2017 California Employment Law Update


Below are some of the new laws going into effect this year that affect the construction industry. Unless otherwise noted, the laws go into effect on January 1, 2017.

Public Works and Prevailing Wages

You can read more about the new laws—AB 326, AB 1926 and SB 954—relating to public works and prevailing wages in an earlier blog post.

Employment Contracts

Choice of Forum and Choice of Law. Under SB 1241, an employer cannot require an employee who primarily works and resides in California to agree to file a lawsuit or bring a claim in another state when the claim arises in California. This is usually referred to as the choice of forum clause.

SB 1241 also prohibits agreements to apply another state’s law to a controversy that arises in California, the choice of law clause.

These two clauses usually arise when a company’s headquarters are located outside of California and the company decides to apply the forum and law of the state where the company is incorporated.

Wage and Hour

Minimum Wage.  California employers must post the new California Minimum Wage Official Notice, which informs employees the minimum wage is $10.50 for employers with 26 or more employees. The minimum wage remains at $10.00 per hour if your business has 25 or fewer employees. Note that January 1st of each year, the minimum wage will go up. Click here to read more about the California Minimum Wage.

Keep in mind that local ordinances may require a higher minimum wage than state law and these cities also require posting of their local ordinance with the effective minimum wage.

Cities with higher minimum wages include: Berkeley ($12.53 effective 10/1/16); El Cerrito ($12.25 effective 1/1/17); Emeryville ($13.00 or $14.82 dependent on employer size, effective 7/1/16); Long Beach ($10.50 effective 1/1/17); Los Angeles City and County ($10.50 effective 7/1/16); Mountain View ($13.00 effective 1/1/17); Oakland ($12.86 effective 1/1/17); Palo Alto ($12.00 effective 1/1/17); Pasadena ($10.50 effective 7/1/16); Richmond ($12.30 effective 1/1/17); San Francisco ($13.00 effective 7/1/16); San Jose ($10.50 effective 1/1/17); Santa Monica ($10.50 effective 7/1/16); and Sunnyvale ($13.00 effective 1/1/17).

The City of San Jose also posts the minimum wage for South Bay cities.

Minimum Pay for Exempt Employees. Under California law, exempt employees must receive a salary that is two times the minimum wage, or $43,680 per year, based on the $10.50 per hour minimum wage.

The U.S. Department of Labor (DOL) also sought to raise the minimum salary to $47,476 per year, which is higher than the California minimum wage. While there is currently an injunction preventing enforcement of these regulations, the DOL has requested an expedited appeal.

Itemized Wage Statements/Pay Stubs. AB 2535 amends Labor Code Section 226 by stating that employees who are exempt minimum wage and overtime requirements are not required to have the number of total hours worked tracked and logged on the exempt employee’s pay stub.

Payroll. Under AB 1847 employers that are required to notify their employees of their eligibility for the federal Earned Income Tax Credit also must notify employees that they may be eligible for the California Earned Income Tax Credit. AB 1847 updates the content of the notice that must be provided to employees.

Challenges to Minimum Wage Violations. Existing law allows employees to file a complaint with the Labor Commissioner. The process for investigating wage complaints may include either a conference or a hearing, or both. Within fifteen (15) days after the hearing, the Labor Commissioner issues an order or decision pertaining to the alleged wage violations. Either party may appeal the order by filing the appeal with the appropriate superior court.

AB 2899 requires a person seeking a writ of mandate contesting the Labor Commissioner’s ruling to post a bond with the Labor Commissioner. The bond would be an amount equal to the unpaid wages assessed under the citation, excluding penalties. The bill also provides that the total amount of the bond is to be forfeited to the employee if the employer fails to pay the amounts owed within 10 days from the conclusion of the proceedings.

Local Wage Investigations. To further combat wage theft, SB 1342 authorizes cities and counties to work with the California Division of Labor Standards Enforcement to enforce wage payment laws. The intent of this new law is to give local wage enforcement programs the necessary tools to conduct successful wage claim investigations to recover unpaid back wages. It permits a city or county to delegate its administrative subpoena authority to city or county officials in order to investigate and enforce local laws or ordinances, including local wage laws. This new law can be found codified in California Government Code Section 53060.4.

Leaves of Absence and Benefits

Paid Family Leave and Disability Insurance Benefits. California law requires employers to notify employees of state disability insurance benefits.

AB 908 pertains to Paid Family Leave (PFL) benefits. The law increases the amount of PFL benefits an employee can receive from 55 percent to 60-70 percent of earnings, depending on the employee’s income. The maximum weekly benefit will remain in place. In January 1,2018, the 7-day waiting period will be removed.

Existing law authorizes the Employment Development Department to administer the disability compensation program, which provides for the partial compensation for the wage losses suffered by eligible individuals unemployed because of sickness or injury. AB 2886 extends the appeal time for disability benefits from 20 to 30 days, effective March 1, 2018.

Leave for Domestic Violence, Sexual Assault, or Stalking. Existing law states that employers cannot discriminate or retaliate against an employee who is a victim of domestic violence, sexual assault, or stalking for taking time off from work for specified purposes related to addressing the domestic violence, sexual assault, or stalking. Existing law requires employers to reinstate and reimburse an employee for lost wages and work benefits caused by the acts of the employer, as well as appropriate equitable relief. An employee has the right to file a complaint with Division of Labor Standards Enforcement.

Under AB 2337, employers must inform each employee of his or her rights established under those laws by providing specific information in writing to new employees upon hire and to other employees upon request. The bill would also require the Labor Commissioner, on or before July 1, 2017, to develop a form an employer may elect to use to comply with these provisions and to post it on the commissioner’s Internet Web site.

Employers would not be required to comply with the notice of rights requirement until the commissioner posts the form.

Private Sector Retirement Savings Plans. SB 1234 implements the California Secure Choice Retirement Savings Program (SCRSP), which is a state-run retirement plan for private-sector workers without a retirement plan, pension, 401k or similar retirement plan. Specific prerequisites must be met before the SCRSP can be implemented. Under SB 1234, employers with five or more employees that do not offer specified retirement plans must put a payroll arrangement into place so that employees may contribute a portion of their salary or wages to a retirement saving program in the SCRSP.

Safe Working Environment

Marijuana and Proposition 64. Proposition 64, known as the Adult Use of Marijuana Act, permits the recreational use of marijuana for adults 21 years old and over. However, employers may still prohibit the use of marijuana by their employees. In fact, the law does not preempt “the rights and obligations of public and private employers to maintain a drug and alcohol free workplace or require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale, or growth of marijuana in the workplace, or affect the ability of employers to have policies prohibiting the use of marijuana by employees and prospective employees, or prevent employers from complying with state or federal law.”

As Proposition 64 makes clear, this means that employers remain free to test workers for marijuana use before hiring them, or at any point during their employment if there is a reasonable suspicion of impairment. If employees test positive, Proposition 64 allows businesses to terminate their employment even if there is no indication that they were actually impaired on the job. These employer-friendly provisions codify case law that emerged after the legalization of medical marijuana.

Generally, though, the law becomes effective November 9, 2016. State law allows adults to smoke or ingest marijuana in a private home, to possess small amounts of nonmedical marijuana, and to grow small amounts at home for personal use. Effective January 1, 2018, state law will also allow for the purchase and consumption of marijuana at a licensed business. Proposition 64 continues to prohibit smoking while driving a vehicle, in all public places, and anywhere that smoking tobacco is prohibited. Possession of marijuana on the grounds of a school, day care, or youth center while children are present is illegal.

For more information on cannabis laws in California please visit Wendel Rosen’s new Cannabis Law Blog.

Smoking in the workplace. AB-7 amends Labor Code Section 6404.5 by broadening the prohibition of smoking in the workplace. Before AB-7, smoking was permitted in some places of employment such as bars, hotel lobbies, warehouse factories and employer-designated smoking break rooms. AB-7 removed these exemptions, but seven narrow exemptions do remain.

AB-7 treats e-cigarettes and vaping devices that contain nicotine as “smoking.”

The law now applies to owner-operated businesses (where the owner is the only employee) and eliminates the exception for employers with five or fewer employees. Also, the minimum smoking age was raised from 18 to 21, except for active military personnel.

Safe Driving. AB 1785 reaffirms existing law that states a person is prohibited from driving a motor vehicle while holding and operating a handheld wireless telephone or a wireless electronic communication device (i.e.¸iPhone, Android phones, etc.)  AB 1785 allows drivers to use their hand to activate or deactivate a feature or function of the device with a single swipe or tap, as long as the device is mounted so as not to hinder the driver’s view of the road. This means drivers can no longer hold onto their phones to view GPS directions guiding them from worksite to worksite.

Indoor Heat Illness. Under existing law, the California Occupational Safety and Health Act of 1973, the Division of Occupational Safety and Health (CalOSHA) investigates complaints that a workplace is not safe and may issue orders necessary to ensure employee safety. SB 1167 requires CalOSHA to propose a heat illness and injury prevention standard applicable to workers working in indoor places of employment by January 1, 2019.

Expanded Discrimination and Retaliation Protections

State Contracts. AB 2844 requires a person that submits a bid or proposal to, or otherwise proposes to enter into or renew a contract with, a state agency with respect to any contract in the amount of $100,000 or more to certify, under penalty of perjury, at the time the bid or proposal is submitted or the contract is renewed that they are in compliance with the Unruh Civil Rights Act and the California Fair Employment and Housing Act (FEHA), and that any policy that they have adopted against any sovereign nation or peoples recognized by the government of the United States, including, but not limited to, the nation and people of Israel, is not used to discriminate in violation of the Unruh Civil Rights Act or the FEHA.

Fair Pay. Two new bills amend existing equal pay laws. Existing law prohibits an employer from paying any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, unless the employer demonstrates that specific, reasonably applied factors account for the entire wage differential. Under existing law, an employer or other person who violates or causes a violation of that prohibition, or who reduces the wages of any employee in order to comply with that prohibition, is guilty of a misdemeanor.

SB 1063 prohibits an employer from paying any of its employees wage rates that are less than the rates paid to employees of another race or ethnicity for substantially similar work.

AB 1676 states that under the Fair Pay Act, prior salary cannot, by itself, justify any disparity in compensation. The law is supposed to “help ensure that both employers and workers are able to negotiate and set salaries based on the requirements, expectations, and qualifications of the person and the job in question, rather than on an individual’s prior earnings, which may reflect widespread, long-standing, gender-based wage disparities in the labor market.”

All-Gender Restrooms.  Existing law requires publicly and privately owned facilities where the public congregates, as defined, to maintain a sufficient number of temporary or permanent toilet facilities to meet the needs of the public at peak hours. SB 1732 requires that all single-user toilet facilities in any business establishment, place of public accommodation, or government agency to be identified as “all-gender” toilets beginning March 1, 2017. The bill would authorize inspectors, building officials, or other local officials responsible for code enforcement to inspect for compliance with these provisions during any inspection.

Form I-9 Protections. Mirroring federal law, SB 1001 makes it unlawful for an employer to request more or different documents than are required under federal law, to refuse to honor documents tendered that on their face reasonably appear to be genuine, to refuse to honor documents or work authorization based upon the specific status or term of status that accompanies the authorization to work, or to reinvestigate or reverify an incumbent employee’s authorization to work, as specified. However, under state law, the Labor Commissioner may impose up to a $10,000 penalty for a violation.

Human Trafficking.  AB 1684 authorizes the Department of Fair Employment and Housing (DFEH) to receive, investigate, conciliate, mediate, and prosecute complaints alleging, and bring civil actions for, a victim of human trafficking.  The bill provides for any damages to be awarded to the victim of human trafficking.

Discrimination Enforcement. While the DFEH is the main state agency that enforces and promulgates regulations to enforce FEHA, there are a handful of other state agencies that also currently have authority to promulgate regulations under FEHA. SB 1442 reorganizes all such authorities to fall under the DFEH, which will now be tasked with investigating and enforcing all of these antidiscrimination provisions.

Background Checks.  AB 1843 prohibits employers from asking an applicant to disclose, or use as a factor in determining any condition of employment, information concerning or related to an arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while the person was subject to the process and jurisdiction of juvenile court law.

SB 269, Roth. Disability access. For more information regarding SB 269, read this.

2 Responses to “2017 California Employment Law Update”

  1. Stephanie Poland

    Is the fair scheduling act (SB 878) still passed as a law and in effect in 2017?


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