The 2013 California legislative session recently ended, and, as expected, Gov. Jerry Brown signed into law a number of bills affecting California employers. These include:
*An increase in California’s minimum wage to $9 and later to $10 per hour (Assembly Bill [AB] 10).
*An expansion of California’s “paid family leave” benefit (Senate Bill [SB] 770).
*A revised definition of “sexual harassment” under the Fair Employment and Housing Act (FEHA) (SB 292).
*Amendments to FEHA to protect military and veterans (AB 556).
*A new limit on attorney’s fees for prevailing employers in certain wage and hour disputes (SB 62).
*New retaliation safeguards, including for “immigration-related practices” (AB 263 and SB 666).
*Additional protections, including accommodation obligations, for victims of stalking and certain serious crimes (SB 288 and SB 400).
*Expanded time off for training purposes for reserve peace officers and emergency rescue personnel (AB 11).
*Limits on criminal background checks for public employers (AB 218).
*A new limit on employer credits against prevailing wage obligations (SB 776).
*Changes regarding employer-proposed work sharing plans to avoid lay-offs (AB 1392).
Gov. Brown also vetoed several bills, including a proposed amendment to FEHA to codify the mixed-motive affirmative defense (SB 655), a proposed new privilege for discussions between employees and union representatives (AB 729), new licensing and surety requirements for foreign labor contractors (SB 516) and prevailing wage requirements for workers compensation injuries (AB 454). .
Below is a list, organized largely by subject matter, of the key employment-related bills signed into law which, unless otherwise indicated, take effect Jan. 1, 2014.
New Employment Laws
FEHA Sexual Harassment Need Not Be Motivated by Sexual Desire (SB 292)
FEHA precludes harassment based on certain statutorily-enumerated bases, including “sex.” Government Code section 12940(j)(4)(C) previously defined “harassment because of sex” to include “sexual harassment, gender harassment, and harassment based on pregnancy, childbirth or related medical conditions.”
This new law amends this definition to specify that “sexually harassing conduct need not be motivated by sexual desire.” This amendment is intended to clarify the legal standard for demonstrating sexual harassment following a recent appellate court decision (Kelley v. Conco Companies (2011) 196 Cal.App.4th 191) which had dismissed a same-sex harassment case because the plaintiff could not demonstrate his supervisor was sexually interested in him. According to the bill’s authors, it returns California law to the pre-Kelley standard wherein a plaintiff may demonstrate harassing conduct was motivated by sex through three evidentiary routes: (1) by showing sexual intent or desire on the harasser’s part towards the plaintiff; (2) by showing general hostility by the harasser towards a particular sex of which the plaintiff is a member; or (3) through comparative evidence about how the alleged harassment treated members of both sexes in a mixed-sex workplace.
FEHA Amendment to Prohibit Harassment or Discrimination Based on Military and Veteran Status (AB 556)
This bill amends FEHA to protect active duty military and veterans, and largely is intended to make current state law more consistent with federal law. For instance, whereas previously the federal law (USERRA) prohibited discrimination against “military and veterans,” California’s Military and Veterans Code only applied to active duty military. However, rather than simply amending California’s Military and Veterans Code, this amends FEHA to add “military and veteran” status to the list of protected classifications, meaning it will be unlawful to harass or discriminate because of an individual’s military or veteran status. Notably also, while the Military and Veterans Code only prohibited discrimination by “employers,” by amending FEHA this bill also prohibits labor organizations, employment agencies or apprenticeship training programs from discriminating or harassing because of military and veteran status.
“Military and veteran status” will be defined in new subsection (k) of Government Code section 12926 as “a member or veteran of the United States Armed Forces, United States Armed Forces Reserve, the United States National Guard, and the California National Guard.” The bill also specifically provides that it does not prohibit employers from identifying members of the military or veterans for purposes of awarding a veteran’s preference as permitted by law.
New Protections, Including Accommodation Obligations, for Victims of Stalking, Domestic Violence or Sexual Assault (SB 400)
Labor Code sections 230 and 230.1 presently provide protections to victims of domestic violence and sexual assault, including prohibiting employers from taking adverse employment action against such individuals who take time off from work to attend to issues arising as a result of the domestic violence or sexual assault. These sections also currently permit an employee who has been discriminated or retaliated against for taking such time off to file a complaint with the Division of Labor Standards Enforcement (DLSE). This new law extends these provisions to a new group of employees, and includes new accommodation requirements.
First, it amends both sections to specify they also apply to victims of stalking, meaning employers cannot discriminate or retaliate against employee because of their known status as a victim of domestic violence, sexual assault or stalking. Whereas sections 230 and 230.1 had previously prohibited any discrimination against such victims, this new law specifies this discrimination must be knowing, either because the victim provides notice to the employer of the status or the employer has actual knowledge of the status.
This law also requires the employer to engage in a good faith interactive process to identify potential reasonable accommodations for stalking, domestic violence, or sexual assault. Employees seeking such accommodation will, at the employer’s request, be required to submit a written statement signed by the employee or an individual acting on the employee’s behalf certifying the accommodation is related to the employee’s status as a victim of domestic violence, sexual assault or stalking. The law specifies an employer is not required to provide a reasonable accommodation to an employee who has not disclosed his or her status as a victim of domestic violence, sexual assault or stalking.
This law also requires employers to provide reasonable accommodation, which may include implementing safety measures such as a transfer/reassignment or modified schedule, a changed work telephone or work station, installation of a lock, or assistance in documenting the employee’s status. An employee will be required to notify an employer if a new accommodation is needed because of changed circumstances, or if the employee no longer needs an accommodation.
As in the disability context, employers will not be required to implement accommodations constituting an “undue hardship,” which would include an action that would violate an employer’s duty to furnish and maintain a safe and healthful workplace for all employees as required under Labor Code section 6400.
This bill originally contemplated creating a private right of action for violations of sections 230 and 230.1, in addition to the current right to file a charge with the DLSE, but this provision was omitted by amendment. Employees who are discriminated or retaliated against because of their status as victims of domestic violence, sexual assault or stalking, or for requesting reasonable accommodation, shall be entitled to reinstatement, reimbursement for lost wages and benefits, “as well as appropriate equitable relief.” (This entitlement to “appropriate equitable relief” is not available to employees who file a DLSE charge for discrimination for taking time off work for jury duty or judicial proceedings related to a crime.)
Finally, this law makes several minor changes to current subsection (d)(1) which identifies the type of certification an employee may provide to justify an unscheduled absence within a reasonable time after the absence. Specifically, whereas this subsection currently identifies “medical professionals, domestic violence advocates or advocates for victims of sexual assault” as being able to supply this documentation, this new law tightens this list and requires it be provided by a “licensed” medical professional or by a “domestic violence counselor” or a “sexual assault counselor” satisfying the definitions in Evidence Code sections 1037.1 and 1035.2 respectively.
Employees Permitted to Take Time Off for Judicial Proceedings Related to Additional Serious Crimes (SB 288)
Labor Code section 230 also precludes employers from discharging or discriminating against employees who take time off to serve on a jury, or who are victims of a crime and must attend court proceedings, or who need time off for court-related proceedings concerning domestic violence and sexual assault.
This law adds a new Labor Code section (section 230.5) to provide similar protections to employee victims who take time off at the victim’s request to appear in court proceedings for additional specified offenses. These specified offenses are (1) vehicular manslaughter while intoxicated; (2) felony child abuse likely to produce great bodily harm or a death; (3) assault resulting in the death of a child under eight years of age; (4) felony domestic violence; (5) felony physical abuse of an elder or dependent adult; (6) felony stalking; (7) solicitation for murder; (8) a serious felony, such as kidnapping, rape or assault; (9) hit and run causing death or injury; or (10) felony driving under the influence causing injury.
For purposes of this bill, a “proceeding” includes any delinquency proceeding, involving a post-arrest release decision, plea, sentencing, post-conviction release decision or any proceeding in which a right of the victim is at issue. This bill also defines “victim” as any person who suffers direct or threatened physical, psychological or financial harm as a result of the enumerated crime or delinquent act. The term “victim” specifically includes the employee’s spouse, parent, child, sibling or guardian.
This new section also incorporates many of the requirements from section 230 (relating to time off for jury duty or domestic violence/sexual assault), including its notice requirements and remedy provisions.
Expansion for “Paid Family Leave” Benefits (SB 770)
Since 2004, California has provided up to six weeks of wage replacement benefits to workers who take time off work to care for a seriously ill child, spouse, parent, domestic partner, or to bond with a minor child within one year of the birth or adoption of the child. (See Insurance Code § 3301). While often referred to as “paid family leave,” this program is funded by additional worker contributions to the Unemployment Compensation Disability Fund and essentially provides “wage replacement” benefits during an already-provided leave.
This bill would, beginning on July 1, 2014, expand the scope of the family temporary disability program to allow workers to receive these partial-wage-replacement benefits while caring for seriously ill grandparents, grandchildren, siblings or parents-in-law, as defined. Please note, this change does not provide new bases for employees to take leave from their employer, but simply expands the types of leaves for which employees can seek wage replacement benefits if their leave is approved.
Various Retaliation Provisions, Including for “Immigration-Related Practices” or Involving Consumer Credit Reports (AB 263)
This new law is intended to protect low wage workers from wage-theft and amends a number of Labor Code provisions regarding retaliation as well as the new Consumer Credit Report protections enacted in 2012. (In this regard, this law is somewhat similar to the also-enacted SB 666 (discussed below), although both versions provide some additional unique protections.)
For instance, Labor Code section 98.6 presently prohibits employers from discharging or discriminating against an employee or applicant because they have engaged in identified protected conduct relating to the enforcement of their rights. This new law expands this protected conduct to include “a written or oral complaint by an employee that he or she is owed unpaid wages.” It also expands these protections to specifically prohibit retaliation and/or taking adverse action (as well as discharging or discriminating), thus entitling employees subjected to retaliation or adverse action to reinstatement and reimbursement for lost wages. While section 98.6 presently states violations constitute a misdemeanor, this new law also subjects employers that are corporations or limited liability companies to a civil penalty up to $10,000 per employee per violation.
This law also adds Labor Code sections 1019 and 1019.1 to prevent employers from engaging in “unfair immigration-related practices” (as defined) against any employee who exercises a “right protected under this code or by any other local ordinance applicable to employees.” “Exercising a right protected by this code” is fairly broadly defined and includes, but is not limited to, the following: (1) filing a good-faith complaint alleging an employer’s violation of the Labor Code or local ordinance; (2) seeking information concerning whether an employer or other party is in compliance with the Labor Code or local ordinance; or (3) informing a person of their potential rights and remedies under the Labor Code or local ordinance, and assisting them in the assertion of those rights.
“Unfair immigration-related practices,” in turn, is defined as any of the following undertaken for retaliatory purposes: (1) requesting more or different work eligibility documents than those required under federal law, or refusing to honor work eligibility documents that on their face reasonably appear to be genuine; (2) using the federal E-verify system to check an employee’s or applicant’s employment authorization status at a time other than required under federal law; (3) threatening to file or the filing of a false police report; or (4) threatening to contact or contacting immigration authorities. The law specifies an “unfair immigration-related practice” does not include conduct undertaken at the express and specific direction or request of the federal government. However, the taking of any “unfair immigration-related practice” within 90 days of the person’s exercise of rights protected under the Labor Code or local ordinance will create a rebuttable presumption it was retaliatory.
This law also outlines fairly severe penalties for unlawful “immigration-related practices.” For instance, as with many other Labor Code provisions, it authorizes an employee subjected to an unfair immigration-related practice to pursue civil action to recover damages, equitable relief and reasonable attorneys’ fees and costs, However, and uniquely, it also allows a court to order the appropriate government agencies to suspend the business license of a person who violates these provisions, with the length of the suspension depending on the number of prior violations and in consideration of statutorily-enumerated factors (e.g., up to 14 days for a first violation, up to 30 days for a second violation, and up to 90 days for a third or any subsequent violation). (An earlier version of this bill proposed a permanent suspension upon a fourth violation but this was omitted in a recent amendment). The law defines “license” to mean any agency permit, certificate approval, registration, or charter that is required by law and that is issued by an agency for purposes of operating a business in this state, but it does not include a professional license. (An earlier version of this bill defined “license” to include articles of incorporation, certificates of partnership or transaction privilege tax licenses, but this was omitted by amendment). “Violation” is defined as “each incident when an unfair immigration practice was committed, without reference to the number of employees involved in the incident.”
This law also makes several changes to Labor Code section 1102.5, which presently precludes any employer from making, adopting or enforcing any rule, regulation or policy precluding an employee from disclosing certain violations to a state or federal agency. First, whereas section 1102.5 presently prohibits retaliation for disclosing information to outside agencies, this new law also prohibits discrimination or retaliation against employees who disclose information internally to a person with authority over the employee or to another employee who has the authority to investigate, discover or correct the violation or non-compliance. It also prohibits discrimination or retaliation against employees who provide information or testify before “any public body conducting any investigation, hearing or inquiry.” As amended, section 1102.5 specifies these anti-retaliation provisions protect employees who engage in such acts “regardless of whether disclosing the information is part of the employee’s job duties.”
Whereas section 1102.5 presently only prohibits employers from discriminating or retaliating, this new law also prohibits “any person acting on behalf of the employer” from making such rules or engaging in retaliation or discrimination.
Lastly, as a reminder, on Jan. 1, 2012, Labor Code section 1024.5 became effective placing limits on most employers from obtaining consumer credit reports for employment purposes. This new law adds a new Labor Code section (section 1024.6) to prohibit an employer from discriminating or retaliating against an employee who updates or attempts to update their personal information. As drafted, the bill does not specifically state these changes must relate to information contained in a consumer credit report, but this appears to be the intent given the proposed addition of subsection 1024.6. This law clarifies this new section does not prohibit an employer from taking action against an employee for changes that “are directly related to the skill set, qualifications, or knowledge required for the job.”
Various Retaliation Protections, Including Related to Reporting Immigration Status (SB 666)
As with AB 263, this new law enacts several provisions intended to prevent retaliation based on an employee’s citizenship or immigration status. For instance, it amends Business and Professions Code section 494.6 to specify that a business license regulated by this code is subject to suspension or revocation if the licensee has been determined by the Labor Commissioner or the court to have violated new Labor Code section 244 (discussed below) and the court or Labor Commissioner has taken into consideration the impact of such discipline upon the licensee’s employees and the licensee’s good faith efforts to resolve any alleged violations after receiving notice.
It also adds Labor Code section 244 prohibiting the reporting or threatening to report of the suspected citizenship or immigration status of an employee, former employee, prospective employee, or their “family member” because they have exercised a right under the Labor Code, Government Code or Civil Code.
It also adds Business Code section 6103.7 to specify that an attorney may be suspended or disbarred if they report or threaten to report the suspected immigration status of a witness or a party (or their family member) to a state, federal or local agency because the witness or party has exercised a right related to their employment, which is to be “broadly interpreted.”
For purposes of both new Labor Code section 244 and Business Code section 6103.7, “family member” means a spouse, parent, sibling, uncle, aunt, niece, nephew, cousin, grandparent, or grandchild related by blood, adoption, marriage or domestic partnership.
This bill also amends several other more-generally applicable Labor Code provisions preventing retaliation and streamlines the process to bringing civil claims. For instance, it adds language to new Labor Code section 244 specifying employees are not required to exhaust administrative remedies prior to initiating civil action unless the Labor Code provision at issue specifically requires such exhaustion. Other language clarifies this non-exhaustion requirement does not affect the requirements of Labor Code section 2699.3 as it relates to Private Attorney General Act claims.
Labor Code section 98.6 previously prohibited employers from discharging or discriminating against an employee or applicant because they have engaged in identified protected conduct relating to the enforcement of their rights. This law expands these protections to specifically prohibit retaliation and also expands the identified forms of protected conduct to include written or oral complaints that they are owed unpaid wages. While section 98.6 previously stated violations constitute a misdemeanor, it now also subjects the employers that are corporations or limited liability companies to a civil penalty up to $10,000 per violation.
This law also makes several amendments to Labor Code section 1102.5, which previously precluded any employer from making, adopting or enforcing any rule, regulation or policy precluding an employee from disclosing certain violations to a state or federal agency. First, whereas section 1102.5 previously prohibited retaliation for disclosing information to outside agencies, it now also prohibits discrimination or retaliation against employees who disclose information internally to a person with authority over the employee or to another employee who has the authority to investigate, discover or correct the violation or non-compliance. It also now prohibits discrimination or retaliation against employees who provide information or testify before “any public body conducting any investigation, hearing or inquiry.” Following these amendments, section 1102.5 also specifies these anti-retaliation provisions protect employees who engage in such acts “regardless of whether disclosing the information is part of the employee’s job duties.”
Lastly, whereas section 1102.5 previously only expressly prohibited employers from discriminating or retaliating, it now also prohibits “any person acting on behalf of the employer” from making such rules or engaging in retaliation or discrimination.
Revisions to California’s Whistleblower Protection Act (SB 496)
To highlight the Legislature’s focus on protecting whistleblowers, this law makes the same amendments to Labor Code section 1102.5 as AB 263 and SB 666 discussed above (i.e., to expand the definition of protected activity to include reporting perceived violations to a supervisor or other employee with responsibility for investigating). It also slightly amends California’s Whistleblower Protection Act to modify the deadlines for the State Personnel Board to render its decision in consolidated proceedings. Once enacted, the State Personnel Board must render its decision on a consolidated matter within six months of the date of the order of consolidation, as specified.
Minimum Wage to Increase by $2 by January 2016 (AB 10)
California’s minimum wage will increase from $8 to not less than $9 as of July 1, 2014, and from $9 to not less than $10 as of Jan. 1, 2016. When originally introduced, this bill contemplated annual adjustments beginning in 2017 based upon the California Consumer Price Index, but subsequent amendment omitted this provision.
This increase in the hourly minimum wage will also impact the annual and monthly salary requirement for exempt status purposes, since Labor Code section 515 requires an exempt employee receive a salary of at least two times the minimum wage for full-time employment on monthly basis. At the new rate of $9 per hour, an exempt employee will need to receive a monthly salary of $3,120 (rather than $2,773) and an annual salary of $ 37,440 (rather than $33,280.).
As a reminder, the Division of Labor Statistics and Research (DLSR) annually evaluates the salary level needed to maintain the computer professional exemption under Labor Code section 515.5. By the end of October, the DLSR is expected to announce whether it will adjust the salary levels required for computer professionals from the current levels of $39.90 hourly, $6,927.75 monthly and $83,132.93 annually.
Overtime Compensation for Personal Attendants and Labor Protections for Domestic Workers (AB 241)
Last year, the Legislature passed, but Gov. Brown vetoed, AB 889 which would have required the Department of Industrial Relations (DIR) to adopt by January 2014 regulations concerning the working conditions of “domestic work employees.” The governor’s veto message cited a concern about adopting extensive new regulations concurrently with the DIR’s plan to conduct studies regarding the regulations’ impact, and he cited a preference for the studies to be conducted first.
Titled the Domestic Worker Bill of Rights, this bill would, until January 2017, regulate the hours of work and provide an overtime compensation rate for certain “domestic work employees,” albeit on a considerably narrower basis than when originally introduced. For example, when originally introduced, this bill broadly proposed to regulate many aspects of domestic worker employment, including creating a right to overtime compensation, creating meal and rest period requirements for personal attendants and creating sleep and lodging guidelines for live-in domestic employees. However, in response to substantial opposition, this bill was pared back considerably, although it is foreseeable that many now-omitted portions of this bill may resurface.
The bill contains one substantive change, contained in new Labor Code section 1454 and essentially amending Wage Order 15-2001, entitling a domestic work employee who is a personal attendant to overtime at one-and-a-half times their regular rate of pay for all hours worked beyond nine hours in a day and forty-five hours in a workweek. While this seems relatively straightforward at first, this new law contains numerous definitions that must be referenced for this narrow change, and likely will be the basis for future legislative proposals concerning “domestic workers.”
For instance, “personal attendant” is defined in new Labor Code section 1454(d) as a “person employed by a private household or by any third-party employer recognized in the health care industry to work in a private household, to supervise, feed, or dress a child, or a person who by reason of advanced age, physical disability, or mental deficiency needs supervision.” This section notes this status applies when the personal attendant did not spend a “significant amount of work” (exceeding 20 percent of the total weekly hours worked) on other tasks.
It also defines “domestic work employees” as individuals who perform domestic work and includes live-in domestic work employees and personal attendants. “Domestic work,” in turn, is broadly defined as services related to the care of persons in private households or maintenance of private households or their premises, and would include childcare providers, caregivers, housekeepers, housecleaners and other household occupations. This definition includes numerous exceptions such as persons providing services through the In-Home Supportive Services (IHSS) program, family members, babysitters under the ages of 18, “casual babysitters” ( as defined), and persons employed by a licensed health facility.
“Domestic work employers” are also broadly defined as persons, including corporate officers or executives, who directly or indirectly, or through an agent or any other person, including through the services of a third-party employer or staffing agency, employs or exercise control over the wages, hours, or working conditions of a domestic work employee. This definition does not include, however, the State of California, individuals receiving domestic work services through the IHSS program, employment agencies that operate solely to procure or attempt to provide work to domestic workers, or licensed health facilities.
The law also requires the governor to convene a committee composed of personal attendants and their employers (and their respective representatives) to study and report on the effects of this new law on personal attendants and their employers.
This law is scheduled to sunset on Jan.1, 2017.
As a reminder, in September 2013, the United States Department of Labor (DOL) published a final rule extending the Fair Labor Standard’s minimum wage and overtime protections to direct care workers who care for the elderly, ill and disabled. This expansion extends the FLSA’s minimum wage and overtime protections to direct care workers employed by home care agencies and other third parties. This final rule also clarifies that direct care workers who perform medically-related services for which training is typically a prerequisite are not companionship workers and therefore are entitled to minimum wage and overtime. The DOL’s final rule and accompanying regulations take effect Jan. 1, 2015, and additional information is available at www.dol.gov.
New Limits on Attorneys’ Fees for Prevailing Employers in Certain Wage and Hour Disputes (SB 462)
Labor Code section 218.5 previously provided that a prevailing party in an action for the “nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions” was entitled to recover reasonable attorneys’ fees. Notably, unlike some other attorneys’ fees provisions, this particular statute did not specifically impose different standards upon prevailing employees and employers who sought to recover attorneys’ fees. A recent California Supreme Court decision (Kirby v. Immoos Fire Protection Inc. (2012) 53 Cal.4th 1244) also left open the possibility that prevailing employers may have the same right as prevailing employees to recover attorneys’ fees under section 218.5.
This new law is intended to foreclose that possibility by amending section 218.5 to permit a prevailing party that is not an employee (presumably an employer) to recover attorneys’ fees and costs only if the court finds that the employee brought the action in “bad faith.” In effect, this bill makes Labor Code section 218.5 consistent with some other attorneys’ fees provisions wherein prevailing employees are entitled to recover reasonable fees as a matter of right, and prevailing employers may only recover by demonstrating the action was essentially frivolous. This bill does not affect Labor Code section 1194 which utilizes a separate one-way attorney fee provision for minimum wage and overtime claims.
Successor Liability for Farm Labor Contractor Wage and Hour Violations (SB 168)
Presently, “farm labor contractors” (FLCs) must be licensed by the Labor Commissioner, and those who fail to comply with specified employment laws may be guilty of a misdemeanor punishable by statutorily-enumerated fines or imprisonment, or both. This new law makes a successor to any FLC that owed wages or penalties to a former employee of the predecessor FLC liable for those wages and penalties if the successor meets any of certain specified criteria. These criteria include (a) using substantially the same or similar physical facilities or workforce as the predecessor, (b) sharing common management or interrelation of business operations with the predecessor, or (c) employing predecessor managers responsible for controlling wages, hours, or working conditions of employees owed wages or penalties by the predecessor.
A successor that has operated with a valid license for at least the preceding three years shall have an affirmative defense to liability for using substantially the same workforce, if all of the following apply: (a) the individuals in the workforce were not referred or supplied for employment by the predecessor FLC; (b) the licensed FLC asserting the defense has not had any interest in, or connection with, the operation, ownership, management or control of the business of the predecessor FLC within the preceding three years; and (c) the licensed FLC asserting the defense has not been determined to have violated any Labor Code provisions within the preceding three years.
Rest Period Protections to be Expanded, Including to Employee “Recovery Periods” (SB 435)
Labor Code section 226.7 presently prohibits employers from requiring employees to work during meal and rest periods mandated by the Industrial Welfare Commission (IWC), and identifies a penalty of one additional hour of pay at the employee’s regular rate of pay for each violation. In addition to the IWC Orders and Labor Code section 226.7, the Heat Illness Prevention regulations adopted by the Occupational Safety and Health Standards Board (OSHA) in 2005 have an additional requirement regarding a “recovery period” applicable to all outdoor places of employment. These regulations, which are codified at 8 CCR § 3395, allow and encourage outdoor employees to take a cool-down rest in the shade for a period of no less than five minutes at a time when they feel the need to so to protect themselves from overheating. Although employers are increasingly complying with these heat illness prevention regulations, employee groups note that presently the only remedy for denial of a recovery period is a citation by the Department of Occupational Safety and Health (DOSH).
To further increase compliance, this law amends Labor Code section 226.7 to prevent employers from requiring employees to work during any “recovery period” mandated by any applicable statute, regulation, standard or order of OSHA or DOSH. “Recovery period” is defined as “a cool down period afforded an employee to prevent heat illness.” This new law further specifies that the provision requiring an employer to pay an additional hour of pay at the employee’s regular rate of pay for each day that a meal or rest period is not provided will also apply to work days that a “recovery period” is not provided. Lastly, this law provides that these new provisions do not apply to an employee who is exempt from meal or rest or recovery period requirements pursuant to other state laws, including a statute, regulation or IWC order.
Liquidated Damages Proposed for Labor Commissioner Investigations (AB 442)
Labor Code sections 98, 1193.6 and 1194 collectively authorize an employee paid less than the statutorily-required minimum wage to recover these wages through a civil action or an administrative hearing. An employee successful through either a civil action or an administrative hearing is also entitled to recover liquidated damages equal to the unpaid wages plus interest.
In addition to these civil actions or administrative proceedings, Labor Code section 1197.1 authorizes the Labor Commissioner to issue a citation during its own investigation directing an employer or person to pay any minimum wages not properly paid. However, through an oversight in Legislative drafting, the Labor Code did not previously authorize the Labor Commissioner to award the liquidated damages for violations it uncovers during its investigation that it could award if an employee initiated a civil action or administrative proceeding. This new law closes this loophole by slightly amending sections 1194.2 and 1197.1 to allow employees to recover liquidated damages for citations issued by the Labor Commissioner for Labor Code violations.
Extended Statute of Limitations and Additional Remedies for Prevailing Wage Violations (AB 1336)
Labor Code section 1771.2 presently authorizes the Labor Commissioner or a “joint labor-management committee” to bring an action against employers who fail to pay prevailing wages required by the Labor Code. This new law extends the current deadline from 180 days to 18 months for the Labor Commissioner to serve a civil wage and penalty assessment and a joint labor-management committee to bring an action against an employer who fails to pay the prevailing wage.
It also revises the available remedies and authorizes the court in such civil actions to award restitution to an employee for unpaid wages plus interest, liquidated damages equal to the amount of unpaid wages owed, and other specified civil penalties, injunctive relief or any other appropriate form of equitable relief. The court will also be required to award a prevailing joint labor-management committee its reasonable attorneys’ fees and costs in maintaining the action, including expert witness fees. Liquidated damages will only be awardable, however, if the complaint alleges with specificity the wages due and unpaid to the individual workers, including how that amount was calculated, and the defendant fails to pay or deposit these wages within 60 days of service of the complaint.
Newly amended section 1771.2 also specifies that an action brought pursuant to this section shall not be based on the employer’s misclassification of the craft of a worker in its certified payroll records.
This law also makes slight changes to Labor Code section 1776 regarding the certified payroll record information employers must provide upon request by a joint labor-management committee or a multi-employer trust fund. For instance, employers providing a copy of certified payroll records to a joint labor-management committee need only redact the individual’s social security number, but not the name as previously permitted. Proponents argued preventing employers from redacting the worker’s name will make it easier for the committee to investigate and prevent wage theft.
Similarly, employers providing such payroll records to a multi-employer Taft-Hartley trust fund need no longer redact the full social security number, but instead will redact all but the last four numbers of an individual’s social security number. Proponents argue this change will make it much easier to track and ensure the correction allocation of health benefit and pension contributions to workers for which the contributions were made.
Penalties for Employer’s Failure to Remit Employee Wage Withholdings (SB 390)
Currently, Labor Code section 227 makes it a crime for an employer to fail to make agreed-upon payments to health and welfare funds, pension funds, or various benefit plans, with violations exceeding $500 deemed a felony, and those below $500 a misdemeanor. Due to a concern many employers were withholding but not remitting these payroll taxes, this law expands section 227 to specify that it will also be a crime for employers to fail to remit withholdings from an employee’s wages that were made pursuant to state, local or federal law. This expansion also enables the Labor Commissioner to pursue criminal misdemeanor prosecution against employers who fail to remit payroll taxes.
Violations of this new provision shall be punishable by imprisonment in a county jail for a period of not more than one year, by a fine of not more than $1,000, or both. In any such criminal proceeding, the recovered withholdings shall be forwarded to the appropriate plan or fund, and if restitution is imposed, the court shall direct to which agency, person or entity it shall be paid.
Labor Commissioner to File Liens Against Employer’s Real Property (AB 1386)
This bill is intended to streamline the collection process for final orders issued by the Labor Commissioner for unpaid wages. Previously, Labor Code section 98.2 required the Labor Commissioner to file a final order with the clerk of the superior court of the appropriate county within 10 days of the order, decision or award becoming final (as defined). This provided a judgment in the employee’s favor (i.e., a legal determination the employee was the prevailing party), but the judgment by itself did not create a legal obligation to pay the amounts owed.
Accordingly, this new law amends Labor Code section 98.2 to create a lien upon real property as an alternative to the judgment lien under prior California law. Once this law is enacted, the Labor Commissioner will be able to record a certificate of lien for amounts due under the final order with the county recorder of any county in which the employer’s real property may be located based upon information the Labor Commissioner obtains concerning the employer’s assets. This lien will attach to all interests in real property of the employer located in the county where the lien is created to which a judgment lien may attach, and unless satisfied or released, shall continue for 10 years from the lien’s creation. If the employer pays the amounts due, the Labor Commissioner shall issue a certificate of release, which may be recorded at the employer’s expense.
Expanded Time Off for Training for Firefighters, Reserve Peace Officers and Emergency Rescue Personnel (AB 11)
This new law corrects a slight discrepancy between Labor Code sections 230.3 and 230.4 regarding time-off for reserve emergency personnel for training purposes.
Previously, Labor Code section 230.3 protected reserve firefighters, peace officers or emergency rescue personnel who took time off for emergency duty, but Labor Code section 230.4 only entitled reserve firefighters to job-protected leave for firefighting training. This bill amends Labor Code section 230.4 to require employers with 50 or more employees to permit an employee who performs emergency duty as a volunteer firefighter, reserve peace officer, or as emergency rescue personnel, as defined, to take up to 14 days of job-protected leave per calendar year for the purpose of engaging in fire, law enforcement or emergency rescue training.
New Limits for When, But Not Whether, Public Employers May Conduct Criminal Background Checks (AB 218)
California law presently precludes public and private employers from asking an applicant for employment to disclose either in writing or verbally any information concerning an arrest or detention that did not result in a conviction. To reduce employment barriers to individuals who have previously been convicted of a crime, this law imposes new conditions concerning when, but not whether, a state or local agency may obtain an applicant’s criminal history. Specifically, it generally prohibits a state or local agency from inquiring about criminal convictions until after the applicant’s qualifications for the position have been determined to meet the position’s requirements. It also specifies a state or local agency would be permitted to conduct a criminal history background check after the applicant has been deemed to meet the position’s requirements.
Notably, this law does not apply to private employers. These new conditions also do not apply to positions for which a state or local agency is required by law to conduct a criminal history background check, to any position within a criminal justice agency (as defined by Penal Code section 13101) or to any individual working for a criminal justice agency on a contract basis or on loan from another government agency.
This new law takes July 1, 2014.
New Limits on Employer Credits on Prevailing Wage Obligations (SB 776)
Labor Code section 1773.1 enumerates various credits employers may claim against their obligation to pay per diem wages, including payments for pension, health and welfare, and vacation. Section 1773.1 specifies these credits do not reduce the employer’s obligation to pay the hourly straight time or overtime wages found to be prevailing, and no credit is permitted for benefits required by state and federal law.
This law establishes an additional restriction on credit granted for employer payments made to monitor and enforce public works. Specifically, it prohibits credit from being granted for employer payments made to monitor and enforce laws related to public works if those payments are not made to a program or committee established under the federal Labor Management Cooperation Act of 1978.
This bill also conforms state law to federal law by providing that qualifying fringe benefit payments may constitute a credit, even if not made during the same period for which the credit is taken, if the employer regularly makes those payments on no less than a quarterly basis.
Changes Regarding Work-Sharing Plans Used by Employers to Avoid Layoffs (AB 1392)
California and federal law allows employers to participate in the work-sharing unemployment compensation benefits program, which makes employees eligible to receive a reduced amount of unemployment compensation benefits if their work hours are reduced by more than ten percent. (For example, employers have used these programs to effectuate a 20 percent reduction of the workforce by reducing full-time employees to four-day workweeks rather than laying off 20 percent of its employees).
This newly-enacted law applies to work sharing plans that became effective before July 1, 2014, and is intended to conform California’s work sharing program to the federal requirements contained in the federal Middle Class Tax Relief and Job Creation Act of 2012. For instance, this bill reduces the maximum cut in employee hours permitted in work sharing programs from 90 percent to 60 percent of the employee’s usual weekly hours. It also requires participating employers providing health or retirement benefits to continue those benefits for the duration of the program as if the affected employees were working normal hours.
This law also imposes new reporting obligations for employers to obtain approval for the work sharing plan, including (a) disclosing how the employer will notify employees of the work sharing plan, (b) estimating the layoffs averted by implementing a work sharing plan, and (c) certifying their participation in the work sharing plan is consistent with the employer’s obligations under state and federal law.
This new law also allows employees in these work sharing program to participate in training approved by the Employment Development Department, including employer required training or training funded through the Workforce Investment Act.
California to Strengthen Commitment to Workforce Investment Systems (SB 118)
California’s Workforce Investment Board is currently responsible for assisting the governor in the development, oversight and continuous improvement of California’s workforce investment system. This bill would specify that this board would also be responsible for assisting the governor in the alignment of the education and workforce investment systems to the needs of the 21st century workforce and the promotion and development of a well-educated and highly-skilled 21st century economy and workforce. This bill would require the board to assist the Governor in targeting resources to specified industry clusters that provide economic security (defined as allowing an employee sufficient wages to support their family and save for retirement, etc.) and leverage state and federal funds to ensure that resources are invested in activities that meet the needs of specified industry sectors.
As part of California’s strategic workforce plan, this bill would also require the creation of a California Industry Sector Initiative to accomplish specified tasks, including aligning and leveraging state, federal, and local Workforce Investment Act funding streams, identifying specified industry sectors and clusters, providing skills-gap analysis, and establishing specified eligibility criteria for the Workforce Investment Act eligible training provider list.
Michael Kalt is the government affairs director for CalSHRM, and is a partner at Wilson Turner Kosmo LLP in San Diego.