Seyfarth Synopsis: New statutory obligations for California employers in 2018 will include prohibitions on inquiries into applicants’ salary and conviction histories, expanding CFRA to employees of smaller employers, expansion of mandatory harassment training to include content on gender identity, gender expression, and sexual orientation, and new immigration-related restrictions and obligations.

California Governor Jerry Brown spent his last day to sign bills in this Legislative Session, October 15, approving and rejecting a number of employment-related bills. Below is our annual summary of those bills that will have—or would have had—the greatest impact on California employers. All approved bills become effective January 1, 2018, unless stated otherwise. Watch this blog for in-depth pieces on the bills below that will pose the most challenges for employers.

APPROVED

Salary Inquiry Ban. After two unsuccessful attempts, AB 168 received the Governor’s approval to make it unlawful in California law for employers, including state and local governments, to ask applicants about their prior salary, compensation, and benefits. The employer may consider prior salary information the applicant voluntarily and without prompting discloses, in setting pay. Don’t forget that Labor Code section 1197.5 already prohibits an employer from using an applicant’s salary history, by itself, to justify a pay disparity. AB 168 will also require employers to provide the position’s pay scale to a job applicant upon reasonable request. Read our in-depth piece on AB 168, and practical implications, here. Adds Section 432.3 to the Labor Code.

Meanwhile, yesterday the Governor vetoed the other pay equity bill we were watching, Gender Pay Gap Transparency Act, AB 1209. More on that bill below.

Ban-the-Box: Prior Conviction History of Applicants. With the approval of AB 1008, the Governor and California Legislature have created yet another protected class of individuals entitled to sue employers under the Fair Employment and Housing Act: applicants denied employment because of their conviction history, where the employer is unable to justify relying on that conviction history to deny employment. AB 1008 makes it unlawful for an employer to include questions seeking disclosure of an applicant’s criminal history on any employment application, inquire or consider the conviction history of an applicant before extending a conditional offer employment, or consider or distribute specified criminal history information in conducting a conviction history background check. If an employer intends to deny a position solely or in part because of the applicant’s prior conviction, the employer must make an individualized assessment of whether the applicant’s conviction history has a direct and adverse relationship with the duties of the job, consider certain topics, and allow the applicant to dispute the accuracy of the conviction history. Read our in-depth analysis, implications, and tips, of the “Scarlet Letter Act” here. Adds Section 12952 to the Government Code, and repeals Section 432.9 of the Labor Code.

New Parent Leave Act and Parental Leave DFEH Mediation Pilot Program. SB 63 extends CFRA’s protections to smaller employers (with at least 20 employees within 75 miles) and prohibits those employers from refusing to allow employees—with more than 12 months and at least 1,250 hours of service—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. An employer employing both parents who both are entitled to leave for the same child does need not give more than 12 weeks of leave total to the employees (which may be granted simultaneously if the employer chooses). Further, an employer can recover the costs of maintaining the health plan for employees that do not to return to work after their leave exhausts because of a reason other than a serious health condition or other circumstances beyond the employee’s control. Beginning January 1, 2018 and ending January 1, 2020, the DFEH, after receiving funding from the Legislature, will create a parental leave mediation pilot program under which an employer may request all parties to participate in mediation within 60 days of receiving a right-to-sue notice. This bill prohibits an employee from pursuing any civil action under these provisions (and tolls the statute of limitations) until the mediation is complete, meaning when either party elects not to participate, withdraws from mediation, or notifies the DFEH that further mediation would be fruitless. Adds Section 12945.6 to the Government Code.

Retaliation: Expanding The Labor Commissioner’s Authority. With the Governor’s October 3 approval of SB 306, the DLSE will be authorized to investigate an employer—with or without a complaint being filed—when, during a wage claim or other investigation, the Labor Commissioner suspects retaliation or discrimination. The bill will also allow the Labor Commissioner or an employee to seek injunctive relief (that the employee be reinstated pending resolution of the claim) upon a mere finding of “reasonable cause” that a violation of the law has occurred. That injunctive relief, however, would not prohibit an employer from disciplining or firing an employee for conduct that is unrelated to the retaliation claim. The bill also authorizes the Labor Commissioner to issue citations directing specific relief to persons determined to be responsible for violations and to create certain procedural requirements. Amends Section 98.7 and adds Sections 98.74, 1102.61, and 1102.62 to the Labor Code.

Immigration: Worksite Enforcement Actions. AB 450, the “Immigrant Worker Protection Act,” prohibits employers from allowing immigration enforcement agents to have access to non-public areas of a workplace, absent a judicial warrant, and prohibits immigration enforcement agents to access, review, or obtain employee records without a subpoena or court order, subject to a specified exception. This bill requires an employer to provide notice of an immigration agency’s inspection of I-9 Employment Eligibility Verification forms or other employment records within 72 hours of receiving the federal notice of inspection—using a template created by the Labor Commissioner—to current employees; requires an employer to provide affected employees (i.e., those who may lack work authorization or whose documents have deficiencies) a copy of the inspection notice, upon reasonable request; and requires employers to provide affected current employees, and their authorized representative, a copy of the immigration agency inspection results and written notice of the obligations of the employer and the affected employee arising from the action. The bill grants exclusive authority to the Labor Commissioner or Attorney General to enforce these provisions and requires that any penalty recovered be deposited in the Labor Enforcement and Compliance Fund. Penalties for failure to satisfy these prohibitions and for failure to provide the required notices are: $2,000 up to $5,000 for a first violation, and $5,000 up to $10,000 for each further violation. The Labor Commission may recover up to a $10,000 penalty for each instance an employer re-verifies the employment eligibility of a current employee at a time or in a manner not required by federal law. Stay tuned for a detailed analysis of AB 450 coming soon. Adds Sections 7285.1, 7285.2, and 7285.3 to the Government Code; adds Sections 90.2 and 1019.2 to the Labor Code.

Harassment Training: Gender Identity, Gender Expression, and Sexual Orientation. SB 396 requires employers with 50 or more employees to add items to already mandated biennial supervisory training to prevent sexual harassment. The new content must include practical examples to address harassment based on gender identity, gender expression, and sexual orientation. Employers must also post a DFEH-developed poster regarding transgender rights. The bill also makes changes to the Unemployment Insurance Code. Amends Sections 12950 and 12950.1 of the Government Code.

VETOED

Gender Pay Gap Transparency Act. AB 1209 would (as of July 2019) have required employers with at least 500 California employees to collect information on differences in pay between male and female exempt employees and between male and female Board members. The bill would have required employers to submit the information to the California Secretary of State by July 1, 2020, in a form consistent with Labor Code § 1197.5, and to provide an update to the Secretary of State every two years. The bill would have required the Secretary to publish the information on a public website if the Legislature provided it with sufficient funding. Yesterday the Governor vetoed the bill, stating—as many employers’ groups had pointed out—that the bill’s ambiguous wording made it unclear that the bill would “provide data that will meaningfully contribute to efforts to close the gender wage gap. Indeed, I am worried that this ambiguity could be exploited to encourage more litigation than pay equity.” He also cited the trust he has placed in his Pay Equity Task Force to provide guidance and recommendations to “assist companies around the state with assessing their current wage practices.” For more detail on implications of this bill had it passed, click through to our in-depth analysis on AB 1209.

Reproductive Health. The Governor vetoed AB 569 on October 15, stating that the FEHA “has long banned such [reproductive health-based] adverse actions, except for religious institutions. I believe those types of claims should remain within the jurisdiction of the [DFEH].” The bill would have added a provision to the Labor Code prohibiting an employer from taking adverse employment action against an employee or the employee’s dependents or family members for their reproductive health decisions, including the use of any drug, device, or medical service (e.g., birth control, abortions, or in vitro fertilization). An employer that violates this prohibition would have been subject to penalties under Labor Code § 98.6, as well as reinstatement, reimbursement of lost wages and interest, and other appropriate compensation or equitable relief. This bill would have prohibited employers from attempting to contract out of these requirements, by making null and void any express or implied agreement waiving these requirements. The bill would have required employers to include a notice of these employee rights and remedies in their handbooks.

Employee Request: Injury and Illness Prevention Program. AB 978 would have required an employer to provide a free copy of the company’s injury prevention program to an employee, or their representative, within 10 days of receiving a written request. A representative would have included a recognized or certified collective bargaining agent, attorney, health and safety professional, nonprofit organization, or immediate family member. AB 978 would have allowed an employer to take reasonable steps to verify the identity or the person making the written request and authorized an employer to assert impossibility of performance as an affirmative defense against allegations of violations of these provisions. Governor Brown found this bill to be “unnecessary and duplicative” of current regulatory proposals sitting with the Cal-OSHA Standards Board and noted that their advisory committee would be “better suited to determine how to properly implement requirements of this kind.”

BILLS THAT FAILED TO MAKE THE LEGISLATIVE CUT

Opportunity to Work Act. The notorious AB 5 would have required employers with 10 or more employees in California to offer additional hours of work to existing nonexempt employees before the employer could hire additional or temporary employees. This bill piggy-backed on the San Jose voter-approved Opportunity to Work Ordinance that, effective March 2017, would have required employers to offer part-time employees additional hours before hiring new or temporary employees. Read more on what AB 5 would have implemented herehere, and watch here.

Rest Breaks. AB 817 would have created 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 have allowed EMS employers to require their employees to monitor and respond to emergency response calls during rest or recovery periods without penalty, so long as the rest period is rescheduled.

Retail Employees: Holiday Overtime. AB 1173 would have established an employee-selected overtime exemption that would have allowed a “retail industry” employee to work up to 10 hours per day with no overtime pay during the holiday season (November through January). Overtime paid at time and one-half of the employee’s regular pay rate would have applied to over 40 hours worked in a workweek or 10 in a work day; double time would have applied to work over 12 hours per day and over eight hours on the fifth, sixth, or seventh day in a workweek. The bill would have required employees to submit a written request for the flexible work schedule for approval by the employer. The authors of this bill did not specifically define what “retail industry” would have meant.

Overtime Compensation: Executive, Administrative, or Professional Employees. AB 1565 would have exempted an executive, administrative, or professional employee from overtime compensation if the employee earns a monthly salary of $3,956 or at least twice the state minimum wage for full-time employment, whichever is greater. This bill would have had California follow President Obama’s FLSA regulations increasing the yearly salary exempt threshold from $23,660 to $47,476 for executive, administrative, and professional workers. (Those regulations have been enjoined by a federal court.)

Health Professional Interns: Minimum Wage. AB 387 would have broadened the definition of employers required to pay minimum wage to include anyone who employs any person engaged in supervised work experience (i.e., students working clinical hours) to satisfy the requirements for licensure, registration, or certification as an allied health professional. This bill would have applied only to a work experiences longer than 100 hours and would not have applied to employers with fewer than 25 allied health professionals or a primary care clinic.

Resident Apartment Manager Wages. AB 543 would have extended an exemption from Industrial Welfare Commission orders allowing employers, who do not charge rent to a resident apartment manager pursuant to a voluntary agreement, to apply up to one-half of the apartment’s fair market value (no value cap) to meet minimum wage obligations to the apartment manager. This was up from the two-thirds previously provided but capped at $564.81 per month for singles, $835.49 for couples.

Voluntary Veterans’ Preference Employment Policy Act. Both AB 353 and its almost identical twin AB 1477 hoped to revise FEHA’s existing Vietnam-Era veterans’ status provision but failed to make it out of both houses and out of the house of origin, respectively. The bills would have expanded a private employer’s authority to institute and uniformly grant a hiring preference for veterans regardless of where the veteran served. The bills stated that the hiring preference would not have violated FEHA or any local or state equal opportunity employment law or regulation. But the bill would have prohibited the use of a veterans’ preference policy for the purpose of discrimination on the basis of any protected classification.

Credit and Debit Card Gratuities. AB 1099 would have required an entity—defined as “an organization that uses online-enabled applications or platforms to connect workers with customers … including, but not limited to, a transportation network company” (e.g., Uber)—to accept tips by credit or debit cards if the entity allows customers to pay with credit or debit cards. The bill would have required that the tip be paid to the worker the next regular payday following the date the customer authorized the card payment. This bill made it out of the Assembly but the author canceled its hearing in the Senate Committee on Labor and Industrial Relations so we may see this bill again next year.

Labor Organizations: Compulsory Fee Payments. AB 1174 would have established the “California Right to Work Act of 2017” to prohibit a requirement that employees pay into a labor union, charity, or other third party as a condition of employment or continuing employment. This bill would have made California part of the list of 28 other Right to Work states in the nation.

Employer Liability: Small Business and Microbusiness. AB 442 would have prohibited Cal OSHA from bringing any “nonserious violation” against small business or microbusiness employers without first notifying the employer of the violation and the right to cure within 30 days. This safe harbor would not have applied to any willful violation. The impact of this bill would have been far reaching—nearly 70% of California employers employ only a handful of employees.

Good Faith Defense: Employment Violations. SB 524 would have allowed an employer to raise an affirmative defense that, at the time of an alleged violation, the employer was acting in good faith when relying upon a valid published DLSE opinion letter or enforcement policy. This bill would not have applied to the DLSE’s prosecution of payment of unpaid wages.

PAGA: 2017’s Three 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 procedures prior 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.

Workplace Solutions.

For more information on how these new Peculiarities might affect your company, read our in-depth focus blogs and contact your favorite Seyfarth attorney.

Seyfarth Synopsis: The California Legislature has just created yet another protected class of individuals entitled to sue employers under the Fair Employment and Housing Act. The new class of potential plaintiffs are applicants denied employment because of their conviction history, where the employer is unable to justify relying on that conviction history to deny employment.

We’ve reported on two January 2017 developments for California employers that use criminal records in employment decisions: (1) Los Angeles enacted a city-wide “ban-the-box” ordinance, and (2) the Fair Employment & Housing Council approved new regulations that borrow heavily from the EEOC’s April 2012 “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964.”

The trend continues. Over the weekend, on October 14, 2017, Governor Jerry Brown announced that he has signed Assembly Bill 1008, which amends FEHA to add new Government Code section 12952. This section will restrict an employer’s ability to make hiring decisions based on an applicant’s conviction records, including a “ban-the-box” provision and a prohibition against considering conviction history until the applicant has received a conditional offer of employment. (It is only scant comfort to reflect that the final version of AB 1008 was not as stringent as the originally proposed bill, which would have placed even greater restrictions on consideration of criminal history.) With a fast-approaching effective date of January 1, 2018, California employers should review their policies and procedures now to ensure compliance.

Coverage

Section 12952, like other parts of FEHA, will apply to employers with five or more employees. Section 12592 exempts from its coverage only a small handful of positions:

  • positions for which government agencies are required by law to check conviction history,
  • positions with criminal justice agencies,
  • Farm Labor Contractors as defined in the Labor Code, and
  • positions as to which the law (g., SEC regulations) requires employers to check criminal history for employment purposes or restricts employment based on criminal history.

Inquiries About Conviction History

Section 12952 will make it unlawful for California employers to

  • include on a job application any question about conviction history, unless the application is presented after a conditional offer of employment,
  • inquire into or consider an applicant’s conviction history before extending a conditional offer of employment, and
  • consider, distribute, or disseminate information about criminal history that California already prohibits employers from considering, such as (a) an arrest not resulting in a conviction (except in the limited situations described in Labor Code section 432.7), (b) referral to or participation in a pretrial or post trial diversion program, and (c) convictions that have been sealed, dismissed, expunged, or statutorily eradicated pursuant to law.

Section 12952 expressly states that it will not prevent employers from conducting conviction history checks that are not covered by the new law.

Section 12952 borrows its definition of “conviction” from Labor Code section 432.7(a)(1), (3):  “a plea, verdict, or finding of guilt regardless of whether sentence is imposed by the court.” The term “conviction history” is somewhat broader, and can include certain arrests.

Individualized Assessment 

If an employer intends to deny hire because of a prior conviction, Section 12952 will require the employer to assess whether the individual applicant’s conviction history has a “direct and adverse relationship with the specific duties of the job that justify denying the applicant the position.” This individualized assessment must consider the nature and gravity of the criminal offense, the time that has passed since the offense and the completion of the sentence, and the nature of the job sought.

The employer, may, but need not, document the required individualized assessment.

Adverse Action Based on Conviction History

If the individualized assessment leads to a preliminary determination that the applicant’s conviction history is disqualifying, then the employer must provide a written notice. Section 12952 will require more than what the federal Fair Credit Reporting Act (FCRA) requires. Specifically, the written notice that Section 12952 will require must

  • identify the conviction at issue,
  • include a copy of any conviction history report (which means the notice is required regardless of the source of the conviction history),
  • explain the applicant’s right to respond to the notice before the employer’s decision becomes final,
  • state the deadline for that response, and
  • tell the applicant that the response may include evidence challenging the accuracy of the conviction history and evidence of rehabilitation or mitigating circumstances.

The applicant has five business days to respond to a preliminary notice. The employer, in then making its final employment decision, may, but need not, explain the reasoning for its final decision. (Note that the Los Angeles ordinance, by contrast, requires employers to document the individualized assessment and to give the applicant a copy of it before making a final decision.)

If the applicant timely notifies the employer that the applicant disputes the accuracy of the conviction history and is taking specific steps to obtain evidence, then the applicant has an additional five business days to respond. The employer must consider any information the applicant submits before the employer can make a final decision.

If an employer then makes a final decision to deny employment based solely or in part on conviction history, a second written notification must be provided to the applicant, which must include:

  • the final denial or disqualification,
  • any existing procedure the employer has to challenge the decision or request reconsideration, and
  • the right to file a complaint with the Department of Fair Employment and Housing.

Again, the employer may, but need not, explain its final decision. (Under the Los Angeles ordinance, new requirements arise when the applicant provides any additional information upon receipt of the employer’s first notice and its initial completed assessment: the employer receiving that additional information must then complete a re-assessment and provide the applicant with a copy of it while notifying the applicant of the final decision.)

Remedies 

Because Section 12952 will be part of the FEHA, an aggrieved individual may sue for the full range of FEHA damages available, including compensatory damages, attorney’s fees, and costs.

Next Steps

Most immediately, California employers should determine whether they need to revise job applications, interview guidelines, and policies and procedures for criminal background checks. Many employers will need to revise their pre-adverse and adverse action letters to comply with the many laws regulating criminal background checks, and to revamp the timing of events in their hiring process.

Employers throughout the United States, and particularly multi-state employers, should continue to monitor developments in this and related areas of the law, including laws restricting the use of credit history information and the fair credit reporting laws.

 

Seyfarth Synopsis:  After two previous failed attempts, California joins seven other U.S. jurisdictions to prohibit inquiries into an applicant’s salary history.  Read on for a recap of the new law.

With Governor Jerry Brown signing AB 168 into law today, California joins Delaware, Puerto Rico, Oregon, Massachusetts, New York City, Philadelphia (currently pending legal challenge), and its own city of San Francisco in prohibiting employers from asking job applicants for “salary history information.” This term includes both compensation and benefits.

AB 168 will add section 432.3 to the California Labor Code. While Section 432.3 will prohibit employers from asking about or relying on prior salary information in deciding whether to offer a job and in deciding how much to pay, Section 432.3 will give employers a pass when an applicant, “voluntarily and without prompting,” discloses salary history information. In that case, Section 432.3 will not prohibit the employer from relying upon the volunteered information in setting the applicant’s starting salary. But note that the California Fair Pay Act (Lab. Code § 1197.5(a)(2)) forbids employers to rely on prior salary, by itself, to justify any disparity in pay.

Section 432.3 will also make California the first jurisdiction in the country to require that employers provide applicants with the pay scale for a position, upon “reasonable request.”

Section 432.3 will apply to “all employers”—both private and public—and will become effective January 1, 2018.

Seyfarth Synopsis: Governor Jerry Brown has till October 15 to approve bills the Legislature sent to his desk by its Friday, September 15, deadline, including bills that would require employers to ”show us the money” for certain employees and to make “mum be the word” for an applicant’s past conviction history.

The 2017 California Legislative Session kicked off on January 4, 2017, with lawmakers introducing over 2,200 bills. Of the many employment-related bills introduced, only a small handful made the Legislative cut. But some, addressed below, could have significant impacts on employers. Will the Governor sign or veto these possible new California peculiarities? We’ll know by his October 15 signing deadline. (Wondering what bills did not make the cut? We’ll include those in our post-October 15 wrap-up.)

Gender Pay Gap Transparency Act. AB 1209—called by some the “public shaming of California employers” bill—would require employers with at least 500 California employees to, beginning July 1, 2019, collect information on differences in pay between male and female exempt employees, by job classification and title, and male and female Board members. The bill would require employers submit the information to the California Secretary of State by July 1, 2020, in a form consistent with Labor Code § 1197.5 (California’s fair pay statute), and, to provide an update to the Secretary every two years. The bill would require the Secretary to publish the information on a public website if the Legislature provides it with sufficient funding. For more detail, click through to our in-depth analysis on AB 1209.

Salary Inquiry Ban. AB 168 would prohibit employers from relying on an applicant’s salary history when deciding whether to offer employment and what salary to offer, and from seeking an applicant’s salary history. The bill expressly authorizes employers, in setting pay, to consider salary history that an applicant discloses voluntarily and without prompting, but affirms Labor Code § 1197.5’s prohibition against using salary history by itself to justify a disparity in pay. The bill would require an employer to provide a job applicant with the position’s pay scale upon reasonable request. The bill would apply to all employers but not to salary information available to the public pursuant to the California Public Records Act or the Freedom of Information Act. This bill comes on the heels of last year’s fair pay legislation AB 1676 and Governor Brown’s veto of AB 1017 (last year’s bill to prohibit salary history inquiries), which veto (he explained) was an effort to give SB 358 (the Fair Pay Act) a chance to work. The new bill also follows in the footsteps of similar legislation in San Francisco, New York City, Philadelphia (stayed pending legal challenge), Delaware, Puerto Rico, Oregon and Massachusetts.

Prior Conviction History of Applicants. AB 1008, dubbed the “Scarlet Letter Act,” by Assembly Member Kevin McCarty on the Assembly Floor, would repeal existing Labor Code § 432.9 and add a section to the Fair Employment and Housing Act (FEHA), which would prohibit an employer with five or more employees from (1) including on any employment application a question seeking disclosure of a job applicant’s conviction history, (2) inquiring into or considering an applicant’s conviction history until after extending a conditional offer of employment, and (3) while conducting a conviction history background check in connection with an employment application, considering, distributing, or disseminating information related to (a) certain arrests not followed by a conviction, (b) referral to or participation in a pretrial or post trial diversion program, and (c) convictions that have been sealed, dismissed, expunged, or statutorily eradicated.

As to an employer that intends to deny employment to a job applicant because of the applicant’s conviction history, this bill would also require the employer to:

  • Make an individualized assessment of whether the conviction history has a direct and adverse relationship with the specific duties of the job—considering the nature and gravity of the offense, the time passed since the offense and completion of the sentence, and the nature of the job held or sought.
  • Notify the applicant in writing of a preliminary decision to deny employment based on that individualized assessment, including disqualifying convictions forming the basis for rescission of the employment offer, a copy of the applicant’s conviction history report, and explanation of the applicant’s right to respond to the preliminary decision before it is final.
  • Allow the applicant specified periods of time to respond, then consider information submitted by the applicant before making a final decision, and then notify the applicant in writing of the final denial or disqualification, of any existing procedure the employer has for the applicant to challenge the decision, and of the right to file a complaint with the DFEH.

The bill’s provisions would not apply to positions with criminal justice agencies, state or local agencies required to conduct background checks, farm labor contractors, and employers required by state, federal, or local law to conduct background checks or restrict employment based on criminal history. The bill would also repeal (because this section would replace) a Labor Code provision prohibiting state or local agencies from asking an applicant for employment to disclose conviction history information.

Reproductive Health. AB 569 would add a provision to the Labor Code prohibiting an employer from taking adverse employment action against an employee or the employee’s dependents or family members for their reproductive health decisions, including the use of any drug, device, or medical service (e.g., birth control, abortions, or in vitro fertilization). An employer that violates this prohibition would be subject to penalties under Labor Code § 98.6, as well as reinstatement, reimbursement of lost wages and interest, and other appropriate compensation or equitable relief. This bill would prohibit employers from attempting to contract out of these requirements, by making null and void any express or implied agreement waiving these requirements. The bill would require employers to include a notice of these employee rights and remedies in its handbook.

This bill is the Legislature’s response to the 2012 U.S. Supreme Court case Hosanna-Tabor Evangelical Lutheran Church & School v. EEOC, to provide employees of religiously affiliated institutions the same benefits and protections as other California employees, unless the employee is the functional equivalent of minister, subject to a “ministerial exception” as developed in First Amendment case law. The Legislature agrees with Justice Alito, in his concurring opinion, 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.” Supporters of this bill cite cases of employees being fired for getting pregnant while unmarried. The bill’s author, Assembly Member Lorena Gonzalez Fletcher, stated on the Assembly floor that this bill “[is] an issue of basic health, privacy and worker rights.” The bill expressly states that it supplements, and does not limit, any right or remedy available under FEHA.

New Parent Leave Act and Parental Leave DFEH Mediation Pilot Program SB 63, the “New Parent Leave Act” would—through a new section added to the California Family Rights Act—extend CFRA’s protections to smaller employers (with at least 20 employees within 75 miles). The bill would prohibit those employers from refusing to allow employees with more than 12 months and at least 1,250 hours of service 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. The bill would provide that an employer employing both parents who both are entitled to leave for the same child need not give more than 12 weeks of leave total to the employees (which may be granted simultaneously if the employer chooses). Further, an employer would be able to recover the costs of maintaining the health plan for employees who decide not to return to work after their leave exhausts because of a reason other than a serious health condition or other circumstances beyond the employee’s control.

SB 63 would also require the DFEH, when it receives funding from the Legislature, to create a parental leave mediation pilot program under which an employer may request all parties to participate in mediation within 60 days of receiving a right-to-sue notice. The bill would prohibit an employee from pursuing any civil action under these provisions (and toll the statute of limitations) until the mediation is complete. The mediation is considered complete when either party elects not to participate or withdraws from mediation, or notifies the DFEH that further mediation would be fruitless.

Retaliation: Expanding The Labor Commissioner’s Authority. SB 306 would authorize the DLSE to investigate an employer, with or without a complaint being filed, when retaliation or discrimination is suspected during a wage claim or other investigation being conducted by the Labor Commissioner. If the Labor Commissioner finds reasonable cause to believe a violation has occurred, the Labor Commissioner may seek injunctive relief. The bill would also allow an employee bringing a retaliation claim to seek injunctive relief upon showing that reasonable cause exists to believe the employee has been subject to adverse action for bringing the claim. The bill would provide that the injunctive relief would not prohibit an employer from disciplining or firing an employee for conduct that is unrelated to the retaliation claim. The bill would also authorize the Labor Commissioner to issue citations directing specific relief to persons determined to be responsible for violations and to create certain procedural requirements for such.

Immigration: Worksite Enforcement Actions. AB 450, known as the “Immigrant Worker Protection Act,” would prohibit employers from allowing immigration enforcement agents to have access to non-public areas of a workplace, absent a judicial warrant, and would prohibit immigration enforcement agents to access, review, or obtain employee records without a subpoena or court order, subject to a specified exception. This bill would also:

  • Require an employer to provide current employees with notices of an immigration agency’s inspection of I-9 Employment Eligibility Verification forms or other employment records within 72 hours of receiving the federal notice of inspection—using a template created by the Labor Commissioner.
  • Require an employer to provide affected employees (meaning employees who may lack work authorization or whose documents have deficiencies) a copy of the Notice of Inspection of I-9 Employment Eligibility Verification forms, upon reasonable request.
  • Require employers to provide to affected current employees, and to an employee’s authorized representative, a copy of the immigration agency notice that provides for the inspection results and written notice of the obligations of the employer and the affected employee arising from the action.
  • Grant exclusive authority to the Labor Commissioner or Attorney General to enforce the provisions of this bill and require that any penalty recovered be deposited in the Labor Enforcement and Compliance Fund.
  • Prescribe penalties for failure to satisfy the bill’s prohibitions and for failure to provide the required notices of $2,000 up to $5,000 for a first violation, and $5,000 up to $10,000 for each further violation.
  • Prohibit an employer from re-verifying the employment eligibility of a current employee at a time or in a manner not required by federal law, and authorize the Labor Commission to recover up to a $10,000 penalty for each violation.

Employee Request: Injury and Illness Prevention Program. AB 978 would require an employer to provide a copy—free of charge—to an employee, or to the employee’s representative, of the company’s injury prevention program within 10 days of a written request. A representative would include a recognized or certified collective bargaining agent, an attorney, a health and safety professional, a nonprofit organization advocate, or an immediate family member. The bill would allow the employer to take reasonable steps to verify the identity of the person making the written request. The bill would authorize an employer to assert impossibility of performance as an affirmative defense in any complaint alleging a violation of these new provisions.

Stay Tuned … check back for a full breakdown of this year’s legislative bills coming after the Governor’s October 15th deadline.

Seyfarth Synopsis: On September 11, AB 1209, the Gender Pay Gap Transparency Act, which would require larger employers in California to publish differences in pay between male and female employees and Board members, left the Legislature on route to Governor Jerry Brown’s desk for his approval or veto. A statewide salary history ban may soon be headed to his desk, as well.

In face of last month’s suspended implementation of “Component 2” of the Revised EEO-1 Report, which would have required employers with over 100 employees to submit W-2 pay and FLSA hours worked information, California moves forward with its own pay data transparency initiative.

Dubbed by Cal Chamber as the “public shaming of employers” bill, AB 1209 has undergone significant changes since Assembly Member Lorena Gonzalez Fletcher introduced it on February 17, 2017, as a nonsubstantive “spot bill” relating to wages.

After multiple amendments and the addition of coauthors from both houses, the version of AB 1209 sent to the Governor would require companies with at least 500 employees to compute differences between the wages of male and female exempt employees and board members located in California and file the report with the California Secretary of State (“SOS”). The SOS would in turn, publish this information on a public website.

What Will Employers Have to Do?

If the bill is signed by Gov. Brown, beginning on July 1, 2019, and biennially thereafter, impacted employers will have to collect and compute:

  • The difference between the wages of male and female exempt employees in California using both the mean and median wages in each job classification or title.
  • The difference between the mean and median wages of male board members and female board members located in California.
  • The number of employees used for these determinations.

This information would then be reported to the California SOS by January 1, 2020 (and biennially thereafter) on a form categorized consistent with Labor Code Section 1197.5—the California Fair Pay Act (“FPA”).

What Will the SOS Do with the Data?

The bill would have the SOS publish the reported information on a public website. While the current version of the bill would no longer require companies to publicly publish their own data, placing that duty on the SOS would be no less dangerous for employers.

As Jennifer Barrera of Cal Chamber and Kara Bush of the Computing Technology Industry Association wrote in a recent Sacramento Bee article: “Public display of the data adds insult to injury. Employers would be required to provide statistics on job duties, wages and gender, but without the factors such as experience and seniority that the law says are legitimate reasons for wage gaps. That’s propounding a half-truth—and a public relations windfall for plaintiffs’ attorneys.” Proponents of the bill contend this bill would help to close the gender wage gap. The bill’s author, Assembly Member Gonzalez Fletcher, touts the bill as giving “the public very precise data about which big companies are paying women the salaries they deserve, and which aren’t.” She also said: “Sunlight is a great way to help expose and address this [gender pay disparity] problem.”

No Per Se Violations of the California Fair Pay Act

The bill provides that “a gender wage differential in the information provided under this [new Labor Code] section [the bill would create] is not, in itself, a violation of Section 1197.5.” Nor does the bill impose any penalty or right of action by its own terms. The bill’s opponents have argued it does not need to, because it effectively forces employers to hand over to potential plaintiffs all information they might need to file a lawsuit, without any context that would explain permissible differentials.

Salary History Ban May Also be Headed to Governor’s Desk

The Governor has until October 15, 2017, to consider and sign or veto this and any other bills.

He may also have before him for consideration AB 168, which, as currently drafted, would prohibit an employer from asking for, or relying upon, an applicant’s salary history, consistent with similar bans in San Francisco, New York City, Philadelphia (stayed pending legal challenge), Delaware, Puerto Rico, Oregon and Massachusetts.

AB 168 passed the Senate yesterday, September 12th, and is headed back to the Assembly for a concurrence vote.

Will the Gov Sign One or Both of These Bills? 

Since signing the Fair Pay Act in 2015, Governor Brown has shied away from approving bills making anything other than incremental changes to that Act (last year adding race and ethnicity to gender and prohibiting prior salary alone from justifying a pay disparity), stating the FPA should be given time to work to see if stricter legislation is needed. But the Trump Administration’s pullback of the revised EEO-1 report may provide an impetus for Governor Brown to treat California’s own gender pay gap initiative more favorably.

Stay tuned for our full legislative updates in the coming weeks. For information on how this bill might affect your company, contact your favorite Seyfarth attorney or any member of Seyfarth’s Pay Equity Group.

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.