrictions provided in the Evidence Code. The bill would require the attorney to obtain a written acknowledgment signed by the client stating that the client has read and understands the confidentiality restrictions. However, an agreement prepared during a mediation would remain valid even if an attorney fails to comply with the disclosure requirement. The bill would also add to the mediation privilege of Evidence Code section 1122 any communication, document, or writing that is to be used in an attorney disciplinary proceeding to determine whether an attorney has complied with the above requirements, and does not disclose anything said or done or any admission made in the course of the mediation.

Immigration Status. AB 2732 would make it illegal—and subject to a $10,000 penalty—for an employer to knowingly destroy or withhold any real or purported passport, other immigration document, or government identification, of another person, in the course of committing trafficking, peonage, slavery, involuntary servitude, a coercive labor practice, or to avoid any obligation imposed on the employer by the Labor Code. This bill would require an employer to post a workplace notice stating the rights of an employee to maintain custody of the employee's own immigration documents, that the withholding of immigration documents by an employer is a crime, and "If your employer or anyone is controlling your movement, documents, or wages, or using direct or implied threats against you or your family, or both, you have the right to call local or federal authorities, or the National Human Trafficking Hotline at 888-373-7888.". Further, the bill would require an employer to provide employees with the "Worker's Bill of Rights," to be developed by the DIR by July 1, 2019, which would inform employees of the same rights. Employers would be required to have employees sign the "Worker's Bill of Rights" and maintain the records for at least three years.

SB 785, which the Governor signed and went into effect immediately May 17, 2018 (to sunset on January 1, 2020), prohibits the disclosure of an individual's immigration status in open court in a civil or criminal action unless the party wishing to disclose the information requests a confidential in camera hearing and the judge deems the evidence relevant and admissible.

Bills that failed... for now:

The following bills did not survive the house of origin deadline or were struck down prior to the deadline. See our prior legislative update for summaries of these bills.

AB 2016 (PAGA); AB 2482 (Flexible Work Schedules); AB 2946 (DLSE Complaints extension); AB 2366 (Victims of Sexual Harassment); AB 1938 (Familial Status Inquiries); AB 2223 and AB 2613 (Wage Statements); AB 2069 (medical marijuana reasonable accommodation); AB 2841 (paid sick leave increase); AB 2680 , SB 1298, AB 2647 (criminal history inquiries).

Stay tuned for our next Legislative update coming around the August 31st deadline for bills to pass both houses and make their way to the Governor's office.

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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