2015 Employment Law Updates for California


2014 and 2015 are proving to be anything but easy for employers in California who want to keep in compliance. In 2014 we had an increase in Minimum Wage, new guidelines regarding Meal and Rest Periods, Military and Veteran status added to the list of protected categories, the definition of Sexual Harassment expanded, additional protections for Whistleblowers, and changes to several mandated Leaves of Absence. In 2015, by far, the most impactful new legislation requires employers to provide Paid Sick Days to all employees as of July 1, 2015. While there is much talk about the new paid sick days law, employers need to be mindful of quite a few other employment-related bills that go into effect in 2015 – many of which provide clarification to or add on to bills that took effect in 2014. A colleague of mine recently lamented that now California employers almost need to adopt an employment attorney just so they can stay in business! As a more manageable alternative, we’ve prepare the following brief description of a number (but mind you, not all) of new employment laws that have gone into effect for 2014 and 2015:

Paid Sick DaysAB 1522 is by far the most significant change in California employment law in the past several years. While many employers are focusing on the requirement to provide all employees with 3 days of paid sick time off as of July 1, 2015, some of the bill’s requirements went into effective as of January 1, 2015 and include an updated Notice to Employees for all current staff and new hires and a new Paid Sick Days Poster. As this law is anything but straightforward and the penalties for non compliance are significant, employers are encouraged to study its various provisions carefully and sooner rather than later. A particular challenge presents itself for employers who already have some form of vacation, sick, or PTO plan in place who wish to keep their existing policy but modify it to be compliant with the new regulations. For more information, please read our detailed article: Healthy Families, Healthy Workplace Act of 2015, Paid Sick Days now Mandated in California.

Minimum Wage – California’s minimum wage increased to $9.00 on July 1, 2014 and will increase again to $10.00 on January 1, 2016. As a reminder, employers with exempt employees need to verify that they are paid at least twice minimum wage for the equivalent of full time work, or at least $37,440 annually in order to remain exempt from overtime. For details, see AB 10. Damages for employers who fail to pay minimum wage were increased on January 1, 2014 by AB 241 to $100 per employee for each pay period where overtime was not paid properly for an initial offense and $250 for subsequent violations.

Minimum Wage – California’s minimum wage increased to $9.00 on July 1, 2014 and will increase again to $10.00 on January 1, 2016. As a reminder, employers with exempt employees need to verify that they are paid at least twice minimum wage for the equivalent of full time work, or at least $37,440 annually in order to remain exempt from overtime. For details, see AB 10. Damages for employers who fail to pay minimum wage were increased on January 1, 2014 by AB 241 to $100 per employee for each pay period where overtime was not paid properly for an initial offense and $250 for subsequent violations.

Meal and Rest Periods – Cal/OSHA requires employers with outdoor places of work to provide Cool-Down Rest Periods (CDRPs) in the shade of not less than 5 minutes at a time on an as-needed basis for employees to protect from overheating. SB 435 (effective January 1, 2014) clarifies that if an employer fails to provide such CDRPs, employees are entitled to the same 1 hour of pay premium penalty that applies to missed meal and rest breaks. SB 1360 (effective January 1, 2015) clarifies that such CDRPs are to be counted as time worked.

Prevailing Wages – a number of bills were passed that relate to prevailing wages which typically impact employers who provide services or who do construction work on public works projects or for the government. 2014 bills: AB 1336, SB 7, SB 54, SB 377, SB 776. 2015 bills: AB 26, AB 1870, AB 1939, AB 2272, AB 2744, SB 266.

Domestic Work Employees – The Domestic Worker Bill of Rights, AB 241, provides for overtime pay for certain in-home, domestic employees who are also personal attendants. Such employees were previously considered exempt but effective January 1, 2014 are eligible for overtime if they work more than 9 hours in a day or 45 hours in a workweek. Note that effective January 1, 2015, federal law provides for overtime for personal attendants hired by a third party or an agency if they work over 40 hours in a week. Any employer with in-home employees should study the definitions in these new regulations carefully not only because of the exclusions within the law about also due to the possible intersection with federal rules.

Protection for Exercising Rights – Previously, the law only protected employees from being discharged or discriminated against as a result of their exercising their rights under the CA Labor Code. Effective January 1, 2014, AB 263 further protects employees against retaliation and adverse action if they make either a written or verbal complaint about wages due to them. An employer is also prohibited from discharging, discriminating, retaliating, or taking any adverse action against an employee as a result of the employee updating his/her personal information. The law imposed steep $10,000 civil penalties per employee, per violation. In 2015, AB 2751 clarifies that the employee would only be protected when making a “lawful” change to his/her personal information and further clarifies that the $10,000 penalties would be paid directly to the employees.

Immigration Matters – AB 263 (January 1, 2014) makes it an unfair immigration-related practice to threaten to contact immigration authorities if an employee exercises his/her rights under the CA Labor Code. AB 2751(January 1, 2015) expands that protection to include filing, threatening to file, or filing a false report or complaint with any state or federal agency. SB 666 (January 1, 2014) permits the state to suspend or revoke an employer’s business license who reports or threatens to report the immigration status of an employee who has exercised a right related to his/her employment. It also allows for the suspension, disbarment, or discipline of attorneys for similar conduct against witnesses or other parties in a lawsuit, and imposes civil penalties of $10,000 per violation. SB 666 does clarify, however, that employers are not subject to suspension or revocation of their business license for requiring workers to verify their employment eligibility through the I-9 process. SB 524(January 1, 2014) clarifies that a person may be found guilty of  criminal extortion if the person threatens to report the immigration status or suspected immigration status of an employee or his/her relatives and family.

Driver’s Licenses for Undocumented Immigrants – Passed in 2014, AB 60 became effective on January 1, 2015, and provides for the DMV to issue driver’s licenses to an undocumented person who can prove his/her identity and CA residency and who can meet all other licensing requirements. Employers should note that such licenses will bear a notation stating that they are not valid for federal purposes such as verifying employment through the I-9 process. AB 1660 (January 1, 2015) makes it a violation of the CA Fair Employment and Housing Act for an employer to discriminate against an individual because he/she holds an AB 60 driver’s license and requires all driver’s license information obtained by the employer to remain confidential. This law clarifies that completing the I-9 process does not violate CA law, and further prohibits an employer from requiring an employee to provide a driver’s license unless being in possession of a valid driver’s license is required by law or a legally permissible job requirement. For employers and HR practitioners who now feel Between a Driver’s License Rock and an I-9 Hard Place, please attend our upcoming seminar – please contact our office or wait for more details in a future e-publication.

Discrimination and Retaliation – Military and Veteran Status was added to the list of categories protected from employment discrimination under the Fair Employment and Housing Act (FEHA) by AB 556 (January 1, 2014). AB 1443 (January 1, 2015) adds unpaid Interns and Volunteers to the individuals who are protected under the FEHA.AB 1792 (January 1, 2014) prohibits an employer from discrimination and retaliation against employees receiving public assistance in the form of participation in the Medi-Cal program and requires state agencies to prepare lists of the top 500 employers with the most number of employees enrolled in Medi-Cal. These lists become available to the public in January 2016. For purposes of AB 1792, “employer” is defined as an entity with more than 100 employees enrolled in Medi-Cal. The Office of Federal Contract Compliance (OFCCP) released new Regulations on Individuals with Disabilities (IWDs) that became effective on March 24, 2014 which prohibit federal contractors and subcontractors from discrimination against IWDs and require employers to take affirmative action.

Sexual Harassment – AB 292 (January 1, 2014). Amends the definition of harassment to clarify that sexually harassing conduct does not need to be motivated by sexual desire. Effective January 1, 2015, SB 1087 requires farm labor contractors to provide sexual harassment prevention training to supervisory and nonsupervisory employees and further places restrictions on the ability to obtain a license by a farm labor contractor who has committed sexual harassment.

Bullying in the Workplace – AB 2053, effective January 1, 2015, requires employers who must provide mandatory sexual harassment training (i.e. employers with 50 or more employees) to include information in that training that addresses the concept of “abusive conduct” in the workplace. While this law does not make such abusive conduct illegal, it does contain a definition of what constitutes abusive conduct. Many feel that it is simply a matter of time before we see employees being able to bring bullying lawsuits against their employers. There is currently legislation pending in a number of states to make bullying illegal in the workplace.

Time off for Crime Victims –  SB 288 (January 1, 2014) expands the existing Crime Victims Leave by allowing time off from work to appear in a court proceeding in which the victim’s rights are at issue as a result of a number of specific crimes. SB 400 (January 1, 2014) extends rights already available to employees who are victims of domestic violence or sexual assault to staking victims and further makes it illegal to discriminate or retaliate against an employee because of his/her status as a victim. Of note to employers is that this law now imposes areasonable accommodation requirement on employers who will now be obligated to take measures to help ensure these employees’ safety while at work.

Time off for Emergency Duty – Previous law provided that employers with 50 or more employees had to give volunteer firefighters up to 14 days of unpaid time off per year to engage in training. AB 11 (January 1, 2014) expands this right to Reserve Peace Officers and Emergency Rescue Personnel. Effective January 1, 2015, AB 2535adds employees who are members of a Disaster Medical Response Team and clarifies that an employee who is a healthcare provider must notify  the employer at the time he/she is designated as emergency rescue personnel and also at the time of learning that he/she will be deployed.

Paid Family Leave  (PFL) – Often a source of confusion for employees and employers, California’s Paid Family Leave program is a wage replacement benefit funded by mandatory deductions from employees’ paychecks that go into a state-administered fund. It is neither an entitlement for an employee to take a leave of absence or an obligation for an employer to grant leave. Effective July 1, 2014, SB 770 expands the PFL program to allow for benefits when an employee takes unpaid time off to care for a seriously ill grandparent, grandchild, sibling, or parent-in-law. This legislation has no effect on California’s Family Rights Act (CFRA).

Workers, Compensation – Quite a number of bills were signed into law in the past couple of years that relate to workers’ compensation. 2014 bills:  AB 1309AB 607AB 1376SP 146SB 809. 2015 bills: AB 1035AB 1746AB 2732.  Of note for employers is that SB 863 from 2012 created changes effective July 1, 2014  in the “Time of Hire” pamphlets that must be given out to all new employees. These changes include new regulations regarding the pre-designation of a personal physician, reporting duties of the primary treating physician, and language changes to the personal physician pre-designation and personal chiropractor/acupuncturist forms. Employers should contact their workers’ compensation carriers to ensure that they have the most up to date forms.

Background Checks – SB 530 (January 1, 2014) prohibits an employer from asking an applicant to disclose information on a conviction that has been expunged, sealed, or dismissed or from considering such information as a condition of employment. AB 218 (July 1, 2014) prohibits public employers from asking applicants for criminal background information until a determination has been made that the minimum job qualifications have been met.San Francisco’s Fair Chance Ordinance, effective August 13, 2014, prohibits private employers with at least 20 employees from inquiring about a San Francisco applicant’s criminal history on an employment application or in an initial interview. Berkeley, East Palo Alto, and Oakland, also have similar such prohibitions in place. AB 1650(January 1, 2015) prohibits contractors bidding on state contracts to require applicants for on-site construction jobs from disclosing criminal history on job applications. Of note for employers is that this is part of a national trend, gaining momentum to support “Ban the Box” laws, referring to legislation that would prevent employers from having a box to check on employment applications where the prospective employee is asked if they have been previously convicted of any crimes. The EEOC has also recently issued cautionary guidance about using criminal records only when job related and when consistent with business necessity. All while making it more challenging for employers to obtain criminal background information on its prospective employees, the state passed AB 1852, which effective January 1, 2015 requires all businesses who provide services to minors to provide written notice to the parents or guardians of these minors regarding the employer’s policies on employee criminal background checks.

Whistleblower Protections – The California Labor Code provides protections for employees who believe their employer is violating a federal or state law. SB 496 (January 1, 2014) expands these protections to cover an employee who reports an alleged violation of local government rules or regulations. It also protects employees who report alleged violations to a supervisory employee or any other employee who has authority to conduct an investigation or to correct the alleged violation. The law also prohibits retaliation against an employee who is believed to have disclosed or who may disclose information. In a similar development of expanding whistleblower protections, the US Supreme Court, in Lawson v. FMR LLC, ruled that the protections of Sarbanes-Oxley apply not only to the direct employees of a public company, but also to contractors like lawyers, accountants, and investment advisors. Additionally, President Obama signed the Intelligence Authorization Act for Fiscal Year 2014which provides expanded protections for whistleblowers who are intelligence agency employees.

Liability for Use of Contract Labor – AB 1897 (January 1, 2015) imposes liability for wage and hour violations, for securing workers’ compensation coverage, and for compliance with occupational health and safety regulations on employers who contract for labor from staffing agencies or other labor contractors. The legislation applies to private sector business who use contract labor and have 25 or more workers (including contract labor) or who have 6 or more contract labor workers at any given time. The liability will be imposed without consideration of whether the contracting employer had knowledge of the violations and irrespective of whether the client employer and the labor contractor are joint employers. While this new law will likely result in employers being more cautious about hiring through third party agencies, it explicitly does not prohibit the client employer from requiring indemnification from the staffing companies it uses.

Healthcare Coverage Waiting Periods – SB 1034’s aim was to resolve the confusion over waiting periods for group health insurance eligibility by permitting California employers to adopt the 90-day maximum waiting period allowed by the national Affordable Care Act. A prior CA law prohibited employers from implementing waiting periods that exceeded 60 days. Although it became effective for plan years beginning after January 1, 2015, many insurance carriers have allowed this change immediately. Employers should note that they may voluntarily offer shorter waiting periods.

Penalties and More Penalties – As if the penalties for non-compliance were not already significant for employers, the following pieces of legislation increased the liability for the following offences:

2014:

  • AB 1386 – allows the Labor Commissioner to assess a lien against an employers real property.
  • SB 390 – creates a criminal penalty and/or jail time for an employer who fails to remit withholdings from an employee’s paycheck that was required by law.
  • SB 462 – provides that employers who win wage claims can only recover attorneys’ fees and costs if the lawsuit was filed “in bad faith” by the employee.

2015:

  • AB 1723 – expands the penalties, restitution, and liquidated damages for an employer’s willful failure to timely pay wages to a terminating employee.
  • AB 2074 – establishes that the statute of limitations for filing a lawsuit for failure to pay minimum wage is 3 years, despite several recent court cases that held the claim had to be filed within one year.
  • AB 2288 – provides increased penalties for violations of CA child labor laws including treble damages for employment law violations that occurred while the employee was a minor and a penalty of $25,000 to $50,000  for violations involving minors 12 years of age or younger. It also “tolls” or extends, the statute of limitations for employment law violations until the minor is 18 years of age.

Local Ordinances

  • San Francisco’s Family Friendly Workplace Ordinance – became effective on January 1, 2014 and was amended on February 14, 2014. It requires covered employers of 20 or more employees to allow covered employees with caregiver responsibilities to request a flexible or predictable work schedule. The employer must consider the requests and respond to the employees within 21 days,  but is permitted to deny the request for various reasons. The law further provides for posting and recordkeeping requirements, and make the employee’s status as a “caregiver” protected.
  • San Diego’s Minimum Wage and Sick Leave Ordinance passed by the city council in July 2014 to increase the city’s minimum wage to $11.50 by 2017 and to require employers to provide paid sick days to employees at the rate of 1 hour of paid sick time for each 30 hours worked effective July 2015. After defeating a veto by the mayor, the council ultimately agreed  to put the matter on the June 2016 primary election ballot after opponents submitted enough signatures to require the council either to rescind the ordinance or allow the voters to decide its outcome.

What should employers do?
Review current Sick Leave, Vacation, or PTO policies to ensure compliance with new mandated Paid Sick Days law.

  • Update all employment posters as of 1/1/15 to include the current minimum wage and new Paid Sick Days Poster. Contact Vantaggio if you need a full set of new employment posters.
  • Begin using new Notice to Employees with new hires and issue an new notice to current employees to provide information required by new Paid Sick Days law.
  • Update your employee handbooks immediately due to various changes in employment law including new protected categories, new leave entitlements, and Paid Sick Days.
  • Ensure all employees are being paid the current minimum wage and that all exempt employees are paid the new minimum salary requirements. It would also be a good time to do an exempt/non-exempt audit of your employees to ensure proper classification.
  • Make sure all employees who work outdoors are provided with the necessary Cool Down Rest Periods.
  • Review, or implement agreements with contract labor providers that indemnify your business for failure to pay required wages or secure valid workers’ compensation coverage.
  • Make sure to have updated workers’ compensation pamphlets and pre-designation forms in new hire packets.
  • Review all payroll rates and practices to avoid potential wage/hour claims and penalties.
  • Check with broker regarding modifying your healthcare coverage waiting periods.
  • Provide training to supervisors regarding harassment and discrimination in the workplace.
  • Evaluate your protections for whistleblowers.
  • Review your I-9 procedures and train employees responsible for I-9 completion in preparation for AB 60 driver’s licenses.
  • Plan your bi-annual Sexual Harassment Prevention training for supervisors and ensure that the training contains the new information about abusive conduct in the workplace.
  • Examine your criminal background check policies and procedures to ensure on-going compliance with evolving law.

It’s a big year, and we imagine you could use some help. Vantaggio can assist with answering additional question, updating your handbook; ensuring that you have the proper forms, notices, and posters in place; conducting training; or implementing solutions to any of the above referenced compliance needs. We can even provide a complete HR audit for your company. For more information, contact us at Info@VantaggioHR.com or call 1-877-VHR-relx (1-877-847-7359)  

And remember,  relax™ We Take the Stress out of HR™!

The information presented in this article is intended to be accurate and authoritative information on the subject matter at the time submitted for publication. It is distributed with the understanding that Vantaggio HR is not rendering legal advice and assumes no liability whatsoever in connection with its use.

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