Like clockwork, each fall season in our beautiful state of California brings with it a flurry of legislative activity where Governor Jerry Brown and the California Legislature typically enact numerous laws that make being an employer in California a little harder and more complicated. The fall of 2017 proved to be no exception.

California employment law is a minefield that can be difficult to navigate for the unwary employer. Below, we summarize the most important, recently enacted California employment laws. All employers should be aware of these new laws and take steps to review and revise their current business practices to avoid potential liability. Unless otherwise specified, all laws go into effect on January 1, 2018.

CONTRACTORS BEWARE: GENERAL CONTRACTOR LIABILITY EXPANDED TO INCLUDE WAGES OWED TO SUBCONTRACTORS’ WORKERS AT ANY TIER FOR PRIVATE WORKS

A.B. 1701 makes general contractors performing construction work in the state liable for payments owed to a subcontractor’s workers at any tier. Liability extends to unpaid wages, fringe or other benefit payments and contributions, and interest owed, but it does not include penalties or liquidated damages. The new law also requires subcontractors to provide payroll records to general contractors upon request. This applies to all contracts entered into on or after January 1, 2018.

Notably, employees will not have standing to enforce the new law on their own. That is, AB 1701 gives the California Labor Commissioner, labor-management cooperation committees, and unions the right to bring an action against the direct contractor, but it does not provide any private right of action to potentially unpaid employees themselves to bring a claim against the direct contractor for unpaid wages.

Practice Tip: General contractors should protect themselves from this type of exposure in their indemnity clauses in contracts with subcontractors. General contractors should ALSO discuss with subcontractors their practices regarding wages and benefits and/or request to review subcontractors’ records where wage compliance may be an issue.

PARENTAL LEAVE LAW EXPANDED TO SMALLER EMPLOYERS WITH 20+ EMPLOYEES

S.B. 63 amends the California Family Rights Act (“CFRA”) to allow employees who work for an employer with at least 20 employees to take 12 weeks of unpaid, but job-protected leave for new child bonding purposes so long as the employee works at a worksite that employs at least 20 employees within a 75 mile radius. This is a significant expansion of leave rights. Prior to this amendment, CFRA leave only applied to employers with 50 or more employees.

It will be unlawful for a covered employer to refuse to allow an eligible employee to take up to 12 weeks of job-protected parental leave to bond with a new child within one year of a child’s birth, adoption or foster care placement. To be eligible for this leave, an employee must have at least 12 months of service plus at least 1,250 hours of service with the employer during the 12-month period preceding the leave.

It is important to note that this amendment only expands CFRA’s bonding leave provision. It does not require employers with fewer than 50 employees to offer CFRA leave for other reasons, such as for the employee’s or a family member’s serious health condition.

Before the start of a parental leave, the employer must provide the employee with a guarantee of reinstatement to the same or comparable position after the leave. Failure to provide this guarantee will violate the law.

Although the leave is unpaid, employees may use accrued vacation, paid sick time, or other accrued paid time off and can apply for California Paid Family Leave benefits.

Employers must maintain and pay for group health coverage during a parental leave at the same level and under the conditions that coverage would have been provided had the employee continued working. The employer can recover coverage costs IF the employee fails to return from leave after the leave entitlement period AND the failure to return is for a reason other than the continuation, recurrence, or onset of a serious health condition or other circumstances beyond the employee’s control.

Practice Tip: Employers with at least 20 employees within a 75-mile radius of the work site should update their employee handbooks and policies, and create or update leave request forms and notices to comply with the reinstatement guarantee requirements of this new law. Most importantly, employers should train all their human resource personnel and managers about the new rights and obligations.

SALARY HISTORY INQUIRIES PROHIBITED

A.B. 168 prohibits all employers, public and private, from relying on salary history information as a factor in determining whether to offer employment and what salary to offer an applicant. Additionally, an employer may not, orally or in writing, personally or through an agent, seek salary history information, including compensation and benefits, about an applicant for employment.

If an applicant voluntarily and without prompting discloses salary history information to a prospective employer, the law would not prevent the employer from considering or relying on that information to set the salary for that application. Additionally, the law requires employers to provide the pay scale for a position upon an applicant’s “reasonable” request. (Note: A similar city ordinance takes effect in San Francisco and goes into effect in July 2018.)

Practice Tip: Employers should revise job applications and hiring forms and notices, both online and offline, to remove questions that seek salary history information. Employers should also revise hiring policies and procedure, including interview/screening guidelines, and train all personnel involved in recruiting to ensure that the organization will not request salary history and will not use salary history unless permitted by law.

“BAN THE BOX” – NO CRIMINAL BACKGROUND CHECKS BEFORE CONDITIONAL JOB OFFER

A.B. 1008 amends the Fair Employment and Housing Act (“FEHA”) to prohibit employers with five or more employees from:

  • Asking about an applicant’s conviction history on an application for employment;
  • Inquiring into or considering an applicant’s conviction history BEFORE the applicant receives a conditional offer of employment;
  • Considering, distributing or disseminating information related to arrests that did not result in convictions, diversion program participation, and/or convictions that were sealed, dismissed, expunged or eradicated.

Exempted from this law are:

  • Positions for government agencies (required by law to check conviction history);
  • Positions with criminal justice agencies;
  • Farm labor contractors;
  • Positions for which the employer is required by federal, state or local law to check criminal history or to restrict employment based on criminal history.

The law provides that the employer may ONLY consider an applicant’s conviction history AFTER the applicant has received a conditional offer of employment. If an employer intends to deny hire solely or in part because of conviction history, the employer MUST conduct an individualized assessment to determine whether that history has a DIRECT and ADVERSE relationship with the specific duties of the job. The employer must consider the nature and gravity of the offense and conduct, the passage of time since the date of the offense, and the nature of the position held or sought. Employers may, but are not required to, record the results of their individualized assessment.

If the individualized assessment leads to a preliminary decision that the conviction history is disqualifying, the employer must then follow a specific procedure as follows:

  • The employer must provide WRITTEN notice to the applicant identifying the conviction upon which the preliminary decision is based and include a copy of the conviction history, if any. The employer must also explain the applicant’s right to respond to the notice within at least five business days.
  • If the applicant timely notifies the employer in writing that he or she is disputing the conviction history and is obtaining evidence to do so, the employer must again notify the applicant regarding the following in writing: (1) the final denial, (2) information relating to any existing procedure to challenge the decision or request reconsideration, and (3) the right to file a complaint with the Department of Fair Employment and Housing.

Practice Tip: Employers should remove any questions or “boxes” that inquire about an applicant’s criminal background or conviction history. Employers should also review interviewing guidelines and hiring processes to ensure managers, hiring, and recruiting personnel understand the law prohibits them from inquiring into or relying on conviction history before a conditional offer of employment is made.

IMMIGRATION ENFORCEMENT

A.B. 450 bars public and private employers, and anyone acting on their behalf, from voluntarily consenting to allow an immigration enforcement agent to enter nonpublic areas of a workplace, unless authorized by a warrant or federal law.

This law also prohibits employers, and anyone acting on their behalf, from providing voluntary consent to an immigration enforcement agent to access, review, or obtain employee records without a subpoena or warrant. This law does not apply to inspection of I-9 records or other documents if the employer has received a Notice of Inspection.

This law imposes several new notification requirements as follows:

  • Within 72 hours of receiving a Notice of Inspection from an immigration agency to inspect I-9 forms or other employment records, the employer must post a workplace notice to employees and provide written notice to a collective bargaining representative. The Labor Commissioner will develop a template that employers can use for this purpose.
  • Within 72 hours of receiving an immigration agency notice that provides results of the I-9 or records inspection, an employer must provide each current affected employee and the collective bargaining representative a copy of the notice. Additionally, the employer must provide to each “affected employee” and their representative written notice of the employer and employee’s obligations arising from the inspection results. An “affected employee” is defined as an individual identified by the inspection results as lacking work authorization or whose work authorization documents were deficient. The notice must relate to the affected employee only and must be hand delivered to the employee at the workplace if possible, or by mail and email if hand delivery is not possible.

Violations of this law carry heavy penalties of $2,000 to $5,000 for a first violation and $5,000 to $10,000 for each subsequent violation.

Finally, this new law prohibits employers from re-verifying employment eligibility of a current employee at a time or in a manner not required by federal law.

Practice Tip: Employers should train management and human resource personnel on this new law and proper procedures when encountered with immigration enforcement authorities. Employers should be prepared to promptly comply with the new posting and notice requirements when a Notice of Inspection or inspection results are received.

ANTI-HARASSMENT TRAINING EXPANDED

Existing law requires employers in California with 50 or more employees to provide two hours of sexual harassment training to supervisors every two years.

S.B. 396 requires employers with 50 or more employees to include in their existing required sexual harassment training an additional component on harassment based on gender identity, gender expression, and sexual orientation. This training must include “practical examples inclusive of harassment based on gender identity, gender expression, and sexual orientation,” and must be “presented by trainers or educators with knowledge and expertise” in these areas.

This law also requires employers with five or more employees to post a new workplace notice (to be developed by the Department of Fair Employment and Housing) regarding transgender rights.

Practice Tip: Employers should update their A.B. 1825 training to include education regarding gender identity, gender expression, and sexual orientation. Employers should also post the new notice regarding transgender rights by January 1, 2018.

MINIMUM WAGE INCREASES

Beginning January 1, 2018, the minimum wage in California increases to $11.00 per hour for employers with 26 or more employees, and to $10.50 per hour for employers with 25 or fewer employees.

Please note that various local city ordinances require a higher minimum wage than state law. Employers are encouraged to research local city ordinances to ensure they are paying their workers the proper minimum wage rates where work is being performed.