Client Alert: California Employment Law Update – 2018
By Carolyn A. Boyd

The following is a summary of the more significant new laws affecting California employers in 2018.

Hiring

Prohibition on Requesting Information Regarding Salary History

AB 168, codified under California Labor Code section 432.3, prohibits an employer from seeking to inquire, directly or indirectly, into a job applicant’s salary history, compensation, or benefits. Likewise, employers may not use such information as a factor in determining whether to offer a job to the applicant, or to decide the salary amount to offer the applicant. Further, where an applicant for employment makes a reasonable request, employers must now provide the pay scale for a position to the applicant for employment.
 

Notably, the new law does not prohibit applicants from “voluntarily and without prompting” disclosing salary history information, and does not prohibit an employer from considering or relying on that voluntarily disclosed salary history information in determining whether to extend a job offer or to decide what compensation to offer the applicant. However, remember that under the Equal Pay Act, prior pay cannot be the sole justification for any disparity in compensation between employees of difference races, sexes or ethnicities.
 

AB 168 applies to all employers, including state and local government employers, with the exception that the prohibitions do not apply to salary history information disclosable to the public under federal or state law.
 

Action Required:

• All employers must review their hiring procedures to ensure compliance with the new law and that they refrain, with respect to all aspects of the application and hiring process (written applications, questions during interviews, etc.), from requesting salary history information. 

• All employee handbooks should be updated to comply with the new law, and to reflect that anyone participating in the hiring process may not request salary history information.

• At a minimum, HR and managers (and potentially all employees) should be informed of the requirements under the new law.

“Ban the Box” - Prohibition on Questions Regarding Criminal Convictions

Existing law prohibits employers from asking an applicant for employment to disclose, or utilizing as a factor in determining any condition of employment, information relating to an arrest or detention that did not result in a conviction. AB 1008, codified as Government Code Section 12952, applies to employers with five or more employees (subject to certain exceptions set forth in the new law) and prohibits them from asking about criminal convictions in any form (including on employment applications or orally), prior to making a conditional offer. Following a conditional offer, Section 12952 further prohibits employers, when conducting a criminal history background check, from considering, distributing, or disseminating information related to specified prior arrests, diversions, and convictions.
 

The new law also requires an employer who intends to deny an applicant a position of employment solely or in part because of the applicant’s conviction history 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, and to consider certain factors when making that assessment, including: (1) The nature and gravity of the offense or conduct; (2) the time that has passed since the offense; and (3) the nature of the position sought. The assessment may, but is not required to be in writing.
 

The employer must then notify the applicant of its preliminary decision, provide the applicant with written notification of the decision pursuant to the requirements set forth in the new law, and afford the applicant 5 business days to respond to that notification before the employer may make a final decision. If the applicant notifies the employer in writing that he or she disputes the accuracy of the conviction history and is obtaining evidence to support that assertion, the applicant will have an additional 5 business days to respond to the notice. The employer must consider the information submitted by the applicant before making a final decision.
 

Further, where an employer makes a final decision to deny employment to the applicant, the employer must notify the applicant in writing and include the final denial, information relating to any existing procedure to challenge the decision or request reconsideration, and notify the applicant of the right to file a complaint with the Department of Fair Employment and Housing.
 

Note, the City of Los Angeles previously passed the Los Angeles Fair Chance Initiative for Hiring Ordinance (FCIHO) effective January 22, 2017, with similar requirements; however, these requirements differ in several key respects. For example, unlike Section 12952, the FCIHO does require the individual assessment to be in writing. Please check all local ordinances for your area to ensure full compliance.
 

Action Required:

• Employers with 5 employees or more must revise all employment applications and remove any “boxes” or questions seeking information relating to an applicant’s criminal conviction history.

• Employers with 5 or more employees must revise their interview and hiring procedure to ensure compliance with the new law. Additionally, if not already implemented, employers in Los Angeles with 10 or more employees must revise their hiring process to also comply with the Los Angeles Fair Chance Initiative for Hiring Ordinance. Employers in other cities should also check local regulations to ensure compliance with similar local laws.

• Employee handbooks should be updated to comply with the new law, and to reflect that anyone participating in the hiring process may not request information relating to an applicant’s conviction history.

• At a minimum, HR and managers (and potentially all employees) should be informed of the requirements under the new law.

Employee Leave

New Parent Leave Act

The California Family Rights Act (CFRA), previously required employers with 50 or more employees to provide baby bonding leave to employees.  Senate Bill 63 amends and expands Section 12945.6 of the California Government Code to cover smaller employers. Effective January 1, 2018, employers with 20 or more employees must provide 12 weeks of unpaid protected leave: (1) to bond with a new baby or child within one year that the baby or child was born to, adopted by, or placed in foster care with an employee; (2) to care for the employee’s parent or spouse who has a serious health condition; or (3) because the employee is suffering from a serious health condition rendering him or her unable to perform the functions of the job. To qualify for the 12 weeks of unpaid family leave, the employee must have at least 1,250 hours of service with the employer during the previous 12-month period, and work at a site with at least 20 employees within a 75 mile radius.

The employer must guarantee employment in the same or a comparable position at the end of the leave period.  The employee may also use accrued vacation pay, paid sick time, or other accrued paid time off during the parental leave period.  The New Parent Leave Act (“the Act”) also prohibits employers from refusing to maintain and pay for coverage under a group health plan for the duration of the covered leave period at the level and under the conditions that coverage would have been provided if the employee had not been on leave (maximum of 12 weeks during the 12-month period after commencement of the leave). However, employers may recover the costs of maintaining the health plan for the employee: (1) if the employee fails to return to work after the leave period is exhausted; and (2) the failure to return is for a reason other than a serious health condition or other circumstances beyond the employee’s control. 

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The Act also prohibits an employer from refusing to hire, or to discharge, fine, suspect, expel, or discriminate against, an individual for exercising the right to parental leave provided under the Act. Employers are also prohibited from interfering with, restraining or denying the exercise of, or attempting to deny any right provided under the Act.

Mediation pilot program. The Act also provides for the creation of a parental leave mediation pilot program. Presuming the Department receives the necessary funding, under the pilot program, if an employer requests participation in the Department’s Mediation Division Program within 60 days of receipt of a right-to-sue notice, an employee may not pursue a civil action under the Act until mediation is complete. The employee’s statute of limitations, including for all related claims not under Act, are tolled upon receipt of the employer’s request to participate in the department’s Mediation Division Program until the mediation is complete. A mediation is considered complete under the Act when, at any time after the employer’s request, either party notifies the department’s Mediation Division Program and all other parties that it is electing not to participate in, or is withdrawing from, the mediation, or the department notifies the parties that it believes further mediation would be fruitless.
 

Action Required:

• Employers with at least 20 employees (not just those with 50 employees) within a 75-mile radius must now provide 12 weeks of unpaid leave to employees seeking family leave as required under the New Parent Leave Act.

• All employee handbooks should be updated to reflect these changes.

• At a minimum, HR and managers should be informed of the requirements under the new law.

• Employers should stay abreast of developments regarding the mediation pilot program and strategically assess whether to participate in the event of an employee claim.

Santa Monica Sick Leave

Effective January 1, 2018, employees who work in Santa Monica are entitled to increased paid sick leave. Santa Monica employers with 25 or fewer employees must provide 40 hours of sick leave per year (up from 32 hours); and employers with 26 or more employees must provide 72 hours of paid sick leave per year (up from 40 hours).

Action Required:

• Santa Monica employers must update their sick leave policies to comply with the augmented requirements of the Santa Monica sick leave ordinance (Employers with 25 or fewer employees must provide 40 hours of sick leave per year, and employers with 26 or more employees must provide 72 hours of paid sick leave). 

• All employee handbooks should be updated to reflect these changes.

• HR and managers should be informed of the requirements under the new law.

Harassment and Discrimination

Expanded Harassment Training Requirement

Employers with 50 or more employees were previously required under the Fair Employment And Housing Act to provide at least two hours of training and education on sexual harassment to all supervisory employees within six months of starting their supervisory role, and thereafter, once every two years.  SB 396 amends Government Code Sections 12950 and 12950.1, and Insurance Code Sections 14005 and 14012, such that employers are now required to include as part of that training, a component based on gender identity, gender expression, and sexual orientation. 

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SB 396 also requires employers with 5 or more employees to post a new workplace poster regarding transgender rights (which will be developed by the Department of Fair Employment and Housing), in a prominent and accessible location. SB 396 also calls for the Department of Fair Employment and Housing to amend its current poster on discrimination in employment to include information relating to the illegality of sexual harassment.

Action Required:

• All employers should request a copy of the amended poster on discrimination in employment (to include information regarding the illegality of sexual harassment) and must post it in a prominent and accessible location. The Department of Fair Housing and Employment will make the posters available online, or employers can request a copy via mail.

• Each employer must obtain the information sheet on sexual harassment from The Department of Fair Housing and Employment, which the Department will make available to employers for reproduction and distribution to employees.

• Employers with 5 or more employees must obtain and post the new workplace poster regarding transgender rights, in a prominent and accessible location. 

• Employers with 50 or more employees must update their sexual harassment training protocols to ensure the required 2 hours of training and education for all supervisory employees (within 6 months of starting their supervisory role, and every 2 years thereafter) includes gender identity, gender expression and sexual orientation as required by the new law.

• All employee handbooks should be updated to reflect these changes.

• HR and managers should be informed of the requirements under the new law.

Anti-Discrimination Protection for Veterans

AB 1710 amends Section 394 of the Military and Veterans Code. Previously, Section 394 prohibited discrimination against an officer, warrant officer, or enlisted member of the military or naval forces of the state or of the United States because of his or her membership or service, including, but not limited to, discrimination with respect to his or her employment; and called for both civil and criminal penalties for violation of this law. AB 1710 expands these protections by stating that, within these prohibitions, employers are prohibited from discrimination in the “terms, conditions, or privileges of employment.” AB 1710 conforms California law to the federal Uniformed Services Employment and Reemployment Rights Act (USERRA), which protects service members from discrimination in the workplace.

Action Required:

• Employers should ensure their policies are in compliance with the new law.

• Employee handbooks should be updated to reflect the changes to this law.

• HR and managers should be informed of the requirements under the new law. 

Retaliation Claims: Expanded Authority for Labor Commissioner Investigations

SB 306 will permit the Labor Commissioner to investigate an employer, regardless of whether a complaint was filed, where the Labor Commissioner suspects retaliation or discrimination during a wage claim or other investigation.

SB 306 also authorizes the Labor Commissioner, upon finding reasonable cause of a violation, to petition a superior court for injunctive relief prohibiting an employer from firing or disciplining an employee, even where the Labor Commissioner has not completed its investigation or conclusively determined that retaliation has occurred. However, an employer can discipline or terminate an employee for conduct unrelated to the retaliation claim. SB 306 also sets forth a new citation process for alleged violations and penalties.

Action Required:

• HR and managers should be informed of the requirements under the new law. 

• Employers should have a strong anti-discrimination, anti-harassment and anti-retaliation policy in place. This policy should be included in employee handbooks.

• Employers should consider adding or augmenting anti-discrimination, anti-harassment and anti-retaliation training programs to minimize incidences of discrimination, harassment and retaliation; as well as the potential liability from such claims. 
   

Immigration and Human Trafficking

Immigration Worker Protection Act

AB 450 was enacted to protect workers from workplace raids by immigration enforcement. Effective January 1, 2018, employers must require a judicial warrant before permitting an immigration enforcement agent to enter the non-public places of a workplace (although some exceptions do apply); and must require a subpoena or court order before an immigration enforcement agent may access, review or obtain employee records without a subpoena or court order. Additionally, employers must provide written notice to an employee, as well as the employee’s authorized representative, if any, within 72 hours of receiving an inspection notice (pursuant to the notice requirements of the new law); as well as a copy of the inspection notice received from the immigration agency.  The Labor Commissioner will create a template of the required notice on or before July 1, 2018.  Further, employers must provide affected employees with a copy of the inspection results, and notice of obligations of the employer and the affected employee resulting from the inspection, within 72 hours of receiving them.

Violations of the Immigration Worker Protection Act (“IWPA”) can subject an employer to fines between $2,000 and $5,000 for the first violation, and between $5,000 and $10,000 for subsequent violations. Further, under the IWPA, employers are prohibited from re-verifying the employment eligibility of a current employee at a time or manner not required by federal law. Violations of this provision can also subject an employer to penalties of up to $10,000 per violation.

Action Required:

• All employers should review their policies and conform them to the new law.

• All employers should alert and train their employees, including HR and all managers, on how to handle requests for inspection and other investigatory measures.

• All employee handbooks should be updated to ensure compliance with the new law.
   

Employee Salaries and Payment

California Minimum Wage Increase

Effective January 1, 2018, the California minimum wage increases from $10.50 per hour to $11.00 per hour for businesses with 26 or more employees, and from $10.00 per hour to $10.50 per hour for businesses with 25 or less employees. 

Please be aware that in addition, many cities have adopted separate minimum wage schedules, which may raise minimum wage requirements above the California state minimum wage.  For example, effective July 1, 2017 Santa Monica raised its minimum wage to $12.00 per hour for businesses with 26 or more employees, and to $10.50 per hour for businesses with 25 or fewer employees. Additionally, at a minimum, employers must post Santa Monica legal notices in English and Spanish; and in additional languages where certain criteria are met. Please check all local laws to ensure full compliance with minimum wage laws.

Action Required:

• All employers should review their payment policies and conform them to the new law.

• All employers should alert their employees, including HR and all managers, of the new law.

• In addition to complying with the California state minimum requirements, all employers should also check local ordinances to ensure compliance with all local minimum wage requirements.