In the latter half of 2016, California Governor Jerry Brown signed numerous bills into law. Below is a summary of those laws that will affect California employers in 2017 and beyond.
Fair Pay Expansion—AB 1676 prevents employers from basing an employee’s salary solely on what the employee earned at a previous job. While employers may still inquire about salary history, the law seeks to eliminate any penalty due to prior practices tainted by gender bias. SB 1063 extends prior amendments to the Fair Pay Act to workers of a different “race or ethnicity,” not just women. Both laws took effect on January 1, 2017.
Choice Of Law And Venue In Employment Contracts—Effective January 1, 2017, new Labor Code section 925 prohibits employers from requiring employees who primarily reside and work in California to agree to, as a condition of employment, a contract provision requiring adjudication of claims outside of California or application of another state’s laws. Any such provision is voidable by the employee. The protections do not apply to employees who were represented by counsel in negotiating the contract.
Domestic Violence Leave Notification Requirements—AB 2337 will require employers with 25 or more employees to provide written notice to their employees—at hire and upon later request—of their right to take a leave of absence as a result of domestic violence, sexual assault or stalking. The Labor Commissioner is required to develop and post online by July 1, 2017 a form that employers may use to satisfy these new notice requirements. The employer’s notice obligations under this law commence once the new form is available.
Cell Phone Use While Driving—AB 1785, which took effect on January 1, 2017, broadens existing law by forbidding drivers to hold their phones or devices while driving. Phones must be mounted to be used, and only a single tap or swipe will be permitted while driving. Employers with policies regarding cellphone use while driving company vehicles or while driving on company business should update their policies accordingly.
Enrollment In Retirement Savings—SB 1234 requires private employers with 5 or more employees who do not offer an employer-sponsored retirement plan to automatically enroll their employees in a new state-funded retirement account and deduct money from their paychecks accordingly, although employees may opt out or set their own savings rate. This mandate for employers, however, will not go into effect until the government’s so-called “Secure Choice” program is fully operational—which could take years.
Gender-Neutral Restrooms—AB 1732 requires all employers to post signs on single-user restrooms indicating that the restroom is an “all-gender” facility by March 1, 2017. The law will not affect restrooms with multiple stalls.
Juvenile Court Records—Effective January 1, 2017, AB 1843 extends California Labor Code protections to juvenile court records. Specifically, Section 432.7 expressly prohibits employment-related requests for, consideration or use of, or other efforts to obtain information relating to any “arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while the person was subject to the process and jurisdiction of the juvenile court law.” Limited exceptions exist for certain health care employers.
Background Checks For Ride-Sharing Company Drivers—Effective January 1, 2017, AB 1289 requires all ride-sharing service providers using an online-enabled platform to run extensive background checks on drivers encompassing their entire local and national criminal histories. The law prohibits “a transportation network company from contracting with, employing, or retaining a driver if he or she, among other things, is currently registered on the United States Department of Justice National Sex Offender Public Website, has been convicted of any of certain terrorism-related felonies or a violent felony, as defined, or, within the previous 7 years, has been convicted of any misdemeanor assault or battery, any domestic violence offense, driving under the influence of alcohol or drugs, or any of a specified list of felonies.” AB 1289 carries a fine of up to $5,000 for any failure to comply with the statute, which includes both the requirement to run the compliant background check and to refrain from hiring certain individuals.
Itemized Wage Statements—AB 2535 adds a new section to Labor Code section 226, no longer requiring employers to list hours worked on the paystubs of exempt workers. This became effective January 1, 2017, eliminating any ambiguity, and frivolous and costly litigation, about reporting hours for exempt employees.
Vetoed—Expansion Of CFRA To Small Employers—Governor Brown vetoed SB 654, which would have required California employers with 20-49 employees to provide up to 6 weeks of unpaid job-protected leave to bond with a new child, citing concern for the impact on small businesses.
Local Leave-Related Developments
San Francisco Paid Parental Leave—San Francisco has made several revisions to its paid parental leave law, effective January 1, 2017. These changes largely focus on determining coverage for employees with fluctuating hours, as well as employee notice requirements. Clarifications provided on December 23, 2016 address definitions, notification requirements, procedures, and computations of payments. Covered employers must post this poster at every work place and job site, and provide this form to employees requesting leave. For more detail, see the San Francisco Paid Parental Leave website.
San Diego Sick Leave—San Diego’s paid sick leave law went live on July 11, 2016. On September 2, 2016, an implementing ordinance took effect, clarifying the law in several important ways. Principally, the implementing ordinance will allow employers to cap sick leave accrual at 80 hours, to front-load sick leave of no less than 40 hours at the beginning of the year (in lieu of by accrual), and overall clarifies the law to be more consistent with the state’s paid sick leave law. For more details, see San Diego’s Minimum Wage Program website.
Berkeley Sick Leave—Effective October 1, 2017, Berkeley will require all employers, regardless of size, to provide paid sick leave to employees at the rate of 1 hour of leave for every 30 hours worked. The law allows a cap of 72 hours of accrual (or 48 hours for employers with fewer than 25 workers). Expect more details on this law as its implementation deadline approaches.