Top Ten Laws Affecting California Employers in 2018

The California legislature and governor have had another busy year adding new laws and regulations for California employers. The changes hit virtually every aspect of the employment relationship – including applications, leaves of absence, wage-and-hour, discrimination, retaliation, immigration, and workplace notice requirements. Many new laws expand existing requirements to a broader array of employers. Here are the top ten laws requiring immediate attention for employers to comply.

1. Ban the Box

New law:

California has extended the “ban the box” law to private employers with 5+ employees.

Ensure the following for compliance:

  • Employers cannot seek to elicit, inquire into, or otherwise consider an applicant’s conviction history before making a conditional offer.
  • Certain information – such as specified arrests not resulting in conviction, referral to diversion programs, and sealed convictions – cannot be considered, distributed, or disseminated at all during hiring decision.
  • If an employer intends to deny an application based, even in part, on a person’s conviction history, then it must determine (and should document that decision) whether the conviction history has a direct and adverse relationship to the duties of the position at issue. Factors to consider include:
    • Nature and gravity of the offense
    • Time that has passed since offense
    • Nature of the position sought
  • The employer must notify the applicant of its preliminary decision in writing. The notice must:
    • Attach a copy of the conviction report (including the convictions on which the employer is making the decision)
    • Include a detailed explanation of the right to respond to the notice before the decision becomes final
    • Include the date on which the decision becomes final, which must be at least 5 business days from the date of the notice
  • The applicant will have another 5 business days if s/he timely disputes the accuracy of the conviction history and takes steps to obtain pertinent evidence.
  • The employer must consider the evidence submitted by the applicant before making a final decision.
  • If, after consideration, the employer still denies the application, it must notify the applicant in writing of:
    • The final denial
    • Any procedures for challenging the decision or requesting reconsideration
    • The applicant’s right to file a complaint with the Department of Fair Employment and Housing

2. Salary History

New law:

Employers may not request or rely on an applicant’s salary history (including compensation and benefits) as a factor in determining whether to offer employment or what salary to offer.

Ensure the following for compliance:

  • Applicants may voluntarily and without prompting provide salary history information. Employers may consider and rely on voluntary disclosures to set the applicant’s salary. Make sure any notation about prior salary states that it was voluntarily given.
  • Upon a reasonable request by an applicant, employers must provide the pay scale for the position.
  • Confirm internally that prior salary alone cannot justify any disparity in compensation between individuals.

3. Small Employer Parental Leave

New law:

Applies the California Family Rights Act to employers with 20-49 employees in a 75-mile radius. (The law previously applied only to employers with 50+ employees in a 75-mile radius, like the Family and Medical Leave Act.)

Ensure the following for compliance:

  • Employers with 20+ employees within a 75-mile radius must provide up to 12 weeks of unpaid, job-protected leave for eligible employees to bond with a new child within one year of his or her birth, adoption, or placement.
    • An employee is eligible if he or she:
      • has been employed for more than 12 months
      • has at least 1,250 hours of service for the employer during the prior 12-month period
      • works at a worksite where there are at least 20 employees within a 75-mile radius
    • The law does not apply to those already subject to the CFRA and the FMLA.
  • If both parents (a) work for the same employer and (b) are entitled to leave under the law, then the amount of total leave for both is capped at 12 weeks.
    • There is no similar cap if one parent is entitled to leave under the new law and the other is entitled to leave under the CFRA/FMLA.
  • Employers must afford a parent on leave health insurance at the same level and conditions that coverage would have been provided if the parent had continued to work.
  • On or before the date leave is set to begin, employers must guarantee reinstatement to the same or comparable position.
  • Until January 1, 2020, if an employer requests mediation pursuant to the law, employees cannot pursue a lawsuit until the mediation is complete or the employee elects not to participate.

4. Transgender Inclusion

New law:

Extends existing requirements for supervisor harassment prevention training. Existing law requires employers with 50+ employees to provide supervisors with at least 2 hours of sexual harassment prevention training every 2 years.

Ensure the following for compliance:

5. Expanding Enforcement of Anti-Retaliation in Wage Claims

New law:

The Labor Commissioner’s authority to prevent retaliation in wage claims has been expanded:

  • If the Commissioner suspects retaliation in connection with a wage claim or other investigation it is conducting, it can investigate even when the affected employee does not file a complaint.
  • Upon finding reasonable cause, the Commissioner can seek an injunction prohibiting the employer from firing the employee or ordering reinstatement pending the outcome of the retaliation claim.
  • Employees also may seek injunctive relief. Any relief granted would not be stayed pending appeal of the decision.
  • Employers are subject to penalties of up to $100 per day ($20,000 maximum) for willful refusal to comply with an order to reinstate an employee or cease the alleged conduct.

Ensure the following for compliance:

  • Ensure training is adequate to address increased liability.
  • Consult with counsel before taking adverse action against an employee raising a wage claim.

6. Whistleblower Discrimination (Health Facility)

New law:

Increased maximum penalty from $20,000 to $75,000 for willful discrimination or retaliation against an employee who raises a concern about conditions at a health facility.

Ensure the following for compliance:

  • Ensure training is adequate to address increased liability.

7. Military Service Discrimination

New law:

Amends California law to conform with USERRA.

Ensure the following for compliance:

  • California’s amended law now prohibits discrimination against service members in all “terms, conditions or privileges” of employment. Check handbook and/or policies to ensure conformity.

8. Domestic Violence Notice

New law:

Employers with 25+ employees are required to give new employees written notice explaining the rights of victims of domestic violence, sexual assault, and stalking.

Ensure the following for compliance:

  • The notice must inform the employee about the right to:
    • Take time off
    • Receive reasonable accommodations
    • Be free from discrimination
    • File a complaint
  • The Labor Commissioner has developed a template notice in the event the employer does not want to create its own.

9. Minimum Wage Increase

New law:

California has increased the minimum wage.

Ensure the following for compliance:

  • Changes according to employer size, beginning January 1, 2018:
    • < 25 employees: $10.50 per hour
    • 26+ employees: $11 per hour
  • The minimum will continue to rise each year until it reaches $15 per hour in 2022 for large employers and 2023 for small employers.
  • Minimum wage increases trigger corresponding increases to the exempt employee salary threshold.
  • Local Ordinances: Numerous localities dictate higher minimum wages, as well as different effective dates for wage hikes.
    • Localities include Los Angeles, Malibu, Santa Monica, San Francisco, San Diego, and Oakland.
    • These ordinances are applicable based on where the employee performs the work.

10. Sanctuary State

New law:

Expands sanctuary rules to employers.

Ensure the following for compliance:

  • Unless required by federal law, the new law forbids an employer from:
    • Allowing immigration agents to enter nonpublic areas of the business.
    • Giving immigration agents access to the employee records.
      • The prohibition does not extend to I-9 forms or other documents for which a notice of inspection has been given to an employer.
      • Immigration agents may include individuals from Homeland Security Investigations.
  • Employers may not re-verify employment eligibility of a current employee unless required by specified federal law. Consult with counsel if auditing current employee I-9s.
  • Post a notice informing employees of a record inspection by an immigration agency within 72 hours of receiving the notice of inspection.
  • The notice must be in the language the employer normally uses to communicate with employees and must include:
    • The name of the inspecting agency
    • The date the employer received the notice
    • The nature of the inspection
    • A copy of the notice of inspection
  • Except as required by federal law, employers must provide affected employees copies of the inspection results and written notice of the various obligations.
    • The information must be provided within 72 hours of the employer receiving the results.
    • The information must include:
        • A description of the deficiencies identified in the inspection
        • The time period for correcting any potential deficiencies
        • The time and date of any meeting with the employer to correct the deficiencies
        • Notice that the employee has a right to representation during any meeting scheduled with the employer
    • The notice must be delivered by hand at the workplace, if possible, or by mail and email if hand delivery is not possible.

To speak to someone about the new California laws, contact Joel O’Malley, Jen Cornell, or Pablo Orozco.

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