Why it matters

The California Legislature has been busy with employment-related bills, passing measures to provide additional protections under the Fair Employment and Housing Act and removing the term "alien" from the state Labor Code. Governor Jerry Brown has already signed both into law. Other bills were passed by lawmakers and are currently being considered by the Governor, including a measure that would limit employers' ability to mandate arbitration as well as a proposal that would prohibit unequal pay based on gender and ban retaliation against workers who discuss or ask about wages. One measure that did not see any movement: Senate Bill 3, which would have bumped the state's minimum wage up again, this time to $13 by 2017. The bills signed into law are set to take effect January 1, 2016, and employers should keep a close eye on the legislation still waiting for a signature, as the proposals could have a significant impact on employment practices.

Detailed discussion

California legislators have had employment on their minds. Below are a few of the new laws and pending bills relevant to employers in the state.

  • In August Governor Jerry Brown signed into law amendments to the Fair Employment and Housing Act (FEHA) that will provide protection for employees who make a request for an accommodation for a disability or religion. Assembly Bill 987 was initiated in reaction toRope v. Auto-Chlor System of Washington, Inc., a 2013 decision from a California appellate panel. In that case the employee requested a leave of absence to donate a kidney to his sister five months prior to the surgery. Two months before the surgery the employee was terminated. He sued for associational disability discrimination under FEHA, but the appellate panel affirmed dismissal of his suit, holding that "a mere request—or even repeated requests—for an accommodation, without more" does not constitute protected activity sufficient to support a claim for retaliation in violation of FEHA. AB 987 amended the statute to establish that "[a] request for reasonable accommodation based on religion or disability constitutes protected activity … such that when a person makes such a request, he or she is protected against retaliation for making the request." The changes to FEHA will take effect January 1, 2016.
  • A second new law, also set to take effect January 1, 2016, will remove the term "alien" from the state Labor Code. Sen. Tony Mendoza (D-Artesia), who proposed Senate Bill 432, said the term was derogatory as applied to foreign-born workers. "California is among the top destination states for immigrants in the United States," the lawmaker said in a statement. "Given the abundant evidence of their many contributions, it is imperative that any derogative references to foreign-born individuals be repealed from state law." Pursuant to the new law, the term will be deleted from the state Code.
  • Bringing the battle over arbitration agreements in the employment context to the Legislature, lawmakers passed a controversial new measure earlier this month. Assembly Bill 465 would effectively ban mandatory agreements to arbitrate employment disputes in the state. While employee groups have voiced support for the proposal, the California Chamber of Commerce has dubbed it a "job killer," cautioning that it would clog the courts and lead to more employment litigation, as well as likely be preempted by the Federal Arbitration Act. The Senate passed the bill in a 22-to-15 vote and the Assembly followed by a vote of 45 to 30. Gov. Brown has until October 11 to sign it into law. If he does, any arbitration agreement entered into, revised, extended, or renewed on or after January 1, 2016 would need to include a statement that the agreement is not mandatory and that signing is not a condition of employment.
  • A second measure awaiting the Governor's signature is Senate Bill 358, the California Fair Pay Act. The legislation would prohibit employers from paying employees of one sex at a rate less than the rate paid to employees of the opposite sex "for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions." In addition, the bill protects workers who discuss or ask about wages from retaliation. Gov. Brown has indicated that he intends to sign the measure, which would take effect January 1, 2016. Sponsor Sen. Hannah-Beth Jackson (D-Santa Barbara) called the bill a "template for other states to follow" and the strongest equal-pay law in the country.
  • One proposed law that didn't pass: Senate Bill 3, a piece of legislation that would increase the state's minimum wage to reach $13 by July 1, 2017, with annual cost-of-living increases beginning in 2019. Currently the state's minimum wage is $9 per hour, with a raise to $10 starting January 1, 2016 as a result of legislation enacted in 2013. SB 3 would have tweaked the schedule to jump to $11 on January 1, 2016 instead, with a further increase to $13 on July 1, 2017. The Assembly's Appropriations Committee held the bill instead of pushing it through the Legislature, however.

To read AB 987, click here.

To read SB 432, click here.

To read AB 465, click here.

To read SB 358, click here.

To read SB 3, click here.