October 20, 2017
CRIMES, MONEY, BABIES AND MORE! WHAT’S IN THE LINEUP FOR CALIFORNIA EMPLOYERS IN 2018
Don’t mistake this for a trailer for your favorite Thursday night TV lineup. Instead, it’s a preview of the legal compliance changes California employers will soon be grappling with. Below is a brief summary of some of the key California employment-related laws recently passed by the California Legislature and signed by Governor Brown as of the October 15 deadline. The new requirements range from pre-employment inquiries regarding criminal conviction history and salary information to parental leave, among other topics. Unless otherwise specified, the new laws will become effective on January 1, 2018.
Bills Signed Into Law By Governor
Conviction History AB 1008
California has joined the “Ban the Box” wave by prohibiting questions on employment applications about job applicants’ criminal conviction histories. Employers are also prohibited from asking about or considering an applicant’s criminal conviction history until after the applicant has received a conditional job offer. To avoid possible discrimination, employers must conduct an individualized assessment when a criminal conviction plays any part in an employment decision which includes: (1) the nature and gravity of the offense or conduct; (2) the time that has passed since the offense or conduct or completion of the sentence; and (3) the nature of the job at issue. The law also imposes certain procedural requirements designed to give the applicant notice and an opportunity to explain before a final decision is made. The law also formalizes, in regard to background checking, that the employer must not consider: (a) an arrest that did not result in conviction; (b) referral to or participation in a pretrial or post trial diversion program; and (c) convictions that have been sealed, dismissed, expunged, or statutorily eradicated pursuant to law.
Note: Prior to the passage of AB 1008, The California Fair Employment and Housing Council adopted new regulations (Cal. Code Regs. tit. 2, § 11017.1, effective July 1, 2017), establishing criteria for the use and consideration of criminal history in employment decisions.
Salary Information AB 168
California has also stepped up its efforts to ensure equal pay for equal work. AB 168 prohibits employers from asking job applicants for salary history information, and prohibits employers from considering an applicant’s salary history information as a factor in making hiring decisions. The intent is to avoid carrying over women’s traditionally lower wages, and instead require employers to set salaries by focusing on the value of the job to the particular business. However, employers may use salary history information disclosed voluntarily, without prompting, by applicants in setting their salary. The bill also requires employers to provide applicants the pay scale for a position (without further explanation of this requirement) upon request.
A related law, AB 46, extends the provisions of the previously enacted state equal pay law to now include public employers.
New Parent Leave Act SB 63
Through the New Parent Leave Act, California expands the existing baby bonding provisions of the California Family Rights Act (“CFRA”) by providing job protected leave for new parents employed by smaller businesses (employers who directly employ 20 or more employees) within one year of their child’s birth, adoption or placement in foster care. Eligible employees must work at a California worksite with at least 20 (but not more than 49) employees within a 75-mile radius and have been employed for 12 months and worked 1250 hours in the past 12 months. (The New Parent Leave Act does not apply to employers who are already subject to CFRA or FMLA.) The leave need not be paid but employees can use accrued paid time off during the leave. During the leave, the employer must continue to pay its regular share of healthcare premiums, though recovery of these premiums may be allowed when the parent does not return to work at the conclusion of the leave.
Gender Identity, Gender Expression, and Sexual Orientation SB 396
To increase awareness of gender issues, employers with 50 or more employees are required to include, as a component of existing prescribed harassment prevention training and education for supervisors, training inclusive of harassment based on gender identity, gender expression, and sexual orientation. The law further requires each employer to post a notice developed by the state regarding transgender rights.
Prohibited Discrimination Against Service Members AB 1710
Service members gain enhanced protection under AB 1710, which prohibits discrimination in employment against members of the military or naval forces because of their membership or service. The purpose of the law is to conform state law to federal law in protecting service members from hostile work environments in their civilian jobs.
Immigrant Worker Protection Act AB 450
This law is part of a package of laws to protect California immigrants. AB 450 requires employers to ask for a judicial warrant before voluntarily granting Immigration and Customs Enforcement (“ICE”) access to non-public areas of a worksite. It also prevents employers from voluntarily sharing with an immigration enforcement agent any employee records without a subpoena or judicial warrant. An employer must notify employees of an I-9 audit or other records request, and must also notify employees and their authorized collective bargaining representative of the results of an I-9 audit or records request. Employers are also prohibited from re-verifying the employment eligibility of a current employee except as permitted by federal law.
Disability Insurance and Paid Family Leave AB 908
The national trend toward providing greater protection for new parents is also reflected in amendments to the State Disability Insurance (“SDI”) and Paid Family Leave (“PFL”) programs. AB 908, signed into law in 2016, takes effect on January 1, 2018, and makes two major changes. First, it increases the wage replacement rates from 55% to 60% or 70% based on the individual’s earnings. Second, it eliminates the seven day waiting period for Paid Family Leave benefits (but not for SDI claims).
Law affecting Public Employers- AB 1339 (background checks), AB 585 (public officer definition), SB 285 (union organizing)
For our public employer clients, there were a few laws of particular interest. In regard to background checks, current law requires employers to provide the full personnel records of any person who applies for a peace officer position. AB 1339 extends the employer disclosure requirements under Government Code section 1031.1 (background checks for peace officers) to any applicant for any position in a law enforcement agency.
The definition of a “police security officer” was amended by AB 585 to include an officer employed by a police division that is within a city department and that operates independently of the city police department commanded by the police chief of a city. This amendment consequently imposes additional training requirements for employees of local entities.
Finally, SB 285 prohibits public employers from deterring or discouraging public employees from becoming or remaining members of a union.
Significant Bills That Were Vetoed
Employers: Gender Pay Differentials AB 1209
AB 1209 would have required employers with 500 or more employees in California to collect data regarding gender pay differentials for exempt employees and board of director members. The requirement would have included data showing the difference between the mean and median salary of male and female exempt employees by job classification or title. Governor Brown vetoed this law, considering the unintended consequential burdens and risks that this legislation would create.
Discrimination: Reproductive Health AB 569
Governor Brown also vetoed AB 569, which would have made it illegal for faith based organizations to enter into contracts or have codes of conduct related to reproductive choices (i.e. abortion or sex outside of marriage). Governor Brown noted, in his veto message, that California Law already prohibits adverse employment action based on reproductive choices, but contains a statutory exclusion for religious organizations.
Significant Activity Involving Local Laws
In addition to the new state laws, California employers who have employees in multiple locations must remain diligent about keeping up with changes in local laws.
A. San Francisco
San Francisco Breastfeeding
All San Francisco employers must provide a clean, comfortable place to pump breast milk due to Ordinance 137-17, signed by Mayor Lee on June 30, 2017. Existing California and federal laws already address lactation accommodation and breaks. The San Francisco ordinance supplements existing law by adding comfort and cleanliness guidelines. Under the new ordinance, employers must also create and implement a written lactation accommodation policy and inform employees of their right to request and take breaks to pump. Violators may be penalized up to $500. However, employers may seek a waiver if compliance with the law would cause an undue hardship.
San Francisco Parity in Pay
Following the national trend toward pay equity laws, on July 19, 2017, San Francisco Mayor Ed Lee signed the Parity in Pay ordinance prohibiting employers in the City and County of San Francisco from the following:
- Inquiring about an applicant’s salary history.
- Refusing to hire, disfavoring, injuring, or retaliating against an applicant for not disclosing his or her salary history.
- Considering or relying on an applicant’s salary history in determining whether to hire the applicant or establish salary upon hire.
- Releasing a current or former employee’s salary history without his or her written authorization, unless disclosure is required by law, is part of a publicly available record, or subject to a collective bargaining agreement.
The ordinance also covers job placement agencies, referral agencies, and other employment agencies. However, the City, local, state, and federal employers are not covered. The ordinance includes posting, enforcement, and penalty provisions. The ordinance is stricter than the state law embodied in AB 168, and becomes effective July 1, 2018.
San Francisco Updates Health Care Security Ordinance
San Francisco employers must also be aware of an increase in the health care expenditure rate. Effective January 1, 2018, the rate will increase to $2.83 per hour for large businesses (100 or more employees total) and $1.89 per hour for medium-sized businesses (20-99 employees total).
B. Los Angeles
Los Angeles Issues Ban the Box Regulations
For Los Angeles employers, this is a reminder that on January 22, 2017, the City of Los Angeles released rules and regulations implementing the City’s Fair Chance Initiative for Hiring Ordinance. This ordinance prohibits employers within the City of Los Angeles from asking job applicants about criminal convictions until after a conditional offer of employment has been made. If after making an appropriate inquiry, the employer decides the information warrants an adverse employment action, the LA “Fair Chance” procedural process must be followed.
C. Minimum Wage Update
Listed below are examples of minimum wage increases at the local level for 2018:
Berkeley – Effective October 1, 2018, Berkeley’s minimum wage will increase to $15.00.
Cupertino – Effective January 1, 2018, Cupertino’s minimum wage will increase to $13.50.
El Cerrito – Effective January 1, 2018, El Cerrito’s minimum wage will increase to $13.60.
Emeryville – Effective July 1, 2018, Emeryville’s minimum wage will increase to $15.00 for businesses with 55 or fewer employees and $15.60 for businesses with 56 or more employees.
Long Beach – Effective January 1, 2017, Long Beach amended its minimum wage ordinance to require $10.50 with an increase by $1.00 every year from 2018 until 2022.
Los Altos – Effective January 1, 2018, Los Altos’ minimum wage will increase to $13.50.
Los Angeles – Effective July 1, 2018, Los Angeles’s minimum wage will increase to $12.00 for businesses with 25 or fewer employees and $13.25 for businesses with 26 or more employees.
Mountain View – Effective January 1, 2018, Mountain View’s minimum wage will increase to $15.00.
Palo Alto – Effective January 1, 2018, Palo Alto’s minimum wage will increase to $13.50.
Pasadena – Effective July 1, 2018, Pasadena’s minimum wage will increase to $13.25.
Richmond – Effective January 1, 2018, Richmond’s minimum wage will increase to $13.00.
Sacramento – Effective January 1, 2018, Sacramento’s minimum wage will increase to $11.00.
San Francisco – Effective July 1, 2018, San Francisco’s minimum wage will increase to $15.00.
San Jose – Effective January 1, 2018, San Jose’s minimum wage will increase to $13.50.
San Leandro – Effective July 1, 2018, San Leandro’s minimum wage will increase to $13.00.
San Mateo – Effective January 1, 2018, San Mateo’s minimum wage will increase to $12.00 for tax exempt nonprofits and $13.50 for all other employers.
Sunnyvale – Effective January 1, 2018, Sunnyvale’s minimum wage will increase to $15.00.
While your TGIT lineup may seem more enticing, here are some recommended steps California employers should take the time to implement in preparation for the New Year:
- Review and update employment applications to remove questions about criminal conviction history and the applicant’s salary history.
- Review and update standard interview questions and background check inquiries to avoid improper questions about salary history and criminal convictions.
- Establish procedures for conducting an individualized assessment of jobs for which criminal conviction histories will be considered after a conditional offer of employment has been made. Train hiring managers so they understand when and under what circumstances denying employment due to a criminal conviction will be appropriate.
- Employers will have an obligation, upon request, to provide to applicants the pay scale for a particular position. Therefore, to the extent you have not done so already, develop pay scales for each job.
- For employers with employees who work at a site in California where there are 20-49 employees within 75 miles: prepare a New Parent Leave policy and be prepared to provide this type of leave.
- For employers with 50 or more employees: update sexual harassment sensitivity training to address harassment based on gender identity, gender expression and sexual orientation.
- Review and update employee handbooks and management training to ensure new legal requirements are incorporated.
- Make sure all legal postings are up to date.
If we can help you meet your business’s needs, please give us a call.
For further information, please contact one of our employment attorneys.
ATTORNEY ADVERTISING – The contents of this newsletter are intended for general informational purposes only and should not be construed as legal advice or a legal opinion. You are advised to consult an attorney about any specific legal question.
Copyright© 2017 Ricketts Case, LLP. All rights reserved.
Ricketts Case, LLP E-Alert
Our mailing address is:
Ricketts Case, LLP
1900 Embarcadero Road
Palo Alto, CA 94303