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November 2015

Review of New Laws and Regulations Likely to Impact California Employers in 2016

Once again, the New Year brings with it new laws and regulations that apply to business in California. Thus, employers are encouraged to review existing policies and procedures, and consult with counsel to implement necessary changes starting on January 1, 2016.

AB 1506 Provides Employers with a Right to Cure

This new law, already in effect, provides employer’s with a right to cure violations of certain provisions under the Private Attorneys General Act of 2004. The law gives employers 12 months to cure a violation of providing employees with appropriate wage statements inclusive of the dates of the pay period as well as the name and address of the entity-employer. To do so, the employer must prove it provided fully compliant wage statements to all aggrieved employees for each pay period during the 3 years preceding the employee’s notice of non-compliance.

AB 987 & 1509 Broaden FEHA Protections

Assembly Bill 987 expands the FEHA provisions to prohibit retaliation or discrimination against an employee who requests accommodations, regardless of whether his or her request was granted, and Assembly Bill 1509 codifies what has become known as the “perceived whistleblower theory.” This law codifies the expansion of FEHA protections to family members of employees and well as employees perceived as engaging in protected activity, and prohibits unlawful discrimination, retaliation, or other adverse employment actions against such persons. This law separately expands the exclusions of non-delegable duties pertaining to workplace safety and payment of wages to certain classes of employers involved in the carrying of household goods.

Each of these laws expands employee and relatives’ protections against unlawful employment practices. Thus, employers should carefully review and consider discussing with counsel all employee requests for accommodations and should advise management about these new laws.

SB 358 Seeks to Reduce Gender Wage Differentials

In order to address continued and persistent wage gaps as between the sexes, this law amends Labor Code section 1197.5 to improve wage disclosure regulations. First, the law broadens the prohibition on wage differentials such that employers may not pay any employees a lower rate for substantially similar work, regardless of whether the employees are within the same establishment. Second, to the extent that a wage differential exists, this law now requires employers affirmatively to establish that the complete wage differential is due to some legitimate factor, among those enumerated in Labor Code section 1197.5(a). Third, this law adds an anti-discrimination/anti-retaliation provision entitling aggrieved employees to reinstatement and reimbursement for lost wages and benefits. Fourth, the law precludes employers from prohibiting employees from disclosing or discussing his or her wages as well as the wages of others or encouraging other employees to exercise his or her right to do so. Lastly, the bill requires employer to maintain records of employee wages, rates, job classifications and other conditions of employment for 3 years, rather than 2.

Regularly reviewing pay structures may help employers avoid exposure for wage differential claims.

AB 1513 Adds to Wage Statement Requirements

This law expands the application of Labor Code section 226.2 to workers paid on a piece-rate basis, and requires employers provide piece-rate employees with itemized wage statements setting for total hours of compensable rest and recovery periods, the rate of compensation, and gross wages paid as well as the total hours of other non-productive time, defined as “time under the employer’s control, exclusive of rest and recovery periods, that is not directly related to the activity being compensation on a piece-rate basis.”

Employers should be aware that revisions to existing wage statements may be required to remain in compliance with these new provisions.

SB 501 Reduces Maximum Allowable Wage Garnishments

This law reduces the maximum allowable wage garnishment of a judgment debtor employee to the lesser of 25% of the employee’s disposable income or only 50% of the amount by which his or her disposable earnings exceed 40 times the state or applicable minimum wage. Unlike most of the laws referenced in this summary, this law takes effect on July 1, 2016.

SB 667 Expands Employee Rights to Disability Insurance

As of July 1, 2016, this law eliminates the 7-day waiting period for disabled employees to receive disability insurance in cases where he or she files a subsequent claim for the same disability within 60 days and previously complied with the requisite waiting period.

AB 622 Restricts Employers’ Use of the E-Verify System

In order to prevent discrimination, this new law prohibits employers from using the federal E-Verify system to check the employment authorization status of any existing employee or applicant who has not yet been offered employment except as authorized by federal law or as a condition to receipt of federal funds. Additionally, if an employer utilizes the E-Verify system in an authorized manner and obtains a tentative non-confirmation, the employer must provide notification to the employee as soon as is practicable. Violations of this law may subject the employer to a $10,000 civil penalty per occurrence.

Under this law, employers are cautioned when utilizing the E-Verify system unnecessarily.

AB 1245 Requires Employers to Utilize Electronic Methods

AB 1245 announces that beginning January 1, 2017, employers with 10 or more employees will be required to file all unemployment insurance reports and returns, and remit all contributions via electronic funds transfer; this law will extend to all employers the following year. Unless a waiver is acquired, employers will be subject to penalties for failure to comply with this new law.

This law may reduce employers’ PAGA exposure. Thus, employers should explore this option with counsel to determine whether they can or should exercise this new right to cure.

SB 579 & AB 304 Expand Employee Rights to Leave, but May Provide Employers with Additional Flexibility in Offering Required Leave

Senate Bill 579 expands the availability for leave to care for a child to employees of certain employers. The law includes attending to emergencies, including finding, enrolling, or reenrolling a child in a school or with a child care provider as protected activities. The law also expands the definition of “parent” under this section to include stepparents, foster parents, and persons standing in loco parentis to a child. Additionally, this law would require employers permit employees to use sick leave for any purpose specified under the Healthy Workplaces, Health Families Act of 2014. Particularly, this expands employees’ entitlement to leave to care for family members, including grandparents, grandchildren, and siblings in addition to children, parents, spouses or domestic partners.

Effectively immediately and as pertaining to sick leave and the Healthy Workplaces, Healthy Families Act of 2014, Assembly Bill 304 amends the provisions of that Act to require that employee for the same employer for 30 days before accruing sick leave at the prescribed rate, and removes retired annuitants of public entities from the definition of “employee” under the Act. In addition, this law provides employers more flexibility in offering accrued leave to employees. Specifically, it allows employers to offer leave on a basis other than that prescribed in the Act, so long as accrual is on a regular basis and the employee will have accrued at least 24-hours of sick leave by his or her 120th calendar day of employment. The law provides additional flexibility to employers with respect to employees’ exercise of their accrued leave as well, allowing employers to limit the use of leave to 24 hours each year as calculated either by year of employment, calendar year, or 12-month period. Unlimited sick leave meets the requirements of this Act, but must be expressly itemized on employees’ wage statements, and employers need not provide additional sick days if they maintain a paid leave or time off policy that meets the Act’s requirements. Employees are also provided some additional protection under this law, which removes the employer’s obligation to inquire into or record the purposes for which an employee takes accrued leave.

AB 621 Provides Motor Carriers with an Amnesty Option

This law adds a new program to the California Labor and Unemployment Insurance codes entitled the Motor Carrier Employer Amnesty Program, which intends to relieve motor carriers performing drayage service from liability for statutory penalties for misclassification of drivers upon agreement to settle, prior to January 1, 2017, with administrative agencies, pay all wages, benefits, and taxes owed, properly convert all drivers to employees, agree to pay certain costs, and fulfill additional obligations.

Motor carrier employers should discuss with counsel the benefits and potential ramifications of entering into settlement agreements under this new program.

AB 359 & 897 Increase Protections for Grocery Workers During Changes in Control

These new laws impact grocery workers and retailers. On January 1, 2015, Bill 359 will obligate certain grocery employers to retain preexisting employees after transitions in ownership for at least 90-days and consider offering eligible employees continued employment after this probationary period. Certain grocery establishments are excluded based primarily on geographic location, Cal. Labor Code § 2516, and “grocery establishments” will not include retail stores which have not operated in over 6 months.

Grocery retailers are encouraged to seek the advice of counsel before making staffing decisions at or near the time of sale, merger, or other change in control.

AB 219 & 852 Expand What Constitutes “Public Works”

Assembly Bill 219 broadens the definition of “public works” under Article 2, section 1770, et seq. to include the hauling and delivery of ready-mixed concrete for purposes of carrying out a public works contract. Any entity hired to perform such hauling or delivering must be paid at the prevailing rate, enter into a written subcontract with the entity engaging it, and comply with the requirements of Section 1776 related to employee recordkeeping requirements. The law will apply prospectively to public works contracts awarded on or after July 1, 2016.

Additionally, Bill 852 expands this definition to include private contracts on projects for a general acute care hospital paid for in whole or part with proceeds of conduit revenue bonds issued after January 1, 2016 by a public agency. This definition does not include projects for rural general acute care hospitals with a maximum of 76 beds.

Employers engaged in any public works contracts are encouraged to discuss these new provisions with counsel to ensure they remain fully compliant.

SB 432 & 623 Potentially Afford Greater Protection for Non-Citizens

Senate Bill 432 repeals the definition of “alien” and provisions of Labor Code sections 1725 and 2015 applying preference to California or non-resident citizens over “aliens” in the extension of public works employment during period of unemployment in the state. Comparably, Senate Bill 623 allows injured employees to receive benefits under the Uninsured Employers Fund or the Subsequent Injuries Benefits Trust Fund regardless of his or her citizenship or immigration status.

To the extent that these new laws forecast a trend toward greater protections for non-citizens, employers are encouraged to consult with counsel.

There are also bills that expand the authority of the Labor Commission to issue citations and otherwise enforce applicable law, see AB 970 & SB 588, and bills particularly relevant to certain vocations and/or professions which are not included herein. (See, e.g., AB 202, 229, 285, 599, 705; SB 327.)

Attorneys in the Labor & Employment Practice Group at Gordon & Rees, LLP are available to assist employers with any questions or concerns they may have related to new legislation.

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