Pending employment legislation

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Now that we are just getting adjusted to the new employment laws that took effect at the beginning of the year, it is time to look at the bills that are currently developing in the California legislature to see what possibly lies ahead and what it would mean for you and your employees. These bills are currently pending and are subject to further amendment. Even if they pass, they are subject to possible veto by the Governor. However, there is a good chance that a number of them will become law in some form. The Scali Law Firm is monitoring these bills and will provide you with further information in the event that they become law. However, we encourage you to contact the CNCDA and let them know if any of these bills cause you concern.

AB 67: Double Pay on the Holiday Act of 2016

This bill would require certain retail stores or grocery store employers with 500 or more employees to pay non-exempt employees twice their regular rate of pay for working on Thanksgiving. Covered “retail stores” are those having a physical store within California with more than 50 percent of its revenue generated from merchandise subject to the state’s sales and use tax, but excluding stores located in a hotel, amusement park or movie theater. “Grocery store establishment” would be defined as those having a physical store within the state that sells primary household foodstuffs for offsite consumption. Exempted from this law are employees covered by a collective bargaining agreement that meets certain criteria.

If this bill passes, affected employers should revise their policies regarding the calculation of holiday pay for the Thanksgiving holiday.

AB 1383: Voluntary Veterans’ Preference Employment Policy Act

This bill unanimously passed in the Assembly and is currently pending in the Senate. It would allow employers to give preferential consideration in hiring decisions to honorably discharged veterans, despite the possible disparate impact favoring men. Veterans could provide a United States Department of Defense Form 214 to confirm eligibility for this preference. The law further indicates that such a preference shall be deemed not to violate any state or local equal employment opportunity law, including the FEHA.

SB 1063: Wage Equality Act

This proposed law builds on the Equal Pay Act amendments that took effect January 2016 regarding gender pay differentials by applying very similar provisions pertaining to pay differentials based on race or ethnicity.

If this bill passes, Employers should audit their pay records for each position to determine whether a wage differential appears to exist among employees based on race and/or ethnicity, and if so, whether an exception applies that justifies the entire differential and whether the differential is reasonable under those circumstances. Additionally, employers should update their non-retaliation and confidentiality policies.

AB 908: State Disability Insurance enhancement

This bill has passed both the Senate and Assembly and is awaiting approval of additional amendments before going to the Governor. This law would increase employee contributions to the State Disability Insurance program from 1% to 1.3%, or higher (but no more than 1.5%) in order to increase the wage replacement benefit rate from the existing 55% to 70% for lower-earning employees, or 60% for higher-earning employees. Also, this bill would eliminate the seven-day waiting period for such benefits.

If this bill passes, Employers should check their policies for any reference to a seven-day waiting period for SDI benefits and make appropriate revisions.

AB 2197: Paid Family Leave

Currently, an employee may receive paid family leave benefits only after being unable to work for a 7-day waiting period. Also under current law, an employer may require an employee to take up to 2 weeks of earned but unused vacation before, and as a condition of, the employee\'s initial receipt of these benefits during any 12-month period in which the employee is eligible for them, and that portion of the vacation leave that does not exceed one week would be applied to the 7-day waiting period. This bill would remove the requirement that vacation leave be applied to the 7-day waiting period.

If this bill passes, Employers should check their vacation and medical leave policies regarding any provisions requiring application of vacation leave to Paid Family Leave and make appropriate revisions with assistance from qualified employment counsel.

AB 1948: Exclusive Penalty for Meal/Rest Break Violation

Existing law prohibits an employer from requiring an employee to work during a legally mandated meal or rest or recovery period and establishes as a penalty of one additional hour of pay at the employee\'s regular rate of compensation for each workday that the meal or rest or recovery period is not provided. This bill would make this penalty the entire penalty amount to be awarded to an employee for a violation of that prohibition. The bill would also prohibit the imposition of civil or criminal penalties for such a violation under other specific statutes, such as Labor Code Section 203- waiting time penalties, Labor Code Section 225- unlawful withholding of wages, Labor Code Section 558- working hours penalties, Labor Code Section 2699- Private Attorneys General Act, or Business and Professions Code section 17200- unlawful competition. In addition, such payment for a violation will be considered a penalty for all purposes, including the statute of limitations, which means that a one-year statute of limitations would apply rather than three or four years, as supported by prior case law.

SB 1342: Subpoena power for local wage ordinances

This bill would authorize a board of supervisors of a county or a legislative body of a city to delegate the authority to issue subpoenas to a county or city officer or department head for the purpose of conducting investigations to enforce local wage laws. Subpoenas could only be issued to obtain records and testimony reasonably necessary to determine if a local wage ordinance was violated. Penalties for non-compliance include contempt.

Revisions to Private Attorneys General Act (PAGA)

Concerns have been raised that PAGA allows claims and penalties for technical violations of the Labor Code that do not actually cause damage to employees. Some amendments have been proposed to address some of those concerns:

  • AB 2461 would limit the violations for which an aggrieved employee is authorized to bring a civil action under PAGA and would require the employee to follow specified procedures before bringing an action. Labor Code Section 2699.5, which currently authorizes civil actions for numerous specified Labor Code provisions, would be repealed, and this law would limit civil actions to those based on violations of Labor Code Section 226 (itemized wage statements), Section 226.7 (meal/rest break penalties), Section 510 (hours worked) and Section 512 (meal periods).
  • AB 2462 would allow an employer to cure any violation of the Labor Code covered by PAGA before the employee may bring a civil action. That right to cure would be provided before, and in addition to, any other specified procedures the employee is required to follow prior to bringing an action.
  • AB 2463 establishes a cap on any civil penalty for PAGA claims of $1000 per aggrieved employee.
  • AB 2464 authorizes a court to dismiss an action brought by an employee seeking recovery of a civil penalty under PAGA if the court finds that the aggrieved employee suffered no appreciable harm.
  • AB 2465 Currently, an employee is authorized to bring an action under PAGA for an alleged violation only after the Labor and Workforce Development Agency provides notification that it does not intend to investigate the alleged violation, if the agency proceeds with an investigation and no citation is issued, or the agency fails to provide notification as prescribed. This bill would require the agency, after receiving notification of an alleged violation, to investigate the alleged violation and determine if there is a reasonable basis for a civil action, and then the aggrieved employee would be authorized to commence an action upon receipt of notice from the agency that there is a reasonable basis for a civil action, or if the agency fails to provide the prescribed notification.

SB 1166: Expansion of Parental Leave

This bill, which is currently pending in the Senate, would require employers to allow an employee to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement. Employers with 50 or more employees are already required to provide such leave to employees with one year of service and at least 1250 hours worked within the past 12 months. This law would expand the coverage of the leave requirement to employers with at least five employees and eliminate the minimum requirement for length of employment or hours worked. The bill would also require reinstatement to the same or comparable position upon termination of the leave and would prohibit an employer from refusing to maintain and pay for coverage under a group health plan for an employee who takes this leave. Leave time taken under this law would run concurrently with leave under the California Family Rights Act and Family Medical Leave Act, except for leave taken for a disability on account of pregnancy, childbirth, or related medical condition.

If this law passes, employers must adopt/amend policies to comport with these new obligations.

SB 1001: Employment Eligibility Verification and Immigrant Non-Discrimination

This bill would make it unlawful for an employer to: 1) request more or different documentation than required under federal law for eligibility verification purposes; 2) to refuse to honor documentation that appears reasonably genuine; 3) to discriminate against an immigrant with authorization to work based upon their immigrant status or because of their work authorization; or 4) to attempt to reinvestigate or re-verify an incumbent employee’s authorization to work unless required to do so under federal legal requirements.

AB 1843: Criminal history inquiries of applicants

Existing laws prohibit certain inquiries and use of information regarding an applicant’s past arrest or detention that did not result in a conviction, referral or participation in, any pretrial or post-trial diversion program, or a conviction that has been judicially dismissed or ordered sealed, except in specified circumstances. This Assembly bill would, in addition, prohibit an employer from asking an applicant to disclose, or from utilizing as a factor in any condition of employment, information concerning specific juvenile court actions or custodial detentions.

AB 2261: Labor Commissioner investigations

This law, pending in the Assembly, would authorize the Commissioner to commence an investigation, issue a citation, or bring an action against an employer based on discharge or discrimination against an individual in violation of any such law, regardless of whether or not an employee complaint was received.

AB 1676: Prohibition on Salary History Inquiries to Applicants

This bill would prohibit employers from seeking salary history information (including compensation and benefits) about an applicant and would require private employers, upon reasonable request, to provide the pay scale for a position to an applicant. The Governor vetoed a similar bill in 2015, stating that it would “prohibit employers from obtaining relevant information with little evidence that this would assure equitable wages.”

If this law is passed, employers would have to revise their employment applications to remove any inquiry regarding an employee’s salary history.

SB 1167: Heat Illness Prevention for Indoor Employees

Current OSHA regulations address heat illness prevention standards for outdoor workers. This bill would require the Division of Occupational Safety and Health to propose by July 1, 2017, a heat illness and injury prevention standard applicable to indoor workers that provides equal or greater protection.

If new indoor heat illness prevention standards are issued, employers should update their policies to comport to the additional standards.

AB 6: Smoking in the Workplace Prohibitions Expanded

Under existing law, employers cannot knowingly or intentionally permit the smoking of tobacco products in an enclosed space at a place of employment. AB 6 would extend the definition of “smoking” to include “the use of an electronic smoking device that creates an aerosol or vapor, in any manner or in any form, or the use of any oral smoking device for the purpose of circumventing the prohibition of smoking.”

If this law passes, employers should review any smoking policies and make revisions as necessary to comport to this expanded definition of smoking.

AB 357: Fair Scheduling Act of 2015

This bill was held in the Assembly and ordered inactive in June 2015. It will likely be reconsidered in 2016. It applies to large food and general retail establishments (i.e., those that have both 500 or more employees in California and 10 or more retail establishments in the US), and would require such establishment to provide its employees with at least 2 weeks’ notice of their schedules, pay those employees additional pay, as specified, for each previously scheduled shift that the establishment moves to another date or time or cancels and each previously unscheduled shift that the establishment requires an employee to work, and would also require such establishment to pay those employees a specified amount for each on-call shift for which the employee is required to be available but is not called in to work. The bill would also require such establishment to allow an employee to, upon request, be absent from work without pay for up to 8 hours twice a year to attend any required appointments at the county human services agency (for example, the CalWorks or CalFresh program), provided that the employee gives reasonable advance notice to the employer of his or her intention to take time off, unless advance notice is not feasible. A substantially similar 2016 bill, SB 878, backed by the Democratic members of the California Women’s Legislative Caucus would create “The Reliable Scheduling Act.”

Other pending measures/regulations

Proposed November 2016 California Ballot Measure for Minimum Wage Increase

Existing law increased the California minimum wage to $10 per hour on effective January 1, 2016. This measure, if passed by the voters, would increase the minimum wage to $11.00 per hour, effective January 1, 2017, and by $1.00 each of the next four years, to $15.00 per hour on January 1, 2021. Thereafter, the minimum wage would adjust annually based on the rate of inflation for the previous year, using the California Consumer Price Index for Urban Wage Earners and Clerical Workers.

Proposed Department of Labor regulations for white collar exemptions expected by July 2016

As we alerted you to last year, the Department of Labor issued proposed revisions to the criteria for the executive, administrative, professional and computer exemptions in which, among other changes, the minimum salary requirement would increase substantially, even higher than the current California minimum salary requirement for these exemptions. The DOL took public comment on these proposed changes last year and final regulations are expected to be released by July of this year.

The following bills failed to pass in the Legislature, but could be revisited, and if eventually passed, would have significant consequences:

Alternative Workweek Allowances

AB 1038 would have allowed individual non-exempt employees to opt for a “4/10” work schedule (four 10-hour days each week) if the employer approves, without receiving overtime for the 9th and 10th hours on the 10-hour days, thus bypassing the alternative workweek election process. Similarly, SB 368 would have enacted the California Workplace Flexibility Act of 2016. The bill would have allowed individual, nonexempt employees to request an employee-selected flexible work schedule of up to 10 hours per day in a 40-hour workweek, without an obligation on the employer to pay overtime compensation for those additional hours (above 8) in a workday. The bill excepted employees covered by collective bargaining agreements and public employees. Republicans have repeatedly proposed this bill but it has always been voted down by the Democratic majority as a threat to the 8-hour workday. The Senate Labor and Industrial Relations Committee failed to pass this measure.

AB 465: Mandatory Employment Arbitration Agreements

This controversial bill was passed by the Legislature last year, but vetoed by Governor Brown. It would have effectively prohibited employers from requiring employees to sign arbitration agreements as a condition of employment. The Governor added that arbitration abuses should be addressed by targeted legislation, and not a blanket ban. The Supreme Court has since considered Federal Arbitration Act (“FAA”) preemption of state arbitration policies in DIRECTV, Inc. v. Imburgia, rejecting the California Supreme Court’s refusal to enforce the arbitration agreement in that case.