In 2016, California passed a slew of labor and employment laws affecting businesses across the state and their personnel policies and practices. Below is a brief summary of many of these laws, which generally took effect last January 1, 2017, unless otherwise noted. Employers should review their policies and practices—preferably with counsel—to ensure compliance and to limit potential exposure depending on their varying needs and concerns. Here’s your annual roundup of new California employment laws.
SB 3: Minimum Wage (Effective January 1, 2017)
By 2022, California’s mandatory minimum hourly wage will be $15 for businesses with more than 25 employees. Starting Jan. 1, 2017, minimum hourly pay will rise from $10 to $10.50, an extra $20 per week for full-time employees. There’s no state-mandated increase in hourly wages in 2017 for businesses that employ 25 or fewer workers. In 2018, however, they must pay workers $10.50 per hour. Some municipalities have taken this matter into their own hands. San Diego’s minimum wage will jump to $11.50 per hour, effective Jan. 1. On Oct. 1, Berkeley’s rate became $12.53 per hour and will rise to $13.75 an hour on Oct. 1, 2017. Los Angeles set a minimum hourly rate of $10.50 last July 1. It will become $12 per hour on July 1, 2017.
Proposition 64: Legalization of Marijuana Under State Law Affects the Workplace (Effective November 9, 2016)
With the passage of Proposition 64 in November of 2016 that legalized recreational marijuana use, many employees believed that they had a free pass to use marijuana. However, employers still retain the right to test workers for marijuana use and even terminate them based on a positive test, even if there is no indication that the impairment occurred on the job. Considering that marijuana can stay in your system anywhere ranging from a week to months depending on usage, this can present quite the problem for certain employees. Many employers may also have workers sign a “statement of reaffirmation” reminding them of company policy in relation to drug use.
SB 1167: Indoor Heat Illness Regulations Coming to California Soon (Effective January 1, 2019)
This bill, which will be codified as California Labor Code Section 6720, requires the Division of Occupational Safety and Health (the “Division”) to propose heat illness and injury prevention regulations regarding employees who work indoors. By January 1, 2019, the Division must propose these regulations to the Occupational Safety and Health Standards Board for review and adoption. The law permits the Division to limit certain high-heat provisions to certain industries.
ABX2-7: Smoking in the Workplace (Effective June 9, 2016)
AB-7 broadens the prohibition of smoking forms of tobacco in the workplace to include e-cigarettes and vaping devices that contain nicotine. Furthermore, the exemption to this rule in places such as bars and hotels was removed. Additionally, the minimum smoking age in California was also raised from 18 to 21 years old, although this went into effect in mid-2016.
AB 908: Paid Family Leave (Effective January 1, 2018)
Paid Family Leave (“PFL”) provides short-term benefits to eligible employees who lose wages when they need to take time off work to care for a seriously ill child, parent, parent-in-law, grandparent, grandchild, sibling, spouse, or registered domestic partner, or to bond with a new child entering the family by birth, adoption, or foster care placement.
AB 1676 & SB 1063: Fair Pay Act Expands to Race and Ethnicity (Effective January 1, 2017)
Under the Fair Pay Act, which went into effect on January 1, 2016, existing law generally prohibits an employer from paying an employee at wage rates lower 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. The Fair Pay Act provides for exceptions if the wage differential is based upon one or more of the following factors: (1) a seniority system; (2) a merit system; (3) a system that measures earnings by quantity or quality of production; (4) a bona fide factor other than sex, such as education, training, or experience.
AB 1676 amends the Fair Pay Act (Labor Code Section 1197.5) to provide an employee’s prior salary cannot, by itself, justify any disparity in compensation under the bona fide factors listed above. SB 1063 amends Labor Code Sections 1197.5 and 1199.5 and expands the requirements of the Fair Pay Act to include an employee’s race or ethnicity, and not just gender.
AB 1732: Single Use Restroom (Effective March 1, 2017)
Commencing on March 1, 2017, this bill requires all single-user toilet facilities (defined as no more than one water closet and one urinal with a locking mechanism) in any business establishment, place of public accommodation, or government agency to be identified as all-gender toilet facilities. This bill would authorize inspectors, building officials, or other local officials responsible for code enforcement to inspect for compliance with these provisions during any inspection.
AB 1843: Criminal History/Ban the Box (Effective January 1, 2017)
California Labor Code Section 432.7 prohibits most employers from asking an applicant to disclose any arrest or detention that did not result in a conviction, or from using such information as a factor in connection with employment. This bill expands this prohibition to include any information concerning or relating to an arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while the person was subject to the process and jurisdiction of juvenile court law. Notably, Los Angeles and San Francisco, along with other jurisdictions, have adopted “ban the box” legislation placing significant restrictions on when and how an employer may inquire into applicants’ criminal background records.
AB 2337: Employment Protections for Victims of Domestic Violence, Sexual Assault, or Stalking (Effective July 1, 2017)
This bill requires that by July 1, 2017, employers with 25 or more employees provide specific information in writing to new employees upon hire and to other employees upon request of their rights to take leave under Labor Code Section 230.1 (relating to victims of domestic violence, sexual assault, or stalking). This bill also requires that, on or before July 1, 2017, the Labor Commissioner develop a form that employers may elect to use to comply with these provisions and to post it on the Labor Commissioner’s website. Employers are not required to comply with the notice of rights requirement until the Labor Commissioner posts such form.
AB 2535: Itemized Wage Statements (Effective January 1, 2017)
This bill amends Labor Code Section 226 and clarifies that employees who are exempt from the payment of minimum wage and overtime are not required to have their hours tracked and logged on an itemized wage statement, i.e. pay stub.
AB 2899: Minimum Wage Violations (Effective January 1, 2017)
This bill expands the requirement that employers post a bond upon appeal of wage violations under California Labor Code Section 1971.1. Existing law requires employers to file a wage bond only for appeals in cases where an employee files a wage claim with the Labor Commissioner for unpaid wages. AB 2899 applies the bond requirement to appeals for cases initiated by the Labor Commissioner for violations of wage laws. It also requires employers post a bond with the Labor Commissioner prior to filing an appeal of a decision by the Labor Commissioner relating to violation of minimum wage laws. The bond must cover the total amount of minimum wages, liquidated damages, and overtime compensation owed to employees. The total amount of the bond is forfeited to the employee if the employer fails to pay the amounts owed within 10 days from the conclusion of the proceedings.
SB 1001: Immigration-Related Unfair Practices (Effective January 1, 2017)
Under existing law, an employer is prohibited from engaging in, or directing another person to engage in, an unfair immigration-related practice against a person for the purpose of, or intent, to retaliate against any person for exercising a protected right. Unfair immigration-related practices are defined as requesting more or different documents than required under federal law, or refusing to honor documents tendered that on their face reasonably appear to be genuine.
SB 1001 amends the existing law to make it unlawful for an employer to: (1) request more or different documents than required under Section 1324a(b) of Title 8 of the United States Code to verify an individual is not an unauthorized immigrant; (2) refuse to honor documents tendered that on their face reasonably appear to be genuine; (3) refuse to honor documents or work authorizations based on specific status or term that accompanies the authorization to work; or (4) attempt to reinvestigate or reverify an incumbent employee’s authorization to work using an unfair immigration-related practice. An employee who suffers an unfair immigration-related practice can file a complaint with the Division of Labor Standards Enforcement. The bill also provides that a violation of these provisions can result in a penalty of up to $10,000.
SB 1241: Choice of Law and Forum in Employment Contracts (Effective January 1, 2017)
This bill adds Labor Code Section 925 and prohibits employers from requiring California-based employees to enter into agreements (including arbitration agreements) requiring them to: (1) adjudicate claims arising in California in a non-California forum; or (2) litigate their claims under the law of another jurisdiction, unless the employee was represented by counsel. Any provision of a contract that violates this new law is voidable by the employee; any dispute arising there under shall be adjudicated in California under California law; and the employee is entitled to recover reasonable attorneys’ fees.