This year has brought many significant changes that will impact all California employers. This annual report from Greenberg Glusker’s Employment Group summarizes some of the most important new federal and state legal developments that will affect California employers in the upcoming year. We look forward to working with you in 2014!
Increase in the Minimum Wage
California’s minimum wage will be increasing. AB 10 amends Labor Code Section 1182.12 and mandates a gradual increase in the state minimum wage over two phases. Beginning on July 1, 2014, the current minimum wage of $8 will be increased to $9 per hour. On January 1, 2016, the minimum wage will further increase to $10 per hour.
The minimum wage increase will not only raise regular and overtime wages, but it will also affect the classification standards of “overtime exempt” employees. Generally, exempt employees must be paid an annual salary that exceeds at least twice the minimum wage. Currently, that amounts to an annual salary of $33,280. Under the first minimum wage increase to $9 per hour, an employee must earn $37,440 annually in order to qualify for the exemption. Under the second increase to $10 per hour, the annual qualifying salary rises to $41,600.
Overtime Pay for Household Personal Attendants
For the first time in California, certain domestic employees classified as “personal attendants” will be eligible for overtime pay. Current California law provides that “personal attendants” who work in private households are fully exempt from overtime pay. “Personal attendants” are defined as any person employed in a private household to supervise, feed or dress a child or person whom by reason of advanced age, physical disability or mental deficiency, needs supervision.
Under the recently passed AB 241, commonly known as the Domestic Worker Bill of Rights (DWBR), employees classified as “domestic workers” and who meet the definition of “personal attendant” will be entitled to overtime pay at one and one-half the employee’s regular pay for working more than nine hours in a workday or more than 45 hours in a workweek. The DWBR is effective starting January 1, 2014, and is valid until January 1, 2017.
The DWBR does not apply to non-domestic work employees, including:
A caregiver who is the parent, grandparent, spouse, sibling, child, or legally adopted child of the employer;
Babysitters under the age of 18;
A casual babysitter, whose employment is irregular or intermittent, is not performed as a vocation, and who does not do a significant amount of work supervising, feeding, and dressing a child;
Any person employed by a licensed health facility, as defined in Health & Safety Code section 1250; and
Any person who is employed pursuant to a voucher issued through a regional center.
Currently under federal law, live-in domestic workers continue to be exempt from overtime. If such a domestic worker does not live-in, he or she remains entitled to overtime after 40 hours in a week.
Federal Fair Labor Standards Act Update
In addition to California’s DWBR, the U.S. Department of Labor (DOL) has revised the Fair Labor Standards Act (FLSA) to also expand certain domestic workers’ rights. Under the current FLSA, domestic workers that provide “companionship services” are exempt from minimum wage and overtime requirements. The exemption is only available to individuals, families, or households. Third party employers are not permitted to claim the exemption.
Effective January 1, 2015, the definition of exempt companionship service employees will be narrowed. The following workers will no longer be considered exempt “companionship service providers,” and will therefore be entitled to minimum wage and overtime benefits after 40 hours in a week:
Domestic workers who perform services primarily for the benefit of other members of the household, such as employees who make dinner for the entire family or who do the household laundry and cleaning; and
Workers who perform medical tasks which typically require training and are performed by medical personnel such as registered nurses, licensed practical nurses, or certified nursing assistants (although the classification is not based on the worker’s actual training or occupational title).
DOL Extends Definition of “Spouse” and “Marriage” to Same-Sex Marriages
Following the U.S. Supreme Court’s June 2013 rulings regarding the rights of same-sex couples, the U.S. Department of Labor (DOL) has provided guidance for interpreting the new rulings. The DOL states that for Title I of ERISA, the Internal Revenue Code, and related department regulations, the terms “spouse” and “marriage” should be read to include same-sex couples legally married in any state or foreign jurisdiction that recognizes such marriages, regardless of the married couples’ state of domicile. However, the terms "spouse" and "marriage," do not include individuals in a formal relationship such as a domestic partnership or a civil union.
The DOL has incorporated these expanded definitions into the Family and Medical Leave Act. Additional changes are also on the horizon which will likely impact the Health Insurance Portability and Accountability Act (HIPAA) and the Public Health Services Act.
New Restriction on Employers’ Ability to Obtain Attorney’s Fees
California employers have one more hurdle to overcome in obtaining attorney’s fees awards in wage-and-hour lawsuits. Under prior law, Labor Code Section 218.5 provided that the “prevailing party” (whether the employee or the employer) in an action for non-payment of wages, fringe benefits, or health and welfare or pension fund contributions was entitled to an award of reasonable attorney’s fees and costs if that party requested such fees upon initiation of the action. Newly enacted SB 462 amends the Labor Code to state that “if the prevailing party in the court action is not an employee, attorney’s fees and costs shall be awarded pursuant to this section only if the court finds that the employee brought the court action in bad faith.” (emphasis added). Thus, even if an employer prevails against an employee’s wage-and-hour suit, it cannot obtain attorney’s fees unless it can show that the employee filed the action in bad faith.
Expansion of California’s Paid Family Leave Program
Under California’s current Paid Family Leave Program (PFLP), eligible employees may receive partial wage replacement wages for up to six weeks of leave per year to care for a seriously ill child, spouse, registered domestic partner, parent, or to bond with a minor child within one year of birth. Effective on July 1, 2014, new legislation expands PFLP to include employees taking time off to care for seriously ill grandparents, grandchildren, siblings, and in-laws.
Expanded Protections for Service Persons and Veterans
Currently, the California Fair Employment and Housing Act (FEHA) protects and safeguards the right and opportunity of all persons to seek, obtain, and hold employment without discrimination or abridgment on account of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, or sexual orientation. AB 556 expands the FEHA protected categories to include military and veterans of the U.S. Armed Forces, U.S. Armed Forces Reserve, the U.S. National Guard, and the California National Guard. Employers are still allowed to use veteran status as a factor in employee selection or to give special consideration to Vietnam-era veterans.
Sexual Harassment Bill Clarifies the Role of “Sexual Desire”
California’s Fair Employment and Housing Act (FEHA) prohibits harassment and discrimination in employment because of sex and gender. Generally, the plaintiff in a sexual harassment case must establish that 1) he or she belongs to a protected group, 2) he or she was subject to unwelcomed sexual harassment, 3) the harassment is based on sex, 4) the harassment is sufficiently pervasive such that it alters the employment conditions and creates an abusive working environment, and 5) the harasser was the employer’s agent.
In 2011, in Kelley v. Conco Companies, 196 Cal. App. 4th 191 (2011), the Court of Appeals held that a plaintiff in a same-sex harassment case must also prove that the harasser held a sexual desire or interest in the plaintiff in order to survive summary judgment. The California legislature recently passed SB 292, which rejects the Kelly requirement. Under SB 292, sexually harassing conduct need not be motivated by sexual desire.
Expansion of Whistleblower Protections
Currently, the California Whistleblower Protection Act prohibits an employer from enforcing any policy preventing an employee from disclosing information to a government or law enforcement agency if the employee has reasonable cause to believe that the information discloses a violation of a state or federal law. Existing law also prohibits any employer from retaliating against an employee for disclosing such information or for refusing to participate in an activity that would result in a violation of or noncompliance with state or federal law.
SB 496 expands these provisions to prohibit an employer from enforcing any policy preventing an employee from disclosing information to a person with authority over the employee or to another employee who has authority to investigate, discover, or correct the violation or noncompliance.
The bill also prohibits an employer from retaliating against an employee because the employer believes that the employee disclosed, or may disclose, information to a government or law enforcement agency, or to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation or noncompliance.
Lastly, the bill also protects employees who provide information to, or testify before, any public body conducting an investigation, hearing, or inquiry, if the employee has reasonable cause to believe that the information discloses a violation or noncompliance with state or federal law.
Protection from Retaliation for Suspected Undocumented Workers
The California Legislature has recognized that wage theft is a serious and widespread problem that particularly impacts low-wage workers and immigrant communities. With that in mind, the Legislature passed AB 263, which provides expansive protections against wage theft, unfair immigration-related practices, and discrimination against employees who have engaged in protected conduct.
Under AB 263, protected conduct includes:
Filing a complaint or informing any person of an employer’s or other party’s alleged violation of the Labor Code or local ordinance, so long as the complaint or disclosure is made in good faith;
Seeking information regarding whether an employer or other party is in compliance with the Labor Code or local ordinance;
Assisting a person in understanding or asserting his or her rights under the Labor Code or local ordinance; and
Making a written or oral complaint by an employee that he or she is owed unpaid wages.
An employee who is retaliated against for engaging in the protected conduct above is entitled to reinstatement and reimbursement for lost wages. Any employer who violates these provisions is subject to a civil penalty of up to $10,000 per violation. And an employer who willfully refuses to reinstate or reimburse an employee who suffered a retaliatory action is criminally liable for a misdemeanor.
AB 263 also authorizes a civil action by an employee or other person who is the subject of an unfair immigration-related practice. An “unfair immigration-related practice” includes:
Requesting more or different documents than are required under federal law, or a refusal to honor documents tendered pursuant to federal law that on their face reasonably appear to be genuine;
Using the federal E-Verify system to check the employment authorization status of a person at a time or in a manner not required under federal law, or not authorized under any memorandum of understanding governing the use of the federal E-Verify system;
Threatening to file or the filing of a false police report; and
Threatening to contact or contacting immigration authorities.
Under AB 263, employees or applicants do not need to exhaust administrative remedies before exercising their rights. AB 263 also creates a rebuttable presumption that an adverse action taken within 90 days of the exercising of a protected right is committed for the purpose of, or with the intent of, retaliation.
Relaxation of Administrative Remedy Exhaustion Requirements
Under SB 666, it is no longer necessary to exhaust administrative remedies or procedures in order to bring a civil action under the Labor Code unless the particular Code section expressly requires it.
Additionally, business licensees regulated by the Labor Code may have their licenses suspended or revoked if the licensee has reported or threatened to report an employee’s suspected citizenship or immigration status to a federal, state, or local agency because the employee exercised a right under the Labor, Government, or Civil Code.
Similarly to AB 263, SB 666 prohibits an employer from taking any adverse action against any employee or applicant for employment because the employee or applicant has engaged in protected conduct, including a written or oral complaint by an employee that he or she is owed unpaid wages. An employer that violates the law is subject to a civil penalty of up to $10,000 per violation.
Expansion of Liquidated Damages Remedies for Minimum Wage Violations
In California, employers that pay wages that are below the state minimum wage are subject to civil penalties and are liable for restitution of wages. Under AB 442, employers may now also be liable for liquidated damages.
Expansion of Temporary Leave Protections for Emergency Duty Personnel
Under AB 11, employers of 50 or more must permit temporary leaves of absence for employees who perform emergency duties as a volunteer firefighter, reserve peace officer, or as emergency personnel. The temporary leave must be for the purpose of engaging in fire or law enforcement training. The temporary leave cannot exceed an aggregate of 14 days per calendar year.
An employee who is discharged or in any other manner discriminated against for taking the permissible time-off is entitled to reinstatement and reimbursement for lost wages and work benefits. In order to seek reimbursement and reinstatement, the employee must file a complaint with the Division of Labor Standards Enforcement.
Expansion of Protections for Volunteering During Medical Emergencies
Under current law, a person who, in good faith and not for compensation, renders emergency medical or nonmedical assistance at the scene of an emergency is generally not liable for civil damages resulting from any act or omission. Under AB 633, an employer is prohibited from enforcing any policy prohibiting an employee from voluntarily providing emergency medical services in response to a medical emergency. However, an employer may adopt and enforce a policy prohibiting an employee from performing emergency medical services on a person who has expressed the desire to forgo resuscitation or other medical interventions through any legally recognized means.
Protected Time-Off for Crime Victims
SB 288 prohibits employers from discharging or retaliating against an employee who is a crime victim for taking time off from work, upon the victim’s request, to appear in court to be heard at any proceeding related to the following offenses:
Vehicular manslaughter while intoxicated;
Felony child abuse likely to produce great bodily harm or a death;
Assault resulting in the death of a child under eight years of age;
Felony domestic violence;
Felony physical abuse of an elder or dependent adult;
Solicitation for murder;
A serious felony;
Hit-and-run causing death or injury;
Felony driving under the influence causing injury; and
In order to take the time-off, an employee must give the employer reasonable advance notice, unless notice is unfeasible. Employees who are discriminated or retaliated against by their employer for taking the time-off as described above are entitled to reinstatement and reimbursement for lost wages and work benefits. Any employer who willfully refuses to rehire, promote, or otherwise restore an employee who has been determined to be eligible for rehiring or promotion by a grievance procedure or hearing authorized by law is guilty of a misdemeanor.
Employers Are Prohibited from Inquiring into Judicially Dismissed Convictions
Under current law, employers are prohibited from asking an employment applicant for information concerning any arrest or detention that did not result in a conviction. Additionally, employers cannot use such information as a factor in determining any condition of employment.
SB 530 expands the applicant’s protection to prohibit employers from seeking, or from utilizing as a factor in determining any condition of employment, information concerning a conviction that has been judicially dismissed or ordered sealed. However, an employer may seek such information in the following circumstances:
The employer is required by law to obtain information regarding a conviction of an applicant;
The applicant would be required to possess or use a firearm in the course of his or her employment;
An individual who has been convicted of a crime is prohibited by law from holding the position sought by the applicant, regardless of whether that conviction has been expunged, judicially ordered sealed, statutorily eradicated, or judicially dismissed following probation; or
The employer is prohibited by law from hiring an applicant who has been convicted of a crime.
San Francisco’s New Right to Flexible Workplace Arrangements
Effective January 1, 2014, under the newly enacted San Francisco Family Friendly Workplace Ordinance, employers with 20 or more employees must allow eligible employees to request a flexible or predictable working arrangement to assist with caregiving responsibilities. Eligible employees are those who are employed in San Francisco, have been employed for six months or more by the current employer, and work at least eight hours per week on a regular basis.
Eligible employees may request a flexible working arrangement to assist with care for:
A child or children under the age of eighteen for whom the employee has assumed parental responsibility;
A person or persons with a serious health condition in a family relationship with the employee; or
A parent (age 65 or older) of the employee.
A flexible working arrangement may include modified work schedule, changes in start and/or end times for work, part-time employment, job sharing arrangements, working from home, telecommuting, reduction or change in work duties, or part-year employment.
An employer must meet with an employee who made a request within 21 days from the date of the request. The employer must then respond to an employee’s request within 21 days of that meeting. An employer who denies a request must explain the denial in a written response that sets out a bona fide business reason for the denial and provides the employee with notice of the right to request reconsideration.