2013 is proving to be a year chock-full of new employment-related laws and regulations for employers – even companies with as few as 5 employees! On the federal level, the National Labor Relations Board has been taking an aggressive approach to protecting employee’s rights to unionize and have been both scrutinizing company Social Media and Confidentiality policies and bringing legal action against non-unionized employers who inappropriately infringe upon employees’ rights to organize. Federal and state audits are on the rise over Independent Contractor Misclassifications, exempt and non-exempt status, and employees’ EEOC rights. California passed a number of new laws which impact the areas of Social Media, Religious Discrimination, Breastfeeding, Personnel and Payroll Records, Commissions, Overtime, Wage Garnishments, Intellectual Disabilities, and Unemployment. Additionally, new Pregnancy Disability Leave regulations were just implemented and major Workers’ Compensation Reform legislation has been passed.
The following is a brief description of a number (but not all) of new employment laws that unless otherwise stated, went into effect on 1/1/13:
Social Media – Employers are now prohibited from requiring or requesting that an employee provide his/her username or password in order to gain access to the employee’s social media. Employers may also not request or require that an employee access his/her social media in the employer’s presence or divulge information about social media. Employers are explicitly prohibited from discharging, disciplining, or retaliating against an employee for his/her refusal to cooperate with such requests or demands. An employer, however, is permitting to request that an employee divulge social media in order to conduct an investigation surrounding workplace misconduct, as long as the information is used solely for that purpose. To read the new law, see: AB 1844.
Religion and Reasonable Accommodation – Employers have been prohibited from discriminating, harassing, or retaliating against an employee based on the employee’s religion. This new law adds the employee’s “religious dress practices” and “religious grooming practices” to those protections. The law states that those terms will be very broadly construed and employees will be protected as long as practices such as wearing or carrying of religious clothing, head or face coverings, jewelry, head, facial and body hair, etc. are part of the observance of a religious creed. Employers must engage in a process of reasonable accommodation with employees whose practices fall under these protections, but the law cautions employers that segregating certain employees from co-workers or the public would not be considered reasonable. For more details, see: AB 1964.
Pregnancy Disability Leave – As a reminder, Pregnancy Disability Leave law applies to all CA employers with 5 or more employees and requires employers to provide unpaid leaves of absence of up to 4 months to employees disabled by pregnancy, childbirth, and related medical conditions as well as job transfers and other accommodations to employees impacted by pregnancy, childbirth, or related medical conditions. Last year, SB 299 required all employers effective 12/1/12 to maintain employees’ health benefits for up to a maximum of 4 months during a Pregnancy Disability Leave under the same terms and conditions as applied prior to the employee going out on leave. Effective 12/30/12, the new regulations make significant changes to existing law including: (1) a change to the definition and calculation of 4 months of leave; (2) an expansion of the term “disabled” by pregnancy; (3) details about what constitutes reasonable accommodation for pregnant employees; (4) increased protections for employees who are both pregnant and “perceived to be” pregnant; (5) more stringent notice requirements for employers; (6) details about the permissibility and administration of requesting medical certification; (7) further clarification of an employer’s responsibility to maintain benefits during leave; (8) guidance of the administration of intermittent leave; (9) coordination with California Family Rights Act (CFRA) and the Americans with Disabilities Act (ADA), (10) updates of posters “A” and “B” that must be displayed in the workplace describing employees’ rights. Most employers, especially smaller ones, can no longer afford to handle employee pregnancies casually.
Breastfeeding – Employees are protected against discrimination, harassment, and retaliation based upon sex, and sex is further defined under the law to include pregnancy, childbirth, and related medical conditions. This new law adds breastfeeding and medical conditions related to breastfeeding to that protection. Note that both under federal and state law, breastfeeding mothers must be afforded a reasonable amount of additional break time if needed to express breast milk during the workday and must be provided with an area in which to conduct this activity in private that is in close proximity to the employee’s work area, and is not a bathroom. For more details, see: AB 2386.
Personnel and Payroll Records – Surprisingly, several new laws on these topics are creating a large amount of confusion. Currently, employers are required to allow employees access to their personnel files provided the employee provides advance notice. Employees are also entitled to receive a copy of any document in their personnel files which contains their signature. AB 2674 has been widely discussed on the internet as being a law which changes and clarifies these rights to personnel records, when in fact it really applies only to certain payroll-related information. Labor Code Section 226(a) details that an employee’s paycheck must be accompanied by a wage statement containing: (1) gross wages; (2) total hours worked unless the employee is an exempt, salaried employee; (3) number of piece-rate units earned; (4) all deductions; (5) net wages; (6) dates of the pay period; (7) employee’s last name and last 4 digits of SSN or an employee ID number; (8) name, address of legal entity who is employer; (9) all applicable hourly rates in effect during the pay period. This information must be kept on file by the employer for at least 3 years. Current and former employees must be allowed to inspect and obtain a copy of this specific information (not everything in the personnel file) upon reasonable request by the employee, and the employer must respond to such requests within 21 days. The law clarifies penalties for non-compliance that may be assessed against the employer if the employee is “injured” by the employer’s failure to comply which would include: (1) not providing a wage statement; (2) providing a statement that was incomplete or inaccurate; or (3) providing a statement on which certain information is not “promptly” and “easily” understood. Additional compliance measures have been imposed on staffing agencies including needing to provide information about the legal employer on the “Notice to Employees” which became mandatory for all newly hired non-exempt employees effective 1/1/12 and a requirement to provide the rate of pay and hours worked on each temporary assignment on an employee’s paystub each pay period. Several new laws apply: AB 2624, AB 1744, and SB 1255.
Commission Plans – Passed in 2011, AB 1396 required all California employers to document commission plans for any employees who are paid in whole or in part by commission. The written document must describe the method by which commissions will be computed and paid. The employer must sign the contract, provide a signed copy to the employee, and receive a signed receipt from the employee. “Commissions” are given the same definition as in the California Labor Law Code – if the compensation is based upon a percentage of the sale of the employer’s goods or services, a commission plan exists. A new law clarifies some of these requirements by describing that the following are not considered “commissions” – short-term productivity bonuses<, and AB 2675.
Fixed Salaries and Overtime – In 2011, a California Court of Appeals in Arechiga v. Dolores Press, ruled that an employer was permitted to pay a non-exempt employee a fixed salary which included a fixed number of regular overtime hours, provided that the salary was calculated using 1.5 times the employee’s regular hourly rate of pay for the overtime hours included in that salary. This new law overturns that decision and modifies the CA Labor Code by describing that a salary paid to any non-exempt employee is deemed to be payment only for regular hours worked, and not overtime. See the details here: AB 2103.
Wage Garnishments – Effective for garnishments issued after 7/1/13, California will no longer align with the federal standards for computing the amount of garnishment that may be taken from an employee’s paycheck. Currently, an employer cannot withhold the lesser of 25% of the employee’s weekly disposable earnings OR the amount by which the disposable earnings exceeds 30 times the federal minimum wage ($7.25). The new rules in California will be that an employer cannot withhold the lesser of 25% of the employee’s weekly disposable earnings OR the amount by which the disposable earnings exceeds 40 times the state minimum wage (currently $8.00). The details can be found here: AB 1775.
Human Trafficking Poster – Effective 4/1/13, certain service organizations (businesses with liquor licenses, adult or sexually-oriented businesses, ER and urgent care, airports, passenger, light rail and bus stations, truck stops, etc.) will be required to post a notice about the illegality of human trafficking and slavery which includes information on resources for potential victims. Samples of the notice will be made available by the Department of Justice. For more information, see: SB 1193.
Intellectual Disability – Two new bills amend a number of existing statutes and regulations by substituting the term “intellectual disability” for the words “mental retardation.” Furthermore, it adds “intellectual disability” to the Fair Employment Housing Act’s list of protected categories. To read details, see: AB 2370 and SB 1381.
Unemployment – The CA Employment Development Division (EDD) can deny reimbursement to an employer for unemployment benefit overpayments that resulted from the employer’s failure to respond to a claim or to provide adequate information that would have influenced the payment of benefits. This new law will apply to overpayments starting on 10/22/13 when both the employer and the employer’s agent will be subject to penalties if the employer, its agent, an officer, or an employee willfully make false statements or fail to report facts relating to an unemployment claim. The penalty will range from 2 to 10 times the weekly benefit amount. For more information, see: AB 1845.
Workers’ Comp – While increasing the amount of permanent disability benefits, this new law is geared to enact comprehensive reform within the work comp system. It targets cutting costs by reducing delays and litigation, addressing the problem of liens, shortening the medical/legal process, implementing an independent medical review system, streamlining the permanent disability schedule, and other changes. The text of the law itself is almost 200 pages. While some provisions go into effect immediately, others will require further administrative/regulatory action before implementation. As of now, it is too soon to judge just how impactful and effective these reforms will be. For a good synopsis of the law, see this article on the DIR’s website: Overview of SB 863.
If you need additional information about any of the above information or if you would like help with making the necessary compliance changes, please give us a call. Vantaggio can help with specific projects or can conduct a complete HR audit for your company.
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