LEGISLATIVE RECAP
The California Legislature has returned from its summer recess, with a fairly large number of employment bills to consider before the August 31st deadline for bills to pass the legislature and be sent to Governor Jerry Brown for signature or veto. Some of the more noteworthy bills under consideration are bills to mandate paid sick leave (AB 1522), to allow employee to obtain pre-judgment liens against employers in wage disputes (AB 2416), and that would make employers jointly responsible for another party’s employees in certain circumstances (AB 1897). The Governor will then have until September 30th to sign or veto bills sent to him.
Concurrently, several municipalities are considering fairly significant employment-related bills, meaning state-wide employers may need to consider both the California Labor Code as well as municipal-level ordinances. For instance, San Diego is considering increasing the minimum wage above the amount required under California law, and is considering mandating paid sick leave in an amount greater than contemplated under AB 1522. Similarly, and as a reminder, San Francisco’s Fair Chance Ordinance took effect August 13, 2014, limiting when certain private employers can consider criminal-record information. These municipal-level ordinances are discussed after the “new state-wide laws” update.
NEW STATE-WIDE LAWS ENACTED IN 2014
Although the majority of bills introduced in 2014 remain pending, several bills have already passed the Legislature and been signed into law during this session. These bills take effect January 1, 2015, unless otherwise noted, and are listed below. The new laws enacted since the last report are listed first, followed by the new laws enacted in 2014 but which were initially discussed in earlier reports:
Governor Brown Signs the “Child Labor Protection Act” (AB 2288)
Known as the Child Labor Protection Act of 2014, this bill enacts a new Labor Code provision (section 1311.5) to provide additional remedies for violations of California’s laws regarding employment of minors. For instance, the statute of limitations for claims related to the employment of minors shall be tolled until the individual allegedly aggrieved by the unlawful employment practice reaches 18 years of age. The bill specifies that this provision is declarative of existing law, meaning it applies retroactively.
This law also authorizes individuals who are discriminated or retaliated against because they filed a claim alleging a child labor violation to receive treble damages in addition to any other legal remedies available. Lastly, while Labor Code section 1288 presently identifies certain “classes” of violations resulting in statutorily-enumerated penalties, this law imposes a civil penalty of $25,000 to $50,000 for each violation involving minors less than 12 years of age.
Governor Brown Signs Law Approving Expedited Workers’ Compensation Proceedings Involving Illegally Uninsured Employers (AB 1746)
California’s Workers’ Compensation system requires the administrative director to establish a priority conference calendar for cases in which the employee is represented by an attorney and the disputed issues are employment or injury (as specified). This law amends Labor Code section 5502 to require that cases in which the employee is or was employed by an illegally uninsured employer and the disputed issues are employment or injury (as specified), be placed on this priority conference calendar.
Governor Brown Signs Law Permitting Employers to Report Workplace Injuries via Email Rather than Telegraph
Although Labor Code section 6409.1 has long required employers to immediately notify the Division of Occupational Safety and Health of an employee’s serious injury, illness or death, this section had not been updated recently, and so it required the employer to provide this notice via telephone or telegraph. This new law amends section 6409.1 to enable the employer to make such reports via telephone or email, and it deletes language authorizing the use of a telegraph.
New Law Clarifies Rest and Recovery Periods are to be Counted as Hours Worked (SB 1360)
Labor Code section 226.7 presently precludes employers from requiring employees to work during any meal, rest, or recovery period, and to pay an additional hour of pay at the employee’s regular rate of pay for each workday a meal, rest, or recovery period is missed. (In 2013, California enacted SB 435 adding the language regarding “recovery periods” to the then-existing version of section 226.7.) Responding to concerns that employers were not sure if rest or recovery periods needed to be paid, this law amends section 226.7 to specify that rest or recovery periods required under state law shall be counted as hours worked for which there shall be no deduction from wages. The bill’s proponents state that this language was mistakenly omitted from SB 435 during the 2013 legislative session.
Because it specifically states it is declarative of existing law, this law is immediately effective and likely applies retroactively.
Clarifying Amendments Enacted Regarding “Immigration-Related” Retaliation Protections (AB 2751)
This “clean up” bill makes relatively-minor changes to several measures enacted last year to protect immigrant workers against unlawful retaliation. For instance, in 2013, California enacted AB 263 and SB 666 which, in turn, enacted Labor Code section 1019 prohibiting employers from engaging in various “immigration-related practices” against persons who had exercised certain rights protected under state labor and employment laws. These immigration-related practices included threatening to file or filing a false police report. This bill expands this particular provision to also include the threatening to file or the filing of a false report or complaint with any state or federal agency, not just the police.
Newly-enacted section 1019 also authorizes the court to order, upon application of a party or upon its own motion, the appropriate government agencies to suspend certain business licenses held by the violating party for prescribed periods based on the number of violations. These amendments clarify that the licenses to be affected would be “specific to the business location or locations where the unfair immigration-related practice occurred,” rather than potentially state-wide.
Last year’s bills also added subsection (b)(3) to Labor Code section 98.6 to authorize a $10,000 penalty against an employer per employee for each violation. Since last year’s amendment did not specify to whom this penalty would be awarded, this new law specifies these penalties shall be “awarded to the employee or employees who suffered the violation.”
In 2011, AB 22 enacted Labor Code section 1024.5 limiting an employer’s ability to use consumer credit reports, and in 2013 AB 263 enacted Labor Code section 1024.6 prohibiting employers from retaliating against employees who update their “personal information.” Because AB 263 did not define “personal information,” this law further amends section 1024.6 to specify that employers may not discharge or discriminate against employees who update their personal information “based on a lawful change of name, social security number or federal employment authorization document.” Responding to employer concerns, these amendments also specify that “an employer’s compliance with this section shall not serve as the basis for a claim of discrimination, including any disparate treatment claim.”
NEW MUNICIPAL LAWS
City of San Diego Ordinance Considering Increasing Minimum Wage and Requiring Paid Sick Leave
The City of San Diego recently made headlines when its City Council overwhelmingly passed an ordinance to increase San Diego’s minimum wage beyond the state level, and to require paid sick leave beyond that contemplated in AB 1522 or that currently required in San Francisco. The ordinance’s legal status, as well perhaps as its final iteration, is in currently in flux given recent political events.
Specifically, on August 8, 2014, Mayor Kevin Faulconer vetoed the ordinance passed by the San Diego City Council (by 6-3 majority vote) providing for earned sick leave and a minimum wage increase for employees working within the City of San Diego (adding Article 9, Division 1, sections 39.0101 through 39.0115, to Chapter 3 of the San Diego Municipal Code). However, on August 18, 2014, the San Diego City Council overrode this veto by a 6-2 vote, meaning this Ordinance will take effect January 1, 2015, unless the San Diego business community obtains enough signatures for a city-wide referendum. (The business community has recently prevailed through two such referendums.) The business community presently has until September 17, 2014, to obtain the requisite number of signatures.
Employers should continue to monitor these developments, but we will quickly identify below the current proposed requirements so employers can assess whether to weigh in or to begin assessing compliance.
If enacted, the ordinance would apply to employees who perform at least two hours of work within the City of San Diego during one or more calendar weeks of the year, and qualify for payment of a minimum wage under California law. It would not apply to an employee who is: authorized by the Labor Code to be paid less than minimum wage; employed under a publicly subsidized summer or short-term youth employment program; or a student employee, or camp or program counselor of an organized camp as defined in the Labor Code. It also would not apply to independent contractors.
The City of San Diego’s geographic limits, by zip code, may be found on the City’s website at the City Council button.
Proposed Minimum wage: The new minimum wage would apply for each hour worked within the City of San Diego and the hourly rate will be as follows (except if the California or federal minimum wage is greater, then that greater wage will be matched):
- Starting January 1, 2015: $9.75;
- Starting January 1, 2016: $10.50;
- Starting January 1, 2017: $11.50; and
- Starting January 1, 2019, and each year after: an increase by the amount corresponding to the prior year’s increase in the cost of living (per Consumer Price Index).
Proposed Earned Sick Leave: Employees must be provided with one hour of sick leave for every thirty hours worked within the City of San Diego, but employers are not required to provide more than forty hours in a benefit year, defined as a consecutive twelve-month period as determined by the employer (except to allow accrual of sick leave and carry-over of unused leave to the following year), or in less than one-hour increments for a fraction of an hour worked. Earned sick leave must be compensated at the same hourly rate or other measure of compensation as the employee earns from employment. Employers who provide paid sick leave, vacation or personal time-off that meets the requirements of this section are not required to provide additional sick leave.
Earned sick leave would begin to accrue at the start of employment, or on April 1, 2015, whichever is later. Employees would be entitled to use sick leave on the 90th day after the start of employment, or on July 1, 2015, whichever is later. Employees not covered by overtime law are assumed to work forty hours each work week, unless their regular workweek is less, and then it accrues based upon that regular work week. Employers may set a minimum increment for the use of sick leave not to exceed two hours.
Earned sick leave may be used:
- if the employee is physically or mentally unable to perform their duties;
- to seek diagnosis or treatment for a medical condition;
- for other medical reasons such as pregnancy or a physical exam;
- to provide care to a family member [child, spouse (including domestic partner), parent, grandparent, grandchild, sibling, or spouse’s child or parent] with a medical condition, or needing diagnosis or treatment for a medical condition;
- for time away from work necessary due to domestic violence, sexual assault or stalking, including for medical attention, counseling, relocation or legal services; or
- due to a closure of the workplace or child’s school based on a public health emergency as declared by a public official.
Employers may require reasonable notice of the need to use sick leave, meaning as soon as practicable if the leave is not foreseeable, and advance notice not to exceed seven days where foreseeable. For an absence exceeding three days, employers may require documentation signed by a licensed health care provider that the amount of leave is needed, but not specifying the nature of the medical condition.
Other requirements: The City of San Diego will provide employers with notices to post in the workplace regarding the earned sick leave and minimum wage ordinance by April 1, 2015, and in subsequent years. Employers must also provide at time of hire or by April 1, 2015 (whichever is later), written (or accessible electronic) notice of the employer’s name, address and phone number and the requirements of the ordinance in English, and in the employee’s primary language if spoken by at least 5% of the workforce at the employee’s job site and translated into ballot materials by the San Diego County Registrar of Voters.
Records documenting employee wages, and the accrual and use of sick leave, must be retained for three years.
It will be unlawful for any employer to retaliate against an employee for exercising any right provided under the ordinance. Any employee who reasonably and in good faith reports a violation of the ordinance to the employer, or a governmental agency that enforces wage and hour law applicable to the employer, is protected under the ordinance.
The City Council will designate an Enforcement Office to enforce the ordinance and to receive and adjudicate complaints. The City or any person claiming harm from a violation of the ordinance may bring an action in court against the employer and seek all remedies available, including but not limited to, back pay, liquidated damages of double back pay, (unspecified) equitable damages for wrongfully denied sick leave, reinstatement, injunctive relief, and reasonable attorneys’ fees and costs to any prevailing plaintiff (including the City). A complaint to the Enforcement Office is not a prerequisite to bringing a private action.
Employers who violate the ordinance shall be subject to a civil penalty of $1,000 per violation, except that failure to comply with notice and posting requirements is subject to a civil penalty of $100 for each employee not given proper notice, up to a maximum of $2,000.
For additional details, please see the following link: http://dockets.sandiego.gov/sirepub/cache/2/ctv5vdqma5pq4hohrijjv0hs/7020620801201401425052.PDF
San Francisco’s “Fair Chance” Ordinance Takes Effect, Limiting When Private Employers Can Obtain or Use Criminal Record Information
Taking effect August 13, 2014, San Francisco’s Fair Chance Ordinance (San Francisco Police Code, Article 49) (FCO) restricts a private employer’s ability to obtain and use criminal history information. As with other San Francisco ordinances, the FCO is very detailed and not only establishes new processes and prohibitions, but also imposes new posting, notice, record-keeping and disclosure requirements upon employers. More information and detail about the FCO is available on the San Francisco Office of Labor and Standards Enforcement’s (OLSE) website: http://sfgsa.org/index.aspx?page=6615. The San Francisco OLSE has also posted some “Frequently Asked Questions,” providing further FCO-related information: http://sfgsa.org/modules/showdocument.aspx?documentid=12136.
Who is affected?
The FCO applies to private employers that are located or doing business in San Francisco and that employ 20 or more persons worldwide, regardless of where they are located. For instance, if the employer has 20 employees worldwide, but one working in San Francisco, the FCO applies to the one employee working in San Francisco. This 20-person threshold includes owners, management and supervisory employees, and job placement, referral agencies and other employment agencies are considered employers.
As mentioned, the FCO applies to employee positions located within San Francisco, regardless of where the employer is located, as long as the position is “in whole or in substantial part, within the City.” The OLSE interprets “in substantial part” to mean an average of 8 hours of work performed a week in San Francisco. The FCO’s requirements apply to applicants, potential applicants for employment, and employees, meaning it applies to hiring decisions as well as employment-related decisions for existing employees. It also applies to all forms of employment, including full-time or part-time, temporary or seasonal, contracted or contingent work, work on commission, work through a temporary agency, or any form of vocational or educational pay.
Limits Obtaining Criminal Records Information
As with other “ban the box” statutes seeking to remove pre-employment hurdles, the FCO limits “when” and “how” employers may obtain information about an applicant’s conviction and “unresolved arrests.” (“Unresolved arrest” is an arrest that is undergoing an active pending investigation or trial that has not yet been resolved.) Generally, an employer can only ask about an applicant’s unresolved arrest or conviction history after the employer has either (1) conducted a live interview with the applicant; or (2) made a conditional offer of employment to the applicant. Even then, however, the FCO identifies the following categories of information that is “OFF LIMITS” and can never be asked about, sought out, or considered by an employer under any circumstances, at any stage of the hiring process:
- An arrest not leading to a conviction — except under specific circumstances identified below with respect to an unresolved arrest;
- Participation in, or completion of, a diversion or a deferral of judgment program;
- A conviction that has been judicially dismissed, expunged, voided, invalidated, or otherwise made inoperative;
- A conviction or any other determination in the juvenile justice system, or information regarding a matter considered in, or processed through, the juvenile justice system;
- A conviction that is more than seven years old (measured from the date of sentencing); or
- A criminal offense other than a felony or a misdemeanor, such as an infraction.
In addition to delaying such inquiries until after an interview or conditional job offer, and in addition to avoiding these “OFF LIMITS” inquiries, an employer interested in obtaining criminal background information must also comply with generally applicable state and federal requirements including, but not limited to, those in the California Investigative Consumer Reporting Agencies Act (ICRAA) and the Federal Consumer Reporting Act (FCRA).
The FCO also establishes new guidelines employers must follow before it obtains such information, in its consideration of such information, and before it makes a decision based upon such information. For instance, if an employer intends to ask about an applicant’s unresolved arrest or conviction history, it must provide a copy of the OLSE’s official notice, and the OLSE recommends employers do so at the start of the hiring process. A copy of this notice is available at: http://sfgsa.org/modules/showdocument.aspx?documentid=11600. As mentioned, if the employer intends to obtain a background check report on an applicant, it must comply with applicable state and federal laws (e.g., ICRAA and FCRA) and notify the applicant such a report is being sought.
If an employer intends to make an employment decision based on the applicant’s unresolved arrest of conviction history, the employer must conduct an “individualized assessment.” The OLSE FAQ’s provide this means considering only “directly-related convictions” that have a “direct and specific negative bearing on that person’s ability to do the job.” These FAQ’s state the employer must consider whether the employment position offers the opportunity for a same or similar offense to occur, and whether the circumstances leading to conduct underlying the prior conviction will recur in the employment position. The employer must then also consider how much time has elapsed since the prior conviction or unresolved arrest, potential inaccuracies in the applicant’s conviction history, evidence of the applicant’s rehabilitation, and other “mitigating factors.”
The FCO also enumerates a specific procedure if an employer intends to deny employment to an applicant or take other adverse action against an employee because of an applicant’s unresolved arrest or conviction record. Specifically, the employer must provide the applicant a copy of the background check report (if any) and explain to the applicant which aspect of their unresolved arrest or conviction history is motivating the adverse action. The employer must also give the applicant at least seven days to inform the employer that there are inaccuracies in the unresolved arrest or conviction record, or that there is evidence of rehabilitation or other mitigating factors. The employer must then delay any adverse action for a reasonable period and reconsider the adverse action if the applicant provides such information, and hold the position open during the process.
Notice, Posting and Record-Keeping Requirements
Not surprisingly, employers are prohibited from disseminating any job solicitation or advertisement that directly or indirectly suggests an applicant with an arrest or conviction record will not be considered for or may not apply for employment.
In addition to this prohibition, however, the FCO also requires employers make affirmative statements concerning their FCO compliance. Specifically, employers covered by the FCO must include in all job ads or solicitations (including on-line job postings) reasonably likely to reach persons reasonably likely to seek employment in San Francisco a statement that the employer will consider qualified applicants with criminal histories in a manner consistent with the FCO. Employers may craft their own version of this statement, but the OLSE has also published the following example that would satisfy these requirements – “Pursuant to the San Francisco Fair Chance Ordinance, we will consider for employment qualified applicants with arrest and conviction records.”
Employers must also post in a conspicuous location at every workplace an OLSE-provided notice about employee rights under the FCO. This notice is available at http://sfgsa.org/modules/showdocument.aspx?documentid=11600. Employers must post this notice in English, Spanish, Chinese, Tagalog and any other language spoken by five percent or more of the employees in the workplace, job site or other location. However, while the OLSE has published translations of this notice in Chinese, Spanish and Tagalog, employers are responsible for providing posters in any other language spoken by at least five percent of the employees at the workplace or job site.
Employers must also maintain and retain for a period of three years records documenting compliance with the FCO. The OLSE’s FAQs suggest these records include, but are not limited to:
- documentation showing the OLSE FCO Notices were posted;
- any background check reports obtained;
- copies of job ads and postings;
- job application forms distributed;
- job applications submitted by applicants;
- documentation of employment interviews including forms, notes, and interview questions;
- any information provided to an applicant regarding potential adverse action;
- any information received from an applicant or employee in response to a background check;
- documentation of all individualized assessments conducted;
- any documentation of rehabilitation or mitigating factors submitted by applicants or employees; and
- documentation of adverse actions based on unresolved arrest or conviction records.
An employer that fails to maintain or retain adequate records documenting compliance, or does not allow the OLSE reasonable access to such records, is presumed to have violated the FCO, absent clear and convincing evidence otherwise.
Employers will also be required to submit an annual reporting form to the OLSE, which the OLSE will develop and publish annually on its website.
Non-Retaliation and Enforcement
The FCO enumerate a number of non-exhaustive rights, including the right to:
- file a complaint about an employer’s alleged violation of the FCO;
- inform any person about an employer’s alleged violation of the FCO;
- cooperate with the OLSE or other persons in the investigation or prosecution of any alleged FCO violation;
- oppose any policy, practice or act unlawful under the FCO; and
- inform any person of his/her rights under the FCO.
The FCO prohibits any discrimination or retaliation against an individual for exercising these rights under the FCO, and creates a rebuttable presumption of retaliation if the employer takes any adverse action within 90 days of an individual exercising their rights under the FCO. The employer will then bear the burden of demonstrating the adverse action was taken for a legitimate, non-retaliatory reason.
The OLSE is responsible for administering and enforcing the FCO, and has the authority to issue penalties for each individual whose rights were violated, with the amount depending upon the number of violations. (For violations occurring prior to August 13, 2015, the OLSE will only issue warnings, notices to correct, and offer the employer guidance on FCO compliance.) The OLSE may also bring a civil action against the employer and may recover reinstatement, back pay, benefits, liquidated damages of $50 per individual for each day of a violation, injunctive relief, and attorneys’ fees and costs.
CURRENTLY PENDING STATE-WIDE BILLS
Paid Sick Leave Bill Continues to Advance (AB 1522)
Known as the “Healthy Workplaces, Healthy Families Act of 2014,” this bill would implement a number of new Labor Code provisions (section 245 et seq.) requiring employers to provide paid sick leave for their employees. This bill would apply to all employers regardless of size, including public employers, the state, and municipalities.
After July 1, 2015, employees who work in California for thirty or more days in a calendar year would accrue paid sick leave at a rate of no less than one hour for every 30 hours worked. Exempt employees would be deemed to work 40 hours per week for accrual purposes, unless their normal workweek schedule is less than 40 hours, in which case they would accrue paid sick leave based upon that normal workweek.
Employees would be entitled to use accrued paid sick days beginning on the 90th calendar day of employment, after which they may use paid sick days as they are accrued. Employers would also have the discretion to lend paid sick days to an employee in advance of accrual, and employers could not require employees to locate a replacement worker to cover days on which an employee uses paid sick days.
While accrued paid sick days shall carry over to the following calendar year, employers may limit an employee’s use of paid sick leave to 24 hours, or three days, in each calendar year. Employers would not be required to compensate employees for unused sick days upon employment ending, but they would be required to reinstate the previously unused balance if they rehired the employee within one year.
Employees would be entitled to use paid sick time for preventive care for themselves or a family member, as well as for the diagnosis, care, or treatment of their or their family member’s existing health condition. For purposes of this bill, “family member” means a (1) child (as defined), (2) parent (as defined), (3) spouse, (4) registered domestic partner, (5) grandparent, (6) grandchild, or (7) sibling. The employer shall also provide paid sick da