Seyfarth Synopsis: Pay equity and Ban The Box bills lead the list of bills approved to continue their quest (moving to the other house of the California Legislature) to become California law.

Friday, June 2, marked the last day for bills in the California Legislature to pass out of their house of origin—the Senate or Assembly—and continue the legislative process for a shot at becoming a new California Peculiarity. Pay equity and Ban The Box bills lead the list of bills approved to continue moving through the process. Meanwhile, some other feared bills, including the Opportunity to Work Act and retail holiday overtime, did not make the cut. But the substance of these bills, like zombies, may refuse to die and re-emerge through amendment to bills that are still alive. We’ll keep watching, and keep you updated, through the September 15 deadline for bills to pass from the Legislature to the Governor’s desk.

Still Alive:

Pay Equity: Salary Inquiry Ban. AB 168 would prohibit employers, including state and local governments (even the Legislature) from asking applicants about their salary history information, including compensation and benefits. The bill would also require private employers to provide the applicant with the position’s pay scale upon a reasonable request. Will the third time be the charm for this legislation? AB 168 is scheduled for hearing June 14 in the Senate Committee on Labor and Industrial Relations.

Pay Equity: Gender Pay Gap Transparency Act. Attempting a California version of the revised EEO-1 report, AB 1209, effective July 1, 2020, would require employers with 250 or more employees to collect specified data on gender pay differentials, to publish the data on their websites, and to submit the data annually in reporting to the Secretary of State. The required data would include the difference between the mean salary and median salary of male exempt employees and female exempt employees, by job classification or title, and the difference between the mean compensation and median compensation of male board members and female board members. Committee analyses note that this bill was modeled after the recent measure passed in the United Kingdom that requires employers with 250 or more employees to publish their gender pay figures by April 2018.

Applicants: Prior Criminal History. On the heels of Los Angeles’s adoption of “Ban-the-Box,” this year’s attempt at even stronger, state-wide “Ban the Box” legislation marches on. AB 1008 would make it unlawful under California’s Fair Employment and Housing Act (“FEHA”) for an employer to include on any employment application any question seeking disclosure of an applicant’s criminal history, to inquire into or consider the conviction history of an applicant before extending a conditional offer of employment, or to consider or distribute specified criminal history information in conducting a conviction history background check. The bill would require an employer that intends to deny a position solely or in part because of the applicant’s prior conviction to assess whether the applicant’s conviction history has a direct and adverse relationship with the specific job duties. Then, the employer must notify the applicant of the reasons for the decision, provide the applicant time to respond, and consider the response before making a final written employment decision. Exempted from the bill’s scope are criminal justice agencies, farm labor contractors, and positions for which the law requires a state or local agency to conduct a background check or precludes employment based on criminal history.

Voluntary Veterans’ Preference Employment Policy Act. AB 353 would allow private employers to establish a veterans’ preference policy and uniformly grant a hiring preference to veteran applicants, regardless of when the veteran served. This preference would not violate the FEHA or any other local or state equal opportunity employment law or regulation (provided that the policy is not applied for the purpose of discrimination on the basis of any protected classification).

Credit and Debit Card Gratuities. AB 1099 would require entities that allow debit or credit card payment for services to also accept gratuities or tips via debit or credit card, and to pay those gratuities to the worker no later than the next regular payday. Prior to amendments, the bill would have applied to specified employers (lodging establishments, car washes, barber shops and beauty salons, massage parlors, restaurants, and on-demand service providers such as transportation network companies). As amended, rather than specifying the industries to which it applies, AB 1099 defines “entity” as “an organization that uses an online-enabled application or platform to connect workers with customers … including, but not limited to, a transportation network company.” The author’s stated reason for the bill is to make it easier and more reliable for workers in the gig economy to receive tips. The Assembly Appropriations Committee estimates the bill would cost approximately $300,000 in annual enforcement by the Department of Labor Standards Enforcement (“DLSE”), an estimate that could earn this bill the Governor’s veto.

Overtime Compensation: Executive, Administrative, or Professional Employees. AB 1565 would exempt from overtime compensation an executive, administrative, or professional employee who earns a monthly salary of either $3,956 or no less than twice the state minimum wage for full-time employment, whichever amount is higher. The bill states the Legislature does not intend to change the “duties test” of the overtime exemptions established in orders of the Industrial Welfare Commission for executive, administrative, or professional employees;  those provisions would continue to apply. The bill’s proponents argue that it would create “important protection for middle class workers who fall into the gap between the state’s overtime pay protections and what would have been higher overtime protections afforded” by federal Fair Labor Standards Act regulations adopted by President Obama’s US Department of Labor but enjoined through a court challenge. Opponents argue the bill unnecessarily accelerates salary increases for California exempt employees and applies to all employers regardless of size.

Immigration: Worksite Enforcement Actions. AB 450, the proposed “Immigrant Worker Protection Act,” would prohibit an employer from allowing federal immigration agency worksite enforcement authorities warrantless access to nonpublic areas of a place of labor and from releasing employee records to those federal authorities without a subpoena. This bill would also require an employer to notify the Labor Commissioner and employee representative of an Immigration and Customs Enforcement I-9 Employment Eligibility Verification audit within 24 hours of receiving the inspection notice and provide a copy of the notice. The bill would prescribe penalties, recoverable by the Labor Commissioner against employers for failing to satisfy the bill’s requirements and prohibitions, of not less than $2,000-$5,000 for the first violation and $5,000-$10,000 for each subsequent violation.

Good Faith Defense: Employment Violations. SB 524 would permit an employer to raise an affirmative defense that, at the time of an alleged violation of statute or regulation, the employer was acting in good faith when the employer relied upon a valid published DLSE opinion letter or enforcement policy. Even though SB 524 failed to pass the Senate Committee on Labor and Industrial Relations, reconsideration was granted and this bill is heading to the Assembly.

Retaliation: Expanding The Labor Commissioner’s Authority.  A former placeholder bill, as amended, SB 306 would authorize the Labor Commissioner, upon finding reasonable cause to believe an employer discharged or discriminated against an employee in violation of Labor Code section 98.7—before issuing a final determination—to seek temporary and permanent injunctive relief. This bill also would allow the Labor Commissioner to recover attorney’s fees and costs on a successful enforcement action, would authorize the Labor Commissioner to cite and penalize a person it determines violated Section 98.7, and would create procedural requirements for these processes.

Reproductive Health. AB 569 would add a provision to the Labor Code that would prohibit employers from taking any adverse employment action against an employee based on the employee’s or an employee dependent’s reproductive health decisions, methods, or use of a particular drug, device, or medical service (e.g., in vitro fertilization), including the timing of such. This bill would also prohibit employers from requiring employees to sign a code of conduct or similar document denying an employee the right to make such decisions. This bill would also require employers to include a notice of the employee rights and remedies in its handbook.  This bill is aimed at religiously affiliated institutions, noting (in language that would not be codified)  the Legislature’s agreement with Justice Alito in Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC (2012) 565 U.S. 171, 199, that “the ministerial exception should apply only to an ‘employee who leads a religious organization, conducts worship services or important religious ceremonies or rituals, or serves as a messenger or teacher of its faith.’”

New Parent Leave Act. SB 63, as its predecessor (the vetoed SB 654 of 2016) attempted, would prohibit larger employers (having at least 20 employees within 75 miles) from refusing to allow an employee to take 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 as long as the employee has at least 1,250 hours of service with the employer during the previous 12-month period. This bill would also require the employer to maintain and pay for the employee’s coverage under a group health plan during this leave and allow—although not require—an employer to grant simultaneous leave to two employees entitled to leave for the same birth, adoption, or foster care placement.

Employee Request: Injury and Illness Prevention Program. AB 978 would require an employer to provide an employee or the employee’s representative a copy of the employer’s injury prevention program, free of charge, within 10 business days after the employer receives a written request. Under this bill, a recognized collective bargaining agent would automatically be treated as an authorized employee representative. The employer would be able to assert an impossibility of performance affirmative defense.

Bills Stuck in the House of Origin:

Opportunity to Work Act. More expansive than the City of San Jose’s voter-approved Opportunity to Work Ordinance, the much-publicized and employer-feared AB 5 would have required employers with 10 or more employees in California to offer additional hours of work to existing nonexempt employees in California before the employer could hire additional employees or temporary employees. AB 5’s hearing in Assembly Appropriations was postponed by the committee on May 3. Read more on what AB 5 would have implemented here, here, and watch here.

Rest Breaks. AB 817 would have carved out an exception to Labor Code section 226.7’s off-duty “rest period” requirement for employers providing emergency medical services to the public. The bill would authorize those EMS employers to require employees to monitor and respond to calls for emergency response purposes during rest or recovery periods without penalty, as long as the rest break is rescheduled. AB 817 stalled in the Assembly Committee on Labor and Employment as the bill’s author, Assembly Member Flora, canceled the hearing.

Retail Employees: Holiday Overtime. AB 1173 would have established an overtime exemption that would have allowed an employee to work up to 10 hours per workday with no overtime pay. Hours worked between 10 and 12 in a workday, or over 40 hours in a workweek would be paid at one and one-half the regular rate of pay. All hours over 12 in a workday and over eight on a fifth, sixth, or seventh day in a workweek would have been paid at double time. This bill never even received a definition to fill in its “retail industry” blank, and was sent to but never heard in the Assembly Committee on Labor and Employment.

Voluntary Veterans’ Preference Employment Policy Act. Feeling déjà vu? AB 1477, almost identical to AB 353, detailed above, would have allowed private employers to establish a veterans’ preference policy  and uniformly grant a hiring preference to veteran applicants, regardless of when the veteran served. This bill remained stagnant in the Assembly Committee on Veterans Affairs and Labor and Employment.

Health Professional Interns: Minimum Wage. AB 387 would have expanded the definition of “employer” to include a person who employs any person engaged in supervised work experience (i.e., clinical hours) to satisfy the requirements for licensure, registration, or certification as an allied health professional. AB 387 was amended to only include work experience longer than 100 hours before Assembly Member Thurmond ordered it to the inactive file on June 1.

Resident Apartment Manager Wages. AB 543 would have authorized an employer that doesn’t charge a resident apartment manager monthly rent, to apply up to one-half of the fair market rental value, instead of the two-thirds provided by existing law, of the apartment to meet minimum wage obligations to the apartment manager, pursuant to a voluntary agreement. This bill’s hearing in the Assembly Committee of Labor and Employment was canceled at the author’s request.

Labor Organizations: Compulsory Fee Payments. AB 1174 would have prohibited a person from requiring employees, as a condition of employment, to pay union dues or contribute financially to any charity sponsored by or at the behest of a labor organization. This bill failed to pass the Assembly Committee on Labor and Employment.

Employer Liability: Small Business and Microbusiness. AB 442 would have prohibited Cal OSHA from bringing an enforcement action for any “nonserious violation” against any employers with small businesses or microbusinesses without first giving the employer written notice of the violation and providing 30 days to cure. The bill would have authorized Cal OSHA to assess a reasonable fee, up to $50, to cover its costs for enforcement. The bill’s hearing in the Assembly Committee on Labor and Employment was canceled at the request of the author.

PAGA: Three Valiant, But Failed, Efforts. 

AB 281 attempted to reform PAGA by (1) requiring an actual injury for an aggrieved employee to be awarded civil penalties, (2) excluding health and safety violations from the employer right to cure provisions, and (3) increasing employers’ cure period to 65 calendar days, up from 33.

AB 1429 would have limited the violations an aggrieved employee can bring, required the employee to follow specific procedural prerequisites to filing suit, limited civil penalties recoverable to $10,000 per claimant and excluded the recovery of filing fees, and required the superior court to review any penalties sought as part of a settlement agreement.

AB 1430 would have required the Labor and Workforce Development Agency (“LWDA”) to investigate alleged Labor Code violations and issue a citation or determination regarding a reasonable basis for a claim within 120 calendar days; and allow an employee private action only after the LWDA’s reasonable basis notification or the expiration of the 120 day period. Read our further analysis of the proposed PAGA amendments here.

All three PAGA reform attempts stalled in the Assembly Committee on Labor and Employment.

Workplace Solutions

We will keep you apprised of these continuing Peculiarities, as well as any other significant legislative developments that occur as the end of the 2017 Legislative Session draws near. Contact your favorite Seyfarth attorney with any questions.

Seyfarth Synopsis: The California Assembly Committee on Labor and Employment yesterday heard and approved AB 5, The Opportunity to Work Act, as it continues to move through the legislative process.

iStock_000000642401_LargeThe Opportunity to Work Act, which would require employers to offer hours to part-time employees before hiring new employees or temporary workers, yesterday cleared its first hurdle in the legislative process, receiving a go-ahead vote from the Assembly Committee on Labor and Employment. Read and watch our summaries of the bill. Next stop: Assembly Appropriations.

The bill’s co-author, Assembly member Gonzalez-Fletcher, kicked off Wednesday’s hearing by touting AB 5’s purported benefits and protections for employees in the retail and fast food industries. Conceding that the bill leaves much to be desired among members of the business community, she emphasized her desire to work with businesses to refine the bill’s language.

Opponents highlighted the ambiguities in AB 5’s language and the difficulties employers would likely face in implementing its provisions. They presented surveys and statistics that conflicted with those presented by the bill’s proponents. For example, the proponents stated that most part-time workers want to work full time, while opponents claimed that 5% of all part-time workers harbor such a desire.

Opponents posed questions such as: How exactly are employers supposed to offer additional hours in a non-discriminatory fashion? Must employers offer hours to all employees (in the same or similar position)? How are employers supposed to notify employees of the additional hours? Do the hours get awarded to the first employee to respond? What if an employee wants to work only a portion (e.g., one or two hours) of the offered shift? Must the employer then ask other employees to cover the remaining hours? Does the bill’s requirement that employers document their offers of additional hours to current employees mean that employers must keep copies of all employee communications, or require employees to sign written acknowledgements of each offer of additional hours?

These questions, Gonzalez-Fletcher assured, arise from intentional ambiguities that she wants to clarify with the help of business owners. She’s already considering amendments that would

  • delay implementation of the bill (for one year) for 501(c)(3) organizations,
  • create a carve-out for collective bargaining agreements that expressly define work hours,
  • limit the bill’s application to only the location where the additional hours are available, if the employer has locations throughout the state, and
  • provide an employee opt-out provision.

We’ll keep monitoring this bill’s progress through the legislative process and keep you updated.

Seyfarth Synopsis: Back from Spring Break, and Back to Work: Our List of L&E Bills to Watch in the remainder of the 2017-2018 California Legislative Session.

New LegislationCalifornia Legislators were, as always, very busy in the first few months of the 2017-18 Legislative Session, introducing well over 2000 bills by the February 17th bill introduction deadline. But, in comparison to prior years, the calendar has been surprisingly light for heavy-hitter labor and employment bills. The Legislature returned to work on April 17, after its spring break, and continued to push bills out of the house of origin in advance of the June 2nd deadline.

Here’s what we’re watching:

Opportunity to Work Act. Modeled after the City of San Jose’s November 2016 voter-approved Opportunity to Work Ordinance (effective April 1, 2017), AB 5 would require employers with 10 or more employees in California to offer additional hours of work to existing nonexempt employees in California before the employer may hire additional employees or temporary employees. The employer would not have to offer the hours to existing employees if those hours would result in the payment of overtime compensation to those employees. The bill would require employers to retain documents, including work schedules of all employees and documentation of offering additional hours to existing employees, prior to hiring new employees or subcontractors. The bill would also require employers to post a notice to be created by the Division of Labor Standards Enforcement (DLSE) outlining employee rights under this (proposed) new law. This Act would create a new Labor Code section, and provide for enforcement by the DLSE on its own accord or via complaint by an employee, or via employee private right of action. The Act would allow for an express CBA carve-out. The bill is scheduled for its initial hearing in the Assembly Committee on Labor and Employment on April 19. Stay tuned for an update on this bill following the hearing.

Rest Breaks. AB 817 would carve out an exception to Labor Code section 226.7’s off-duty “rest period” requirement for employers providing emergency medical services to the public. The bill would authorize those EMS employers to require employees to monitor and respond to calls for emergency response purposes during rest or recovery periods without penalty, as long as the rest break is rescheduled. The bill expressly states that it is declaratory of existing law. Likely in response to the California Supreme Court’s December 22, 2016 ruling in Augustus v. ABM Security Services, Inc. (holding that no true rest break was permitted when security guards were required to carry radios or pagers and respond to calls during rest breaks), this bill is one to watch.

Retail employees: Holiday Overtime. AB 1173 would establish an overtime exemption for “a holiday season employee-selected flexible work schedule,” requested in writing by individual nonexempt retail employees and approved by the employer. The exemption would allow the employee to work up to 10 hours per workday with no overtime pay. Hours worked between 10 and 12 in a workday, or over 40 hours in a workweek would be paid at one and one-half the regular rate of pay. All hours over 12 in a workday and over eight on a fifth, sixth, or seventh day in a workweek would be paid at double time. This bill contains a CBA carve-out, and clearly has many details to still be ironed out, as it contains a blank in the bill text for the definition of “retail industry.”

Pay Equity: salary inquiry ban. Once again, AB 168 seeks to ban employers, including state and local government employers, from asking job applicants about their salary history, as well as compensation and benefit information. The bill would also require that private employers, upon reasonable request, provide the applicant with the position’s pay scale. AB 168 brings back language that was shot down twice—first by Governor Brown in his October 2015 veto of AB 1017, then removed from 2016’s AB 1676 (fair pay legislation) before it received the Governor’s approval in September 2016.

Pay Equity: Gender Pay Gap Transparency Act. Dubbed the “Gender Pay Gap Transparency Act,” by author Assembly Member Gonzalez-Fletcher in her April 4, 2017 Equal Pay Day press release, AB 1209 would “require companies with more than 250 employees to include gender pay data as part of their annual reporting to the Secretary of State.” If passed, AB 1209 would require employers, beginning July 1, 2020, to publish and update yearly the difference between the mean salary and median salary of male exempt employees and female exempt employees broken down by job classification or title and the difference between the mean compensation and median compensation for male board members and female board members. Arguments against this bill will likely mirror those made in response to the EEOC’s revised EEO-1 rule.

Voluntary Veterans’ Preference Employment Policy Act. Dubbed the “Voluntary Veterans’ Preference Employment Policy Act,” AB 353 and AB 1477 would allow private employers to establish a veterans’ preference policy  and uniformly grant a hiring preference to veteran applicants, regardless of when the veteran served. These bills would expand Government code section 12940(a)(4), which currently allows for a veterans’ preference policy for Vietnam-era veterans only. The bill would provide that the granting of a veterans’ preference will not violate any local or state equal employment opportunity law or regulation, including FEHA, as long as the policy is not applied for the purpose of discriminating against an employment applicant on the basis of any protected classification.

Applicants: prior criminal history. The Legislature is joining the flurry of “Ban-the-Box” initiatives throughout California with AB 1008, which would make it unlawful for an employer to: 1) include on any job application questions that seek the disclosure of an applicant’s criminal history; 2) inquire or consider an applicant’s prior convictions before extending a conditional offer; and 3) when conducting a background check, to consider or disclose  various information. The bill would also require employers that intend to deny employment to an applicant because of prior convictions to perform an individualized assessment of whether the applicant’s conviction history has a direct and adverse relationship to the specific job duties, considering the nature and gravity of the offense, the time passed since the completion of the sentence, and the nature of the job. Then, the employer must notify the applicant of the reasons for the decision and provide the applicant 10 days to respond and challenge the accuracy of that information or provide evidence of rehabilitation which it must consider before making a final employment decision, in writing. This bill is substantially similar to the recent Fair Employment and Housing Council regulations, which go into effect in July 2017; and would thus largely codify what will soon be required by regulation.

Health professional interns: minimum wage. Following the recent increases in minimum wage, AB 387 would expand the definition of “employer” to include a person who employs any person engaged in supervised work experience (i.e., clinical hours) to satisfy the requirements for licensure, registration, or certification as an allied health professional. Cal Chamber opposes this bill, as it could cause internships provided for educational credit to be eliminated.

Resident apartment manager wages. AB 543 would authorize, under a voluntary written agreement, an employer that doesn’t charge a resident apartment manager monthly rent, to apply up to one-half of the fair market rental value of the apartment to meet minimum wage obligations to the apartment manager. Existing law allows employers to take a credit against minimum wage for two-thirds of the ordinary rental value, up to $564.81 per month for a single occupant and $835.49 per month for couples.

Credit Card gratuities. AB 1099 would require employers that are lodging establishments, car washes, barber shops and beauty salons, massage parlors, restaurants, and on-demand service providers such as transportation network companies that allow debit or credit card payment for services to also accept a debit or credit card for gratuities or tips. This bill would require the tip payment to be made to the employee by the next regular payday following the date the credit card authorized payment.

Overtime compensation: executive, administrative, or professional employees. AB 1565 would exempt from overtime compensation an executive, administrative, or professional employee, if the employee earns a monthly salary of either $3,956 or no less than twice the state minimum wage for full-time employment, whichever amount is higher.

Labor organizations: compulsory fee payments. AB 1174 would, beginning January 1, 2018, prohibit a person from requiring employees, as a condition of employment, to pay union dues or contribute financially to any charity sponsored by or at the behest of a labor organization.

Employer liability: small business and microbusiness. AB 442 would prohibit Cal OSHA from bringing an enforcement action for any “nonserious violation” against any employers with 100 or fewer employees and an average gross of $10,000,000 or less over the past three years, or microbusinesses  with 25 or fewer employees and an average gross of $2,500,000 or less over the past three years, without first giving the employer written notice of the violation and providing 30 days to cure. AB 442 would authorize Cal OSHA to assess a reasonable fee, up to $50, to cover its costs for enforcement.

Immigration: worksite enforcement actions. AB 450, the “Immigrant Worker Protection Act,” would impose several requirements on public and private employers dealing with federal ICE workplace raids or enforcement actions. Assemblymember Chiu has described the key components as:

  • Requiring employers to ask for a warrant before granting ICE access to a worksite.
  • Preventing employers from releasing employee records without a subpoena.
  • Requiring employers to notify the Labor Commissioner and employee representative of a worksite raid and notifying the Labor Commissioner, employees, and employee representatives of an I-9 audit (i.e., employment eligibility verification).
  • Preventing retaliation by enabling workers crucial to a labor claim investigation to receive certification from the Labor Commissioner that employee complainant or employee witness has submitted a valid complaint for violations of the Code and is cooperating in the investigation and prosecution of the violations.

The bill would authorize the Labor Commissioner to asses penalties of at least $10,000 to $25,000 for each violation against employers for failure to satisfy the bill’s requirements and prohibitions.

FEHA enforcement expansion. SB 491 would expand Government Code section 12993 and allow local jurisdictions, such as cities and counties, to enforce FEHA discrimination regulations. Cal Chamber opposes this bill.

Good faith defense: employment violations. SB 524 would permit an employer to raise an affirmative defense that, at the time of a violation, the employer was acting in good faith when the employer relied upon a valid published DLSE opinion letter or enforcement policy. SB 524 would only apply after January 1, 2018 to DLSE opinion letters or enforcement policies that are still in effect at the time of the violation. Employers would not be able to claim an affirmative defense when a DLSE opinion letter or enforcement policy has been modified, rescinded, or deemed invalid. Cal Chamber supports this bill but hearings for SB 524 have been canceled at the request of the author, Senator Vidak. We’ll keep our eye on this to see if there is any further movement.

Reproductive health. AB 569 would prohibit employers from taking any adverse employment action against an employee based on the employee or employee’s dependent’s reproductive health decisions. The bill would also prohibit employers from requiring employees to sign a waiver or any document denying an employee the right to make his or her own reproductive health care decisions, including the use of a particular drug, device, or medical service (e.g., in vitro fertilization). The bill would require an employer to include in its handbook a notice of the employee rights and remedies under this bill.

New Parent Leave Act. Likely DOA, but resurrected for another go from its 2016 veto, SB 63, the “New Parent Leave Act,” would prohibit employers with at least 20 employees within 75 miles, from refusing to allow an employee to take 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. Like under CFRA, to be eligible, the employee must have more than 12 months and at least 1,250 hours of service with the employer during the previous 12-month period. The bill would require the employer to maintain and pay for the employee’s coverage under a group health plan during this leave. SB 63 would also allow—but not require—an employer to grant simultaneous leave when two employees are entitled to leave for the same birth, adoption, or foster care placement. This bill is almost identical to 2016’s SB 654, which Governor Brown vetoed, and only provided for 6 weeks of leave, rather than the 12 weeks SB 63 would provide. The Governor’s veto message expressed his concerns for impact the leave would have on small business and pointed lawmakers to explore an amendment that would have made mediation an option—which the SB 63 does not have.

PAGA: Three New Valiant Efforts. AB 281 attempts to reform PAGA by: 1)  requiring an actual injury for an aggrieved employee to be awarded civil penalties; 2) excluding health and safety violations from the employer right to cure provisions; and 3) increasing employers’ cure period to 65 calendar days from 33.

AB 1429 would limit the violations an aggrieved employee can bring, require the employee follow specific procedural prerequisites to filing suit, limit civil penalties recoverable to $10,000 per claimant and exclude the recovery of filing fees, and require the superior court to review any penalties sought as part of a settlement agreement.

AB 1430 would require the Labor and Workforce Development Agency (LWDA) to investigate alleged Labor Code violations and issue a citation or determination regarding a reasonable basis for a claim within 120 calendar days; and allow an employee private action only after the LWDA’s reasonable basis notification or the expiration of the 120 day period. Read our further analysis of PAGA proposed amendments here.

Workplace Solutions

We will continue to monitor and report on these potential Peculiarities, as well as any other significant legislative developments over the course of the 2017 Legislative Session. Contact your favorite Seyfarth attorney with any questions.

Edited by Colleen Regan.

Seyfarth Synopsis: As of March, all single-occupancy restrooms in California businesses, government buildings, and places of public accommodation must be gender neutral. This post reviews the annoyingly specific requirements regarding restroom signage to help employers remain compliant.

North Carolina achieved notoriety with its “Bathroom Bill,” restricting restroom access on the basis of gender. California has countered with its own bill, AB 1732, the Equal Restroom Access Act, signed by Governor Brown in September 2016.

Single-occupancy restrooms once could be designated as being either for males or for females. The Equal Restroom Access Act, applying to single-occupancy restrooms in businesses, government buildings, and places of public accommodation, requires that they be available to everyone. The Act defines a single-user restroom as a “toilet facility with no more than one water closet and one urinal with a locking mechanism controlled by the user.” Assemblyman Phil Ting provided context in stating that “this bill sends a simple message that everyone’s rights must be respected and protected…restricting access to single use restrooms defies reason.”

To comply with the new law (codified at Health & Safety Code § 118600, et seq.), the signage on single-occupancy restrooms must be updated to gender-neutral signs by March 1, 2017. And although the Act does not create any penalties or a private right of action for non-compliance, inspectors, building officials, and local officials can inspect, and it is likely that municipalities will pass or revise ordinances in response. So this is a good time to take a fresh look at existing signage to see that it complies.

The California Building Standards Code provides the requirements for the three types of restroom signs to be aware of for your business:

  • Geometric signs: a circle (women), a triangle (men), and a triangle on top of a circle (gender neutral)
  • Designation signs: signs that identify permanent rooms and spaces (i.e., restrooms, closets, and vending areas)
    • Tactile signs: Signs that are read by touch (i.e. raised lettering and Braille)
    • Pictograms: Pictures accompanied by tactile characters and Braille
  • Directional and Information signs: signs that are read visually

California requires at least two signs to identify each restroom open to the public: a geometric sign and a designation tactile sign. Just how California businesses must designate these signs is very peculiar indeed, so you’ll want to read this closely!

Geometric Signs

The required geometric symbols are different for men’s, women’s, and unisex or all-gender restrooms. Women’s restrooms are identified by a circle measuring 12 inches in diameter. Men’s restrooms are identified by an equilateral triangle with all sides being of equal 12 inches length. Finally, relevant to AB 1732, all single-occupancy restrooms must now be identified by an equilateral triangle measuring 12 inches on each length within a circle with a 12 inch diameter. The color of the triangle must contrast with the color of the circle within which it is superimposed.

Regardless of which geometric restroom sign is used, the sign must contrast in color with the surface on which it is mounted. So a light sign should be on a dark door and, conversely, a dark sign should be on a light colored door. Further, each geometric sign must be ¼ of an inch thick and be mounted at a minimum of 58 inches and a maximum of 60 inches above the ground.

Designation Signs

Designation signs that must be tactile include signs for “Restroom,” “Women’s,” Men’s,” “All-Gender Restroom,” and “Unisex Toilets.” Descriptive signs, such as “All restrooms are open to persons of all genders,” are not considered designation signs and are not required by law to be tactile.

For required tactile signs, the lettering must be 1/32 inches thick, in all uppercase, 5/8 inches to 2 inches in height, and may not be italic, oblique, script, highly decorative, or any other unusual style. Left-flush or centered 3/8 inches to 1/2 inches below the lettering must be a Braille duplication of the lettering. Tactile signs are also subject to certain mounting requirements, including the requirements that the sign be mounted on the latch side or on the right hand side of doorway without a door, and placed outside the swing of any door.

Although pictograms are not required by the new law, they are commonly used to identify restrooms. Familiar pictograms used for restrooms include the toilet symbol, as well as the corresponding symbols for male and female. If pictograms are used, California law requires that they have contrasting colors and no glare, and the field must be six inches minimum in height with no text, Braille, or anything else in it. A text description must also be placed below the field in tactile lettering and Braille. Pictograms are subject to the same mounting requirements as tactile signs and should be placed adjacent to the door.

Important For Our Readers:

  • The minimum size of the pictogram field will not fit into a 12 inch triangle. As a result, all “unisex” geometric signs with pictograms in them are not compliant and should be not used.
  • You must use approved symbols and verbiage when using pictograms. Although many websites offer pictograms for use, they may not comply with the size requirements, or they may potentially be offensive. So look at these very carefully for compliance!

Directional and Information Signs

Directional and information signs provide messages about interior or exterior places and facilities, such as: “Smoking is not allowed in the restrooms” or “For customer use only.”

These signs have various requirements regarding matters such as the finish, size, style, thickness, and spacing, depending upon the viewing distance and mounting height. Unlike designation signs, directional and information signs are not required to have raised lettering or Braille.

Note that when using directional and information signs, it is important to remain generic so that the sign does not become an identifier requiring tactile signage. For instance, “the company’s restroom is open to all persons” is generic and only gives information about the restroom. Contrast that with a sign saying “Unisex Restroom” which specifically identifies the restroom and is therefore a designation sign that must comply with tactile sign requirements.

Workplace Solution: As you can see, California’s bathroom signage requirements are very technical and specific. Please contact your favorite Seyfarth attorney if you need any assistance with remaining or becoming compliant with these specifications.

Edited by Coby M. Turner.

Seyfarth Synopsis: Background screening companies that provide background checks to online child care job posting services in California may face increased civil liability as they seek to comply with new Assembly Bill No. 2036.

Parents want to employ only the most qualified individuals to watch over their children. Background checks on these individuals—often provided by consumer reporting agencies—therefore are at a high premium. The author of Assembly Bill 2036, Assembly member Patty Lopez, cited just this concern in support of her new bill, which imposes additional restrictions on businesses providing online childcare job posting services in California and on background screening companies providing background checks to those businesses: “This Bill is another good step to protecting our children and ensuring that child care consumers are making the most informed and safest decisions about the individual(s) they hire to care for their child[ren].”

In the old days, people who needed childcare would often engage a nanny referral service. Now, of course, there are websites (“online child care job posting services”) that list babysitters and nannies available for hire by parents (or other consumers). These websites usually state that the babysitters/nannies listed have undergone background checks. According to the California Child Care Resource and Referral Network, while parents trust online child care job posting services when they advertise that their providers have undergone background checks, these checks are often conducted by “third parties,” a process that makes it difficult to determine what information the background check may contain (for example, the check may not contain information from the FBI and the DOJ’s Child Abuse Central Index databases).

AB 2036 amends existing law by imposing new duties on businesses that offer child care services (for example, nannies and babysitters) via online job-posting. In particular, if a covered business provides access to a background check on child care providers listed on its website in California, the business must provide “by means of a one-click link on each California child care provider” a written description of the background check provided by the background screener. The background screener is responsible to provide this information to the business posting the child care services. Background screeners that fail to comply with the law may be liable to individuals using the job-posting websites.

For background screening, to whom exactly does this statute apply?

The statute applies to background screeners that “provide background checks for online child care posting websites in California.” These background screeners must “provide to the online child care posting services a written description of the background checks conducted,” as detailed below.

This language does not expressly address whether the statute applies to background screeners that are affiliated with the job-posting website but that provide the background checks directly to the users of the child care services rather than to the business offering the services.

What information must background screeners include in their descriptions?

At minimum, a background screener’s description of the information contained in the background checks must include:

  1. A detailed description of what is included in the background check.
  2. A chart that lists each county in California and the databases that are checked for each county, including the following information for each database, as applicable:
  • The source of the data, the name of the database used, and a brief description of the data included in the database.
  • The date range of the oldest data and the most recent data included.
  • How often the information is updated.
  • How the databases are checked (by name, social security number, fingerprints, etc.).
  • A list of the counties for which no data is available.

These requirements raise a host of issues, including:

  • Are these requirements general or specific? In other words, do they require a description of what background check services are generally offered, or do they require a description of what background check services were offered and provided on a particular individual?
  • Do the requirements include searches that are not tied to a county? For example, if a background screener includes social traces in background report, should the social trace be listed in the chart?
  • What do “database” and “source” mean, and how do the terms differ? The terms are undefined in AB 2036.  If records are obtained from a court, is the court considered a “database,” a “source,” or both?  What about records obtained from a vendor?
  • How frequently must a background screener update the descriptions? For example, if a database is updated regularly (and many are), the date range for the data in that database would vary regularly.

What are the liability risks and resulting penalties?

In the grand California tradition, AB 2036 provides a right to sue, and there are no restrictions on class actions. Any individual “damaged by a willful violation” can sue under the act. This class of individuals seems to encompass recipients and subjects of the reports (for example, parents requesting the reports and the providers who were the subject of the reports). Recoverable damages include general, special, and punitive damages. Because individuals must be “damaged” to sue, lawsuits under the statute are likely to be limited to claims involving financial loss or a plausible claim of emotional damage. In addition, the requirement of actual damage may make it difficult for individuals to bring class actions for violations of the statute.

The statute provides for civil penalties of $1,000 per offense. These penalties can be awarded in actions brought by government entities, but an action can proceed only if the defendant was notified of the violation and failed to correct it within 30 days of the notice.

So what next?

What AB 2036 means for background screeners is not fully clear, and we expect that there may be additional guidance from regulators and the courts as the statute is implemented. We will keep a close eye on this one, so please stay tuned for developments and updates!

If you have questions about the statute, including its application to your business, please contact Esther Slater McDonald, Marjorie Soto, or your favorite Seyfarth attorney.

Seyfarth Synopsis: New legislation effective 2017 will expand California workers’ compensation coverage by requiring coverage for certain high-level individuals unless they affirmatively opt out and waive coverage, thereby reversing the prior rule by which those individuals, to get coverage, had to opt in. 

As a general rule, California employers must provide employees with workers’ compensation insurance coverage for work-related and industrial injuries and illnesses. Until now, the definition of “employee” has included paid corporate officers and directors, but has excluded corporate officers and directors who are the sole shareholders and has excluded working members of a partnership or limited liability company (“LLC”). These folks were not considered employees unless they “opted in” to workers’ compensation coverage.

Comes now AB 2883, signed into law by Gov. Jerry Brown on August 26, 2016, which will amend Labor Code sections 3351 and 3352 to alter the coverage rules for workers’ compensation coverage. As of January 1, 2017, certain officers, directors, and owners of companies will be covered by workers’ compensation unless they affirmatively “opt out.” Specifically, all officers and members of boards of directors who work for a corporation for pay will be covered under workers’ compensation unless the individual (1) owns at least 15% of the issued and outstanding stock of the corporation and (2) executes a sworn waiver of rights under the Labor Code stating that he or she is qualified for the exemption. In addition, working members of a partnership or LLC receiving partnership or LLC wages will be covered employees unless they qualify as (1) a general partner of a partnership or a managing member of a LLC and (2) sign a waiver of the type just mentioned.

These amendments aim to keep employers from giving their employees sham titles or small ownership shares to avoid covering them under workers’ compensation.

AB 2883 also amends Labor Code Section 3352 to provide that if a signed waiver is effective upon the date of receipt and acceptance by the insurance carrier. Note, the provisions of AB 2883 apply to all in-force policies as of January 1, 2017, and unless a signed waiver is received and accepted by the insurance carrier, any individual who had been exempted from coverage under the workers’ compensation policy will need to be added to the coverage until a waiver is received and accepted by the insurer.

Sample Waiver Forms prepared by the State of California Department of Insurance appear at: http://www.insurance.ca.gov/0250-insurers/0300-insurers/0200-bulletins/bulletin-notices-commiss-opinion/upload/NoticeAB2883.pdf

By “opting out,” any working owner waives rights to three particular benefits:

(a) Potential lifetime medical coverage for the industrial injury. This coverage can be significant if the person leaves the company by retirement or otherwise.

(b) Rights to permanent disability, which can be significant for a serious injury with residuals.

(c) Temporary disability to cover any wage loss. (Companies, in the alternative, may consider short and long-term disability benefits for injuries that may last longer than the time provided by state disability coverage.)

Workplace Solution: With new laws being enacted continuously in California, we understand the struggle to keep up with developments. We have a team of experts focusing exclusively on workers’ compensation issues and they are here to help.

Seyfarth Synopsis: Governor Jerry Brown recently signed pay equity legislation to build on SB 358, a gender pay equity bill that he signed just last year.

Recent state pay equity initiatives (in Massachusetts, New Jersey, New York) have focused on gender. California is different. Leave it to the state that last year passed the nation’s strictest pay equity law as to gender to take it up another notch.  SB 1063, dubbed the “Wage Equality Act of 2016,” extends last year’s Fair Pay Act amendments to Labor Code section 1197.5 to cover unequal pay as to race and ethnicity. Thus, effective January 1, 2017, California employers must not pay employees a wage rate less than the rate paid to employees of a different race or ethnicity for substantially similar work. (Read our prior alert for a description of the Act’s requirements and prohibitions.) Meanwhile, newly enacted AB 1676 will prohibit employers from using an employee’s prior salary as the sole basis to justify a pay disparity. In the process, however, California has declined to follow the Massachusetts example of forbidding employer inquiries into an applicant’s prior salary.

SB 1063 was introduced in February 16, 2016, just four months after Governor Jerry Brown signed into law SB 358 (one of the nation’s most aggressive gender pay equity bills). The move to include race and ethnicity was foreshadowed last summer when the California National Organization of Women—sponsor of this year’s bill—opposed the Fair Pay Act (SB 358) for its failure to include pay equity protections for various additional categories protected by anti-discrimination laws (such as race, ethnicity, sexual orientation, gender identity, and disability status).

Senator Hall, who authored the Wage Equality Act of 2016, justified the opposition by saying that “the 65 year old California Equal Pay Act fails to include one of the largest factors for wage inequity—race and ethnicity.” Senator Hall cited a 2013 study by the American Association of University Women reporting that “Asian American women make 90 cents, African American women make 64 cents, and Hispanic or Latina women make just 54 cents for every dollar that a Caucasian man earns. The wage gap isn’t only between men and women, as African American men earn just 75% of the average salary of a Caucasian male worker.”

Opponents of SB 1063 objected that it would go too far, too fast: SB 358 is still in its infancy,with its standards likely to be tested over the next several years in litigation. Therefore, the opponents argued, “the legislature should allow time for employees, employers, and the courts to interpret and implement the new boundaries of the equal pay law before seeking to amend and expand it even further.” Opponents also noted that employees have other ways to challenge pay discrimination. The Fair Employment and Housing Act already prohibits discrimination against people in many classifications, including race and ethnicity.

AB 1676, which was passed concurrently with SB 1063, will amend Section 1197.5 (the same section SB 1063 amends) to prohibit employers from using prior salary as the sole justification for a pay disparity. In its original proposed form, AB 1676 would have prohibited employers from seeking an applicant’s salary history information, just as its vetoed predecessor, AB 1017, had attempted to do last year. In vetoing AB 1017, Governor Brown stated that further gender pay equity changes should wait until we see how SB 358 plays out. The removal of any ban on asking about salary history likely made AB 1676 palatable to the Governor, and kept California from matching the new Massachusetts law, which prohibits Massachusetts employers from requesting an applicant’s pay history, unless the applicant has voluntarily disclosed that information.

What’s an employer to do? First, self-assess where your company is on pay equity. If you’ve not analyzed the issue before, conducting a proactive pay equity analysis could be the first and best step to take to achieve fair pay and diminish legal risk. Through the use of statistical models and analyses (conducted by a labor economist), employers can test the extent to which permissible factors explain existing pay differentials. This “look under the hood” is especially important for companies considering making public proclamations about the company’s state of pay equity. With SB 1063 now looming on the horizon, companies should not limit these analyses to gender. Engaging legal counsel to direct and conduct this work under attorney-client privilege minimizes risk that this analysis and related deliberations might be discovered in litigation. Even companies that are well-versed in pay equity are wise to revisit the issue with an eye to race and ethnicity. And all companies should review their written policies, practices, and hiring, promotion, and compensation factors to ensure that all comply with the requirements of the California Fair Pay Act.

Join members of Seyfarth’s Pay Equity Group and top labor economists on November 30 for a robust discussion around strategies for navigating the complexities of “pay equity”.

Seyfarth Synopsis: Employers in California: be aware and prepare for new laws increasing minimum wages and mandating overtime pay for agricultural employees; expanding the California Fair Pay Act to race and ethnicity and to address prior salary consideration; imposing new restrictions on background checks and gig economy workers; and more. Small employers will be relieved the Governor vetoed expanded unpaid parental leave, but it will likely return in future sessions.

Friday, September 30, was Governor Jerry Brown’s deadline to sign or veto bills approved during the 2015-2016 Legislative Session. We summarize below this year’s bills that did and did not receive the Governor’s signature. Read on to prepare for our October 6 webinar offering Workplace Solutions for these pesky new Cal-peculiarities and register here.

SIGNED

Pay Equity

Fair Pay Act: Prior Salary & Race/Ethnicity. Saving some high-profile approvals to the last day, on Friday the Governor signed into law AB 1676 and SB 1063.  AB 1676 amends last year’s Fair Pay Act, Section 1197.5 of the Labor Code, to prohibit employers from considering prior salary as the sole justification for any disparity in compensation. SB 1063 expands the Fair Pay Act to race and ethnicity, and responds to critics that the pay equity issue is not limited to gender.  Specifically, it would prohibit employers from paying employees a wage less than the wage paid to employees of a different race or ethnicity for substantially similar work. Since both bills were signed by the Governor, both bills’ substantive changes will become law, though only the last-chaptered bill will be that which officially becomes law.

Before amendments applied in the legislative process, AB 1676 would have prohibited employers from seeking an applicant’s salary history information just as its vetoed predecessor, AB 1017, attempted to do last year. In vetoing AB 1017, Governor Brown stated that we should wait to see whether last year’s momentous Fair Pay Act, SB 358, addressed the pay equity issue before making further changes.  The amendments likely made this amendment palatable to the Governor, and kept California from matching the new Massachusetts law prohibiting Massachusetts employers from requesting the compensation history of a prospective employee before making an offer, unless the prospective employee has “voluntarily” disclosed that information. Amends Labor Code Sections 1197.5 and 1199.5. Effective January 1, 2017.

Wage and Hour

Agricultural Workers. AB 1066  enacts the “Phase-In Overtime for Agricultural Workers Act of 2016,” which requires employers to pay agricultural workers overtime over a four-year phase-in process. Beginning January 1, 2019, employers are required to pay overtime for any hours worked over 9.5 hours per day or 55 hours per workweek. Each year the hours worked triggering overtime pay will reduce, until reaching 8 hours per day, 40 hours per week, beginning January 1, 2022. Also beginning on January 1, 2022, any employee who works over 12 hours per day must be paid at a rate no less than double the regular rate of pay. The Governor may temporarily suspend the scheduled overtime requirement but only if the minimum wage increases are suspended as well. Employers that employ 25 or fewer employees will have an extra three years to comply with the phase-in and must begin paying overtime by January 1, 2022.  This bill began as AB 2757, which failed to pass the house of origin in June.  Undeterred, author Assembly Member Lorena Gonzales resurrected it with the legislative “gut and amend” trick, putting its contents into a bill formerly relating to educational employees.  Amends Labor Code Section 554 and adds Chapter 6 (commencing with Section 857) to Part 2 of Division 2 of the Labor Code.  Effective January 1, 2017.

Minimum Wage Violation Challenges. AB 2899 requires that any employer, before appealing a decision by the Labor Commissioner (LC) relating to a violation of wage laws, must file a bond—in favor of the unpaid employee—with the LC that covers the total amount of any minimum wages, liquidated damages, and overtime compensation owed. The bill also provides that the total amount of the bond is to be forfeited to the employee if the employer fails to pay the amounts owed within 10 days from the conclusion of the proceedings. Amends Labor Code Section 1197.1. Effective January 1, 2017.

Itemized Wage Statements. AB 2535 comes on the heels of the recent federal decision, Garnett v. ADT,  and clarifies Labor Code section 226. This bill specifies that employers need not list the number of hours worked on wage statements for any employee who is exempt from minimum wage and overtime requirements under the applicable IWC Wage Order or under statutes specified in Labor Code Section 226(j). Amends Labor Code Section 226.  Effective January 1, 2017.

Leaves of Absence

Paid Family Leave Expansion.  AB 908, which the Governor signed on April 11, 2016, increases the amount of benefits paid to employees on paid family leave and state disability leave from the current level of 55 percent to either 60 or 70 percent depending on the applicant’s income.  Read our report on AB 908 hereAffects Sections 2655, 3303, and 2655.1 of the Unemployment Insurance Code. Effective January 1, 2017, but provisions of the bill not operative until January 1, 2018.

Background Checks

Criminal History. AB 1843 prohibits employers from asking an applicant for employment to disclose any information regarding juvenile convictions and seeking or utilizing any information related to juvenile arrests, detentions, or court dispositions as a factor in employment determination. The bill does specify that an employer at a health facility can inquire into an applicant’s juvenile criminal background if a juvenile court made a final ruling or adjudication, that the applicant had committed a felony or misdemeanor relating to sex crimes or certain controlled substances crimes within five years prior to applying for employment. Still, these employers cannot inquire into an applicant’s sealed juvenile criminal records. Read more about existing California law on background checks hereAmends Labor Code Section 432.7.  Effective January 1, 2017.

Unfair Immigration-Related Practices. SB 1001 is a redux of 2015’s AB 1065, which was held in committee (and which we reported on here). SB 1001, like AB 1065, makes it an unlawful employment practice to request more or different documents than required under federal law to verify that an individual is not an unauthorized immigrant, or to refuse to honor documents tendered that on their face reasonably appear to be genuine, refuse to honor documents or work authorization based on specific status or term that accompanies the authorization to work, or to attempt to reinvestigate or re-verify an incumbent employee’s authorization to work using an unfair immigration-related practice. This year’s bill provision states that job applicants and employees who suffer an “unfair immigration-related practice” can file a complaint with the DLSE for enforcement. The bill provides that a violation of these provisions can result in a penalty of up to $10,000. Adds Section 1019.1 to the Labor Code.  Effective January 1, 2017.

Transportation Network Companies

Background Checks. AB 1289 requires a transportation network company (“TNC”; e.g., Uber) to conduct, or have a third party conduct, criminal background checks on each participating driver. This bill follows a 2014 lawsuit that accused TNCs of misleading customers by suggesting their background checks were the toughest in the industry. The bill also prohibits a TNC from contracting with a driver who is currently registered on the DOJ’s National Sex Offender Public Website; has been convicted of specified felonies within the past seven years; and/or has been convicted, within the past seven years, of misdemeanor assault or battery, domestic violence, or driving under the influence of drugs or alcohol. Adds Section 5445.2 to the Public Utilities Code.  Effective January 1, 2017.

Driving Under the Influence. AB 2687 makes it unlawful for a person to drive a vehicle with a blood alcohol level (BAC) of 0.04% or more when a passenger for hire is in the vehicle. The bill comes as an effort to lower taxi cab and ride sharing service driver’s BAC limit—currently at 0.08%—to the BAC limit of 0.04% as required for commercial motor vehicle drivers. Amends Vehicle Code Sections 23152 and 23153.  Effective July 1, 2018.

Personal Vehicles. AB 2763 defines a personal vehicle, used by a participating driver in a transportation network company, as one that has a passenger capacity of eight persons or less, (including the driver) and is owned, leased, or rented for a term that does not exceed 30 days, or otherwise authorized for use by the participating driver. Amends Public Utilities Code Section 5431.  Effective January 1, 2017.

Discrimination/Harassment

Employment Protections. AB 2337 expands the notice requirement employers with twenty-five or more employees must give to employees regarding domestic violence protections. Specifically, this bill provides that an employer must inform each new employee—and other employees upon request—of the rights protecting employees affected by domestic violence in writing. The Labor Commissioner is charged with developing the form providing notice by July 1, 2017.  Employers are not required to provide notice until the Labor Commissioner posts the form. Amends Labor Code Section 230.1.  Effective July 1, 2017.

Sexual Harassment Prevention Training. AB 1661 requires local agency officials to receive two hours of training and education on sexual harassment prevention within the first six months of taking office or commencing employment. To meet the requirements of this bill, local agency officials, including any member of a legislative body and any elected official of cities and counties, and special districts, must continue to receive this training once every two years. While AB 1661 is specific to local agency officials, AB 1825, enacted in 2004, established the same provisions for the workplace. AB 1661 comes on the heels of various high-profile sexual harassment cases against elected officials. Adds Article 2.4.5 (commencing with Section 53237) to Chapter 2 of Part 1 of Division 2 of Title 5 of the Government code.  Effective January 1, 2017.

Employment Discrimination. AB 488 allows individuals employed under a special license in a nonprofit sheltered workshop or rehabilitation facility to bring an action under the Fair Employment and Housing Act (FEHA) for prohibited harassment or discrimination. This bill came as an expansion of AB 1443, enacted in 2014, which extended FEHA’s protections to unpaid interns and volunteers. AB 488 now extends FEHA’s protections to workers with disabilities. Amends Section 12926, and adds Section 12926.05 to, the Government Code. Effective January 1, 2017.

Other Employee Protections

Employment Contracts—Choice of Law and Forum. SB 1241 prohibits an employer from requiring an employee, who resides and works in California, as a condition of employment, to agree to a provision that would either require the employee to litigate or arbitrate employment disputes (1) outside of California or (2) under the laws of another state. The only exception is where the employee was individually represented by a lawyer in negotiating an employment contract. The bill provides that any contract that violates these provisions is voidable by the employee. A court may award an employee reasonable attorney’s fees, among other remedies, for enforcing rights under the act. Read our in-depth report on SB 1241 hereAdds Section 925 to the Labor Code.  Effective January 1, 2017.

Employment Heat Safety. SB 1167 provides that the Division of Occupational Safety and Health (DOSH) shall propose to the Occupational Safety and Health Standards Board (Standards Board) for review and adoption, a standard that minimizes heat-related illness and injury among workers working in indoor places of employment by January 1, 2019. This bill comes as a response to a 2012 OSHA decision, upheld in 2015 by the Cal/OSHA appeals board, in which a staffing company and warehouse operator were fined for the heat illness suffered by an employee who was working inside a metal freight contained in over 100 degree heat. Adds Section 6720 to the Labor Code.  Effective January 1, 2019.

Employee Contact Information. AB 2843 expands an existing provision of the California Public Records Act (CPRA) that exempts the homes addresses and home telephone numbers of certain public employees from public disclosure to now cover all public employees, including persons paid by the state to provide in-home support services. Additionally, this bill extends the CPRA exemption to include the employee’s personal cell phone number and birth date. However, telephone numbers will be made available to bargaining agents for those employees. Amends Government Code Sections 6253.2 and 6254.3.  Effective January 1, 2017.

Industry Specific

Property Service Workers. AB 1978 creates the Property Services Workers Protection Act by establishing various requirements for the janitorial industry, including registering annually with the DLSE, to protect janitorial employees from wage theft and sexual harassment. The provisions of this bill apply to employers that employ at least one “covered worker” who enters into a contract, subcontract, or franchise agreement to provide janitorial services. This bill also requires the DLSE to maintain a database of property service employers and to develop a biennial sexual harassment and violence prevention training. This bill prohibits an employer from registering or renewing its registration if it has not fully satisfied any final judgment for unpaid wages or made appropriate tax contributions. “Successor employers” are also liable for any wages and penalties owed to the predecessor’s employees. The bill was signed while janitors were fasting outside of the CapitolAdds Part 4.2 (commencing with Section 1420) to Division 2 of the Labor Code.  Effective July 1, 2018.

Talent Services. AB 2068 updates the Talent Service Act’s existing communication and contractual protections to include new technologies, such as mobile applications. Specifically, AB 2068 strengthens the protection for an artist’s information or image to include information posted on an online service, online application, mobile application, or website. AB 2068 also updates the communication and advertisement protections between talent agencies and artists by including communication through the use of a telecommunication device, in print, on the Internet, or through the use of a mobile or online application or other electronic communication. AB 2068 also adds “text message” and other “electronic communication” to the list of methods by which an artist may ask that photographs and other information about the artist be removed from a website, online service, online application, or mobile application owned or serviced by the talent service. Amends Labor Code Sections 1703 and 1703.4.  Effective January 1, 2017.

Work Experience Education. AB 2063 provides an additional option for a student, at least 14 years old, to participate in work experience education. The bill also increases the number of hours per week a student may participate in job shadowing from 25 to 40 hours per semester, if the principal of the school where the student is enrolled certifies that it is necessary for the student’s participation in a career technical education program. Amends Education Code Section 51760.3 and 51769.  Effective January 1, 2017.

Commercial Online Entertainment Employment Services. AB 1687 addresses age discrimination in the entertainment industry by prohibiting a commercial online entertainment employment service (i.e., IMDb) that enters into a contract, from publishing a subscriber’s age or date of birth in an online profile. Proponents of this legislation cited cases such as Hoang v. Amazon.com, Inc, et al, in which a subscriber sued for having her age published on her profile page. The bill also requires that a service provider—upon request by the subscriber—remove age information from public view in any online profile under its control. Adds Section 1798.83.5 to the Civil Code. Effective January 1, 2017.

Other

Single-User Restrooms. AB 1732 requires all single-user toilet facilities in any business establishment, place of accommodation, or government agency to be identified as all-gender toilet facilities. The bill also provides that local officials responsible for code enforcement are to inspect for compliance. Adds Article 5 (commencing with Section 118600) to Chapter 2 of Part 15 of Division 104 of the Health and Safety Code.  Effective March 1, 2017.

VETOED (i.e., “it coulda been worse”)

Parental Leave. SB 654 would have significantly expanded California’s parental leave laws by requiring employers with 20 to 49 employees to provide up to six weeks of unpaid, job-protected parental leave and paid health benefits to bond with a new child within one year of the child’s birth, adoption, or foster care placement. Existing law—the California Family Rights Act—applies only to employers with 50 or more employees, and provides for at least 12 weeks of job-protected parental leave. The Governor vetoed this bill on September 30, stating: “It goes without saying that allowing new parents to bond with a child is very important and the state has a number of paid and unpaid benefit programs to provide for that leave.  I am concerned, however, about the impact of this leave particularly on small businesses and the potential liability that could result.  As I understand, an amendment was offered that would allow an employee and employer to pursue mediation prior to a lawsuit being brought.  I believe this is a viable option that should be explored by the author.”  In other words, we likely have not seen the last of this proposal.

Examination of Jurors. AB 1766 would have required that prospective jurors be referred to by either an identification number or abbreviation during voir dire in criminal trials. In his August 29 veto message, the Governor stated: “The open nature of criminal trials preserves both the defendant’s right to a fair and open trial, as well as the public’s faith in the court’s impartial application of the law. Under existing law, there are adequate remedies available if the court finds good cause to deny public access to the voir dire process or to specific juror information. These situations are best addressed on a case by case basis, and I do not believe there is a demonstrated need for a wholesale change at this time.”

BILLS THAT DIDN’T MAKE THE LEGISLATIVE CUT (i.e., “it coulda been a lot worse”)

Double Pay on the Holiday—2016 Edition. The Double Pay on Holiday Act of 2015 failed to make its way to the Governor for the second year in a row. AB 67 would have required retail and grocery store establishments, as well as restaurants located within them, to pay at least twice the regular rate of pay for employees who work on Thanksgiving.

Employee Time Off. AB 2405 would have required an employer to provide an employee at least eight hours annually of paid, job-protected, time off for an absence under the Family School Partnership Act. This bill came on the heels of SB 579, chaptered in 2015, which expanded the authorized reasons an employee can take job-protected time off under the Act and specified the definition of ‘family member” under California’s Kin Care. Read our report on SB 579 here.

Work Hours. SB 878 was similar to AB 357, the Fair Scheduling Act of 2015, which did not make it out of the Assembly. SB 878, the Reliable Scheduling Act of 2016, would have required that restaurant, grocery, and retail employers provide non-exempt employees with a 21-day work schedule in advance of their first shift on that work schedule. SB 878 would have required at least seven days advance notice. SB 878 would have required employers to pay “modification pay”—defined as compensation in addition to regular pay (the hourly rate calculated based upon 90 days prior)—if any scheduled shift is canceled, moved, or added, and for each shift for which an employee is required be on call but is not called into work.

Meal and Rest or Recovery Periods. AB 1948 would have provided a statutory remedy for an employer’s failure to provide a meal or rest or recovery period. The bill would have specified that the entire “penalty amount” was an additional hour or pay for each day that a meal or rest or recovery period was not provided to the employee.

California Workplace Flexibility Act. SB 985, SB 368’s predecessor, would have allowed employees to submit a written request for a flexible work schedule of up to four 10-hour days per week without obligating the employer to pay overtime for the 9th and 10th hours worked per day. The employer would have been obligated to pay overtime for any hours worked over 10 hours per workday or 40 hours per workweek.

Age Information in Employment. AB 984 would have prohibited an employer from using information obtained via websites regarding a person’s age to discriminate against an employee or applicant for employment. The bill also would have specified that a service provider is considered as doing business in this state and subject to California’s antidiscrimination laws when they knowingly accept payment from persons in California in exchange for posting their resumes and professional photos online.

Voluntary Veterans Preference Policy. AB 1383 would have created the Voluntary Veterans’ Preference Employment Policy Act to authorize a private employer to establish a written veterans’ preference employment policy. The bill also would have specified that granting a veteran preference, in and of itself, would not violate any local or state equal employment opportunity law or regulation, including, but not limited to, FEHA; and would have prohibited a veterans’ preference employment policy from being established or applied for the purpose of discriminating against an employment applicant on the basis of a protected classification.

Independent Contractors. AB 1727 would have established rights for independent contractors to organize and negotiate with “hosting platforms.” This bill would have provided a right for independent contractors to engage in “group activities” in an effort to negotiate through activities such as withholding work and boycotting or critiquing labor practices. The bill would have authorized an independent contractor or a representative of independent contractors claiming a violation under this bill to bring an action in superior court and to seek injunctive relief.

Employment Arbitration Agreements Discrimination. AB 2879, the “Service Member Employment Protection Act,” brought back the language of 2015’s AB 465, which the Governor vetoed (read our summary here), but limited the application to military service members, similar to USERRA. Specifically, the bill would have prohibited employers from requiring service members to waive any Labor Code protections, including the right to file and pursue a civil action or complaint, and would have prohibited employers from requiring service members to accept private arbitration, as a condition of employment, unless the waiver was “knowing and voluntary and not made as a condition of employment.”

DLSE Enforcement. AB 2261 would have provided the Department of Labor Standards Enforcement (DLSE) with new independent authority to, with or without an employee complaint, bring an action against an employer that it suspects may have terminated or otherwise discriminated against an employee in violation of any law under the jurisdiction of the Labor Commissioner. The authors of this bill argued that despite laws providing employees protection and encouragement to report abuse, the reality is that many workers do not report out of fear of losing their jobs. AB 2261 was built upon AB 970, which the Governor signed into law last year, and which we wrote about here.

Employee Safety. AB 2895 would have required an employer to keep at each worksite with three or more employees a complete, updated copy of the currently required written injury prevention program and make it available for inspection by any employee or by the Division of Occupational Safety and Health upon request. The bill would have also required an employer to inform each employee of the availability, and employee’s rights, to inspect and receive a copy of the injury prevention program. Additionally, an employer that received a written request would have had to  comply within a specified timeframe. The bill would have also entitled the employee to injunctive relief if the employer did not timely respond to the request.

Human Trafficking Training. AB 1595 would have required public and private mass transportation providers (bus, train, light rail, etc.) to provide training to recognize and report the signs of human-trafficking to employees who were likely to interact with victims of human trafficking. AB 1942 would have required the same training as AB 1595 but it was specific to hotels and motels that provide lodging services.

Sexual Offenses Against Minors. AB 2199 would have defined a two-year sentence enhancement where a defendant who committed a sex crime against a minor held a position of authority over the minor. The bill specifically provided that a person in a “position of authority” included, but was not limited to, a stepparent, foster parent, partner of the parent, youth leader, recreational director, athletic manager, coach, teacher, counselor, therapist, religious leader, doctor, or employer, or employee of one of the aforementioned persons.

PAGA. AB 1317 expanded on last year’s bill, AB 1506, which was signed by the Governor, that gave employers a limited right to cure certain wage-statement violations before an aggrieved employee could sue under PAGA. This bill would have provided an employer a right to cure any violation of the Labor Code before an employee could sue and would have provided an appropriation to the Labor and Workforce Development Agency to establish new positions to review and investigate PAGA cases. This bill was stuck in the Senate committee on rules.

PAGA Reform. None of the bills in this year’s five-bill Private Attorneys’ General Act (PAGA) reform package made it out of the Assembly. Those bills were:

  • AB 2461 would have limited the violations an aggrieved employee was authorized to bring and required specific procedures before suing.
  • AB 2462 would have provided employers with a right to cure before an employee brought a civil action.
  • AB 2463 would have established a penalty cap of $1,000 for each aggrieved employee.
  • AB 2464 would have authorized a court to dismiss an action if the court found the aggrieved employee suffered no appreciable physical or economic harm.
  • AB 2465 would have required the Labor and Workforce Development Agency to investigate alleged violations and determine if there was a reasonable basis for a civil action.

Workplace Solutions.

Head spinning?  We’ll summarize all the new and almost-laws and give you practical tips to prepare for them in our webinar on October 6.  Register here.  Or feel free to contact any of the authors or your favorite Seyfarth attorney with any questions.

Seyfarth Synopsis: On September 25 (yes, a Sunday), Governor Brown signed into law Senate Bill 1241. SB 1241, effective January 1, 2017, adds Section 925 to the Labor Code to restrain the ability of employers to require employees to litigate or arbitrate employment disputes (1) outside of California or (2) under the laws of another state. The only exception is where the employee was individually represented by a lawyer in negotiating an employment contract.

For companies that have headquarters outside of California and that employ people who work and reside in California, this assault on the freedom of contract is not welcome news.

Existing Law and the Genesis of SB 1241

Companies have long used forum-selection clauses and choice-of-law provisions in an effort to avoid California courts apply California law to employment disputes, especially those involving unfair competition. SB 1241 generally invalidates these provisions.

There often are legitimate reasons to have employment disputes decided where the company primarily does its business. Companies may prefer a court in their own state to decide which law (California’s or some other state’s) will govern a dispute. Under the common law, courts apply “substantial relationship” and “contrary to a fundamental policy of a state” tests to see if California law or some other law should govern a particular case.

Courts have long held that the freedom to contract favors the enforcement of forum-selection clauses. The U.S. Supreme Court in 2013 reinforced this rule in Atlantic Marine Constr. Co. Although not an employment case, Atlantic Marine broadly endorsed forum-selection clauses, stating that “courts should not unnecessarily disrupt the parties’ settled expectations” and that usually “ ‘the interest of justice’ is served by holding parties to their bargain.” Since that time, federal district courts in California have increasingly given more weight to forum-selection clauses.

What SB 1241 Provides

As we reported earlier, SB 1241 was among various employment-related bills that went to the Governor at the end of August 2016. SB 1241, the full text of which appears here, will be enacted as Labor Code section 925. It applies to employment contracts entered into, modified, or extended on or after January 1, 2017.

The key provision of Section 925 is its first section:

(a) An employer shall not require an employee who primarily resides and works in California, as a condition of employment, to agree to a provision that would do either of the following:

(1) Require the employee to adjudicate outside of California a claim arising in California.

(2) Deprive the employee of the substantive protection of California law with respect to a controversy arising in California.

A key exception to the application of Section 925 appears in subdivision (e):

(e) This section shall not apply to a contract with an employee who is in fact individually represented by legal counsel in negotiating the terms of an agreement to designate either the venue or forum in which a controversy arising from the employment contract may be adjudicated or the choice of law to be applied.

Thus, Section 925 generally forbids employers to require California employees to adjudicate claims outside of California or to submit to the laws of another state. An employee who successfully sues to void such offending provisions can recover reasonable attorney’s fees. Lab. Code § 925(e).

History of Labor Code Section 925

Section 925 represents a direct response to work-arounds that some employers have developed in attempts to dodge peculiar California law, such as California’s prohibition of covenants not to compete. (See Bus. & Prof. Code § 16600.)

Section 925 follows Governor Brown’s refusal to sign Assembly Bill 465. As we wrote earlier, AB 465 attempted to ban mandatory employment arbitration agreements. Governor Brown’s veto message explained that purported employment abuses “should be specified and solved by targeted legislation, not a blanket prohibition.” Section 925 is one such piece of targeted legislation, attacking contractual provisions that are hostile to California law, whether they appear in an arbitration clause or elsewhere within an employment agreement.

What Labor Code Section 925 Does and Does Not Do

Under prior law, a party seeking to enforce a forum-selection clause in an employment agreement already faced an uphill battle: it had to “prove that enforcement of the forum selection clause would not result in a significant diminution of rights.” Indeed, the Court of Appeal has refused to enforce an employer’s forum-selection clause and related choice-of-law clause because they violated California public policy on employee compensation. Section 925 changes the employer’s battle from difficult to hopeless: clauses that once were simply presumptively unenforceable will now be categorically unenforceable, except for clauses negotiated with an employee “individually represented by legal counsel.”

Although Section 925 apparently is a reaction to Governor Brown’s October 2015 veto of legislation that would have banned mandatory employment arbitration agreements, Section 925 applies to all employment contracts, regardless of whether they contain arbitration clauses. Section 925 affects arbitration clauses by ensuring that employment arbitrations with California residents generally will occur in California and apply California law. Arbitration clauses that contain forum-selection or choice-of-law provisions that offend Section 925 will be to that extent contrary to public policy, an outcome that would make enforcement of the overall arbitration agreement more difficult.

Section 925 does not affect employment agreements already in effect. By its terms, the law applies only to contracts entered into, modified, or extended on or after January 1, 2017.

Open Questions (or Things Left to Litigate)

Section 925 does not define what it means for an employee to “primarily reside[] and work[] in California.” Nor does it specify what qualifies as a “substantive protection of California law” that it seeks to protect.

Although the term “primarily” is vague, it often will not be difficult to determine whether an employee primarily resides and works in California. More difficult would be determining whether applying the law of another state would “[d]eprive the employee of the substantive protection of California law.” Some California courts have recognized that choice-of-law provisions are enforceable where the substantive law of the selected state provides the same or similar protections as California.