Employment Law | 2016 Legislative Update – Part 1

Employment Law | 2016 Legislative Update – Part 1

Employment Law | The beginning of a new year is an important time for business owners and employers. With each new year comes new laws and changes to existing employment-related requirements that can affect whether or not your business is in compliance with California state law. Carefully prepared by attorneys Jerry W. Pearson and Jefferson X. Eberhardt, this two-part 2016 Employment Law Legislative Update addresses new and amended labor laws that could dramatically impact your business in the new year. Part One will address legislative updates including to changes to piece-rate compensation, prohibitions to gender-based pay differentials and modifications to wage garnishment restrictions. Part Two of the update will outline the cases that dramatically changed California’s legal landscape in 2015.

Unless specified, the following list of new legislation goes went into effect on January 1, 2016.


Paid Sick Leave Law Is Amended

The amendments to the law include a clarification as to who is a covered worker; alternative accrual and payment methods; and a grandfather clause protecting employers that already provided paid sick leave prior to January 1, 2015 (AB 304).

E-Verify Use Is Restricted

This law expands the definition of an “unlawful employment practice” to prohibit an employer or any other person or entity from using the E-Verify system at a time or in a manner not required by a specified federal law or not authorized by a federal agency memorandum of understanding to check the employment authorization status of an existing employee or an applicant who has not received an offer of employment, except as required by federal law or as a condition of receiving federal funds. The law also requires an employer that uses the E-Verify system to provide to the affected employee any notification issued by the Social Security Administration or the United States Department of Homeland Security containing information specific to the employee’s E-Verify case or any tentative non-confirmation notice. There is a $10,000 penalty for each violation (AB 622).

Grocery Workers Protections Clarified

This law amends newly enacted AB 359 to provide that “grocery establishment” as defined in the new protections for grocery workers affected by a change in control does not include an establishment that has ceased operations for six months or more (AB 897).

Labor Commissioner’s Enforcement Capabilities Expanded

This law authorizes the Labor Commissioner to investigate and enforce local overtime and minimum wage laws and to issue citations and penalties for violations, except when the local entity has already cited the employer for the same violation. The law also authorizes the Labor Commissioner to issue citations and penalties to employers that violate the expense reimbursement provisions of Labor Code Section 2802 (SB 970).

PAGA Cure Period Provided

This law, which became effective immediately, amends the Private Attorneys General Act (“PAGA”) to provide an employer with the right to cure a violation of the requirement that an employer provides its employees with the inclusive dates of the pay period and the name and address of the employer before an employee may bring a civil action under PAGA. An employer can utilize this cure provision only once in a 12-month period. The law also provides a cure period to an employer that has not received notice of such a wage statement violation (AB 1506).

Retaliation Against Family Members Of Whistleblowers Prohibited

This law prohibits employers from retaliating against an employee who is a family member of an employee who has or is perceived to have engaged in protected conduct or made a protected complaint (such as whistleblowing). Additionally, the law excludes certain entities, such as certain household goods carriers, from the imposition of joint liability on client employers for all workers supplied by a labor contractor (AB 1509).

Piece-Rate Compensation Requirements Changed

This law requires employers to pay piece-rate employees for rest and recovery periods and “other nonproductive time” at or above specified minimum hourly rates, separately from any piece-rate compensation. It also defines “other nonproductive time” as time under the employer’s control, exclusive of rest and recovery periods, that is not directly related to the activity being compensated on a piece-rate basis. Additionally, employers must specify the following on a piece-rate employee’s itemized wage statement: the total hours of compensable rest and recovery periods, the rate of compensation paid for those periods, and the gross  wages paid for those periods during the pay period (AB 1513).

Meal Period Waiver Rules For Health Care Employees Clarified

This law clarifies that special meal period waiver rules for employees in the health care industry remain in force, despite the uncertainty caused by a recent court of appeal opinion (SB 327).

Gender-Based “Fair Pay Act” Enacted

This law amends Labor Code § 1197.5 (SB 358):

Broader Prohibition of Gender Wage Differentials Enacted

Currently, Section 1197.5 prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work. The amendment revises this prohibition, instead prohibiting an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex for “substantially similar work.” “Substantially similar work” is determined by analyzing a composite of skill, effort, and responsibility, while considering whether the work is being performed under similar working conditions. SB 358 does not require such “substantially similar work” to be “in the same establishment” of the employer as previously required by Section 1197.5.

Employer Required To Demonstrate Exemptions

Section 1197.5 automatically exempted certain gender wage differentials related to payments based on a seniority system, a merit system, quantity or quality of production, or any bona fide factor other than sex. SB 358 amends Section 1197.5 to require that an employer must affirmatively demonstrate that: (i) a wage differential is based on a seniority system, a merit system, quantity or quality of production, or any bona fide factor other than sex; (ii) each factor relied upon is applied reasonably; and (iii) these factors account for the entire wage differential.

Anti-Retaliation Protections Introduced

SB 358 added a provision to Section 1197.5 that prohibits an employer from discharging, discriminating or retaliating against an employee by reason of any action taken by the employee to invoke or assist in any manner the enforcement of this legislation. This new provision authorizes an employee to disclose the employee’s own wages, discuss the wages of others, inquire about another employee’s wages, or aid or encourage other employees to exercise their rights under this legislation. If an employee is discharged, discriminated or retaliated against in the terms and conditions of his or her employment because the employee engaged in any such protected conduct, the employee may seek reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer as well as other appropriate equitable relief.

Recordkeeping Duration Lengthened

SB 358 also increases the duration of recordkeeping requirements of wages, wage rates, job classifications, and other terms and conditions of employment from two years to three years.

Wage Garnishment Restrictions Modified

This law reduces the prohibited amount of an employee’s weekly earnings subject to levy under an earnings withholding order from exceeding the lesser of: (i) 25% of the employee’s weekly earnings or (ii) 50% of the amount by which the employee’s earnings for the week exceed 40 times the minimum wage (SB 501).

School Activity And Sick Leave Protections Expanded

This law provides additional circumstances under which employees may take school activities leave. California school activities leave now includes the addressing of a child care provider emergency, a school emergency, finding, enrolling, and reenrolling a child in a school or with a child care provider. The pool of eligible employees is expanded to include employees who are stepparents, foster parents or stand in loco parentis to a child. The law also requires employers to permit employees to use sick leave for the purposes specified in the Healthy Workplaces, Healthy Families Act of 2014 and prohibits an employer from denying or retaliating against such employee for using sick leave for such purposes (SB 579).

Labor Commissioner Enforcement Authority Broadened, Liability For Managing Agents Expanded

This law expands the Labor Commissioner’s authority with regard to the enforcement of judgments. For example, the law authorizes the Labor Commissioner to issue a lien on an employer’s property for amounts owed to an employee, such as unpaid wages, and other compensation, penalties, and interest. The law also provides that an owner, director, officer or managing agent of the employer may be held personally liable for violations of any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission (SB 588).

New Protected Classes Added To Unruh Civil Rights Act

This law expands the protections of the Unruh Civil Rights Act by prohibiting discrimination by business establishments based on citizenship, primary language, or immigration status (SB 600).

 Click here to read part two of the 2016 Employment Law Update

It is important to note that every employment law situation is unique and this Employment Law Legislative Update is not a replacement for legal counsel.  If you have questions on how these changes may affect your business, contact the Employment Law Department at Young Wooldridge, LLP.  

Photo Credit: Jeff’s Canon via Flickr 

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