The 2017 California legislative session closed October 15, 2017, with Governor Jerry Brown waiting until the last days of the session to sign several bills affecting employers. Below is a summary of the employment-related bills that were signed into law and vetoed by Governor Brown. Unless otherwise noted, changes to the law are effective January 1, 2018.
AB 168 - Salary History Inquiries
AB 168 prohibits private and public sector employers from asking applicants about their prior salary, compensation, and benefits. Employers are also prohibited from relying on an applicant’s salary history as a factor in determining whether to offer employment, or the amount of salary to offer. However, in determining pay, employers may consider prior salary information the applicant voluntarily discloses. AB 168 also requires employers to provide an applicant the pay scale for a position upon an applicant’s request.
Employer Action: Employers should review and update their employment applications and recruitment guidelines to ensure these documents do not impermissibly inquire into, or rely upon, salary history information. Personnel involved in the hiring process should also be trained on the types of inquiries and questions that are permissible and not permissible.
AB 450 – Immigration Workforce Protection Actions
AB 450, known as the Immigrant Worker Protection Act, protects workers from immigration enforcement while on the job. Under AB 450, an employer is prohibited from voluntarily providing a federal immigration enforcement agent access to a business without a properly executed warrant. The employer is also forbidden from providing the agent access to the employee’s records without a subpoena. Additionally, employers are required to provide notice of an immigration agency’s inspection of I-9 forms or other records within 72 hours to employees, and provide a copy of the inspection notice and any results to affected employees and their authorized representatives.
Employer Action: Penalties for violations of the provisions of this law range from $2,000 to $5,000 for a first violation and $5,000 to $10,000 for each subsequent violation. Before this law takes effect, security personnel, supervisors and Human Resources representatives should receive training on handling the law’s new regulations, including notification requirements.
AB 1008 – Ban-the-Box
Existing law prohibits state and local agencies from asking an applicant to disclose conviction information until the applicant is made a conditional offer of employment. AB 1008 extends this prohibition to all employers in California with five or more employees. Covered employers may no longer include on employment applications questions about an applicant’s conviction history. Once an offer has been made, criminal history information may be obtained by the employer. Before an employer may reject an applicant based on the criminal history, the employer must conduct an individual assessment and notify the employee of its preliminary decision. The assessment must justify denying the applicant the position by drawing a relevant connection between the conviction history against the specific job duties of the position. Applicants will have an opportunity to respond to the employer’s notice. If the employer intends to stick with the decision to not hire the applicant, the employer must provide a second notice informing the applicant of the decision.
Employer Action: Employers should review and update employment applications, recruitment and hiring guidelines, including background check procedures to ensure documents do not impermissibly inquire into, or consider conviction histories. Personnel involved in the hiring process should also be trained on the types of inquiries and questions that are permissible and not permissible.
AB 1556 - Gender-Neutral Terms for Leaves Existing laws prohibit an employer from preventing an employee from taking leave for pregnancy, childbirth, or a related medical condition. Under many of these pregnancy-related employment protections, there are statutory references to gender specific terms such as "female," "she," and "her." AB 1556 revises these provisions by deleting gender-specific personal pronouns and replacing them with gender-neutral terms such as "person" or "employee."
Employer Action: In light of AB 1556’s revisions, employers should update employment policies and leave forms and letters to reflect gender-neutral terms related to leaves under the California Family Rights Act and the Pregnancy Disability Leave Act.
AB 1461 – Food Delivery Enterprises AB 1461 requires an employee of a food delivery enterprise, who is involved in the preparation, storage or service of food as part of his or her employment, to obtain a food handler card.
Employer Action: Food delivery enterprises should become familiar with the requirements of this law and obtain the necessary licenses.
AB 1701 – Joint Liability of General Contractors and Subcontractors AB 1701 holds general contractors jointly liable with subcontractors for unpaid wages, benefits, or contributions that a subcontractor owes for labor connected to the contract. The law also requires subcontractors to provide required payroll records upon a general contractor’s request. Notably, AB 1701 permits a wage claimant to proceed directly against the direct contractor for the subcontractor’s debts, without having to first obtain a judgment against the subcontractor. AB 1701 applies to construction contracts entered into on or after January 1, 2018.
Employer Action: Governor Brown issued a signing memo regarding AB 1701, requesting AB 1701’s sponsors to clarify any confusion over the application of this new law regarding liability for penalties and liquidated damages. Contractors are advised to review AB 1701, and be on the lookout for potential revisions to this law in 2018.
SB 63 – New Parent Leave Act SB 63, the New Parent Leave Act ("NPLA"), expands California’s parental leave laws by requiring employers with 20 to 49 employees to provide up to 12 weeks of unpaid, job-protected parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement. Similar to the California Family Rights Act, the NPLA requires employers to continue the employee’s health insurance benefits while on leave. The NPLA applies to private, state, and municipal employers.
Employer Action: Covered employers must amend their leave policies and employee handbooks to include the NPLA, and train personnel on handling leaves, which in the past had only applied to larger employers.
SB 295 - Farm Labor Contractors’ Harassment Training
Existing law requires farm labor contractors to certify they have provided sexual harassment training to agricultural employees as a condition to receiving a license. SB 295 expands these requirements by requiring the training to be in the language understood by the employee. SB 295 also requires applicants seeking a license to provide the Division of Labor Standards Enforcement with a complete list of all materials and resources used to provide sexual harassment prevention training to agricultural employees and the total number of agricultural employees trained in sexual harassment prevention during the calendar year preceding an application.
Employer Action: Agricultural employers must update harassment training materials and resources, including certificates of training, to ensure these materials are provided in the languages spoken in the workplace.
SB 306 - Labor Commissioner Workplace Retaliation Investigations SB 306 allows an employee or the Labor Commissioner to obtain a temporary restraining order to prohibit employers from terminating employees who allege retaliation before the Labor Commissioner completes its investigation. Under current law, the Labor Commissioner has the authority to seek injunctive relief only after it has investigated a claim of retaliation and made a determination that a violation exists.
Employer Action: Employers should be aware that they may be prevented from terminating an employee filing a retaliation complaint with the Labor Commissioner during the investigation, if the Labor Commissioner issues the employer a temporary restraining order.
SB 396 - Harassment Training Amendments Existing law, AB 1825, requires employers with 50 or more employees to provide two hours of sexual harassment training to all supervisors every two years or within six months of assuming a supervisory position. SB 396 expands the scope of training by requiring employers to include practical examples to address harassment based on gender identity, gender expression, and sexual orientation. Employers will also be required to post an updated poster regarding sexual harassment once updated by the Department of Fair Employment and Housing ("DFEH"), and a new poster developed by the DFEH regarding transgender rights.
Employer Action: Employers must ensure their training materials include practical examples and information on gender identity, gender expression and sexual orientation, and must keep on the lookout for the new and updated posters from the DFEH.
SB 490 - Hair Salons and Commission Wages Responding to confusion regarding the applicability of commission compensation rules for professionals licensed under the Barbering and Cosmetology Act, SB 490 clarifies that such employees may be paid by commission if certain requirements are met. SB 490 provides that wages paid to licensed employees, when paid as a percentage or a flat sum portion paid to the employer by the client, constitute "commissions," provided that the employee is paid a regular base hourly rate of at least two times the state minimum wage for all hours worked in addition to commissions. SB 490 also allows employers and employees to agree on a commission in addition to the base hourly rate, and requires that commission wages be paid twice during each calendar month on pre-designated paydays.
Employer Action: Barbering and Cosmetology employers should carefully review commission and compensation agreements and policies to ensure compliance with the new compensation requirements.
SB 621 – Salary Test for Part-Time Private School Teachers
SB 621 follows up on AB 2230 from last year, which established a new earnings standard for private school teachers designated as exempt employees (de-coupling minimum salary from the "twice the state minimum wage" standard). SB 621’s amendments extend the exception to part-time teachers if their salary is proportionate to the full-time salary requirements.
Employer Action: Private schools may classify part-time teachers as exempt if their compensation satisfies requirements under the amended law, and other requirements are satisfied.
The Governor vetoed a handful of notable bills. AB 1209 would have required companies with 500 or more employees to report data on gender wage differentials to the government. The Governor also vetoed bills prohibiting discrimination against employees or their dependents related to "reproduction health decisions" (AB 569), requiring the disclosure of an employer’s Injury and Illness Prevention Program ("IIPP") upon request from employees (AB 978), and authorizing local government entities to enforce employment discrimination claims against employers (SB 491).