New California Employment Laws: Preparing for...
Transcript of New California Employment Laws: Preparing for...
New California Employment Laws: Preparing
for 2017 Changes to Fair Pay Act, Leave and
Wage Laws, Background Checks, and More
Today’s faculty features:
1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific
The audio portion of the conference may be accessed via the telephone or by using your computer's
speakers. Please refer to the instructions emailed to registrants for additional information. If you
have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.
WEDNESDAY, DECEMBER 14, 2016
Presenting a live 90-minute webinar with interactive Q&A
James A. Goodman, Member, Epstein Becker & Green, Los Angeles
Mark S. Spring, Partner, Carothers DiSante & Freudenberger,
San Francisco & Sacramento, Calif.
Emily Vicente, Partner, Hunton & Williams, Los Angeles
Tips for Optimal Quality
Sound Quality
If you are listening via your computer speakers, please note that the quality
of your sound will vary depending on the speed and quality of your internet
connection.
If the sound quality is not satisfactory, you may listen via the phone: dial
1-866-370-2805 and enter your PIN when prompted. Otherwise, please
send us a chat or e-mail [email protected] immediately so we can address
the problem.
If you dialed in and have any difficulties during the call, press *0 for assistance.
Viewing Quality
To maximize your screen, press the F11 key on your keyboard. To exit full screen,
press the F11 key again.
FOR LIVE EVENT ONLY
Continuing Education Credits
In order for us to process your continuing education credit, you must confirm your
participation in this webinar by completing and submitting the Attendance
Affirmation/Evaluation after the webinar.
A link to the Attendance Affirmation/Evaluation will be in the thank you email
that you will receive immediately following the program.
For additional information about continuing education, call us at 1-800-926-7926
ext. 35.
FOR LIVE EVENT ONLY
CA LABOR & EMPLOYMENT LAW YEAR IN REVIEW KEY DEVELOPMENTS FROM 2016 &
TIPS TO PREPARE FOR 2017
DECEMBER 14, 2016
JAMES GOODMAN – EPSTEIN BECKER GREEN – LOS ANGELES
[email protected], WWW.EGBLAW.COM
EMILY BURKHARDT VICENTE - HUNTON & WILLIAMS LLP – LOS ANGELES
[email protected], WWW.HUNTON.COM
MARK S. SPRING – CAROTHERS DISANTE & FREUDENBERGER LLP
NORTHERN CALIFORNIA
[email protected], WWW.CDFLABORLAW.COM
Disclaimer: Although this presentation may provide information concerning potential legal issues, it is not a substitute
for legal advice from qualified counsel. This presentation is not created nor designed to address the unique facts or
circumstances that may arise in any specific instance. You should not, nor are you authorized to, rely on this content as a
source of legal advice.
New Laws/Statutes
Administrative Agency Developments
Significant Judicial Decisions
Recommendations
Today’s Agenda
5
New California Laws/Statutes
6
Legalization of Marijuana
Approved by voters on November ballot.
Recreational use of marijuana legalized in
CA.
Does NOT require change to drug-free
workplace policies/practices – can still
fire/refuse to hire employee/applicant for
positive drug test (marijuana).
SHOULD review policies to ensure that they
make clear that applicants/employees who
test positive for illegal Schedule 1 drugs
under federal law (including medicinal and
recreational marijuana).
7
AB 1843 - Juvenile Criminal History Inquiries
Amends California Labor Code section 432.7 to
expand prohibitions on employers from inquiring
about, or from utilizing as a factor in determining
any condition of employment, information relating to
convictions, arrests, or similar actions under the
jurisdiction of a juvenile court.
8
Itemized Wage Statements
AB 2335 – Amends Labor Code section 226 to
clarify that hours worked information for employees
who are exempt from overtime need not be
included on itemized wage statements.
9
Heat Illness Prevention
SB 1167 - Requires
Cal-OSHA, by
January 1, 2019, to
propose standards
for heat illness
prevention for
indoor workers,
similar to those
currently in place
for outdoor
workers. 10
All-Gender Restrooms
AB 1732 – Effective
March 1, 2017, all single-
user toilet facilities in any
business establishment
must be identified as
“all-gender” toilet
facilities.
Employers are not
required to add single-
occupancy restrooms.
11
Paid Family Leave Benefits
Effective January 1, 2018, the amount of paid
family leave benefits an employee can receive is
increased to 60 or 70 percent of earnings (up from
55%), depending on level of income.
Also eliminates 7-day waiting period for receipt of
benefits.
12
Paid Sick Leave Expansion
SB 3 – Expands California’s paid sick leave law to cover in-home supportive care workers beginning July 1, 2018.
Amount of paid sick leave different than for other types of workers.
8 hours or 1 day per year beginning July 1, 2018.
16 hours or 2 days per year when state minimum wage reaches $13/hour.
24 hours or 3 days per year when state minimum wage reaches $15/hour.
13
Equal Pay Laws
SB 1063 - Expands California’s equal pay law, which
currently prohibits wage differentials based on gender,
to also prohibit employers from paying employees of
one race or ethnicity less than similarly situated
employees of a different race or ethnicity.
AB 1676 – Amends equal pay law to expressly provide
that prior salary alone is not a sufficient justification for
a pay disparity.
14
PAGA Amendments
Passed as part of budget bill in June 2016 (effective immediately);
The Labor Workforce Development Agency (LWDA) now has 60 days to review a PAGA notice (increased from 30 days) and up to 180 days to conduct an investigation (increased from 120 days);
A plaintiff cannot file a lawsuit alleging a PAGA violation until at least 65 days (up from 33 days) after sending the PAGA notice to the LWDA (unless the LWDA provides earlier notice [in less than 65 days] to the plaintiff that it does not intend to investigate, in which case the plaintiff could then proceed with filing a lawsuit at that time);
15
PAGA Amendments, Cont.
For PAGA cases in which the LWDA notice is filed on or after July 1, 2016, the plaintiff must, within 10 days of filing a lawsuit, provide the LWDA with a file-stamped copy of the complaint;
The LWDA must be provided with a copy of any proposed settlement of a PAGA claim at the time it is submitted to the court for approval;
A copy of the court’s judgment and any other order that awards or denies PAGA penalties must be provided to LWDA within 10 days; and
PAGA claim notices and employer cure notices or other responses must now be filed online, along with a $75 fee for any claim notice or initial employer response.
16
SB 3 – Minimum Wage Increase
January 1, 2017 – CA minimum wage increases to $10.50 per hour for employers with 26 or more employees (employers with less than 26 employees must comply by Jan. 1, 2018).
Also affects minimum salary for exempt commissioned salespersons (inside sales) whose earnings must exceed 1.5 times state minimum wage, and minimum salary for white-collar overtime exemptions in CA – increases to $43,680/year.
Note: FLSA overtime rule would increase this to $47,476/year. Rule currently blocked.
Also may impact CBA-based exemptions from numerous California laws; to be exempt, employees covered by CBA generally must be paid a regular hourly rate that is at least 30% more that state minimum wage.
17
Local Minimum Wage Ordinances
(2017 rates)
Berkeley - $12.53 (increases to $13.75 on 10/1/2017)
Cupertino - $12.00
El Cerrito - $12.25
Emeryville*
55 or fewer: $12.25 (increases to $14.00 on 7/1/2017)
56 or more: $14.44
Los Altos - $12.00
Los Angeles (city and county)*
25 or fewer: $10.00 (increases to $10.50 on 7/1/2017)
26 or more: $10.50 (increases to $12.00 on 7/1/2017)
Malibu – same as Los Angeles
Mountain View - $11.00
* Also have local paid sick leave ordinances
18
Local Minimum Wage Ordinances
(2017 rates)
Oakland* - $12.25
Palo Alto - $12.00
Pasadena - same as Los Angeles
Richmond - $12.30
San Diego* - $11.50
San Francisco* - $13.00 (increases to $14.00 on 7/1/2017)
San Jose - $10.50 (includes employers with 25 or less employees)
San Mateo - $12.00
Santa Clara - $11.10
Santa Monica* - same as Los Angeles
Sunnyvale - $13.00
* Also have local paid sick leave ordinances 19
Salary Threshold for CA Exempt Computer Professionals and Hourly Physicians
RAISED ANNUALLY
Effective Jan. 1, 2017
Hourly Paid Physicians &
Surgeons
At least $77.15 per hour
Computer Professionals
Hourly rate of at least $42.35
Monthly salary of at least $7,352.62
Annual salary of at least $88,231.36
20
Agricultural Worker Overtime
AB 1066 – Overtime Pay Required for Agricultural Workers, Phased in Over Several Years.
Employers with More Than 25 Employees:
1/1/19 - Time and one-half for hours worked over 9.5 per day or 55 hours per week.
1/1/20 - OT for hours worked over 9 per day/50 per week.
1/1/21 - OT for hours worked over 8.5 per day/45 per week.
1/1/22 - OT for hours worked over 8 per day/40 per week.
Employers with 25 or fewer employees – phase in begins 1/1/22.
In addition to OT requirements, AB 1066 eliminates exemption for agricultural workers from California’s one day’s rest in seven requirement.
21
Immigration Verification Protections
SB 1001 – Adds section 1019.1 to Labor Code.
Unlawful employment practice for an employer, in the course of verifying an applicant’s authorization to work, to (1) request more or different documents than are required under federal law; (2) refuse to honor documents tendered that on their face appear to be reasonably genuine; (3) refuse to honor documents or work authorization based upon the specific status or term of status that accompanies the authorization to work; or (4) attempt to reinvestigate or reverify an incumbent employee’s authorization to work using an unfair immigration-related practice.
An applicant or employee subject to a violation of this law is entitled to file a complaint with the Department of Labor Standards Enforcement and recover a penalty of $10,000 per violation.
22
Contesting Labor Commissioner
Citation re Minimum Wage
AB 2899 – Makes it more
costly to challenge a Labor
Commissioner citation for
failing to pay minimum
wage.
Employer must now post a
bond equal to the amount of
unpaid wages plus
liquidated damages,
excluding penalties.
23
SB 1241 – Choice of Law and Forum
Clauses
Adds section 925 to Labor Code.
Prohibits employees who primarily reside and work in California from being required, as a condition of employment, to agree to a forum outside California for adjudication of disputes.
Also prohibits employees from being required to agree to a choice of law provision stating that the laws of a state other than California will govern a dispute between the employer and the employee, if the choice of law provision would deny the employee a substantive protection of California law.
Any such provision voidable by employee and employee may recover attorneys’ fees to enforce rights under new law.
24
Smoking Prohibitions
ABX2-7 expands prohibitions
on smoking in enclosed places
of employment to all
employers of any size.
Eliminates prior exemptions for
certain areas.
Smoking now prohibited in all
covered parking lots, break
rooms, warehouses, and
gaming clubs. 25
Employee Notice of Rights – Domestic Violence,
Stalking, Sexual Assault
Existing law requires employers with 25+ employees to
allow employees to take time off from work for specified
purposes associated with being a victim of sexual assault,
domestic violence, stalking.
AB 2337 requires employers to give written notice of these
rights to all new hires and to existing employees upon
request.
Labor Commissioner required to create form notice for
employers to use by 7/1/17; employers need not comply
until form is created.
26
Administrative Law
Developments
27
New FLSA Overtime Exemption Rule
Increases minimum salary for white-collar overtime-exempt employees to $47,476 (up from $23,660), with a mechanism for the minimum salary to automatically increase further every 3 years.
Highly compensated employee exemption – minimum salary increased to $134,004 (up from $100,000).
Employers may use nondiscretionary bonuses and incentive compensation to satisfy up to 10% of the new salary level.
New rules slated to take effect December 1, 2016 but have been blocked on a nationwide basis by a Texas court.
28
New I-9 Form
New I-9 Form released by USCIS on November 14, 2016.
Employers can use old version until January 21, 2017;
must use new form beginning January 22, 2017.
New form available at www.uscis.gov.
29
California Fair Employment and Housing
Council (“FEHC”)
New FEHA Regulations (April 2016) Requiring Employers to Adopt a Discrimination/Retaliation/Harassment Prevention Policy that:
Is in writing;
Lists all current protected categories covered under FEHA;
Indicates that the law prohibits coworkers and third parties, as well as supervisors and managers, with whom the employee comes into contact from engaging in conduct prohibited by the Act;
Creates a complaint process to ensure that complaints receive: (A) An employer’s designation of confidentiality, to the extent possible; (B) A timely response; (C) Impartial and timely investigations by qualified personnel; (D) Documentation and tracking for reasonable progress; (E) Appropriate options for remedial actions and resolutions; and (F) Timely closures.
30
Cal. FEHC (cont.)
Provides a complaint mechanism that does not require an employee to complain directly to his or her immediate supervisor.
Instructs supervisors to report any complaints of misconduct to a designated company representative, such as a human resources manager, so the company can try to resolve the claim internally.
Indicates that when an employer receives allegations of misconduct, it will conduct a fair, timely, and thorough investigation that provides all parties appropriate due process and reaches reasonable conclusions based on the evidence collected.
States that confidentiality will be kept by the employer to the extent possible, but not indicate that the investigation will be completely confidential.
Indicates that if at the end of the investigation misconduct is found, appropriate remedial measures shall be taken.
Makes clear that employees shall not be exposed to retaliation as a result of lodging a complaint or participating in any workplace investigation.
31
California Labor Commissioner
New Opinion Letters (www.dir.ca.gov/dlse/opinions)
October 16, 2016 – clarification of calculation of paid sick leave for commissioned employees and exempt employees
Exempt employees – regular salary; bonuses not included.
Commissioned employee – can calculate based on either (1) regular rate for pay period in which PSL taken, or (2) average of total non-overtime earnings for prior 90 day period.
March 23, 2016 -- Quarterly bonus programs and forfeiture on termination of employment
Ok to have non-discretionary bonus program that pays out on quarterly basis tied to quarterly goals (rather than each pay period).
Provisions calling for forfeiture of bonus in event of termination of employment prior to end of quarter OK if (1) voluntary termination, or (2) termination for cause, but not if employee terminated without cause (conduct of employee).
Be sure to put employee on advance notice of forfeiture conditions and use caution in applying forfeiture in involuntary termination cases (even for cause) because issue of “cause” likely to be disputed .
32
Key Judicial Decisions
33
Arbitration Agreements with Class Action Waivers
Lewis v. Epic Systems (7th Circuit), Morris v. Ernst & Young (9th Circuit) – both agreed with NLRB DR Horton doctrine that provisions requiring employees to waive right to bring claims on a class or representative basis violate employees’ Section 7 right to engage in concerted activity for mutual aid and protection.
Creates split of authority among circuit courts – 2nd, 5th, and 8th Circuits have rejected DR Horton and upheld enforceability of class action waivers.
4 Petitions for review pending before U.S. Supreme Court; issue likely to be taken up.
What should employers do now? What about allowing employees choice to opt-out of arbitration agreement?
34
Arbitration Agreements – Who Decides
If Class Arbitration Is Allowed?
Sandquist v. Lebo Automotive (Cal. Supreme Ct.)
Arbitration agreement silent about whether class claim can
be brought in arbitration (which generally means it cannot)
Agreement did not say whether court or arbitrator decides
this issue
Cal Supreme– arbitrator gets to decide because the
agreement generally and broadly says that the parties
agree to arbitrate all disputes that otherwise would be
decided in court
35
Tip Pooling
Oregon Restaurant and Lodging v. Perez; Cesarz v.
Wynn Las Vegas (9th Circuit):
Under FLSA, tip pooling may only include employees who
customarily and regularly receive tips – only those directly
involved in service of table (e.g. waiter, busser, host), not
back of house workers (e.g. cooks, dishwashers).
Contrary to California law where courts have held that it is
permissible for back of house employees to participate in tip
pool because contribute to diners’ experience.
Petition for review pending before U.S. Supreme Court.
Cal employers must comply with FLSA where more protective
of employees.
36
Time Rounding and De Minimis Time
Corbin v. Time Warner Advance Newhouse (9th
Circuit)
Upholds practice of rounding employee time
entries to nearest quarter hour (under FLSA and
California law).
Upholds doctrine that de minimis time worked
need not be compensated (under FLSA and
California law).
Caution: Rounding policies still carry risk; must be
applied in a neutral manner that over time does
not result in employees not being compensated
for time worked. Issue of de minimis doctrine
pending before Cal Supreme Ct in Troester v.
Starbucks
37
Calculating Regular Rate of Pay for Overtime Purposes
Flores v. City of San Gabriel
(9th Circuit)
Cash-in-lieu of benefits
payments must be included in
regular rate calculation for
overtime purposes.
Failure to include all required
forms of compensation in
regular rate calculation is an
increasing focus of wage and
hour claims.
38
Suitable Seating
Kilby v. CVS; Henderson v. JPMorgan Chase Bank (Cal Supreme Court) – clarifies CA suitable seating requirements,
Standard – employees must be provided with suitable seats when nature of work reasonably permits use of seat,
“Nature of work” assessed at each location (e.g. stock room, cash register) where employee performs work and is based on totality of tasks done at that location; seat may be required at one location but not another,
Qualitative assessment based on nature of tasks, feasibility of going back and forth between sitting/standing, physical layout of space, employer business judgment as to whether quality/effectiveness requires standing,
Can’t consider physical characteristics of particular workers.
39
Electronic Signatures on Employment Agreements/Policies
Espejo v. Southern California Permanente Med. Group
(Cal. Ct. App.)
Employer has burden to prove by preponderance of
evidence (more likely than not) that employee is the one
who signed the document.
Company witness must be able to explain how
e-signature process works and how it utilizes security
measures (e.g. individual passwords) to show how
e-signature must have been made by person whose
name is reflected.
40
Recommendations
Ensure compliance with state and local minimum wage increases and posting requirements
Review regular rate of pay calculation methods (overtime)
Consider internal equal pay audit
Ensure compliance with California requirement to have harassment/discrimination/retaliation prevention policy
Review employment contracts/arbitration/non-disclosure agreements re choice of law/choice of forum provisions and revise as needed
Review employment applications to ensure they do not seek juvenile conviction info
41
Recommendations (cont.)
Assess possible revision of arbitration agreement to provide opt-out right
Comply with single-user toilet facility gender neutral signage requirement
Update, as necessary, smoking policies/postings
Monitor status of FLSA overtime exemption rule and prepare for possible compliance with new salary levels
Use new I-9 form and prepare for compliance with new EEO-1 pay reporting
Review/revise drug-free workplace policies to be consistent with Employer desires related to medicinal/recreational marijuana
42
Questions?
43