With the New Year come new laws that affect California employers. The following is the "A to Z" of changes in the law that may affect your business in 2018.
Amendment to Equal Pay
Effective January 1, 2018, California's Fair Pay Act will extend to public employers. California law requires that employees (regardless of sex, race or ethnicity) be compensated equally for "substantially similar work" in terms of skill, effort and responsibility when performed under similar working conditions. Employers may defend disparities using legitimate factors such as seniority, merit or productivity, but employers must demonstrate that each factor is applied reasonably, and that the factors account for the entire wage disparity.
For more information concerning details of California's equal pay laws, please see https://www.dir.ca.gov/dlse/California_Equal_Pay_Act.htm
Ban the Box
The California state-wide "ban the box" legislation takes effect on January 1, 2018. Under the new law, it is unlawful for an employer with five or more employees to include on any employment application any question that seeks the disclosure of an applicant's conviction history, to inquire into or consider the conviction history of an applicant until that applicant has received a conditional offer, and, when conducting a conviction history background check, to consider, distribute, or disseminate information related to specified prior arrests, diversions, and convictions.
An employer who intends to deny an applicant a position of employment solely or in part because of the applicant's conviction history must make an individualized assessment of whether the applicant's conviction history has a direct and adverse relationship with the specific duties of the job, and to consider certain topics when making that assessment.
An employer who makes a preliminary decision to deny employment based on that individualized assessment is required to provide the applicant written notification of the decision before a final decision is made; the notification must contain specified information.
The applicant then has five business days to respond to that notification before the employer may make a final decision. If the applicant notifies the employer in writing that he or she disputes the accuracy of the conviction history and is obtaining evidence to support that assertion, the applicant has an additional five business days to respond to the notice.
City and County Ordinances – Minimum Wage and Sick Leave
Make sure you know all applicable minimum wage and sick leave ordinances for every city and county where you have the requisite number of employees. Please see the minimum wage chart and sick leave chart for details. Please see the minimum wage chart and sick leave chart for details.
Driving While Using Wireless Devices
Drivers are prohibited from operating a motor vehicle while holding and operating a handheld wireless telephone and certain electronic wireless communications devices (with some exceptions). Effective January 1, 2018, use of a specialized mobile radio device and a two-way messaging device while driving will no longer be prohibited.
"Employee" Definition for Workers' Compensation
Effective July 1, 2018, SB 189 expands the scope of the exception to the definition of "employee" under California workers' compensation law.The exception applies to an officer or member of the board of directors of a quasi-public or private corporation who owns specified stock of the corporation if that officer's or member's parent, grandparent, sibling, spouse, or child also owns at least a certain percentage of the issued and outstanding stock and that officer or member is covered by a health care service plan or a health insurance policy, and executes a written waiver.
The law generally takes effect July 1, 2018, except as otherwise specified.
Fair Labor Standards Act
The California Labor Code differs significantly from the Fair Labor Standards Act (FLSA) and other states' laws. Some of California's labor laws are stricter than federal requirements. Always make sure you are in compliance with the applicable laws.
Starting January 1, 2018, general contractors are liable for nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions incurred by a subcontractor at any tier. A claim brought under this new law must be brought within one year of the date of completion of the work or notice of completion of the direct contract, whichever is earlier. Claims may only be brought by the Labor Commissioner; there is no private right of action.
For more information concerning the details of this law, please see https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB1701
Harassment Training and Posting Requirements
Employers are currently required to provide two hours of sexual harassment training to supervisors every two years. Effective January 1, 2018, employers with 50 or more employees must include, as part of the mandated training, components on harassment based on gender identity, gender expression and sexual orientation. Employers must also post a notice approved by the California Department of Fair Employment and Housing regarding transgender rights.
Immigration – Worksite Enforcement Actions
Effective January 1, 2018, employers are prohibited from allowing immigration officials to (1) enter non-public labor areas or (2) access or review employee records without a subpoena or court order.The law also requires that employers notify an employee within 72 hours of a lawful inspection of their employment documents and must provide the employee with a copy of their I-9 Employment Eligibility Verification forms and a copy of the written notice of inspection. Violations of this law are subject to a fine ranging from $2,000 to $10,000 for each violation.
Joint Employer Liability
Joint employer liability can arise in many different contexts such as when using staffing agencies, management companies or even in a franchise context.
Know the laws that affect you as an employer, and contact us with questions!
Liability for Whistleblower Retaliation – Health Facilities
Existing law prohibits a health facility from discriminating or retaliating against a patient, employee, member of the medical staff, or any other health care worker of the health facility because that person has presented a grievance, complaint, or report to the facility, or has initiated, participated, or cooperated in an investigation or administrative proceeding related to the quality of care, services, or conditions at the facility, as specified. Effective January 1, 2018, the maximum fine for a misdemeanor violation of these provisions increases from $20,000 to $75,000.
Motels, Hotels, and Bed and Breakfast Inns
Existing law requires specified businesses and establishments such as bars, airports, adult businesses and emergency rooms to post a notice that contains information related to slavery and human trafficking, including information related to specified nonprofit organizations that provide services in support of the elimination of slavery and human trafficking. Effective January 1, 2018, this requirement also extends to hotels, motels, and bed and breakfast inns.
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Parental Leave – Small Employers
Under existing law, the California Family Rights Act's ("CFRA") parental leave protections apply to employers with at least 50 employees within a 75-mile radius. As of January 1, 2018, the CFRA's parental leave protections will extend to employers with at least 20 employees within a 75-mile radius. Employers covered by CFRA must offer 12 weeks of unpaid leave for baby-bonding time within one year of a child's birth, adoption, or foster care placement to those employees with more than 12 months and 1,250 hours of service.The new law also requires employers to maintain medical benefits during the leave period.
Parental Leave – Mediation Pilot Program
Effective January 1, 2018, the Department of Fair Employment and Housing will create a parental leave mediation pilot program through January 1, 2020. Under the pilot program, within 60 days of receipt of a right-to-sue notice regarding a parental leave claim, an employer may request all parties participate in the department's Mediation Division Program. If an employer elects to enter mediation, the employee cannot sue until the process is complete.
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Retaliation Complaints and Actions
Starting on January 1, 2018, the Labor Commissioner is authorized to commence an investigation of an employer, with or without a complaint being filed, when retaliation or discrimination is suspected during the course of an investigation being conducted by the Labor Commissioner. The Commissioner may also seek injunctive relief (such as reinstatement) while the claims are still being investigated, and the burden of proof is less than usually required to obtain injunctive relief. It can also issue citations directing specific relief to persons determined to be responsible for violations and to create certain procedural requirements such as procedures for hearings regarding claims brought under these new provisions.
Salary History Inquiry Not Permitted
Beginning January 1, 2018, employers are prohibited from seeking or relying on the salary history information of an applicant for employment as a factor in determining whether to offer an applicant employment or what salary to offer an applicant; however, if an applicant volunteers such information without prompting, the employer may rely on it in determining the salary to offer the applicant. However, salary history alone can never be used to justify any disparity in compensation. Further, upon reasonable request, employers are required to provide the pay scale for a position to an applicant for employment. This new law applies to all employers, including state and local government employers and the Legislature and does not apply to salary history information disclosable to the public pursuant to federal or state law.
Transgender Rights Poster
Effective January 1, 2018, employers will be required to display a poster developed by the Department of Fair Employment and Housing regarding transgender rights. You can access the English version of the poster here.
Unlawful Discrimination Against Service Members
Beginning on January 1, 2018, the types of unlawful discrimination against service members is expanded to prohibit various types of discrimination against an officer or enlisted member of the military or naval forces of the state or the United States because of his or her membership or service. The amendments prohibit discrimination in terms, conditions, or privileges of employment and include remedies for violations.
Victims of Domestic Terrorism
If employees are injured in an act of domestic terrorism, a new law effective January 1, 2018 requires employers to provide injured employees with immediate support from a nurse case manager, who will assist injured employees in obtaining medically necessary medical treatment and assist providers of medical services in seeking authorization of medical treatment.
These provisions apply only if the Governor declares a state of emergency in connection with the act of domestic terrorism.
Existing law prohibits an employer from paying any of its employees at wage rates less than the rates paid to employees of the opposite sex or of another race or ethnicity for substantially similar work. An employer or other person who violates or causes a violation of that prohibition, or who reduces the wages of any employee in order to comply with that prohibition, is guilty of a misdemeanor. Effective January 1, 2018, the law expands the definition of "employer" to include public and private employers. The new law specifies that a public employer is not subject to the misdemeanor provision.
Should you have any questions about these rate changes or about your local minimum wage obligations if your business is in California, please contact your BakerHostetler Employment attorney.
Be sure to review your overtime calculations to ensure you are paying employees correctly.
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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.