Earlier this fall, California Governor Edmund G. “Jerry” Brown signed into law more than a dozen bills impacting businesses employing workers in California. The bills range from new anti-discrimination protections to restricting employer access to personal social media accounts. The bills described below will have a significant impact on employers in 2013. Employers should prepare to comply with the new laws when they take effect, which unless otherwise specified below, will be on Jan. 1, 2013.
Definition of “Sex” Includes Breastfeeding
The California Legislature has again expanded the definition of “sex” under the Fair Employment and Housing Act (FEHA), which prohibits discrimination in employment. Under existing law, “sex” includes gender, pregnancy, childbirth, and medical conditions related to pregnancy or childbirth. Assembly Bill 2386 adds breastfeeding and related medical conditions to the FEHA’s definition of “sex.” Employers also will be required to provide employees with an update to their Discrimination and Harassment Notice.
Religious Dress and Grooming Practices are Protected
Under the FEHA, employers must not discriminate on the basis of employees’ religious beliefs and observances, and must provide a reasonable accommodation, unless doing so would create an undue hardship. Assembly Bill 1964 specifies that religious dress and grooming practices are covered “beliefs and observances.” As a result, under the new law, employers cannot discriminate against employees on the basis of their religious dress or grooming practices and must provide reasonable accommodation of such practices. The new law specifically states that when providing reasonable accommodation of employees’ religious dress or grooming practices, employers cannot segregate employees either from the public or other employees.
Personal Social Media and Passwords are Private
Under Assembly Bill 1844, employers are prohibited from requiring or requesting that employees or job applicants provide their usernames or passwords for personal social media accounts, access their accounts in the employer’s presence, or divulge personal social media. “Social media” is broadly defined to include any “electronic service or account, or electronic content, including, but not limited to, videos, still photographs, blogs, video blogs, podcasts, instant and text messages, email, online services or accounts, or Internet Web site profiles or locations.” The new law prohibits an employer from discharging, disciplining, threatening, or otherwise retaliating against an employee or applicant for not complying with a request by the employer that violates these provisions. A limited exception permits employers to ask employees to divulge their personal social media for the purpose of an employer’s investigation into alleged employee misconduct or violations of the law. Senate Bill 1349 applies similar prohibitions to public and private post-secondary educational institutions.
Employees’ Right to Inspect Personnel Records is Expanded
Assembly Bill 2674 expands upon existing Labor Code requirements regarding employees’ right to inspect their personnel records. Under new provisions, employers must retain personnel files for at least three years following termination of employment, and must permit current as well as former employees, or their representatives, to inspect and receive a copy of their personnel records within 30 days of receiving a written request to do so. The employee and employer may agree in writing to a date beyond 30 but not to exceed 35 days by which the employer must comply with the employee’s request. The new law also specifies that an employer is not required to comply with more than one request per year by a former employee or with more than 50 requests per month by employees’ representatives, with certain exceptions. In addition, under the new law, employers must develop a written form that employees may use to request inspection and a copy of their personnel records, and provide this form to employees upon request.
“Injury” Caused by Non-Compliant Itemized Wage Statements is Defined
Among the claims commonly added to wage and hour suits in California are claims alleging improper wage statements. These claims frequently have failed because courts have found that even if the wage statement omits some piece of required information, the employee had not suffered any injury due to the omission. Senate Bill 1255 now provides that if an employer either fails to provide such wage statements, or knowingly or intentionally fails to provide complete and accurate information on the wage statements such that employees cannot promptly and easily ascertain the required information from the wage statement alone, employees are deemed to have suffered an “injury” and are entitled to recover damages. The new law also clarifies that employers may keep computer-generated records rather than actual copies of the wage statements issued to employees in order to comply with the requirement to keep a copy of wage statements on file for at least three years.
Commission Agreements Must be in Writing
Assembly Bill 1396 requires that as of Jan. 1, 2013, employment agreements providing for commissions must be in writing and must set forth the method by which commissions are to be computed and paid. Employers will be required to give a signed copy of the agreement to employees and obtain a signed receipt.
Assembly Bill 2675 exempts temporary, variable incentive payments that increase, but do not decrease, payment under the written contract from the requirement that the commission agreement be in writing.
Fixed Salaries Paid to Non-Exempt Employees Do Not Cover Overtime
Under Assembly Bill 2103, payment of a fixed salary to a non-exempt employee will be deemed compensation only for the employee’s regular, non-overtime hours. The new law effectively invalidates any private agreement to the contrary. In other words, parties who enter into “explicit mutual wage agreements” may only provide for regular, not overtime, compensation through those agreements. The stated intent of the new legislation is to overturn Arechiga v. Dolores Press, 192 Cal.App.4th 567 (2011), in which the Court of Appeal held that an “explicit mutual wage agreement” that provided a fixed salary for 66 hours of work each week complied with California overtime laws and that no further overtime compensation was owed to the employee.
Temporary Service Employers Must Provide Additional Information on Wage Statements and Wage Theft Notice
In an additional piece of legislation dealing with wage statements, AB 1744, which goes into effect on July 1, 2013, requires that temporary-service employers include additional information on itemized wage statements, beyond what is already required under the Labor Code. Specifically, temporary-service employers will have to include the rate of pay for each separate assignment and the total hours worked for each assignment.
In addition, temporary-service employers will be required to include the name, physical address of the main office, mailing address if different, and telephone number of the legal entity for whom the employee will perform work, and any other information the Labor Commissioner deems material and necessary on the Wage Theft Notice provided to new employees.
Human Trafficking Posting is Required
Under Senate Bill 1193, certain employers must post a notice that contains information about listed organizations that provide services in support of the elimination of slavery and human trafficking. The notice must be displayed in a conspicuous location that is easily visible by both employees and the public, and must be printed in English, Spanish, and one other language that is the most widely spoken in the county where the establishment is located. The Department of Justice will be making a model notice available. This new law goes into effect Jan. 1, 2013, and the required notice must be displayed on or before April 1, 2013.
Under Assembly Bill 2677, increased employer -payment contributions that result in a lower hourly straight time or overtime wage do not constitute a violation of the applicable prevailing-wage determination as long as certain specified conditions are met.
Assembly Bill 1855 adds warehouse contractors to the list of vendors with whom a person is prohibited from entering into a contract where the person knows or should have known that the contract does not include funds sufficient to comply with applicable wage laws or regulations.
Assembly Bill 1775 increases the amount of wages exempt from wage garnishments to $320.00 per week, effective July 1, 2013. Under the new law, the amount of wages exempt from garnishment is now tied to the California, rather than the federal, minimum wage. The new limit of $320.00 per week reflects 40 hours of work at the California minimum wage of $8.00 per hour. Wages above $320.00 per week may be garnished up to a limit of 25 percent of the debtor’s disposable income.