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That’s A Wrap—Six Important California Employment Legislative Updates Effective January 1, 2018

By Anne Cherry Barnett

As the 2017 California legislative session comes to an end, employers are faced with new employment laws added to the labyrinth of California employment compliance. Governor Brown recently signed into law six new statutory obligations that take effect on January 1, 2018*:

1. Ban on Salary Inquiries- Applicant’s Prior Salary History (AB 168): 

California is the eighth state and/or local government to prohibit inquiries into an applicant’s salary history. AB 168 enacts Labor Code section 432.3, which makes it unlawful for California employers to ask job applicants about their salary history, including benefits and/or other compensation information. 

California employers were already precluded from using an applicant’s salary history to justify a pay disparity (Labor Code section 1197.5). However, the addition of section 432.3 creates potential liability for employers if they ask about salary history when interviewing, extending job offers and/or deciding how much to pay applicants. To the extent that an applicant voluntarily provides their salary history, an employer may consider the information, but should do so with great care to avoid any hint of impropriety which could lead to a potential claim. 

Section 432.3 makes California the first state to require an employer to provide the pay scale of a position to an applicant upon “reasonable request.” The law is silent as to what constitutes a “reasonable request.” We expect to see guidance from the legislature and/or the courts in the coming months to identify the specific facts and/or circumstances that would trigger this employer obligation. 

2. Parental Leave for Small Employers and Parental Leave Mediation Program (SB 63)

The California Family Rights Act (“CFRA”) has long provided child bonding parental leave to employees at companies with 50 or more employees. However, California Senate Bill 63 (codified as Section 12945.6 of the California Government Code), the “New Parent Leave Act,” extends CFRA rights to employees working at locations with at least 20 employees within a 75 mile radius. 

Identical to CFRA, an employee under the New Parent Leave Act must have at least 12 months of service with a covered employer and at least 1,250 hours of service during the 12-month period prior to his/her leave to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption or foster care placement. 

The new statute also establishes a parental leave pilot mediation program through the Department of Fair Employment and Housing (“DFEH”) for the resolution of claims related to parental leave. Specifically, the program permits an employer to demand mediation within 60 days of receiving a “right-to-sue” letter from the DFEH. Until 2020 (when the trial period of the program is currently scheduled to end), an employee will be prevented from pursuing a private civil action until the mediation is complete or the parties determine that mediation will be fruitless. 

3. “Ban The Box”-Conviction History of Applicants (AB 1008)

California officially joins the ever-growing list of states that have adopted “ban-the-box” laws limiting employers’ ability to review and/or consider an applicant’s prior criminal conviction history. As a result, the California Fair Employment and Housing Act (“FEHA”) has been amended to prohibit employers with 5 or more employees from inquiring into, seeking disclosure of, or considering an applicant’s conviction history until after the applicant receives a conditional offer of employment. 

Specifically, this new “ban-the-box” law prohibits California employers from making hiring decisions based on an applicant’s criminal conviction records. Few exceptions apply, limited to the following positions and/or circumstances: 

(1) criminal justice agencies; 

(2) farm labor contractors; 

(3) criminal background check, conviction history or restriction of employment based on an applicant’s criminal history as required by state, federal or local law. 

The state-wide “ban-the-box” provision mimics the “fair chance” process that is required in San Francisco before an employer can deny employment based on an applicant’s conviction history. To the extent that California employers do not comply with this new legislation and the accompanying “fair chance” process, they will be at risk for claims under the FEHA. Accordingly, an applicant denied employment based on conviction history may file a claim for violation of the FEHA before the DFEH. 

4. Additional Harassment Training on Gender Identity, Expression & Sexual Orientation (SB 396)

Senate Bill 396 requires California employers with 50 or more employees to expand their mandatory biennial sexual harassment prevention training for supervisory/managerial employees to include the topics of gender identity, gender expression and sexual orientation. This training must include practical examples to address such harassment. Covered employers must also post a DFEH-approved poster for all employees to review regarding transgender rights.

5. Immigration Worker Protection Act (AB 450)

Governor Brown recently signed legislation limiting the coordination between local and state law enforcement and federal immigration officials. 

To mirror this commitment to the undocumented worker, Governor Brown also signed into law Assembly Bill 450, “the Immigration Worker Protection Act” (“the Act”), which prohibits employers from allowing federal immigration enforcement officials to access non-public areas of a work place without a judicial warrant. The Act also prohibits an employer from voluntarily allowing an immigration enforcement agent to access, review or obtain employee records without a court order or subpoena, with the following exceptions: 

(1) employment Eligibility Verification forms and other documents for which a Notice of Inspection has been provided to the employer; or 

(2) instances where federal law requires employers to provide access to records. 

The Act requires employers to provide affected employees sufficient notice of an agency’s inspection, which must meet specific content requirements in order to be compliant. Employers who violate the provisions of the Act may face civil penalties of up to $10,000 per violation. Accordingly, employers should review the Act and seek guidance from legal counsel. 

6. Expansion of the Labor Commissioner’s Authority For Retaliation Claims (SB 306) 

SB 306 will provide the California Labor Commissioner greater authority to investigate and assure compliance with anti-retaliation laws by: 

(1) Permitting the Division of Labor Standards Enforcement (“DLSE”) to investigate an employer without any complaint of retaliation it if “suspects” that retaliation occurred through its adjudication of a wage claim, field inspection or other inquiry.

(2) Authorizing the DLSE to obtain injunctive relief when it finds “reasonable cause” to believe that an employer has engaged, or is engaging in, unlawful retaliation. 

(3) Providing a fast-track method (mirroring the procedure for unpaid wage claims) for the DLSE to enforce violations by removing the DLSE’s burden to initiate civil actions. Rather, the DLSE/Labor Commissioner may now issue a citation directing an employer to take corrective actions. If the employer disagrees with the order, it may seek review through an administrative hearing before the Labor Commissioner within 30 days of the citation. 

(4) Imposing penalties up to $20,000 for any “willful” refusal to post a notice to employees, to hire, promote or otherwise restore a current or former employee to a position, and/or to comply with a court order to stop the offending activity. 

(5) Permitting an employee to initiate a civil action for retaliation in violation of Labor Code section 1102.5 and seek temporary or preliminary injunctive relief, which must be issued when “reasonable cause exists to believe a violation has occurred.” 

The 2017 Legislative Session brings many changes for California employers of all sizes. Employers should review these new obligations, set a plan for compliance, and prepare for enforcement of these new requirements. 

*The legislative updates discussed in this blog represent a partial list of the new employment laws that were passed during the 2017 California Legislative Session.