Governor Brown Signs Several Bills That Impact Employers

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

Governor Jerry Brown recently signed bills enacting several new employment statutes. Below are brief explanations of these new laws that affect employers in California. It should be noted that the Governor vetoed AB 1450, which would have made it unlawful to discriminate against applicants for employment based on their status as unemployed.

AB 1844—Limiting Access to Employee Social Media Accounts

On September 27, 2012, Governor Brown signed into law AB 1844, which prohibits employers from requiring or requesting the social media username or password of an employee or applicant. AB 1844 will be codified in the California Labor Code, starting in section 980, entitled “Employer Use of Social Media.”

Although not initially apparent, employers will greatly benefit from the new law. Because employers are prohibited from requesting access to their employees’ social media accounts, employers have a defense to potential allegations that an employer has a legal duty to monitor its employees’ social media content or is responsible for its employees’ online conduct.

Also applauded as a significant triumph for the privacy of employees and job applicants, the law protects these individuals from being forced to provide access to their social media accounts to their employers. The law also prohibits employers from discharging or disciplining employees for refusing to comply with a demand for access to their social media accounts.

Notably, the law does not preclude employers from requiring or requesting an employee’s username or password in order to access an employer-issued electronic device.

The Governor also signed SB 1349, which prohibits California public and private postsecondary educational institutions and their employees and representatives from requesting access to the social media accounts of a “student, prospective student, or student group.” 

Although several states have passed social media privacy laws for either the workplace or secondary educational institutions, California is the first state to pass a comprehensive social media privacy law that covers the workplace as well as universities and colleges.

SB 863Workers’ Compensation Reform Bill

On September 18, 2012, Governor Brown signed into law a bipartisan bill (SB 863) to reform California’s workers’ compensation law. The new law promises to reduce costs to employers, which have been seeing sharp increases in insurance rates over the past four years, while providing faster and increased benefits to injured workers.

The new law, which will be effective for injuries occurring on or after January 1, 2013, will provide injured workers with an increase of nearly 30 percent in permanent disability rates.

The reforms dramatically affect medical providers by changing how medical bills will be handled. Disputed medical bills will be resolved by an independent bill reviewer whose decision will be final, similar to binding arbitration, as opposed to being litigated before the Workers’ Compensation Appeals Board.

Under the new law, compensation for permanent impairment for injuries like insomnia and mental health problems that arise as the result of a physical injury has been eliminated. With regard to treatment, the new law places limits on chiropractors who will not be able to act as an injured worker’s treating physician once the maximum number (24 visits per year) of chiropractic treatments has been exhausted. 

By establishing a binding, independent review system to resolve medical treatment and billing disputes, the timeline for injured workers to receive treatment and final adjudication of their claims is expected to move much faster—from years to months.

For California employers, which have seen workers’ compensation insurance rates increase in the past two years from $14.8 billion to $19 billion, a reduction in rates is a welcomed relief.

AB 1964—Religious Clothing and Grooming Practices Are Protected from Discrimination

On September 8, 2012, Governor Brown signed into law AB 1964, the Religious Freedom Act of 2012, which amends Section 12926 of the California Government Code. This new law enhances the protections for employees against religious discrimination by, among other things, strengthening the definition of what constitutes an undue hardship.

The existing law protects individuals from employment discrimination based on race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, and sexual orientation.

The new law, which will take effect on January 1, 2013, expands the definition of “religious creed” to include religious dress and grooming practices as part of an individual’s religious observance or belief. “Religious dress practice” will be construed broadly to include “wearing or carrying of religious clothing, head or face covering, jewelry, artifacts, and any other item that is part of the observance by an individual of his or her religious creed.” Religious grooming practice includes all forms of head, facial, and body hair that is likewise part of observing an individual’s religious creed.

Employers have been required to reasonably accommodate the religious belief or observance of an individual unless the accommodation would be an undue hardship on the conduct of business of the employer. AB 1964 provides that an undue hardship requires a “significant difficulty or expense” as opposed to the “de minimis” standard under federal law. Under AB 1964, for an employer to show it is unable to reasonably accommodate the religious belief or observance without undue hardship on the conduct of its business, the employer must demonstrate that it has explored any available reasonable means of accommodating the religious belief or observance such as excusing the employee from the duties that conflict with his or her religious belief or permitting those duties to be performed at another time or by another person. Additionally, the law makes it clear that an accommodation that would require the individual to be segregated from the public or other employees would not be considered reasonable.

While employers have always needed to take requests for religious accommodation seriously, they will want to ensure that they carefully consider each request in light of the new heightened standards.

AB 340—Pension Reform for Public Employees

AB 340 is a bipartisan bill that aims to end pension abuses such as “double-dipping” and “spiking” of retirement rates. It will also require public employees to contribute more and retire later.

Although many of the provisions will only affect newly-hired employees, some of the provisions will affect all employees regardless of their hire or retirement date. One such provision relates to the purchase of Additional Retirement Credit (ARC), which will be prohibited as or January 1, 2013.

AB 1775—Wage Garnishment

Under federal law, the amount of earnings that may be subject to garnishment cannot exceed 25 percent of the individual’s weekly disposable earnings or the amount by which the individual’s disposable earnings for the week exceed 30 times the federal minimum hourly wage (currently $7.25).

AB 1775 both defines disposable income as the portion of an individual’s income that remains after deducting all amounts required to be withheld by law and reduces the amount that can be garnished by prohibiting the amount of the garnishment from exceeding the lesser of 25 percent of weekly disposable income or the amount in excess of 40 times the state minimum hourly wage (currently $8.00).

AB 2386Breastfeeding

AB 2386 amends the California Fair Employment and Housing Act’s (FEHA) protection against sex discrimination to include breastfeeding and medical conditions related to breastfeeding. Under FEHA, “sex” was defined as gender, pregnancy, childbirth, and medical conditions related to pregnancy or childbirth. This law supplements Labor Code sections 1030 through 1033, which require accommodation of lactating employees by prohibiting discrimination or retaliation against employees who express milk at work.

AB 1744Temporary Services Employers—New Itemized Wage Statement and Written Notice Requirements

AB 1744 amends the law regarding employers providing wage statements to employees to specify that temporary services employers provide itemized statements that include the rate of pay and total hours worked for each assignment. The wage statement must also include the name, address, and telephone number of the entity for whom the employee will perform work.

AB 1794Information Sharing Under the Unemployment Insurance Code

Under AB 1794, the Employment Development Department (EDD) will be authorized to share new employee information that it requires from employers, with the Joint Enforcement Strike Taskforce on the Underground Economy, the Contractors' State License Board, and the State Compensation Insurance Fund, to ensure that employers and contractors are obtaining adequate workers’ compensation insurance coverage for their employees.

AB 2103—Employers and Nonexempt Employees Cannot Agree to a Fixed Salary that Includes Overtime

The California Labor Code requires the payment of overtime to nonexempt employees who work over eight hours per day or 40 hours per week. However, in 2011 a California court of appeal upheld an explicit mutual wage agreement, which established in advance, a nonexempt employee’s overtime compensation and included it in the employee’s salary. Under AB 2103, such agreements would be invalid and any salary paid to nonexempt employees would be considered payment only for non-overtime hours.

SB 1255—Wage Statement Violations, Injury Defined

SB 1255 defines what constitutes injury for the purpose of a violation of Labor Code section 226, which requires employers to provide itemized wage statements and allows employees who suffer injury as a result of a knowing and intentional failure of the employer to recover damages. The employee is deemed to have suffered injury if the employer fails to provide a wage statement or fails to provide accurate and complete information such that the employee cannot promptly determine from the wage statement the following: (a) the amount of gross or net wages paid during the pay period; (b) the deduction that the employer made from gross wages to determine net wages paid during that pay period; (c) the name and address of the employer; (d) the employee’s name; and (e) the employee identification number or only the last four digits of the employee’s social security number.

The law also clarifies that an isolated or unintentional payroll error due to clerical or inadvertent mistake does not constitute a “knowing and intentional failure” on the part of the employer.

AB 2675—Exemption from Written Commission Contracts

California Labor Code sections 2751 and 2752 require that, as of January 1, 2013, employers provide written contracts containing specific information to employees who are paid commissions. AB 2675, which responds to concerns that such contracts are overly burdensome in temporary incentive programs (like those used for car dealerships), creates an exemption in Labor Code section 2751 for “temporary, variable incentive payments that increase, but do not decrease, payment under the written contract.”

AB 2674Inspection of Employee Personnel Files

Currently, Labor Code section 1198.5 provides that an employee has the right to inspect the personnel records that his or her employer maintains related to the employee’s performance or any grievance involving the employee. Some of the logistical issues regarding inspection of personnel records are addressed by AB 2674.

Under the new law, both current and former employees have the right to inspect their personnel files. Also, the employer must permit the inspection no later than 30 days after receiving a written request. If requested, the employer is required to provide copies of the records at a charge not to exceed the actual cost of reproduction (and postage, if requested by a former employee). The law specifies that current employees are to be permitted to inspect the records where the employee works, while former employees may inspect the records at the site where the records are stored.

The law also requires that personnel records be maintained for a minimum of three years after termination of the employment. The law requires that employers comply with one request per year for former employees and no more than 50 requests per month for current employees. The right to inspect is suspended if the employee has brought a lawsuit against the employer related to personnel matters. The law does not apply if the employee is covered by a collective bargaining agreement that provides for hours, wages, and working conditions, a procedure for copying and inspection of personnel records, and a regular rate of pay not less than 30 percent more than the state minimum wage.

Employers that do not timely comply with the provisions of this law are liable to the employee or the Labor Commissioner for a penalty of $750, and injunctive relief and attorneys’ fees to the employee. The law also amends the requirements of Labor Code section 226(a) to allow for computer-generated wage statements to suffice as a “copy” of the wage statement that the employer must maintain for a minimum of three years.

AB 2492—Changes to California False Claims Act Expand Whistleblower Protections

On September 27, 2012, Governor Brown signed AB 2492 amending the California False Claims Act (CFCA) to align with the federal False Claims Act. The CFCA applies to persons who knowingly make false claims for money, property, or services to the state.

The bill adds whistleblower protections that are expanded to include not only employees but also contractors and agents. It also increases civil penalties for false claims against the state from a range of $5,000-$10,500 to $5,500-$11,000. Whistleblowers can recover legal fees and costs. The amended statute now allows for the potential recovery of a reduced award even if the whistleblower planned or initiated the violation.

Under the new law, which goes into effect on January 1, 2013, defendants can recover attorneys’ fees if the defendant prevails and the court finds that the case was clearly frivolous.

AB 2396Infants in the Entertainment Industry

It is prohibited to employ infants younger than one month on a motion picture set or on location unless a prescribed certification is made by a physician and surgeon who is board certified in pediatrics. AB 2396 provides that the requirement of medical certification must be met before a temporary permit for employment may be issued for the infant.

SB 1381Change of Term from “Mental Retardation” to “Intellectual Disability”

SB 1381 changes the term “mental retardation” to “intellectual disability” in various California statutes, including under the definition of “mental disability” in the Fair Employment and Housing Act.

SB 1370Prevailing Wage Rate Requirements To Be Posted on the Department of Industrial Relations Website

SB 1370 requires the Director of Industrial Relations (DIR) to post a list of every California Code section and the language therein that relates to prevailing wage rate requirements for workers employed in a public work project on the DIR’s website on or before June 1, 2013. The DIR will update the list on February 1, annually.

SB 1186Access Lawsuits Under the Americans with Disabilities Act

SB 1186, signed by Governor Brown on September 19, 2012, seeks to limit frivolous Americans with Disabilities Act (ADA) access lawsuits in California and expand access to businesses for those with disabilities. The new law requires that at least 30 days prior to filing a lawsuit for lack of access, a notice be sent to the business, alerting the owner of a potential violation or infraction. The new law also prohibits “demand for money” letters that propose to drop the lawsuit in exchange for a monetary payment. 

In addition, the law requires landlords to disclose whether their buildings or properties are state certified and in compliance with ADA laws. The new law also significantly reduces damages against business owners who correct alleged violations within 30 to 60 days of receiving a complaint.

SB 1038Elimination of the Fair Employment and Housing Commission

SB 1038 eliminates the Fair Employment and Housing Commission and transfers its duties to a new Fair Employment and Housing Council within the Department of Fair Employment and Housing (DFEH). It also allows the DFEH to file cases directly in court, after requiring all parties to undergo free mandatory dispute resolution. Further, it authorizes courts to award the DFEH reasonable attorneys’ fees and costs if successful, to be put into a special fund to offset costs of the department.


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.

© Ogletree, Deakins, Nash, Smoak & Stewart, P.C. | Attorney Advertising

Written by:

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

Ogletree, Deakins, Nash, Smoak & Stewart, P.C. on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.