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California Law Update

California Law Update

2018 looks to be a busy year in the labor and employment arena.  The California legislature has passed and the Governor has signed a raft of new laws, most of which expand workers’ protections.  The following is a summary of legal developments, including relevant new case law and statutory changes that take effect in 2018.

Workplace Immigration Enforcement

Most of us know about the Trump administration’s relentless assault on immigrants, including immigrant workers.  In an effort to blunt this assault, California has enacted new laws designed to protect immigrant workers from being ambushed by federal immigration agents in the workplace.  Subject to limited exceptions, employers cannot allow federal immigration agents to enter non-public work areas or review employee records unless the agents have a warrant.  If the employer “voluntarily” lets the agents in without a warrant, the employer will be subject to steep fines: up to $5,000 for the first violation and up to $10,000 for each subsequent violation.

In addition, if an employer receives a Notice of Inspection (NOI) stating that federal immigration agents intend to inspect I-9s or other employee records, the employer must post a notice informing employees of the inspection.  The notice must be posted within 72 hours of the employer’s receipt of the NOI.  In unionized workplaces, the employer must also notify the union within 72 hours.

These new laws took effect on January 1, 2018.  They are codified at Government Code Sections 7285.1, 7285.2 and 7285.3 and Labor Code Section 90.2.

Ban the Box

Effective January 1, 2018, the California Fair Employment and Housing Act (FEHA) has been amended to limit an employer’s use of a candidate’s criminal record.  Under the new law, most employers are prohibited from inquiring about an applicant’s criminal record or conviction history – whether on the employment application or through any other means – until after a conditional offer of employment is made (hence the term “ban the box”).  Once an offer has been made and the candidate’s criminal history is obtained, the employer cannot rescind the offer unless it performs an individualized assessment evaluating the conviction in light of the specific position being sought.  “Ban the box” builds upon existing laws that generally prohibit employers from inquiring into arrests that do not result in a conviction.      

Wireless Communication Devices (AB 1222)

In 2016, California expanded its “distracted driving” law to prohibit holding or operating a wireless telephone or electronic device while driving unless the device is configured for hands-free use.  After this law was passed, concerns were raised that it was written too broadly and could be construed as prohibiting two-way radios devices and other specialized messaging devices used by commercial drivers.  Effective January 1, 2018, the California legislature amended the law to clarify that the use of such devices is not prohibited.  This will clear the way for the safe use of these devices by commercial drivers. 

Parental Leave(SB 63)

This bill extends California’s “baby-bonding” leave law to more workers.  Effective January 1, 2018, employers with 20 or more workers must provide employees who have worked at least 1,250 hours in the past year 12 weeks of unpaid leave to bond with their new child within one year after the child’s birth, adoption or foster placement.  Previously, baby-bonding leave only applied to employers with 50 or more workers.  

Expanded Harassment Training (SB 396)

The last half of 2017 saw an increase in sexual harassment claims due in large part to the heightened social awareness around the widespread problem of workplace harassment.  Since 2004, California has required employers with more than 50 employees to provide supervisors with sexual harassment training.  In 2015, that statute was expanded to require training on bullying and abusive conduct (AB 2053).  And now, as of January 1, 2018, employers must include gender identity, gender expression and sexual orientation in their anti-harassment training (SB 396). 

Salary Information Requests (AB 168; Labor Code § 432.3)

Despite decades of efforts to reduce the gender pay gap, women still make only 80% of what men make.  One potential  reason for  the pay gap is that new employers often base their salary decisions on an applicant’s prior salary history, thereby perpetuating pay inequities that have resulted from past discriminatory treatment.

AB 168 (Labor Code § 432.3) seeks to break this cycle of discrimination.  As of January 1, 2018, employers are prohibited from asking job applicants, or the applicant’s former employers, about their salary history.  Employers are also prohibited from using salary history as a factor in deciding whether to extend an offer of employment.  In addition, employers must provide applicants with the position’s pay scale upon request.  Applicants can still voluntarily disclose their salary history; however, if they do so, the employer could use that information to set the applicant’s salary. 

CALIFORNIA FAIR PAY ACT (SB 358; LABOR CODE § 1197.5)

Hailed as the strongest equal pay law in the nation, California’s Fair Pay Act requires employers to provide male and female employees with equal pay for “substantially similar work.”  Prior law only required equal pay for “equal work,” which meant that employers could defeat equal pay claims by pointing to very small differences in job duties.  By adopting the standard of “substantially similar work,” the Fair Pay Act, effective since January 1, 2016, has made it easier for employees to challenge gender-based pay disparities.

A separate provision of the Fair Pay Act prohibits employers from retaliating against employees for disclosing their wages, discussing the wages of others, inquiring about another employee’s wages or encouraging an employee to exercise any of these rights.  Since these protections are similar to those already contained in Section 7 of the National Labor Relations Act (NLRA), it remains to be seen whether the courts will find this new law to be preempted by the NLRA.  For the time being, employees should be aware that they may have additional remedies if their employer retaliates against them for engaging in protected activities. 

Retirement Savings Program Requirement for Employers (SB 1234)

In 2016, California established the “Secure Choice Retirement Savings Program,” a state-administered retirement plan for private employees.  Once the Program is fully operational, employers with 5 or more employees who don't already provide a retirement plan will be required to either begin offering a retirement plan or automatically enroll their employees in the Secure Choice Program.  Participating employers must allow employees to have income withheld from their paychecks to be contributed into their Secure Choice accounts through a third-party administrator.

The Secure Choice Program will likely be launched in late 2018.  In year one, likely 2019, employers with 100 or more employees must comply with Secure Choice Program rules.  In year two, 2020, employers with 50 or more employees must comply with Secure Choice Program rules.  Finally, in year three, 2021, employers with five or more employees must comply with Secure Choice Program rules.

EMPLOYEE CLASSIFICATION- LINTON

An important Court of Appeals case has recently been decided.  This case addresses the longstanding question of how to determine whether a worker is an “employee” or an “independent contractor” under California law.  

Over the past 25 years, California law has gradually enabled more and more workers to achieve the benefits of being classified as an employee in industries where employers have, often deliberately, misclassified these employees as independent contractors.  While misclassification is particularly widespread in the transportation industry, employees in all industries may be affected by misclassification.

Since 1989, California courts have held that worker’s compensation, unemployment, and state disability benefits are available to misclassified workers, and that minimum wage laws apply to them as well.

In Linton v. DeSoto Cab Company, Inc., 15 Cal.App.5th 1208 (2017), California courts once again pushed the envelope in favor of stronger wage and hour protections for California workers.  In Linton, a taxicab driver brought a wage and hour claim against his employer.  The trial court held that the driver was an independent contractor and dismissed his claims on that basis.  The Court of Appeals overturned the trial court’s decision, holding that it had applied “independent contractor” test too rigidly.  Applying the correct legal standard, the Court of Appeal found that the driver was an employee and, therefore was entitled to unpaid wages and penalties, together with interest.  The Court also held that the employer, by way of a gate fee, had been taking an unlawful kickback from wages.  Finally, the Court reaffirmed that employers bear the burden of proof in disputes over whether a worker is an independent contractor rather than an employee.  

The Linton case is a significant victory for workers on many fronts.  It makes it more difficult for employers to misclassify workers as independent contractors and eliminate their legal protections.  In addition, the Linton case may make it easier for employees to unionize and obtain other protections under the NLRA.

If you believe any of the workers you are organizing are being misclassified as independent contractors and are not receiving the State benefits to which they are entitled, we would be happy to speak with them and provide our legal opinion.    

MINIMUM WAGE INCREASE

As of January 1, 2018, California’s State minimum wage has once again increased.  Employers with 26 or more employees must pay at least $11.00 per hour.  Employers with 25 employees or less must pay at least $10.50 per hour.  

In Los Angeles City and County, the minimum wage will increase even more in 2018.  Currently, Los Angeles employers with 26 or more employees must pay at least $12.00 per hour.  Employers with 25 or fewer employees must pay at least $10.50 per hour.  Effective July 1, 2018, the minimum wage will increase to $13.25 and $12.00, respectively.  The minimum wage in Los Angeles will increase steadily each year until it reaches $15.00 per hour in 2020. 



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