Seyfarth Synopsis: Effective January 1, 2019, California’s minimum hourly wage goes up to $12.00 for large employers, and many local minimum wages will go higher still. Don’t forget that the statewide change will affect salary thresholds for white collar exemptions, as well.

Effective January 1, as New Year’s bells toll, California’s minimum hourly wage will increase to $12.00 for employers of 26 or more, and $11.00 for employers of 25 or fewer.

This latest statewide adjustment is part of a series of adjustments mandated by a 2016 statute that, by 2020, will raise the statewide minimum wage to $15.00. The latest adjustment obviously increases what employers must pay for regular and overtime wages for employees currently earning the minimum. And the new, higher minimum wage also will automatically increase the threshold salary employers must pay to maintain salary-exempt status for administrative, executive, and professional employees: the threshold salary is twice the state minimum wage for a 40-hour week. The new annual salary minimum for large employers as of 2019 will thus rise to $49,920 (2 times $12/hour times 40 hours/week times 52 weeks/year).

In addition, to maintain overtime-exempt status for commissioned salespeople (in retail and service establishments, with the earnings threshold calculated as exceeding 1.5 times the current minimum wage), employers must now pay a higher earnings threshold—$18.01 per hour—and over one-half of the earnings must consist of commissions, so commissions might have to be increased accordingly.

And, of course, employers, under the Wage Theft Prevention Act, must notify non-exempt employees in writing of any changes to their new rate of pay within seven calendar days from the time of the change.

On top of the statewide change, the following California cities will be sending their own New Year’s greetings for minimum-wage earners:

Belmont: Employers who are subject to the Belmont Business License Tax or who maintain a facility in Belmont must pay—to each employee who performs at least two hours of work per week in Belmont—a minimum wage of $13.50. This requirement applies to both adult and minor employees.

Cupertino: Employers who are subject to the Cupertino Business License Tax or who maintain a facility in Cupertino must pay—to each employee who performs at least two hours of work per week in Cupertino—a minimum wage of $15.00. Covered employees are entitled to these rights regardless of immigration status.

El Cerrito: An employee who performs at least two hours of work in a particular workweek within the geographic limits of the City of El Cerrito must be paid a minimum wage of $15.00. This minimum wage applies regardless of the size of the employer, and applies to both part-time and full-time employees.

Los Altos: Employers who are subject to the Los Altos Business License Tax or who maintain a facility in Los Altos must pay—to each employee who performs at least two hours of work per week in Los Altos—a minimum wage of $15.00. This requirement applies to both adult and minor employees.

Mountain View: Employers who are subject to the Mountain View Business License Tax or who maintain a facility in Mountain View must pay—to each employee who performs at least two hours of work per week in Mountain View—a minimum wage of $15.65. This requirement applies to both adult and minor employees.

Oakland: Employers in the City of Oakland must pay a minimum wage of $13.80 to employees who perform at least two hours of work in a workweek within the geographic limits of the city. This requirement applies to both part-time and full-time employees.

Palo Alto: Employers in Palo Alto must pay a  minimum wage of $15.00 to any employee who works two hours per week within Palo Alto.

Redwood City: Redwood City’s local minimum wage of $13.50 will apply to all business operating within the geographic boundaries of Redwood City and any employee working at least two hours per week.

Richmond: All employers in the City of Richmond must pay a minimum wage of $15.00 to employees who work at least two hours per week within the geographic boundaries of the city. This requirement applies to both minor and adult employees.

San Diego: Employers must pay all employees who perform at least two hours of work in one workweek within the geographic boundaries of the City of San Diego a minimum wage of $12.00. This requirement applies to both minor and adult employees.

San Jose: Employers who are subject to the San Jose Business License Tax or who maintain a facility in San Jose must pay—to each employee who performs at least two hours of work per week in San Jose—wages of not less than $15.00 per hour. This requirement applies to both minor and adult employees.

San Mateo: Employers who are subject to the City of San Mateo Business License Tax or who maintain a facility in the city must pay a minimum wage of $15.00. Tax-exempt nonprofit organizations must pay a minimum wage of $13.50. This requirement applies to adult and minor employees.

Santa Clara: Employers who are subject to the Santa Clara Business License Tax or who maintain a facility in Santa Clara must pay—to each employee who performs at least two hours of work per week in Santa Clara—a minimum wage of $15.00 per hour. This requirement applies to both minor and adult employees.

Sunnyvale: Employers who are subject to the Sunnyvale Business License Tax or who maintain a facility in Sunnyvale must pay—to each employee who performs at least two hours of work per week in Sunnyvale—a minimum wage of $15.65. This requirement applies to both adult and minor employees.

Below is a handy “at a glance” chart detailing these municipal increases.

City Minimum Hourly Wage Effective January 1, 2019
Belmont $13.50
Cupertino $15.00
El Cerrito $15.00
Los Altos $15.00
Mountain View $15.65
Oakland $13.80
Palo Alto $15.00
Redwood City $13.50
Richmond $15.00
San Diego $12.00
San Jose $15.00
San Mateo $15.00
Santa Clara $15.00
Sunnyvale $15.65

Finally, still more cities (including Los Angeles and San Francisco) will impose higher minimum-wage requirements next July 1. Be sure to check this space in mid-2019 for those updates.

Seyfarth Synopsis: Yes, it’s true: California employees can be entitled to pay for time they haven’t worked. Here, we highlight two common instances: split shifts and reporting time.

Your head—already spinning if you’ve wrapped it around California’s quirky wage and hour laws—may explode when you consider the notion of having to pay for time not worked. The duties to pay split-shift and reporting-time premiums are not new, but don’t worry: you’re not alone if you haven’t heard of them. Reading this piece will deepen your appreciation of just how peculiar California can be!

Split Shift Pay

What is it? Split-shift pay is governed by the Wage Orders (generally Section 4(C)). A split shift occurs when (1) a work schedule includes a block of unpaid time that is longer than 60 minutes (that is not a meal period) in a workday, (2) the block of time interrupts two work periods, and (3) the total daily wage does not exceed the minimum wage for all hours worked, plus one additional hour. The idea behind requiring split-shift pay is that the employee is not really free of duty between shifts because of the looming shift later in the day.

When a split shift occurs, employers must pay a premium of one hour of pay (unless the break qualifies as a “bona fide” rest or meal period).

What’s an example? For an eight-hour workday, the employer schedules a first shift from 9:00 a.m. to 1:00 p.m., and a second shift from 3:00 p.m. to 7:00 p.m.

How is the premium calculated? The split-shift premium generally would be an hour of pay at the minimum wage.

But it can get tricky. If the hourly wage exceeds the minimum wage, a split-shift premium may not be due. To see if one is due, you multiply the difference in rate (between the hourly wage and the minimum wage) by the hours worked that day. If the product of those numbers exceeds the split-shift premium (one hour at minimum wage), then the split shift premium is offset and not owed.

Suppose that two employees of a large employer both work the split shift described in our example. One employee makes the 2018 California minimum wage: $11.00. The other employee’s wage is $13.00. Here are the calculations:

Employee 1—earns $11.00/hr Employee 2—earns $13.00/hr

(1) $11.00 * 8 = $88.00 (daily wage)

(2) Add $11.00 premium

(3) $88.00 + $11.00 = $99.00

Split shift premium owed: $11.00

Total due for that workday =  $99.00 [($11 * 8 hours) + $11.00 premium]

 

(1) $13.00 * 8 = $104.00 (daily wage)

(2) $13.00 – $11.00 = $2.00 (difference between hourly and minimum wage)

(3) $2.00 * 8 = $16.00

Split shift premium owed: None (because $16.00 > split-shift premium of $11.00, the premium is offset and thus not owed)

Total due for that workday = $104.00

Nuance: While split-shift payments are considered wages, they need not be included in the regular rate when calculating overtime pay.

A strange split-shift issue can arise if an employee’s work crosses the defined workday. Consider a night-shift employee subject to a typical workday—starting at midnight—who works at minimum wage from 12:01 a.m. to 4:00 a.m. and then again from 10:00 p.m. to 4:00 a.m. That employee would be entitled to a split-shift premium, because of the long block of time separating work shifts within the same workday. The result would differ, however, had the workday been defined to start at 9:00 p.m. In that case, the employee would not experience a block of time separating work shifts during the same workday. An employer can redefine the workday for a group of employees so long as the workday definition is not a temporary means to avoid overtime.

Reporting Time Pay

What is it? Reporting-time pay is governed by the Wage Orders (Section 5). When an employee reports to work at the regularly scheduled time, but then gets sent home (usually for lack of work), the employer must pay for at least one-half the scheduled hours, at the regular rate. In no case, however, is the employee entitled to less than two hours of pay or to more than four. Here, the idea is that the employee who honored the employer’s schedule, expecting to work, should be compensated for the lack of work.

What are some examples?

  • Employee 1 is scheduled for an eight-hour shift, but then gets sent home after working just one hour. The employer must pay four hours at the regular rate—one for the hour worked and three more for reporting time—because four hours is one-half of the scheduled eight hours of work. Note that only the one hour actually worked, however, would count as hours worked for purposes of determining eligibility for weekly overtime pay.
  • Employee 2 is scheduled to report to work a second time in a workday, but then gets furnished less than two hours of work. The employer still must pay for two hours at the regular rate.

The DLSE has identified certain exceptions to reporting-pay rules, applying when

  • operations cannot begin or continue because of threats to employees or property, or when civil authorities recommend that work not begin or continue;
  • public utilities fail to supply electricity, water, or gas, or there is a failure in the public utilities, or sewer system; or
  • the interruption of work results from a cause beyond the employer’s control (such as an earthquake).

Nuance: The reporting-time pay provisions do not apply to employees on paid standby status, or to employees who have a regularly scheduled shift of less than two hours, such as a relief cashier who works a one-hour shift in the middle of the day.

Workplace Solutions

Employers should carefully review their practices to ensure that they adequately pay employees on split shifts. Employers should also be sure to incorporate reporting-time pay requirements into their policies. Doing this can avoid an obligation to pay back wages and penalties. If you have any questions about work schedules or compensation for your employees, please do not hesitate to reach out to one of our wage and hour experts at Seyfarth Shaw.

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

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

APPROVED

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

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

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

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

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

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

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

VETOED

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

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

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

BILLS THAT FAILED TO MAKE THE LEGISLATIVE CUT

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

Rest Breaks. AB 817 would have created an exception to Labor Code section 226.7’s off-duty “rest period” requirement for employers providing emergency medical services to the public. The bill would have allowed EMS employers to require their employees to monitor and respond to emergency response calls during rest or recovery periods without penalty, so long as the rest period is rescheduled.

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

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

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

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

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

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

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

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

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

PAGA: 2017’s Three Failed Efforts. 

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

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

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

Workplace Solutions.

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

Seyfarth Synopsis:  As if high rent and California’s peculiar laws were not enough to worry about, San Francisco employers must also comply with City-specific ordinances. Trailblazing City requirements often exceed state laws and have sometimes been harbingers of state-level enactments. One might say that San Francisco, with its distinctive laws, is to California what California is to the rest of the country. We highlight the Big Eight SFO peculiarities, below.

Minimum Wage

Minimum wage is an example of San Francisco taking the lead and inspiring changes to state law. On July 1, 2017, San Francisco’s minimum wage officially increased to $14.00 per hour; on July 1, 2018, it will jump to $15.00. The rates apply to all employees who work at least two hours per week within the City or County of SF. The City approved these rate increases years before the California Legislature followed suit in passing the Fair Wage Act of 2016, which mandated an annual state-wide increase until it reaches $15.00 in 2020. Might the City then push to exceed this amount come 2020?

Paid Sick Leave

Paid sick leave is another area where City entitlements differ from those available under state law. San Francisco says that all employees, including part-time and temporary workers, are entitled to paid sick leave when they are ill, require medical care, or need to care for their family members or designated person. While state law currently provides employees with three days (24 hours) of paid sick leave for most of the same reasons, the City offers employees significantly more protected paid time off.

San Francisco employers with fewer than 10 employees must allow workers to accrue up to 40 hours, and those with 10 or more employees must allow accrual up to 72 hours. Not only are employees thus entitled to two to three times what the state mandates, but any unused days also carry over year to year (subject to the above accrual caps). Remember that employers must comply with both state and City laws, as satisfying one does not satisfy the other. Originally enacted in 2007, the City amended its paid sick law as of January 1, 2017, so check out the City’s FAQs for additional updates.

Paid Parental Leave & Family Friendly Workplace

San Francisco has its own take on California’s family-related leave programs—with two separate but related ordinances. You may recall that California’s Paid Family Leave offers six weeks of partial pay/wage replacement (after an eight-day waiting period) to employees who are otherwise entitled or permitted to take time off to bond with a new child or to care for a seriously ill family member. The California Family Rights Act (“CFRA”) also mandates that covered employers give 12 weeks of unpaid, protected leave within a year to eligible employees for a child’s birth, adoption, or foster placement, for the employee’s own serious medical condition, or to care for a seriously ill or injured family member. To be eligible for CFRA leave, an employee must have worked for the covered employer for at least a year and have clocked 1250+ hours.

In San Francisco, by contrast, an employee needs only eight hours per week on a regular basis for six months before taking advantage of its Paid Parental Leave benefits. While matching the state’s six weeks of state (EDD) paid time for new child bonding, San Francisco requires that the employer also pay the leave in the form of supplemental compensation that, in conjunction with California’s Paid Family Leave benefits, equals 100% of the employee’s gross weekly wages. Currently, this law applies to employers with 35 or more employees (regardless of location) and employees working 40% or more of their hours in San Francisco. Beginning January 1, 2018, this law will expand to include all employers with 20 or more employees.

San Francisco has a separate ordinance that attempts to make what is often a difficult time easier for individuals who have family caregiving obligations. Employees who have worked eight hours per week for six months can request a flexible or predictable schedule to assist with these responsibilities. Specifically, the law applies to employers with 20 or more workers (regardless of location) and covers caring for children under 18, seriously ill family members, and parents of the employee who are over 65. San Francisco wants the state to know that family friendliness begins here!

Health Care Security

San Francisco’s mandatory health care law ensures that employees are cared for, too. Employers must make health care expenditure payments each quarter for every employee who has been working more than 90 days. Employers with fewer than 20 employees are exempt altogether, but employers with 20-99 employees must spend $1.76 per hour payable per each employee, while those with 100+ must spend $2.64 per hour. The City allows these payments to be made to the employee directly, to the City, or as a contribution to a reimbursement program. Under this ordinance, the City may impose several different penalties for non-compliance, so getting caught not paying these expenditures would certainly be worse than catching a cold!

Fair Chance (SF’s Version of “Ban-the-Box”)

The City does not believe that having been behind bars should necessarily bar the employment of qualified individuals. The Fair Chance ordinance aims to make work more accessible and put applicants with prior arrests or convictions on an even playing field. All employers with more than 20 employees must state in job solicitations that qualified applicants with arrest or conviction records will be considered. Employers also must not ask about such records until after a live interview or a conditional offer, at which time only arrests or convictions directly related to the ability to perform a given job may be considered in the hiring decision. An employer that chooses not to employ an applicant with a record must first allow the individual a chance to respond with evidence of inaccurate information, rehabilitation, or other mitigating factors.

California currently prohibits employers from asking about certain criminal records, including arrests that did not result in criminal convictions and convictions that have been dismissed or expunged. As of July 1, 2017 (per new FEHC regulations that we discussed here that are similar to San Francisco’s law), California employers may not consider criminal records in hiring decisions that would adversely affect individuals belonging to a protected class. If there is a disparate impact, then employers must show that their background check policy is “job-related and consistent with business necessity.” Before making a decision based on criminal records, employers must conduct an individualized assessment that allows anyone screened out by the policy to respond with proof that the background check is inaccurate or with reasons why adverse action should not be taken.

Formula Retail Employee Rights

Whether it be disrupted budgeting, inconvenience, or some other reason, employees can get upset when their work schedule suddenly changes; San Francisco has a law for that. Chain stores with 40+ locations worldwide and 20 or more people working in San Francisco must provide notice of the work schedule two weeks in advance. In addition, employers must provide “predictability pay” whenever an employee’s schedule changes with less than a week’s notice, and if an on-call employee is required to be available but is not called into work during the shift, the employer must still pay them for that time.

These same employers must offer (in writing) any available extra hours to current qualified part-time employees before they can hire someone new to cover the workload. If an establishment is sold, the successor employer must retain, for 90 days, any eligible employee who worked longer than six months before the sale. San Jose voters passed a comparable ordinance, and new legislation was recently introduced in the California legislature with aims to enact a similar law. Beware of these special laws that apply “within the City and County” soon getting a California-sized expansion!

Lactation Accommodation

In June 2017, the San Francisco Board of Supervisors approved specific legislation requiring employers to provide a private space for new mothers to pump their milk. The ordinance goes into effect January 1, 2018, and calls for a clean space that contains a chair, access to electricity, and surface space for a breast pump. In addition, the employee’s workspace must be in close proximity to a sink with running water as well as a refrigerator. Subject to certain exceptions, if such a space does not exist, then one must be constructed. Employers will be required to distribute the company’s lactation accommodation policy to all employees at the time of hiring.

While state and federal law mandate that employers make reasonable efforts to provide new mothers with lactation breaks throughout the workday, San Francisco’s more expansive legislation may very well be a predictor of what’s next to come on the state level.

We will keep you informed of updates and changes to these ordinances as violations can come with hefty penalties or result in administrative investigations and civil suits. It should be noted that some exceptions and exemptions apply, and those details and additional requirements can be found on the San Francisco Office of Labor Standards Enforcement website. To ensure your company is compliant, or if you have questions about anything mentioned here, Seyfarth’s Labor and Employment attorneys are available to assist you.

Edited by Michael A. Wahlander.

Seyfarth Synopsis: Just when you thought it was safe to relax for the summer, California is giving employers four new reasons to keep on their toes. Laws going into effect on July 1, 2017, will address (1) domestic violence, (2) the minimum wage, (3) criminal background checks, and (4) transgender rights.

Notice Posting and Leave for Domestic Violence Issues

Employers must now notify employees of workplace rights regarding domestic violence victims. By way of background, Labor Code section 230.1 forbids employers with 25 or more employees to discriminate against employees who take time off to

  • seek medical attention for injuries caused by domestic violence, sexual assault, or stalking,
  • obtain services from a domestic violence shelter, program, or rape crisis center as a result of domestic violence, sexual assault, or stalking,
  • obtain psychological counseling for domestic violence, sexual assault, or stalking, or
  • participate in safety planning or other actions (including temporary or permanent relocation) to increase safety from domestic violence, sexual assault, or stalking.

Employees taking time off must give the employer reasonable advance notice, unless the advance notice is not feasible. But if the employee takes an unscheduled absence, the employee remains protected by providing, within a reasonable time after the absence, a certification of the protected reason for leave. Employers must maintain the confidentiality of the reason.

The Labor Commissioner has developed a notice form for use which can be found here. You can find Section 230.1 here.

Minimum Wage Increases for Los Angeles, San Francisco, Santa Monica and Emeryville

Earlier this year, California once again hiked its minimum wage (to $10.50).  But for some municipalities that was not enough. On July 1, the minimum wage rises in certain California cities/counties:

Before Increase:                    July 1, 2017:

Emeryville:
(56 or more employees)         $14.82                                     $15.20
(55 or fewer employees)        $13.00                                     $14.00

Los Angeles:
(25 or more employees)         $10.50                                     $12.00
(25 or fewer employees)        $10.00                                     $10.50

San Francisco:                        $13.00                                     $14.00

Santa Monica:
(26 or more employees):        $10.50                                     $12.00
(25 or fewer employees):       $10.00                                     $10.50

For further information, visit your local website.

New Criminal Background Check Regulations

On July 1, the Fair Employment and Housing Council will begin to enforce new regulations which will impose additional burdens on use of criminal background checks in employment decisions. As with any criminal background check policy that creates an adverse impact on a protected class, the employer must justify the policy as job-related and consistent with business necessity.

The regulations identify two ways an employer could justify the policy: (1) show that a “bright-line” disqualification properly distinguishes those who do and do not pose an unacceptable level of risk; (2) individually assess the individual’s qualifications. The employer must also give the applicant or employee a reasonable opportunity to show that the conviction information is wrong. If the individual provides evidence of factual inaccuracy, then the conviction cannot be considered in the employment decision.

Even when an employer can show job-relatedness and business necessity, an individual can still prevail on a claim if there is a less discriminatory alternative (such as a narrower list of disqualifying convictions) that advances the employer’s legitimate concerns as effectively as the challenged practice would.

The regulations pose a substantial new risk to employers who maintain no-hire policies for individuals with criminal convictions. Any such policy should be reviewed for compliance.

You can see the final regulations here.

FEHC Transgender Rights Regulations

On July 1, Fair Employment and Housing Council regulations will expand upon laws relating to gender identity and expression.

As background, note that as of March 1, 2017, all single-user toilet facilities in any California business establishment, place of public accommodation, or government agency must be identified as “all-gender.” As of July 1, transgender employees must have equal access to restrooms and other facilities, including locker rooms, dressing rooms, and dormitories. Employers now must allow employees to use those facilities without regard to the employee’s assigned sex at birth. The regulation provides that employers may make reasonable, confidential inquiries of employees to ensure that facilities are safe and adequate for use.

The July 1st regulation also

  • require employers to honor an employee’s request to be identified by a preferred gender or name,
  • forbid employers to impose appearance, grooming or dress standards inconsistent with an individual’s gender identify and gender expression,
  • forbid employers to require proof of an individual’s sex, gender, gender identity or gender expression, and
  • expand existing gender expression, gender identity and transgender definitions to include “transitioning” employees.

The expanded definition of this protected class may likewise expand liability for harassment, which is particularly likely with respect to a group traditionally subject to discrimination.

Employers should review policies and consider management training to ensure compliance with the California initiatives around gender identity and expression.

You can see the newly adopted regulation here.

Edited by Michael A. Wahlander.

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

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

Still Alive:

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

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

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

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

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

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

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

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

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

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

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

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

Bills Stuck in the House of Origin:

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

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

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

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

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

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

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

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

PAGA: Three Valiant, But Failed, Efforts. 

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

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

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

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

Workplace Solutions

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

Seyfarth Synopsis: Our mission here at Cal-Pecs is to illuminate how California employment law differs from the law that employers generally experience throughout America. In this back-to-basics piece, we provide some background and a brief catalog of stark contrasts.

In 1846, American settlers in Mexican Alta California staged the Bear Flag Revolt. They declared an independent republic, seeking freedom from Mexico. The rebels got lucky: the Mexican-American War soon intervened to dislodge the California territory from Mexican control. California, in 1850, became our thirty-first state.

The legacy of the Bear Flag Revolt continues: the state flag depicts a grizzly bear astride a patch of grass, above the logo “California Republic.” The underlying rebellious attitude has persisted as well. State politicians—especially since the 2016 election—have defiantly proclaimed California’s right to chart its own course on such vital matters as the environment, health care, immigration, and the right to use marijuana.

Perhaps nowhere is California’s independence more prominent than in the area of employment law. Federal labor law hit high tide in the 1930s, with the National Labor Relations Act and the Fair Labor Standards Act. The high tide returned in the 1960s—bringing us the Equal Pay Act, Title VII, and the Age Discrimination in Employment Act—and returned yet again in the 1990s, bringing us the Americans with Disabilities Act and the Family and Medical Leave Act.

In the Golden State, meanwhile, the waves of employment regulation have risen ever higher, even when federal regulations have ebbed. The chart below spots differences between federal and California law in key areas of interest to employers that operate both in California and in the rest of America. In each case, of course, the California version favors employees, plaintiffs, and unions, while never favoring the employer.

Issue U.S. Law & State Law Generally California Law
What’s the minimum wage? $7.25, and higher in a few states $10.50, rising to $15 by July 2022
Must that wage be paid separately for all work, including unproductive tasks? No. Employers generally can comply with an average wage that meets the minimum. Yes. This result has surprised some employers that pay piece rate or commissions.
Must employers pay non-exempt piece-rate and commission workers separately for rest breaks? No Yes
Must employers pay non-exempt employees for required travel outside regular hours? No Yes
What overtime hours generally require premium pay? Only hours worked in excess of 40 per week. Weekly overtime plus daily overtime (over 8 hours per day) plus any time on seventh consecutive workday in a workweek.
Can employers use the “fluctuating workweek method” to compute overtime pay for salaried non-exempt employees? Yes. The regular rate is salary divided by all hours worked, with a 0.5 multiplier for overtime hours. No. The regular rate is deemed to be weekly salary divided by 40, and the overtime multiplier is 1.5, not 0.50.
Is doubletime ever required? No Yes, for hours exceeding 12 per day or 8 hours on a seventh consecutive workday.
Are there civil penalties for labor law violations? Often no, and penalties that do apply are relatively modest. Yes: for many Labor Code violations penalties are typically $100 per employee per pay period.
Can plaintiffs personally sue supervisors and co-workers under anti-harassment statutes? No Yes
Are middle managers, pharmacists, and nurses typically exempt from overtime rules? Yes No
Are employees entitled to reimbursement for routine business expenses? No Yes
What statuses do employment discrimination laws protect? Race, color, religion, sex, national origin, age over 40, disability (and sexual orientation by some judicial readings of Title VII) Those plus sexual orientation, gender identity, transgender status, political affiliation, marital status, breastfeeding, HIV status, requests for disability accommodation, etc.
Can employers invoke the “undue hardship defense” for religious accommodations simply by showing a cost > de minimis, and can they accommodate grooming and dress practices by transferring employees to a more remote location? Yes and yes. No and no. The “undue hardship” defense must meet the same tough test required in disability cases. And it is categorically unreasonable to accommodate a religious dress or grooming practice by moving the employee away from the public.
Can undocumented workers recover back pay on a claim for wrongful termination? No Yes; immigration status of a worker is irrelevant to any California remedy, except reinstatement of employment if prohibited by federal law.
Can an employer fire a worker who provided a false name, SSN or information about legal status to work? Yes No; an employer cannot discharge, discriminate, retaliate or take any adverse action against an employee who updates such information based on a lawful change.
What consequences do employers suffer for denying meal or rest breaks? Breaks that are too short are counted as working time. Failure to provide specified, timely breaks can result in up to two extra hours of premium pay per day.
Are “use it or lose it” vacation plans acceptable? Yes, generally. No
Is paid sick pay required? No Yes
Do farmworkers have the right to unionize, and do unions enjoy special protections with respect to their mass picketing? No and no. Yes and yes. California’s Agricultural Labor Relations Act protects farmworkers, and its Moscone Act limits judicial power to prohibit mass picketing.

As this limited sample of comparisons might suggest, an employer used to doing business elsewhere can find California employment law a real bear. For more detailed treatment, see the 2017 edition of our Cal-Peculiarities: How California Employment Law is Different.

Seyfarth Synopsis: 2016 brought a wave of new protections for California employees and scant protection for employers. In this week’s post, we anticipate changes for 2017, in the ever-peculiar world of California employment law.

True to our tradition, we pause at the beginning of the New Year to reflect on last year’s California employment law changes, and consider possible trends. On the good ship Cal-Pecs, our contributors take turns keeping lookout in the crow’s nest. Where, we ask, is the wandering bark of employment law heading in California? What shoals loom ahead?

Despite the sea change that the election of Donald J. Trump represents, including expected changes favoring employers at the federal level, California remains (with apologies to Carey McWilliams) its own “island on the land.” An island of employees who know their rights. While lawmakers in Illinois, New York, New Jersey, and Massachusetts are doing whatever they can to catch up, all three branches of California’s government—legislative, executive, and judicial—continue to tack toward expanding employee rights.

To pick just a few examples: in 2016, California judges, legislators, and municipalities

  • extended the protections of pay equity laws beyond gender, to also prohibit unjustified disparities based on race and ethnicity,
  • shielded applicants from being haunted by juvenile conviction histories,
  • provided that all contracts with California employees will be governed by California law, unless the employee is represented by a lawyer,
  • increased the number of jurisdictions where minimum wage and paid sick time rights exceed state norms,
  • required employers, upon pain of penalty, to schedule work time for certain employees well in advance.

The above developments—which we’ve discussed in more detail here, here, and here—are part of a continuing trend in recent years that emphasizes equal pay, expansion of paid sick and small-necessity leave rights, prevention of ”wage theft,” and increasing work opportunities for historically underprivileged or disenfranchised groups such as immigrants and those with criminal histories.

Against this ever more employee-friendly backdrop, one can only wonder how California will grapple with the challenges of a modern economy, such as job eliminations (caused by more work automation), the increasingly “gig” nature of our state’s economy (resulting in more independent contractors and fewer employees), and the impact of legalization of recreational marijuana (employees can’t be impaired in the workplace, but attempts to limit non-work time use could implicate employee privacy, among other things). One particularly bold effort came in 2016: proposed bill AB 1727 would have given independent contractors the right to organize and negotiate with work providers through “group activities” such as withholding work, boycotting, or critiquing labor practices. That effort died in the Assembly Judiciary Committee. But hear this fearless prediction: we will hear of this again. And we can expect other bold efforts to empower the growing numbers of gig economy workers.

Meanwhile, we anticipate answers on the following workplace issues now pending before the California Supreme Court:

  • Which “employee” test determines whether a class should be certified to determine whether a group independent contractors was misclassified? The IWC definition of “employee” (as construed in Martinez v. Combs, 49 Cal. 4th 35 (2020), or the common law test set forth in S.G. Borello & Sons, Inc., 48 Cal. 3d 341 (1989)? [Dynamex Operations West, Inc., v. Superior Court, S222732]
  • What does it mean that a California employer is to provide “one’s day rest in seven”? [Mendoza v. Nordstrom, S224611]
  • Does the federal de minimis doctrine apply to claims for unpaid wages under California Labor Code Sections 510, 1194 and 1997 (minimum wage and overtime)? [Troester v. Starbucks Corp., S234969]
  • What is the correct way to calculate the rate of overtime pay when a non-exempt employee receives a flat sum bonus? [Alvarado v. Dart Container Corp of California, S232607].

If we can take any guidance from the Supreme Court’s latest wage-hour decision (Augustus v. ABM Security, rewriting the law on required rest breaks [see links to our OMM and prior post on the case here]), the results in the above cases will continue the tide of worker rights that will swamp more than a few employer boats, making management of California employees even more complicated, and increasing the risks of employers incurring inadvertent violations.

As in past years, we invite you to contact us with any comments, suggestions, or disagreements you may have regarding any of our posts, or if you would like to be a guest author.

We look forward to keeping you apprised of continuing ebbs and flows in California employment law during the year to come.

Seyfarth Synopsis: The Office of the California Labor Commissioner (aka the DLSE) recently issued an opinion letter explaining how employers should calculate sick pay for commissioned employees. Somewhat surprisingly, the letter counsels that the rate of sick time pay for these employees must be calculated using one of the schemes applicable to non-exempt employees—even if the commissioned employees qualify as exempt outside salespersons or as “commissioned employees.” 

On October 11, 2016, the DLSE issued an opinion letter regarding California’s Healthy Workplace Healthy Families Act of 2014.  As is usual with opinion letters, the DLSE was responding to a request for guidance from a cautious employer seeking to cure uncertainty about how to interpret a statute.  Opinion letters are binding only on the particular employer who asked the question, but the rest of the California employment world generally pays attention; the letters the DLSE choses to publish provide general insight into the DLSE’s approach.

The employer here wanted to know the correct way to calculate the rate of pay for sick leave taken by commissioned employees.  The  statute provides three alternative methods:

(1) Paid sick time for nonexempt employees shall be calculated in the same manner as the regular rate of pay for the workweek in which the employee uses paid sick time, whether or not the employee actually works overtime in that workweek.

(2) Paid sick time for nonexempt employees shall be calculated by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.

(3) Paid sick time for exempt employees shall be calculated in the same manner as the employer calculates wages for other forms of paid leave time. Labor Code section 246(K)(1)-(3).

Based on this plain language, it would seem reasonable for California employers to use the scheme of section 246(k)(3), as commissioned employees are often exempt from overtime under applicable standards. But the DLSE has a different view. The opinion letter explains that the term “exempt,” as used in in this section, refers only to those employees who satisfy both the salary and duties tests of the professional, executive, or administrative exemptions.  By this reading, the term “exempt” does not include those employees who are exempt from overtime under the outside sales exemption or commissioned employee exemption.

To qualify as an outside salesperson, an employee must “customarily and regularly work more than half the working time away from the employer’s place of business selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities.”  “Commissioned employees”  are persons working in the “Retail Industry” who earn more than one-half their compensation from commissions and whose  total compensation exceeds 1.5 times the minimum wage for each hour worked during the pay periodFor these employees, the DLSE says, employers should calculate sick time using one of the two sections applicable to nonexempt employees, even if they are actually exempt.

Workplace solution:  While the guidance may seem counter to the statutory language, the good news is that we now have some guidance.  To act consistently with the DLSE’s latest opinion, California employers should look to Labor Code sections 246(k)(1) or (2)—which articulate the two methods used to calculate sick pay for non-exempt employees—when determining how to appropriately calculate sick time for employees who receive commissions, even if they qualify as exempt from overtime as either an outside salesperson or a “commissioned employee.”

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

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

SIGNED

Pay Equity

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

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

Wage and Hour

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

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

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

Leaves of Absence

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

Background Checks

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

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

Transportation Network Companies

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

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

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

Discrimination/Harassment

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

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

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

Other Employee Protections

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

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

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

Industry Specific

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

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

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

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

Other

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

VETOED (i.e., “it coulda been worse”)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Workplace Solutions.

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