As we welcome a new year, business owners and employers should also be prepared to welcome a number of significant new laws that could affect whether or not their business is in compliance with California State Law. This legislative update will address new labor laws and changes to existing laws that that could impact California businesses in 2018, including expanded protections to parental leave, new restrictions on applicant inquiries, continuing increases to the minimum wage and more.
It is important to note that every employment law situation is unique and this labor law update is not a replacement for legal counsel. If you have questions on how these changes may impact your business, contact an employment law attorney.
Unless otherwise specified, the following legislative changes went into effect January 1, 2018.
Parental Leave Protections Expanded (SB 63)
This new law expands parental leave protections to individuals who work for employers with at least 20 employees. Under the new law, employers with at least 20 employees must allow an employee who has more than 12 months of service with the employer to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement. The new law expands the protections afforded under the existing law, which had previously applied only to employers with 50 or more employees.
Statewide “Ban-the-Box” Legislation (AB 1008)
Known as “Ban-the-Box” legislation in reference to the box applicants are asked to check if they have any prior criminal convictions, the new law prohibits employers from inquiring about or considering a job applicant’s conviction history prior to an offer of employment. Specifically, the new law amends California’s Fair Employment and Fair Housing Act (“FEHA”) by making it unlawful for employers in California with five or more employees to include on any application for employment any question that seeks the disclosure of an applicant’s conviction history; to inquire into or consider the conviction history of an applicant until that applicant has received a conditional offer; and, when conducting a conviction history background check, to consider, distribute, or disseminate information related to specified prior arrests, diversions, and convictions.
California Becomes a “Sanctuary State” (AB 450)
California Gov. Jerry Brown signed into law nearly a dozen new immigration-related bills, including AB 450, which prohibits employers from cooperating with federal immigration authorities in the absence of a judicial warrant or court order. Among other things, the new law:
- Prohibits employers from voluntarily consenting to an immigration enforcement agent’s entering nonpublic areas of the workplace without a warrant;
- Prohibits employers from voluntarily consenting to an immigration enforcement agent’s accessing, reviewing or obtaining employment records without a subpoena or court order;
- Prohibits employers from verifying the employment eligibility of a current employee at a time or in a manner not required by federal law; and
- Requires employers to provide notice to current employees of an inspection of I-9 forms and other employment records by an immigration agency within 72 hours of receiving the federal notice of inspection.
- Penalties for failure to comply with the new law range from $2,000 to $10,000 per violation.
New Restrictions on Inquiries Into Applicant’s Salary History (AB 168)
This new statewide salary history inquiry law will largely restrict employers in the state from seeking and relying upon salary history information obtained from applicants during the hiring process. The law applies to all private and public sector employers and will prohibit employers from:
- relying on salary history as a factor in determining whether to offer employment to an applicant or what salary to offer; or
- seeking, orally or in writing or through an agent, salary history information about an applicant.
- The law will also require an employer, upon reasonable request by an applicant, to provide the pay scale for a position. The law further provides that if an applicant voluntarily and without prompting discloses salary history information to a prospective employer, that employer may then consider and/or rely on that voluntarily disclosed salary history information in determining the salary for that applicant. However, the law reiterates that, consistent with the state’s currently existing equal pay law, employers may not rely upon voluntarily disclosed prior salary, by itself, to justify any disparity in compensation.
Mandatory Training to Prevent Gender Identity Harassment (SB 396)
This law expands the scope of mandatory sexual harassment training employers must provide to their supervisory employees. Currently, FEHA requires employers with 50 or more employees to provide at least two hours of prescribed training and education regarding sexual harassment to all supervisory employees within six months of their assumption of a supervisory position and then once every two years thereafter. This new law expands the scope of FEHA’s requirements by mandating that the training must also cover harassment based on gender identity, gender expression, and sexual orientation. California employers also will be required to place in a prominent and accessible location in the workplace a new poster developed by the DFEH regarding transgender rights.
Employer Must Provide Assistance to Employees Injured by Domestic Terrorism (AB 44)
In instances in which the governor has declared a state of emergency in connection with an act of domestic terrorism, employers must provide immediate support to injured employees from a nurse case manager who will assist claimants to obtain medically necessary medical treatment. “Treatment” includes mental health treatment and counseling services for psychological injuries and post-traumatic stress disorder. Employers are also required to provide a prescribed notice to claimants.
Prohibitions Against Wage Discrimination Are Now Applicable to Public Sector Employees (AB 46)
The law allows public employees to pursue wage discrimination claims in court through the state’s Division of Labor Standards Enforcement (DLSE). Previously, only private-sector employees were allowed to press those claims under the California Equal Pay Act. AB 46 now prohibits an employer from paying any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, unless the employer demonstrates that one or more specific factors, reasonably applied, account for the entire wage differential. The law also prohibits employers from paying lower wages to employees of another race or ethnicity for substantially similar work.
Safety Training Required for Owners and Operators of “Stationary Source” Air Pollution Locations (AB 55)
On October 9, 2017, AB 55 was approved to amend the safety training required for owners and operators of “stationary source” air pollution. Prior to approval of AB 55, the Secretary for Environmental Protection was required to implement a unified hazardous waste and hazardous materials management regulatory program. The law required owners and operators of certain stationary sources, when contracting for the performance of construction, alteration, demolition, installation, repair, or maintenance work at one of these stationary sources, to require that its contractors and any subcontractors use a skilled and trained workforce, including skilled journeypersons, to perform all onsite work within an apprenticeable occupation in the building and construction trades. The law exempted an owner or operator from that requirement if the contract was awarded before January 1, 2014, unless the contract is extended or renewed after that date. To qualify as skilled journeyperson, workers were required to have at least 20 hours of approved advanced safety training, within the prior 2 years. Amongst other changes, AB 55 has changed the requirement to 20 hours of approved safety training within previous 3 years.
Businesses Required to Post Notice Regarding Human Trafficking Expanded
The list of businesses required to post information related to slave and human trafficking has expanded to hotels, motels, and bed and breakfast inns (not including personal residences).
Less Restrictions on Using Electronic Wireless Communications Devices While Driving
It is a crime to drive a motor vehicle while holding and operating a handheld wireless telephone or electronic wireless communications device. An electronic wireless communications device includes, but is not limited to, a broadband personal communication device, a specialized mobile radio device, a handheld device or laptop computer with mobile data access, a pager, or a two-way messaging device. While it is still a crime to operate a motor vehicle while holding a handheld wireless communications device, the new law removes a specialized mobile radio device and a two-way messaging device from the list of devices specifically included as an electronic wireless communications device.
IIPP Must be Provided Upon Request (AB 978)
Upon written request, employers are required to provide a copy of the written injury prevention program, free of charge, to a current employee, or his or her representative. Employers must comply with this request as soon as practicable, but no later than 10 business days from when the request is received.
Overtime Requirements for Agricultural Field Workers Phase-In (AB 1066) (Passed in 2016)
Beginning January 1, 2019, wage and hour laws pertaining to agricultural employees will begin to drastically change. This bill removes the exemption for agricultural employees regarding hours, meal breaks, and other working conditions, including specified wage requirements. Most notably, AB 1066 phases in overtime requirements for agricultural workers, over the course of 4 years, from 2019 to 2022. Beginning January 1, 2022, the bill will require any work performed by a person, employed in an agricultural occupation, in excess of 12 hours in one day to be compensated at the rate of no less than twice the employee’s regular rate of pay. Employers who employ 25 or fewer employees have an additional 3 years to comply with the phasing in of these overtime requirements. The modification schedule is as follows:
26 or more employees 25 or fewer employees
January 2019 January 2022
9.5 hours per day 9.5 hours per day
55 hours per week 55 hours per week
January 2020 January 2023
9 hours per day 9 hours per day
50 hours per week 50 hours per week
January 2021 January 2024
8.5 hours per day 8.5 hours per day
45 hours per week 45 hours per week
January 2022 January 2025
8 hours per day 8 hours per day
40 hours per week 40 hours per week
Healthcare Facilities Face Increased Fines for Discriminating or Retaliating Against Whistleblowers (AB 1102)
It is illegal to discriminate or retaliate against employees for filing a grievance, making a complaint, reporting to a facility, or participating or cooperating in an investigation or administrative proceeding. With the passing of AB 1102, health care industries found guilty of violating the foregoing provision are guilty of a misdemeanor punishable by a fine of $75,000, rather than $20,000 as in years prior.
Construction Contract Payments Must Be Posted by State Agencies (AB 1223)
The Department of General Services has been required to publish notice of progress payments made to prime contractors in the California State Contracts Register.
Notwithstanding construction contracts valued below $25,000, AB 1223 requires state agencies that maintain an internet website to post 1) the project for which the payment was made; 2) the name of the construction contractor or company paid; 3) the date the payment was made, or the date the state agency transmitted instructions to the controller or other payer to make the payment; 4) the payment application number or other identifying information; and 5) the amount of the payment. The aforementioned information should be posted within 10 days of making a construction contract payment.
Small Business Gender Discrimination in Services Compliance Act (AB 1615)
Discrimination based on sex is prohibited by both state and federal law. Additionally, the Unruh Civil Rights Act prohibits discrimination on a variety of personal characteristics including sex. Sex is defined to include pregnancy and childbirth. On those bases, businesses have long been prohibited from discriminating based on characteristics protected by the Unruh Civil Rights Act. AB 1615 enacts the Small Business Gender Discrimination in Services Compliance Act, and defines “gender discrimination in pricing services claim” as a claim in a civil action with respect to a business establishment, including, but not limited to, a claim brought under the Unruh Civil Rights Act or the Repeal Act of 1995, based on alleged price difference charged for services of similar or like kind against a person because of the person’s gender.
Original Contractor of Construction Projects Liable for Debt Owed to Wage Claimants (AB 1701)
All contracts entered into on or after January 1, 2018, require a direct contractor, making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other work, to assume, and be liable for, specified debt owed to a wage claimant that is incurred by a subcontractor, at any tier, acting under, by, or for the direct contractor for the wage claimant’s performance of labor included in the subject of the original contract. The Labor Commissioner is authorized to bring an action under specified statutes or in a civil action to enforce. The bill also authorizes third parties owed fringe or other benefits to bring a civil action to enforce the liability against a direct contractor under these provisions. The bill does not apply to any work being done by an employee of the state or any political subdivision of the state. Upon request from a direct contractor, subcontractors would be required to provide information regarding the subcontractor’s and third party’s work on the project. If the subcontractor fails to provide the requested information, the director contractor is permitted to withhold disputed sums.
State Agencies Hiring Interns and Student Assistants: Hiring Preference (AB 1840)
So long as the candidate is 26 years old or younger, employers hiring for internships and student assistant positions were required to give preference to persons who are, or have been, dependent children in foster care. AB 1840 expands the list of individuals given preference to include homeless and formerly incarcerated youth.
Digital Signatures (AB 2296)
AB 2296 clarifies that for the purposes of the Uniform Electronic Transaction Act, an electronic signature includes a digital signature. The bill also specifies that if a public entity elects to use a digital signature that meets the specified requirements, the signature has the same force and effect of a manual signature in any communication with the public entity.
Employment Protections: Victims of Domestic Violence, Sexual Assault, or Stalking (AB 2337)
California prohibits an employer from discharging, or in any manner discriminating or retaliating against an employee who is a victim of domestic violence, sexual assault, or stalking. Further, employers are prohibited from discharging, threatening with discharge, demoting, suspending, or in any manner discriminating or retaliating against in the terms and conditions of employment, because the employee has taken time off for those purposes. Employees subject to said discrimination are entitled to reinstatement, reimbursement for lost wages, work benefits, equitable relief, and is allowed to file a complaint with the DLSE. Effective January 1, 2018, employers are required to provide specific information in writing to new employees upon hire, and to other employees upon request about these rights. However, employers are not required to comply with the notice requirements until it is posted on the Commissioner’s website.
New Parent Leave Act for Small Employers (SB 63)
Effective January 1, 2018, California employers with 20-49 employees within a 75 mile radius are required to provide up to 12 weeks of job-protected unpaid leave to new parents for the purpose of bonding with a newborn child. The leave is provided under the same terms and conditions as apply for FMLA and CFRA. FMLA and CFRA apply to private employers with 50 or more employees within a 75-mile radius and to all size public employers. Parental leave is provided in addition to pregnancy disability leave under California Government Code section 12945.
Workplace Safety: Cleaning Product Data (SB 258)
Unlike cosmetics and food, cleaning products have not been required to disclose most of their ingredients. Now, cleaning products will be required to discuss the bulk of their ingredients, particularly chemicals of concern. Additionally, employers required to maintain safety data sheets must also make information available about certain consumer cleaning products.
Challenging a Labor Commissioner’s Decision Regarding Minimum Wage Violations Requires a Bond (AB 2899)
It is prohibited for an employer or other person acting either individually or as an officer, agent, or employee of another person, who pays or causes to be paid to any employee a wage less than the minimum fixed by applicable state or local law or an order of the Industrial Welfare Commission. Those who violate the provision is subject to a civil penalty, restitution of wages, liquidated damages payable to the employee.
Prior to AB 2899, a party contesting a citation was permitted to file a writ of mandate, with the appropriate Superior Court, within 45 days. AB 2899 requires a person contesting the Labor Commissioner’s ruling to post a bond with the Labor Commissioner in an amount equal to the unpaid wages assessed under the citation, excluding penalties. The bond must be issued in favor of the unpaid employees and ensure that the person seeking the writ makes prescribed payments pursuant to the proceedings. The proceeds of the bond must be sufficient to cover the amount owed, would be forfeited to the employee if the employer fails to pay the amounts owed within 10 days from the conclusion of the proceedings, as specified.
Minimum Wage Increase (SB 3)
In 2015, the California Legislature enacted SB 3 which sought to increase the minimum wage, each year until reaching $15.00 per hour. Beginning January 1, 2018, the effective minimum wage for employers with 26 or more employees is $11.00, while those with 25 or fewer is $10.50. The remaining increases are as follows:
Date 26 or more employees 25 or fewer employees
January 1, 2019 $12.00 $11.00
January 1, 2020 $13.00 $12.00
January 1, 2021 $14.00 $13.00
January 1, 2022 $15.00 $14.00
January 1, 2023 $15.00 $15.00
From January 1, 2024 going forward, on or before August 1 of each year, the California Director of Finance will calculate an adjusted minimum wage. The calculation will increase the minimum wage by the lesser of 3.5 percent and the rate of the change in the averages of the most recent July 1 to June 30, inclusive, period over the preceding July 1 to June 30, inclusive, period for the United States Bureau of Labor Statistics non-seasonally adjusted Consumer Price Index for Urban Wage Earners and Clerical Workers (U.S. CPI-W). The result will be rounded to the nearest 10 cents ($0.10). Each adjusted minimum wage increase calculated under this subdivision shall take effect on the following January 1.
California Recognizes a Third Gender (SB 179)
Through the Gender Recognition Act, residents of California may choose a third, non-binary gender category on California state-issued identification cards, birth certificates and driver’s licenses. Additionally, a California resident can now change their identity on legal documents more easily by no longer requiring a statement from a physician declaring that they have undergone clinical treatment.
Definition of Employee for Workers’ Compensation Purposes Expanded (SB 189)
For the purposes of workers’ compensation, an employee was defined to include, amongst others, officers and members of boards of directors of quasi-public or private corporations while rendering actual service for the corporations for pay. Excluded from that definition were officers or member of the board of directors of a quasi-public or private corporation, as specified, who owns at least 15% of the issued and outstanding stock and executes a written waiver of his or her rights under the laws governing workers’ compensation, stating under penalty of perjury that he or she is a qualifying officer or director. Beginning July 1, 2018, that list has been expanded to include quasi-public or private corporations, except as specified, who own at least 10% of the issued and outstanding stock, or 1% of the issued and outstanding stock of the corporation if that officer’s or member’s parent, grandparent, sibling, spouse, or child owns at least 10% of the issued and outstanding stock of the corporation, and the officer or member is covered by a health care service plan or a health insurance policy.
Additional Requirements to Maintain Farm Labor Contractor License (SB 259)
Certain employees are required to receive sexual harassment prevention and reporting training in order for a farm labor contractor license to be issued. SB 259 expands the requirements for which licensees must comply. Training for each agricultural employee must be in the language understood by that employee. To renew their license, employers must provide the commissioner with a complete list of all materials or resources used to train their agricultural employees in the calendar year prior to the month the renewal application is submitted. The bill also requires a licensee to provide the total number of agricultural employees trained in sexual harassment prevention in the calendar year prior to the month the renewal application, to the commissioner.
Training Regarding Gender Identity, Gender Expression, and Sexual Orientation (SB 396)
On October 15, 2017, California passed SB 396, a new law that requires employers to train supervisors on how to identify and prevent harassment based on gender identity, gender expression, and sexual orientation. Employers must include these components in their harassment training for supervisors by January 1, 2018. The new law also requires employers to display a Department of Fair Employment and Housing (DFEH) poster regarding transgender rights in a prominent and accessible location.
Local Government Entities May Refer Discrimination Claims to DFEH (SB 491)
The Unruh Civil Rights Act has long prohibited business establishments from discriminating on specified bases. FEHA also prohibits discrimination in housing and employment bases and provides procedures for enforcement by the Department of Fair Employment and Housing (DFEH). SB 491 enables local government entities under the California Fair Employment and Housing Act (FEHA) to refer a person alleging discrimination to the department and to provide the person information and resources as possible.
It is important to note that every employment law situation is unique and this Employment Law Update is not a replacement for legal counsel. If you have further questions or would like additional information, please contact Jerry Pearson at firstname.lastname@example.org.
To read about the case law that impacted Wage and Hour and Discrimination legislation in 2017, read part two of our Employment Law Update.