A Selective Review of New 2016 Laws Affecting California Employers

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1 Peter R. Andre ( ) Michael J. Morris James C. Buttery Dennis D. Law Scott W. Wall Kathryn M. Eppright William V. Douglass Lisa LaBarbera Toke Karen Gjerdrum Fothergill Collette A. Hillier Amber L. Simmons Of Counsel J. Todd Mirolla Gordon E. Bosserman A Selective Review of New 2016 Laws Affecting California Employers By Gordon E. Bosserman Last year, the California Legislature was busy (as usual) adopting new employment laws and tweaking existing employment laws. What follows is a discussion of some of the laws that take effect in 2016 and which have impact on the way California employers conduct their business operations. It is not, however, an exhaustive look at all new or changed employment laws. Unless otherwise indicated, these laws become effective on January 1, LEAVES Mandatory Paid Sick Leave Amendments Last year, the Healthy Workplace, Healthy Families Act was signed into law and required employers to begin providing the mandatory paid sick leave (PSL) benefit beginning July 1, The Legislature has since passed clean-up legislation, which made several substantial amendments to the law. The law has been tweaked so as to (1) clarify who is a covered worker; (2) provide alternative accrual methods other than one hour for every 30 hours worked; (3) clarify protections for employers that already provided PSL or paid time off before January 1, 2015; and (4) provide alternative methods for paying employees who use PSL. Educational Activities The new law expands the ability of employees to take protected time off from work for school or child care related activities. For example, it allows an employee to take time off to find a school or a licensed child care provider and to enroll or re-enroll a child, and time off to address child care provider or school emergencies. The law also expands the categories of employees eligible to take time off for a child. These rules only apply to employers with 25 or more employees. Kin Care The law allows employees to use kin care time for the same purposes specified by the PSL law and defines family member under the kin care law the same way that PSL does Laurel Lane P.O. Box 730 San Luis Obispo, CA ph 805/ fx 805/ South Broadway, Suite 109 P.O. Box 1430 Santa Maria, CA ph 805/ fx 805/

2 National Guard Leave and Protections The law expands the list of employees eligible for California s military leave protections, such as return rights and other job protections. Unemployment Insurance and Electronic Reporting You need to check with your payroll company or make sure your payroll department is on top of this. The law requires electronic reporting for unemployment insurance reports submitted to the Employment Development Department. It also requires employers to remit contributions for unemployment insurance premiums by electronic funds transfer. The requirements will apply to employers with 10 or more employees beginning January 1, 2017, and to all employers beginning January 1, DISCRIMINATION/RETALIATION Gender Wage Equality The new law (Fair Pay Act) is found in a revision to Labor Code section , which deals with gender pay inequality or disparity. Under existing California law, employers cannot pay an employee less than the rate paid to an opposite-sex employee in the same establishment for equal work on jobs that require equal skill, effort and responsibility, and could face a lawsuit for such disparity. The new law eliminates the requirement that the pay difference be within the same establishment and eliminates use of the terms equal work for equal skill, effort, and responsibility. Instead, the new law prohibits an employer from paying any of its employees less than employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort and responsibility. In addition, the legislation places specific requirements on employers to affirmatively show that any wage differential is not unlawful but is instead based entirely and reasonably upon one or more of the acceptable listed factors, including seniority and merit systems or other bona fide factors coupled with a showing of what the law calls business necessity. The Fair Pay Act prohibits employers from terminating, discriminating or retaliating against an employee who exercises his/her rights under the Act or assists others exercising their rights. Employers are also precluded from prohibiting employees from disclosing their wages, discussing the wages of others or asking about another employee s wages. This part of the Act is consistent with the stance the NLRB has taken on such issues. On the other hand, the Act does not obligate anyone to disclose wages. Whistleblower and Anti-Retaliation Protections The new law expands whistleblower and anti-retaliation protections to prohibit employers from retaliating against an employee when his/her family member engages in whistleblowing or other described protected activity, such as complaining of wage theft or unsafe working conditions. In other words, if an employee s spouse went to the Labor Board and complained about the treatment of a particular employee,

3 the employer would be prohibited from disciplining its employee even if the spouse revealed confidential information about the employer. Reasonable Accommodation and Retaliation The new law makes it clear that an employer cannot retaliate or discriminate against an employee for requesting a reasonable accommodation for a disability or religion, regardless of whether the request was granted. The law clarifies that the mere act of making the request is protected conduct under the Fair Employment and Housing Act. State Contracts The new law amends existing law to prohibit the state from entering into contracts for goods or services of $100,000 or more with a contractor that discriminates on the basis of gender identity, such as being transgender, when providing benefits. WAGE AND HOUR Many of the changes in laws in the wage-and-hour arena deal with increasing penalties and expanding liability, instead of imposing significant new obligations on employees. This could be a significant change in that it might increase the exposure for employers to wage and hour class actions and actions by individual employees under the Private Attorneys General Act. Private Attorneys General Act The new law amends the Private Attorneys General Act ( PAGA ) to allow employers a limited right to cure two types of itemized wage statement violations before an employee may bring a civil action under PAGA. (See my earlier Updates for a discussion on PAGA.) An employer will now be allowed to correct violations involving: (1) a failure to provide employees with an itemized wage statement that contains the inclusive dates of the pay period; or (2) a failure to provide employees with an itemized wage statement that contains the name and address of the legal entity making up the employer. These types of violations are frequently added to wage and hour actions because the penalties can be significant and because the rules are so highly technical. This is not an area where the no harm, no foul rule applies. Piece Rate Workers Of interest to certain types of employment, including farming, this law sets forth new rules for employers with piece-rate employees. The law requires employers to pay piece rate workers for rest and recovery periods and other non-productive time at specified minimum hourly rates, separate from the piece-rate compensation. The new law mandates that specific information, such as the total hours of compensable rest and recovery periods, must now be included on a piece-rate employee s itemized pay stub.

4 The law also contains a safe harbor provision for employers who, in the past, may not have properly paid piece-rate workers for rest and recovery periods or non-productive time and face liability. Certain Meal Periods In The Health Care Industry The new law confirms that a specific meal period waiver in the health care industry is still in effect. Employers in the health care industry can continue to allow employees to voluntarily waive one of their two meal periods, even when an employee s shift exceeds 12 hours. Labor Commissioner Expanded Enforcement Powers In order to enforce a judgment for nonpayment of wages, the new law allows the Labor Commissioner to issue levies and liens on employer property and to issues stop orders preventing the employer from continuing to conduct business in the state. The law also specifies that an individual acting on behalf of the employer can be personally liable for violating certain provisions of the Labor Code. Finally, the law further provides for joint and several liability for unpaid wages in the property-services and long-term care industries when judgments are not satisfied. Labor Commissioner Enforcement of Local Laws The new law also allows the Labor Commissioner to investigate and enforce local overtime and minimum wage laws, such as the local minimum wage ordinances enacted by many cities, including San Francisco. Wage Garnishment The new law reduces the prohibited amount of weekly disposable earnings that may be garnished pursuant to a withholding order. This amendment is effective July 1, Public Works and Prevailing Wages A number of bills signed this year relate to public works and prevailing wages. Employers who provide services or construction work on public works projects for the government or public-sector entities must pay the prevailing wage, which is usually significantly higher than the minimum wage. Professional Cheerleaders Are Employees For you football and basketball fans, the law now requires that California-based professional sports teams to classify cheerleaders as employees -- not independent contractors -- when the cheerleaders are used by the team during its exhibitions, events or games.

5 HIRING Unlawful Use of E-Verify The new law prohibits employers from using the federal E-Verify system at a time or in a manner not required by federal law to check the employment authorization status of an existing employee or of an applicant who has not yet received an offer of employment. Employers can still use E-Verify, in accordance with federal law, to check the employment authorization status of a person who has been offered employment. The law also requires employers who use E-Verify to comply with specific employee notification requirements when they receive notice from a federal agency that the submitted E-Verify information does not match federal records. There is a penalty of $10,000 for each violation. MISCELLANEOUS Other new laws make changes that may affect specific types of California business relationships. Ride Sharing Services For those of you who are Uber users, the new law requires ride-sharing services, such as Uber and Lyft, to participate in the state Department of Motor Vehicles pull-notice system to regularly check the driving records of participating drivers, regardless of whether the driver is an employee or an independent contractor. The pull-notice system shows accidents, license revocations/suspensions, DUIs and other actions taken against a license holder. This is probably another burden on such companies that has its genesis in the enmity born by the taxi companies for service providers like Uber and Lyft.