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New Employment Laws in 2018 for California and Bay Area Employers

This year’s batch of new California laws brings some broad changes by prohibiting criminal conviction and salary history questions during at least certain stages of the hiring process, and by significantly broadening the number of employers who must provide family leave time off for new child bonding. The following are highlights of the significant new laws impacting employers, which will take effect on January 1, 2018, and are accessible at www.leginfo.legislature.ca.gov. The San Francisco Bay Area cities have also been busy this year, and some of the significant city ordinance developments are summarized in this article.

Limitations on Hiring: Ban the Box and Salary History Prohibitions

1.  Ban the Box (Criminal Conviction History Restrictions)

Following the lead of several other states and various cities (including San Francisco and Los Angeles), Governor Brown signed into law, AB 1008, which makes it an unlawful employment practice under the California Fair Employment and Housing Act (FEHA) to include on employment applications any question that would require the disclosure of an applicant’s criminal conviction history or to otherwise inquire into conviction history until a conditional job offer has been extended. The legislative findings state that nearly one in three adults in California have an arrest or conviction record that can significantly undermine their efforts to obtain gainful employment, and that experts have found that employment is essential in helping formerly incarcerated people support themselves and reduce recidivism.

Following a conditional job offer, employers may conduct background investigations into criminal histories. However, consistent with existing law and reiterated in the new law, employers are prohibited from considering arrests which are not followed by convictions (although there are some narrow exceptions for health facilities), participation in a pretrial or posttrial diversion program, or sealed, dismissed or expunged convictions.

If an employer intends to deny employment solely or in part due to the applicant’s conviction history, it must make an individualized assessment of whether that history has a direct and adverse relationship with the specific duties of the position and must consider the nature and gravity of the offense, the amount of time since the offense and the nature of the job. If the employer makes a preliminary decision that the applicant’s criminal history disqualifies the applicant, the employer is required to notify the applicant in writing and provide a copy of the background investigation report, along with a notice that the applicant may respond to the notice before the decision will become final. The applicant may provide information to dispute the accuracy of the information or evidence of rehabilitation or mitigating circumstances. The employer must provide at least five business days for the applicant to respond.

If the employer makes a final decision to deny the application, another written notice must be provided to the applicant, which includes a notice of the applicant’s right to file a complaint with the Department of Fair Employment and Housing as well as any existing procedure the employer has for applicants to challenge these types of decisions.

These requirements do not apply to certain government positions and positions in which criminal background checks are required by law.

Employers who are covered by similar city ordinances must ensure compliance with both the local law and the state law. The San Francisco Fair Chance ordinance has requirements that are more detailed than the California law. See: http://sfgov.org/olse/fair-chance-ordinance-fco

2.  Salary History Restrictions (Statewide)

The California Legislature has addressed pay inequity in the last several sessions by expanding the Fair Pay Act, including that employers may not simply point to an employee’s salary history to justify differences in pay. This year, AB 168 takes this concept another step further. It prohibits employers from requesting salary history information, including compensation and benefits, from or about an applicant – which includes through an agent, such as a recruiter. It further prohibits employers from relying on an applicant’s salary history when determining whether to make a job offer or what salary to offer. However, if an applicant voluntarily and without prompting by the employer provides this information, the employer may consider or rely on it when determining the salary.

The new law requires employers to provide the pay scale for the applicant’s prospective job, upon reasonable request. What is reasonable is not defined, but presumably, this would involve a specific request and a sufficient amount of time for the employer to respond.

Although this law applies to public and private sector employers, it does not apply to salary history information that is disclosable to the public under federal or state law.

3.  Salary History Restrictions (San Francisco)

In July 2017, the City of San Francisco approved the Consideration of Salary History ordinance, which turned out to be a precursor of the new state law, AB 168. It applies to employees in San Francisco and contains the same prohibitions as AB 168. Be aware that this ordinance also prohibits employers from releasing salary information regarding current or former employees to prospective employers without written authorization. Here is a link for more information: http://sfgov.org/olse/consideration-salary-history-ordinance

New Parent (Baby Bonding) Leave Expanded to Employers with 20 Employees

SB 63, entitled the New Parent Leave Act, expands the California Family Rights Act (CFRA) to cover employers with 20 or more employees, requiring them to provide unpaid job-protected leaves of absence of up to 12 work weeks in a 12-month period for eligible employees for baby bonding. Employees in all locations are counted to determine employer coverage. Eligibility for employees tracks the CFRA requirements, namely, being employed for 12 months and working at least 1,250 hours in the 12-month period preceding the start of the leave.

The new law applies the CFRA requirements for the employer to continue to pay its portion of health insurance premiums during the leave so long as the employee continues to pay his or her portion. Similar to CFRA, if both parents are employed by the same employer, they would together have 12 weeks of leave.

Employers in San Francisco covered by the Paid Parental Leave ordinance will need to determine applicable changes to their policies prompted by this new state law.

Expanded Content for Harassment Prevention Training

Ten years ago, the Fair Employment and Housing Act was amended to require employers with 50 or more employees to provide two-hour harassment prevention training for supervisors and managers every other year. SB 396 expands this training requirement to include education regarding harassment based on gender identity, gender expression, and sexual orientation. The training is to be conducted by trainers with knowledge and expertise in these areas.

Clarification of Fair Treatment of Military Service Members

The federal Uniformed Services Employment and Reemployment Rights Act (USERRA) was updated in 2011 to ensure that military service members would be protected from hostile work environments in their civilian jobs due to their military service. AB 1710 extends the California Military Veterans Code to explicitly prohibit discrimination in the terms and conditions of employment, which includes the work environment, of members of the military or naval forces of the State of California or the United States.

Employer Access to Immigration Enforcement Agents

Current California law authorizes the Labor Commissioner’s office to access worksites for enforcement purposes. AB 450 prohibits employers from providing voluntary consent to an immigration enforcement agent to enter nonpublic areas of the workplace unless the agent provides a judicial warrant, and prohibits an employer’s voluntary consent to an agent to obtain or review employment records without a subpoena or court order.

If an employer receives a federal notice of inspection of Employment Eligibility Verification (I-9) forms, the employer is required to provide a written notice to employees within 72 hours. The Labor Commissioner is required by law to prepare a form for this purpose.

This new law does not diminish employers’ requirements to comply with I-9 rules designed to ensure employees’ eligibility to work in the U.S.

California’s Minimum Wage and Overtime Exemption Salary Requirements (including Private School Teachers)

 Beginning January 1, 2018, the minimum hourly wage in California for employers with 25 or less employees will be $10.50, and for employers with more than 25 employees, it will be $11.00. Various cities have minimum wage rates that are higher and thus, employers must stay on top of where employees are working and applicable local laws.

The minimum salary for most California overtime exemptions will be $43,680 per year as of January 1, 2018 for employers with 25 or less employees, and $45,760 per year for employers with more than 25 employees.  In order to maintain their overtime exemption status, employees must be paid at least this minimum threshold, along with performing duties that qualify under one of the exemption classifications.

In order to qualify for the California computer professional exemption as of January 1, 2018, employees must be paid at least $43.58 per hour, $7,565.85 per month or $90,790.07 per year.

In July 2017, a law went into effect relative to the overtime exemption for certain teachers at private elementary and secondary schools, which tied the minimum salary requirement to salaries paid to public school teachers in the same county. In this legislative session, SB 621 has become law and clarifies that salaries may be tied to the county office of education, that part-time employee salaries may be proportional to full-time salaries when determining the minimum and that when budgeting for a future school year, a school may determine the salary requirements by referring to school salary schedules in effect for up to 12 months prior to the start of the school year.

San Francisco Lactation Accommodation Requirements

Federal law requires certain employers to provide nursing mothers with reasonable break time to express milk for one year after the child’s birth and a private area other than a restroom to do so. California law extends these requirements to all employers.

The City of San Francisco enacted an ordinance in 2017 with the stated intent of enhancing employed mothers’ ability to continue breastfeeding through their child’s first year and beyond by creating the following requirements. A reasonable amount of break time must be provided (which is the same under present state law). The lactation space must be safe, clean, and free of toxic or hazardous materials, must contain a place to sit and a surface to place a breast pump and personal items, and must have access to electricity, a sink with running water and a refrigerator in close proximity to the employee’s work area. Multi-purpose rooms may be used as lactation space if they satisfy these requirements, although use of the room for lactation takes priority over other uses. Employers may establish an exemption from these requirements by demonstrating it would cause undue hardship, for example, if it would require the employer to build a room.

Employers are required to have a policy regarding employees’ right to request a lactation accommodation and a process for requesting and responding. Retaliation for requesting or utilizing a lactation accommodation is prohibited.

City of Berkeley Paid Sick Leave and Family Friendly Workplace Ordinances

Following the lead of other California cities, the City of Berkeley passed a paid sick leave ordinance, which largely tracks the San Francisco requirements. It requires paid sick leave of one hour for every 30 hours worked up to the applicable maximum accrual cap of 48 hours for employers with 25 or less employees or 72 hours for employers with more than 25 employees.

The City of Berkeley also passed a Family Friendly and Environment Friendly Workplace ordinance. It applies to employers with 10 or more employees and is similar to the San Francisco ordinance on the subject. It sets up a process for employees to request a flexible or predictable work schedule when employees are caring for a new child or ill family member.

City of San Jose Opportunity to Work Ordinance

In March 2017, the City of San Jose implemented a new ordinance as a result of a voter-approved ballot measure. It requires employers with 36 or more employees to offer additional work hours to existing nonexempt part-time employees before hiring new employees, including subcontractors and the use of temporary employment agencies. The offer need only be made to employees who are qualified for the work in question.

Employer “To Do” Items:

*Review employment applications (internet-based and otherwise) and delete criminal conviction history questions for California openings, as well as any other states and locations which have “Ban the Box” laws. Consider deleting these questions for all applications regardless of location.

*Provide specific instructions to those engaged in interviewing and hiring that they must avoid questions about salary history for California positions. Ensure that external recruiters or placement agencies are not asked to obtain this information. If your company does not already have a compensation structure with salary ranges for its positions, consider investing in setting this up.

*For employers with 20 to 49 employees (not already covered by CFRA), update your Employee Handbook to include the New Parent Leave Act provisions.

*Ensure harassment prevention training includes a component on gender identity, gender expression, and sexual orientation.

*Review your harassment prevention policy and training to verify it encompasses military service members – and update as necessary.

*Inform managers of the procedures to follow regarding immigration enforcement actions.

*Review salary levels for California overtime exempt employees to ensure they meet the minimum amounts required.

*Double-check the work locations of all employees and determine if any city ordinances require policy changes or additional benefits, such as paid sick leave. Please note that, as of October 2017, seven cities in California have paid sick leave ordinances (San Francisco, Berkeley, Oakland, Emeryville, Los Angeles, Santa Monica and San Diego).

For more information or assistance with employment law compliance matters, please contact Ms. Topliff at topliff@joblaw.com.

 

Mary L. Topliff, Esq. ©2017 Mary L. Topliff. For more information, contact Mary at topliff@joblaw.com. This article may not be copied or reproduced without the express permission of Mary L. Topliff.