Governor Jerry Brown has signed into law a number of employment related bills that will significantly impact California employers. This newsletter provides brief summaries and the best practices to ensure compliance with the new laws most likely to affect California workplaces. These new laws will take effect on January 1, 2018. Please contact the attorneys at Palmer Kazanjian Wohl Hodson LLP if you would like further explanation on how a particular bill may apply to your organization.
Prohibition on Salary History Inquiries (AB 168)
AB 168 will prohibit all employers, regardless of size, both public and private, from relying on “salary history Information” as a factor in determining whether to offer employment and what salary to offer to an applicant. As long as a candidate is not prompted, the bill would not prohibit an applicant from voluntarily disclosing salary history information. If a candidate voluntarily provides their salary history, an employer can use that information for salary consideration. The stated goal of the new law is to narrow the gender wage gap by preventing employers from relying on an applicant's prior salary, compensation, and benefits as factors in determining whether to offer employment or what salary to offer to a given applicant. The bill further requires employers to provide the pay scale for a position to a requesting applicant.
Best Practices to Ensure Compliance
-Employers should revise job applications or any other documents provided to candidates, whether hard copy or electronic, to remove questions that seek salary history information.
-Employers should revise applicable hiring policies and procedures and interview/screening guidelines, to ensure that the organization does not request salary history and will not use salary history, unless otherwise permitted by law.
-Procedures should be put in place to ensure pay scale information can be quickly and easily provided upon a candidate’s request.
-Training should be provided to all personnel, involved in any stage of the hiring process, to ensure they understand the restrictions and obligations imposed by the new law.
AB 1008 amends the Fair Employment and Housing Act (“FEHA”) to make it an unlawful employment practice for employers with five or more employees to:
include on any application for employment any question that seeks the disclosure of an applicant’s conviction history;
inquire into or consider an applicant’s conviction history before the applicant receives a conditional offer of employment; and
consider, distribute, or disseminate information related to arrests that did not result in convictions, convictions resulting in diversion program participation, and/or convictions that were sealed, dismissed, expunged or eradicated.
The new ban the box law exempts from its coverage just a few positions:
positions for which government agencies are required by law to check conviction history;
positions with criminal justice agencies; farm labor contractors; and
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.
AB 1008 provides that covered employers may only consider an applicant’s conviction history after the applicant has received a conditional offer of employment. If an employer plans to deny hire solely, or in part, because of conviction history, the employer must conduct an individualized assessment to assess whether that history has a direct and adverse relationship with the specific duties of the job. Further, when making that assessment, the employer must consider the nature and gravity of the offense and conduct, the passage of time since the date of the offense/conduct and completion of any sentence, and the nature of the position held or sought. Employers may, but are not required by law to, record the results of their individualized assessments in writing.
If the individualized assessment leads to a preliminary decision that the conviction history is disqualifying, the employer must then follow a specific procedure, sometimes referred to as a “fair chance” process, as follows:
First, the employer must provide written notice to the applicant. The written notice must identify the conviction on which the preliminary decision is based, include a copy of the conviction history report, if any, and explain the applicant’s right to respond to the notice within at least five business days. The notice must also explain the applicant’s right to submit evidence challenging the accuracy of the conviction record, or evidence of rehabilitation, mitigating circumstances, or both.
Second, if the applicant timely notifies the employer in writing that the applicant is disputing the conviction history and is taking steps to obtain evidence to do so, the employer must provide the applicant an additional five business days to respond. If the applicant provides any additional evidence in response, it must be taken into consideration by the employer before a final decision can be made.
Finally, if after receiving the response from the applicant the employer makes a final decision to deny employment based on conviction history, the employer must notify the applicant in writing. This final notification must include: the final denial; information relating to any existing procedure to challenge the decision or request reconsideration; and the right to file a complaint with the Department of Fair Employment and Housing. The employer has the option to provide the applicant with an explanation regarding why he final denial was made.
Best Practices to Ensure Compliance
-Revise paper and electronic employment applications to remove “boxes” or questions, which ask for criminal conviction information from applicants.
-Review interview guidelines and hiring processes to ensure compliance with the law and provide training to managers, hiring, and recruiting personnel pertaining to the prohibition on seeking or relying on conviction history, prior to a conditional offer of employment is made to the applicant.
-Create procedures to comply with the individualized assessment and “fair chance” process requirements.
The existing Fair Pay Act forbids private employers from paying any of its employees at wage rates less than the rates paid to employees of the opposite sex, or of a different race or ethnicity, for substantially similar work. The new wage discrimination law extends the Fair Pay Act prohibitions to public employers, by defining “employer” to include public and private employers.
Best Practices to Ensure Compliance
-Make employee data readily available, including the compensation of every employee that can be compared by the protected class, as well as job related factors that can explain pay differentials, such as length of time in position and with company. Make certain that all offers, raises, and promotions are tracked and that supporting documentation exists for such changes.
-If your company is not prepared to handle this level of tracking, hire an outside company to conduct a compliance audit and manage data operations.
-If your company has possibly engaged in salary discrimination, immediately cease the practice and ensure compliance going forward with new hires.
Immigration Enforcement in the Workplace (AB 450)
AB 450 is designed to protect immigrant employees from workplace raids. The new law will bar public and private employers, and anyone acting on their behalf, from voluntarily consenting to permit an immigration enforcement agent to enter nonpublic areas of a workplace, except if the agent provides a judicial warrant or as otherwise required by federal law. Subject to exceptions required by federal law, AB 450 prohibits employers from allowing immigration enforcement agents to:
enter any nonpublic areas of a workplace, absent a judicial warrant, or
access, review, or obtain employee records, without a subpoena or court order.
The law also requires employers within 72 hours of receiving a Notice of Inspection from an immigration agency to inspect I-9 forms or other employment records, to post a workplace notice to employees, and provide written notice to a collective bargaining representative. The Labor Commissioner will then develop a template that employers can use for this purpose. Upon reasonable request, an employer must provide employees a copy of an I-9 Notice of Inspection.
AB 450 further requires employers, within 72 hours of receiving an immigration agency notice that provides results of the I-9 or records inspection, to provide all current affected employees and their collective bargaining representative a copy of the notice. 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 one identified by the inspection results as lacking work authorization or whose work authorization documents have been identified by the agency inspection to have deficiencies. The notice must relate to the affected employee only and must be delivered by hand at the workplace if possible, or by mail and email, if hand delivery is not possible. Employers are not permitted to re-verify the employment eligibility of a current employee at a time or in a manner not required by federal law.
Violations of this law will result in civil penalties from $2,000 to $5,000 for a first violation and from $5,000 to $10,000 for subsequent violations.
Best Practices to Ensure Compliance
-Employers should provide training to supervisors, receptionists, front office personnel, and anyone else likely to interact with immigration authorities on the new prohibitions on granting access to immigration authorities.
-Employers should be ready to promptly comply with the new posting and notice requirements when a Notice of Inspection or inspection results are received.
-Review and revise, if necessary, I-9 processes to ensure that they are in full compliance with the law and are not engaging in reverification practices that are not strictly required by federal law.
New Parental Leave Act (SB 63)
SB 63 requires small businesses to provide parental leave. The New Parent Leave Act amends the California Family Rights Act (“CFRA”) to allow employees who work for an employer with 20 or more employees, within a 75 mile radius, to take 12 weeks of unpaid leave for new child bonding purposes. The new law applies to both private and public employers. The law applies to employees with more than 12 months of service with the employer, who have at least 1,250 hours of service with the employer during the previous 12-month period, and who work at a company in which the employer employs at least 20 employees within 75 miles.
Prior to the start of a parental leave, the employer must provide the employee with a guarantee of reinstatement to the same or comparable position following the leave. Failure to do this will violate the law. If both parents work for the same employer and are otherwise eligible for leave, the employer can require them to share the 12-week allotment between them.
Leave is unpaid, but employees may use accrued vacation, paid sick time, other accrued paid time off, or other paid or unpaid time off negotiated with the employer, and can apply for California Paid Family Leave benefits. Employers are required to maintain and pay for group health coverage during a parental leave, at the level and under the conditions that coverage would have been provided had the employee continued working. An employer can recover the costs of maintaining the health plan for employees who do not to return to work after their leave exhausts because of a reason other than a serious health condition or other circumstances beyond the employee’s control.
The new law does not affect an employee’s right under California law to take up to four months of leave for pregnancy-related disability, in addition to the 12 weeks of parental leave. Also, the new law does not apply to employees who are already subject to the Family Medical Leave Act (FMLA) and CFRA.
SB 63 further authorizes the California Department of Fair Employment and Housing (DFEH) to create a parental leave mediation pilot program. Under the pilot program, within 60 days of receipt of a right-to-sue notice, an employer may request all parties to participate in the department’s Mediation Division Program. Employees are prohibited from pursuing any civil action under these provisions until the mediation is complete, meaning when either party elects not to participate, withdraws from mediation, or notifies the DFEH that further mediation would be unproductive. The employee’s statute of limitations would be tolled during the course of the mediation.
Best Practices to Ensure Compliance
-Employers with at least 20 employees, within a 75-mile radius of the company, should promptly update employee handbooks and personnel policies.
-Create/update leave request forms and notices with respect to the new leave rights, reinstatement guarantee, and other requirements.
-Train human resource employees and managers on the new leave rights and obligations.
"Whistleblower" Retaliation Protections (SB 306)
SB 306 authorizes the Labor Commissioner's office, with or without receiving a complaint, to investigate an employer when it suspects retaliation or discrimination:
during the course of adjudicating a wage claim,
during a field inspection concerning labor standards, or
in instances of suspected immigration-related threats.
SB 306 also authorizes the Labor Commissioner or an employee to seek immediate injunctive relief from a court, upon a finding of "reasonable cause" that the law has been violated. The temporary relief does not restrain an employer from disciplining or terminating an employee for conduct unrelated to the retaliation claim. The bill authorizes the Labor Commissioner to issue specific citations, directing the employer to cease the alleged violation and take actions necessary to remedy the violation, such as ordering reinstatement or back pay. Any employer challenging the citation will be required to post a bond with the Labor Commissioner’s office equal to the amount of back pay allegedly owed.
Best Practices to Ensure Compliance
-Employers should carefully analyze and make well thought out disciplinary decisions, which are thoroughly documented.
-Employers should familiarize themselves with the provisions of the new law and be aware that litigating these claims will be difficult and costly.
SB 285 bans public employers from “deterring or discouraging” public employees from becoming or remaining members of an employee organization. This law applies to counties, cities, districts, the state, schools, transit districts, the University of California, and the California State University, among others. According to the author, this bill closes a loophole in existing labor relations statutes that permitted public employers to use unfair tactics to convince or coerce employees to withdraw from union membership. The Public Employment Relations Board (PERB) has jurisdiction to enforce this law.
Best Practices to Ensure Compliance
-Employers should make certain that managers and supervisors are aware of this new law and urge caution if the subject of union membership arises in the workplace.
Construction Contractor Liability (AB 1701)
Under AB 1701, general contractors will be responsible for any payments owed to a wage claimant (or third party on a wage claimant’s behalf) by their subcontractors, if the claimant’s work is a subject of the contractors’ relationship. Liability extends to unpaid wages, fringe or other benefit payments and contributions, and interest owed, but it does not include penalties or liquidated damages.
AB 1701 gives the Labor Commissioner the right to bring an administrative action or civil lawsuit against general contractors. Unions owed fringe benefits and joint labor management cooperation committees, may also bring an action under this new law. Prevailing plaintiffs are entitled to recover attorneys’ fees and costs, but prevailing contractors are not. A lawsuit or action can be brought within one year of project completion. AB 1701 includes no specific safe harbor for diligent general contractors, but it does require subcontractors to provide payroll records to general contractors upon request.
Best Practices to Ensure Compliance
-General Contractors should ensure they have strong indemnity language in all subcontracts including supply contracts.
-General contractors should discuss with subcontractors their practices regarding wages and benefits.
-General contractors should request to review subcontractors’ payroll records where wage compliance may be an issue.
Human Trafficking Notice (AB 260)
Current California law requires specific types of businesses to post a notice regarding human trafficking and assistance hotlines. AB 260 will extend the posting requirement to hotels, motels, and bed and breakfast inns, and SB 225 will require new language in the notice to state that person may text a specified number for services and support.
Best Practices to Ensure Compliance
-Employers should make sure the notice is in place and that it is updated to incorporate the new language.
Anti-Harassment Training (SB 396)
The FEHA requires employers with 50 or more employees to provide two hours of sexual harassment education and training to supervisory and managerial employees, every two years. SB 396, in an effort to further prevent sexual harassment, will require that anti-harassment training also include a 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. The new law further requires employers with five or more employees to post a new workplace notice, to be developed by the DFEH, regarding transgender rights.
Best Practices to Ensure Compliance
-Employers must update their sexual harassment training to include information regarding gender identity, gender expression, and sexual orientation.
-Employers should make sure their new poster is up in the workplace by January 1, 2018.
DON’T WAIT, BE IN COMPLIANCE!
Due to the extent of the upcoming changes to workplace related laws in 2018, employers have much to do to ensure compliance. If you have any questions about your company’s compliance with these laws or need assistance getting prepared for the upcoming year, please contact the attorneys at Palmer Kazanjian Wohl Hodson LLP.