Thursday, June 5 marked the last day for bills to pass out of their house of origin in the California Legislature. Here is a summary of some key employment bills that made it through (followed by some significant bills that did not), and how they may affect California businesses if they make it all the way to the Governor’s approval with their current language.

Leaves of Absence

Paid Sick Leave. AB 304. We’re all watching Assembly Member Lorena Gonzalez’s attempt to clean-up some of the language in her Healthy Workplaces, Healthy Families Act of 2014, which took effect January 1, 2015, but which largely becomes operative July 1, 2015. On June 2, the Assembly approved inclusion of an urgency clause, which would allow the bill’s provisions to take effect immediately upon the Governor’s signing the bill; and exempts the bill from the house of origin deadline (the Assembly did not vote on it last week).

But, will the bill receive the Senate and Governor’s approval prior to July 1? It would have to move quickly, as would employers in adapting to these new provisions. Some key provisions in the current version of the bill are: (i) changing the rate of pay from a 90-day look-back to the regular rate, (ii) relieving employers of a duty to inquire or record the reason for an employee taking paid sick leave, (iii) allowing employers with unlimited time-off policies to comply with the written accrual notice by stating “unlimited” on the employee’s pay stub, and (iv) delaying until 2016 the written notice requirement for employers subject to Wage Orders 11 and 12. Look for an in-depth analysis on this bill here in coming days.

Meanwhile, Gonzalez’s AB 11, which would have included in-home support services under the definition of “employees” under the Healthy Workplaces, Healthy Families Act, did not make it out of the Assembly.

Kin Care. SB 579 seeks to amend California’s Kin Care law to tie its protections to the use of sick leave for the reasons specified in the Healthy Workplaces, Healthy Families Act of 2014. The bill also would expand coverage of California’s school activities leave (Family School Partnership Act) to include day care facilities and cover child care provider emergencies, and the finding, enrolling, or reenrolling of a child in a school or day care, and would extend protections to an employee who is a step-parent or foster parent or who stands in loco parentis to a child.

CFRA Leave. SB 406 would narrow the California Family Rights Act (“CFRA”) small business exemption. CFRA would now apply to businesses that employ 25—as opposed to the current 50 –within 75 miles. CFRA’s protections would also now extend to care for grandparents, all children (removing any age restriction), and grandchildren, as well as siblings, domestic partners, and in-laws.

Anti-Retaliation

FEHA. AB 987 would make clear that a request for reasonable accommodation on the basis of religion or disability is a protected activity and would provide protection against retaliation when an individual requests a reasonable accommodation under the FEHA, regardless of whether the request was granted. The bill was inspired by the contrary holding in Rope v. Auto-Chlor Sys. of Washington, Inc., (2013) 220 Cal. App. 4th 635.

Protected Complaints – Family Members of Employees. AB 1509 would make it unlawful for an employer to retaliate against an employee for being a family member of an employee who has engaged in certain protected activities, including filing complaints with governmental agencies, under Labor Code sections 98.6, 1102.5, and 6310.

Changes to Wages, Related Prohibitions, and Enforcement Authority

Minimum Wage Increase. SB 3 would increase the minimum wage to $11 per hour in 2016 and $13 per hour in 2017. The bill would also, beginning January 1, 2019, automatically adjust the minimum wage on each January 1 to maintain employee purchasing power diminished by the rate of inflation in the prior year. Other minimum wage bills on which we previously reported, AB 1007 and AB 669, failed to make it out of the Assembly.

Job Candidate Salary History Restriction. AB 1017 would add a provision to the Labor Code prohibiting employers from seeking salary history information from job applicants and from releasing salary history of current or former employees without their written authorization. A prohibition on employers advertising jobs without including the minimum rate of pay, or paying less than the advertised wage, has been stricken from the bill.

Expansion of Labor Commissioner Enforcement Authority. AB 970 would authorize the Labor Commissioner to enforce local laws regarding overtime hours or minimum wage provisions and to issue citations and penalties for violations, except when the local entity with jurisdiction in the matter has already issued a citation or has initiated an investigation against an employer for the same violation. The bill would also authorize the Labor Commissioner to issue citations and penalties to employers who violate the expense-reimbursement provisions of Labor Code section 2802.

Gender Wage Differential Prohibition. SB 358 would prohibit an employer from paying any employee at a wage rate less than that paid to employees of the opposite sex for doing substantially similar work—when viewed as a composite of skill, effort, and responsibility—and require the employer to affirmatively demonstrate that a wage differential is based entirely and reasonably upon one or more enumerated factors, such as a seniority system, a merit system, a system that measures earnings by quantity or quality of production, or a bona fide factor that is not based on or derived from a sex-based differential in compensation and that is consistent with a business necessity. The bill contains anti-retaliation provisions and provides a private right of action to enforce its provisions.

Equal Pay for Equal Work Act of 2015. AB 1354 This bill would require, of each employer with over 100 employees that is or that wishes to be a contractor or subcontractor with the State, to submit a nondiscrimination program (policies and procedures designed to ensure equal employment opportunities for all applicants and employees) to the DFEH, and intermittent compliance reports, which are to include data on employee and applicant compensation, race, and gender. The bill authorizes the DFEH to require an employer with fewer than 100 employees to submit a nondiscrimination report, and to audit employers for compliance of the program. The bill’s stated intent is to “promote pay equity and nondiscrimination in setting pay and making hiring or promotional decisions, and to obtain better data on pay equity to more wholly address the problem.”

On-boarding and Related Prohibitions

Protected Applicant Classes

  • Unemployed. Undeterred by the Governor’s 2014 veto of similar legislation in AB 2271, AB 676 was introduced, and may again land on the Governor’s desk, having passed to the Senate for its review and approval. The bill would prohibit employers—absent a bona fide occupational qualification—from publishing an announcement for a job indicating that current employment is a requirement and from requiring applicants to disclose their current employment status. These provisions provide for filing of complaints with, and imposition of penalties by, the Labor Commissioner. This bill expressly does not create a private right of action.
  • Public Employees. AB 883 would prohibit private and public employers from discriminating against current or former public employees in publishing job advertisements, establishing qualifications for job eligibility, and in making adverse employment decisions. The bill would also prohibit persons who operate job posting websites from publishing any job advertisement or announcement that indicates the applicant must not be a current or former public The current version of the bill removes previously proposed damages and penalty recovery provisions.

Voluntary Veterans’ Preference Employment Policy Act. AB 1383 would amend FEHA to ensure that none of its nondiscrimination provisions affect the hiring decisions of an employer that maintains a veterans’ preference employment policy established in accordance with the Voluntary Veterans’ Preference Employment Policy Act (Gov. C. Section 12958 et seq.), which this bill would also create.

Arbitration and Pre-Employment Waiver Restrictions. AB 465 would prohibit an employer from requiring any prospective employee, as a condition of employment, to waive any legal right, penalty, remedy, forum, or procedure for a violation of any provision of the Labor Code, including the right to file and pursue a civil action or complaint with, or otherwise notify, the Labor Commissioner, state agency, other public prosecutor, law enforcement agency, or any court or other governmental entity. If any such waiver is made, the bill requires that it be knowing and voluntary, in writing, and expressly not a condition of employment; and places the burden on the employer to prove that this standard was met. The bill would also prohibit the employer from retaliating, threatening, or discriminating against the prospective employee for refusing to agree to any such waiver. Employers who violate this provision would be subject to a civil penalty up to $10,000 per individual per violation and reasonable attorney’s fees. (Of course, it is likely that the contemplated provision would be preempted, in least in part, by the Federal Arbitration Act.)

Annual E-Verify Bill. AB 622 would prohibit an employer from using E-Verify to check the employment authorization status of an existing employee or an applicant who has not received an offer of employment, except as required by federal law or as a condition of receiving federal funds.

Some Industry Specific Bills Moving Quickly … Others Not

Concert Venues. AB 1506 is one of the faster-moving bills, having passed to the Senate in May. It would expand (to certain employees employed at a venue that hosts live theatrical or concert events) the existing civil penalty imposed on employers that pay an employee by a check, draft, or voucher that is refused payment because it is drawn on a nonexistent account or on an account that has insufficient funds.

Cheerleaders. AB 202 also moved to the Assembly in May. This proposed cheerleader-protection legislation would require California-based professional baseball, basketball, football, ice hockey, and soccer teams to ensure that cheerleaders who perform during those teams’ exhibitions, events, or games be classified and treated as employees.

Grocery Workers. AB 359 would afford grocery workers certain employment retention rights and place certain obligations on both the incumbent and successor grocery employers—subject to collective bargaining agreement and other exceptions.

Retail Scheduling Bill Dead (for now). The much-feared “Fair Scheduling Act of 2015”, AB 357, based upon the recent San Francisco Retail Workers’ Bill of Rights, was held in the Assembly. Watch for its provisions to appear in another vehicle later in session, or in a new bill during 2016…

Bills That Did Not Make It Out of Their House of Origin

OT Exemption. AB 1470 was head in the Assembly at the author’s election. It would have established a rebuttable presumption that employees with gross annual compensation of $100,000 or greater (at least $1,000 per week paid on a salary or fee basis) who regularly perform any exempt duties of an executive, administrative, or professional employee are exempt from overtime pay.

Double Pay on the Holiday Act of 2015. AB 67, Assembly Member Gonzalez’s attempt to require employers pay employees double pay on Christmas and Thanksgiving failed passage out of the Assembly, despite her request that the bill be reconsidered, then, yesterday, was ordered to the inactive file by the author.

PAGA. AB 588, which sought to amend California’s Private Attorneys General Act to give employers the right to cure a violation of the itemized wage statement law before an employee may bring a civil action alleging a PAGA claim based on Section 226(a), was held in an Assembly committee at the author’s choice.

Workplace Flexibility Act(s) of 2015. AB 1038 would have amended the Labor Code to permit nonexempt employees to request employee-selected flexible work schedules providing for workdays up to 10 hours per day without obligating the employer to pay overtime for those additional hours. The bill did not make it out of its first committee hearing. SB 368 similarly would have allowed a nonexempt employee to request a flexible work schedule up to 10-hour work days, and, entitled the employee to overtime if he or she worked greater than 10 hours in a work day or 40 hours in a work week.

Age Information. AB 984, which would have prohibited an employer from using information obtained on a website regarding an employee’s or applicant’s age in making any employment decision regarding that person, failed in committee.

Unfair Immigration-Related Practices. AB 1065 was also held in committee. This bill would have made it an unlawful employment practice for an employer to request more or different documents than are required under federal law relating to verification that an individual is not an unauthorized alien, or to refuse to honor documents tendered that on their face reasonably appear to be genuine, or to attempt to reinvestigate or re-verify an incumbent employee’s authorization to work unless required to do so by federal law or authority.

Workplace Solutions. We will continue to monitor and report on these potential sources of annoyance for California employers, as well as any other significant legislative developments of interest.