This alert highlights selected significant new laws:

  • AB 1522 – Paid sick leave
  • AB 2536 – Expansion of "emergency rescue personnel" leave under Labor Code section 230.3
  • SB 1034 – California's 60-day waiting period is repealed to conform with the Affordable Care Act's 90-day waiting period
  • SB 1446 – Certain small employer healthcare plans may continue through 2015
  • AB 2053 – Employer harassment training must cover "abusive conduct"
  • AB 1443 – Unpaid interns and volunteers entitled to FEHA discrimination and harassment protections
  • AB 2751 – Definition of "unfair immigration-related practices" expanded
  • AB 1660 – Employers cannot discriminate against employees because of undocumented drivers licenses
  • AB 1792 – Protection from retaliation extended to employees enrolled in the Medi-Cal program
  • SB 1360 – Legally mandated rest and recovery periods, such as "cooldown periods," count as "hours worked"
  • AB 1897 – Expansion of employer liability to workers obtained from third-party labor contractors
  • AB 1723 – Waiting time penalties recoverable through Labor Commissioner citation
  • AB 2743 – Waiting time penalties recoverable by unionized, regular short-term theatrical employees
  • AB 2074 – Three-year statute of limitations to recover liquidated damages claim for failure to pay minimum wage
  • AB 1634 – Significant changes to abatement requirements during pending Cal-OSHA appeal
  • AB 326 – Employers may now use email (instead of telegraph) to report serious injuries to DOSH
  • AB 2617 – Employment arbitration agreements cannot waive certain civil rights claims

Like most recent years, the California Legislature passed and Governor Jerry Brown signed many labor and employment bills into law once again in 2014. Below are highlights of the most significant new laws. Each will become effective on January 1, 2015, unless otherwise stated.

LEAVE AND BENEFITS

AB 1522 – Paid sick leave

One of the most noteworthy new laws is the Healthy Workplaces, Healthy Families Act of 2014, which requires employers to provide all employees (employed for a minimum of 30 days) with one hour of paid sick leave for every 30 hours worked. The law becomes effective July 1, 2015, but some notice requirements become effective January 1, 2015. The law applies to every employee (including exempt, part-time and temporary). Benefit accrual begins after a minimum of 30 days of employment, but the employee is not entitled to use the sick leave until 90 days of employment. Employees may use paid sick leave for diagnosis, care or treatment of an existing health condition or preventative care for either themselves or a family member. An employee may also use their accrued sick leave if the employee is a victim of domestic assault, sexual violence and/or stalking, wherein sick leave is used for the purpose of seeking relief through protective orders, medical attention or another method. When the need for sick leave is foreseeable, the employee must give reasonable advance notice and in cases when it is not foreseeable, the employee must give notice as soon as practicable.

Accruals must carry over to the following year, but employees can be capped to 24 hours (or three work days) in any one year. Also, employers may cap maximum accrual to 48 hours (or six work days). Employers may set a minimum increment use not exceeding two hours. Unlike vacation time, accrued but unused sick leave under this act need not be paid to an employee upon termination. However, if that employee is rehired by the employer within a year, all previously accrued and unused sick time is reinstated.

There are also numerous notice requirements including: (1) written notice to employees of the amount of accrued sick leave on either the employee's itemized wage statement or in a separate writing, (2) posters in conspicuous places stating specific information and (3) an amended "Labor Code section 2810.5 Notice" including information about sick leave accruals. Examples of the latter two will also be made available by the labor commissioner. Employees must be paid for sick leave taken no later than the pay day for the next regular payroll period. Employers must keep three years of records documenting the hours worked and paid sick days accrued and used by an employee.

There are only limited exemptions. First, the law does not apply if an employer's PTO policy already allows for the minimum requirements of the law, although the employer will need to comply with the notice requirements set forth above. Second, certain types of employees are excluded. Third, the law does not apply to employees covered under a union contract if the contract complies with five enumerated conditions.

AB 2536 – Expansion of "emergency rescue personnel" leave under Labor Code section 230.3

Labor Code section 230.3 prohibits employers from discharging or in any manner discriminating against employees for taking time off to perform emergency duty as a volunteer firefighter, reserve peace officer or emergency rescue personnel. Section 230.3 currently does not protect all types of emergency rescue personnel, such as disaster medical response personnel. This law expands the list of eligible employees to include an officer, employee or member of a disaster medical response entity sponsored or requested by the state, such as state coordinated programs like California Medical Assistance Teams (CAL-MAT). AB 2536 also requires an employee who is a healthcare provider to notify his or her employer at the time the employee becomes designated as "emergency rescue personnel" and when the employee is notified that he or she will be deployed. The law's requirements do not apply to any public safety agency or provider of medical services if the employee's absence would hinder the availability of public safety or emergency medical services.

SB 1034 – California's 60-day waiting period is repealed to conform with the Affordable Care Act's 90-day waiting period

The Affordable Care Act includes a provision prohibiting an otherwise eligible employee from being required to wait more than 90 days before health coverage becomes effective. California law currently provides for a 60-day waiting period when the person is enrolled but no premium is paid and no services are provided, or a six-month pre-existing period during which no payments are provided for a pre-existing medical condition. SB 1034 repeals the 60-day waiting period to conform to federal standards, which will eliminate the confusion resulting from the mismatch of allowable waiting periods for benefits.

SB 1446 – Certain small employer healthcare plans may continue through 2015

SB 1446 allows a small employer healthcare service plan contract or a small employer health insurance policy to continue in force until December 31, 2015, provided it (1) was in effect on December 31, 2013, (2) was still effective at the law's passage and (3) does not qualify as a grandfathered health plan under the Affordable Care Act.

HARASSMENT AND DISCRIMINATION

AB 2053 – Employer harassment training must cover "abusive conduct"

AB 2053 adds "abusive conduct" training obligations to the Fair Employment and Housing Act (FEHA) at Section 12950.1 of the Government Code. Under the law, employers with 50 or more employees who are currently required to provide at least two hours of sexual harassment training to supervisory employees every two years now must also include in this training education on preventing "abusive conduct" in the workplace. This has been called the "anti-bullying" training requirement. "Abusive conduct" refers to an instance when an employer or employee conducts himself of herself in the workplace, with malice, in a manner that a reasonable person would find hostile, offensive, and unrelated to an employer's legitimate business interests. It may include (1) repeated infliction of verbal abuse, such as the use of derogatory remarks, insults and epithets; (2) verbal or physical conduct that a reasonable person would find threatening, intimidating or humiliating; or (3) the gratuitous sabotage or undermining of a person's work performance. A single act does not constitute abusive conduct, unless especially severe and egregious.

AB 1443 – Unpaid interns and volunteers entitled to FEHA discrimination and harassment protections

AB 1443 covers the FEHA's protection of unpaid interns and volunteers. The law prohibits employers from subjecting unpaid interns or volunteers to discrimination or harassment based on their race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status. An employer may also be liable for the acts of nonemployees, with respect to sexual harassment towards unpaid interns or volunteers, where the employer, its agents or its supervisors knows or should have known of the conduct and fails to take immediate and appropriate corrective action.

AB 2751 – Definition of "unfair immigration-related practices" expanded

AB 2751 makes several notable changes to Labor Code sections 98.6, 1019 and 1024.6. Current law prohibits an employer or any other person from engaging in – or directing another person to engage in – an unfair immigration-related practice against a person for the purpose of or with the intent of retaliating against any person for exercising a right protected under state labor and employment laws or under a local ordinance applicable to employees, as specified. "Unfair immigration-related practice" is expanded from, among other things, only actually filing a false police report to now include "the threatening to file or the filing of a false report or complaint with any state or federal agency."AB 2751 further requires a $10,000 civil penalty for an employer's retaliation against an employee for exercising a right protected under state labor and employment laws or under a local ordinance applicable to employees, as specified, to be awarded to the employee who suffered the retaliation. It authorizes a civil action for equitable relief and any applicable damages or penalties by anyone subjected to an unfair immigration-related practice and authorizes a court to order the suspension of certain business licenses held by the violating party for varying periods based on the number of violations. It also prohibits an employer from discharging or in any manner taking any adverse action against an employee because the employee updates or attempts to update personal information based on a lawful change of name, Social Security number or federal employment authorization document. Finally, AB 2751 prohibits an employer's compliance with these federal provisions from serving as the basis for a claim of discrimination, including any disparate treatment claim.

AB 1660 – Employers cannot discriminate against employees because of undocumented drivers' licenses

AB 1660 clarifies an existing law prohibiting "national origin" discrimination against employees who hold or present a driver's license obtained under Section 12801.9 of the California Vehicle Code. Under Section 12801.9 of the California Vehicle Code, the Department of Motor Vehicles (DMV) must issue a driver's license to a person who cannot prove his or her presence in the United States is authorized under federal law, but meets all other requirements for licensure and provides satisfactory proof to the DMV of his or her identity and California residency. Such licenses have a distinguishing feature showing the letters "DP" instead of the letters "DL." AB 1660 clarifies that discrimination based on an employee having such a license is in violation on both the Unruh Civil Rights Act and the FEHA. The law also provides, however, that an action taken by an employer to comply with any requirement or prohibition under the federal Immigration and Nationality Act is not a violation of law.

AB 1792 – Protection from retaliation extended to employees enrolled in the Medi-Cal program

AB 1792 prohibits an employer from discharging, discriminating or retaliating against an employee who enrolls in the Medi-Cal program and from refusing to hire a beneficiary for being enrolled in the Medi-Cal program.

WAGE AND HOUR

SB 1360 – Legally mandated rest and recovery periods, such as "cooldown periods," count as "hours worked"

Labor Code section 226.7 prohibits an employer from requiring an employee to work during a meal, rest or recovery period mandated by an applicable statute, or applicable regulation, standard or order of the Industrial Welfare Commission (IWC), the Occupational Safety and Health Standards Board, or the Division of Occupational Safety and Health. Section 226.7 also establishes penalties for an employer's failure to provide a required meal or rest and recovery period.

SB 1360 amends Section 226.7(d) to clarify existing laws that legally mandated "rest" periods and "recovery" periods to count as "hours worked," preventing employers from deducting any such time from an employee's wages. Of particular importance, the amended provision does not mention "meal periods" and thus meal periods remain unpaid and do not count as "hours worked."

Section 226.7(a) specifically defines "recovery period" to mean "a cooldown period afforded an employee to prevent heat illness." SB 1360 thus requires employers to pay for "cooldown periods" when it was not clear whether employers had to pay for "cooldown" periods before.

AB 1897 – Expansion of employer liability to workers obtained from third-party labor contractors

Under current California law, an employer that obtains workers from third-party labor contractors can only be held responsible if a worker can prove "joint employer" status. AB 1897, adding a new Section 2810.3 to the Labor Code, effectively removes the "joint employer" requirement by greatly expanding liability for employers that obtain workers from third-party labor contractors. The law will require client employers to share with a third-party labor contractor all civil responsibility and liability for all workers supplied by the labor contractor for the payment of wages and the failure to obtain valid workers' compensation coverage. Contractual waivers of these provisions are contrary to public policy, void and unenforceable.

Finally, AB 1897 prohibits client employers from shifting to the third-party labor contractor legal duties or liabilities under workplace safety provisions regarding the workers supplied by the labor contractor. Agencies must be given documents to verify compliance with applicable state laws and may adopt necessary regulations and rules to administer and enforce the bill's provisions. AB 1897 exempts from the definition of labor contractor specified nonprofit, labor and motion picture payroll services organizations and third parties engaged in certain employee leasing arrangements. There are also certain, very specific exemptions to liability for otherwise covered labor contractors.

AB 1723 – Waiting time penalties recoverable through Labor Commissioner citation

AB 1723 deals specifically with "waiting time penalties." Labor Code section 1197.1 currently allows for specified statutory penalties against employers who fail to pay minimum wage. Current law allows employees to recover "waiting time penalties" by allowing for (1) a civil penalty, (2) restitution and (3) liquidated damages. Current law also states employers who fail to pay minimum wage are subject to "waiting time" penalties through (1) a civil action and (2) a hearing before the labor commissioner. AB 1723 amends Section 1197.1 to authorize employees' recovery of "waiting time" penalties through a citation given by the labor commissioner.

AB 2743 – Waiting time penalties recoverable by unionized, regular short-term theatrical employees

AB 2743 allows unionized, regular short-term theatrical or concert venue employees to recover liquidated damages upon nonpayment of wages after discharge.

AB 2074 – Three-year statute of limitations to recover liquidated damages claim for failure to pay minimum wage

Before AB 2074, it was unclear whether California Labor Code section 1194.2 imposed only a one-year statute of limitations on the recovery of liquidated damages for failure to pay minimum wage. This law clarifies that the statute of limitations to recover liquidated damages for failure to pay minimum wage will be that of the underlying wage claim, which is three years.

OCCUPATIONAL SAFETY

AB 1634 – Significant changes to abatement requirements during pending Cal-OSHA appeal

AB 1634 makes significant changes to employer obligations regarding abatement during a pending Cal-OSHA appeal.

AB 1634 was introduced to make several changes to employers' obligations to abate during pending appeals. Under the new law regarding citations alleging serious violations, the Department of Occupational Safety and Health (DOSH) shall not grant a proposed modification to civil penalties for abatement or credit for abatement unless the employer has done any of the following: (1) abated the violation at the time of the initial inspection, (2) abated the violation at the time of a subsequent inspection prior to the issuance of a citation or (3) submitted a signed statement under penalty of perjury and supporting evidence when necessary to prove abatement. Furthermore, AB 1634 will now require employers also to submit "supporting evidence" where necessary to prove abatement, in addition to a signed statement under penalty of perjury that the employer has complied with the abatement terms.

Notably, the filing of a petition for or the pendency of the reconsideration of a final order or decision involving a citation classified as serious, repeat serious or willful serious shall not stay or suspend the requirement to abate the hazards affirmed by the decision or order unless the employer can demonstrate, by a preponderance of the evidence, that the stay or suspension of the abatement will not adversely affect the health and safety of employees.

AB 326 – Employers may now use email (instead of telegraph) to report serious injuries to DOSH

Under California Labor Code section 6409.1, employers are required to file a complete report of every occupational injury or occupational illness of each employee, as specified, with the Division of Occupational Safety and Health within the Department of Industrial Relations. The law replaces "telegraph" with "email," and Section 6409.1 now requires employers to make an immediate report by telephone or email of every case involving an employee's serious injury, illness or death to the division.

ARBITRATION

AB 2617 – Employment arbitration agreements cannot waive certain civil rights claims

This new law restricts the contractual waiver of certain civil rights statutes involving hate crimes on employment arbitration agreements altered, modified, renewed or extended after Jan. 1, 2015. Under AB 2617, no person shall require another person to waive any legal right, penalty, remedy, forum or procedure for violation of the Ralph Civil Rights Act or the Bane Civil Rights Act as a condition of entering into a contract for the provision of goods and services. This includes the right to file and pursue a civil action or complaint with or otherwise notify the attorney general, any other public prosecutor or any law enforcement agency, the Department of Fair Employment and Housing (DFEH), or any court or other governmental entity.

The Ralph Civil Rights Act prohibits violence or threats of violence based on an individual's race, color, religion, ancestry, age, disability, sex, sexual orientation, political affiliation or position in a labor dispute. The Bane Civil Rights Act prohibits any person from interfering by force or by threat of violence with your federal or state constitutional or statutory rights.

The waiver of any right under these civil rights acts shall be knowing, voluntary, in writing and expressly not made as a condition of entering into the contract or as a condition of providing or receiving goods and services. Any person who seeks to enforce such a waiver shall have the burden of proving that it was knowing, voluntary and not made as a condition of the contract or of providing or receiving goods or services.