13 Changes To California Law In 2014: What Employers Need To Know

by Perkins Coie

Every new year brings employment law changes for California’s employers and, while the Affordable Care Act has taken the spotlight for 2014, a vast array of employment laws deserve special attention from California employers for 2014.  We have attempted to briefly summarize these laws in this Employment Law Alert. 

Minimum Wage Increase – Effective July 1, 2014

On July 1, 2014, the hourly minimum wage in California for nonexempt employees increases from $8.00 to $9.00 an hour.  On January 1, 2016, the minimum wage is slated to increase to $10.00 an hour.  Please note that San Francisco employers are subject to the city’s Minimum Wage Ordinance which increases the hourly minimum wage to $10.74 an hour effective January 1, 2014.

Sexual Harassment Claims Do Not Require “Sexual Desire”

California’s Fair Employment and Housing Act (FEHA) now expressly provides that employees who assert claims under the FEHA for sexual harassment need not allege or otherwise show that the harassment is motivated by sexual desire.  Senate Bill (SB) 292 arose in an effort to rectify what the California legislature saw as a deficiency in the California Court of Appeals decision in Kelley v. Conco Cos., 196 Cal. App. 4th 191 (2011), which held that a plaintiff must prove that the harasser was motivated by sexual desire in order to establish a same-gender sexual harassment claim.

Military and Veteran Status Now Protected Category Under the FEHA

California’s FEHA has been amended to add “military or veteran status” as a protected class.  This amendment is intended to enhance certain federal and state laws which already provide protections for such individuals.  “Military and veteran status” is defined as “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.”  The new law, however, provides an exception for an inquiry by an employer regarding military or veteran status for the purposes of awarding veterans’ preference points.  Notably, California has previously amended the FEHA to protect against discrimination related to genetic information, gender identity, and gender expression.

Domestic Workers, Including Household Employees, Now Entitled to Overtime

This new legislation is referred to as the “Domestic Workers Bill of Rights” which took effect on January 1, 2014 and sunsets on January 1, 2017 and requires overtime pay for domestic employees, including childcare providers such as nannies, caregivers for the disabled or elderly, house cleaners, and personal attendants.  As such, employers, including private individuals employing domestic workers, must pay overtime at a rate of one-and-a-half times the employee’s hourly rate for all hours worked in excess of nine hours a day or 45 hours a week.  “Domestic work” does not include care of persons in facilities providing board or lodging in addition to medical, nursing, convalescent, aged, or child care, including, but not limited to, residential care facilities for the elderly.  Certain individuals are excluded from the overtime obligations, including babysitters.  Specifically, and while not exhaustive of the individuals excluded, the new law does not apply to any of the following:  workers who are relatives of the employer (grandparent, parent, spouse, sibling, child, or adopted child), any person who performs services through the In-Home Supportive Services program, and any person under 18 years of age who is employed as a babysitter for a minor child of the domestic work employer in the employer’s home.  However, if a person who performs babysitting services on an irregular and intermittent basis and does a significant amount of work other than supervising, feeding, and dressing a child, then the overtime exemption shall not apply and the person shall be considered a domestic work employee entitled to overtime. 

Limit on Prevailing Right to Attorneys’ Fees by an Employer in Wage and Hour Lawsuits

In wage and hour lawsuits, California Labor Code Section 218.5 previously granted prevailing employers the right to recover attorneys’ fees where a statute or an agreement allowed for recovery.  Under the new amendment, prevailing employers can recover their attorneys’ fees and costs only if they can prove that the employee brought the wage law action in “bad faith,” a clearly heightened standard that arguably significantly diminishes the ability of employers to recovery attorneys’ fees even when prevailing on such claims.

California Labor Commissioner Now Has Expanded Authority to Award Liquidated Damages for Minimum Wage Violations

An employer who fails to pay an employee the required minimum wage is now subject to civil penalties and restitution, as well as liquidated damages to the affected employee.  The new law (Assembly Bill (AB) 442) expands the jurisdiction of the California Labor Commissioner to recover liquidated damages from an employer based on a citation issued by the California Labor Commissioner for minimum wage violations without having a civil action filed to recover any such applicable liquidated damages.  Thus, the affected employee may be entitled to liquidated damages equal to the amount of unpaid wages owed plus interest.

Expanding Whistleblower Protections

Current California Labor Code Section 1102.5(a) 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 is not permitted to retaliate against an employee because the employer “believes that the employee disclosed or may disclose information.”

Additional Protections for Victims of Domestic Violence, Sexual Assault, and Stalking

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 from the domestic violence or sexual assault.  SB 400 extends these protections to victims of stalking.  Interestingly, the new law requires employers to provide reasonable accommodations for victims, which may include implementation of safety measures or procedures.  However, such accommodation only needs to be made available to known domestic violence and sexual assault victims.  Additionally, employers are prohibited from discharging, discriminating against, or retaliating against an employee because he/she is a victim of stalking, as well as a victim of domestic violence or sexual assault.

Paid Family Leave Expanded

Effective July 1, 2014, SB 770 expands coverage 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.  The law previously only applied 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. 

Limits on Criminal Background Checks

California Labor Code Section 432.7 prohibits employers from asking employees or applicants about arrests that did not result in a conviction (except for those currently pending where the individual is still awaiting trial, or participating in a pretrial or post-trial diversion program).  The bill, SB 530, now prohibits most employers from asking applicants to disclose, or using as a factor in employment decisions, including denying employment, any information concerning a conviction that has been judicially expunged, sealed, or dismissed.

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 and can only do so after the applicant has been deemed to meet minimum employment qualifications.  Ultimately, this means that inquiries into criminal history cannot be made at the initial job application stage.  Exempt from this requirement are positions required by law to have a criminal background check conducted, such as law enforcement positions or positions where the applicant will work with children, the elderly, or the disabled.  AB 218’s stated purpose is to reduce barriers for prior criminal offenders, reduce recidivism, and increase economic stability.

Greater Protections for Immigrant Workers

AB 263, SB 666, and AB 524 include protections for immigrant workers.  AB 263 prohibits an employer from engaging in “unfair immigration-related practice” when an employee asserts protected rights under the Labor Code.  Specifically, an employer may not threaten to contact, or contact, immigration authorities because an employee complained that he/she was paid less than the minimum wage.  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.  Under SB 666, a California attorney may be disciplined for reporting or threatening to report the immigration status of a witness, party, or his/her family members for exercising an employment-related right.  Finally, AB 524 provides that a person may be guilty of criminal extortion if he/she threatens to report the immigration status or suspected immigration status of an individual or his/her family members.

San Francisco Employers Required to Address Employee Requests for Flexible Work Schedules

The Family Friendly Workplace Ordinance requires San Francisco employers of 20 or more employees to consider employees’ requests for flexible work arrangements to accommodate caregiver responsibilities.  To be eligible, employees must have been employed for six months or more and work at least eight hours per week.  Flexible work arrangements may be requested to care for (1) a child under the age of 18, (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.  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 cite to the text of the ordinance, which permits 30 days for the employee to request reconsideration.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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