Why it matters

Employers in California will be facing some new laws in the coming months as Governor Jerry Brown signed several employment-related bills on the last day of the legislative session. In addition to extending the protections of the Fair Pay Act to race and ethnicity and prohibiting employers from considering prior salary as the justification for disparity in compensation, employers will be barred from asking applicants to disclose any information regarding juvenile convictions, pursuant to another measure. The governor also signed a bill restricting employers’ use of choice of law and forum provisions. With the new laws scheduled to take effect on January 1, 2017, employers should familiarize themselves with the changes.

Detailed discussion

As the California legislative session wound down, lawmakers sent several employment-related bills to the Governor Jerry Brown’s desk for a signature. The governor obliged with regard to the following pieces of legislation:

  • Two separate bills expand upon last year’s Fair Pay Act. Similar to the Act to Establish Pay Equity recently passed in Massachusetts, Assembly Bill 1676 prohibits employers from considering prior salary as a reason to justify disparity in compensation. A second measure, Senate Bill 1063, added two new protected categories to the Fair Pay Act: race and ethnicity. Senate Bill 1063, known as “The Wage Equality Act,” bans employers from paying employees a wage rate less than the rate paid to employees of a different race or ethnicity for substantially similar work, using the same evidentiary standards and burdens as set forth in the Fair Pay Act. Both new laws are set to take effect January 1, 2017.
  • Employers are no longer permitted to ask job applicants about any juvenile court matter beginning January 1, 2017, after Gov. Brown signed Assembly Bill 1843 into law. The measure prohibits employers from asking an applicant to disclose any information regarding juvenile convictions or seeking or utilizing any information related to “an arrest, detention, processing, diversion, supervision, adjudication, or court disposition” while the person was subject to the process and jurisdiction of a juvenile court. An applicant may recover $200 or actual damages—whichever is greater—for violations of the law, with treble damages or $500 for intentional violations, plus costs and reasonable attorney’s fees.
  • In another change for employers, a new law bars the use of choice of law and forum provisions that require employees to litigate or arbitrate outside the state of California. Senate Bill 1241 provides that employers cannot require an employee “who primarily resides and works in California,” as a condition of employment, to either adjudicate outside of California a claim arising in the state or deprive the employee “of the substantive protection of California law with respect to a controversy arising in California.” Neither “primarily resides or works in California” nor “substantive protection of California law” were terms defined by the statute. The law does contain an exception for workers represented by counsel who negotiate the terms of their employment agreements. Employees may bring a private action for violations of the law with the ability to recover reasonable attorney’s fees. The new law applies only to contracts entered into, modified or extended on or after January 1, 2017.

To read A.B. 1676, click here.

To read S.B. 1063, click here.

To read S.B. 1843, click here.

To read S.B. 1241, click here.