Employment Law Update
New Employment Legislation for 2018
By Shane Cahill and Douglas Melton
With the New Year comes new legislation affecting California employers. Below is a summary of the new laws for 2018 likely to impact your business.
Salary-History Inquiries (AB 168): This law bans businesses from inquiring into applicants’ salary history. The bill is meant to further expand the protections afforded under California’s Equal Pay Act and to end pay disparities that may be perpetuated by historical discrimination.
Under AB 168, employers may not rely on an applicant’s salary or income history (including other forms of compensation and benefits) “as a factor in determining whether to offer employment… or what salary to offer….” The ban prohibits both direct and indirect inquires. Only when the applicant volunteers information about his or her salary history, “without prompting,” may the employer consider the applicant’s income history in setting his or her salary.
Businesses must also, upon reasonable request, provide applicants with the pay scale assigned to the position sought.
San Francisco passed a similar law in 2017 (the Parity in Pay Ordinance) that goes into effect on July 1, 2018. The Parity in Pay Ordinance includes an added provision prohibiting employers from disclosing a current or former employee’s salary history unless: (1) it has the employee’s express authorization; (2) it has a legal obligation to do so; (3) it is subject to a legal duty to publically disclose all employees’ salaries; or (4) the disclosure is pursuant to a collective bargaining agreement.
Criminal-Background Inquiries (AB 1008): As expected, Governor Brown approved a statewide “ban-the-box” law (named after the check-mark boxes on employment applications asking applicants to disclose if they had been convicted of a crime). The law forbids businesses with five or more employees from inquiring into an applicant’s criminal-conviction history until a conditional offer of employment has been made. Before passage of the statewide ban-the-box law, San Francisco and Los Angeles had enacted similar ordinances.
The new law’s application to pre-offer conviction history inquiries is comprehensive, meaning businesses cannot ask an applicant about his or her criminal history on applications or during an interview. Nor can businesses independently investigate an applicant’s criminal history (for example, through internet searches) before making a conditional offer of employment.
Once a conditional offer of employment has been made, there are strict rules employers must follow in conducting background checks that may reveal the candidate’s criminal history. There are also limitations on the types of convictions about which businesses can inquire. Employers must notify conditionally-hired applicants that a background check is being performed and provide information about what the check will entail and the applicant’s rights.
If a background check reveals the applicant has a criminal history, the employer must perform an “individualized assessment” before denying employment. This requires consideration of the nature of the offense and job sought, passage of time since the conviction, and whether the applicant has been rehabilitated. Although businesses are not required to do so, this process should be documented.
If an employer revokes a conditional offer of employment based on the applicant’s criminal history, the applicant must be notified of the decision in writing, given a copy of the background-check report, and told that he or she has 5 business days to respond. Before making its final decision, the employer must consider any response (or failure to respond) from the applicant (along with any evidence he or she offers).
If, after the applicant has had an opportunity to respond, the employer’s final decision is to revoke the offer of employment, the employer must notify the applicant of its decision in writing and advise the applicant of any rights he or she may have to appeal the determination pursuant to the business’ existing policies or procedures, as well as the applicant’s right to file a complaint with the Department of Fair Employment & Housing.
Parental Leave Act (SB 63): California’s Parental Leave Act (“CPLA”) extends the baby-bonding leave-of-absence rights generally afforded to employees of larger companies under the California Family Rights Act (“CFRA”) to employers with between 20 and 49 employees. Under CPLA, covered California employers must provide eligible employees with up to 12 weeks of unpaid, job-protected leave to bond with a newborn, adopted, or foster child. Leave must be taken within a year of the birth or placement.
To be eligible for CPLA leave, employees must have 12 months of service and 1,250 hours of work during the 12-month period before commencing leave. Employees on CPLA leave may (but cannot be required to) use accrued vacation, paid sick leave, or other paid time off. Employees on CPLA leave may also be eligible for wage replacement benefits under California’s Paid Family Leave program and/or San Francisco’s Paid Parental Leave Ordinance (discussed here https://www.longlevit.com/publications/employment-law-update-6/.)
CPLA requires that employers guarantee employment in the same, or comparable, position when the employee returns from leave and CPLA prohibits employers from retaliating and/or discriminating against employees who take CPLA leave.
New Anti-Harassment Training Requirements (SB 396): Existing law requires businesses with 50 or more employees to provide at least 2 hours of mandatory anti-harassment training to all supervisory employees within 6 months of hire or promotion and once every 2 years. Beginning this year, anti-harassment training and education must also address issues related to gender identity, gender expression, and sexual orientation.
In addition, businesses with five or more employees must prominently post a workplace notice regarding transgender rights. The notice has been developed by the Department of Fair Employment & Housing and is available at https://www.dfeh.ca.gov/resources/posters-and-brochures-and-fact-sheets/.
Immigration Worksite Enforcement Actions (AB 450): In anticipation of Immigration and Customs Enforcement (ICE) sweeps, and in line with its “sanctuary state” status, California enacted AB 450. The law prohibits employers from voluntarily allowing ICE agents to enter nonpublic areas of the workplace unless the ICE agents provide a judicial warrant (or as otherwise required by federal law). The law also prohibits employers from voluntarily providing ICE agents access to employees’ records without a subpoena or court order. The law prescribes penalties of $2,000 to $5,000 for a first violation and $5,000 to $10,000 for each subsequent violation.
Expansion of DLSE Authority (SB 306): Beginning this year, the California Department of Labor, Division of Labor Standards Enforcement (the state agency charged with investigating employee wage claims and enforcing California’s wage laws) will be empowered to independently investigate businesses suspected of discriminating or retaliating against employees in violation of laws within the DLSE’s jurisdiction – with or without a complaint from an aggrieved employee.
Human-Trafficking Posting Requirements (AB 260 and SB 225): Existing law required that certain businesses (including alcohol retailers, adult or sexually-oriented businesses, various transportation agencies, emergency rooms, farm labor contractors, and massage parlors) conspicuously post a notice developed by the Department of Justice containing information related to slavery and human trafficking. AB 260 and SB 225 expands this posting requirement to hotels, motels, and bed-and-breakfast inns. The law also amends the existing notice to include a hotline individuals may access by text message. County-specific notices are available at https://oag.ca.gov/human-trafficking/sb1193/counties.
Direct-Contractor Wage Liability (AB 1701): Under this law, direct contractors entering into construction contracts with subcontractors on or after January 1, 2018, must assume, and be liable for, unpaid wages and benefits owed to employees of the subcontractor. The law provides direct contractors with the right to obtain payroll records from subcontractors. Further amendments to the law are expected to be proposed this year to clarify its scope.
California Minimum Wage: The process of boosting California’s minimum wage to $15.00 per hour by 2022 continued with a 50 cent raise, effective January 1, 2018. For 2018 the California minimum wage is $11.00 for employers with 26 or more employees and $10.50 for employers with 25 or fewer employees.
Bay Area Minimum Wages: On January 1, 2018, Oakland’s minimum wage increased to $13.23 and San Jose’s minimum wage increased to $13.50. Effective July 1, 2018, San Francisco’s minimum wage will increase to $15.00 per hour. Effective October 1, 2018, Berkeley’s minimum wage will also increase to $15.00 per hour.
Be sure to check your local laws and ordinances to ensure your business is compliant with your city’s or county’s minimum-wage laws.
Conclusion: Employers should review their impacted policies and procedures for compliance with these new laws. If you have questions about California’s new employment laws and how they might impact your business, contact our Employment Law Group.