California Governor Jerry Brown has recently signed into law numerous bills that will impact California employers. The most notable new California statutes, and one new San Francisco Ordinance, are summarized below. All new laws are effective January 1, 2014 unless otherwise noted. Please contact our Employment Practice Group if you would like to discuss further details or adjusting your practices or policies in light of these new laws.
Minimum Wage Increasing to $10 by 2016
Since 2008, the minimum wage in California has been $8 per hour. AB 10 raises the minimum wage in California to $9 per hour effective July 1, 2014, and $10 per hour effective January 1, 2016. In addition to increasing the base pay for hourly employees, this will affect overtime rates, workers’ compensation insurance premiums, and the minimum salary necessary to support overtime exempt status. California Labor Code § 515 requires that most exempt workers earn a salary equal to at least two times the minimum wage at full time employment. Under this new minimum wage, these minimum salary requirements will increase to $37,440, effective July 2014, and $41,600, effective January 2016. Thus, employers should reexamine their classification of exempt workers in light of these new minimums.
Clarifying Definition of Sexual Harassment
The definition of hostile environment based upon sex has been revised to clarify that sexually harassing conduct need not be motivated by sexual desire. SB 292 amends the Fair Employment and Housing Act at California Government Code §12940(j)(4)(C). This amendment was aimed at overturning the California appellate court decision Kelley v. Conoco Companies, 196 Cal. App. 4th 191 (2011), where plaintiff’s sexual harassment claim failed absent a showing that defendant’s actions were an “expression of actual sexual desire or intent” or resulting from plaintiff’s “actual or perceived sexual orientation.”
Expanding Whistleblower Protections
Existing law prohibits employers from retaliating against an employee who divulges information to a government or law enforcement agency if the employee has reasonable cause to believe the disclosure demonstrates a violation of a state or federal statute or regulation. SB 496 expands this protection to include violations of local rules and regulations, and disclosures “to a person with authority over the employee or to another employee who has authority to investigate, discover, or correct the violation.” In addition, an employer cannot retaliate against an employee because the employer “believes that the employee disclosed or may disclose information.”
Active-Duty Military and Veterans are Protected Categories Under FEHA
AB 556 amends the California Fair Employment and Housing Act (“FEHA”) to include “military and veteran status” to the list of categories protected from employment discrimination. California Government Code § 12926(k) will define “military and veteran status” to include “a member or veteran of the United States Armed Forces, United States Armed Forces Reserve, the United States National Guard, and the California National Guard.” However, the new law provides an exception for a government employer to identify members of the military or veterans to apply veteran’s preference points to open civil service examinations as otherwise permitted by law.
Protecting Employee Victims of Domestic Violence, Sexual Assault, and Stalking
Existing California law protects victims of domestic violence or sexual assault by prohibiting employers from taking adverse action, discriminating, or retaliating against victims for taking time off to attend to issues arising out of the domestic violence or sexual assault. SB 400 extends these protections to victims of stalking. In addition, the new law requires employers to provide reasonable accommodations for victims, which may include implementation of safety measures or procedures. Finally, employers are prohibited from discharging, discriminating, or retaliating against an employee because they are a victim of domestic violence, sexual assault, or stalking.
Paid Family Leave Expanded
SB 770 expands the scope of the California Paid Family Leave law to provide partial replacement of wages for time off to care for seriously ill grandparents, grandchildren, siblings, or parents-in-law. Currently, the law only applies to time taken off to care for a seriously ill child, spouse, parent, domestic partner, or to bond with a child that was recently born, adopted, or taken into foster care. The new expansion goes into effect July 1, 2014.
Outdoor Workers May Seek Penalties for “Recovery Periods” to Cool Down
Currently, California Labor Code § 226.7 prohibits employers from requiring employees to work during meal or rest periods, and provides an employee one hour of pay as a penalty for not receiving meal or rest periods. SB 435 expands the Section 226.7 penalty to “recovery periods” otherwise mandated by law. The term “recovery periods” is defined by SB 435 as the “cool down period afforded an employee to prevent heat illness.” Employers should review California OSHA recommendations to preventing heat illness, which includes providing outdoor workers with at least five minutes to cool down in the shade when temperatures exceed 85 degrees Fahrenheit.
Increased Anti-Retaliation Protection
AB 263 and SB 666 roll out a handful of new anti-retaliation protections for employees as part of omnibus legislation. These protections include prohibiting employers from retaliating or taking adverse action against an employee or applicant for making a bona fide complaint or claim, including written or oral complaints for unpaid wages. They entitle such employees to reinstatement and reimbursement for lost wages, authorize civil penalties of up to $10,000, and waive exhaustion of administrative remedies for such actions. These new laws also prohibit any person acting on behalf of an employer from stopping an employee from disclosing information to the government, and expand prohibited actions to include preventing an employee from testifying before a public body. Violations are a misdemeanor and civil penalties up to $10,000 are authorized. Finally, employers are prohibited from taking adverse action against employees for updating their personal information, unless the changes are directly related to the job.
Increased Protection for Immigrant Workers
In addition to anti-retaliation protection, AB 263 and SB 666 also include provisions aimed at protecting immigrant workers. AB 263 bars employers from engaging in an “unfair immigration-related practice” (such as threatening to file a false police report or contact immigration authorities) in retaliation against employees for exercising their statutory rights. AB 263 also authorizes a civil action by the offended employee, creates a rebuttable presumption of retaliation for actions taken within 90 days of exercising the statutory right, and allows for suspension of certain business licenses for violations. In addition, SB 666 waives the exhaustion of administrative remedies. Under SB 666, a California attorney may be disciplined for reporting or threatening to report the immigration status of a witness, party, or their family members for exercising an employment-related right. Finally, AB 524 makes threats to report the immigration status of an individuals or their family a criminal extortion.
Ban on Government Employers Making Criminal History Inquiries
Starting July 1, 2014, state government employers will be barred from asking job applicants to disclose their conviction history until after the applicant has been deemed to meet minimum employment qualifications. This effectively means that inquiries into criminal history cannot be made at the initial job application stage. Positions required by law to have a criminal background check conducted are exempt from this requirement. AB 218’s stated purpose is to reduce barriers for prior criminal offenders, reduce recidivism, and increase economic stability. This law follows the recent U.S. Equal Employment Opportunity Commission guideline aimed to increase leniency in criminal history screenings by emphasizing a two-step process that first identifies qualified applicants and then checks their criminal background.
Limiting Employer’s Ability to Recover Attorney Fees in Nonpayment of Wages Cases
Under SB 462, employers may only recover attorneys’ fees and costs if the court finds that the employee acted in “bad faith” when bringing an action for nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions. Under existing law, attorneys’ fees were available for the prevailing party if any party requested attorneys’ fees at the start of the action. Although SB 462 does not define “bad faith,” it will make recovery of attorneys’ fees more difficult for employers even if they prevail.
San Francisco Employers Must Discuss Requests for Flexible Work Schedules
The San Francisco Board of Supervisors passed, and Mayor Ed Lee signed, the Family Friendly Workplace Ordinance, a measure that requires San Francisco employers to consider employees’ requests for flexible work arrangements to accommodate caregiver responsibilities. Eligible employees must have been employed for over six months and work over eight hours per week. Flexible work arrangements may be requested to care for (1) a child, (2) a parent over the age of 65, or (3) a spouse, domestic partner, child, parent, sibling, grandchild, or grandparent with a serious health condition. The law will only apply to businesses that regularly employ 20 or more employees, and requests must be made in writing and explain how the proposed arrangement would assist with caregiver responsibilities. Employers must meet with the employee within 21 days of the request, and within 21 days after the meeting must provide a written response confirming or denying the request. If the employer denies the request, it must provide a bona fide business reason and the text of the Ordinance, which allows 30 days for the employee to request reconsideration.