New California Laws

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The following was written collectively by our Labor & Employment Department.

New California Laws

1. California Salary History Ban

AB 168, which enacted California Labor Code Section 432.3, is intended to promote equal pay, particularly between men and women. In passing AB 168, which went into effect on January 1, 2018, California joins a handful of states (Massachusetts, Delaware and Oregon) and municipalities (New York City, Philadelphia and San Francisco) which have enacted similar measures. In sum, AB 168 prohibits all California employers (including public employers) from

  • Inquiring or seeking from job applicants, whether “orally or in writing, personally or through an agent,” salary history information (the law does not define the term “salary history); and
  • Relying on or considering salary history as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant.

In addition, the new law obligates an employer, “upon reasonable request,” to provide “the pay scale for a position to an applicant applying for employment.” (The law does not address whether an employer must establish a pay scale for all positions, and many employers do not have formal pay scales, particularly for higher level positions).

Notably, AB 168 does not prohibit an applicant from “voluntarily and without prompting,” disclosing his or her salary history, nor does it prohibit an employer from relying upon such voluntarily disclosed information for purposes of determining the salary to offer. The law also does not apply to salary history information that is disclosable to the public pursuant to a federal or state law (e.g., the California Public Records Act, the federal Freedom of Information Act). AB 168 does not specify any penalties. However, violating Labor Code Section 432.3 might subject an employer to equal pay or other civil claims.

2. California Extends CFRA’s Baby Bonding Leave Obligations to Smaller Employers

SB 63, the New Parent Leave Act (“PLA”), which went into effect on January 1, 2018, extends baby-bonding leave with job protection rights and continuation of pre-existing health insurance to a broad segment of California employees. Employers with twenty (20) or more employees within 75 miles of a qualified employee’s worksite must provide “12 weeks of [unpaid] parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement.” A qualified employee is one with twelve (12) months of service to the employer and 1,250 hours worked in the previous year. This leave is unpaid but the employee is entitled to use any accrued vacation pay, sick pay or other paid time off during the period of parental leave. Moreover, during the protected period of the leave, the employer must continue its payments for employee health coverage under a group health plan.

It should be noted that this law does not change anything for businesses with 50 or more employees as they were already required to provide such baby-bonding leave under the California Family Rights Act (“CFRA”) and the federal Family and Medical Leave Act (“FMLA”). PLA is estimated to impact 16 percent of California’s labor force.

Employers should bear in mind that the PLA confers rights that are in addition to those already established by the Pregnancy Disability Leave (“PDL”) provisions of the Fair Employment and Housing Act. The PDL provides employees with disabilities related to pregnancy, childbirth or related medical conditions with up to four (4) months of leave. The PLA will provide qualified employees with the opportunity to take an additional leave of absence for baby-bonding.

SB 63 also requires the California Department of Fair Employment and Housing (“DFEH”) to set up a pilot mediation program, effective until January 1, 2020, that will permit employers who receive a right-to-sue notice to request that all parties participate in a DFEH mediation. If such a request is made, the employee cannot bring a civil action until the mediation is “complete.” Unfortunately, a mediation will be deemed “complete” if an employee simply elects not to participate in mediation.

3. New Training and Posting Requirements with Respect to LGBT Rights

While existing law already requires employers with fifty (50) or more employees to provide at least two (2) hours of sexual harassment training to supervisors every two years, SB 396 adds mandates that this training now address harassment based on gender identity, gender expression, and sexual orientation, including providing practical examples. Additionally, SB 396 also imposes a new posting obligation addressing the rights of transgender applicants and employees.

4. All-Gender Restrooms

AB 1732, which went into effect on March 1, 2017, requires all single-user toilet facilities in any business establishment, place of public accommodation, or government agency to be identified as all-gender (or gender-neutral) toilet facilities. The law does not require any specific wording on the signs as long as the wording used is gender neutral. For example, the sign may state “Restroom,” “All-Gender Restroom,” “Gender-Neutral,” or “Unisex.”

5. California Prohibits Employers from Voluntarily Cooperating With Federal Immigration Authorities

Effective January 1, 2018, the Immigrant Worker Protection Act (AB 450) restricts public and private employers in California from admitting immigration inspectors to the workplace without a judicial warrant. It also requires employers to notify their employees before and after certain immigration inspections take place.

In conflict with the U.S. Immigration and Customs Enforcement’s (“ICE”) plans to increase enforcement actions under the Immigration Reform and Control Act (“IRCA”), which includes criminal and civil penalties for employers who knowingly employ unauthorized workers, the new California law seeks to protect foreign workers from unfair immigration-related practices, potentially causing problems for employers who must comply with federal and state laws.

Unless required by federal law, the Immigrant Worker Protection Act prohibits California employers from:

  • Allowing immigration enforcement agents to enter any nonpublic areas of a workplace without a judicial warrant. However, an employer may permit an agent to enter a nonpublic area (where employees are not present) for purposes of verifying whether the agent has a judicial warrant.
  • Allowing immigration enforcement agents to access, review, or obtain their employee records without a subpoena or judicial warrant. This includes Social Security numbers, payroll information and other personnel records. The only exception to this requirement is for I-9 Employment Eligibility Verification forms and other documents for which a Notice of Inspection has already been provided to the employer.
  • Requires employers (within 72 hours of receiving a Notice of Inspection for I-9 Forms or other employment records by an immigration agency) to provide a notice to each current employee and their union, if one exists. The Notice should be posted in the language the employer normally uses to communicate employment-related information to its employees and must include specific details about the upcoming inspection.
  • Requires the employer, within 72 hours of receiving the results of an inspection, to provide each current “affected employee” and their union, if any, a copy of the written results and the obligations of the employer and the affected employee arising from the results of the inspection. This notice must contain specific information about the investigation results.
  • Prohibits employers, from reverifying employment eligibility of a current employee at a time or manner not required by federal law. This may create problems for employers conducting voluntary internal audits in the course of business, who may now risk violating the law.

However, nothing in the new law restricts an employer’s compliance with the memorandum of understanding governing the use of the federal E-Verify system.

A violation of the new law may impose an employer to a civil penalty of up to $10,000.

6. California Legalizes Recreational Marijuana

In 2016, California passed Proposition 64, authorizing the legalization of recreational marijuana use in California. New provisions consistent with Proposition 64 went into effect on January 1, 2018. Many employers are concerned about what, if any, impact the legalization of recreational will have on the workplace. Here are the primary things to consider:

  • Like alcohol, marijuana may impair an employee’s ability to do his or her job and an employer has a legitimate right to regulate the use of marijuana during working hours and working under the influence of marijuana.
  • Under current law, a California employer has no duty to accommodate even lawfully obtained medical marijuana. See, Ross v. RagingWire Telecommunications, Inc., 42 Cal. 4th 390 (2008)
  • Significantly, marijuana still remains illegal under federal law and on January 4, 2018, Attorney General Jeff Sessions announced plans to rescind the Obama-era federal policy of not enforcing certain federal marijuana laws in jurisdiction where medical or recreational use is permitted under state laws.

7. California “Bans the Box”

In 2017, California became part of the group of several states and localities that have adopted a “ban the box” statute that significantly restricts an employer’s ability to seek or obtain information about a job applicant’s criminal history. This new California law (AB 1008) amends the California Fair Employment and Housing Act (“FEHA”). Employers with five (5) or more employees now are prohibited under FEHA from:

  • Including on any employment application any question that seeks the disclosure of an applicant’s criminal conviction history; or
  • Inquiring into or considering an applicant’s conviction history before he or she receives a “conditional offer of employment.”
  • Interfering with, restraining, or denying the exercise or attempted exercise of any rights under the statute.

Once an employer has made a conditional offer of employment to an applicant, it may make inquiries about the applicant’s conviction history and also may conduct a criminal background check. However, even after making a conditional offer, employers are prohibited from considering the following types of information: (a) an arrest that did not result in a conviction, subject to certain exceptions; (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.

If the employer intends to deny the applicant employment solely, or in part, because of his or her conviction history, then the employer is required to make an individualized assessment of whether the applicant’s conviction history has a direct and adverse relationship with the specific duties of the job that justify denying the applicant the position. The individualized assessment must take into account: (a) the nature or gravity of the offense; (b) the time that has passed since the offense and completion of the sentence; and (c) the nature of the job held or sought. The employer may memorialize in writing the results of the individualized assessment, but is not required to do so.

If the employer makes a preliminary decision that an applicant’s conviction history disqualifies him or her from employment, the employer must notify the applicant in writing. The notification may, but is not required to, justify or explain the employer’s reasoning. The notification must, however, contain all of the following: (a) identification of the disqualifying conviction(s) that are the basis for the preliminary decision to rescind the conditional offer; (b) a copy of the conviction history report, if any; and (c) an explanation of the applicant’s right to respond to the notice of the preliminary decision, including that the applicant may submit evidence challenging the accuracy of the conviction history report or evidence of rehabilitation or mitigating circumstances, and the deadline to respond.

The employer must provide the applicant with at least five (5) business days to respond to the employer’s preliminary decision. If, within that period, the applicant notifies the employer in writing that he or she intends to dispute the accuracy of the conviction history report and is taking steps to obtain evidence supporting this assertion, then the employer must provide the applicant with an additional five (5) business days to respond.

If after considering information submitted by the applicant, the employer makes a final decision to deny an application solely, or in part, because of the conviction history, the employer must notify the applicant, in writing. The notification must include the following: (a) the final denial or disqualification (the employer may, but need not, justify or explain its reasoning); (b) any procedure that the employer has for the applicant to challenge the decision or request reconsideration; and (c) the applicant’s right to file a complaint with the California Department of Fair Employment and Housing.

The new law does not apply to several types of position, most notably a position where an employer is required by law to conduct criminal background checks for employment purposes or to restrict employment based on criminal history.

Significantly, by adding these new prohibitions to FEHA, the California legislature made the full panoply of civil rights remedies available to those claiming violation of the new law, including economic, emotional distress and punitive damages and attorneys’ fees.

8. DLSE’s Authority Expanded

Pursuant to SB 306, effective January 1, 2018, the Division of Labor Standards Enforcement (“DLSE”) is now authorized to commence an investigation of an employer, with or without a complaint being filed, when specified retaliation or discrimination is suspected during the course of: (a) a wage claim; or (b) other specified investigations conducted by the Labor Commissioner.

In addition, the DLSE or an aggrieved employee may obtain temporary injunctive relief, such as reinstatement of employment, from a superior court if the employee has been or currently is being subjected to retaliation. The superior court is required to issue temporary injunctive relief on a mere showing that “reasonable cause” exists to believe a violation of the law has occurred. In ruling on the request for injunctive relief, the superior court will consider the chilling effect on other employees asserting their rights. If temporary injunctive relief is granted, the relief cannot be stayed pending an appeal by the employer.

The bill clarifies that the issuance of temporary injunctive relief does not prohibit an employer from disciplining or terminating an employee for conduct unrelated to the claim of retaliation.

The Labor Commissioner also has the authority to issue citations directly to individuals found to have engaged in discrimination or retaliation, directing the individual to provide specific relief to the victim. The bill establishes procedures for the alleged wrongdoer to obtain review of any citation issued. An employer who refuses to comply with a final order shall be subject to a penalty of $100 per day of noncompliance, up to a maximum penalty of $20,000.

9. New Notice Requirements Regarding Domestic Violence, Sexual Assault and Stalking Protections

California law prohibits employers with 25 or more employees from discharging, discriminating or retaliating against an employee who is a victim of domestic violence, sexual assault or stalking for taking time off of work for specified reasons related to the domestic violence, sexual assault or stalking. More specifically, employees who are victims may take time off to: seek medical attention; obtain services from a domestic violence shelter, program or rape crisis center; obtain psychological counseling; and participate in safety planning to avoid future incidents of such conduct.

As a result of AB 2337, covered employers are now required to provide notice to new employees, or existing employees upon request, of their rights under the law if they are the victim of domestic violence, sexual assault or stalking. The Labor Commissioner has created a notice that employers may use to comply with the new law, which can be found here.

10. Workplace Smoking Restrictions

Previously, California law prohibited smoking of tobacco products inside an enclosed space, at a place of employment with more than five (5) employees. A new law (ABX2-7) expands the prohibition to all employers, including owner-operated businesses. It also eliminates exemptions that previously permitted smoking in some work environments such as hotel lobbies, bars and taverns, banquet rooms, warehouse facilities, and employee break rooms.

For employers that allow access to their place of employment to non-employees, they can comply with this law by posting clear and prominent signs at each entrance to the building that state “no smoking” or “smoking is prohibited except in designated areas,” whichever is applicable. In addition, if a non-employee is smoking in an enclosed workplace, the employer must request that the individual refrain from smoking, unless making such a request involves a risk of physical harm to the employer or any employee. The employer is not required to eject smokers physically.

This law does not apply to twenty percent (20%) of the guestrooms in hotels and motels, nor does it apply to tobacco shops or private smokers’ lounges. This law supersedes local regulation of smoking tobacco products in enclosed places of employment or owner-operated businesses.

A violation of the workplace smoking restrictions is punishable by a fine not to exceed $100 for a first offence, $200 for a second violation within one year, and $500 for each subsequent violation within one year.

11. Military Service Discrimination

California law previously has prohibited various types of discrimination against members of the military or naval forces of California or the United States. AB 1710 expands existing law to prohibit discrimination in all “terms, conditions or privileges” of employment against those service members.

A person who violates this law is guilty of a misdemeanor and is liable for actual damages and reasonably attorneys’ fees incurred by the service member.

12. California Minimum Wage Increase

The California minimum wage will continue to annually, consistent with SB 3 which became effective in January 2017. The below schedule of incremental increases remains subject to possible temporary delays for general economic or budgetary reasons at the Governor’s discretion.

Rate (Jan. 1) 26 Employees or More 25 Employees or Less
2018 $11.00 $10.50
2019 $12.00 $11.00
2020 $13.00 $12.00
2021 $14.00 $13.00
2022 $15.00 $14.00
2023 $15.00 $15.00
2024 Indexed* Indexed*

* Rate adjusted to changes in Consumer Price Index (if any) to a cap of 3.5 percent each year.

The increased minimum wage will affect whether certain employees meet the minimum salary requirements for exempt employees. For example, in order to qualify for the executive, administrative and professional exemptions, an employee must earn no less than two (2) times the state minimum wage for full-time employment. For employers with 26 or more employees, an employee must earn an annual salary of $45,760 in 2018 to be eligible for certain exemptions. For smaller employers, the annual salary requirement in 2018 is $43,680.

Approximately 22 localities in California have enacted their own minimum wage ordinances. Many of the ordinances increase the local minimum wage effective January 1, 2018, including but not limited to the following cities: Berkeley; Emeryville; Los Angeles; Malibu; Oakland; Pasadena; San Francisco; San Jose; and Santa Monica.

13. SDI and Paid Family Leave Benefits Increased

California law provides partial wage replacement benefits as follows: (a) for employees who have a short-term disability; and (b) paid family leave benefits for up to six (6) weeks for employees who take approved leave to bond with a new child or to care for certain family members with a “serious health condition” AB 908 increases the weekly benefit amount from 55% of the employee’s salary to 60-70% (depending on employee’s income) of the employee’s salary, and increases the maximum weekly benefit to $1,216. The maximum benefit is tied to California’s average weekly wage, which changes from year to year.

The bill also eliminates the seven (7) day waiting period that previously applied before an employee was able to receive the paid family leave benefits.

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