Governor Brown recently signed into law several significant employment-related bills. This issue of Compliance Matters is dedicated to summarizing these new laws, most of which go into effect on January 1, 2018.
• AB 168: Use of Salary History in Offering Employment. Assembly Bill 168 adds section 432.3 to the California Labor Code and prohibits employers from seeking a job applicant's salary history either on the employment application or through other means. Employers are also prohibited from relying on an applicant's salary history as a factor in deciding whether to make a job offer or determining what amount of salary to offer a job applicant unless the applicant has voluntarily provided such information. While employers will no longer be able to ask about compensation history during the application process, it is not unlawful to ask an applicant how much he or she desires to be paid in the new position.
• SB 63: New Parent Leave Act. The California Family Rights Act ("CFRA") currently requires larger employers (i.e., with 50 or more employees) to provide 12 weeks of legally protected time off for baby bonding following the birth of a child; the adoption of a child; or the placement of a child in the home for foster care. This new law expands this leave requirement to smaller employers with just 20 or more employees. Additionally, the new law states that employees must be permitted to use accrued vacation pay, paid sick time, or other accrued paid or unpaid time off during this leave.
• AB 1008: "Ban the Box." Following in the footsteps of ordinances in San Francisco and Los Angeles, Assembly Bill 1008 prohibits employers from seeking any criminal history information from most applicants until after a conditional offer of employment has been extended. It also lays out a procedure that employers must follow when considering criminal conviction history of job applicants.
o AB 1008 makes it a violation of the California Fair Employment and Housing Act for any employer with five or more employees to inquire about an applicant's conviction history until the applicant has been given a conditional offer of employment. This means employers must remove any question about criminal history from the employment application.
o After a conditional offer of employment is extended, an employer may conduct a background check or make other inquiries seeking information about an applicant's criminal history. If an employer intends to deny the employment because of the applicant's conviction history, the employer must perform an assessment to determine whether the conviction history has a "direct and adverse relationship" with the applicant's intended job duties such that it justifies denying employment. The assessment must take into account (1) the nature and gravity of the offense, (2) the time that has passed since the offense and completion of the sentence, and (3) the nature of the job sought. The employer may, but does not have to, put the results of the assessment in writing.
o If the employer concludes that the applicant's conviction history disqualifies the applicant from employment, the employer must notify the applicant in writing of its decision. The notification may, but does not have to, justify or explain the employer's reasoning. However, the notification must explain that before the employer makes a final decision. the applicant has the legal right to respond to the notice within 5 days.
o The applicant has five days to dispute the employer's preliminary decision to deny employment based upon the conviction by submitting evidence challenging: (i) the accuracy of the conviction history report relied on by the employer; and (ii) evidence of rehabilitation or mitigating circumstances.
o If the applicant timely furnishes the employer with the challenge notice, then the employer must re-consider the application in light of the information provided before making a final decision.
o If the employer makes a final decision to deny employment because of the applicant's conviction history, the employer must notify the applicant in writing. However, unlike the "ban-the-box" ordinances in Los Angeles and San Francisco, the employer is not required to justify its reasoning for denying the employment.
• AB 46: Amendments to California Equal Pay Act. The Equal Pay Act prohibits employers from paying any of its employees less than employees of different genders, race or ethnicity for substantially similar work, unless the employer can demonstrate one or more approved factors account for the wage differential. A willful violation of the Act is a crime (i.e., a misdemeanor) and carries a maximum $10,000 fine. Assembly Bill 46 amends California's Equal Pay act by defining "employer" under the Act to include both public and private employers, but exempts public employers from being charged for a misdemeanor.
• AB 1710: Prohibited Discrimination Against Service Members. Existing California law already prohibited employment discrimination against a member of the armed services because of his or her membership or service. AB 1710 now amends the law to include a prohibition of discrimination in the "terms, conditions, or privileges of employment." The purpose of this law is to expand existing protections for military service members in the workplace to include protection against a hostile work environment because of their membership in the armed services. In practical terms, this means that service members can now bring claims of harassment based upon hostilities experienced in the workplace which they attribute to their military commitment/service.
• AB 450: Immigration Worksite Enforcement Actions. As part of California's efforts to thwart the Trump administration's efforts to tighten up immigration enforcement, AB 450 imposes strict requirements on how California employers must behave when the immigration service comes knocking. AB 450 sets the following new rules for employers when ICE shows up at your door for a workplace inspection.
o An employer (or any person acting on behalf of the employer) may not voluntarily consent to allow a federal immigration enforcement agent to enter any non-public areas of a place of labor unless the agent has a judicial warrant or subpoena authorizing the entry/inspection.
o Employers may not voluntarily consent to allow a federal immigration enforcement agent access to the employer's employee records without a subpoena or judicial warrant.
o Employers must give notice to employees of any immigration review of employment records within 72 hours of receiving notice of the inspection. Notably, this notice must be posted in the language the employer normally uses to communicate information to the employee.
o Upon reasonable request, an employer must provide an "affected employee" a copy of the Notice of Inspection of I-9 Employment Eligibility Verification forms.
o An employer (or any person acting on behalf of the employer) who violates this new law is subject to penalties that range from $2,000 - $5,000 for a first violation and between $5,000 and $10,000 for each subsequent violation.
• SB 306 Expanded Labor Commissioner Authority. Current law authorizes the California Labor Commissioner to investigate discrimination and retaliation claims. The new law significantly expands this authority in several important ways.
o First, the Labor Commissioner is authorized to commence an investigation of an employer, with or without first receiving a complaint. For example, if during the course of processing a wage claim, conducting a field inspection, or in instances of immigration-related threats, the Labor Commissioner will be permitted to proceed without a complaint where it suspects discrimination or retaliation has occurred.
Further, SB 306 authorizes the Labor Commissioner to petition a Court for temporary or preliminary injunctive relief during an investigation when "reasonable cause" exists to believe that an employer has engaged, or is engaging in, unlawful retaliation, before a determination has been reached. The law does not identify the specific injunctive relief available, however such relief would likely include reinstatement for unlawful terminations or a stay on the identified adverse employment action. The injunction would remain in effect until the Labor Commissioner issues a determination or completes its investigation.
o Second, the burden to dispute adverse determinations has now shifted to the employer. If the Labor Commissioner determines a violation has occurred, it will now have the power to issue a citation to the person/entity responsible for the violation, directing that person/entity to cease the violation and to take actions necessary to remedy the violation, including rehiring or reimbursement of lost wages and posting notices. Employers will have the ability to dispute the Labor Commissioner's determination by seeking judicial review in superior court, but the burden has now shifted to requiring the employer to bring a court action to dispute the Labor Commissioner's determination. Previously, the Labor Commissioner was required to bring a court action against the employer to enforce its orders.
o Third, SB 306 provides that an employer who willfully refuses to comply with a court order to reinstate/rehire an employee or to post any required notice or to cease and desist shall also be liable for penalties up to $100 per day of non-compliance (up to a maximum of $20,000). And, any penalty collected pursuant to this section would be paid to the affected employee. Additionally, if the Labor Commissioner prevails, the Court will award the Labor Commissioner its reasonable attorneys' fees and costs against the employer.
o Finally, SB 306 authorizes employees bringing a civil action for retaliation/whistleblower claims to seek temporary or preliminary injunctive relief, which the Court must issue when "reasonable cause" exists that a violation has occurred.
• SB 396: Expanded Harassment Training and Poster Requirements: Gender Identity, Gender Expression, and Sexual Orientation. Current law, under FEHA, requires employers with 50 or more employees to provide at least two hours of prescribed training and education regarding sexual harassment to supervisory employees within six months of hire or promotion to a supervisory position and once every two years. Under SB 396, Employers must now incorporate training on the prevention of harassment based on gender identity, gender expression, and sexual orientation. The required training and education content must include practical examples of such harassment and be presented by trainers with knowledge and expertise in these areas. Additionally, employers will now be required to post the DFEH's poster regarding transgender rights in a prominent and accessible location in the workplace.
• SB 179: Gender Recognition Act. This new law allows Californians to update their gender on birth certificates, driver's licenses and identity cards without undergoing clinical treatment or getting a court order. It would also make California the first state in the country to legally recognize "non-binary" as a gender. Specifically, this new law adds a third gender option to driver's licenses, birth certificates, identity cards, and gender change court orders. It authorizes a person to submit to the State Registrar an application to change gender on the birth certificate, accompanied by an affidavit attesting, under penalty of perjury, that the request for a change of gender is to conform the person's legal gender to the person's gender identity and not for any fraudulent purpose. Minors would also be given the option to apply to update their gender on birth certificates, with permission from parents or legal guardians. Portions of this law go into effect in 2018 and 2019.
• SB 31: California Religious Freedom Act. This law was passed with "urgency" to take effect immediately, in order to preemptively guard against the possibility that President Trump might follow through with his campaign promise to create a Muslim registry-a database that would track individuals based upon their religious affiliation. The purpose of the law is to prohibit California agencies from participating in the creation of any such registry, or any enforcement related to such a registry. Therefore, under the new law, state or local agencies or public employees acting under color of law cannot:
o Give the federal government personal information regarding a person's religious beliefs, practices, or affiliation, when the information is sought for the purpose of compiling a database of individuals based on religion, national origin, or ethnicity for law enforcement or immigration purposes.
o Use agency resources to assist with any government program compiling such a database.
o Make state databases available in connection with an investigation or enforcement under such a program.
o Collect personal information on the religious beliefs, practices, or affiliation of any individual, except as part of a targeted investigation, or where necessary to provide religious accommodations. Additionally, state law enforcement cannot investigate or enforce a violation of any requirement that individuals register with the federal government based on religion, national origin, or ethnicity.
The bill does not prevent the collection, retention, or disclosure of personal information or documents as required by Federal law or a court order. Accordingly, this law will not impact current obligations to collect voluntary data on employees. However, an agency or employee would be deemed to be in violation of this law if the agency or employee acted with actual knowledge that the information shared would be used for the purpose of creating such a Registry as the one described above.
• AB 1701: Contractor Liability for Wages. Assembly Bill 1701 specifies that a direct contractor (a contractor that has a direct contractual relationship with an owner) entering into a contract in California to construct or repair a building will be liable for any debt owed to a wage claimant incurred by a subcontractor. In other words, when a subcontractor is acting under or for the direct contractor, and a worker files a wage complaint, the direct contractor is liable for debts owed to the worker as a result of the complaint. However, the contractor's liability extends only to any unpaid wages or benefit payments, including interest. Contractors would not be liable for penalties or liquidated damages. The bill authorizes the Labor Commissioner to bring an administrative or civil action against the contractor, while third parties owed benefit payments or contributions on a wage claimant's behalf can bring a civil action. Because the bill adds a new section to the Labor Code (Section 218.7), the provisions of the law are enforceable under California's Private Attorneys General Act.