2017 LEGISLATIVE ISSUES FOR CALIFORNIA EMPLOYERS
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1 2017 LEGISLATIVE ISSUES FOR CALIFORNIA EMPLOYERS January 2017 *This presentation is offered for informational purposes only, and the content should not be construed as legal advice on any matter. January
2 California minimum wage increases SB 3 will increase the minimum wage over the next several years to $15/hour Beginning on January 1, 2017, minimum wage increases to $10.50/hour January
3 Equal pay AB 1676 amends last year s Fair Pay Act, Section of the Labor Code, to prohibit employers from considering prior salary as the sole justification for any disparity in compensation. Effective January 1, 2017 SB 1063 expands the Fair Pay Act to race and ethnicity, and responds to critics that the pay equity issue is not limited to gender. Specifically, it prohibits employers from paying employees a wage less than the wage paid to employees of a different race or ethnicity for substantially similar work. Effective January 1, January
4 Wage and hour AB 1066 enacts the Phase-In Overtime for Agricultural Workers Act of 2016, which lowers the current 10-hour-day threshold for overtime by half an hour each year until it reaches the standard eight-hour day/40-hour week by Effective January 1, 2019, employers are required to pay overtime for any hours worked over 9.5 hours per day or 55 hours per workweek AB 2899 requires that any employer, before appealing a decision by the Labor Commissioner (LC) relating to a violation of wage laws, must file a bond in favor of the unpaid employee with the LC that covers the total amount of unpaid wages assessed under citation, excluding penalties. Effective January 1, 2017 AB 2535 employers need not list the number of hours worked on wage statements for any employee who is exempt from minimum wage and overtime requirements under the applicable IWC Wage Order or under statutes specified in Labor Code Section 226(j). Effective January 1, January
5 Background checks and immigration AB 1843 prohibits employers from asking an applicant for employment to disclose any information regarding juvenile convictions and seeking or utilizing any information related to juvenile arrests, detentions, or court dispositions as a factor in employment determination. Some exceptions for employers at a health facility. Effective January 1, 2017 SB1001 makes it an unlawful employment practice to request more or different documents than required under federal law to verify that an individual is not an unauthorized immigrant, or to refuse to honor documents tendered that on their face reasonably appear to be genuine, refuse to honor documents or work authorization based on specific status or term that accompanies the authorization to work, or to attempt to reinvestigate or reverify an incumbent employee s authorization to work using an unfair immigration-related practice. Effective January 1, January
6 Federal background checks and immigration Revised I-9: On Nov. 14, USCIS released a revised version of Form I-9. By January 22, 2017, employers must use the revised form. Employers should continue to follow existing storage and retention rules for all of their previously completed Forms I-9. Among the changes in the new version, Section 1 asks for other last names used rather than other names used, and streamlines certification for certain foreign nationals. Other changes include: The addition of prompts to ensure information is entered correctly The ability to enter multiple preparers and translators A dedicated area for including additional information rather than having to add it in the margins A supplemental page for the preparer/translator January
7 Discrimination and harassment AB 2337 requires employers with 25 or more employees to give notice to employees regarding domestic violence protections and right to time off related thereto Employer must inform each new employee and other employees upon request of the rights protecting employees affected by domestic violence in writing Labor Commissioner is charged with developing the form providing notice by July 1, Employers are not required to provide notice until the Labor Commissioner posts the form (Existing law already requires employers to allow time off to any employee who is the victim of domestic violence or sexual assault and who needs time off for a TRO, medical attention, shelter or rape crisis services, counseling, or safety planning or relocation; new law simply establishes notice requirement) January
8 Other new California legislation Employment contracts choice of law and forum SB 1241 prohibits an employer from requiring an employee who resides and works in California, as a condition of employment, to agree to a provision that would either require the employee to litigate or arbitrate employment disputes (1) outside of California or (2) under the laws of another state. Effective January 1, 2017 EXCEPTION: OK for non-ca venue/choice of law if the employee was represented by a lawyer in negotiating an employment contract Single-user restrooms AB 1732 requires all single-user toilet facilities in any business establishment, place of accommodation, or government agency to be identified as all-gender toilet facilities. The bill also provides that local officials responsible for code enforcement are to inspect for compliance. Effective March 1, 2017 Payroll AB1847 requires that employers who notify employees of their eligibility for the federal EIC Tax Credit must also notify these employees that they may be eligible for the California EIC January
9 Other new California legislation (cont d) New certification requirements for public contractors AB 2844 requires those who bid, propose, or renew a contract of $100,000 or more with a state agency to certify their compliance with the Unruh Civil Rights Act and the Fair Employment and Housing Act Increase in paid family leave benefits AB 908 increases the amount of paid family leave benefits an employee can receive from 55 percent of earnings to either 60 or 70 percent of earnings, depending on income. These increases begin on January 1, 2018 Private retirement savings plans AB1234 requires that employers with five or more employees that do not offer specified retirement plans put a payroll arrangement in place so employees can contribute a portion of their wages to a retirement savings program in the California Secure Choice Retirement Savings Program January
10 New local ordinance: San Jose Scheduling Measure E: Requires that before additional personnel are hired, existing employees must be offered additional hours of work if they have the skills and experience to perform the work Applies to employers with more than 36 employees in total throughout the company, but does not require employees to be given overtime Employers are encouraged to train their employees to make them qualified for additional hours Newly proposed AB-357: The California Fair Scheduling Act would require certain businesses with 10 or more employees to offer additional hours of work to an existing nonexempt employee who, in the employer s reasonable judgment, has the skills and experience to perform the work, before hiring an additional employee January
11 High times! California voters passed Proposition 64, legalizing recreational use of marijuana Californians who are 21 and older can possess, transport, buy, and use up to an ounce of marijuana Effective immediately Does not set a legal limit for marijuana (like 0.08% for blood alcohol level) While use is lawful, people still cannot be high at work January
12 New local ordinance: San Francisco Scheduling San Francisco formula retail employee rights ordinances: Requires certain restaurants and retailers to provide employees with work schedules two weeks in advance, with a penalty of up to four hours of pay for subsequent changes. Employers also must provide specified amounts for employees who are on call and offer additional work to certain part-timers before hiring more staff. Effective March 1, 2016 Newly proposed AB-357: The California Fair Scheduling Act would require certain businesses with more than 500 California employees (including electronic and tech retailers, grocery stores, restaurants, and franchises) to: Provide employees with at least 2 weeks notice of their work schedules Pay penalties for shifts that are changed or canceled within that two weeks and Pay specified amounts to employees who are on call January
13 New local ordinances: Los Angeles Wage and hour Los angels city minimum wage and sick leave ordinance: The new law, which went into effect on July 1, 2016, requires that employers with 26 or more employees provide employees with 48 hours of paid sick leave per year, which is twice the amount required by California state law. The ordinance also increases the minimum wage according to the following rate: Effective date Employers with 26 or more employees 7/1/2016 $10.50 Deferred 7/1/2017 $12.00 $ /1/2018 $13.25 $ /1/2019 $14.25 $ /1/2020 $15.00 $ /1/2021 $15.00 $15.00 Employers with 25 or fewer employees or nonprofit corporations with 26 or more employees with approval to pay a deferred rate January
14 January
15 New local ordinance: San Diego Wage and hour San Diego minimum wage and earned sick leave: San Diego s new minimum wage ordinance implemented the following rules: Employees working in the City of San Diego must now be paid a minimum wage of at least $10.50 per hour The minimum wage increases to $11.50 per hour on January 1, 2017 Beginning January 1, 2019, the minimum wage will be tied to the Consumer Price Index and adjusted as necessary based on the cost of living Employers must provide employees with 1 hour of earned sick leave for every 30 hours worked January
16 January
17 New legislation: Portland, Oregon CEO pay Tax surcharge on CEO pay: Effective January 1, 2017, companies with CEOs whose compensation is more than 100 times the median pay of all of their workers must pay an extra 10% surcharge on top of Portland s existing 2.2% business income tax. Companies with CEOs who make 250 times the median pay will pay an additional 25% This applies to every organization doing business in Portland not just those who are based within the city The Portland City Council estimates this will generate an estimated $2.5 million to $3.5 million per year January
18 DOL overtime rules on hold On November 22, 2016, a Texas federal district judge issued a preliminary injunction on the DOL s final rule Technically, this injunction excuses employers everywhere for now from complying with the new rule that was set to become effective on December 1 If you have already told employees of their new status, it may not make sense to reverse field on short notice Employees who expected salary increases or OT pay may react negatively, contact the DOL or an attorney Morale issues Confusion with employees, administration, payroll Uncertainty over whether the preliminary injunction will survive an appeal by the DOL to the US Court of Appeals for the Fifth Circuit Note that briefing on the appeal is expedited, to be concluded in end of January (i.e., after the new Trump Administration takes over) January
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