California Legislation 2014

California Governor Jerry Brown has signed into law a number of bills that will impact the employer community. A brief summary of these new laws, along with links to the bills, can be found below.

Healthy Workplaces, Healthy Families Act of 2014—Paid Sick Leave (AB 1522)

On September 10, 2014, Governor Brown signed a bill that provides workers with a minimum of three paid sick days per year. Beginning on July 1, 2015, California employers must provide employees with one hour of paid sick leave for every 30 hours worked. Additional information on the new law can be found in our blog post, “BREAKING NEWS: California Legislature Passes Mandatory Paid Sick Leave Bill.” Ogletree Deakins will also host a webinar on October 9, 2014, addressing the new law.

Practical Tip: An employer’s existing paid time off (PTO) policy will comply with the new law if it is equal to or more generous than the law. For employers without a PTO policy, it will become important to formulate one because the law permits employers to cap use and accrual, among other customizable options.

Employment Discrimination or Harassment: Education and Training: Abusive Conduct (AB 2053)

AB 2053 amends section 12950.1 of the Government Code to require additional training for supervisors. Currently, California employers with 50 or more employees are required to provide harassment prevention training to supervisors. Under the new law, the training must also include training and education on the prevention of “abusive conduct” or bullying. 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.” AB 2053 provides that a single act does not constitute abusive conduct, unless it is especially severe and egregious.

Practical Tip: This new training topic can be incorporated into the existing two-hour training obligation. Along with the training, employers may choose to formulate policies discouraging such misconduct, and describing how a victim may seek assistance.

Harassment: Unpaid Interns (AB 1443)

AB 1443 extends the protections of California’s Fair Employment and Housing Act to unpaid interns. The law prohibits employers from subjecting unpaid interns to discrimination and/or harassment based on their race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status. Under AB 1443, an employer may also be liable for harassment of an unpaid intern by a nonemployee if the employer knew or should have known of the conduct and failed to take immediate and appropriate corrective action.

Practical Tip: This new anti-harassment category should be added to company policies and incorporated into harassment prevention training. Interns should be advised of their rights and instructed to complain about any misconduct to a designated company representative.

Civil Rights (AB 2634)

AB 2634 expands the law to allow any individual whose civil rights have been violated to institute and prosecute in his or her own name and on his or her own behalf an action for injunctive relief to eliminate the offending pattern or practice of conduct that is in violation of certain civil rights laws.

Civil Rights: Waiver of Rights (AB 2617)

AB 2617 prohibits the pre-dispute waiver of certain civil rights provided by the Ralph Civil Rights Act (Civil Code 51.7) and the Tom Bane Civil Rights Act (Civil Code 52.1). Generally, these civil rights acts prohibit hate violence and threats against citizens based on certain protected classes, such as political affiliation, sex, race, color, religion, ancestry, national origin, disability, medical condition, or on account of position in a labor dispute. The new law prohibits contracts, mandatory arbitration agreements, or pre-litigation settlement agreements that include a waiver of these civil rights protections. The law also prohibits requiring a waiver of the right to file and pursue a civil action or complaint with the state Attorney General or any other public prosecutor, law enforcement agency, the Department of Fair Employment and Housing, or any court or other governmental entity.

Practical Tip: This new law imposes limits on pre-dispute arbitration agreements and pre-litigation settlement agreements, as they may apply to the two civil rights acts. Portions of this new law may be preempted by federal law. In any event, employment law counsel will need to advise clients on the ramifications of these limited scope carve-outs.

Employees: Wages (AB 1723)

Labor Code 1197.1 authorizes the Labor Commissioner to issue a civil penalty for failure to pay less than the minimum wage, including restitution and liquidated damages. AB 1723 amends section 1197.1 to authorize the Labor Commissioner to also include in such citations “waiting time penalties” for willfully failing to timely pay the wages of a discharged employee or an employee who has resigned.

Employment: Wages (AB 2743)

AB 2743 addresses waiting time penalties for employers and employees that are part of a collective bargaining agreement in the entertainment industry. This bill allows employees—who are employed at a venue that hosts live theatrical or concert events and are enrolled in and routinely dispatched to employment through a hiring hall or other system of regular short-term employment established through a collective bargaining agreement—to recover waiting time penalties against employers that do not pay final wages in accordance with their collective bargaining agreements.

Recovery of Wages: Liquidated Damages (AB 2074)

AB 2074 amends Section 1194.2 of the California Labor Code to allow an employee who alleges minimum wage violations to file suit for liquidated damages any time before the expiration of the statute of limitation on the underlying minimum wage action.

The bill was introduced in response to the California Court of Appeal decision, Bain v. Tax Reducers, Inc., in which the court held that an employee was entitled to recover wages for three years of minimum wage violations, but could only recover one year of liquidated damages. As a result of this bill, California workers will have a three-year statute of limitations on liquidated damages claims for failure to pay minimum wage.

Health Care Coverage: Waiting Periods (SB 1034)

SB 1034 imposes a 90-day limit on eligibility waiting periods for insured health benefits issued by insurers subject to regulation by the California Department of Insurance and/or the California Department of Managed Health Care. The blog post by Ogletree Deakins shareholder Timothy G. Verrall, “Resistance WAS Futile—California Conforms to ACA Waiting Period Requirement,” provides an in-depth look at SB 1034.

Health Care Coverage: Small Employer Market (SB 1446)

SB 1446 is a fix relating to the Affordable Care Act (ACA) for small employers. It allows certain small employers (i.e., those with less than 50 employees) to keep their existing, non-ACA compliant health care coverage until the end of 2015, if the employer meets certain criteria. SB 1446 applies to policies that (1) were in effect on December 31, 2013; (2) were still in effect when the bill was signed on July 7, 2014; and (3) do not qualify as a grandfathered health plan under the ACA. These plans will need to become compliant with ACA requirements by January 1, 2016, in order to remain in force. (For more on SB 1446, see our blog post, “California Governor Signs Bill Giving Small Businesses Extra Time to Comply with ACA.”

Practical Tip: Premiums will be lower for these plans. Employers are encouraged to talk to an insurance broker about preserving them through 2015.

Workplace Violence Prevention Plans: Hospitals (SB 1299)

The California Occupational Safety and Health Act of 1973 imposes safety responsibilities on employers and employees, including the requirement that an employer develop and maintain an effective injury prevention program. SB 1299 adds section 6401.8 to the California Labor Code to require that by July 1, 2016, the Occupational Safety and Health Standards Board adopt standards developed by Cal/OSHA that require specific types of hospitals, including general acute care hospital and acute psychiatric hospital, to adopt a workplace violence prevention plan as a part of the hospital’s injury and illness prevention plan in order to protect workers from aggressive and violent behavior.

Compensation: Rest or Recovery Periods (SB 1360)

SB 1360 provides that a rest or recovery period, afforded to an employee by law to prevent heat illness, will be counted as hours worked for which there will be no deduction from wages. This bill is declaratory and clarifies that employees must be paid for the recovery periods that they take during hot weather.

Practical Tip: This law follows SB 435, which grants premiums to employees deprived of mandated recovery periods. Employers of outdoor workers are urged to update their heat illness policies and procedures.

Occupational Safety and Health: Reporting Requirements (AB 326)

AB 326 addresses the manner by which employers must report workplace accidents in compliance with Cal/OSHA. The new law requires employers to make an 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. The bill changes the wording in Section 6409.1 of the California Labor Code from “report by telephone or telegraph” to “report by telephone or email.”

Practical Tip: It’s official, employers can dispose of their telegraphs.

Occupational Safety and Health: Violations (AB 1634)

AB 1634 requires that an employer that seeks to receive a 50 percent penalty reduction in the form of an abatement credit to submit proof, under penalty of perjury, that abatement has occurred. The bill also requires employers to abate serious workplace hazards even if the employer petitions for reconsideration of an adverse Administrative Law Judge ruling unless they seek leave from abatement from the Appeals Board. The Appeals Board is holding a stakeholder meeting on November 6 to consider regulatory changes to the appeal process in light of the new bill. It is also important to note that the bill explicitly states that the abatement statement cannot be used as evidence of the existence of a violation.

Practical Tip: Certainly companies will want to immediately eliminate known workplace hazards. In some cases, employers contesting the citation will challenge the existence and need to abate alleged workplace hazards. This amendment complicates an employer’s response. Employers should continue the wise practice of seeking immediate assistance from safety consultants and legal counsel after any workplace accident.

Retaliation (AB 2751)

AB 2751 follows legislation enacted last year, prohibiting among other things employers from using immigration status to retaliate against workers who exercise their rights under the California Labor Code. The new law requires that the $10,000 civil penalty under AB 263 be paid directly to the employee or employees who faced the illegal retaliation, instead of the state. AB 2751 limits the scope of AB 263 with respect to the prohibition against taking disciplinary action against an employee who “updates or attempts to update his or her personal information” unless directly related to job skills, qualifications, or knowledge. The amended language protects only employees who update or attempt to update personal information “based on a lawful change of name, social security number, or federal employment authorization document.” The language is narrowed so that it does not protect those employees who correct misrepresentations about their education or criminal history.

Practical Tip: The amended language gives employers more latitude in disciplining employees who make false statements unrelated to immigration status. Where employees make changes to immigration-related documents, employers must act cautiously to avoid a violation of the anti-retaliation provisions of the law.

Driver’s Licenses: Nondiscrimination (AB 1660)

AB 1660 amends the Fair Housing and Employment Act (FEHA) and makes it a violation for an employer or other entity to discriminate against individuals with driver’s licenses issued to undocumented workers. This law follows AB 60, enacted in 2013, which authorized the California Department of Motor Vehicles to issue driver’s licenses to undocumented immigrants. The amended FEHA states that discrimination against those possessing this type of license is a form of “national origin” discrimination. The bill prohibits an employer from requiring a person to present a driver’s license, unless required or permitted by law. AB 1660 also obligates an employer to maintain the privacy of certain information related to such driver’s licenses.

Practical Tip: The new law specifies that it does not alter an employer’s obligation to comply with federal immigration law. This would include, for example, following I-9 procedures when hiring new workers. Further, employers may require employees to possess a driver’s license, if required for work.

Marriage (SB 1306)

SB 1306 updates language in the California Constitution regarding marriage, a year after the Supreme Court of the United States cleared the way for same-sex marriage in California. The terms “husband and wife” and “unmarried man and unmarried woman” will be changed to “spouses” and “two unmarried people,” respectively. The change updates the language in the state constitution to be consistent with state law.

Practical Tip: This law does not directly impact California employers that already extend equal rights to same-sex married couples.

Child Labor Protection Act of 2014 (AB 2288)

AB 2288 addresses civil sanctions relating to the unlawful employment of minors. On July 8, 2014, Governor Brown signed into law the Child Labor Protection Act of 2014. Under the Act, an individual may be entitled to treble damages if he or she is discriminated against in the terms or conditions of his or her employment because he or she filed a claim or civil action alleging a violation of the California Labor Code that arose while he or she was a minor.

The new law specifies that the statute of limitations for a child labor violation is tolled until the child reaches the age of 18. The bill also increases civil penalties in Class “A” violations involving a minor 12 years of age from $5,000-$10,000 to $25,000-$50,000. Class “A” violations typically involve placing children into hazardous occupations or dangerous settings.

Child Performer Services Permit (AB 1680)

AB 1680 requires that any person with a valid Child Performer Services Permit include the permit number on advertising in print or electronic media, including on the Internet or any other medium of advertising.

Labor Contracting: Client Liability (AB 1897)

AB 1897 extends liability for wage, Cal/OSHA, and workers’ compensation violations to companies using contracted labor from staffing agencies and other labor contractors. The bill aims to address the increasing use of long-term temporary workers in place of regular employees by creating joint liability for the labor contractor and the company using temporary labor. (For more on AB 1897, see our blog post, “Governor Brown Signs Bill Making Companies Liable for Employment Violations of Independent Labor Contractor Companies.”)

Practical Tip: When working with any vendor, including staffing companies, it is prudent to review the vendor’s legal compliance measures, service contract terms, and secure adequate insurance, among other measures. This new law could increase the risk of litigation for companies that fail to take adequate precautions.

Public Works: Apprenticeship Program (AB 2744)

Current law addresses the violation of the requirements by contractors and subcontractors relating to public works contracts. AB 2744 amends section 1777.1 of the California Labor Code to extend the penalties for those violations to provisions related to the employment of apprentices.

Public Works: Prevailing Wages: Contractor’s Costs (AB 1939)

Current law requires that contractors and subcontractors performing work on publicly funded construction and maintenance projects to pay their workers minimum prevailing wage rates and to comply with other apprenticeship and recordkeeping obligations. Contractors and subcontractors are liable for violations of prevailing wage laws. AB 1939 adds section 1784 to the California Labor Code to allow contractors to bring an action to recover from the hiring party that the contractor directly contracts with, any increased costs such as the difference between the wages actually paid to an employee and the prevailing wage for the project, among other costs.

Foreign Labor Contractors: Registration (SB 477)

SB 477 requires foreign labor contractors, who recruit foreign workers to California, to register with the Labor Commissioner. The law also penalizes such contractors for intimidation, discrimination, and other violations to prevent the exploitation of foreign workers. The law becomes effective July 1, 2016.

Practical Tip: Companies working with foreign labor contractors should confirm that the contractor is registered with the Labor Commissioner, and take other steps to confirm that the contractor is complying with state and federal labor laws.

Farm Labor Contractors (SB 1087)

SB 1087 prohibits the state from issuing a farm labor contractor license to anyone who has been convicted of sexual harassment of an employee within the last three years or who has hired, as a supervisor, an individual who has been convicted of that crime in the last three years. The bill amends the Labor Code’s requirement that an applicant for a license to act as a farm labor contractor participate in at least eight hours of educational classes each year, increasing the requirement to nine hours of classes with at least one hour of sexual harassment prevention training.

Practical Tip: Agricultural businesses should continue to work with reputable, licensed farm labor contractors.

Workers’ Compensation: Expedited Hearings (AB 1746)

AB 1746 provides for expedited hearings for injured workers of employers that are illegally uninsured for workers’ compensation claims, and the disputed issues are employment or injury. The bill is intended to quickly resolve the issues that determine access to benefits and medical care.

Unemployment Insurance Benefits: Determination: Appeals (SB 1314)

Effective July 1, 2015, SB 1314 extends the deadline for a reconsideration or appeal of an unemployment insurance benefit ruling, determination, computation, or administrative law judge decision from 20 days to 30 days. (For more on SB 1314, see our blog post, “Tips for Taking Advantage of California’s Extended Unemployment Appeal Deadline.”)

Practical Tip: This amendment adds 10 days to the deadline to request a hearing, as well as an additional 10 days to file an appeal following the administrative law judge’s ruling. The 20-day deadline for filing unemployment benefits appeals has always been tight for busy HR departments. This law provides some relief, allowing companies time to investigate facts supporting possible disqualification, seek legal counsel, and evaluate the pros and cons of filing an appeal.

Contracts: Unlawful Contracts (AB 2365)

AB 2365 is intended to protect consumers’ rights to leave negative reviews of goods and services, such as online reviews. The bill prohibits contracts that require that a consumer waive his or her right to make statements about the goods or services that he or she received. It also prohibits businesses from penalizing a customer for making such comments. The law imposes civil penalties of $2,500 for the first violation and $5,000 for each subsequent violation, as well as an additional penalty of $10,000 if the violation was willful, intentional, or reckless. The bill does not prohibit a business that hosts its own consumer reviews or comments from removing a statement that is otherwise lawful to remove.

Employees: Emergency Rescue Personnel (AB 2536)

Current law prohibits employers from discharging and discriminating against an employee for taking time off to perform emergency duty as a volunteer firefighter, reserve peace officer, or emergency rescue personnel. AB 2536 expands the definition of emergency rescue personnel to include an officer, employee, or member of a disaster medical response organization sponsored or requested by the state. The bill also requires an employee who is a health care provider to notify his or her employer at the time the employee becomes designated as emergency rescue personnel and when the employee is notified that he or she will be deployed as a result of that designation.

Practical Tip: Written policies should be updated to include this expansion of the emergency rescue personnel leave law.