Governor Jerry Brown signed into law 800 out of 894 bills at the end of California’s 2013 legislative session. As a result, a plethora of new laws impacting the workplace will be going into effect in 2014 in California. The following discusses a selection of significant changes, along with practice tips for employers — think of it as a “to do” list for the new year.
Some of the new laws are beyond the scope of this article, ranging from immigration, health insurance benefits, privacy requirements, and even a Domestic Worker Bill of Rights (AB 241). All of the new laws are accessible at www.leginfo.ca.gov.
Minimum Wage Increase and Overtime Exemption Changes
Effective July 1, 2014, employers must pay workers in California a minimum wage of $9.00 per hour. Another increase will occur on January 1, 2016 to $10.00 per hour. California’s current minimum wage of $8.00 per hour has been in effect since January 2008. In contrast, the federally mandated minimum wage is $7.25 per hour.
The state-wide minimum wage increase means that the minimum salary for employees to qualify for the Administrative, Professional and Executive overtime exemptions will then increase to $37,400 per year (or $3,120 per month). This minimum salary requirement is two times the state minimum wage rate multiplied by 2,080 (which is the equivalent of a 40 hours times 52 weeks) — and it is not pro-rated for employees who work part-time.
On January 1, 2014, California’s Computer Professional overtime exemption minimum compensation amounts will increase to $84,130.53 per year or $40.38 per hour, due to an increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers to which it is tied.
Employers must comply with any local ordinances applicable to their employees. For example, employees who work in San Francisco and San Jose must be paid a minimum wage of $10.74 and $10.15, respectively, effective January 1, 2014. Some cities have living wage ordinances, for example, the city of Berkeley requires certain employers doing business with the city to pay a living wage.
Review the current base salary amounts for all employees, identify exempt employees who will be paid less than $37,400 as of December 31, 2013, and ensure that such employees receive a pay increase to at least $37,400 on or before July 1, 2014. Ensure that your payroll representative (whether it’s an employee or a vendor) has been notified of the various new increases.
The “Notice to Employee” form required by California’s Wage Theft Prevention Act need not be issued to employees receiving an increase in their pay so long as the rate of pay is properly reflected on the employee’s paycheck stub. Thus, ensure that paycheck stubs provide accurate and legally compliant information.
Additional Time Off Protections
Three new laws were enacted, adding to the ever-growing list of reasons for employees to take time off from work.
1. Reasonable Accommodations and Time Off for Victims of Domestic Violence, Sexual Assault and Stalking. Labor Code Section 230 authorizes employees who are victims of domestic violence and sexual assault to take time off to seek a temporary restraining order for safety purposes. Labor Code Section 230.1 authorizes employees who work for employers with 25 or more employees to take time off for a variety of reasons related to domestic violence, including seeking medical attention, seeking safe shelter, and psychological counseling.
SB 400 extends these legal protections to victims of stalking. It further sets forth reasonable accommodation obligations for victims of domestic violence, sexual assault or stalking who request an accommodation for their safety while at work, which may include a transfer, a change in the employee’s work station or phone number, or other safety precautions. Similar to disability accommodation obligations, employers are to engage in an interactive dialogue with the employee in question to identify a reasonable accommodation. The new law also provides an undue hardship exception.
2. Crime Victims. SB 288 adds a new Labor Code provision, Section 230.5, prohibiting all employers (i.e., there is no minimum number of employees triggering the requirement) from taking adverse actions against employees who are victims of specified offenses for time off to appear in court to be heard in any proceeding, including any delinquency proceeding, post-conviction release decision or any proceeding in which the rights of the victim are at issue. “Victim” is defined as a person who suffers direct or threatened physical, psychological, or financial harm as a result of the commission or attempted commission of a crime or delinquent act, and includes the person’s spouse, parent, child, sibling, or guardian. The specified offenses include felony child abuse, domestic violence, stalking, and sexual assault, among others.
Employers may require certification for the absence, such as a police report or court order. Employees may use vacation, personal leave or compensatory time off for such absences.
3. Reserve Peace Officers and Emergency Rescue Personnel. Labor Code Section 230.4 applies to employers with 50 or more employees, requiring them to provide volunteer firefighters up to 14 days off per calendar year for fire or law enforcement training. AB 11 extends this law to employees who are reserve peace officers and emergency rescue personnel.
Practice Tips: Update your Employee Handbook to reflect these new legal protections. Provide guidance to front-line supervisors regarding these additional time off provisions as they are likely to receive time off requests directly from their employees.
Meal/Rest Period Penalties Extended to “Recovery Periods” to Prevent Heat Illness
Employers who fail to provide employees with meal or rest periods as required by California law (Labor Code Section 226.7) must pay an additional hour’s pay to such employees. SB 435 expands this penalty provision to cover “recovery periods,” defined as cooldown periods provided to employees to prevent heat illness. These recovery or cooldown periods have been previously mandated to apply to industries such as agriculture, construction, and landscaping in which employees work outdoors. The new law means that an employee (otherwise covered by the heat illness rules) who is not provided with all of the requisite recovery periods will be owed an additional hour’s pay for each such work shift.
Practice Tips: Determine if any employees are subject to the heat illness prevention laws, ensure compliance and set up a mechanism for employees to report that they received the requisite recovery periods.
Sexual Harassment Definition Clarified
The Fair Employment and Housing Act defines “harassment because of sex” as including sexual harassment, gender harassment, and harassment based on pregnancy, childbirth, or related medical conditions. SB 292 provides the following clarification: “Sexually harassing conduct need not be motivated by sexual desire.”
This law was prompted by the California Court of Appeal decision, in Kelley v. The Conco Companies, in which a male plaintiff working on a construction site had been the subject of repeated vulgar and demeaning comments of a sexual nature by other male supervisors and co-workers. The court dismissed plaintiff’s sexual harassment claim on the basis that the comments were abusive and crude, but were not motivated by sexual desire.
Practice Tips: Ensure that your harassment prevention policy adequately covers this most recent legal definition of harassment and that it prohibits sexual harassment as well as other forms of harassment based on other protected characteristics. Take this opportunity to consider whether your policy accurately reflects your company culture, which may necessitate a more expansive description of the standards of behavior in the workplace.
Protected Classes Expanded
The Fair Employment and Housing Act prohibits employment discrimination and harassment against individuals who have certain characteristics or fall within certain categories — also known as “protected classes.” AB 556 adds the category of “military and veteran status” to this list, which is defined 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 new law allows employers to continue to use veteran status as a factor in employee selection and to give special consideration to Vietnam-era veterans.
Practice Tip: Ensure that your Equal Employment Opportunity statement is updated, including in your Employee Handbook and recruiting materials.
California’s Paid Family Leave Program Expanded
Nearly ten years ago, California expanded its State Disability Insurance program to provide up to six weeks of wage replacement benefits to employees who took time off to care for a seriously ill family member (including a parent, child, spouse, or registered domestic partner) or to bond with a new child. This program has been dubbed, Paid Family Leave, even though it is not a leave of absence law.
SB 770 expands the definition of family member to include siblings, grandparents, grandchildren and parents-in-law. However, neither the California Family Rights Act nor other California or federal laws require employers to provide job-protected leaves of absence for employees to care for family members other than parents, children, spouses and registered domestic partners.
Practice Tips: Employers are well-served by thoughtfully considering whether to expand their family leave policies to cover siblings, grandparents, grandchildren and parents-in-law. Employers who opt not to do so should nonetheless review their Handbooks and update references to Paid Family Leave benefits to reflect this new law.
Limits Placed on Attorney Fee Awards for Employers in Wage Claims
SB 462 amends Labor Code Section 218.5, which required the court to award reasonable attorney’s fees to the prevailing party in a lawsuit for nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions. This meant that either the employee or the employer, whichever prevailed, would be able to obtain payment of its attorney’s fees by the losing party. SB 462 now drastically limits this option for employers that prevail. They may only seek a fee award if the court first finds that the employee-plaintiff brought the lawsuit in bad faith — which is typically very difficult to demonstrate.
Impact: This new law will surely change settlement negotiations and litigation strategies. Plaintiffs will no longer have the fear of getting hit with a huge bill for their employer’s attorney’s fees if they lose. Employers will need to carefully consider the cost-benefit ratio of vigorously litigating wage and hour lawsuits.
San Francisco Enacts Family Friendly Workplace Ordinance
The City and County of San Francisco likes to keep employers on their toes. The latest employment regulation is the Family Friendly Workplace Ordinance, going into effect January 1, 2014. The new law imbues eligible employees with the right to request a different working arrangement to better accommodate caregiving responsibilities and prohibits adverse employment actions or retaliation against employees because of their caregiver status or because of their request. It applies to employers with 20 or more employees — which means all employees are counted for this purpose regardless of whether they are employed in San Francisco.
The first five pages of the ordinance provide for interesting reading regarding historical and demographic changes in the workforce, the need for legal protections for caregivers, as well as successful efforts by other countries to increase workplace flexibility.
Eligible employees are those who work in San Francisco, have been employed for six months or longer and work at least 8 hours per week on a regular basis. They will be entitled to request a flexible or predictable working arrangement to assist with the care of a child under age 18, a family member with a serious health condition or a parent age 65 or older. Flexible arrangements may include a modified work schedule, changes in start or end times, part-time employment, job sharing, or working from home.
Upon an employee’s request, the employer must meet with the employee and respond within 21 days. Requests may be made two times every 12 months, unless a major life event creates a separate basis for such a request. Employers may require verification of the employee’s caregiving responsibilities. Denials must be in writing and qualify as a “bona fide business reason” — and employees must be informed of their right to request reconsideration. “Bona fide business reasons” include the identifiable cost of the requested arrangement, the detrimental effect on the company’s ability to meet client demands, inability to organize work assignments or insufficiency of work to be performed during the time the employee has requested to work. Either the employee or employer may revoke the work arrangement with 14 days written notice, which would trigger the employee’s right to submit another request. If an employer grants a request but has insufficient work for the employee during the period of the “predictable working arrangement,” it is not required to pay the employee during such period of insufficient work.
Employers must post a notice about the new ordinance, which will be published by the City’s Office of Labor Standards Enforcement. Certain public safety and public health jobs may be exempt from the requirements. In addition to the City’s enforcement powers, aggrieved employees may file a civil lawsuit and seek, among other things, liquidated damages in the amount of $50.00 to each person whose rights were violated for each day of the violation.
Practice Tips: Employers in San Francisco should review the specific requirements of the new ordinance and update their Employee Handbook accordingly. Set up a procedure for employees to submit their requests and a mechanism for analyzing and responding to them.
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For more information or to discuss assistance with employment law compliance matters, please contact Ms. Topliff at email@example.com.
The Workplace Wave is provided for general educational and informational purposes only and should not be construed as specific legal advice. The contents may not be quoted or reprinted without the prior written consent of Mary L. Topliff.