Due to the extensive number of legislative developments, this will be the “Part 1″of the Legal Updates on legislative developments impacting California employers in 2015 and beyond.
The following article is by Littler attorney Chris E. Cobey. Please see my Summary and Important Points below.
Does his hand hurt? Between signing and vetoing bills this year, California Governor Jerry Brown exercised his executive signature on the highest number of bills sent to a California governor since 2008.
The California Legislature concluded the final year of its 2013-2014 regular session in the early morning of August 29, 2014. A total of 4,233 bills were considered during this two-year period. This year, preliminary figures indicate that the Legislature sent 1,073 bills to Governor Brown for approval.1 By the signing deadline last Tuesday evening (September 30), Governor Brown had signed 931 bills into law, and vetoed 142 bills (13.6% of those sent to him in 2014).2The following is a brief description of the major 2014 bills3 affecting California private-sector employers. Unless otherwise noted, the effective date of all new laws is January 1, 2015.
The Key New Employment Laws
California enacted a right to paid sick leave (PSL) for most employees who do not have it. This 14-page bill, which generated nine amended versions and 17 committee and floor reports, was the most significant employment legislation in years, providing a PSL benefit to more than an estimated six million California workers who currently do not have that benefit. PSL eligibility will commence beginning July 1, 2015, and will eventually accrue at a rate of one hour of paid sick leave for every 30 hours worked. The new law is complex, creating eight new statutes and amending a ninth, and adding recordkeeping and notice requirements for employers. For more information on this important new law, see the September 22, 2014, Legal Update, The Epidemic Continues: California Enacts Statewide Paid Sick Leave Law. (AB 1522; adds Labor Code sections 245, 245.5, 246, 246.5, 247, 247.5, 248.5, and 249, and amends section 2810.5.)
A new measure addresses national origin discrimination that could result from the improper use of California driver’s licenses. Specifically, the law expands the definition of national origin discrimination in California’s Fair Employment and Housing Act (FEHA); prohibits employer discrimination on the basis of possessing a driver’s license granted pursuant to the law that permits a person unable to submit satisfactory proof that the applicant’s presence in the United States is authorized under federal law (“AB 60 license”,4 and who is otherwise qualified to be granted a driver’s license; stipulates that an employer violates FEHA by requiring a person to present a driver’s license, unless possessing a driver’s license (a) is required by law or (b) is required by the employer and the employer’s requirement is otherwise permitted by law; provides that an action taken by an employer to comply with any requirement or prohibition under the federal Immigration and Nationality Act is not a violation of law. (AB 1660; amends Government Code section 12926 and Vehicle Code sections 1653.5, 12800.7 and 12801.9.)
The governor signed an arbitration measure. This new law will prohibit the waiver of protections afforded under California civil rights laws in arbitration agreements or pre-litigation settlement agreements as a condition of entering into a contract for the provision of goods or services, including the right to file and pursue a civil action or complaint with, or otherwise notify, the Attorney General or any other public prosecutor, or law enforcement agency, the Department of Fair Employment and Housing, or any court or other governmental entity. To be valid, waivers of the protections of the Ralph Civil Rights Act or the Tom Bane Civil Rights Act must be knowing, voluntary, in writing, and not expressly made as a condition of entering into a contract or as a condition of providing or receiving goods or services. These prohibitions do not apply to agreements to waive legal rights, penalties, forums or procedures “after a legal claim has arisen.” (AB 2617; amends Civil Code sections 51.7, 52, and 52.1.)
New Laws Applicable to All or Most California Private-Sector Employers
Employees will be able to recover damages more quickly for wage and hour violations. This law allows an employee who alleges state minimum wage violations to recover liquidated damages in an amount equal to the wages unlawfully unpaid with interest at any time before the expiration of the statute of limitations on the underlying wage claim(s). (AB 2074; amends California Labor Code Section 1194.2.)
Penalties are expanded for willful failure to pay wages of a resigned or discharged employee. The new measure expands the penalties, restitution and liquidated damages available for the Labor Commissioner to pursue on an employee’s behalf when an employer willfully fails to pay wages of a resigned or discharged employee, and authorizes the Labor Commissioner in administrative actions to seek waiting time penalties against employers pursuant to Labor Code section 203 (a right previously available to employees in civil actions only); any citation issued by the Labor Commission for Section 203 waiting time penalties would require an investigator to find an employer willfully failed to pay wages. (AB 1723; amends Labor Code section 1197.1.
There are expanded grounds and remedies for immigration-related retaliation. This new measure prohibits an employer from threatening to file, or filing, a false complaint with any state or federal agency; prohibits an employer from discharging or in any manner discriminating, retaliating, or taking any adverse action against an employee because the employee updates or attempts to update personal information based on a lawful change of name, social security number, or federal employment authorization document; prohibits an employer’s compliance with these provisions from serving as the basis for a claim of discrimination, including any disparate treatment claim; and requires that the civil penalty assessed for unlawful immigration-related retaliation of up to $10,000 be awarded to the employee or employees who suffered the violation. (AB 2751; amends Labor Code sections 98.6, 1019, and 1024.6.)
The “Child Labor Protection Act of 2014” allows for an award of treble damages if a minor is discriminated against in the terms or conditions of his/her employment because he/she filed a claim or civil action alleging a Labor Code violation that arose during minority; statute of limitations for child labor violations is tolled until the child reaches 18 years of age; civil penalties for a violation involving a minor 12 years of age or younger are increased to between $25,000 and $50,000 for each violation. (AB 2288; adds Labor Code Section 1311.5.)
A new measure extends the Fair Employment and Housing Act’s anti-harassment and anti-discrimination protections to unpaid interns. Employers are prohibited from discrimination based on protected characteristics in the “selection, termination, training or other terms” of unpaid internships; employers are prohibited from harassing unpaid interns based on protected characteristics; employers may be held liable for sexual harassment of unpaid interns by non-employees if the employer knew or should have known of the conduct, but failed to take appropriate corrective action promptly; employers may not take adverse actions against unpaid interns based on religious beliefs, and must provide reasonable accommodations for religious observance unless it would pose an undue hardship on the employer. (AB 1443; amends California Government Code section 12940.)
The content of the two-hour supervisory sexual harassment training required of employers with at least 50 employees every two years is expanded to include a “prevention of abusive conduct” component in the training; “abusive conduct” is defined as “conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interests. Abusive conduct may include repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, and epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person’s work performance. A single act shall not constitute abusive conduct, unless especially severe and egregious.” The new law does not expand the duration of the mandatory training – only the content of that training. (AB 2053; amends Government Code Section 12950.1)5
A new law modifies most existing statutory terms used to describe mental health conditions. It replaces terms such as “feeble-minded,” “insane,” “mentally disordered,” “mentally defective,” and “abnormal” with terms such as “persons with a mental health disorder” or “persons who lack legal capacity to make decisions.” (AB 1847; amends dozens of Code sections.)
A new measure increases employer responsibilities in the event of a data breach. Among other provisions, the amended statute requires a business that owns, licenses, or maintains personal information about a California resident to implement and maintain reasonable security procedures and practices appropriate to the nature of the information to protect the personal information from unauthorized access, destruction, use, modification, or disclosure. With respect to the information required to be included in the notification of a data breach – if the person or business providing the notification was the source of the breach, it requires that the person or business offer to provide appropriate identity theft prevention and mitigation services, if any, to the affected person at no cost for not less than 12 months if the breach exposed or may have exposed specified personal information. (AB 1710; amends Civil Code section 1798.81.5.)
As part of a 110-page budget bill, a new urgency statute increases the penalties on employers that fail to payunemployment insurance contributions and personal income withholdings and other employer taxes from 10% of the amount of contributions to 15% of the amount of contributions and increases the penalty for unreported wages from $10 to $20 per each unreported worker. The amended statute also imposes a fee on contractors of public works projects to enforce current laws for public project contracting at the Department of Industrial Relations; the fee will be set at $300 per contractor for 2014-15. (SB 854; amends Unemployment Insurance Code sections and 1112 and 1114; effective June 20, 2014.)
Starting in 2017, physicians’ assistants may be able to certify an employee’s disability for unemployment insurance (UI) purposes. The new law amends the Physician Assistant Practice Act to authorize a physician assistant, for purposes of UI, to certify disability, after performance of a physical examination by the physician assistant under the supervision of a physician and surgeon consistent with the Act; expands the definition of practitioner to include a physician assistant; and requires the Employment Development Department to implement these provisions on or before January 1, 2017. (SB 1083; amends Unemployment Insurance Code section 2708.)
Employees seeking unemployment benefits will be provided more time to contest the denial of unemployment benefits. Effective July 1, 2015, the deadline for requesting reconsideration from the EDD of its determination of eligibility for unemployment benefits will be 30 days (instead of 20 days) from the date of notice. Applicants will have 30 days (instead of 20 days) to initiate an appeal to the California Unemployment Insurance Appeals Board of an administrative law judge’s decision affirming, reversing, modifying, or setting aside an eligibility determination. (AB 1314; amends, repeals, and adds Unemployment Insurance Code sections 1030, 1032.5, 1328, 1330, 1332, 1334, 1377, 3654.4, 3655, 3656, 3701, 4655, 4656, and 4701.
Pursuant to a new measure, the coverage of the priority calendar of the administrative director of the Division of Workers’ Compensation will extend not only to cases in which employees are represented by an attorney and the disputed issues are employment or injury, but also to cases of employees who are or were employed by an illegally uninsured employer and the disputed issues are employment or injury. (AB 1746; amends Labor Code section 5502.)
The Governor signed a bill that prohibits the Division of Occupational Safety and Health (DOSH) from granting, for serious violations of employment safety laws, a proposed modification to civil penalties for abatement or credit for abatement unless the employer has done one of the following: (1) abated the violation at the time of the initial inspection; (2) abated the violation at the time of the subsequent inspection (prior to the issuance of a citation); or (3) submitted a signed statement under penalty of perjury with supporting evidence when necessary to prove abatement. DOSH can only grant a modification if the employer abated the violation at the time of the initial inspection or subsequent inspection, or the sworn statement and supporting evidence are received within 10 days after the end of the period fixed for abatement. In cases of serious, repeat serious, or willful violations, an appeal to the Occupational Safety and Health Appeals Board by the employer will not stay or suspend the requirement to abate the hazards unless the employer can demonstrate by a preponderance of the evidence that a stay or suspension of the abatement will not adversely affect the health and safety of employees. (SB 1634; amends Labor Code sections 6319, 6320, and 6625.
An updated law replaces the telegraph with email among the options by which an employer must make the required immediate report by telephone or email of every case involving an employee’s serious injury or illness or death to the Division of Occupational Safety and Health (DOSH). (AB 326; amends Labor Code section 6409.1.)
Part 2 of the Legislative update will cover the following: new laws applicable to some California private-sector employers, including developments in health care coverage, prevailing wage law; employment-related bills vetoed or failing passage; looking forward to the 2015 legislative session; and, other wage rate increases for 2014.
________________________________________ 1 In comparison, the Legislature sent Governor Brown 895 bills in 2013, 998 bills in 2012, and 870 in 2011. The Legislature sent former Governor Schwarzenegger 1,029 bills in 2010, 893 in 2009, and 1,179 in 2008. 2 Brown’s veto rates in previous years were 11% (2013), 12% (2012), and 14% (2011). In comparison, Governor Schwarzenegger’s veto rates were 29% in 2010, 27% in 2009, and 35% in 2008. 3 All versions of each bill (including current law as amended by the bill), and committee and floor reports and votes, can be found at the California Legislative Information site (http://leginfo.legislature.ca.gov). “AB” refers to Assembly Bill; “SB” to Senate Bill. 4 Pursuant to negotiations between the California Department of Motor Vehicles and the federal Department of Homeland Security reported on September 19, 2014, by the DMV, these licenses will include on their face the phrase “federal limits apply.” 5 The California Department of Fair Employment and Housing has indicated, in response to questions from Littler’s Workplace Policy Institute®, that there will be no Departmental requirement on how many minutes must be devoted to abusive conduct training as part of sexual harassment training. In response to a question on the required content of AB 2053 abusive conduct training, the Department has recommended that training cover the language as written in new Government Code section 12950.1(g)(2). The Department has indicated that it would be reasonable to state that, although workplace bullying is not actionable under the FEHA, its prevention is nonetheless included in the training as a good business practice.
SUMMARY & IMPORTANT POINTS
Update employee handbooks and, if necessary, policies and procedures, related to the increase in the minimum wage rate; changes in available leaves of absence; new protected categories; and prohibitions against discrimination in employment based on citizenship or immigration status, among other changes made by the new legislation.
Consider revising handbook and policies and procedures to reflect 2014 major case holdings, as described in the weekly Legal Updates throughout the year.
Train, or send a memo to supervisors, advising them of the new laws, their responsibility to know these new laws, and their responsibilities to administer policy in conformity with the new laws.
Stay alert for modifications coming later in 2014 regarding new California driver’s licenses (2013’s AB 60), and how they may or may not be used in the workplace.
Stay alter for guidance on the new Paid Sick Leave law coming from the Division of Labor Standards Enforcement in either late 2014 or early 2015 prior to the July 1, 2015 effective dates.
This update is provided by Gary W. Bethel and Littler Mendelson in order to review the latest developments in employment law.
This update is designed to provide accurate and informative information and should not be considered legal advice.
About Littler Mendelson
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