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By Brian P. Long

When you dismiss an employee for poor performance, or when he beats you to the punch by quitting on you, you rarely feel the urge to rush that slacker his final check. But you should. Under the California Labor Code, you must pay all wages due at the time of an involuntary termination. And you must pay resigning employees within 72 hours if they suddenly quit on you. Further, if they are kind enough to toss at least 72 hours’ notice of resignation your way, then you must pay final wages to the resigning employee on the last day of employment.

Because these rules sometimes get lost in the heat of a termination moment, now seems the time to provide some reminders:

If an employee is terminated mid-pay period, can’t I just treat the former employee like everyone else and pay him in the regular payroll cycle?

No. Welcome to another California peculiarity; employers must pay wages to terminated employees on their last day of employment, even if that’s smack dab in the middle of the payroll cycle, or even the very next day after the last paycheck.

This may seem like an unnecessary trouble, but recall that Labor Code Section 203 imposes daily penalties for any willful failure to pay according to the schedule we described above. The penalty is measured in terms of the amount of daily wages, from the date the final wages were due until the date they are paid, up to a total of 30 days.

What kind of money are we talking about?

Suppose an employee who made $20 per hour is fired after working only two hours into the new payroll period. And suppose the employer then observes the normal payroll cycle and waits 13 days to pay the $40 in earned wages. The penalties for this seeming trivial infraction could be a startling $2,080 ($20 per hour x 8 hours per day x 13 days). In other words, waiting less than two weeks in this situation to pay the final wages could ultimately cost more than 50 times what the employee was actually owed. And yes, all days of delay are counted, including weekend days. The penalties just keep on rolling.

I fired an employee and now she claims she is due additional wages for dates that she did not actually work. I don’t want to face these pesky waiting time penalties, but do I have to pay?

Not necessarily. You need only pay the wages you concededly owe. If you have a good faith dispute as to whether you actually owe wages, then you have a defense to a claim for waiting time penalties. This is because assessment of the penalty is not automatic, and a “good faith dispute” that any wages are due is a defense to a penalty claim.

An employee on his way out the door just handed me 27 pages of business expense reimbursements. There’s no way I can verify and process these in 72 hours! Will I owe waiting time penalties?

No. The penalty is for failing to pay “wages.” A wage is money owed for labor performed. Expense reimbursements are not wages. Obviously, you don’t want to drag your heels on paying any expenses you owe. But no waiting time penalties should accrue while you work that number out.

An employee who just quit says, “Oh, by the way, I was denied meal breaks.” Will waiting time penalties accrue if I do not pay premium wages for missed meal breaks?

Some might argue Yes, but the best answer is No. While some argue that waiting time penalties can accrue solely for a failure to make premium payments for missed meal or rest breaks, the California Supreme Court, in Kirby v. Imoos Fire Protection, Inc., 53 Cal. 4th 1244, 1255 (2012), undermined that argument. The Kirby court said that meal and rest payments are not “wages” for the purpose of Labor Code section 218.5, which permits recovery of attorney’s fees in an action brought for nonpayment of wages. Rather, Kirby said, those payments are a form of a penalty, for purposes of that statute. Kirby’s language supports an argument that premium payments, if not “wages” for purposes of Section 218.5, are also not “wages” for purposes of Section 203. At least some courts have recognized the common sense of applying Kirby’s language in this context. Accordingly, employers have at least a good-faith argument that non-payment of meal and rest premiums would not be non-payment of “wages,” and a good-faith argument is all you need to avoid penalties under Section 203.

Workplace solutions:  If it’s been a while since you’ve checked in on those who process your California terminations, it’s a good idea to remind them of the rules and the consequences for ignoring them. Also, ensure you have a practice in place whereby you can process a payroll the same day, just in case an immediate termination occurs. And, of course, if you have any questions about any final pay issues, reach out to your favorite member of the California Workplace Solutions team.

Regarding the Title: In apologizing for this obscure temporal allusion, we invite the culturally challenged to consult http://en.wikipedia.org/wiki/Time_Is_on_My_Side.

Edited by Chelsea Mesa

Seyfarth Synopsis: The 2028 Los Angeles Olympics is already bringing change to the city. On December 11, 2024, the Los Angeles City Council voted 12-3 to approve a draft ordinance to amend the Living Wage Ordinance and the Hotel Worker Minimum Wage Ordinance in 2025.  If the City Council approves of the City Attorney’s draft ordinance, the proposed wage increases will make a splash across the tourism industry leading up to the Games.

Update: Although the Los Angeles City Council passed the “Olympic Wage Ordinance” on May 23, 2025, on May 30, 2025, the Office of the City Clerk approved a referendum against the ordinance. A petition signed by 92,998 registered City of Los Angeles voters was timely filed with the City Clerk on June 27, 2025. It remains to be seen if the petition will pass the verification process and whether voters will have the opportunity to vote on whether to uphold or repeal the ordinance.  

The ordinance, dubbed the “Olympic Wage Ordinance,” would amend the Los Angeles Living Wage Ordinance (LWO) and the Hotel Worker Minimum Wage Ordinance (HWMO) to increase minimum wages for eligible employees incrementally each year up to $30 per hour by July 2028, just in time for the 2028 Los Angeles Olympics.

Who On The Team Is Covered?

The proposed Olympic Wage Ordinance would cover many Los Angeles tourism workers, including concessionaires, skycaps, and cabin cleaners, among others. Employees at hotels with at least 60 rooms would also benefit from the Ordinance.

Minimum Wage Timeline

Under the proposed ordinance, eligible employees will take the gold with a minimum wage of $30 by 2028. 

The Olympic Wage Ordinance would increase hotel and airport workers’ minimum wage by $2.50 each year as follows:

  • $22.50 an hour on July 1, 2025
  • $25.00 an hour on July 1, 2026
  • $27.50 an hour on July 1, 2027
  • $30.00 an hour on July 1, 2028

Healthcare Benefits

Beginning July 1, 2025, eligible airport workers would also receive an increase in healthcare payments from the current $5.95 per hour to $8.35 per hour.  Eligible hotel workers would be granted the same healthcare payment. The healthcare benefit payment will increase each year on July 1 with new rates announced on April 1.  Under the draft Ordinance, the healthcare benefit payment will increase proportionately by the percentage increase in the California Department of Managed Healthcare’s Large Group Aggregate Rates report of each year, if at all.

Hardship and Right-to-Cure

The Olympic Wage Ordinance includes a hardship exemption clause to the LWO for concessionaires with 50 or less employees at LAX who already have a lease at the time of the passage of the ordinance. However, there is currently no exemption for covered hotels. 

The proposed Ordinance also includes a right-to-cure provision.  An employee can only file a complaint if (1) the employee first provided written notice to the employer outlining the alleged violations; and (2) the employer takes no action to cure the alleged violation within 30 days of receipt of the written notice. If the employer does not take sufficient timely action, the employee can then file an administrative complaint with the Los Angeles Office of Wage Standards or in court.

Workplace Solutions

While there is not a formal Olympic Wage Ordinance yet, it is anticipated that it will be finalized in early 2025—in time for the July 1, 2025 increase. If approved, the Ordinance will have a significant impact on Los Angeles’ tourism workforce.  Employers should reach out to their favorite Seyfarth attorney to help prepare to comply with the new wage and benefits rules by July, and check back with us here at CalPeculiarities for more developments in this area.

Edited by: Cathy Feldman

Seyfarth Synopsis: With the Governor’s September 30 deadline to sign bills behind us, we review the employment bills that made the cut to become laws, as well as those that didn’t survive the season. The most notable new laws read intersectionality into FEHA protected categories, recast victims’ time off provisions, adjust paid family leave, and impact protections for freelance workers and whistleblowers.

We previously detailed the cornucopia of key bills California legislators introduced in 2024. Below is our summary of the labor and employment bills the Governor signed into law and key measures that were vetoed. All new laws are effective January 1, 2025, unless otherwise stated.

Soon-to-be-New Laws

SB 1137– Protected Characteristics: Intersectionality

SB 1137 makes California the first jurisdiction to explicitly adopt the concept of intersectionality and clarifies how courts should assess overlapping claims under the state’s anti-discrimination laws. As stated in the law, intersectionality “captures the unique, interlocking forms of discrimination and harassment experienced by individuals in the workplace and throughout society, particularly Black women, as compared to Black men and White women.” Under this new law, the Fair Employment and Housing Act (“FEHA”) will expressly protect the intersection, or any combination of the currently-enumerated protected characteristics from discrimination. 

The bill amends Sections 12920 and 12926 of the Government Code (also amends the Unruh Act and Education Code).

AB 1815 – Race Discrimination – Hairstyles

AB 1815 expands the definition of “race” under the FEHA by removing the term “historically” and including traits associated with race beyond hair texture and protective hairstyles. The new law will also add definitions for “race” and “protective hairstyle” to the Unruh Act.

The bill amends Section 51 of the Civil Code, Section 212.1 of the Education Code, and Section 12926 of the Government Code.

SB 1340 – Discrimination: Local Enforcement

AB 1340 specifies that nothing in the FEHA limits or restricts efforts by any city, county or other political subdivision of the state to enforce local anti-discrimination laws if certain requirements are met. Local laws can be enforced when an employment complaint has been filed with the CRD after the CRD has issued a right to sue notice (but before the expiration of the time to file a civil action in the notice) and the local law at issue is at least as protective as the FEHA. The law requires the CRD to promulgate regulations governing local enforcement pursuant to these provisions.

The bill amends Section 12993 of the Government Code.

AB 2499 – “Victims” Time Off

AB 2499 expands and recasts jury, court, and victim time off provisions as unlawful practices under the FEHA (previously addressed in the Labor Code), placing them under the CRD’s enforcement authority. Specifically, the law prohibits the discrimination/retaliation/discharge of an employee who: takes time off for jury service; takes time off to appear in court as a witness under court order; is a victim and takes time off to obtain relief for their/their child’s health, safety, welfare; and (for employers with 25 or more employees) is a victim/has a family member who takes time off to assist the family member for various reasons related to a qualifying act of violence (instead of crime/crime or abuse). 

Additionally, the new law expands eligibility for reasonable accommodations to include an employee who is a victim/has a family member who is a victim of a qualifying act of violence. Employees will be able to use vacation, personal, and paid sick leave for leaves granted as reasonable accommodations under this provision. Such leave will run concurrently with CFRA/FMLA (if the employee would have been eligible), and be subject to time use limitations. Employers will be required to inform employees of their rights in writing at hire and upon request.

The bill amends Section 214 of the Code of Civil Procedure, Section 48205 of the Education Code; add Section 12945.8 to the Government Code, and amends Section 246.5 of, and repeals Sections 230 and 230.1 of the Labor Code (among other things).

SB 1105 – Paid Sick Leave – Agricultural Employees

SB 1105 expands California’s existing paid sick leave provisions to allow agricultural employees who work outside to use their currently entitled paid sick leave to avoid smoke, heat, or flooding conditions created by a local or state emergency. The law states that its purpose is to confirm that California’s Healthy Workplaces, Healthy Families Act of 2014 (“HWHFA”) provides for the use of paid sick leave under these circumstances under the preexisting “preventive care” reason for use. While this term is not defined in the HWHFA, the Department of Industrial Relations’ FAQs provide that examples of preventive care are annual exams and flu shots. To the extent the legislature intended for “preventive care” to be a more expansive term, SB 1105 provides an important clarification.

This bill amends Section 246.5 of the Labor Code.

SB 1100 – Discrimination: Driver’s License

SB 1100 prohibits statements in employment materials (such as a job advertisement, posting, or application) that an applicant must have a driver’s license. The only exceptions are if the employer reasonably expects the position’s duties to require driving and reasonably believes that an alternative form of transportation would not be comparable in travel time or cost to the employer. Alternative forms of transportation may include a ride hailing service, taxi, carpooling, bicycling, or walking.

The bill amends Section 12940 of the Government Code.

SB 399 – Captive Meetings Ban

SB 399 prohibits an employer from subjecting or threatening discrimination or adverse action against any employee who declines to attend or participate in, receive, or listen to an employer-sponsored meeting or communications regarding the employer’s opinion about religious or political matters. The new law requires employers to continue paying employees who refuse to attend such meetings, and imposes a civil penalty of $500 per employee for each violation. We may well see challenges to this new law, as opponents of the bill were vocal that it is preempted by the NLRA.

The bill adds Chapter 9 (commencing with Section 1137) to Part 3 of Division 2 of the Labor Code.

AB 2123 – Paid Family Leave  

Under AB 2123, employers can no longer require employees to take up to two weeks of earned and unused vacation before the employee’s initial receipt of paid family leave benefits during any 12-month period in which employees are eligible for these benefits.

The bill amends Section 3303.1 of the Unemployment Insurance Code.

AB 1888 – DOJ Labor Trafficking Unit

Governor Newsom approved AB 1888 to establish a Labor Trafficking Unit within the DOJ that will “increase leadership and coordination among state agencies to combat labor trafficking in California.” The Governor signed three other non-employment-related human trafficking bills the same day: AB 2020, SB 963, and SB 1414.

The bill adds and repeals Section 12530.5 to the Government Code.

AB 3234 – Social Compliance Audit

AB 3234 requires an employer that has voluntarily subjected itself to a “social compliance audit” relating to labor laws (regardless of whether the audit is to determine if the employer uses child labor) to post a report detailing the findings of its compliance with child labor laws on its website. The new law defines a “social compliance audit” as a voluntary, nongovernmental inspection or assessment of an employer’s operations or practices to evaluate whether the operations or practices are in compliance with state and federal labor laws, including wage and hour and health and safety regulations, including those regarding child labor.

The bill adds Chapter 1.5 (commencing with Section 1250) to Part 4 of Division 2 of the Labor Code.

AB 2738 – Labor Code Enforcement and OSHA Training

In an effort to address worker injuries and fatalities at concert festivals, this law requires contracts with entertainment events vendors to provide in writing that upon hire for a live event, the vendor will furnish to the contracting entity certain information about the federal and Cal/OSHA trainings its own employees and subcontractors’ employees have completed.

This new law also authorizes public prosecutors enforcing Labor Code violations to recover all remedies available under the Labor Code, which would go first to workers for unpaid wages, damages, or penalties, and the remainder to the General Fund. It also authorizes recovery of fees and costs to the prevailing plaintiff in such an action.

The bill amends Sections 181, 9251, and 9252 of, and adds Section 9252.1 to the Labor Code.

AB 1034 – PAGA exemption: Construction Industry Employees

AB 1034 extends the current January 1, 2028 expiration date of the PAGA exemption for employees in the construction industry applicable to work performed under a valid collective bargaining agreement in effect any time before January 1, 2025, to 2038.

The bill amends Section 2699.6 of the Labor Code.

SB 988 – “Freelance Worker Protection Action Act”

SB 988 requires a “hiring party” (not limited to an employer) to pay an Independent Contractor (“IC”) on the date specified by the contract, or if unspecified, no later than 30 days after completion of the freelance worker’s services. This new law prohibits requiring the freelance worker to accept less compensation than what is specified by the contract, to provide more goods or services, or to grant additional intellectual property rights as a condition of timely payment. The hiring party and IC will need to enter into a written contract that the hiring party must retain for no fewer than four years. Hiring parties are also prohibited from discriminating  against an IC for asserting rights under these provisions, and the law creates a private right of action with injunctive relief, damages, fees, and costs available.

The bill adds Part 5 (Section 18100 et seq) to Division 7 of the Business and Professions Code.

AB 224 – Newspaper Distributors and Carriers AB 5 Exemption Extension

AB 224 extends the exemption from the application of Dynamex to newspaper distributors working under contracts with publisher/carriers until January 1, 2030, and extends the corresponding mandatory LWDA payroll and wage reporting requirements.

The bill amends Section 2783 of the Labor Code.

AB 2754 – Port Drayage Motor Carriers Contracts – Liability

AB 2754 extends existing Labor Code provisions to port drayage motor carriers. These provisions prohibit a person or entity from entering into contracts for labor or services with certain types of contractors if they know or should have known that the contract does not include sufficient funds to allow the contractor to comply with all applicable employment laws. The law also imposes joint and several liability for customers of port drayage motor carriers where the motor carriers misclassify drivers as independent contractors.

The bill amends Sections 2810 and 2810.4 of the Labor Code.

AB 2364 – Property Service Worker (Janitorial) Protections

AB 2364 increases the payment provided to qualified organizations that provide mandatory sexual violence and harassment prevention training to janitors. The rates will jump from $65 per participant to $200 per participant for training sessions having fewer than 10 participants, and $80 per participant for training sessions with 10 or more participants, except as specified. These enumerated rate hikes will be in effect until January 1, 2026, and then increase each year thereafter. The new law also requires the DIR to contract with the UCLA Labor Center to study opportunities to improve janitorial industry worker safety and rights.

The bill amends Sections 1420 and 1429.5 of, and adds and repeals Section 1429.6 of, the Labor Code.

Bills Already Signed Into Law

Some laws were ahead of the curve, and were signed into law much earlier in the legislative session.

AB 2299 – Whistleblower Protections Posting

AB 2299, signed into law July 15, 2024, requires the Labor Commissioner to develop, and an employer to post, a model list of employees’ rights and responsibilities under the State’s whistleblower laws. An employer is considered compliant with the posting requirement set forth in Labor Code section 1102.8 if the employer posts the model list.

The bill amends Section 1102.8 and adds Section 98.11 to the Labor Code.

AB 2288 and SB 92 – PAGA Compromise

We previously detailed the sweeping PAGA reforms effectuated by AB 2288 and SB 92, which were signed into law on June 21, 2024 and are retroactively effective as of June 19, 2024.

The bills amend Sections 2699 and 2699.5 of the Labor Code, and amend, repeals and add Section 2699.3 of the Labor Code.

AB 2049 – Summary Judgment Filing Deadlines

AB 2049, signed into law on July 15, 2024, changes the deadline for a party to file a motion for summary judgment or summary adjudication from the current 75 days to at least 81 days before the hearing on the motion. The deadlines for filing an opposition are likewise extended from 14 days to at least 20 days before the hearing, and for filing a reply from 5 days to at least 11 days before the hearing. The new law prohibits a party from filing more than one motion for summary judgment against an adverse party (multiple motions for summary adjudication are excluded from this prohibition) without leave of court, and expressly prohibits the introduction of new facts in a reply to an opposition to a motion for summary judgment. 

This bill amends Section 437c of the Code of Civil Procedure.

SB 828 – Minimum Wages: Health Care Workers Delay

SB 828 was signed into law on May 31, 2024 and delayed the implementation of SB 525, the health care minimum wage law signed by Governor Newsom on October 13, 2023. This law moved all minimum wage adjustments in SB 525 by one month, which meant that the minimum wage schedule took effect on July 1, 2024 instead of June 1, 2024. Additionally, all future minimum wage increases scheduled to take place after 2024 will take place on July 1, rather than June 1, of each year.

This bill amends Sections 1182.14 and 1182.15 of the Labor Code.

Bills That Did Not Make the Cut

SB 1022 – CRD Group/Class Civil Action Filing Extension: This bill would have made a variety of changes to FEHA administrative timelines, including changes to tolling rules and extending the deadline for the Civil Rights Department (CRD) Director to file a group or class complaint to seven years from the date of the alleged violation. This would have tacked years onto the CRD’s current time limits to bring systemic complaints, and was the very reason why the Governor vetoed the bill.  Despite the veto, the Governor encouraged the Legislature to try again next year with a more reasonable period for CRD to initiate a group or class complaint.

AB 1832 – CRD Human Trafficking Task Force: This bill would have established a Labor Trafficking Task Force within the CRD, “tasked” with taking various actions and working with various state agencies, to combat labor trafficking. Governor Newsom vetoed the bill as redundant of AB 1888.

SB 1116 – Benefits for Striking Workers: Under this bill, after two weeks of an employee’s absence due to a trade dispute or strike, the employee would have been eligible for unemployment benefits under the Unemployment Insurance Code.

AB 2494 – Employer Notification: This bill would have required all employers, public and private, to provide employees with a written notice of coverage under COBRA, in-person and via email, following termination or reduction in hours.

AB 2930 – AI & Automated Decision Systems: This bill would have regulated the use of automated decision tools in employment pay, promotion, hiring, termination, or task allocation for purposes of determining employment terms or conditions. Expect more action on this topic in years to come, as the Governor’s veto message on AB 1047 previewed.

Workplace Solutions

Sign up for our October 2, 2024 webinar regarding these new laws and the new compliance obligations they create for employers. Visit us at Cal Peculiarities for regular updates on the oddities of California employment law, and check out our Policy Matters podcast and newsletter for regular check-ins on California (and national) policy and legislative updates.

Edited by Cathy Feldman and Elizabeth Levy

Seyfarth Synopsis: Having run the legislative gauntlet, the fate of California’s 2022 employment bills now lie with Governor Newsom’s pen, including bills that would expand pay data reporting and pay scale requirements, extend COVID-19 Supplemental Paid Sick Leave, and create mandatory wages and working conditions for fast food workers, and more.

August 31, 2022, marked the close of the 2022 Legislative Session. Bills that the Assembly and Senate passed late into the night will now be presented to the Governor for signature, where he will generally have until September 30 to act on them (bills sent to the Governor prior to the end of session must be acted upon sooner). Top of employers’ minds are bills that would expand pay data reporting and pay scale requirements, extend COVID-19 Supplemental Paid Sick Leave (again), and create a mandatory wages and working conditions program for fast food workers. Read on for our summary of these and other key employment bills that may soon become law.

Bills That Made The Cut

SB 1162: Pay Data Reporting and Pay Scale Disclosures

As we previously reported, SB 1162 would expand existing requirements that employers with 100 or more employees provide the California Civil Rights Department (CRD, f/k/a the DFEH) with specified EEO-1 pay data. New requirements would include reporting mean and median hourly rates, as well as a separate second report to be provided by employers that have 100 or more employees hired through labor contractors (so long as 1 employee is in CA).

The bill would expand the requirement that employers provide a pay scale for candidates to require all employers with more than 15 employees provide to existing employees the pay scale for the employee’s current position.

This bill will amend Section 12999 of the Government Code and Section 432.3 of the Labor Code.

AB 1949: Protections for Bereavement Leave

AB 1949 would amend the California Family Rights Act (“CFRA”) to prohibit an employer from denying a request from an employee with at least 30 days of active service to take up to five days of bereavement leave upon the death of a family member, defined as spouse or a child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law. While the days of bereavement leave need not be taken consecutively, the allotted leave must be completed within three months of the date of death of the family member. If the employer does not have a paid bereavement policy, the leave may be unpaid, except that an employee may use vacation, personal leave, accrued and available sick leave, or compensatory time off that is otherwise available to the employee.

The bill would allow the employer to require documentation of the death of the family member, which can be in the form of a death certificate, a published obituary, or written verification of death, burial, or memorial services from a mortuary, funeral home, burial society, crematorium, religious institution, or governmental agency. The bill would prohibit retaliation for requesting bereavement leave.

The bill will amend Sections 12945.21 and 19859.3 of, and add Section 12945.7 to, the Government Code.

AB 2188: Off-the-Job Cannabis Use Protection

AB 2188 would, starting January 1, 2024, prohibit employers from discriminating against a person based upon their use of cannabis off the job. However, the bill expressly does not prohibit employers from taking action against a person for failing a valid pre-employment drug test that does “not screen for nonpsychoactive cannabis metabolites.” The bill would also permit an employer to administer a performance-based impairment test, and to terminate an employee who is determined to be impaired by cannabis on the property or premises of the place of employment. These provisions would not apply to employees in building or construction trades, and would not preempt state or federal laws requiring employees to be tested for controlled substances.

The bill will add Section 12954 to the Government Code.

AB 152: COVID-19 Supplemental Paid Sick Leave (Again)

The 2022 COVID-19 SPSL law was set to sunset on September 30, 2022. A very last minute gut and amend to AB 152 seeks to extend SPSL to December 31, 2022. This bill would only extend the time during which workers can elect to use the leave—it is not a newly-banked tranche of leave. The qualifying reasons for leave remain the same, as we previously summarized. In a slight extension of existing law, the bill would permit an employer to require an employee to submit to a second diagnostic test within no less than 24 hours, after the first positive result. The employer may decline to provide SPSL where the employee refuses a second test.

The bill was presented to the Governor August 31, 2022, and will take effect immediately upon signature.

AB 1041: Leave – Designated Person

AB 1041 would amend the California Family Rights Act to include a “designated person” for whom an employee may take leave. Designated person is defined as “any individual related by blood or whose association with the employee is the equivalent of a family relationship,” and would include domestic partners. An employer may limit an employee to one designated person per 12-month period, and may require the employee to substitute any of the employee’s accrued vacation leave or other accrued time off during this period or any other paid or unpaid time off negotiated with the employer.

The bill will amend Section 12945.2 of the Government Code and Section 245.5 of the Labor Code.

AB 257: Fast Food Accountability and Standards Recovery Act (FAST Recovery Act)

This bill, initially introduced in January of 2021, would establish a Fast Food Sector Council charged with creating a fast food workers’ bill of rights “to establish sectorwide minimum standards on wages, working hours, and other working conditions adequate to ensure and maintain the health, safety, and welfare of, and to supply the necessary cost of proper living to, fast food restaurant workers.”

The bill would forbid the Council from promulgating regulations requiring predictable scheduling, to amend current statutes, or to create new paid time off benefits. The bill also regulates the amount the Council may establish for purposes of minimum wage. The Council would also be subject to legislative committee oversight, explicitly requiring the Council to “provide information as requested by the appropriate committees of the Legislature.” The bill would establish a rebuttable presumption of unlawful discrimination or retaliation if an adverse action is taken against an employee within 90 days following the employer learning that the employee filed a complaint, or refused to work based on a reasonable belief that the condition of the restaurant would violate worker health and safety laws.

The bill was recently amended to remove a requirement that franchisors ensure franchisee compliance with a variety of employment, worker, public health and safety laws, including those related to unfair business practices, general liability, employment discrimination, the California Retail Food Code, a range of labor regulations, as well emergency orders. That provision would have also established joint and several liability for franchisee non-compliance with the measure, and prohibited any waiver or indemnity provisions.

The bill will amend Section 96 of, and adds Part 4.5.5 (commencing with Section 1470) to Division 2 of, the Labor Code.

AB 676: Franchisor Discrimination

This bill prohibits a franchisor from failing or refusing to grant a franchise or financial assistance to a current franchisee or prospective franchisee based solely on any characteristic protected by the Unruh Civil Rights Act of the prospective franchisee, or of the geographic area where the franchise is located, if any characteristic of the composition of the neighborhood or geographic area where it is to be located is protected by the Unruh Act. The Unruh Act confers protected status based on sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status.

This bill will amend multiple Business and Professions Code and Corporations Code provisions.

SB 1262: Background Checks

This bill was inspired by the California Court of Appeal’s decision in All of Us or None of Us. v. Hamrick, which held that an individual’s date of birth and driver’s license number could not be used as data identifying a criminal defendant in public records. This caused courts around the state to redact birth dates and driver’s license numbers from their indexes, making routine background checks much more difficult. Abrogating the Court of Appeal’s decision, this bill would require publicly accessible electronic indexes of defendants in criminal cases to permit searches and filtering of results based on a defendant’s driver’s license number or date of birth.

This bill will amend Section 69842 of the Government Code.

SB 1044: Emergency Conditions – Prohibition on Adverse Employment Actions

SB 1044 would prohibit employers, in the event of an emergency condition from: (1) taking or threatening adverse action against an employee for refusing to report to or leaving a workplace because they feel unsafe; or (2) preventing an employee from accessing their mobile device for use for emergency purposes. The bill defines “emergency condition” as either: (1) conditions of disaster or extreme peril to the safety of persons or property at the workplace caused by natural forces or a criminal act; or (2) an order to evacuate a workplace, a worker’s home, or the school of a worker’s child due to natural disaster or a criminal act. A health pandemic is not considered an emergency condition, and the measure is inapplicable to emergency conditions that have ceased.

The employee, where feasible, would be required to notify the employer of the emergency condition before benefiting from the bill’s provisions. The bill does not apply to first responders, disaster service workers, employees on military bases, and employees of residential care facilities, among others.

While a violation of these provisions could subject an employer to a private lawsuit and penalties under the Private Attorneys General Act (PAGA), the bill allows a right to cure alleged violations following Labor Code section 2688.3.

Adds Chapter 11 (commencing with Section 1139) to Part 3 of Division 2 of the Labor Code.

AB 2183: Agricultural Labor Relations

As an alternative procedure to the polling place election process set forth in Section 1156.3 of the Labor Code, the bill would permit a labor organization to be certified through either a labor peace election or a non-labor peace election as the exclusive bargaining representative of a bargaining unit, through a representation ballot card election or by mail, thereby permitting a bargaining unit to summarily select a labor organization as its representative for collective bargaining purposes without holding a polling place election.

Last year, Governor Newsom vetoed a similar measure, directing the Labor and Workforce Development Agency to work with the Agricultural Labor Relations Board to correct some procedural irregularities and internal inconsistencies with the previous version of the bill.

Adds Sections 1160.10 and 1162 to the Labor Code.

AB 1601: Call Centers

AB 1601 originally would have required an employer of employees in a call center that intends to relocate from this state to notify the Labor Commissioner at least 120 days before the relocation. The measure, however, underwent a serious gut and amend, recasting the provisions of the measure to provide employment protections for employees in call centers subject to mass layoffs, relocations, or termination of employees—in other words, California’s statutory WARN requirements. This bill would prohibit a call center employer from ordering a relocation of its call center unless notice of the relocation is provided to the affected employees at least 60 days prior to the relocation.

Amends Labor Code Sections 1400, 1406, and adds related Labor Code Articles.

AB 2777: Extending Sexual Assault Statute of Limitations

The bill would amend the Code of Civil Procedure to permit a putative plaintiff, from January 1, 2023, to December 31, 2023, to pursue a cause of action in court based on sexual assault regardless of whether that claim would be barred by the applicable statute of limitations, so long as the alleged wrongful actions occurred on or after January 1, 2009. This is despite the fact that the Code of Civil Procedure already provides for a lengthy ten-year statute of limitations for claims relating to a sexual assault.

A previous version of this measure would have permitted revival of all claims “arising out of a sexual assault or other inappropriate contact, communication, or activity of a sexual nature that would otherwise be barred before January 1, 2023,” but the statute did not endeavor to define what constitutes “activity of a sexual nature.” Thankfully, that troubling provision was removed. Before “reviving” a claim under this provision, the attorney bringing the claim must sign a declaration “stating that the attorney has reviewed the facts of the case and consulted with a mental health practitioner, and . . . that it is the attorney’s good faith belief that the claim value is more than two hundred fifty thousand dollars.”

Amends Section 340.16 of the Code of Civil Procedure.

Bills That Did Not Make The Cut

AB 2133: Wages, Final Payment

This bill would have amended Section 201 of the Labor Code to reduce the amount of time to pay final wages from 72 to 48 hours in the event of a layoff of seasonal employees employed in the curing, canning, or drying of any variety of perishable fruit, fish, or vegetables. Recently, however, the legislation underwent a complete gut and amend to remove any labor and employment provisions, and recast the measure to require a reduction in statewide greenhouse gas emissions to at least 55 percent below the statewide greenhouse gas emissions limit no later than December 31, 2030. On the last day of session, the Assembly refused to concur in the Senate amendments and the bill failed.

AB 437: Exclusivity Requirements For Actors

This bill would have prohibited contractual provisions for the personal or professional services of an employee working as an actor that would prohibit the employee from working for multiple employers, “unless the employer can show that the other employment would pose a direct scheduling conflict or the employer can show that it would materially interfere with the employer’s business.” The measure was ordered to the inactive file in the middle of August by the bill’s author, the same Senator that put on this masterclass at the end of session.

Workplace Solutions

We will continue to keep you apprised of developments as they come out of the Governor’s office. Expect a deep dive on our blog of bills that ultimately pass and will affect you and your California workforce. Please check back in with us here at California Peculiarities, and you can also check out our Policy Matters podcast and newsletter for regular check-ins on California (and national) policy and legislative updates as well.

Edited by Coby Turner and Elizabeth Levy

Seyfarth Synopsis:  On Saturday, October 9, 2021 Governor Newsom signed the last of 2021’s pending employment-related bills, including a bill imposing even more restrictions on settlement agreements. The new laws will become effective on January 1, 2022. This post summarizes the new approvals as well as other new key employment laws with which California employers will need to comply.

On October 9, 2021 a day before his official deadline, Governor Newsom finished review of the 836 bills passed to him by the Legislature, signing 770. This 7.9% veto rate is higher than the lowest veto rates tallied by Jerry Brown in the late 70s/early 80s; but far lower than Arnold Schwarzenegger, who had the highest veto rates.

The most notable bill approved on October 9 was the “Silenced No More Act,” SB 331, which will, for settlement agreements entered into on or after January 1, 2022, expand the prohibition on confidentiality provisions to all forms of workplace discrimination.

Large retailers and wholesalers were hit especially hard this legislative season, with bills such as AB 1084, which will require large retail department stores to display a “reasonable selection” of gender-neutral items for children; SB 62, which imposes joint and several liability for brand guarantors and garment manufacturers; and AB 701, which will impose notice and other requirements on warehouse distribution centers that use quotas.

Also notable are AB 1003, making wage theft grand theft, and AB 1033, which expands CFRA leave to parents-in-law.  Conspicuously absent from the final new law count is any legislation extending COVID-19 Supplemental Paid Sick Leave, which expired September 30, 2021.

Read on for summaries of recently-approved employment laws as well as other major employment bills that the Governor approved or vetoed, some of which we discussed in greater detail in our previous posts on September 15, 23, and 29.

Approvals

More Restrictions on Settlement and Severance Agreements:  For settlement agreements entered into on and after January 1, 2022, SB 331, the “Silenced No More Act” amends Section 1001 of the Code of Civil Procedure (enacted by SB 820 of 2018).  The law extends the prohibition on confidentiality provisions in settlement agreements to all forms of workplace discrimination—not just discrimination based on sex.

SB 331 also amends Section 12964.5 of the Government Code (enacted by SB 1300 of 2018) so that employers implementing non-disparagement agreements as a condition of employment (or in a separation agreement) will need to carve out an employee’s ability to discuss conduct the employee has reason to believe is unlawful. Specifically, it requires provisions restricting employees’ ability to disclose information related to conditions in the workplace to state: “Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.” The bill also adds a provision specifically stating that any agreement or document violating the above provisions is contrary to public policy and unenforceable. These provisions do not prohibit inclusion of a legally-valid general release or waiver of all claims in a separation agreement, and requires employers offering agreements related to separation to notify the employee that he/she has a right to consult with an attorney, and provide at least five days within which to do so. Like its predecessors, the bill authorizes provisions prohibiting disclosure of the amount paid in a severance or settlement agreement, as well as an employer protecting its trade secrets, proprietary information or confidential information that are not related to unlawful acts in the workplace.

Gender Neutral Retail Departments: AB 1084 will require a retail department store with 500 or more employees that sells childcare items to maintain a gender-neutral section, displaying a “reasonable selection” of items for children, regardless of whether they have been traditionally marketed for either girls or for boys. These requirements will be enforced by the State of California through the Attorney General, a district attorney, or city attorney, and provides for recovery of attorneys’ fees. Failure to comply with the measure’s requirements will yield a civil penalty not to exceed $250 for a first violation, and $500 for a subsequent violation.

Large Group Health Insurance: SB 255 will authorize an association of employers to offer a large group health care service plan contract or large group health insurance policy consistent with ERISA if certain requirements are met, including: (1) that the association is headquartered in California; (2) has continuously been a Multi-Employer Welfare Arrangement under ERISA (MEWA) since before March 23, 2010; (3) and that the large group health care service plan contract or large group health insurance policy have provided a specified level of coverage since January 1, 2019.

Warehouse Distribution Center Employee Quotas: AB 701, as we discussed in depth previously, among other things, adds several Labor Code sections that will require employers with over 100 California employees at a single warehouse distribution center—or with 1,000 or more California employees at multiple warehouse distribution centers—to give each nonexempt employee (including employees of third-party employers, temporary services, or staffing agencies) a written description of any quota that applies. This notice is to include (1) the number of tasks to perform or materials to produce or handle, (2) the relevant time period, and (3) any potential adverse employment action that could result from a failure to meet the quota. This written description must be provided upon hire, or within days of the January 1, 2022 effective date.

CFRA Leave for Parents-in-Law: AB 1033, co-sponsored by the California Chamber of Commerce, will add parents-in-law to the list of family members for which an employee can take leave under the California Family Rights Act (CFRA). This addition builds upon last year’s SB 1383, which expanded CFRA to require businesses with as few as five employees to provide 12 weeks of mandatory family leave per year. SB 1383 also expanded the categories of persons for whom an employee can take CFRA leave to care to include grandparents and domestic partners. According to the Chamber of  Commerce, the inclusion of “parents-in-law” was inadvertently omitted from 1383, and its inclusion here, in AB 1033, is to fix this oversight.

AB 1033 will also require the Department of Fair Employment and Housing (DFEH) to notify an employee in writing of the requirement for mediation under the DFEH’s small employer mediation program prior to filing a civil action, and would require an employee to contact the DFEH’s dispute resolution division to indicate whether they are requesting mediation, and make other related changes.

Garment Manufacturer Brand Guarantor Wage/Hour Liability: SB 62 will subject those sitting at the top of the supply chain—what the bill calls “Brand Guarantors”—to liability for the wage violations committed by their garment manufacturing vendors, even where the ultimate seller of the garment was completely unaware of the violation. In other words, as we previously blogged here, the bill will make clothing “brands” and holding companies—and even retailers—jointly liable with the contractors from whom they purchase t-shirts, hats, or even belts to sell for the contractor’s wage/hour violations, and perhaps even for violations by the contractor’s subcontractor.

According to the Governor’s signing announcement, SB 62 aims to “protect marginalized low-wage workers, many of whom are women of color and immigrants, ensuring they are paid what they are due and improving workplace conditions.” The California Chamber of Commerce disagrees, noting that “[n]othing in SB 62 will address the problem of underground bad actors in the garment industry evading the law”; SB 62 simply “allows those bad actors to continue operating as usual while passing the cost and liability to companies that have no control over the workers.” Time will tell if this measure will accomplish its intended goal. Regardless, employers should begin auditing their garment manufacturing vendors as soon as possible.

Emailing Required Postings to Employees: SB 657 adds Section 1207 to the Labor Code to authorize employers to additionally distribute information that they are required to physically post to employees by email with the document or documents attached.

AB 5 Exemptions: Newspaper Distributors and Carriers and Manicurists: AB 1506 and AB 1561, among other things, extend the exemption from the application of the ABC test for independent contractor status for newspaper distributors working under contract with a newspaper publisher and newspaper carriers and for licensed manicurists to January 1, 2025.

Wage Theft as Grand Theft: AB 1003 adds Section 487m to the Penal Code, making it the crime of grand theft to engage in intentional theft of wages, including gratuities, “in an amount greater than nine hundred fifty dollars ($950) from any one employee, or two thousand three hundred fifty dollars ($2,350) in the aggregate.” Grand theft is generally punishable either as a misdemeanor by imprisonment in a county jail for up to one year or as a felony by imprisonment in county jail for 16 months or two or three years.

Removing IWC Licenses to Pay Less to Individuals with Disabilities: Starting January 1, 2022, SB 639 will prohibit the Industrial Welfare Commission from issuing special licenses that authorize the employment of a person with a disability for less than the minimum wage.

PAGA Janitorial CBA Exception SB 646: Creates a limited exception from PAGA for specific janitorial employees performing work under a collective bargaining agreement.

Expansion of OSHA Citation Authority: SB 606 will radically increase Cal/OSHA’s enforcement power by establishing two additional categories of violations for which Cal/OSHA can issue citations: (1) “Enterprise-wide Violations” and (2) “Egregious Violations,” both of which we previously summarized in detail. The California Chamber of Commerce initially designated SB 606 a job killer, but removed the bill from the list after amendments removed a provision that would have created a rebuttable presumption of retaliation if an employer were to take adverse action against an employee within 90 days of the employee taking any of a number of actions, such as disclosing a positive COVID-19 test or diagnosis of a communicable disease or reporting a possible violation of an OSHA standard.

Cal/OSHA agricultural workers wildfire smoke protections: AB 73 imposes wildfire smoke protections for agricultural workers.

COVID-19 Workplace Notices: AB 654, effective immediately upon its October 6, 2021 approval, clarifies AB 685 of 2020, which requires notice of COVID-19 cases in the workplace by eliminating duplicative obligations for businesses in certain industries, matching terms to corresponding federal guidelines, among other changes.

Hospitality Preferential Hiring for Pandemic Layoffs: As we detailed here, SB 93 requires certain hospitality employers—hotels, private clubs, event centers, and airport hospitality services—and successor employers, to offer preferential hiring to employees laid off because of the pandemic. The bill carried an urgency clause, making it effective the same date the Governor signed it, April 16, 2021.

COVID SPSL (Now-Expired) Extension: As discussed in detail here, SB 95 was a budget trailer bill that—effective immediately upon its April 16, 2021 signing, and retroactive to January 1, 2021—extended COVID-19 supplemental paid sick leave (SPSL) to September 30, 2021 for employers with over 25 employers. The law provided an annual allotment of up to 80 hours of available SPSL, covered persons who telework, and extended SPSL entitlements to reasons related to vaccinations and family care.

Vetoes

AB 616 would have created a process for agricultural employees to elect a labor representative through a ballot card election. In his veto message, the Governor cited inconsistencies and procedural issues related to the collection and review of ballot cards and directed the Labor and Workforce Development Agency to work with the Agricultural Labor Relations Board to go back to the drawing board and develop new policy proposals for legislative consideration.

AB 123 would have revised the formula for calculating certain leave benefits by requiring the weekly benefit amount be increased to equal to 65% or 75% of the highest wages paid to an individual. In his veto message, the Governor expressed his support for a robust paid leave program, but noted that his administration has already enacted a number of measures—SB 83 (increased duration of paid family leave), SB 1383 (CFRA expansion), AB 138 (increasing wage replacement)—aimed at increasing paid leave, making this legislation an unnecessary new expense. According to the bill’s author, however, the current formula for determining wage replacement is woefully deficient for low-income workers.

AB 1074 would have renamed the “Displaced Janitor Opportunity Act” the “Displaced Janitor And Hotel Worker Opportunity Act,” extending the right to recall provisions of the Act to hotel workers. In his veto message, the Governor explained, as we previously summarized, that he enacted SB 93 in the beginning of 2021, which provided robust recall rights for hotel workers displaced by the pandemic.

Workplace Solutions

Employers will need a few months to prepare before the new laws become effective on January 1, 2022. Should you have a specific question about proactive measures to ensure compliance with any of the above new requirements, please feel free to reach out to your Seyfarth counsel.

Edited by Elizabeth Levy and Coby Turner

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

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

SIGNED

Pay Equity

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

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

Wage and Hour

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

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

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

Leaves of Absence

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

Background Checks

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

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

Transportation Network Companies

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

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

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

Discrimination/Harassment

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

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

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

Other Employee Protections

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

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

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

Industry Specific

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

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

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

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

Other

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

VETOED (i.e., “it coulda been worse”)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Workplace Solutions.

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

When an employee dies, employers ask, “Who gets the employee’s wages, and how do I pay them without getting into trouble?” While employers might be tempted to consult the California Labor Code (see discussion of payment of wages to a terminated employee here), under certain circumstances, paying wages earned by a deceased employee is governed by the California Probate Code.

Sections 13600-13606 address when and to whom an employer should pay wages owed to a deceased employee. We focus here on cases where the deceased employee has left a surviving spouse. Section 13600 provides a method much more expedient that the usual probate process by which a surviving spouse may receive the wages owed to the deceased spouse. (Other states differ. In New York, for example, employers can make reasonable efforts to contact the administrator of the estate of the deceased employee to pay wages within the time wages generally must be paid).)

Upon the death of an employee, a California employer must pay the deceased’s spouse the earned “salary or other compensation … including compensation for unused vacation, not in excess of fifteen thousand dollars.”  Cal. Prob. Code § 13600. The surviving spouse (or the conservator of the estate of the surviving spouse) must state under penalty of perjury this information:

(1) The name of the decedent.

(2) The date and place of the decedent’s death.

(3) The declarant is either (A) “the surviving spouse of the decedent” or (B) “the guardian or conservator of the estate of the surviving spouse of the decedent.”

(4) “The surviving spouse … is entitled to the earnings of the decedent under the decedent’s will or by intestate succession and no one else has a superior right to the earnings.”

(5) “No proceeding is now being or has been conducted in California for administration of the decedent’s estate.”

(6) “Sections 13600 to 13605, inclusive, of the California Probate Code require that the earnings of the decedent, including compensation for unused vacation, not in excess of fifteen thousand dollars ($15,000) net, be paid promptly to the … declarant.”

(7) “Neither the surviving spouse, nor anyone acting on behalf of the surviving spouse, has a pending request to collect compensation owed by another employer for personal services of the decedent under Sections 13600 to 13605, inclusive, of the California Probate Code.”

(8) “Neither the surviving spouse, nor anyone acting on behalf of the surviving spouse, has collected any compensation owed by an employer for personal services of the decedent under Sections 13600 to 13605, inclusive, of the California Probate Code except the sum of _____ dollars ($_____) which was collected from _____.”

(9) “The … declarant requests … the salary or other compensation owed by you for personal services of the decedent, including compensation for unused vacation, not to exceed fifteen thousand dollars ($15,000) net, less the amount of _____ dollars ($_____) which was previously collected.”

(10) “The … declarant affirms or declares under penalty of perjury under the laws of the State of California that the foregoing is true and correct.”

Cal. Prob. Code § 13601.

The employer, upon receiving such a statement and “reasonable proof of identity of the surviving spouse,” must “promptly pay” the surviving spouse “the earnings of the decedent, including compensation for unused vacation, not in excess of fifteen thousand dollars.” Cal. Prob. Code §§ 13601(b), 13602.

If the surviving spouse’s statement satisfies the requirements of Probate Code section 13601, and adequate identification is provided, the employer is discharged “from any further liability with respect to the compensation paid. The employer may rely in good faith on the statement and has no duty to inquire into its truth. Cal. Prob. Code § 13603.

If an employer refuses to pay wages under Section 13600, the surviving spouse can sue  to recover the wages, and, if the employer “acted unreasonably in refusing to pay,” can collect reasonable attorney fees. Cal. Prob. Code § 13604. Actions to recover wages would likely be brought in the Probate Division of the California Superior Court, as the action arises under the Probate Code.

By following California Probate Code sections 13600-13606, employers can thus discharge their liability regarding the deceased’s wages through a relatively straightforward process that also affords the surviving spouse ready access to earned wages and earned but unpaid vacation pay.

Edited by Coby M. Turner.

By Paul S. Drizner

We’ve long known that California law does not treat Labor Code Section 203 penalties as “wages.” Earlier this year, the IRS published its view on how to treat those penalties (often referred to as “waiting time penalties” or WTPs) for purposes of federal income and employment taxes. A Chief Counsel Advice (“CCA”) memo concludes that WTPs are not wages for purposes of federal income or employment tax.

iStock_000000642401_LargeLabor Code Section 203 makes a California employer liable if it has willfully failed to timely pay final earned wages to an employee whose employment has terminated. The offending employer must pay an amount equal to the employee’s daily wages from the due date until the date of payment, up to a maximum of 30 days. WTPs can result so long as the employer knew what it was doing, the late payment occurred, and the timing of the payment was within the employer’s control. The employer’s intent to pay the wages on time would not be a defense. The only viable defense would be a showing that the employer, in good faith, disputed that any further final wages were owed on the due date.

When WTPs are paid, are they treated as wages? The California Department of Industrial Relations (DIR) website reports that WTPs are not wages, and thus an employer need not take deductions from a penalty payment.

But what is the view of the federal taxing authority—the IRS? The characterization of WTPs implicates several sections of the Internal Revenue Code. As to any payment of “wages,” Sections 3101 and 3111 impose social security tax and Medicare tax (aka FICA tax), Section 3301 imposes federal unemployment tax, and Section 3402(a) requires income tax withholding. All these IRC sections define “wages” as remuneration paid for employment or services performed by an employee for his employer, with certain exceptions.

The General Counsel’s CCA begins by recognizing that “wages” is applied broadly for income and employment tax purposes. In United States v. Quality Stores, Inc., 134 S. Ct. 1395 (2014), the Court held that severance payments made to involuntarily terminated employees are wages for FICA tax purposes, and in Social Security Board v. Nierotko, 327 U.S. 358 (1946), the Court defined “employment” to mean not only the work an employee performs, but the entire employer-employee relationship in which the employer pays compensation to the employee.

The CCA also considers contrasting California authority: the California Supreme Court, in Pineda v. Bank of America, rejected the notion that WTPs are “wages” recoverable as restitution under California’s unfair competition law. The CCA also cites Revenue Ruling 72-268, which addressed the income and employment tax status of payments made under the FLSA for liquidated damages and for previously unpaid minimum and overtime wages. The FLSA makes employers liable for liquidated damages equal to the amount of unpaid minimum and overtime wages, unless the employer can show that the non-payment was based on reasonable grounds to believe that the failure to pay those wages was not in violation of the FLSA. The Revenue Ruling held that payments of unpaid minimum and overtime wages were wages for federal income and employment tax purposes, but that the liquidated damages were not.

The CCA concludes that WTPs differ from severance pay (as considered in Quality Stores) because WTPs, unlike severance pay, do not result from the employee’s service but rather result from the employer’s failure to timely pay final wages. WTPs thus resemble liquidated damages owed under the FLSA: WTPs are statutorily imposed penalties owed for employer misconduct—penalties that are in addition to wages and that reflect the extent of the employer’s misconduct rather than the level of the employee’s services. The IRS thus concluded that, notwithstanding the traditionally broad application of the term “wages,” WTPs are not wages for purposes of federal income and employment tax.

The CCA applies only to WTPs and does not apply to meal and rest payments made under California Labor Code Section 226.7. Under California law, these payments are sometimes called penalties and sometimes called wages. The CCA volunteers the IRS’s own, tentative view: “Because the meal and rest period payments are essentially additional compensation for the employee performing additional service during the period when the meal and rest periods should have been provided, it appears those payments would be wages for federal employment tax purposes.”

A CCA is prepared by the IRS Office of Chief Counsel for field or service center employees and may not be cited as precedent by any taxpayer. Nevertheless, CCA 201522004 is helpful because it sets forth current IRS thinking on the federal income and employment tax treatment of WTPs and, perhaps to a lesser degree, the tax treatment of meal and rest payments. Although not citable precedent, the CCA provides welcome guidance after years of uncertainty concerning the federal income and employment tax treatment of WTPs.

October 11, 2015, was Governor Brown’s last day to sign bills the California Legislature presented to him following the first year of the 2015-2016 Legislative Session. Below is a summary of what did and did not make Governor Brown’s final cut, and some practical tips for California employers to prepare themselves for compliance with these new California peculiarities.

SIGNED BY THE GOVERNOR

Piece Rate. AB 1513, adding Labor Code section 226.2 and repealing sections 77.7, 127.6, and 138.65, will make it even more difficult for California employers to pay employees on a piece-rate basis. Effective January 1, 2016, employers must pay piece-rate employees for rest and recovery periods (and all other periods of “nonproductive” time) separately from (and in addition to) their piece-rate compensation. Specifically, employers will need to pay the following rates for rest and recovery periods and “other nonproductive time”:

  • Rest and recovery periods. Employers must pay a piece-rate employee for rest and recovery periods at an average hourly rate that is determined by dividing the employee’s total compensation for the workweek (not including compensation for rest and recovery periods and overtime premiums) by the total hours worked during the workweek (not including rest and recovery periods).
  • Other nonproductive time. Employers must pay piece-rate employees for other nonproductive time at a rate that is no less than the minimum wage. If employers pay an hourly rate for all hours worked in addition to piece-rate wages, then those employers would not need to pay amounts in addition to that hourly rate for the other nonproductive time.

Employers must specify additional categories of information on a piece-rate employee’s itemized wage statement: (i) the total hours of compensable rest and recovery periods, (ii) the rate of compensation paid for those periods, and (iii) the gross wages paid for those periods during the pay period. If employers do not pay a separate hourly rate for all hours worked (in addition to piece-rate wages), then the employer must also list (i) the total hours of other non-productive time, (ii) the rate of compensation for that time, and (iii) the gross wages paid for that time during the pay period. Signed October 10, 2015.

PAGA. AB 1506, amending California’s Private Attorneys General Act (“PAGA”) codified in Labor Code sections 2699, 2699.3, and 2699.5, became effective upon the Governor’s signature on October 2, 2015. PAGA, as thus amended, now gives employers a limited right to cure certain wage-statement violations before an aggrieved employee may sue under PAGA. Specifically, an employer can cure violations of the wage-statement statute (Labor Code section 226(a)) with respect to providing either the inclusive dates of the pay period or the name and address of the legal entity that is the employer. An employer can take advantage of this provision only once for the same violation of the statute during each 12-month period.

Employer Liability: Employee Family Member Protected Complaints & Labor Contractor Joint Liability. AB 1509, effective January 1, 2016, amends Labor Code sections 98.6, 1102.5, and 6310 to forbid employers from retaliating against employees for being a family member of an employee who has, or is perceived to have, engaged in activities protected under those Labor Code sections (i.e., generally, making complaints about working conditions or pay, or whistleblowing). The bill also amends Labor Code section 2810.3—added to the Labor Code in January 2015 to impose joint liability on client employers for employees supplied by a labor contractor (our analysis of that law is here)—to exclude from that law client employers that use Public Utilities Commission-permitted third-party household goods carriers, as specified. Signed October 11, 2015.

Expansion of Labor Commissioner Enforcement Authority. AB 970, effective January 1, 2016, amends Labor Code sections 558, 1197, and 1197.1 to authorize the Labor Commissioner to enforce local laws regarding overtime and minimum wage provisions and to issue citations and penalties for violations, provided the local entity has not already cited the employer for the same violation. The bill also authorizes the Labor Commissioner to issue citations and penalties to employers who violate the expense reimbursement provisions of Labor Code section 2802. Signed October 11, 2015.

Labor Commissioner: Judgment Enforcement. SB 588, effective January 1, 2016,  makes various changes and additions to the Labor Code relating to the Labor Commissioner’s enforcement authority. Among other things, it authorizes the Labor Commissioner to file a lien on the employer’s property in California for unpaid wages, and other compensation, penalties, and interest owed to an employee. Signed October 11, 2015.

Industrial Welfare Commission: Wage Orders—Hospital Meal Periods. SB 327 clarifies that existing law regarding a health care employee’s ability to waive voluntarily one of the two meal periods on shifts exceeding 12 hours remains in effect. The bill states that the rules remain the same as they have been since 1993 (as expressly embraced by the Industrial Welfare Commission in 2000). The legislation was adopted to remove any uncertainty caused by the decision in Gerard v. Orange Coast Mem. Med. Ctr., 234 Cal. App. 4th 285 (2015). Signed by the Governor on October 5, 2015, the bill took effect immediately as an urgency measure.

Gender Wage Equality. As we discussed in detail immediately after the Governor’s October 6 signing of SB 358, the bill, effective January 1, 2016, amends Labor Code section 1197.5 to prohibit employers from paying any employee at a wage rate less than that paid to employees of the opposite sex for doing substantially similar work—when viewed as a composite of skill, effort, and responsibility. The new legislation also requires employers to affirmatively demonstrate that a wage differential is based entirely and reasonably upon enumerated factors, such as a seniority system, a merit system, a system that measures earnings by quantity or quality of production, or a bona fide factor that is not based on or derived from a sex-based differential in compensation and that is consistent with a business necessity. The bill contains anti-retaliation provisions and provides a private right of action to enforce its provisions.

Kin Care. SB 579, effective January 1, 2016, amends California’s Kin Care law (Labor Code section 233) to tie its protections to the reasons and definition of “family member” specified in the Healthy Workplaces, Healthy Families Act of 2014 (i.e., paid sick leave law). The bill also expands coverage of California’s school activities leave (Family School Partnership Act, Labor Code section 230.8) to include day care facilities and cover child care provider emergencies, and the finding, enrolling, or reenrolling of a child in a school or day care, and would extend protections to an employee who is a step-parent or foster parent or who stands in loco parentis to a child. Signed October 11, 2015.

Annual E-Verify Bill. AB 622, effective January 1, 2016, adds section 2814 to the Labor Code to prohibit an employer from using E-Verify to check the employment authorization status of an existing employee or an applicant who has not received an offer of employment, except as required by federal law or as a condition of receiving federal funds. Each employer that uses E-Verify in violation of this new section is liable for $10,000 per violation. Signed October 9, 2015.

Paid Sick Leave Amendments. AB 304, signed by the Governor July 13, 2015, and effective on that date, amends provisions of the Healthy Workplaces, Healthy Families Act of 2014 codified in Labor Code sections 245.5, 246, and 247.5. Read our detailed analysis of this legislation.

Accommodation Request as Protected Activity. AB 987, effective January 1, 2016, amends Government Code section 12940 to overturn the interpretation in Rope v. Auto-Chlor Sys. of Washington, Inc., 220 Cal. App. 4th 635 (2013), that an accommodation request is not a protected activity. The Legislature thus intended to clarify that a request for reasonable accommodation based on religion or disability constitutes protected activity. The Fair Employment and Housing Act, thus amended, will now expressly prohibit retaliation and discrimination against a person for requesting accommodation, regardless of whether the request is granted.  Signed July 16, 2015.

Professional Sports Team Cheerleaders as Employees. AB 202, effective January 1, 2016, requires California-based professional major and minor league baseball, basketball, football, ice hockey, and soccer teams to classify and treat cheerleaders who perform during those teams’ exhibitions, events, or games as employees and not independent contractors.

90-Day Retention of Grocery Workers Following Change of Ownership. AB 359 and AB 897, effective January 1, 2016, adds Labor Code sections 2500-2522 to require a “successor grocery store employer” to retain the current grocery workers for 90 days upon the “change in control” of a grocery store. The new law, previously discussed here also imposes specific requirements on the incumbent grocery store. Governor Brown noted in his signing message an ambiguity in how the law applies if an incumbent grocery employer has ceased operations, and noted the author and sponsor have committed to clarify that the law would not apply to a grocery store that has ceased operations for six months or more. The Legislature responded with AB 897, which will exclude from the definition of “grocery establishment” a retail store that has ceased operations for six months or more. AB 897 signed September 21, 2015.

VETOED: BILLS THE GOVERNOR REJECTED (i.e., “it coulda been worse”)

Arbitration and Pre-Employment Waiver Restrictions. As we recently wrote, AB 465 would have added section 925 to the Labor Code to (i) prohibit companies from conditioning employment offers (or renewals) on the waiver of any Labor Code-related right, (ii) require that any waiver of Labor Code protections be knowing, voluntary, and in writing, (iii) deem any waiver of Labor Code rights conditioned on employment to be “involuntary, unconscionable, against public policy, and unenforceable,” (iv) prohibit retaliation against any person who refuses to waive Labor Code-related rights, and (v) authorize an attorneys’ fees recovery for a plaintiff who enforces rights under the newly created section 925. The Governor vetoed the bill on October 11, 2015. His signing statement says that arbitration is not necessarily less fair to employees, and even if it were, Armendariz provides protections for employees in arbitration proceedings. Any remaining abuses should be addressed by targeted, not blanket legislation. And Governor Brown wants to see the outcome of two pending FAA-preemption cases before considering such a broad blanket prohibition.

Other Pay Equity Bills. AB 1017 (enrolled and presented to the Governor September 15) and AB 1354 (enrolled September 10). AB 1017 would have added section 432.3 to the Labor Code to prohibit an employer from seeking salary history information about an applicant for employment. AB 1354 would have amended Government Code section 12990 to require, of each employer with over 100 employees that is or wishes to be a state contractor or subcontractor, a nondiscrimination program that includes policies and procedures designed to ensure equal employment opportunities for all applicants and employees, an analysis of employment selection procedures, and a workforce analysis that contains the total number of workers, the total wages, and the total hours worked annually, within a specific job category identified by worker race, ethnicity, and sex. On October 11, the Governor vetoed both bills. In vetoing AB 1017, he stated we should wait to see if SB 358—the strongest equal pay law in the country—covers the issue, and did not think this bill’s broad prohibition on employers obtaining relevant information would have any effect on pay equity. In vetoing AB 1354, he stated that the DFEH’s current requirements and powers made the legislation unnecessary.

CFRA Leave. SB 406 would have extended the protections of the California Family Rights Act (“CFRA”), Government Code section 12945.2, to care for grandparents, all children (removing any age restriction), and grandchildren, as well as siblings, domestic partners, and in-laws. Vetoed October 11, 2015, because the bill would have created a disparity between FMLA and CFRA.

Athletic Trainers. AB 161 would have made it unlawful and an unfair business practice for any person to use the title of athletic trainer, unless the trainer is certified by the Board of Certification and has completed specified educational or training requirements. Exempt from these provisions were persons who have worked as athletic trainers in California for a period of 20 consecutive years prior to January 1, 2016. AB 161 would have added sections 18898 and 18899 to the Business and Professions Code. Vetoed on September 28,  for the same reasons as the nearly identical measure the Governor vetoed last year—he believes that the conditions set forth in the bill impose unnecessary burdens on athletic trainers without sufficient evidence that changes are needed.

ALRA. AB 561 was this year’s Agricultural Labor Relations Act bill. It would have required the Agricultural Labor Relations Board to process within one year all board orders finding an employer liable for benefits due to unfair labor practices. It also would have required an employer who appeals an order of the Board involving certain awards to employees to post a bond in the amount of the entire value of the order. The Governor vetoed this bill on October 11, because he does not believe the one-year timeline allows for unexpected delays or litigation—even expedited awards take about 18 months. He also noted that, as he did in SB 28 last year, a balanced approach to ALRA enforcement reforms is needed, and encouraged the ALRB to explore internal reforms for more timely awards.

Unemployed. Undeterred by the Governor’s 2014 veto of similar legislation in AB 2271, the Legislature put AB 676 on the Governor’s desk, which would have added section 432.4 to the Labor Code to prohibit employers from publishing an announcement for a job that states or indicates an unemployed person is not eligible for the job, and to prohibit employers from asking applicants to disclose, orally or in writing, the applicant’s current employment status. The Governor vetoed the bill on October 10, because “nothing has changed. I still believe that the author’s approach does not provide a proper or even effective path to get unemployed people back to work.”

Public Employees. AB 883 would have added section 432.6 to the Labor Code to prohibit a state or local agency from discriminating against current or former public employees in publishing job advertisements, in establishing qualifications for job eligibility, and in making adverse employment decisions. The bill would also have prohibited persons who operate job posting websites from publishing any job advertisement or announcement that indicates the applicant must not be a current or former public employee. The bill removed private employers from its scope and removes damages and penalty recovery provisions. Vetoed October 10, 2015.

BILLS THAT FAILED TO MAKE THE FINAL LEGISLATIVE CUT (i.e., “it coulda been a lot worse”)

Minimum Wage Increase. SB 3 would have increased the minimum wage to $11 per hour in 2016 and $13 per hour in 2017. The bill would have also, beginning January 1, 2019, automatically adjusted the minimum wage on each January 1 to maintain employee purchasing power diminished by the rate of inflation in the prior year. Other minimum wage bills on which we previously reported, AB 1007 and AB 669, failed to make it out of the Assembly. This bill, likewise, stalled in appropriations.

Retail Scheduling. The much-feared “Fair Scheduling Act of 2015,” AB 357, based upon the recent San Francisco Retail Workers’ Bill of Rights, was held in the Assembly and ordered inactive in June. Watch for its provisions to reappear in 2016.

OT Exemption. AB 1470 was held in the Assembly at the author’s election. It would have established a rebuttable presumption that employees with gross annual compensation of $100,000 or greater (at least $1,000 per week paid on a salary or fee basis) who regularly perform any exempt duties of an executive, administrative, or professional employee are exempt from overtime pay.

Double Pay on the Holiday Act of 2015. AB 67, Assembly Member Gonzalez’s attempt to require employers to pay employees double pay on Christmas and Thanksgiving, failed passage out of the Assembly. The bill then was ordered to the inactive file by the author.

Workplace Flexibility Act(s) of 2015. AB 1038 would have amended the Labor Code to permit nonexempt employees to request employee-selected flexible work schedules providing for workdays up to 10 hours per day without obligating the employer to pay overtime for those additional hours. The bill did not make it out of its first committee hearing. SB 368 similarly would have allowed a nonexempt employee to request a flexible work schedule up to 10-hour work days, and entitled the employee to overtime for hours worked greater than 10 hours in a work day or 40 hours in a work week.

Voluntary Veterans’ Preference Employment Policy Act. AB 1383 would have amended the FEHA to ensure that none of its nondiscrimination provisions affect the hiring decisions of an employer that maintains a veterans’ preference employment policy established in accordance with the Voluntary Veterans’ Preference Employment Policy Act (Government Code section 12958 et seq.), which this bill would have also created.

Age Information. AB 984, which would have prohibited an employer from using information obtained on a website regarding an employee or applicant’s age in making any employment decision regarding that person, failed in committee.

Unfair Immigration-Related Practices. AB 1065 was also held in committee. This bill would have made it an unlawful employment practice for an employer to request more or different documents than are required under federal law relating to verification that an individual is not an unauthorized alien, or to refuse to honor documents tendered that on their face reasonably appear to be genuine, or to attempt to reinvestigate or re-verify an incumbent employee’s authorization to work unless required to do so by federal law.

Paid Family Leave Benefit Extension. AB 908 would have required the family temporary disability insurance program to provide up to eight weeks, rather than the existing six weeks, of wage replacement benefits to workers who take time off work to care for specified persons, or to bond with a minor child within one year of the birth or placement of the child. This bill also would have required the weekly benefit amount under this program to be calculated using a specified formula.

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