Now comes the fun part.
The California Legislature is back in full swing for its final push towards adjournment on Friday, September 13th.
In these remaining weeks, action will occur that will produce – or not produce – the passed bills that could become the new laws governing California private sector employers. Of those five weeks of action, the two final weeks (September 1-13) will see the bulk of the legislative tumult. In the past three annual legislative sessions, more than 80% of the bills signed by the Governor were chaptered1 after the Legislature returned from its summer recess. So far, in 2013, only 70 bills had been signed by Governor Jerry Brown through the July summer recess. The final total of bills signed by the Governor by October will probably be at least ten times that number.
The legislative tactic known as “gut and amend” allows legislators to delete the text of an existing bill and replacing it with something new and often unrelated as little as three days before adjournment.2 Look for such products again this September. Such last-minute bills have a higher rate of passage than legislation that goes through the normal process – probably in part precisely because they proceed through a short-circuit of the “normal process,” and also because sometimes such products represent the behind-the-scenes joint consultations of various key stakeholders from, for example, the Governor’s office, the business community, and organized labor.
The following outlines major California legislative developments as of August 16, 2013, as well as a summary of significant pending bills affecting California private-sector employers.
Major Recent Developments
- The minimum wage increase (AB 10), now pending in the state Senate, was amended on June 19 to delete its automatic increase feature, but now proposes to increase the minimum wage by 25% over a five-year period. The bill’s prospects are uncertain after a hearing before the Senate Appropriations Committee last week at which the Governor’s office expressed some concerns about the costs of the bill.
- The Senate passed a bill (SB 400) that would extend current protections required of employers for employees who are victims of domestic violence and sexual assault to employees who are known or suspected victims of stalking, and require reasonable accommodations, which could be any of more than a dozen possible accommodations listed in the current version of the bill. The bill is at its last committee stop (Assembly Appropriations) before coming up for final passage by the Assembly.
- For employers who have unionized employees, another bill of interest would create a new evidentiary privilege, making confidential most communications between a union agent and union member (AB 729). This bill is awaiting a final Senate floor vote.
- Unfair immigration-related practices could be the subject of heavy fines and private enforcement actions under proposals contained in AB 263 and SB 666.
- Two bills would create additional protected categories under the Fair Employment and Housing Act (FEHA) for familial status (SB 404) and military and veteran status (AB 556).
- A bill (SB 292) declaring that a person prosecuting a claim of sexual harassment need not prove that the sexually harassing conduct was motivated by sexual desire has been signed into law by Governor Brown, and will take effect as a regular new law January 1, 2014.
The last day for any bill to be passed is September 13. Any bill passed by the Legislature on or before September 13 and in the Governor’s possession after September 13 must be signed or vetoed by Sunday, October 13.
Bill Summary and Status
Following is a summary of significant bills affecting California private employers3 now pending in the Legislature, and their status in the legislative process.
AB 10 (amended June 19) would amend section 1182.12 of the Labor Code to increase the minimum wage on and after January 1, 2014, to not less than $8.25 per hour. The bill would further increase the minimum wage, on and after January 1, 2015, to not less than $8.75 per hour; on and after January 1, 2016, to not less than $9.25 per hour; on and after January 1, 2017, to not less than $9.50 per hour; and on and after January 1, 2018, to not less than $10 per hour. Passed Assembly and Senate Labor and Industrial Relations; pending in Senate Appropriations.
AB 11 (amended January 28) would amend Section 230.4 of the Labor Code. Existing law requires an employer employing 50 or more employees to permit an employee who is a volunteer firefighter to take temporary leaves of absence, not to exceed an aggregate of 14 days per calendar year, for the purpose of engaging in fire or law enforcement training. This bill would revise these provisions to require those employers to permit an employee who performs emergency duty as a volunteer firefighter, reserve peace officer, or as emergency rescue personnel, as defined, to take the leave of absence described above for the purpose of engaging in fire, law enforcement, or emergency rescue training. Enrolled4 August 8.
AB 241 (last amended July 1) would enact the “Domestic Worker Bill of Rights” covering childcare providers; caregivers of people with disabilities; sick, convalescing, or elderly persons; house cleaners; housekeepers; maids; and other household occupations. Pending in Senate Appropriations. AB 263 (last amended August 12) would, among other things, add Labor Code section 1019 to prohibit specified "unfair immigration-related practices," increase civil penalties to as high as $10,000 per employee per violation for any retaliation against an employee, authorize a private right of action for equitable relief, damages, and penalties, and require a court to order the appropriate government agencies to suspend or revoke an offending employer’s business license. The bill would expand the protected conduct to include a written or oral complaint by an employee that he or she is owed unpaid wages. The bill would also expand the prohibited actions to include preventing an employee from, or retaliating against an employee for, providing information to, or testifying before, any public body conducting an investigation, hearing, or inquiry. Pending in Senate Appropriations.
AB 302 (last amended August 12) would amend Labor Code section 1720. Existing law requires that, except as specified, not less than the general prevailing rate of per diem wages, determined by the Director of Industrial Relations, be paid to workers employed on public works projects. Existing law defines “public works” to include, among other things, construction, alteration, demolition, installation, or repair work done under contract and paid for, in whole or in part, out of public funds, but exempts from that definition, among other projects, an otherwise private development project if the state or political subdivision provides, directly or indirectly, a public subsidy to a private development project that is de minimis in the context of the project. to state that public subsidy is de minimis if it is both less than $25,000 and less than 1% of the total project cost. The bill would specify that those provisions do not apply to a project that was advertised for bid, or a contract that was awarded, before January 1, 2014. Final Senate floor vote pending.
AB 442 would amend Labor Code sections 1194.2 and 1197.1 to expand the civil penalty and the payment of restitution of wages to the employee for a Labor Commissioner citation against an employer to also subject the employer to payment of liquidated damages to the employee. Final Senate floor vote pending.
AB 556 (last amended April 11) would amend Government Code section 12920 and related sections to add the protected category of “military and veteran status” to the FEHA. Final Senate floor vote pending.
AB 729 (last amended July 9) amends sections 912 and 917, and adds sections 1048-1048.1, of the Labor Code to provide that a union agent, as defined, and a represented employee or represented former employee, have a privilege to refuse to disclose any confidential communication between the employee or former employee and the union agent while the union agent was acting in his or her representative capacity, except as specified. The bill would provide that, in most instances, a represented employee or represented former employee also has a privilege to prevent another person from disclosing a privileged communication. The bill would further provide that this privilege may be waived in accordance with existing law, and does not apply in criminal proceedings. The bill is double-jointed5 with AB 267. Bill source: California Labor Federation, AFL-CIO. Final Senate floor vote pending.
AB 1140 (last amended May 24) would amend Labor Code section 1773.6 to require that if the Director of Industrial Relations determines, within a semiannual period, that there is a change in any prevailing rate of per diem wages in a locality, that determination applies to any public works contract that is awarded or for which notice to bidders is published on or after January 1, 2014. The bill would authorize any contractor, awarding body, or specified representative affected by a change in rates on a particular contract to, within 20 days, file with the director a verified petition to review the determination of that rate. The bill would require the director to, upon notice to the interested parties, initiate an investigation or hold a hearing, and, within 20 days after the filing of that petition, except as specified, make a final determination and transmit the determination in writing to the awarding body and to the interested parties. The bill would make that determination issued by the director effective 10 days after its issuance, and until it is modified, rescinded, or superseded by the director. Passed Assembly and Senate committee; final Senate floor vote pending.
AB 1165 (last amended June 13) would amend Labor Code section 6600 to provide that an appeal of an OSHA citation or notice, as specified, that is classified and cited as a serious violation, repeat serious violation, willful serious violation, willful violation, willful repeat violation, or failure to abate shall not stay abatement dates and requirements. Pending in Senate Appropriations.
AB 1336 (last amended June 24) would amend Labor Code sections 1741, 1771.2, and 1776 to change the deadline for service of wage and penalty assessments by the Labor Commissioner on public works projects, modify the date by which any action by a joint labor-management committee to enforce prevailing wage requirements must be filed, and would also change the permissible modification of the redaction of payroll records kept for inspection by public works contractors. Final Senate floor vote pending.
AB 1383 would amend section 1205 of the Labor Code to establish that no provision of the Labor Code shall be deemed to restrict the exercise of local police powers in a more stringent manner. Final Senate floor vote pending.
AB 1384 would add Labor Code section 2676.55 to subject any person registered as a garment manufacturer who fails to display his or her name, address, and garment manufacturing registration number on the front entrance of his or her business, as specified, to a civil penalty, as specified. Final Senate floor vote pending.
AB 1386 would amend Labor Code section 98.2 to require that the amount due under a Labor Commissioner order, decision, or award that becomes final and has become a Superior Court order shall be a lien on the employer’s personal and real property, as specified, and would require the county recorder to record and index the order as a mortgage on real estate and to file and index the order as a security interest. Final Senate floor pending.
AB 1387 (amended April 18) would amend section 2055 and repeal section 2067 of the Labor Code to increase the car wash employer’s bond requirement amount from $15,000 to $150,000, but would exempt an employer from that requirement if the employer has a collective bargaining agreement in place that meets specified criteria, and would delete the existing sunset date for the statute governing car washes, thus extending those provisions indefinitely. Passed Assembly and Senate Labor and Industrial Relations; final Senate floor vote pending.
SB 7 (last amended August 7) would make certain findings and add Labor Code section 1782 which would prohibit a charter city from receiving or using state funding or financial assistance for a construction project if the city has a charter provision or ordinance that authorizes a contractor to not comply with prevailing wage provisions on any public works contract. The bill would, except as specified, prohibit a charter city from receiving or using state funding or financial assistance for a construction project for up to two calendar years if the city has, after January 1, 2014, has awarded, within the prior two years, a public works contract without requiring the contractor to comply with prevailing wage provisions. This bill would authorize charter cities to receive or use state funding or financial assistance if the city has adopted a local prevailing wage ordinance, applicable to all of its public works contracts, that includes requirements that are equal to or greater than the state’s prevailing wage requirements, as specified. This bill would exclude contracts for projects of $25,000 or less for construction work, or projects of $15,000 or less for alteration, demolition, repair, or maintenance work. This bill would require the Director of Industrial Relations to maintain a list of charter cities that may receive and use state funding and or financial assistance for their construction projects. This bill would provide that it does not restrict a charter city from receiving or using state funding or financial assistance that was awarded to the city prior to January 1, 2015, or from receiving or using state funding or financial assistance to complete a contract that was awarded prior to January 1, 2015, and that a charter city would not be disqualified from receiving or using state funding or financial assistance for its construction projects based on the city’s failure to require a contractor to comply with prevailing wage provisions in performing a contract the city advertised for bid or awarded prior to January 1, 2015. Pending in Assembly Appropriations.
SB 25 (last amended June 19) would amend Labor Code section 1164 to require an agricultural employer or labor organization filing an impasse declaration to additionally declare that it has made itself available to meet and bargain with the other party at reasonable times and places during the applicable period. This bill would permit the filing of a declaration as described above without having to meet the condition that the parties have not previously had a binding contract between them. The bill would also provide that an action to enforce the order of the Agricultural Labor Relations Board may be filed within 60 days whether or not the other party is seeking judicial review of the order. The bill would also increase the evidentiary threshold for the court to grant a stay of the board’s order and require the court to make written findings supporting any order granting a stay of the order during the pendency of the appeal. Final Assembly floor vote pending.
SB 54 (last amended August 5). In its first four versions, this bill was an urgency measure concerning county employees’ retirement. In its fifth version, it was transformed by the “gut-and-amend” process into a bill that would add Health and Safety Code section 25536.7 to require an owner or operator of a stationary source with one or more covered processes that is required to prepare and submit a risk management plan (RMP), when contracting for the performance of construction, alteration, demolition, installation, repair, or maintenance work at the stationary source, to require that its contractors and any subcontractors use a skilled and trained workforce to perform all onsite work within an apprenticeable occupation in the building and construction trades, including skilled journeypersons paid at least a rate equivalent to the applicable prevailing hourly wage rate. The bill would not apply to oil and gas extraction operation. Pending in Assembly Appropriations.
SB 168 (last amended August 5) would add section 1698.9 to the Labor Code to make a successor farm labor contractor liable, as specified, for wages and penalties, owed by a predecessor farm labor contractor. Final Assembly floor vote pending.
SB 292 (amended April 2) would amend section 12940 of the Government Code (California Fair Employment and Housing Act) to specify, for purposes of the definition of sexual harassment, that sexually harassing conduct need not be motivated by sexual desire; intent of bill is to overrule what the bill’s author suggests is the outlier holding in Kelley v. Conco Companies (2011) 196 Cal.App.4th 191, that a plaintiff in a same-sex harassment case must prove that the harasser harbored a sexual desire for the plaintiff in order to survive summary judgment. The bill received no negative votes in the committees or in either house of the Legislature. Sponsor: California Employment Lawyers Association. Signed by the Governor August 12 (Chapter 88).
SB 377 (last amended May 9) would amend Labor Code sections 1726, 1741, 1771.2, and 1773.5 to require a political subdivision that believes a project in which it is interested, as specified, is not a public work, to provide notice, as specified, to the Director of Industrial Relations, the Labor Commissioner, and any other person who requests that notice. This bill would require the director to determine, within 60 days of receipt of a request for a determination, except as specified, whether a project is a public work. This bill would also require an administrative appeal of that determination to be made within 30 days of the date of the determination, and would require the Director of Industrial Relations to issue a determination on an appeal within 30 days after the receipt of the appeal, except as specified. This bill would grant to the director quasi-legislative authority to determine coverage of projects under prevailing wage requirements, and provide that a final determination on any appeal is subject to judicial review. The bill would also toll the period for service of assessments for the period of time required by the Director of Industrial Relations to make a determination whether the project is a public work, as specified. The bill would also toll the period for the period of time that a contractor or subcontractor fails to provide certified payroll records pursuant to a request from the Labor Commissioner, a joint labor-management committee, or an approved labor compliance program. In addition, the bill would toll the period for commencing an action during the period of time in which a request to determine whether a project is a public work, including the period of a timely administrative appeal, is pending before the director, as specified. Pending in Assembly Appropriations.
SB 390 (amended June 25) would amend Labor Code section 227 to make it a crime for an employer to fail to remit withholdings from an employee’s wages that were made pursuant to state, local, or federal law; and would prescribe how recovered withholdings or court-imposed restitution, if any, are to be forwarded or paid. Pending in Assembly Appropriations.
SB 400 (last amended August 6) would amend sections 230 and 230.1 of the Labor Code to extend the protections available to persons in FEHA-protected categories to victims of stalking; prohibit an employer from discharging or in any manner discriminating or retaliating against an employee because of the employee’s known status as a victim of domestic violence, sexual assault, or stalking; require the employer to provide reasonable accommodations for such a victim; create a private right of action for an aggrieved employee to seek enforcement of those victim status protection and reasonable accommodation provisions; and permit the recovery of reasonable attorney’s fees by a prevailing employee only. Pending in Assembly Appropriations.
SB 404 (last amended July 3) would amend sections 12920, 12921, 12926, 12940, and 12955.2 of the Government Code to add “familial status" to the FEHA as an additional protected status. Cosponsors: California Employment Lawyers Association, Center for Worklife Law, Equal Rights Advocates. Pending in Assembly Appropriations.
SB 435 (amended April 16) would amend section 226.7 of the Labor Code to require employees of piece rate workers to pay those employees for any meal or rest breaks, or recovery periods, and set the rate of pay for rest and recovery periods for piece rate workers. Pending in Assembly Appropriations.
SB 462 would amend section 218.5 of the California Labor Code to authorize the award of attorney's fees and costs in an action brought for the non-payment of wages, fringe benefits or health and welfare pension fund contributions, where the prevailing party is not the employee, contingent on a finding by a trial court that the employee brought the court action in bad faith. Sponsor: California Employment Lawyers Association. Enrolled August 15.
SB 516 (last amended August 5) would amend various sections of the Business and Professions Code to, among other things, add new registration and bonding requirements (some effective January 1, 2015) for certain foreign labor contractors, create joint and several liability between both foreign labor contractors and employers who use their services, and impose and increase penalties for noncompliance. Pending in Assembly Appropriations.
SB 556 (last amended July 1) would add section 3273 to the Civil Code to prohibit a person, firm, corporation, or association that is a nongovernmental entity and contracts to perform labor or services for a public entity from displaying on a vehicle or uniform a seal, emblem, insignia, trade, brand name, or any other term, symbol, or content that reasonably could be interpreted as implying that the labor or services are being provided by employees of the public agency, unless the vehicle or uniform conspicuously displays a disclosure. Co-sponsors: California Labor Federation; California Professional Firefighters. Final Assembly floor vote pending.
SB 648 (last amended May 7) would amend and add sections of various codes to, among other actions, extend the same prohibitions on the smoking of tobacco products in workplaces to electronic cigarettes. Pending in Assembly Governmental Organization.
SB 655 (last amended August 6) would amend section 12965, and add section 12940.5, of the Government Code to provide that, in a claim of discrimination or retaliation under the FEHA, the person claiming to have been aggrieved shall prevail if he or she has proven that a protected characteristic or activity was a substantial motivating factor, as defined, in the employment action or decision. If an employer pleads and proves that it would have made the same employment action or decision at the same time, without considering the protected characteristic or activity, the remedies available to the employee would be limited as specified. If an employer fails to prove that it would have made the same employment action or decision at the same time without considering the protected characteristic or activity, the bill would authorize noneconomic damages, injunctive relief, and attorney’s and expert’s fees against the employer, and would require a specified civil penalty to be paid by that employer to the employee. The bill purports to codify the California Supreme Court's decision in Harris v. City of Santa Monica (2013) 56 Cal.4th 203, on consideration of an employer’s mixed motives in discrimination cases, and defines “substantial motivating factor.” Final Assembly floor vote pending.
SB 666 (last amended August 5) would add sections 494.6 and 6103.7 to the Business and Professions Code, amend sections 98.6 and 1102.5 of, and add section 244 to, the Labor Code, to subject specified business licenses to suspension or revocation, with a specified exception, if a current, former, or prospective employee of the licensee attempts to exercise a right related to his or her employment or any terms, conditions, or benefits of that employment protected by state law and, in reaction, the licensee threatens to retaliate or retaliates based on the employee’s citizenship or immigration status. The bill would make it a cause for suspension, disbarment, or other discipline for any member of the State Bar to report immigration status or threaten to report immigration status of a witness or party to a civil or administrative action or his or her family member, as defined, to a federal, state, or local agency because the witness or party exercises or has exercised a right related to his or her employment. The bill would also prohibit an employer from retaliating or taking adverse action against any employee or applicant for employment because the employee or applicant has engaged in protected conduct. The bill would expand the protected conduct to include a written or oral complaint by an employee that he or she is owed unpaid wages. The bill would subject an employer to a civil penalty of up to $10,000 per violation of these provisions. Existing law entitles an employee to reinstatement and reimbursement for lost wages and benefits if the employee has been discharged, demoted, suspended, or in any way discriminated against because the employee engaged in protected conduct or because the employee made a bona fide complaint or claim or initiated any action or notice, as prescribed. The bill would similarly grant these entitlements to an employee who is retaliated against or subjected to an adverse action, and would specify that enforcement of these provisions does not require exhaustion of administrative remedies. According to committee reports, the bill is sponsored by the California Labor Federation. Pending in Assembly Appropriations.
SB 770 (amended August 5) would amend section 3300, and amend, repeal, and add sections 2708, 3301, 3302, and 3303, of the Unemployment Insurance Code to, beginning July 1, 2014, expand the scope of the family temporary disability program to include time off to care for a seriously ill grandparent, grandchild, sibling, or parent-in-law. Sponsor: Legal Aid Society-Employment Law Center. Pending in Assembly Appropriations.
SB 776 (amended April 15) would amend section 1773.1 of the Labor Code to modify existing law concerning permissible credits employers may take against the obligation to pay the general prevailing rate of per diem wages for prevailing wage payments, and would prohibit credit from being granted for employer payments made to monitor and enforce laws related to public works if those payments are not required by a collective bargaining agreement. Enrolled August 15.