Seyfarth Synopsis: Dominating this spring’s planting of proposed employment-related legislation are bills aimed at ending sexual harassment and promoting gender equity. Among the secondary crops are bills regarding accommodation, leave, criminal history, and wage and hour law. It threatens to be another bitter fall harvest for California’s employer community.

California legislators stormed into the second half of the 2017-18 legislative session, introducing over 2,000 bills by the February 16 bill introduction deadline. With Spring upon us, one must ponder what L&E-related bills planted thus far will grow into by the time of the legislative harvest this fall. By that time some will have died on the vine in the summer heat, and some, fully ripened, will go to the Governor. Will the Governor, among the closing acts of his term, approve or reject them?

Meanwhile, the newly planted bills will get a week to rest as legislators head for Spring Break today, March 22. The Legislature reconvenes on April 2 for committee hearings and amendments. June 1 is the deadline for legislation to pass out of its house of origin. Stay tuned for more in-depth analyses of the proposed bills as the session continues.

Sexual Harassment

No fewer than ten bills address the issue of sexual harassment. Some are merely spot bills, while others are more developed. Because you all have day jobs, we have read the bills so you won’t have to. A brief summary of each follows. Contact us if you want to know more. Or even just to vent.

AB 1867 would require employers with 50 or more employees to retain records of all internal employee sexual harassment complaints for ten years, and would allow the Department of Fair Employment and Housing (DFEH) to seek an order compelling non-compliant employers to do so.

SB 1300 would amend the Fair Employment and Housing Act (FEHA) to (1) absolve a plaintiff who alleges that his/her employer failed to take all reasonable steps necessary to prevent discrimination and harassment from occurring from proving that sexual harassment or discrimination actually occurred, (2) prohibit release of claims under FEHA in exchange for a raise or a bonus or as a condition of employment or continued employment, and (3) require employers, regardless of size, to provide two hours of sexual harassment prevention training within 6 months of hire and every two years thereafter to all employees—not just supervisors.

SB 1343, which closely resembles SB 1300, would require employers with five or more employees to provide at least two hours of sexual harassment training to all employees by 2020 and then once every two years thereafter. SB 1343 would also require the DFEH to produce and publish a two-hour video training course that employers may utilize.

SB 224 would extend liability for claims of sexual harassment where a professional relationship exists between a complainant and an elected official, lobbyist, director, or producer. AB 2338 would require talent agencies to provide to employees and artists, and the Labor Commissioner to provide minors and their parents, training and materials on sexual harassment prevention, retaliation, nutrition, reporting resources, and eating disorders.

Assembly Member Gonzalez-Fletcher introduced a package of spot bills (to which substance will later be added) targeting “forced arbitration agreements” and increasing protections for sexual harassment victims. AB 3080 would prohibit (1) requiring employees to agree to mandatory arbitration of any future claims related to sexual harassment, sexual harassment, or sexual assault as a condition of employment and (2) non-disclosure provisions in any settlement agreement. AB 3081 would create a presumption that an employee has been retaliated against if any adverse job action occurs against that employee within 90 days of making a sexual harassment claim, and would extend current sexual harassment training requirements to employers with 25 or more employees. AB 3082 would create a statewide protocol for public agencies to follow when In Home Support Service (IHSS) workers encounter harassment and sexual harassment prevention training for IHSS workers and clients. AB 2079—soon to be named the “Janitor Survivor Empowerment Act”—would enact specific harassment training rules for the janitorial service industry. AB 2079 builds upon AB 1978—the Property Services Workers Protection Act, effective July 1, 2018—which established requirements to combat wage theft and sexual harassment for the janitorial industry.

AB 1761 would require hotels to (1) provide employees with a free “panic button” to call for help when working alone in a guest room, (2) maintain a list of all guests accused of violence or sexual harassment for five years from the date of the accusation and decline service for three years to any guest on that list when the accusation is supported by a sworn statement, and (3) post on the back of each guestroom door a statement that the law protects hotel employees from violent assault and sexual harassment.

SB 1038 would impose personal liability under FEHA on an employee who retaliates by terminating or otherwise discriminating against a person who has filed a complaint or opposed any prohibited practice, regardless of whether the employer knew or should have known of that employee’s conduct. (Personal liability already exists for harassment, but not for retaliation.)

AB 2366 would extend existing law, which already protects employees who take time off work related to their being a victim of domestic violence, sexual assault, and stalking. AB 2366 would also protect employees who take time off because an immediate family member has been such a victim. AB 2366 would also add sexual harassment to the list of reasons for which this protection applies.

AB 2770 addresses the apprehension that harassment complaints and employer responses might trigger defamation suits. AB 2770 creates a “privilege” for complaints of sexual harassment by an employee to an employer based upon credible evidence, for subsequent communications by the employer to “interested persons” and witnesses during an investigation, for statements made to prospective employers as to whether an employee would be rehired, and for determinations that the former employee had engaged in sexual harassment. The California Chamber of Commerce has sponsored this bill.

AB 1870 would extend the time an employee has to file a DFEH administrative claim (including, but not limited to, a sexual harassment claim). The current deadline is one year from the alleged incident. AB 1870 would make it three years! In a similar bill, AB 2946 would extend the time to file a complaint with the DLSE from six months to three years from the date of the violation. This bill would also amend California’s whistleblower provision to authorize a court to award reasonable attorney’s fees to a prevailing plaintiff.

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

SB 820, the “Stand Together Against Non-Disclosure” (STAND) Act, would prohibit provisions in settlement agreements entered into on or after January 1, 2019 that require the facts of the case to be kept confidential, except where the claimant requested the provision, in cases involving sexual assault, sexual harassment, and sex discrimination. SB 820 would allow settlement amounts to be kept private. The bill is sponsored by the Consumer Attorneys of California and the California Women’s Law Center.

AB 3109 would void any contract or settlement agreement entered into on or after January 1, 2019 that waives a party’s free speech and petition rights, meaning one that would limit a party’s ability to make any written or oral statement before or in connection with an issue before a legislative, executive, or judicial proceeding, or make any written or oral statement in a place open to the public or a public forum in connection with an issue of public interest. The bill would also prohibit contracts or settlement agreements that restrict a party’s rights to seek employment or reemployment in any lawful occupation or industry.

Pay Equity

SB 1284 is another effort to mandate annual reporting of pay data. It follows last year’s vetoed AB 2019 attempt at a pay data report, though it more closely resembles last year’s failed revised federal EEO-1 report. SB 1284 would require employers with 100 or more employees to report pay data to the Department of Industrial Relations on or before September 30, 2019 and on or before September 30 each year thereafter. The report is to include the number of employees by race, ethnicity, and sex; all levels of officials and managers; professionals; technicians; sales workers; administrative support workers; craft workers; operatives; laborers and helpers; and service workers; and each employee’s total earnings for a 12-month period. Non-compliant employers would be subject to a $500 civil penalty. In contrast, last year’s AB 1209 would have required California employers with 500 or more employees to gather information on pay differences between male and female exempt employees and male and female board members and report the information annually to the Secretary of State for publishing (i.e., public shaming).

Wage/Hour

Pay Statements: SB 1252 would grant employees the right “to receive” a copy (not just inspect) their pay statements. AB 2223 would provide employers the option to provide itemized pay statements on a monthly basis in addition to the currently required semi-monthly basis or at the time wages are paid. Conversely, AB 2613 would impose penalties of $100 for each initial violation plus $100 for each subsequent calendar day, up to seven days, and more than double for subsequent violations, payable to the affected employees, on employers who violate Labor Code provisions requiring payment of wages twice per month on designated paydays, and once per month for exempt employees.

Flexible Work Schedules: AB 2482 would allow non-exempt employees working for private employers and not subject to collective bargaining agreements to request a flexible work schedule to work ten hours per day within a 40-hour workweek without overtime for the 9th and 10th hours, as long as the employee does not work more than 40 hours in the workweek.

Contractor Liability: AB 1565 is an urgency statute that would take effect immediately upon receiving the Governor’s signature. AB 1565 would repeal the express provision that relieved direct contractors for liability for anything other than unpaid wages and fringe or other benefit payments or contributions including interest owed. The law currently extends liability in construction contracts for any debt owed for labor to a wage claimant incurred by any subcontractor acting under, by, or for the direct contractor or the owner.

PAGA: AB 2016 would require that the employee’s required written PAGA notice to the employer include a more in-depth statement of facts, legal contentions, and authorities supporting each allegation, and include an estimate of the number of current and former employees against whom the alleged violations were committed and on whose behalf relief is sought. AB 2016 would also prescribe specified notice procedures if the employee or employee representative seeks relief on behalf of ten or more employees. The bill would exclude health and safety violations from PAGA’s right-to-cure provisions, increase the time the employer has to cure violations from 33 to 65 calendar days, and provide an employee may be awarded civil penalties based only on a violation actually suffered by the employee. (In sum, a valiant effort to provide employers with some modicum of due process in PAGA case, but it doesn’t stand a chance.)

Accommodations

Lactation: AB 1976 would clarify existing law so that employers must make reasonable efforts to provide a room or location for lactation, other than a bathroom. This bill cleared its first hurdle—the Assembly Labor and Employment Committee—by receiving unanimous approval on March 14. SB 937 would require even more: a lactation room must be safe, clean, and free of toxic or hazardous materials, must contain a surface to place a breast pump and personal items, must contain a place to sit, and must have access to electricity. SB 937 would also require employers to develop and implement a new lactation accommodation policy. The policy must describe an employee’s right to a lactation accommodation, how to request an accommodation, the employer’s obligation to provide accommodation, and the employee’s right to file a request with the Labor Commissioner. Employers would be required to respond to an employee’s accommodation request within five days and provide a written response if the request is denied, and maintain accommodation request records for three years. SB 937 would make employers with fewer than five employees eligible for an undue hardship exemption from the room or location requirement. The bill would also charge the DLSE with the responsibility of creating a model lactation policy and request form and making it available to employers on the DLSE website.

Marijuana: About a dozen states now protect medical cannabis users from employment discrimination. California, meanwhile, has permitted employers to enforce policies against the use of cannabis, which remains illegal under federal law. AB 2069 would change that. AB 2069 would prohibit employers from refusing to hire, taking adverse action against, or terminating an employee based on testing positive for cannabis if the employee is a qualified patient with an identification card or their status as one. The bill would permit employers to take corrective action against an employee who is impaired while on the job or on the premises, and would not apply to employers who would lose a monetary or licensing benefit under federal law if they hired or retained such an employee.

Sick & Other Leaves

AB 2841 would increase an employer’s alternate sick leave accrual method from 24 hours by the 120th calendar day of employment to 40 hours (or 5 days) of accrued sick leave or paid time off by the 200th calendar day of employment. But an employee’s total sick leave accrual would not need to exceed 80 hours (or 10 days). An employer would be able to limit the amount sick leave carried over to the following year to 40 hours or 5 days. This increase would apply to IHSS providers beginning January 1, 2026.

AB 2587 would remove an employer’s ability to require an employee to take up to two weeks of earned but unused vacation before the employee receives family temporary disability insurance benefits under the paid family leave program to care for a seriously ill family member or to bond with a minor child within one year of birth or placement during any 12-month period the employee is eligible for these benefits.

Criminal History

Following the state-wide Ban-the-Box law that went into effect on January 1, 2018, AB 2680 would require the California Department of Justice (DOJ) to create a standard consent form that employers must use when requesting that a job applicant consent to a DOJ criminal conviction history background check. Meanwhile, the “Increasing Access to Employment Act,” SB 1298, would limit the criminal history information the DOJ will provide employers to recent misdemeanors and felonies (within five years), and other offenses for which registration as a sex offender is required. The bill would also prohibit the disclosure of any convictions that have been dismissed, exonerations, or arrests that have been sealed.

SB 1412 would allow employers to inquire into a job applicant’s particular conviction, regardless of whether that conviction has been judicially dismissed or sealed, under these specified conditions: (1) the employer is required by state or federal law to obtain information about the particular conviction, (2) the job applicant would carry or use a firearm as part of the employment, (3) the job applicant with that particular conviction would be ineligible to hold the position sought, or (4) the employer is prohibited from hiring an applicant who has that particular conviction.

AB 2647 would prohibit evidence of a current or former employee’s criminal history from being admitted, under specified circumstances, in a civil action based on the current or former employee’s conduct against an employer, an employer’s agents, or an employer’s employees.

In a category all its own, yet still notable:

SB 954 would require an attorney representing a party in mediation to inform the client of the confidentiality restrictions related to mediation and obtain informed written consent that the client understands these restrictions before the client participates in the mediation or mediation consultation.

Workplace Solutions.

Don’t fret yet! Spring has only just sprung, and these bills all have a lot of growing to do (with some pruning for improvement?). Stay tuned … . We’re keeping our eyes and ears glued on the Capitol.

Seyfarth Synopsis: With the widespread use of direct deposit, the thought of an employee regularly reviewing wage statements may seem inconceivable. Still, employers must ensure that their wage statements strictly comply with California law, as even trivial, inadvertent failures to do so can lead to heavy penalties. We highlight here the information to include on wage statements while pointing out some of the legal landmines trod upon by unwary employers.

Labor Code Section 226(a) Is Pain. Anyone Who Says Differently Is Selling Something.

Much like The Princess Bride, wage statements remain incredibly relevant. Section 226(a) forces employers to report nine items of information on each itemized statement that accompanies a payment of wages:

  1. gross wages earned by the employee,
  2. total hours worked by the employee,
  3. all applicable hourly rates during the pay period,
  4. all deductions taken from the employee’s wages,
  5. the net wages the employee earned,
  6. the pay period that the wage statement reflects, including the start and end date,
  7. the employee’s name and ID number (which can be the last four digits of the Social Security number (SSN)),
  8. the name and address of the legal employer, and
  9. if the employee earns a piece rate, then the number of piece-rate units earned and the applicable piece rate.

(Note that employers must also report available paid sick leave, either on the wage statement or on another document issued at the time of each wage payment.)

Avoiding the Fire Swamp: Wage Statement Line Mines to Avoid

  • If you use a payroll service to prepare the itemized wage statement, can you just “set it and forget it”? No, you can’t. Many excellent payroll services do get it just right. Meanwhile, other companies, operating nationally, have not always heeded each California-specific requirement. And they do not feel it’s their responsibility; it’s yours. They do not offer legal advice or indemnification to prevent and correct wage-statement mistakes. If you are the typical California employer, you are on your own to ensure that your wage statements are sufficiently “Cal-peculiar.”
  • If you create in-house wage statements, can you rely on your IT department to capture all the right payroll information in the format that HR has designed? No, you can’t. Many companies have lamented the discovery that the perfect wage statement designed by the legal or HR department did not emerge quite as envisioned once IT completed all the necessary programming. In the world of wage statements, for every ugly duckling turning into a swan there is a swan turning into an ugly duckling.
  • Many well-regarded employers—national behemoths and local start-ups alike—have tripped over innocent, often trivial wage-statement mistakes to fall into a pit of despair, where they’ve found themselves inundated by millions of dollars in penalties that bear little or no relation to any actual employee harm.
  • Among the alleged hyper-technical violations causing employers to spend heavily to defend themselves—and sometimes causing them to incur huge penalties—have been these:
    • Neglecting to total all the hours worked, even though the wage statement lists all the various types of hours individually.
    • Accidentally showing net wages as “zero” where an employee gets direct deposit.
    • Leaving off either the start or end date of the pay period.
    • Not showing the number of hours worked at each applicable rate.
    • Recording an incomplete employer name (“Summit” instead of “Summit Logistics, Inc.”).
    • Recording an incomplete employer address.
    • Failing to provide an employee ID number, or reporting a full nine-digit SSN instead of a four-digit SSN.
  • And remember to keep a copy of your wage statements (or to have the capability to recreate what the employees have received).

Reaching the Cliffs of Insanity: How Recent Case Law Intensifies the Impact of Section 226

By now, you surely ask, “Can it possibly get any worse than that?” Yes, it can. It has been bad enough, of course, that hyper-technical failures to show an item required by Section 226(a) could create large liability unrelated to any real harm. But, until recently, employers at least had the defense that no penalty was available absent a “knowing and intentional” violation, because that was what a plaintiff had to prove to get penalties ($50 or $100 per employee per pay period) under Section 226(e).

But now, if a recent Court of Appeal decision stands, that defense has been stripped away. Lopez v. Friant & Associates, LLC held that an employer whose wage statement failed to record an employee ID number could be subject to penalties under California’s Private Attorneys General Act (PAGA), even though the mistake was inadvertent and promptly corrected, and even though the employee admittedly suffered no injury by his employer reminding him each pay period what the last four digits of his SSN are. Lopez permitted the employee to sue for PAGA penalties without needing to prove the “injury” and “knowing and intentional” elements of a Section 226(e) claim. In short, Lopez is about as appealing as a Rodent Of Unusual Size (R.O.U.S.). See our detailed client alert on Lopez here.

Workplace Solutions: What Would Miracle Max Do

Though the exact impact of Lopez is unclear at this point (Lopez did not decide whether the extra PAGA penalty would be $250 per employee, under Section 226.3, or $100 per employee per pay period, under Section 2699(f)), Lopez rings the alarm that employers must proactively ensure that their itemized wage statements strictly comply with Section 226(a), lest they be the next to fall in the pit of despair. When is the last time you did your self-audit? Don’t hesitate to reach out to Seyfarth to help you ensure your wage statements are compliant.

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

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

Here’s what we’re watching:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Workplace Solutions

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

Edited by Colleen Regan.

Readers interested in developments concerning California’s unique Private Attorneys General Act (PAGA) may want to delve into a short thought piece (actually advice to the California Legislature) on a recently-proposed bill that would amend PAGA. To read that post, also available on Seyfarth’s Wage & Hour Litigation Blog, please click here or at the end of the synopsis.

Seyfarth Synopsis: Sometimes, plaintiffs’ attorneys have circumvented a key aspect of the California Legislature’s intent in enacting PAGA: limiting standing to pursue penalties for Labor Code violations to those employees who were actually harmed. Though a new California bill could halt those attempts, PAGA plaintiffs’ wiliness warrants a cautionary comment to the Legislature to ensure that any amendment furthers—rather than further frustrates—the original legislative intentContinue Reading

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

SIGNED BY THE GOVERNOR

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Workplace Solutions

Follow our Cal Pecs blog www.calpecs.com for more in-depth analysis of how some of the new legislation may affect employers doing business in California.

California State Capitol in Sacramento

The California Legislature adjourned Friday evening, September 11, to close its 2015-16 Legislative Session. It sent a number of employment-related bills to Governor Brown for consideration by his October 11, 2015 deadline to sign or veto the bills. Below is a summary of those before him for consideration, as well as some significant bills he has already signed or that did not make it to his desk. Which private labor and employment bills will the Governor sign into law? We’ll keep you updated…

PENDING BILLS:

Wage and Hour

Piece Rate. AB 1513, if approved, would make it even more difficult for California employers to pay employees on a piece-rate basis. The bill provides that employers must pay piece-rate employees for rest and recovery periods (and all other periods of “nonproductive” time) separately from (and in addition to) their piece-rate compensation. Specifically, the bill would require that employers pay the following rates for rest and recovery periods and “other nonproductive time.”

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

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

AB 1513 would add Section 226.2 to the Labor Code, and repeal Sections 77.7, 127.6, and 138.65 of the Labor Code. Enrolled on September 16, 2015.

Gender Wage Equality, SB 358, AB 1017, AB 1354. As we recently wrote, there are a few important gender pay equality bills making their way through the Legislature. First, representing what media observers call the nation’s most aggressive attempt yet to close the salary gap between men and women, SB 358 would substantially broaden California gender pay differential law. SB 358 (enrolled and presented to the Governor September 15) would prohibit an employer from paying any employee at a wage rate less than that paid to employees of the opposite sex for doing substantially similar work—when viewed as a composite of skill, effort, and responsibility—and require the employer to affirmatively demonstrate that a wage differential is based entirely and reasonably upon one or more enumerated factors, such as a seniority system, a merit system, a system that measures earnings by quantity or quality of production, or a bona fide factor that is not based on or derived from a sex-based differential in compensation and that is consistent with a business necessity. The bill contains anti-retaliation provisions and provides a private right of action to enforce its provisions.

AB 1017 (enrolled and presented to the Governor September 15) and AB 1354 (enrolled September 10). AB 1017 would add section 432.3 to the Labor Code, to prohibit an employer from seeking salary history information about an applicant for employment. AB 1354 would amend Government Code section 12990 to require, of each employer with over 100 employees that is or wishes to be a state contractor or subcontractor, a nondiscrimination program that includes policies and procedures designed to ensure equal employment opportunities for all applicants and employees, an analysis of employment selection procedures, and a workforce analysis that contains the total number of workers, the total wages, and the total hours worked annually, with a specific job category identified by worker race, ethnicity, and sex.

PAGA. AB 1506 would amend California’s Private Attorneys General Act (“PAGA”), now codified in Labor Code sections 2699, 2699.3, and 2699.5, to give employers a limited right to cure certain wage-statement violations, before an employee may bring a civil action under PAGA. Specifically an employer would be able to cure a violation of the requirement in Labor Code section 226(a) that an employer provide employees with the inclusive dates of the pay period and the name and address of the legal entity that is the employer. The employer would be allowed to take advantage of this provision only once for the same violation of the statute during each 12-month period. The bill’s provisions would become effective immediately upon the Governor’s signing the bill. Enrolled September 11, 2015.

Leaves of Absence

Kin Care. SB 579 would amend California’s Kin Care law (Labor Code Section 233) to tie its protections to the reasons and definition of “family member” specified in the Healthy Workplaces, Healthy Families Act of 2014. The bill also would expand coverage of California’s school activities leave (Family School Partnership Act, Labor Code Section 230.8) to include day care facilities and cover child care provider emergencies, and the finding, enrolling, or reenrolling of a child in a school or day care, and would extend protections to an employee who is a step-parent or foster parent or who stands in loco parentis to a child. Enrolled and presented to the Governor September 8, 2015.

CFRA Leave. SB 406 would extend the protections of the California Family Rights Act (“CFRA”), Government Code Section 12945.2, to care for grandparents, all children (removing any age restriction), and grandchildren, as well as siblings, domestic partners, and in-laws. Enrolled September 16, 2015.

Hiring/Applicants

Unemployed. Undeterred by the Governor’s 2014 veto of similar legislation in AB 2271, AB 676 was introduced and made its way to the Governor’s desk. The bill would add section 432.4 to the Labor Code, beginning July 1, 2016 to prohibit employers from publishing an announcement for a job that states or indicates an unemployed person is not eligible for the job, and from asking applicants to disclose, orally or in writing, the applicant’s current employment status. Enrolled and presented to the Governor September 16, 2015.

Public Employees. AB 883 would add section 432.6 to the Labor Code to prohibit a state or local agency from discriminating against current or former public employees in publishing job advertisements, in establishing qualifications for job eligibility, and in making adverse employment decisions. The bill would also prohibit persons who operate job posting websites from publishing any job advertisement or announcement that indicates the applicant must not be a current or former public employee. The current version of the bill removes private employers from its scope and removes damages and penalty recovery provisions. Enrolled September 14, 2015.

Annual E-Verify Bill. AB 622 would add section 2814 to the Labor Code to prohibit an employer from using E-Verify to check the employment authorization status of an existing employee or an applicant who has not received an offer of employment, except as required by federal law or as a condition of receiving federal funds. The bill would subject each employer that uses E-Verify in violation of this new section to $10,000 per violation. Enrolled and presented to the Governor September 16, 2015.

Other

Employer Liability: Employee Family Member Protected Complaints & Labor Contractor Joint Liability. AB 1509 would amend Labor Code sections 98.6, 1102.5, and 6310, to make it unlawful for an employer to retaliate against an employee for being a family member of an employee who has, or is perceived to have, engaged in activities protected under those Labor Code sections. The bill would also amend Labor Code section 2810.3, which was added to the Labor Code January 1, 2015 to impose joint liability on client employers for employees supplied by a labor contractor (our analysis of that law is here), to exclude from that law client employers that use Public Utilities Commission-permitted third-party household goods carriers, as specified. Enrolled and presented to Governor September 16, 2015.

Expansion of Labor Commissioner Enforcement Authority. AB 970 would amend Labor Code sections 558, 1197, and 1197.1 to authorize the Labor Commissioner to enforce local laws regarding overtime and minimum wage provisions and to issue citations and penalties for violations, provided the local entity has not already cited the employer for the same violation. The bill would also authorize the Labor Commissioner to issue citations and penalties to employers who violate the expense reimbursement provisions of Labor Code section 2802. Enrolled and presented to the Governor September 15, 2015.

Arbitration and Pre-Employment Waiver Restrictions. As we recently wrote, AB 465 would add section 925 to the Labor Code to (i) prohibit companies from conditioning employment offers (or renewals) on the waiver of any Labor Code-related right, (ii) require that any waiver of Labor Code protections be knowing, voluntary, and in writing, (iii) deem any waiver of Labor Code rights conditioned on employment to be “involuntary, unconscionable, against public policy, and unenforceable,” (iv) prohibit retaliation against any person who refuses to waive Labor Code-related rights, and (v) authorize an attorneys’ fees recovery for a plaintiff who enforces rights under the newly created section 925. Enrolled and presented to the Governor September 3, 2015.

Athletic trainers. AB 161 would make it unlawful and an unfair business practice for any person to use the title of athletic trainer, unless the trainer is certified by the Board of Certification and has completed specified educational or training requirements. Exempt from these provisions are persons who have worked as athletic trainers in California for a period of 20 consecutive years prior to January 1, 2016. AB161 would add sections 18898 and 18899 to the Business and Professions Code. Enrolled and presented to the Governor September 16, 2015.

SIGNED BY THE GOVERNOR

Paid Sick Leave Amendments. AB 304. Read our detailed analysis of this legislation and its effect on the Healthy Workplaces, Healthy Families Act of 2014 provisions it amended (Labor Code sections 245.5, 246, 247.5). The bill was signed by the Governor July 13, 2015, and became effective on that date, as Chapter 67 of the Statutes of 2015. AB 11, which would have included in-home support services under the definition of “employees” under the Healthy Workplaces, Healthy Families Act, did not make it out of the Assembly.

Accommodation Request as Protected Activity. AB 987 was intended to overturn any contrary interpretation in Rope v. Auto-Chlor Sys. of Washington, Inc. (2013) 220 Cal. App. 4th 635 that an accommodation request is not a protected activity. By amending Government Code section 12940, the Legislature intended to clarify that a request for reasonable accommodation based on religion or disability constitutes protected activity. With the amendments, the statute, effective January 1, 2016, will expressly prohibit retaliation and discrimination against a person for requesting accommodation, regardless of whether the request is granted. Signed by the Governor on July 16, 2015. Chapter 122 of the Statutes 2015.

Professional Sports Team Cheerleaders as Employees. AB 202 requires California-based professional major and minor league baseball, basketball, football, ice hockey, and soccer teams to classify and treat cheerleaders who perform during those teams’ exhibitions, events, or games as employees and not independent contractors. Adds section 2754 to the Labor Code. Signed by the Governor on July 15, 2015. Chapter 102 of the Statutes 2015.

90-Day Retention of Grocery Workers Following Change of Ownership. AB 359 and AB 897. AB 359 would require a “successor grocery store employer” to retain the current grocery workers for 90 days upon the “change in control” of a grocery store. It also imposes specific requirements on the incumbent grocery store. Look for a separate blog devoted to this important piece of legislation for the grocery industry on www.calpecs.com. Adds §§ 2500-2522 to the Labor Code. Signed by the Governor on August 17, 2015. Chapter 21 of the Statutes 2015.

Governor Brown noted in his signing message an ambiguity in how the law applies if an incumbent grocery employer has ceased operations, and noted the author and sponsor have committed to clarify that the law would not apply to a grocery store that has ceased operations for six months or more. On August 20, Assembly Member Gonzalez gutted and amended AB 897, which previously related to court records, to amend provisions that will be put in place by AB 359 on January 1, 2016 to exclude from the definition of “grocery establishment” a retail store that has ceased operations for six months or more. AB 897 was presented to the Governor on September 15.

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

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

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

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

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

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

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

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

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

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

Workplace Solutions

We will continue to monitor and report on these potential sources of annoyance for California employers, as well as any other significant legislative developments of interest. Follow our Cal Pecs blog www.calpecs.com for more in-depth analysis of how some of the new legislation may affect employers doing business in California.

Defense and attack .fatBy David Kadue

The traditional posture of California employers apprehensive about “gotcha” wage and hour claims is to hunker down and wait for the next lawsuit. But a few brave souls have taken the offensive. We celebrate two examples here. We cannot guarantee the success of their efforts, but we applaud their courage.

Declaratory relief action against California Labor Commissioner

One annoying peculiarity of California employment law is the Bluford doctrine, announced in a 2013 Court of Appeal decision called Bluford v. Safeway Inc. The Bluford case announced that truck drivers—already paid handsomely by mileage rates and by hourly rates for specified tasks and situations—were entitled to additional, separate pay for each rest period, under a notion that “employees must be compensated for each hour worked at either [1] the legal minimum wage or [2] the contractual hourly rate.” The court found it immaterial that the truck drivers earned, on an hourly average, far more than the minimum wage. Although Bluford was a controversial decision, the California Supreme Court declined to grant the employer’s petition for review.

OK. Fair (or unfair) enough. Then came the California Labor Commissioner and the Division of Labor Standards Enforcement, to rub salt in the Bluford wound. The DLSE determined that employers who pay on a piece-rate basis not only must separately pay for rest periods, but also must pay for those periods at a rate higher than the minimum wage or a contractual wage. According to the DLSE, an employer must pay piece-rate workers for rest periods at a rate equal to their average hourly piece-earning rate (which would vary on a continuous basis and which could greatly exceed the minimum wage). The DLSE announced this determination in a November 2013 internal memorandum, developed without the benefit of a rule-making process. The resulting “underground regulation” robs piece-rate paying employers of the certainty of paying rest periods at a fixed, pre-determined hourly rate.

Certain agricultural employers, heavily reliant on piece-rate labor, got mad as heck and decided not to take it anymore. In April 2015, in a case entitled Ventura County Agricultural Association v. Su, employer associations sued the government. They brought a petition for writ of mandate and a complaint for declaratory and injunctive relief in Sacramento County Superior Court. They argue that the DLSE has issued an unlawful regulation and one that is contrary to Bluford. We wish them well.

Making a federal case out of compelling a plaintiff to arbitrate PAGA claims Continue Reading Sticking up for Their Rights: Employers Taking the Offensive

April the first, Fool's day, on table calendarBy our source in Sacramento

Emergency legislation promises to revitalize the California economy and place our state in the forefront of jurisdictions promoting economic growth and employment opportunity.

The California’s Open for Business—Really!—Act (“COBRA”), AB 666, effective April 1, works the following reforms in California employment law.

PAGA repeal. Article I of COBRA repeals the Private Attorneys General Act of 2004. The legislative finding reports that PAGA, during its first ten years, did little more than enrich opportunistic plaintiffs’ counsel by creating collateral settlement leverage in wage and hour class actions.

Other wage and hour reform: Systematic Labor Code amendments advance a new general principle that pay practices that are lawful under federal law are also lawful in California, absent express statutory language stating a clear intent to deviate from the employment law followed in America generally. Under COBRA, judges no longer can invent special rules to burden California employers. The Legislature has thus restored California to the national fold with respect to a business’s use of piece rates, commission plans, temporary employment agencies, independent contractor relationships, and other traditional methods of securing services.

Litigation reform: Employees suing employers must now make a written monetary demand before they sue. Plaintiffs’ lawyers cannot recover attorney’s fees or costs unless the final outcome of the case is more favorable to the employee than the amount of the initial demand. And defendants filing summary judgment motions can now do so with 28 days’ notice (as is often the case in federal courts), rather than the excessive 75 days’ notice that California now requires.

Leave law reform: COBRA repeals California’s new mandatory paid sick leave act, and preempts municipal ordinances that require paid sick leave.

In his signing statement, Governor Jerry Brown praised the Legislature’s historic bipartisan accomplishment: “When we got to talking about this, everyone realized that we were tired of California being the laughing stock of the nation. No prudent business was even thinking about starting or expanding operations here with all the crazy labor laws we’ve created. They were just driving up costs and impairing efficiency while encouraging shake-down ‘gotcha’ lawsuits. Now we can truly welcome the businesses that create jobs for California families.”

Governor Brown continued: “We finally realized that our labor law has been prescriptive without being clear, mandatory without accounting for how working relationships vary, and onerous to employers while not producing significant benefits for workers. Enough already!”

If you would like to discuss this exciting new development, then please contact your favorite Seyfarth lawyer.

Or you might skip that step because you know that any news about California actually reducing burdens on employers would have to be an April Fool’s joke.

Edited by Chelsea Mesa