Department of Industrial Relations

Seyfarth Synopsis: California Legislators sent Governor Jerry Brown 1,217 bills to consider in his final bill-signing period as Governor—more than any California governor has seen since 2004. The final tally: 1016 signed, 201 vetoed. Below is our full, final roundup of new laws that employers must comply with, bills that fell to the Governor’s veto pen, and bills that never made it to the Governor’s desk. Even though the Governor’s veto saved California employers from some truly awful legislation (such as AB 3080’s attempted ban on employment arbitration agreements), 2019 may well bring a new Legislature just as hostile to business, and a new Governor not known for the practical caution that sometimes has characterized Governor Brown. We expect that the vetoed bills will re-emerge, and may receive a more favorable gubernatorial consideration.

Sign up for our webinar on October 10, 2018 for a discussion of these results and implications for employers.

APPROVED

Sexual Harassment Bills

Human Trafficking Awareness. SB 970 requires hotel and motel employers (excluding bed and breakfast inns), to provide—by January 1, 2020, and once every two years thereafter—at least 20 minutes of interactive human trafficking awareness training to employees likely to interact with human trafficking victims. The Department of Fair Employment and Housing can seek an order requiring an employer comply with these requirements. Adds section 12950.3 to the Government Code.

Sexual Harassment Omnibus Bill. SB 1300 adds a section to the Government Code that declares the purpose of harassment laws is to provide all Californians with equal opportunity to succeed in the workplace. To that end, the bill expressly affirms or rejects specified judicial decisions in:

  • Harris v. Forklift Systems: approving the standard in Justice Ruth Bader Ginsburg’s concurrence that in a workplace harassment suit “the plaintiff need not prove that his or her tangible productivity has declined as a result of the harassment. It suffices to prove that a reasonable person subjected to the discriminatory conduct would find, as the plaintiff did, that the harassment so altered working conditions as to make it more difficult to do the job.”
  • Brooks v. City of San Mateo: prohibiting reliance on Judge Alex Kozinksi’s Ninth Circuit opinion to determine what conduct is sufficiently severe or pervasive to constitute actionable harassment under FEHA.
  • Reid v. Google, Inc.: affirming the California Supreme Court’s rejection of the “stray remarks doctrine,” because the “existence of a hostile work environment depends on the totality of the circumstances and a discriminatory remark, even if made not directly in the context of an employment decision or uttered by a nondecisionmaker, may be relevant, circumstantial evidence of discrimination.”
  • Kelley v. Conco Companies: disapproving use of this case to support different standards for hostile work environment harassment depending on the type of workplace.
  • Nazir v. United Airlines, Inc: affirming this case’s observation that “hostile working environment cases involve issues ‘not determinable on paper.’ ”

SB 1300 also:

  • Expands an employer’s potential FEHA liability for acts of nonemployees to all forms of unlawful harassment (removing the “sexual” limitation).
  • Prohibits employers from requiring an employee to sign (as a condition of employment, raise, or bonus): (1) a release of FEHA claims or rights or (2) a document prohibiting disclosure of information about unlawful acts in the workplace, including nondisparagement agreements. This provision does not apply to negotiated settlement agreements to resolve FEHA claims filed in court, before administrative agencies, alternative dispute resolution, or though the employer’s internal complaint process.
  • Prohibits a prevailing defendant from being awarded attorney’s fees and costs unless the court finds the action was frivolous, unreasonable, or groundless when brought or that the plaintiff continued to litigate after it clearly became so.
  • Authorizes (but does not require) employers to provide bystander intervention training to its employees.

SB 1300 would have—contingent upon SB 1038 also passing—subjected employees alleged to have engaged in harassment to personal liability for retaliation, discrimination, and other adverse employment actions taken against any person who has opposed practices forbidden by FEHA or participated in a FEHA action. As SB 1038, discussed below, failed to make it out of the Legislature, this proposed amendment in SB 1300 does not become operative.

SB 1300 amends Government Code sections 12940, 12965 and adds Government Code sections 12923, 12950.2, 12964.5.

Sex Harassment Settlement Agreement Confidentiality Restrictions. For settlement agreements entered into on or after January 1, 2019, SB 820 will prohibit and make void any provision that prevents the disclosure of information related to civil or administrative complaints of sexual assault, sexual harassment, and workplace harassment or discrimination based on sex. SB 820 expressly authorizes provisions that (1) preclude the disclosure of the amount paid in settlement and (2) protect the claimant’s identity and any fact that could reveal the identity, so long as the claimant has requested anonymity and the opposing party is not a government agency or public official. SB 820 suggests that a violation of its provisions would give rise to a cause of action for civil damages. Adds section 1001 to the Code of Civil Procedure.

Banning Waivers of Rights to Testify. As to any contract or settlement agreement entered into on or after January 1, 2019, SB 3109 makes void and unenforceable any provision that waives a party’s right to testify in a legal proceeding (if required or requested by court order, subpoena or administrative or legislative request) regarding criminal conduct or sexual harassment on the part of the other contracting party, or the other party’s agents or employees.  Adds section 1670.11 to the Civil Code.

Strengthening Prohibitions Against Harassment With Respect to Professional Relationships. SB 224 gives additional examples of professional relationships where liability for claims of sexual harassment may arise and authorizes the DFEH to investigate those circumstances. Amends section 51.9 of the Civil Code and section 12930 and 12948 of the Government Code.

Requiring Sexual Harassment Education by Talent Agencies. AB 2338 requires talent agencies to provide adult artists, parents or legal guardians of minors aged 14-17, and age-eligible minors, within 90 days of retention, educational materials on sexual harassment prevention, retaliation, and reporting resources. For adult model artists only, the talent agency will be required to provide materials on nutrition and eating disorders. Talent agencies will also have to retain, for three years, records showing that those educational materials were provided. Adds Article 4 (commencing with Section 1700.50) to Chapter 4 of Part 6 of Division 2 of the Labor Code.

Expanding Scope of Required Sexual Harassment Training. SB 1343 requires an employer of five or more employees—including seasonal and temporary employees—to provide certain sexual harassment training by January 1, 2020. Within six months of their assuming their position (and once every two years thereafter), all supervisors must receive at least two hours of training, and all nonsupervisory employees must receive at least one hour. SB 1343 also requires the DFEH to make available a one-hour and a two-hour online training course employers may use and to make the training videos, existing informational posters, fact sheets, and online training courses available in multiple languages. Amends sections 12950 and 12950.1 of the Government Code.

Requiring Sexual Harassment Education for In-Home Support Services. AB 3082 requires the Department of Social Services to develop or identify—and provide a copy and description to the Legislature by September 30, 2019—(1) educational materials addressing sexual harassment of in-home supportive services (IHSS) providers and recipients, and (2) a method to collect data on the prevalence of sexual harassment in the IHSS program. Adds section 12318 to the Welfare & Institutions Code.

Non-Harassment Bills

Lactation Location. AB 1976 requires employers to make reasonable efforts to provide a room or location (that is not a bathroom, deleting “toilet stall” and inserting “bathroom”) for lactation. The also bill authorizes a temporary lactation location if certain conditions are met and provides a narrow undue hardship exemption. The Governor vetoed the similar, more onerous, SB 937, discussed below. Amends section 1031 of the Labor Code.

Pay Statement: Right to Receive. Stating it is declaratory of existing law, SB 1252 provides employees the right “to receive” a copy of—not just inspect or copy—their pay statements. Amends section 226 of the Labor Code.

Rest Breaks in Petroleum Facilities. AB 2605 exempts from rest-period requirements certain workers who hold “safety-sensitive positions,” defined as a position whose duties reasonably include responding to emergencies in the facility and carry communication devices. The exemption applies only to workers covered by a collective bargaining agreement and subject to Industrial Wage Commission Wage Order No. 1. But employers must pay exempted workers one hour of pay at the regular rate if the rest period is interrupted to respond to an emergency. Because AB 2605 is an urgency statute, these provisions took effect immediately when approved by the Governor on September 20, 2018 and will sunset on January 1, 2021. The author of this bill sought to carve out an exemption for these positions in light of the recent Augustus v. ABM Security Services, Inc. case. Adds section 226.75 to the Labor Code.

Port Drayage Motor Carries. SB 1402 requires the DLSE to post a list on its website of port drayage motor carriers with any unsatisfied judgment or assessment or any “order, decision, or award” finding illegal conduct as to various wage/hour issues, specifically including independent contractor misclassification and derivative claims. This bill also extends joint and several liability to the customers of these drayage motor carriers for their future wage violations of the same nature. Adds section 2810.4 to the Labor Code.

Contractor Liability. Passed as an urgency statute to make clarifying changes to last year’s AB 1701—which created joint liability for construction contractors and subcontractors—AB 1565 immediately repeals the express provision that relieved direct contractors for liability for anything other than unpaid wages and fringe or other benefit payments or contributions including interest owed. For contracts entered into on or after January 1, 2019,  the direct contractor must specify what documents and information the subcontractor must provide in order to withhold a disputed payment. Amends section 218.7 of the Labor Code.

Criminal History. SB 1412 requires employers to consider only a “particular conviction” (“for specific criminal conduct or a category of criminal offenses prescribed by any federal law, federal regulation, or state law that contains requirements, exclusions, or both, expressly based on that specific criminal conduct or category of criminal offenses”) relevant to the job when screening applicants using a criminal background check. Amends section 432.7 of the Labor Code.

Women on Boards. SB 826 requires California-based publicly held corporations to have on their board of directors at least one female—defined as people who self-identify as women, regardless of their designated sex at birth. The deadline for compliance is December 31, 2019. A corporation may need to increase its authorized number of directors to comply with this requirement. The bill imposes minimum seat requirements that must be filled by women, proportional to the total number of seats, by December 31, 2021. The Secretary of State must publish a report by July 1, 2019 of the number of corporations whose principal executive offices are in California and have at least one female director, and an annual report beginning March 1, 2020, detailing the number of corporations that (1) complied with requirements in 2019, (2) moved their headquarters in or out of California, and (3) were subject to these provisions during 2019, but no longer publicly traded.

For each director’s seat not held by a female during at least a portion of the calendar year—when by law it should have been—the corporation will be subject to a $100,000 fine for the first violation and a $300,000 fine for further violations. Corporations that fail to timely file board member information with the Secretary of State will also be subject to a $100,000 fine. Adds sections 301.3 and 2115.5 to the Corporations Code.

Mediation Confidentiality. SB 954 requires attorneys, except in class actions, to provide their mediating clients with a written disclosure containing the confidentiality restrictions provided in Section 1119 of the Evidence Code and obtain the client’s written acknowledgment that the client has read and understands the confidentiality restrictions. This duty arises as soon as reasonably possible before the client agrees to participate in mediation or a mediation consultation. The bill is of little consequence as an attorney’s failure to comply is not a basis to set aside an agreement prepared in or pursuant to a mediation. Amends Evidence Code section 1122 and adds Evidence Code section 1129.

Class Action Settlements. Among many other changes not directly relevant to this blog, AB 3250 revises amendments to Code of Civil Procedure section 384, which took effect immediately upon the Governor’s signing SB 847 on June 27, 2018 (SB 847 also added relevant Code of Civil Procedure sections 382.4 and 384.5). By virtue of SB 847, Section 384 requires a court, before the entry of a judgment (including consent judgment, decree, settlement agreement approved by the court) in a class action, to determine the total amount that will be payable to all class members, and set a date when the parties are to report to the court the total amount that was actually paid to the class. After the report is received, the court must amend the judgment to direct the defendant to pay the sum of the unpaid residue, plus interest on that sum at the legal rate of interest from the date of entry of the initial judgment (AB 3250 deletes this italicized language and replaces it with “that has accrued thereon”), to nonprofit organizations or foundations to support projects that will benefit the class or similarly situated persons, or that promote the law consistent with the underlying cause of action, or to child advocacy programs, or to nonprofit organizations providing civil legal services to the indigent. An attorney for a party to a class action must notify the court if the attorney has a connection to a proposed nonparty recipient of class action settlement funds that could reasonably create the appearance of impropriety. The court must transmit a copy of the judgment to the Judicial Council, identifying nonparty recipients of class action settlement funds. Amends Business and Professions Code section 6402.2, Civil Code sections 51.7, 52.1, and 54.8, Code of Civil Procedure sections 384, 1013b, 1276, 1277, and 1277.5, Health & Safety Code section 103430, and Insurance Code section 10861.03. Repeals Code of Civil Procedure section 630.30.

VETOED

Banning Contractual Limits on Disclosure and Arbitration Agreements. AB 3080 would have prohibited businesses from requiring, as a condition of employment, employment benefit, or contract (1) that a job applicant or employee waive any right, forum, or procedure (e.g., arbitration) for a violation of FEHA or the Labor Code, and (2) that a job applicant, employee, or independent contractor not disclose instances of sexual harassment suffered, witnessed, or discovered in the work place or in performance of the contract, opposing unlawful practices, or participating in harassment and discrimination related investigations or proceedings. Biting their fingernails into the night on the Governor’s signing deadline, to employers’ relief, Governor Brown vetoed the bill. The Governor stated he was compelled to veto this bill because it “plainly violates federal law.” He remained consistent with his veto of a similar bill in 2015, in which he referred to recent court decisions that invalidated state policies that impeded arbitration and stated his desire to watch future US Supreme Court decisions on the topic before “endorsing a broad ban on mandatory arbitration agreements.” He stated that the “direction from the Supreme Court since my earlier veto has been clear—states must follow the Federal Arbitration Act and the Supreme Court’s interpretation of the Act,” citing DIRECTV, Inc. v. Imburgia; and Kindred Nursing Centers Ltd. Partnership v. Clark to reject this bill’s premise “that the Act governs only the enforcement and not the initial formation of arbitration agreements.”

Expanding Record Retention. AB 1867 would have required employers with 50 or more employees to maintain records of complaints alleging sexual harassment for at least five years after the last date of employment of the complainant or alleged harasser, whichever is later. In his veto message, the Governor sagely noted this bill could lead to the retention of records for decades and could require complaints alleging sexual harassment to be maintained for the same amount of time regardless of the result of the investigative process. For those reasons, and because existing law requires personnel records, including records of complaints, be maintained “for suitable periods of time,” the Governor found the time expansion of this bill unwarranted.

Expanding Administrative Charge Filing Deadlines. AB 1870 would have extended a complainant’s time to file an administrative charge with the DFEH from one year to three years after the alleged incident for all types of FEHA-prohibited conduct, including sexual harassment. In vetoing this bill, Governor Brown found the current filing deadline, in place since 1963, “not only encourages prompt resolution while memories and evidence are fresh, but also ensures that unwelcome behavior is promptly reported and halted.”

Extending Liability for Employers and for Businesses Using Labor Contractors. AB 3081 would have amended the FEHA and Labor Code to (1) add status as a sexual harassment victim to existing prohibitions on discrimination against employees who are victims of domestic violence, sexual assault, or stalking, (2) create a rebuttable presumption of unlawful retaliation if an employer—within 30 days of notice of the victim’s status—discharges or threatens to discharge, demotes, suspends, or otherwise discriminates against a victim employee, (3) make a business jointly liable for harassment of workers supplied by the business’s labor contractor (existing law similarly extends liability for the contractor’s failure to pay wages and obtain valid workers’ compensation coverage), (4) prohibit businesses from shifting to their labor contractors duties or liabilities under the Labor Code workers’ compensation insurance provisions. Governor Brown rejected the bill on the basis that most of its provisions are unnecessary as already contained in current law, or, if new, are confusing.

Immigration Documents. AB 2732 would have subjected to penalties employers that destroy or withhold passports or other immigration documents, and required all employers to provide a “Worker’s Bill of Rights” (to be developed by the DIR) to all employees. AB 2732 also would have made various changes to the Property Service Worker Protection Act, contingent upon this bill’s and AB 2079’s passing. In a lesson to narrowly tailor bills, Governor Brown found the “provision of this bill that prohibits employers from withholding immigration documents from workers is very appropriate,” but still struck down this entire bill due to its “burdensome and unwarranted” mandate that all employers, even those having nothing to do with labor trafficking, provide the “Worker’s Bill of Rights’ to every employee in California. “This goes too far.”

Lactation Accommodations. SB 937 would have required employers to (1) provide a lactation room with prescribed features and access to a sink and refrigerator (or another cooling device suitable for storing milk) in close proximity to the employee’s workspace, (2) develop and distribute to employees a lactation accommodation policy, and (3) maintain accommodation request records for three years and allow the employee and Labor Commissioner access to the records. SB 937 would have also deemed the denial of time or space for lactation a failure to provide a rest period under Labor Code section 226.7, and required the DLSE to create a model lactation policy and a model lactation accommodation request form. Having signed AB 1976 to further “the state’s ongoing effort to support working mothers and their families,” Governor Brown vetoed this bill as not necessary.

Property Service Worker Protection Act Amendments. Governor Brown vetoed two bills (AB 2732, discussed above, and AB 2079) to amend the Property Service Worker Protection Act, which went into effect July 1, 2018 (AB 1978), and imposes requirements to combat wage theft and sexual harassment for the janitorial industry. In his veto message, the Governor urged AB 2079’s authors and sponsors to allow the Act—“the first of its kind in the country”—to be fully implemented before proposing significant changes. AB 2079 would have required (1) all employers applying for new or renewed registration to demonstrate completion of sexual harassment violence prevention requirements and provide an attestation to the Labor Commissioner, (2) the Department of Industrial Relations (DIR) to convene an advisory committee to develop requirements for, and maintain a list of, qualified organizations and peer-trainers for employers to use in providing training, and (3) employers, upon request, to provide requesting employees a copy of all training materials. AB 2079 would have also prohibited the Labor Commissioner from approving a janitorial service employer’s request for registration or for renewal if the employer had not fully satisfied a final judgment to a current or former employee for a violation of the FEHA.

Janitorial Workers Employment Classification. AB 2496 would have established a rebuttable presumption that janitorial workers who perform services for property service employers are employees, not independent contractors. Governor Brown vetoed the bill as premature, pending Legislature review of the California Supreme Court decision in in Dynamex Operations West, Inc. v. Superior Court, which recently established a new test to determine whether a worker is properly classified as an employee or independent contractor.

Veterans and Military Personnel. Governor Brown vetoed SB 1427, which would have added veterans and military personnel as a protected class under the FEHA, because the bill’s other, non-employment-related provisions went “too far.”

Construction Industry Harassment and Discrimination. SB 1223 would have required the DIR to convene an advisory committee to recommend minimum standards for a harassment and discrimination prevention policy and training program specific to the construction industry, and to report to the Legislature specific implementation recommendations. Governor Brown vetoed this bill as better placed with the DFEH—responsible for enforcing the FEHA and its harassment and discrimination prevention and training requirements—not the Labor Commissioner.

FAILED TO PASS BOTH HOUSES OF THE LEGISLATURE

Personal Liability for Retaliation. SB 1038 proposed the same amendment to FEHA as SB 1300 to impose personally liability upon an employee for retaliating against a person who has filed a complaint against the employee, testified against the employee, assisted in any proceeding, or opposed any prohibited practice. As discussed, above, since SB 1038 failed, so did the same proposed amendment in SB 1300.

Hotel Panic Button. AB 1761 would have required hotel employers to provide employees with a “panic button” to call for help in case of an emergency, post a notice of these provisions in each guestroom, provided paid time off or a reasonable accommodation to an employee who is the victim of an assault, required an employer—upon the employee’s request—to contact police, prohibited employers from taking action against any employee who exercises the protections, and imposed penalties for violations of the proposed provisions.

Employers Pay Data. SB 1284 would have required private employers with 100 or more employees and required to file an EEO-1 report to submit a pay data report to the DFEH containing specified information. This bill would have also authorized fines to be imposed on employers who fail to report, authorized the DFEH to seek an order requiring the employer to comply, and require the DFEH to maintain the records for 10 years, though no individually identifiable information could be made public.

FAILED TO PASS THE HOUSE OF ORIGIN

Victims of Sexual Harassment. AB 2366 would have extended existing law that protects employees who take time off work due to being victims of domestic violence, sexual assault and stalking, to include victims of sexual harassment. This bill would have also extended job-protected leave to family members of such victims.

DLSE Time to File Extension. AB 2946 would have extended the time to file a complaint with the DLSE from six months to three years from the date of the violation and amended California’s whistleblower provision to authorize a court to award reasonable attorney’s fees to a prevailing plaintiff.

Familial Status. AB 1938 would have limited employer inquiries about familial status during the hiring or promotional process and made it unlawful to make any non-job related inquiry about an individual’s real or perceived responsibility to care for family members.

Pay Statements. AB 2223 would have provided employers the option to provide itemized pay statements on a monthly basis and extended the time an employer has to respond to a request to inspect or copy pay statements from 21 to 28 calendar days. AB 2613 would have imposed penalties on employers who violate Labor Code provisions requiring payment of wages twice per month on designated paydays, and once per month for exempt employees.

Flexible Work Schedules. AB 2482 would have allowed private non-exempt employees, not subject to collective bargaining agreements, to request a flexible work schedule to work ten hours per day within a 40-hour workweek without overtime compensation.

Marijuana. AB 2069 would have provided that the medical use of cannabis by a qualified patient with an identification card is subject to a reasonable accommodation by an employer.

Another Failed PAGA Effort. AB 2016 would have required an employee’s required written PAGA notice to the employer include a more in-depth statement of facts, legal contentions, and authorities supporting each allegation, and include an estimate of the number of current and former employees against whom the alleged violations were committed and on whose behalf relief is sought. AB 2016 would have prescribed specified notice procedures if the employee or employee representative seeks relief on behalf of ten or more employees. The bill excluded health and safety violations from PAGA’s right-to-cure provisions, increased the time the employer had to cure violations from 33 to 65 calendar days, and provided an employee may be awarded civil penalties based only on a violation actually suffered by the employee.

Sick Leave. AB 2841 would have increased an employer’s alternate sick leave accrual method from 24 hours by the 120th calendar day of employment to 40 hours of accrued sick leave or paid time off by the 200th calendar day of employment—but not needing to exceed 80 hours. An employer would have been able to limit the amount sick leave carried over to the following year to 40 hours. This provision would have applied to IHSS providers on January 1, 2026.

Criminal History. AB 2680 would have required the CA Department of Justice to adopt a standard form that employers would have to use when seeking the consent of an applicant for employment to conduct a conviction history background check on that applicant by the department. SB 1298 would have placed limits on the criminal history reporting that DOJ would provide to employers and required DOJ to provide the subject with a copy of the information and at least five days to challenge its accuracy before releasing it to the employer. AB 2647 would have prohibited evidence of a current or former employee’s criminal history from being admitted, under specified circumstances, in a civil action based on the current or former employee’s conduct against an employer, an employer’s agents, or an employer’s employees.

With this summary, our legislative team bids you, and Governor Jerry Brown, adieu. But don’t forget to sign up and attend our upcoming webinar for our verbal tribute to this year’s L&E legislation and Governor Brown’s final acts.

Seyfarth Synopsis: As recent triple-digit temps have shown, California is still one of the hottest places to be—literally. Today’s post reminds all employers, especially with employees who work outdoors or in open-air environments, that OSHA, Cal-OSHA, and the California Labor Code all prescribe protections from the heat.

California rest and recovery breaks.

California employers must provide non-exempt employees with a paid 10-minute rest break for every four hours worked or major fraction thereof. Refresh your recollection of the rest-break requirement here. And employers in certain industries should recall their additional obligations to help outdoor workers avoid heat-related illnesses by providing water, shade, and additional rest breaks, as required by California’s regulations.

The heat illness prevention regulations

Who is subject to heat illness prevention regulations? Anyone with outside workers, but the list of industries commonly affected includes:

  • Agriculture
  • Construction
  • Landscaping
  • Oil and gas extraction
  • Transportation or delivery

What does California require regarding outdoor places of employment? Employers must establish, implement, and maintain an effective heat illness prevention plan for outdoor workers. The Department of Industrial Relations offers detailed instructions and tips to help employers comply with state laws. Below are some main concerns:

Drinking Water. In addition to mandatory break periods, employees must have access to potable water that is “fresh, pure, suitably cool, and provided free of charge.”

Shade. If temperatures exceed 80° F, employers must maintain an area with shade at all times that is either open to the air or provides ventilation or cooling.

High-heat procedures. When temperatures exceed 95° F, employees in the industries specifically listed above must be given a minimum 10-minute cooldown period every two hours. These breaks may be concurrent with meal or other rest periods when the timing aligns properly.

What should I do if a worker suffers from heat-related illness? If a worker shows any signs of heat-related illness, a supervisor should be prepared to respond with first aid or other medical intervention—and should not permit a worker showing any symptoms of heat-related illness to resume working until the worker has sufficiently recovered from the symptoms.

Federal OSHA guidance

Federal laws and regulations, of course, also apply in California. The attached Management Alert contains some timely information about the four types of heat illness and what you can do to protect yourselves and your employees from this hazard.

Workplace Solution: Stay aware of the potential for heat illness in the workplace, and the steps needed to reduce the danger. Please feel free to reach out to your favorite Seyfarth lawyer if you have any questions, and as you continue to enjoy the summer.

Seyfarth Synopsis: Summer is just getting started, and with it come special circumstances California employers should keep in mind. Vacations, hot weather, and company-sponsored events are among the summertime activities that raise employment issues. Here are some tips to beat the heat this summer.

Vacations

The kids are out of school and employees are ready to hit the road. Here’s what you need to know as to vacation pay:

Must employers provide paid vacations? Employers need not provide vacation time at all, paid or unpaid. But California employers who elect to offer paid time off should be aware that this time is considered a form of wages that is earned as work is performed.

How is vacation pay accrued? Like other wages, vacation pay accrues proportionally as the employee works. Consider an employee who is entitled to two weeks (10 business days) of vacation time each year who works 40 hours per week. She will accrue 1.538 hours of vacation time for each week. This accrued vacation time is treated as wages. When an employee leaves the company, voluntarily or involuntarily, any accrued and unused vacation time should be paid out at the employee’s final rate of pay along with the employee’s final pay check.

Can employers require that employees use their vacation time by a certain date or forfeit it? No. California does not allow a “use-it-or-lose-it” approach to paid vacation time, but our previous posts explain how employers may place a cap on the amount of vacation an employee accrues or limit the eligibility for paid time off.

How does vacation pay compare to holiday pay? Holiday pay, like vacation pay, is something that employers need not provide but often do. Holiday hours, like vacation hours, do not count as hours worked for the purpose of calculating overtime pay. If a holiday is tied to a specific event (think birthdays or national holidays), then unused holiday pay is not due when an employee leaves the company. But employers should beware of “floating holidays.”

Preventing Heat-Related Illness.

Rising summer temperatures can present serious dangers for outdoor workers. Making sure you comply with California’s regulations for heat-related illness prevention means everyone can keep their cool.

California employers must provide non-exempt employees with a paid 10-minute rest break for every four hours worked or major fraction thereof. Refresh your recollection of California’s rest break requirement here. And employers in certain industries should be mindful of their additional obligations to help outdoor workers avoid heat-related illnesses by providing water, shade, and additional rest breaks as required by California’s heat illness prevention regulations.

Who is subject to heat illness prevention regulations? Anyone with outside workers, but the list of industries commonly affected includes, and is not limited to:

  • Agriculture
  • Construction
  • Landscaping
  • Oil and gas extraction
  • Transportation or delivery

What does California require regarding outdoor places of employment? Employers must establish, implement, and maintain an effective heat illness prevention plan for outdoor workers. The Department of Industrial Relations offers detailed instructions and tips to help employers comply with state laws, but below are some of the main concerns:

Drinking Water. In addition to mandatory break periods, employees must have access to potable water that is “fresh, pure, suitably cool, and provided free of charge.”

Shade. If temperatures are greater than 80° F, then employers must maintain an area with shade at all times that is either open to the air or provides ventilation or cooling.

High-heat procedures. When temperatures exceed 95° F, employees in the industries specifically listed above must be given a minimum 10-minute cooldown every two hours. These breaks may be concurrent with meal or other rest periods when the timing aligns properly.

What should I do if a worker suffers from heat-related illness? If a worker does show any signs of heat-related illness, a supervisor should be prepared to respond with first aid or other medical intervention—and should not permit a worker showing any symptoms of heat-related illness to resume working until the worker has sufficiently recovered from the symptoms.

Employer-Sponsored Events

Summer is the time of company picnics and other social events that bring colleagues together. But employers may unwittingly find themselves obliged to pay their employees for company-sponsored social events unless they follow a few ground rules.

When is a company-sponsored event compensable? Generally, there is a 4-factor test to determine whether employees must be paid. And while the rule refers to pay for lectures, meetings, or training programs, the rules are a good guideline for determining obligations for paying an employee for a company-sponsored event. An employer need not pay if all of the following apply:

  • Attendance is outside business hours
  • Attendance is voluntary
  • The activity is not directly related to the employee’s job
  • No substantive work is performed during the activity

How can employers sponsor events that do not trigger compensation? There are options for employers to consider to ensure their events fall outside the four-factor test spelled out above:

  • Inform employees that the event is in fact voluntary (and then be mindful not to pressure them too much to attend).
  • Throw the event off-site and outside typical business hours.
  • Have any necessary work be done by exempt employees only.

With these guidelines in mind, everyone can beat the heat and enjoy the summer! As always, Seyfarth’s attorneys are available to answer your questions and address your concerns on these issues.

Edited by Chelsea Mesa.

Seyfarth Synopsis: On March 30, 2017, the California Fair Employment and Housing Council (“FEHC”) considered proposed regulations on transgender employees. The FEHC also discussed draft regulations on national origin discrimination in the workplace.

Transgender Identity. On March 30, 2017, the FEHC, convened in Sacramento for its second meeting of the year, voted unanimously to adopt proposed regulations on transgender identity and expression, which will go to the Office of Administrative Law for approval. We expect a final text in July. The FEHC first proposed these amended regulations in 2016, which we covered here.

Some highlights: the amended proposed regs would

  • prohibit employers from requiring applicants to disclose their sex, gender, gender identity or expression,
  • protect transitioning employees by expanding the definitions of gender identity and expression,
  • ensure that employees are addressed by their preferred name, gender, and pronoun, and
  • require employers to provide equal access to comparable, safe, and adequate bathrooms, locker rooms, and similar facilities.

Employers can familiarize themselves with the approved regulations now to anticipate questions that may arise in this context.

The FEHC heard public comment over a perceived conflict in bathroom signage required by the proposed regulations and pre-existing Cal-OSHA regulations. The proposed FEHC regulations, consistent with recently enacted legislation (discussed here), require that single-user bathrooms have gender-neutral signage. But the Cal-OSHA regulation, which predates both the FEHC regs and the recent legislation, calls for single-user bathrooms to be for a single gender. The conflict is one of perception only, as the Department of Industrial Relations has clarified that Cal-OSHA will not enforce its rule, and instead will follow the gender-neutral requirement found in the statute (and the proposed FEHC regs). We expect that other agencies may adopt the DIR’s approach, favoring transgender protections over conflicting pre-existing regulations.

Kevin Kish, Director of the Department of Fair Employment and Housing, confirmed the DFEH would consult with the Labor and Workforce Development Agency and Cal-OSHA to ensure consistency in the implementation and enforcement of the regulations.

National Origin Discrimination. The FEHC has also drafted proposed regulations regarding national origin discrimination in the workplace, following recommendations by Legal Aid at Work. The proposed regulations are still in their early stages; as yet, there has been no formal notice of the proposed regulations or a public hearing.

The proposed regulations largely track the EEOC’s new guidance on national origin, which we summarized in our Employment Law Lookout blog here. The draft FEHC regulations address these issues:

  • Defining national origin to include place of birth or ancestor’s place of birth, association or perceived association with a person of a national origin group or ethnicity, Native American Tribe, language, and accent.
  • Harassment and retaliation against undocumented workers.
  • Discrimination based on immigration status, accent, or English proficiency.
  • Workplace language restrictions.

Public comments have addressed the proposed provisions that would curb employer inquiry into an individual’s immigration status. The proposed regulations would permit such an inquiry only where clear and convincing evidence shows the inquiry is needed to comply with federal law. Based on further comment by Legal Aid at Work, we anticipate that further modifications may provide guidance on workplace language policies.

What’s Next? We expect to see more activity from the FEHC in the months ahead. The FEHC will likely revise its proposed regulations on national original discrimination before it issues formal notice of proposed action of the regulation. The FEHC also plans to expand its outreach efforts, seeking further comment from the public and civil rights groups to shape the FEHC’s future agenda. We will continue to monitor and report further developments.

Edited by Colleen Regan.

Seyfarth Synopsis: A court has temporarily suspended the deadline for employers to elect the statutory “safe harbor” for purposes of complying with recent legislation that makes it even more difficult for employers that pay with a piece rate rather than an hourly rate for any portion of an employee’s work.  

As we previously reported, the California Legislature’s enactment of AB 1513 (commonly known as the “piece rate pay law”), which became effective on January 1, 2016, has created significant challenges for California employers that pay employees on a piece-rate basis for any part of their work. This new law requires employers to pay piece-rate employees separately for rest and recovery periods and for “other non-productive time,” based on a specific formula, and requires detailed disclosures in wage statements.

AB 1513’s “Safe Harbor” for Past Violations

AB 1513 creates an affirmative defense to wage claims for employers that follow the law’s very specific “safe harbor” provisions. To come within the safe harbor, employers must (1) provide written notice of their intent to utilize the safe harbor procedures by no later than July 1, 2016, and (2) pay employees for all previously uncompensated rest and recovery periods and other non-productive time, plus interest, for the period from July 1, 2012, through December 31, 2015, by December 15, 2016.

Challenge to the Piece Rate Pay Law

An agricultural employer group, Nisei Farmers League, filed a lawsuit challenging AB 1513 on constitutional grounds. The lawsuit argues that AB 1513 is unconstitutionally vague, fails to provide employers with fair notice of its requirements, and is impermissibly retroactive. The League sought to enjoin enforcement of certain provisions of AB 1513, including the safe harbor, pending a trial of their claims.

On June 30, 2016, one day before the deadline to elect the safe harbor, the court entered an Order to Show Cause re Preliminary Injunction and Temporary Restraining Order. This Order restrains the Department of Industrial Relations from enforcing the deadline until at least July 18, 2016, the date of the hearing on the Order to Show Cause. If the court enters a preliminary injunction at the hearing, the DIR will be enjoined from enforcing the deadline until thirty days after the preliminary injunction expires, and from enforcing the payment requirement until 197 days after the preliminary injunction expires. If the court does not enter a preliminary injunction, then the deadline will become effective ten days later (on July 28, 2016).

What Does This Mean for Piece Rate Employers?

The Order provides piece-rate employers with some additional time (at least until July 28, 2016, and longer if the court enters a preliminary injunction) to decide whether to invoke the safe harbor if they have not already done so. Employers that already made this election may have additional time to comply with the back-pay requirements if the court enters a preliminary injunction on July 18. In either case, the many California employers struggling to comply with the unclear and burdensome requirements of AB 1513 should watch this legal challenge closely.