California Legislative Update 2013

by Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

Governor Jerry Brown recently signed bills enacting several new employment statutes, marking the end of the California Legislature’s 2013 regular session. A brief summary of these new laws, along with links to the bills, can be found below.

Increase of Minimum Wage to $10 per Hour by 2016 (AB 10)

On September 25, 2013, Governor Brown signed AB 10 into law, raising California’s minimum wage to $10 per hour over a two-year period. The first increase will go into effect on July 1, 2014, raising the minimum wage to $9 per hour. The jump to $10 per hour will take place on January 1, 2016. For more on implications for employers, read our recent blog post on the topic.

Temporary Leave of Absence for Volunteer Firefighters (AB 11)

AB 11 requires that employers with 50 or more employees permit an employee who performs emergency duty as a volunteer firefighter, reserve peace officer, or as emergency rescue personnel to take a temporary leave of absence for the purpose of engaging in fire, law enforcement, or emergency rescue training.

Domestic Work Employees (AB 241)

On September 26, 2013, Governor Brown signed AB 241, which gives certain domestic workers, such as home health care workers and nannies, overtime pay for working over nine hours in a day or over 45 hours in a week.

The law, which goes into effect on January 1, 2014, defines “domestic work” as “services related to the care of persons in private households or maintenance of private households or their premises.” It also states that the “[d]omestic work occupations include childcare providers, caregivers of people with disabilities, sick, convalescing, or elderly persons, house cleaners, housekeepers, maids, and other household occupations.” The law excludes certain individuals, including casual babysitters who are hired on an intermittent basis.

Employment: Retaliation: Immigration-Related Practices (AB 263)

AB 263 adds a new section to the California Labor Code prohibiting specified “unfair immigration-related practices.” The new law prohibits an employer from retaliating or taking adverse action against any employee or applicant for employment because the employee or applicant has engaged in protected conduct. The bill also expands the protected conduct to include a written or oral complaint by an employee that he or she is owed unpaid wages. Under this bill, an employee who was retaliated against or otherwise was subjected to an adverse action is entitled to reinstatement and reimbursement for lost wages. A person who violates these provisions is subject to a civil penalty of up to $10,000 per violation. Under the bill, it is not necessary to exhaust administrative remedies or procedures in the enforcement of specified provisions. Because the willful refusal by an employer to reinstate or reimburse an employee who suffered a retaliatory action under these provisions would be a misdemeanor, the bill expands the scope of a crime and imposes a state-mandated local program. In addition, the bill allows a court to order the appropriate government agencies to suspend or revoke an offending employer’s business license.

Employees: Wages (AB 442)

Under AB 442, employers that pay employees less than the minimum wage will be subject to liquidated damages, in addition to other civil and criminal penalties, which the California Labor Commissioner can impose under current law.

Artistic Employment Contracts: Minors (AB 533)

Current law requires that the employer of a minor under contract as an actor, dancer, musician, comedian, singer, stunt-person, voice-over artist, or sports player set aside 15 percent of the minor’s gross earnings, as specified, and provides for the establishment of a trust for the purpose of preserving for the minor a portion of his or her gross earnings.

AB 533 exempts an employer of a minor under a contract for services as an extra, background performer, or in a similar capacity from this requirement.

Fair Employment and Housing Act: Military Veterans (AB 556)

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, signed by Governor Brown, adds “military and veteran status,” to the list of categories protected from employment discrimination under the Act. The law also provides an exemption for an inquiry by an employer regarding military or veteran status for the purpose of awarding a veteran’s preference as permitted by law.

Workers’ Compensation: Dependent Children (AB 607)

AB 607 eliminates the requirement that, in order to conclusively presume that children under 18 or certain adult children are wholly dependent for support on the deceased employee-parent, there not be a surviving totally dependent parent.

Emergency Medical Services: Civil Liability (AB 633)

Among other things, AB 633 prohibits employers from having a policy of prohibiting an employee from providing voluntary emergency medical services, including, but not limited to, cardiopulmonary resuscitation, in response to a medical emergency, except as specified. The bill states that these provisions do not impose any express or implied duty on an employer to train its employees regarding emergency medical services or cardiopulmonary resuscitation.

Workers’ Compensation: Professional Athletes (AB 1309)

AB 1309 changes California workers’ compensation law so that professional athletes who play for teams outside of California cannot bring claims for workers’ compensation for their cumulative trauma injury or occupational disease. The new law applies to professional athletes in the major and minor leagues of professional football, ice hockey, baseball, basketball, and soccer. The law applies retroactively to claims filed on or after September 15, 2013.

Prevailing Wages: Payroll Records (AB 1336)

AB 1336 changes the deadline for service of wage and penalty assessments by the California Labor Commissioner on public works projects to not later than 18 months after the filing of a valid notice of completion, or not later than 18 months after acceptance of the public work, whichever occurs last. It also modifies dates for filing enforcement actions by a joint labor-management committee, and the permissible payroll record redactions.

Committee on Labor and Employment: Employee Complaints: Final Orders (AB 1386)

AB 1386 provides that once a California Labor Commissioner order, decision, or award becomes final, a lien is created and the Labor Commissioner may record a certificate of lien, as specified, with the county recorder of any county in which the employer’s property may be located. The bill provides that the lien would continue on the employer’s real property until satisfied or released or for 10 years.

Car Washes (AB 1387)

AB 1387 increases an employer’s bond requirement amount from $15,000 to $150,000, but would exempt an employer from that requirement if the employer has a collective bargaining agreement in place that meets specified criteria.

Public Works: Charter Cities (SB 7)

Currently about 50 charter cities in California have provisions that exempt contractors from paying prevailing wages. Under SB 7, the state will withhold state funds from charter cities that exempt contractors from paying prevailing wages for local public works projects.

Personal Information: Privacy (SB 46)

Signed by the governor on September 27, 2013, SB 46 requires individuals and companies that maintain computerized data about their clients or customers to notify them if a security breach is detected.

Current law defines “personal information” for these purposes, to include an individual’s first name and last name, or first initial and last name, in combination with one or more designated data elements relating to, among other things, social security numbers, driver license numbers, financial accounts, and medical information.

The new law imposes additional requirements on the disclosure of a breach of the security of the system or data in situations where the breach involves personal information that would permit access to an online or email account. The new law goes into effect on January 1, 2014.

Hazardous Materials Management: Stationary Sources: Skilled and Trained Workforce (SB 54)

SB 54 requires an owner or operator of a stationary source that is engaged in certain activities with regard to petroleum and with one or more covered processes that is required to prepare and submit a risk management plan, when contracting for the performance of construction, alteration, demolition, installation, repair, or maintenance work at the stationary source, to require that its contractors and any subcontractors use a skilled and trained workforce to perform all onsite work within an apprenticeable occupation in the building and construction trades, including skilled journeypersons paid at least a rate equivalent to the applicable prevailing hourly wage rate. The governor’s signing message can be found here.

Farm Labor Contractors: Successors: Wages and Penalties (SB 168)

SB 168 amends the current law to clarify successor liability for farm labor contractors with regard to wages owed by a predecessor farm labor contractor. If certain conditions are met, farm labor contractors would be liable for wages and penalties owed by its predecessor and may face misdemeanor charges in certain circumstances.

Employment Protections: Time Off (SB 288)

SB 288 requires that leave be provided for certain employees who are victims of specified crimes so that they may appear in court to testify.

Employment: Sexual Harassment (SB 292)

On August 12, 2013, Governor Brown signed into law SB 292, which amends section 12940 of the California Fair Employment and Housing Act. The bill addresses the Kelley v. Conoco Companies decision and clarifies that an individual who sues for sexual harassment under state law need not prove that the sexually harassing conduct was motivated by sexual desire. 

Employee Wage Withholdings: Failure to Remit (SB 390)

Current law makes it a crime for an employer to fail to remit agreed-upon withholdings for health and welfare funds, pension funds, and various benefit plans. Under SB 390, it is also a crime punishable as either a felony or misdemeanor for an employer to fail to remit withholdings required by state, local, or federal law from an employee’s wages.

Public Works: Project Determinations: Wage and Penalty Assessments (SB 377)

SB 377 requires the director of the Department of Industrial Relations (DIR) to establish new processes for determining the existence of a public work, making the work subject to prevailing wage law, and for deciding administrative appeals from those determinations. The governor’s signing message can be found here

Compensation: Meal and Rest or Recovery Periods (SB 435)

SB 435 amends section 226.7 of the California Labor Code to require employees of piece rate workers to pay those employees for any meal or rest breaks, or recovery periods, and set the rate of pay for rest and recovery periods for piece rate workers. The employer must provide one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal or rest or recovery period is not provided. A “recovery period” is defined as a cool down period that is afforded to employees to prevent heat illness.

Limiting Attorneys’ Fees for Employers in Wage Cases (SB 462)

Governor Brown, on August 28, 2013, signed into law a measure (SB 462) limiting the ability of employers to obtain attorneys’ fees awards if they are the prevailing defendants in wage disputes.

SB 462 amends section 218.5 of the California Labor Code to provide that a prevailing employer may only recover attorneys’ fees if a trial court finds that the employee brought the wage action in bad faith. With this amendment, it will be even more difficult for a prevailing employer to recover attorneys’ fees in wage and hour actions in California. The statute goes into effect on January 1, 2014. For more on the implications for employers, visit our blog post on the topic.

Expansion of Paid Family Leave (SB 770)

SB 770 amends sections 2708, 3300, 3301, 3302, and 3303 of the Unemployment Insurance Code to expand the scope of the family temporary disability program (California Paid Family Leave) to include time off to care for a seriously ill grandparent, grandchild, sibling, or parent-in-law. The California Paid Family Leave program allows eligible employees to take up to six weeks of partially paid leave from their jobs each year. Previously, the program only covered workers who requested time off to care for a child, spouse, or registered domestic partner. The amended law goes into effect on July 1, 2014.

Public Works: Prevailing Wage Rates: Employer Payment Credits (SB 776)

On August 27, 2013, Governor Brown signed a bill (SB 776) that amends section 1773.1 of the California Labor Code to modify existing law concerning permissible credits employers may take against the obligation to pay the general prevailing rate of per diem wages for prevailing wage payments. The new law would also prohibit credit from being granted for employer payments made to monitor and enforce laws related to public works if those payments are not required by a collective bargaining agreement.

Patient Protection and Affordable Care Act (ACA) and Health Benefit Exchange (AB 362, AB 422, AB 1180, SB 28, SB 138, SB 161, SB 249, SB 332, SB 353, and SB 800)

On October 1, 2013, Governor Brown signed a series of bills implementing the Affordable Care Act. California also launched its health insurance marketplace called Covered California.

Vetoed by Governor

Evidentiary Privileges: Union Agent-Represented Worker Privilege (AB 729)

AB 729 would have amended the California Labor Code to provide that a union agent and a represented employee or represented former employee have a privilege to refuse to disclose any confidential communication between the employee or former employee and the union agent while the union agent was acting in his or her representative capacity, except as specified.

Fair Employment and Housing Act: Unlawful Practices (SB 655)

SB 655 would have codified the California Supreme Court’s decision in Harris v. City of Santa Monica (2013) on the mixed-motive defense applicable to discrimination claims brought under Fair Employment and Housing Act. This bill would have amended the California Government Code to provide that in a claim of an unlawful practice under Act, the employee prevails if he or she has proven that a protected characteristic was a substantial factor in the adverse employment action. The remedies available to the employee would have been limited, as provided, if the employer was able to prove as an affirmative defense that it would have taken the same adverse action against an employee based on lawful reasons.

Note: This article was published in the October 25, 2013 issue of the California eAuthority.

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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