Not-So-Happy New Year Wishes For California Employers

December 12, 2013

As 2013 draws to a close, ‘tis the season to take note of all that the California legislature has accomplished to ensure that the state maintains its reputation as the most overregulated state in the country for employers. The following is a summary of this year’s significant California employment-related legislative enactments that will take effect in 2014:

Minimum Wage Increase: Effective July 1, 2014, California’s minimum wage will increase from $8.00 per hour to $9.00 per hour. Eighteen months later on Jan. 1, 2016, it will increase again to $10.00 per hour. (Cal. Assembly Bill [AB] 10)

Domestic Worker Protections: California now has a “Domestic Worker Bill of Rights” that is codified in Cal. Labor Code §§ 1450-1454. Individuals performing certain in-home domestic work related to the care of individuals in private households or the maintenance of those households will be entitled to overtime compensation for hours worked in excess of nine per day or 45 per week. (AB 241)

FEHA Expansions and Clarifications: The California Fair Employment and Housing Act (FEHA) has been amended, such that Cal. Government Code §12940(j)(4)(C) now specifies that “sexual harassment” need not be motivated by sexual desire. FEHA also has been amended to add military and veteran status as protected classifications. (California Senate Bill [SB] 292/AB 556)

Penalties For Non-Provision of Heat Illness Recovery Periods: Cal/OSHA mandates a heat illness standard requiring five-minute cool-down periods on an “as-needed” basis to prevent overheating, with these periods referred to as “recovery periods.” Cal. Labor Code § 226.7 (which provides for the payment of one additional hour of pay at an employee’s regular rate of compensation for meal and rest break violations) has been amended to make that payment also now applicable to each day that an employer fails to provide an employee with a recovery period. (SB 435)

Prohibitions on Retaliatory Immigration Reporting: New Cal. Labor Code § 1019 makes it unlawful for an employer to report or threaten to report an employee or the employee’s family members to Immigrations and Customs Enforcement because the employee has complained about Labor Code or other violations by the employer. Violations of this new law can result in the employer’s loss of its business license, a civil action for equitable relief and penalties, and/or prosecution for criminal extortion. (AB 263/SB 666)

Prohibitions Against Retaliation For Reporting Wage and Hour Violations: Cal. Labor Code § 98.6 has been amended to prohibit retaliation or adverse action against employees for exercising their rights under the Labor Code. The definition of “protected conduct” under the statute is further expanded to include a written or oral complaint by an employee for unpaid wages. The amendment also provides for a civil penalty of $10,000 per employee per violation. (AB 263)

Whistleblower Protections: The whistleblower protections in Cal. Labor Code § 1102.5 formerly applied only to reporting potential legal violations to government or law enforcement agencies. Effective Jan. 1, 2014, the statute has been amended to expand those protections to include making such reports to any person “with authority over the employee,” or to another employee who has “the authority to investigate, discover or correct the violation.” The statute also has been amended to prohibit retaliation against an employee for his actual or threatened reporting of an alleged violation by the employer. (SB 496)

Attorneys’ Fees For Prevailing Employers On Wage Claims: Cal. Labor Code § 218.5 has been amended to provide that an employer that prevails in an action for the nonpayment of wages can only recover its attorneys’ fees and costs from the losing employee if the court finds that the employee filed the action in bad faith. (SB 462)

Expansion of Labor Commissioner’s Authority To Remedy Violations: Where an employer is found to have violated California’s minimum wage laws, the California Labor Commissioner is now authorized to award to the employee, in addition to actual damages, an additional amount equal to the actual damages plus interest as liquidated damages. An employer can defend against an award of liquidated damages by demonstrating that it acted in good faith and reasonably believed it was in compliance with minimum wage laws. The Labor Commissioner’s authority also has been expanded to permit it to create and record a lien against an employer’s real property once a Labor Commissioner order, decision and award resulting from a hearing becomes a final order. The lien would remain in place until satisfied or released, or for 10 years. (AB 442/1386)

Time Off and Accommodations For Domestic Violence, Sexual Assault and Stalking Victims: Current law permitting victims of domestic violence and sexual assault to take time off to appear at legal proceedings and to seek medical or psychological help and safety planning has now been extended to stalking victims. The law also has been amended to prohibit any discrimination or retaliation against an employee due to his or her status as a victim under this law. Further, a reasonable accommodation requirement has been added for victims, and employers may now be obligated to take certain precautionary safety measures in the workplace. (SB 400)

Time Off For Emergency Duty: Employers with 50 or more employees are subject to Cal. Labor Code § 230.4, which permits volunteer firefighters to take up to 14 days off each year for fire or law enforcement training. The statute has been amended to provide that volunteer firefighters, reserve peace officers and emergency rescue personnel must be permitted to take up to 14 days’ leave of absence each year to perform emergency duty or to receive fire, law enforcement and emergency rescue training. (AB 11)

Time Off For Crime Victims, Including Domestic Violence/Sexual Assault: California law prohibits employers from discriminating against or discharging an employee for taking time off to serve on a jury, for taking time off as a victim of a crime to appear in court as a witness in judicial proceedings, and for taking time off due to being a victim of domestic violence/sexual assault and needing to seek certain relief. The statute has been amended to now afford crime victims the ability to take time off to be heard in any proceeding in which a right of the victim is at issue, such as plea, sentencing and post-conviction proceedings. (SB 288)

Expansion of Paid Family Leave (PFL) Benefits: As amended, PFL wage replacement benefits available to employees who take time off to care for a seriously ill child, spouse, parent or domestic partner are also now available for the serious illnesses of a grandparent, grandchild, sibling or parent-in-law. (SB 770)

Background Checks: California’s background check law has been amended to prohibit an employer from asking an applicant or employee about any conviction that has been judicially dismissed or ordered sealed, or using such information as a basis for any employment-related decision. Exceptions to this prohibition include where the employer is legally required to obtain the information, is legally prohibited from hiring an employee with any criminal convictions (either generally or with respect to the particular job), and where the applicant is required to possess or use a firearm during the course of his or her employment.

San Francisco Family-Friendly Workplace Ordinance: The new Family Friendly Workplace Ordinance (FFWO) applies in San Francisco only. The FFWO requires employers with 20 or more employees to permit any employee who is employed in San Francisco, has been employed for at least six months with the employer and who works at least eight hours per week to request a flexible working arrangement to assist with caring for: (1) a child/children under 18 years old; (2) a family member with a serious health condition; or (3) the employee’s parent, if the parent is over age 65. An employer is required to meet with an employee who requests such an arrangement within 21 days of the employee’s request and to respond to that request within 21 days thereafter. Any denial of a request must be written, must provide an explanation for the denial and must provide the employee with notice of the right to request reconsideration.

For further information on or questions about any of these new laws and how they might impact your business, or for guidance on revising handbook and other policies to address the same, please contact the authors or a member of McGuireWoods’ California Labor and Employment team.