Here We Go Again: New Year, New Laws-California Employers Get Ready!
October 19, 2018
Every Fall California employers brace themselves for another onslaught of new employment laws going into the next calendar year. 2019 will be no exception. To help prepare our clients and friends, we summarize below some of the more significant new developments for the coming year. Unless otherwise indicated, the laws will become effective on January 1, 2019.
- Sex Harassment Mandatory Training Expanded – SB 1343. As California employers know, the Fair Employment & Housing Act (“FEHA”) mandatory 2 hour training for all supervisory employees is currently limited to employers with 50 or more employees. This new law dramatically expands the scope of the required training to employers with just 5 or more employees, and now includes training for temporary or seasonal employees, and nonsupervisory employees. By January 1, 2020, supervisory employees must have at least 2 hours of classroom or interactive sex harassment prevention training within 6 months of assuming the supervisory position, and nonsupervisory employees must have at least 1 hour of sex harassment prevention training within 6 months of hire. After January 1, 2020, the required training must be provided once every two years. Also of note is that seasonal and temporary employees, or any employee hired to work less than 6 months, must be provided training within the earlier of 30 calendar days after their hire date or 100 hours worked. However, temporary services employers who provide temporary employees to a client are responsible for providing the required training, not the client. The Department of Fair Employment & Housing (“DFEH”) has been ordered to develop 1- and 2- hour online training courses, as well as fact sheets and posters, on sex harassment, and post them on the DFEH website. An employer may develop its own training or direct employees to view the online training developed by the DFEH to satisfy the training requirement.
- Sex Harassment and Settlement Agreements – SB 820. In response to the #MeToo movement, California legislators passed a law that prohibits employers from requiring, in a settlement agreement, language to prevent an employee from disclosing information related to complaints of sexual harassment, sexual assault, or workplace harassment or discrimination based on sex, that are filed in a civil or administrative action. However, the law does specifically allow such agreements to preclude disclosing the amount paid in settlement, as well as provisions to protect the claimant’s identity, at the request of the claimant.
- Sex Harassment and Privileged Communications – AB 2770. California legislators also passed a bill that expands the privilege of certain communications from liability for slander and libel to communications pertaining to sex harassment. Civil Code 47, which provides employers and other individuals immunity from liability for slander and libel in specified certain circumstances, now expands the scope of the privilege to: (a) employees who report sex harassment to their employer (subject to the same proviso that any such statements are made without malice and are based on credible evidence); (b) communications between an employer and “interested persons” such as witnesses or victims regarding sex harassment allegations (made without malice); and (c) employers who, without malice, disclose whether a decision not to rehire an employee is based on the employer’s determination the employee engaged in sex harassment. By immunizing individuals and employers from legal liability for libel and slander, these additional privileges are intended to encourage reporting and cooperation in investigations of sex harassment, and to make more transparent to prospective employers those individuals who have been determined to have engaged in sex harassment.
- Sex Harassment Amendments to FEHA – SB 1300. This lengthy bill made numerous noteworthy changes to FEHA, including the following:
a. Under FEHA, an employer currently may be liable for the acts of nonemployees (such as a vendor) for sex harassment toward its employees, applicants, unpaid interns or volunteers, or persons providing services pursuant to a contract in the workplace, if the employer (through a supervisor or other agent) knew or should have known of the conduct and failed to take immediate and appropriate corrective action. This law would extend that protection to all forms of unlawful harassment (not just sex harassment), by a nonemployee toward an employee, applicant, unpaid intern or volunteer, or person providing services pursuant to a contract in the workplace.
b. This law also prohibits employers from requiring an employee, in exchange for a raise or bonus, or as a condition of employment or continued employment, to release a claim or right under FEHA, or to enter a nondisparagement agreement that does not allow the employee to disclose information about unlawful acts in the workplace, including sex harassment.
c. The law clarifies that a prevailing defendant in a FEHA action will not be awarded fees and costs unless the court finds the action was frivolous, unreasonable or groundless or that the plaintiff continued to litigate after it clearly became so.
d. This law also expressly affirms or rejects key principles from significant court cases addressing harassment which will significantly narrow the potential defenses available to California employers going forward:
i. It affirms the standard set forth by Justice Ruth Bader Ginsburg in her concurrence in Harris v. Forklift Systems (1993) 510 U.S. 17 that in a workplace harassment suit “the plaintiff need not prove that his or her tangible productivity has declined as a result of the harassment. It suffices to prove that a reasonable person subjected to the discriminatory conduct would find, as the plaintiff did, that the harassment so altered working conditions as to make it more difficult to do the job.” (Id. at 26).
ii. It rejects the 9th Circuit’s opinion in Brooks v. City of San Mateo (9th Cir. 2000) 229 F.3d 917, and highlights that a single incident of harassing conduct is sufficient to create a triable issue regarding the existence of a hostile work environment if the harassing conduct has unreasonably interfered with the plaintiff’s work performance or created an intimidating, hostile, or offensive working environment.
iii. It affirms the decision in Reid v. Google, Inc. (2010) 50 Cal.4th 512 which rejected the “stray remarks doctrine.” The existence of a hostile work environment depends upon the totality of the circumstances and a discriminatory remark, even if not made directly in the context of an employment decision or uttered by a non-decision maker, may be relevant, circumstantial evidence of discrimination.
iv. It disapproves of Kelley v. Conco Companies (2011) 196 Cal.App.4th 191 to the extent inconsistent with the following principles: (a) The legal standard for sexual harassment should not vary by type of workplace; (b) It is irrelevant that a particular occupation may have been characterized by a greater frequency of sexually related commentary or conduct in the past; and (c) In determining whether or not a hostile environment existed, courts should only consider the nature of the workplace when engaging in or witnessing prurient conduct and commentary is integral to the performance of the job duties.
v. It affirms the court’s observation in Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243 that hostile working environment harassment cases are rare
ly appropriate for disposition on summary judgment.
- Contract Waiver of Right to Testify about Sex Harassment Prohibited – AB 3109. Another new law spurred by the #MeToo movement prohibits anyone from requiring, as a provision in a contract or settlement agreement, a waiver of a party’s right to testify in an administrative, legislative or judicial proceeding concerning alleged criminal conduct or sex harassment. (Civil Code Section 1670.11.)
- Salary History Information – AB 2282. Last year the legislature enacted a law that prohibits California employers from asking an applicant for salary history information and required employers to provide applicants with the pay scale for a position upon reasonable request. In July of this year, the legislature amended the law (Labor Code 432.3) to provide some important clarifications to aid in enforcement of the law. Specifically, the term “applicant” means only applicants who seek employment with an employer, not an internal candidate or other current employees. The term “pay scale” means hourly wage or salary range (it does not include bonuses), and a “reasonable request” is one that is made after the applicant has completed an initial interview with the employer. Significantly, the new law confirms that an employer may ask for an applicant’s salary expectation. In addition, the new law amends the Fair Pay Act (Labor Code 1197.5) to clarify that an employee’s prior salary may not be used to justify a disparity in compensation, except that an employer may make a compensation decision based on a current employee’s existing salary, so long as any wage differential resulting from that compensation decision is justified by one or more of the following factors: (a) a seniority system; (b) a merit system; (c) a system that measures earnings by quantity or quality of production; or (d) a bona fide factor other than sex, race or ethnicity, such as education, training, or experience.
- California Publicly Held Corporations/Female Board Member – SB 826. To improve opportunities for women and enhance gender parity, SB 826 was enacted to require that no later than December 31, 2019, each publicly held corporation whose principal executive offices, according to its SEC 10-K form, are located in California, must have a minimum of one female member on its board of directors. By the end of 2021, public companies with 6 or more directors must have at least 3 female directors; if the company has 5 directors, it must have a minimum of 2 female directors; and if the company has 4 or fewer directors, the number of female directors may remain at 1. Companies that fail to comply will be subject to significant fines of $100,000 for the first violation and $300,000 for subsequent violations.
- Criminal History – SB 1412. This bill amends Labor Code 432.7 to clarify that an employer may ask about certain criminal convictions under certain conditions, for example, when the employee is required to carry a firearm, or the employer is prohibited by law from hiring an applicant with a particular type of conviction into a specified position.
- Lactation Accommodation – AB 1976. The significant aspect of this bill is that it amended Labor Code 1031 to allow an employer to provide a temporary lactation location that is reserved solely for that purpose while an employee is expressing milk. The bill also provides that an agricultural employer may comply by providing a private, enclosed and shaded space for the lactation break.
- Wage Records Inspection and Copying – SB 1252. This law amends Labor Code 226 to clarify that employees may request to inspect or receive a copy their wage statements, and that the employer is required to make the copies (but may charge the actual cost of reproduction to the employee).
- Paid Family Leave – AB 2587. Before 2018, the paid family leave benefit law allowed employers to require employees to use up to two weeks of vacation before their initial receipt of benefits, and to apply the first week of vacation to satisfy the seven day waiting period for benefits. As of January 1, 2018, the seven day waiting period was removed. This law cleans up the statutory language by removing the reference to applying the first week of vacation to a waiting period. However, employers may still require employees to take up to two weeks of unused vacation before initial receipt of paid family leave benefits.
- Paid Family Leave – SB 1123. This bill expands, effective January 1, 2021, the purposes for which paid family leave benefits may be provided to include time off to participate in a qualifying exigency related to covered active military duty (a type of leave provided by the federal Family and Medical leave Act).
- Discrimination Against Service Members – SB 1500. This law expands the protections against discharge from employment to members of the Federal Reserve components of the Armed Forces of the United States and members of the State Military Reserve. (Military and Veterans Code 394.)
- PAGA Exemption for Certain Construction Industry Employees – AB 1654. This law amends the Private Attorneys General Act (“PAGA”), Section 2699.6 of Labor Code, to exempt an employee in the construction industry with respect to work performed under a valid collective bargaining agreement that contains certain provisions including a grievance and binding arbitration procedure. This law is valid until the earlier of the date the applicable CBA expires or January 1, 2028.
Significant Regulatory Developments
California employers should also be aware that the California Fair Employment and Housing Council issued new national origin discrimination regulations that became effective July 1, 2018. These regulations expand the definition of “national origin” to include an individual’s or ancestor’s actual or perceived:
- physical, cultural, or linguistic characteristics associated with a national origin group;
- marriage to or association with persons of a national origin group;
- tribal affiliation;
- membership in or association with an organization identified with or seeking to promote the interests of a national origin group;
- attendance or participation in schools, churches, temples, mosques, or other religious institutions generally used by persons of a national origin group; and
- name that is associated with a national origin group.
“National origin groups” include, but are not limited to, ethnic groups, geographic places of origin, and countries that are not presently in existence.
The new regulations impact employment practices such as English-only or English proficiency policies, height and weight requirements and the documents an applicant or employee may be required to provide
Minimum Wage Increases
The federal minimum wage has remained at $7.25 since 2009, and the California minimum wage is currently $10.50 for small employers (1-25 employees) and $11 for large employers (26+ employees). As a reminder, many cities and counties in California have their own minimum wage laws that may be higher than the state minimum wage and change at more frequent intervals.
Action Items For 2019
To ensure your compliance with the myriad of new California employment laws, employers with California employees are encouraged to do the following:
- Update your sex harassment training materials and provide required training to both supervisory (2 hours) and nonsupervisory employees (1 hour) by the required time frames.
a. Make sure seasonal and temporary employees receive the required training within the earlier of 30 calendar days after their hire date or within 100 hours worked.
2. Review and update the policies in your employee handbook to reflect the changes imposed by these new laws and the FEHC national original discrimination regulations, including:
a. any English-Only or English proficiency requirements;
b. employment reference policy and practices to ensure any statements made by company representatives about a former employee will fall within the privileges that exclude the company from liability for libel or slander.
3. Review your hiring practices to make sure you do not ask inappropriate questions about salary history. In addition, don’t forget about the restrictions on asking about criminal conviction history before a conditional offer of employment is made, and the individualized assessment and notice processes that must be satisfied prior to revoking a conditional job offer based on criminal history. See https://www.dfeh.ca.gov/useofcriminalhistoryinemployment for FAQs and Sample Forms to comply with the California law. Los Angeles employers must also follow a local Fair Chance ordinance. See https://bca.lacity.org/fair-chance.
4. Review your pay practices and policies to ensure there are no improper wage differentials based on gender, race or ethnicity.
5. If you use template separation agreements, make sure they are updated and reviewed by legal counsel so that prohibited provisions related to sex harassment are not included.
6. Provide training to managers on the new legal requirements, and refresher training on other topics to minimize potential liability.
For further information, contact one of our employment attorneys.
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