Legislative Developments Affecting California Employers in 2017 and Beyond

November 7, 2016Client Alert
Greenberg Glusker Client Alert

This year has brought many changes that will impact all California employers. This annual report from Greenberg Glusker’s Employment Department summarizes some of the most important employment law developments that will affect California employers in the upcoming year. We look forward to working with you in 2017!

Prohibitions on Smoking in the Workplace (Took Effect June 9, 2016)

California law already prohibited smoking of tobacco products inside an enclosed space at a place of employment for certain employers. This law (ABX2-7), which became effective in June of this year, amends Labor Code section 6404.5 to expand the prohibition to employers of any size, including even a place of employment where the owner-operator is the only employee. The bill also eliminates most of the specified exemptions that existed, such as hotel lobbies, bars and taverns, banquet rooms, warehouse facilities and employee break rooms. Now, “enclosed spaces” includes “covered parking lots, lobbies, lounges, waiting areas, elevators, stairwells and restrooms that are a structural part of the building.” A violation of this law is punishable by a fine not to exceed $100 for a first violation; $200 for a second violation within one year; and $500 for a third and for each subsequent violation within one year.

Some exceptions to the workplace smoking ban remain. This ban does not apply to places of employment where (1) 20% or more of the space of a hotel, motel or similar transient lodging establishment is comprised of guestroom accommodations; (2) retail or wholesale tobacco shops and private smokers’ lounges; (3) cabs of motortrucks; (4) theatrical production sites, if smoking is an integral part of the story in the theatrical production; (5) medical research or treatment sites, if smoking is integral to the research and treatment being conducted; (6) private residences, except for licensed family day care homes; and (7) patient smoking areas in long-term health care facilities.

Los Angeles and Santa Monica Minimum Wage and Los Angeles Sick Leave Pay (Took Effect July 1, 2016)

The City of Los Angeles passed an ordinance that accelerates state minimum wage increases by six months, thereby increasing the minimum wage to $10.50 an hour effective July 1, 2016. Future increases will be effective in Los Angeles every July 1 through 2020. The same accelerated schedule was also adopted by the City of Santa Monica.  Employers of less than 26 employees are given a one year reprieve.

The City of Los Angeles also passed an ordinance that requires an employer to provide at least 48 hours of sick leave to every employee who works for that employer for thirty days or more within a year. The employer must provide either the entire 48 hours of sick leave at the beginning of the calendar year or permit accrual of one hour of sick leave for every thirty hours worked with certain rules for carryover and accrual caps.  Employers of 25 or fewer employees do not need to comply until July 1, 2017.

Santa Monica Minimum Sick Leave Pay (Effective January 1, 2017)

The City of Santa Monica passed an ordinance allowing employees to accrue up to 40 hours of paid sick leave if their employer has 26 or more employees, and up to 32 hours of paid sick leave if their employer has 25 or fewer employees. The number of hours of sick leave increases on January 1, 2018.  There are numerous other requirements in this ordinance which differ from the state paid sick leave law, such as the lack of a cap on the annual use of sick leave.

San Diego Sick Leave Ordinance (Took effect July 11, 2016)

The San Diego Municipal Code was revised to provide an employee with one hour of sick leave for every thirty hours worked in the City of San Diego. The ordinance is designed to provide employees who work in San Diego with at least five days of sick leave per year.

San Francisco Paid Parental Leave Ordinance (Effective January 1, 2017)

The City and County of San Francisco have enacted an extensive ordinance that will require San Francisco employers to supplement the California Paid Family Leave 55% wage replacement so that employees are paid 100% of their salary during the six-week period of paid family leave for bonding with a new child.

Bond Requirements for Challenges to Wage Violation Findings (Effective January 1, 2017)

Pursuant to Labor Code section 1197.1, an employer who fails to comply with minimum wage requirements is subject to a citation which can include a civil penalty, restitution of wages, liquidated damages payable to the employee, and/or any additional applicable penalties. An employer may challenge the citation by seeking a writ of mandate contesting the ruling before the Labor Commissioner. Under AB 2899, an employer seeking a writ must 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 employee and ensure that the person seeking the writ makes prescribed payments pursuant to the proceedings. The proceeds of the bond are forfeited to the employee if the employer fails to pay the amounts owed within 10 days from the proceedings’ conclusion.

Clarification of Employer Requirements for Itemized Wage Statements (Effective January 1, 2017)

In California, employers are required to provide employees with accurate itemized wage statements in writing with specific information, including hours worked.  However, wage statements for employees whose compensation is salary-based, and who are exempt from overtime pay, do not need to include the total number of hours worked. AB 2535 clarifies that itemized wage statements do not need to include the total work hours for employees exempt from payment of minimum wage and overtime pay under specified statutes or any applicable order of the Industrial Welfare Commission.

Choice of Law and Forum in Employment Contracts and Right to Court Reporter in Arbitration Hearings (Effective January 1, 2017)

For employment contracts entered into, modified, or extended on or after January 1, 2017, SB 1241 will prohibit an employer from requiring its California employees to adjudicate employment disputes outside of California, or to contract around substantive protections of California law, where signing an employment contract is a condition of employment. This law will not apply where the employee is individually represented by counsel in negotiating his or her employment agreement.  Provisions that violate this law will be voidable at the employee’s request, with those requests to be adjudicated in California. The bill also allows for an employee who seeks to void such a provision to recover reasonable attorney fees and to obtain injunctive relief.

SB 1007 grants a party to an arbitration the right to have a certified shorthand reporter transcribe any deposition, proceeding, or hearing.

Expansion of Protection for Artists in the Talent Services Industry (Effective January 1, 2017)

Under current law, in order to display an artist’s photograph or information on a talent service’s website (or a website that the talent service has authority to design or alter), the talent service must have a contract with the artist that contains notice that the talent service will remove the content within 10 days of an artist’s request made by telephone, mail, facsimile transmission, or email. A willful violation of those restrictions is a crime.

AB 2068 amends Labor Code sections 1703 and 1703.4 and expands those restrictions to allow an artist to lodge a removal request by text messages or other “electronic communications.” AB 2068 also expands the law to apply to a talent service’s display of the artist’s photograph and/or information on the talent service’s online service, online application, or mobile application, including those which the talent service has the authority to design or alter.

Expansion of Scope of Prohibited Unfair Immigration-Related Practices (Effective January 1, 2017)

Employers are prohibited from engaging in unfair immigration-related practices, including requesting more or different documents than are required under federal law, or refusing to honor documents that on their face reasonably appear to be genuine. SB 1001 expands the protection against unfair immigration-related practices by prohibiting employers from refusing to honor documents or work authorization based upon the specific status or term of status that accompanies the authorization to work, or to reinvestigate or re-verify an incumbent employee’s authorization to work. An applicant or employee subject to an unlawful immigration-related practice may file a complaint with the Division of Labor Standards Enforcement (DLSE). Any person who violates these provisions is subject to liability for equitable relief and a penalty imposed by the Labor Commissioner not exceeding $10,000.

Local Wage Investigation Subpoenas (Effective January 1, 2017)

SB 1342 specifies that a legislative body of a city or county is authorized to delegate that body’s authority to issue subpoenas and to report noncompliance thereof to the judge of the superior court of the county, or to a county or city official or department head, in order to enforce any local law or ordinance, including local wage laws.

Prohibition on Use of Criminal History in Applications for Employment (Effective January 1, 2017)

The California Labor Code already proscribes what an employer can or cannot ask applicants about their criminal history that did not result in or involve a conviction.  This new law amends Labor Code section 432.7 to prohibit employers from asking job applicants to disclose, or from utilizing as a factor in determining any condition of employment, information concerning or related to juvenile crimes, including specifically “an arrest, detention, process, diversion, supervision, adjudication, or court disposition that occurred while the person was subject to the process and jurisdiction of juvenile court law.” For the purposes of this law, a “conviction” does not include “an adjudication by a juvenile court or any other court order or action taken with respect to a person who is under the jurisdiction of the juvenile court law.”

This law also prohibits an employer at a healthcare facility from asking about specific events that occurred while the applicant was subject to juvenile court law, with a certain exception, and from asking about information concerning or related to an applicant’s juvenile offense history that has been sealed by the juvenile court. An employer at a health facility seeking disclosure of juvenile offense history under that exception is required to provide the applicant with a list describing offenses for which disclosure is sought.

Wage Discrimination and Application of Equal Pay to Race and Ethnicity (Effective January 1, 2017)

Under the Fair Pay Act, which went into effect on January 1, 2016, employers are generally prohibited from paying an employee a wage rate less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort and responsibility, and which are performed under similar working conditions (sometimes referred to as “Equal Pay for Equal Work”).  The Fair Pay Act (Labor Code section 1197.5) provides for bona fide factors that may justify a wage differential, including (a) a seniority system; (b) a merit system; (c) a system that measures earnings by quantity or quality of production; and (d) a bona fide factor other than sex, such as education, training or experience.

AB 1676 amends the Fair Pay Act to provide that an employee’s prior salary cannot, by itself, justify any disparity in compensation under the bona fide factors above.

SB 1063 expands the Fair Pay Act beyond prohibiting wage differentials based on gender alone, to also prohibit it based on race or ethnicity.

Single-User Restrooms (Effective March 1, 2017)

AB 1732 will require any single-user restroom facility in any business establishment, place of public accommodation, or government agency to be identified and available as accessible to all genders. This new law authorizes inspectors, building officials, or other local officials responsible for code enforcement to inspect for compliance with these provisions during any inspection.

Required Disclosures regarding Protected Leave for Victims of Domestic Violence (Effective upon the Labor Commissioner’s posting of the relevant form on or before July 1, 2017)

Existing law prohibits an employer from discharging, discriminating or retaliating against an employee for taking time off from work for specified purposes related to domestic violence, sexual assault, or stalking. An employee discriminated or retaliated against for taking this protected leave is entitled to reinstatement and reimbursement for lost wages and benefits caused by the employer’s acts, additional equitable relief, and the right to file a complaint with the California Division of Labor Standards Enforcement (DLSE).

AB 2337 requires employers to inform employees of these rights by providing specific information in writing to new employees upon hire or upon an employee’s request. On or before July 1, 2017, the Labor Commissioner shall develop a form employers may elect to use to comply with this notice requirement. Employers are not required to comply until the Commissioner posts the new form.

Paid Family Leave (Operative January 1, 2018)

While not becoming operative until January 1, 2018, this bill increases the amount of weekly benefits payable to employees who take leave under California’s existing paid family leave law.

California’s existing paid family leave law allows an employee to request paid leave to care for a family member with a “serious health condition” or to bond with a new child. Under the current law, an employee receives 55% of his or her usual salary, up to a maximum of around $1,129 per week, for a period of up to 6 weeks. These benefits are paid for by the employees through mandatory payroll deductions. Currently, the benefits begin after a 7 day waiting period.

AB 908 revises the formula for determining benefits available to eligible employees “for periods of disability commencing after January 1, 2018, but before January 1, 2022.” The amount of increase in benefits will be determined by the employee’s income, but sets a minimum of $50 a week. An employee earning below about $20,000 a year will now receive 70% of his or her usual salary. A higher income worker will receive 60% of his or her usual salary, up to a maximum benefit of around $1,260 a week, or technically, “not to exceed the maximum workers’ compensation temporary disability indemnity weekly benefit amount established by the Department of Industrial Relations pursuant to Section 4453 of the Labor Code.”

AB 908 also eliminates the 7 day waiting period, so that the increased benefits become payable immediately.

For advice or to answer questions, please contact anyone in our Employment Law Group:

Nancy Bertrando | [email protected]

Paul Blechner | [email protected]

Wendy Lane | [email protected]

Charles Shephard | [email protected]

Priya Sopori | [email protected]

Karina B. Sterman | [email protected]

Kelly Raney | [email protected]

Daniel Stone | [email protected]