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New Employment Laws in California Cover Hiring, Wages, Paid Leave, Discrimination and More

Published by on March 29, 2016

California continues to enact and adjust an extensive range of laws and regulations impacting labor and employment. Here are some of the most recent changes that employers need to know about.

The California legislature actively sought to impose broader obligations on employers by enacting a host of new laws and amendments that became effective on or shortly prior to January 1, 2016.

Below is a summary of some of the key new laws and amendments California employers should be aware of as they strive to comply with the multitude of existing and new California employment laws in 2016 and beyond:

Wage & Hour

Fair Pay Act (SB 358)

The Fair Pay Act amends California’s Equal Pay Act to target gender-based wage gaps. The Fair Pay Act prohibits an employer from paying lower wage rates for “substantially similar” work rather than “equal” work as used in existing law. This change reduces the burden of proof for a plaintiff claiming a discriminatory pay practice based on gender.

The Fair Pay Act also increases the burden of proof for employers in defending such claims. California employers must demonstrate that a wage differential is based on a “bona fide factor other than sex,” such as a difference in education, training or experience that is related to the employee’s position. The Fair Pay Act also eliminated the requirement that the wage differential be in the “same establishment,” allowing employees to challenge their pay based on wages paid to employees at their employer’s other locations.


Minimum Wage Increased to $10 Per Hour

California’s minimum wage reached $10 per hour on January 1, 2016, making it one of the highest minimum wages in the nation. Likewise, the minimum overtime and double time rates increased to $15 per hour and $20 per hour, respectively.


Minimum Salary for Exempt Employees Increased to $41,600

With the increase of California’s minimum wage to $10 per hour, the minimum salary threshold for exempt employees in California increased to $41,600. California employers must ensure that their employees who are exempt pursuant to the administrative, executive or professional exemptions, are paid a minimum monthly salary of at least twice the California minimum wage for full-time employment.


Cure Noncompliant Wage Statements Under PAGA (AB 1506)
(Effective as of October 2, 2015)

The California Private Attorneys General Act of 2004 (Labor Code section 2699, et seq.) authorizes an allegedly aggrieved employee to bring a representative claim on behalf of the State to recover civil penalties for Labor Code violations. To the dismay of California employers, many PAGA actions sought significant monetary penalties for technical violations of wage statement requirements that cause no actual injury to the alleged aggrieved employees. In response, AB 1506 was enacted to reduce the frequency of these technical wage statement claims.

AB 1506 provides employers with 33 days from the postmarked date of notice to cure wage statements that omit the inclusive dates of the period for which the employee was paid or the name and address of the legal entity that is the employer. An employer can cure a violation by providing a fully compliant, itemized wage statement to each aggrieved employee for each pay period for the three-year period prior to the date of the written notice.


Expanded Labor Commissioner Enforcement Powers (SB 588)

SB 588 establishes new procedures that the Labor Commissioner can use to enforce judgments or awards arising from unpaid wages to employees. The Labor Commissioner is authorized by SB 588 to file a lien on real estate, or a levy on an employer’s property, or impose a stop order on an employer’s business to assist an employee in collecting unpaid wages where there is a judgment against the employer.

Additionally, individual liability can be extended to the owners, director, officers, and managing agents of the employer for willful failure to pay wages, failure to issue pay stubs, failure to provide cool-down, rest, or meal periods, or failure indemnify business expenses. A bond of up to $150,000 may be required of an employer who does not promptly pay a judgment for unpaid wages.


IWC Wage Orders 4-2001 and 5-2001 and Health Care Employees (SB 327)

The California legislature enacted SB 327, making meal period waivers for health care employees valid and enforceable. For more information on this topic, please see our blog article posted on December 3, 2015, entitled “New California Law Allows Health Care Workers to Waive Meal Periods”.


Piece-Rate Employees Must Be Paid Separate Hourly Rate for Meal and Rest Period (AB 1513)

AB 1513 amended Labor Code section 226.2 to provide that piece-rate workers must be “compensated for rest and recovery periods and other nonproductive time” at an hourly rate that is separate from any other piece-rate compensation.” AB 1513 also defined “other nonproductive time” as “time under the employer’s control, exclusive of rest and recovery periods, that is not directly related to the activity being compensated on a piece-rate basis.”

AB 1513 also amended Labor Code section 226(a) to require that piece-rate employees’ wage statements must reflect the total hours worked for compensable rest and recovery periods and other nonproductive time, as well as the rates of compensation and gross wages paid for those periods of time. Despite the increased obligations imposed on employers, AB 1513 provides a safe harbor if employers fully compensate their specified employees for all under-compensated or uncompensated rest periods, recovery periods, or unproductive time between July 1, 2012 and Dec. 31, 2015, by Dec. 15, 2016.


Leave & Benefits

Paid Sick Leave Amendments (AB 304)

California’s paid sick leave obligations, which applies to most California employers, became effective on July 1, 2015. For more information on California’s paid sick leave law, please see our blog article posted on October 6, 2014, entitled “California Enacts Paid Sick Leave and Paid Time Off Legislation”.

The California legislature amended the paid sick leave laws on July 13, 2015 and clarified the following points:

  • An employee must work for the same employer for 30 or more days within a year of the commencement of employment to be eligible to use paid sick leave.
  • Allow for alternative accrual methods for all leave banks.
  • “Grandfather” in leave banks existing as of January 1, 2015.
  • Allow employers with unlimited or undefined leave banks to indicate “unlimited” on the employee’s itemized wage statement.
  • Allow employers to calculate the rate of pay for employees using any of three methods.
  • Make other clarifications and exclusions from the paid sick leave law, and delay its effective date for some employers.


Expansion of Rights Under the Family School Partnership Act and to Kin Care Leave (SB 579)

These amendments expand the reasons for which an employee can take job-protected leave under Labor Code section 230.8 (Family School Partnership Act). SB 579 allows employees to take up to 40 hours of job-protected time off to find, enroll or re-enroll their children in a school or with a licensed child care provider.

It also allows employees to take time off to address a “child care provider or school emergency,” meaning that a child cannot remain in a school or with a child care provider for a number of specified reasons. For purposes of who is covered by leave, the bill also expands the definition of “parent” to include a stepparent, foster parent, or a person who stands in loco parentis to a child.

This law also amends California’s “kin care” provision in Labor Code section 233, which requires employers to allow employees to use one-half of their accrued sick leave to care for a “family member,” including a child, parent, spouse, registered domestic partner, grandparent, grandchild, or sibling. The prior version only covered “leave to attend to an illness,” but the amendment covers leave for the diagnosis, care, or treatment for an existing health condition, or for preventative care, and for certain absences resulting from domestic violence, sexual assault, or stalking.

The amendment permits employees to use kin care leave for the purposes provide in California’s Paid Sick Leave Law (Labor Code section 245 et seq.).


Discrimination and Retaliation

Requests for Accommodation Are a “Protected Activity” Under FEHA (AB 987)

In addition to prohibiting harassment and discrimination based on various protected classifications and retaliation, California’s Fair Employment and Housing Act (FEHA) also requires employers to reasonably accommodate an employee’s medical condition or religious beliefs.

AB 987 adds requests for disability or religious accommodations within the definition of “protected activity” for retaliation claims to abrogate the 2013 California Court of Appeal decision in Rope v. Auto-Chlor System of Washington Inc., 220 Cal. App. 4th 635, which held that a request for accommodation, without more, is not a protected legal activity and does not evidence a FEHA retaliation claim. Pursuant to AB 987, an employee who makes a request for disability or religious accommodation is protected from retaliation, whether or not the request is granted.

Please see our post on January 14, 2016, entitled “California: A Request for Accommodation Alone Will Be Considered a “Protected Activity” for Purposes of Retaliation or Discrimination Under FEHA” for more information on this topic.


No Retaliation Against Family Members of Employees Engaged in Protected Activity (AB 1509)

AB 1509 provides protection for family members of employees who engage in “protected activity.” AB 1509 prohibits employers from retaliating against an employee because the employee is a family member of a person who has, or is perceived to have engaged in any acts protected by the Labor Code sections 98.6 (complaints of discrimination), 1102.5 (whistleblowers) and 6310 (temp workers).


Other Employment-Related Laws

Restrictions on the Use of E-Verify (AB 622)

Federal law only allows companies to employ individuals authorized to work in the United States. E-Verify is an electronic system administered by various federal agencies that allows employers to determine the work eligibility of their employees. AB 622 prohibits misuse of the E-Verify system by employers.

The law expands the definition of an “unlawful employment practice” to include using E-Verify in a time or manner not required by federal law or authorized by a federal agency memorandum of understanding. The law prohibits employers from checking the employment authorization status of existing employees, or of job applicants who have not received an offer of employment.

Also, the employer is required to provide notification to the applicant as soon as practicable if the employer receives a notice of a tentative non-confirmation issued by the Social Security Administration or the Department of Homeland Security. The law carries a civil penalty of up to $10,000 for each violation.


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