The beginning of a new year means new laws that will take effect in California.  Some of the laws that are of particular interest to employers in the hospitality industry are below:

  • Minimum Wage Increases: The minimum wage in California is increasing to $9/hour effective July 1, 2014.  Employers should confirm whether currently exempt employees will continue to meet any minimum compensation requirements once the minimum wage increases (e.g., twice the minimum wage will become $720 a week or $37,440 a year).  Additionally, San Jose and San Francisco have increased the minimum wages in their municipalities to $10.15/hour and $10.74/hour, respectively, each effective January 1, 2014.  Come 2014, employers who fail to pay minimum wages may be subject to liquidated damages to the employee in addition to existing penalties. 
  • Background Check Restrictions: Effective January 1, employers will be expressly prohibited from considering prior criminal convictions in employment decisions when the conviction has been judicially dismissed.  Effective July 1, state or local agencies will be prohibited from asking an applicant to disclose information regarding a criminal conviction until after there has been a determination that the applicant meets the minimum job qualifications with certain exceptions.
  • Breaks for Heat Illness Prevention: California has expanded an employee’s entitlement to breaks throughout the workday to cover “heat illness recovery periods.”  Under the new law, an employer cannot require a non-exempt employee to work during a recovery period, defined as a “cool down period afforded an employee to prevent heat illness.”  An employee who is not provided with a recovery period will be entitled to an additional hour of pay each workday that the recovery period is not provided.
  • Expanded Protection for Exercising Rights Under Labor Code: Current law protects employees who assert their rights under the Labor Code from discharge and discrimination.  This law has now been expanded to prohibit “retaliation” or other “adverse action” against such employees and to clarify that oral or written complaints regarding owed unpaid wages are protected.  A civil penalty of up to $10,000 per employee per violation has been added to the statutory provisions.
  • -New Prohibited Bases of Discrimination: “Military and veteran status” has been added to the list of categories protected from discrimination under the Fair Employment and Housing Act (“FEHA”).  Such status is defined under FEHA as “a member or veteran of the U.S. Armed Forces, U.S. Armed Forces Reserve, the U.S. National Guard, and the California National Guard.”
  • Definition of Sexual Harassment Clarified: New law clarifies that sexual harassment may involve actions unmotivated by sexual desire.
  • San Francisco Caregiver Leave: The Family-Friendly Workplace Ordinance requires that covered employers consider requests for “flexible or predictable working arrangements to assist with care giving responsibilities.” Employees are protected from adverse action on the basis of “caregiver status.” Employers with San Francisco worksites will be required to include a poster on this ordinance in the workplace with other required postings (poster not yet available).
  • Protections for Stalking, Domestic Violence and Sexual Assault Victims: New law extends the protections for victims of domestic violence or sexual assault to victims of stalking as well.  All California employers are prohibited from discharging, discriminating or retaliating against an employee who needs to take leave to appear in court or attend any related legal proceedings.  Employers with 25 or more employees must provide leave for psychological or medical treatment, including safety planning.  The law prohibits discrimination or retaliation against the employee due to his or her status as a victim of domestic violence, sexual assault or stalking and requires that an employer provide reasonable accommodations, which may include the implementation of safety measures.
  • Whistleblower Protections Expanded: Whistleblower protections have been expanded to include reporting alleged violations of local rules or regulations. The law was also expanded to protect employees who disclose, or may disclose, information regarding alleged violations “to a person with authority over the employee or another employee who has authority to investigate, discover or correct the violation.”  The law also prohibits retaliating against the employee based on a belief “the employee disclosed or may disclose information.”
  • Increased Protection of Immigrants: New law prohibits employers from engaging in “unfair immigration-related practices” when an employee asserts rights under the Labor Code and provides a variety of penalties including a private right of action and civil penalties as high as $10,000 per employee per violation for retaliation against the employee.  The law also permits the court to order the suspension or revocation of a business license due to violation of these provisions. 

In addition to the above key changes, the following changes should also be noted:

Leave Laws

  • Time Off for Emergency Duty: California has expanded its law providing leave for volunteer firefighters to train for emergency duty.  Now, employers of 50 or more employees must also permit employees to take up to 14 days off to train to perform emergency duty as reserve peace officers, or emergency rescue personnel.
  • Time Off for Crime Victims: California has expanded the rights of certain crime victims to take time off work to appear in any court proceeding in which their rights as a victim are at issue. The law does not apply to all crimes and employees must comply with requirements for requesting leave.
  • Paid Family Leave Benefits Expanded: California is broadening the definition of “family” within the Paid Family Leave (PFL) program effective July 1, 2014, to allow workers to receive partial wage replacement benefits while taking care of siblings, grandparents, grandchildren, and parents-in-law.  As before, the right to receive state PFL benefits is separate from whether an employee has a protected right to take time off.  Importantly, the definition of “family” was not modified in leave statutes such as the California Family Rights Act (CFRA). 

Wage and Hour Laws

  • Attorney’s Fees for Bad Faith Wages Claims: This new law authorizes an award of attorney’s fees and costs to an employer who prevails in an action brought for the non-payment of wages, fringe benefits or health and welfare pension fund contributions, only when a trial court finds that the employee brought the court action in bad faith.
  • Criminal Penalties for Wage Withholding Violations: Employers who fail to remit withholdings from an employee’s wages that were made pursuant to state, local, or federal law may now face criminal penalties in addition to any other liability.

Immigrant Protections

  • Retaliatory Threats to Report Immigration Status: New law permits the suspension or revocation of an employer’s business license for threatening to report or reporting an employee’s suspected or actual citizenship or immigration status, or the suspected or actual citizenship or immigration status of a family member, to a federal, state or local agency because the employee, former employee or prospective employee exercised their rights under the Labor Code, Government Code, or Civil Code.  The law provides a civil penalty up to $10,000 per violation and contains no requirement that the employee exhaust administrative remedies prior to bringing a civil action under a provision of the Code unless the Code explicitly requires exhaustion.  Individuals may also be criminally liable for extortion for such reports or threatened reports.

As many of these changes impact the language in employee handbooks and other policies, employers should begin the process now of coming into compliance.  We welcome you to consult EBG for further information on any of the above laws and their impact on your business.