Updated 2015-16 California Labor and Employment Laws

The new year brought a multitude of new laws that took effect on January 1, 2016 (unless otherwise noted). Here are some of the most notable changes employers need to be aware of.

AB 1513: This bill repealed sections 77.7, 127.6, and 138.65 and added Labor Code section 226.2. This new law sets forth requirements for the payment of a separate hourly wage at or above specified minimum hourly rates for rest and recovery periods and for “other nonproductive time” worked by piece-rate employees. It also defines “other nonproductive time” as time under the employer’s control, exclusive of rest and recovery periods, that is not directly related to the activity being compensated on a piece-rate basis. Additionally, employers must specify the following on a piece-rate employee’s itemized wage statement: (1) the total hours of compensable rest and recovery periods, (2) the rate of compensation paid for those periods, and (3) the gross wages paid for those periods during the pay period. Employers should note that the bill provides an affirmative defense and safe harbor for employers who, by December 15, 2016, fully compensate their specified employees for all under-compensated or uncompensated rest periods, recovery periods, or unproductive time between July 1, 2012 and December 31, 2015. Please be aware this bill took effect on January 1, 2016.

AB 304: This legislation was an amendment to AB 1522 that passed in 2014. AB 304 was urgency legislation that went into effect on July 13, 2015. The purpose of the urgency legislation was to provide clarification regarding which workers were covered, how paid time off accrued, and how it affected employers that already have a paid sick leave policy in place. Under AB 304 an employee can accrue sick leave after 30 days of employment in California for the same employer and is eligible to use the sick leave after 90 days. An employer may use an accrual method or front loading method, so long as it provides at least 3 days or 24 hours per year. Additionally, employers who already have a Paid Time Off (PTO) policy in place may rely on that for compliance, so long as it meets the minimum requirements of the new leave law.

SB 358: This bill significantly modified California Labor Code § 1197.5, California’s equal pay statute, by relaxing the burden of proof for a plaintiff’s claims while weakening an employer’s defense. Prior law prohibited an employer from paying an employee at a wage rate less than an employee of the opposite sex in the same establishment. However under prior law an employer had a defense if the pay differential was based on a seniority system, merit system, a system based on quantity or quality of work, or another bona fide factor other than sex. This legislation eliminated the requirement that the wage differential be within the same establishment and instead would prohibit a wage differential for substantially similar work. The new legislation weakens an employer’s defense by requiring that the employer affirmatively show the wage differential was based on one of the previously mentioned factors and that that factor relied upon was applied reasonably. This legislation further weakens an employer’s rights by preventing the  employer from prohibiting an employee’s disclosure of the employee’s own wages, discussing the wages of others, inquiring about another employee’s wages, or aiding or encouraging any other employee to exercise his or her rights under these provisions. Additionally, employers should make themselves aware of heightened record keeping requirements. Please be aware this bill took effect on January 1, 2016.

AB 987: Under existing law, the California Fair Employment and Housing Act (FEHA) protects the rights of employees to be free from discrimination and harassment based on their membership in a protected class. Additionally FEHA requires an employer to provide reasonable accommodations for a person’s disability and religious beliefs and prohibits discrimination against any person because he or she has opposed any practices forbidden under the act or because the person has filed a complaint. This bill provides additional protection by preventing an employer from retaliating or discriminating against an employee for requesting an accommodation, regardless of whether the accommodation request was granted. This legislation is of special importance to employers who are not subject to Title VII, which already provides for this protection. Please be aware this bill took effect on January 1, 2016.

AB 1506: Under the Private Attorney General’s Act (PAGA), an aggrieved employee may bring a civil action to recover specified civil penalties that would otherwise be assessed and collected by the Labor and Workforce Development Agency. PAGA is limited to certain serious Labor Code violations, including but not limited to those in §226 of the Labor Code relating to pay stub violations. This legislation does provide employers the opportunity to cure certain pay stub defects before the employee is entitled to bring a PAGA claim, specifically the inclusive dates of the pay period as well as the name/address of the employer. Employers should note that this bill limits the employer’s right to cure any defect to only once in a 12-month period. Additionally, employers should be aware that this was urgency legislation, meaning that it took effect immediately upon being signed on October 2, 2015.