2019 is already well underway. It wouldn’t be a new year in California without new employment regulations. And 2019 brought with it an overhaul of existing regulations as well as some significant new cases from the court system that together affect California employment in several ways.
Here is a quick overview of the most critical changes and what you need to do to be in compliance:
SB 1343 – Sexual harassment prevention training for nonsupervisory employees:
Beginning January 1, 2020, all employers with five or more employees will be required to provide two hours of sexual harassment training to supervisors and one hour to nonsupervisory employees within six months of hire or promotion, and every two years after that. There is also no requirement that the five employees or contractors work at the same location or that all work or reside in California.
Starting in 2020, employees hired to work less than six months (for example, seasonal and temporary employees) will need to receive their training within the first 30 days of hire or before they work 100 hours, whichever occurs first.
Waiver and Release Agreements: It is not uncommon for employers in California to utilize waiver and release agreements when settling employee claims or in the event of employee severance. Employers must now make several new changes to these agreements in order for them to be enforced by California courts.
AB 3109: Any provision in a contract or settlement that waives a party’s right to testify in administrative, legislative, or judicial proceedings regarding criminal conduct or sexual harassment will be found void and unenforceable.
SB 820: This legislation bars confidential non-disclosure agreements in cases involving sexual harassment, assault, or discrimination. The bill does allow for provisions that protect the victim’s identity.
AB 1976: Every California employer must provide reasonable time to accommodate an employee desiring to express breast milk and to provide the employee with the use of a room at or near the employee’s work area to do so in private. Now, however, employers must also make reasonable efforts to provide an employee with use of a room other than a bathroom. The law also allows for employers to assert undue hardship defenses in relation to the employer’s size, nature, or structure.
Ban on Salary Inquiries
AB 2282: In 2018, employers became prohibited from relying on prior salary history when setting a new employee’s compensation by AB 186. New for 2019, California passed several amendments to the salary history inquiry ban to clarify the ban and also to provide more options for employers. Specifically, in addition to defining the terms “pay scale,” “reasonable request,” and “applicant,” the bill now clarifies that these provisions do not prohibit an employer from inquiring of an applicant what their salary expectation is for the position sought. The bill now also allows an employer to make a compensation decision based on a current employee’s salary so long as any resulting wage differential is justified by one or more specified factors, like seniority or merit.
Criminal History of Job Applicants
SB1412: Employers may ask a job applicant about past criminal history (or seek information about certain convictions) if (1) the employer is required by law to obtain information regarding the particular conviction, even if it has been expunged, sealed, or
dismissed following probation; (2) the applicant would be required to possess or use a firearm in the course of employment; or (3) an individual with a particular conviction is prohibited by law from holding the position sought (also if the employer is prohibited by law from hiring such a person) even though the conviction has been expunged, sealed, or dismissed following probation.
New Cal/OSHA Form 300A: California employers that are non-exempt with 250 or more employee and employers with 20-249 employees who are members of Cal/OSHAspecified industries; and any employers directed by Cal/OSHA to submit its Form 300A electronically are now required to electronically submit Cal/OSHA Form 300. Beginning in 2019, employers must submit 300A by March 2 of the year following the year covered on the form.
Calculating Bonus Payments into the Overtime Rate
Alvarado v. Dart Container Corp. of California: The California Supreme Court clarified that when a nonexempt employee receives a non-discretionary flat-sum bonus during a single pay period, the overtime rate should be based on the employee’s straight time hours worked during the pay period in which the bonus is earned, and not the employee’s total hours worked during the pay period. Continuing to use total hours worked in overtime calculations (which is permitted under federal law) runs the risk of underpaying your employees.
Rounding Employees’ Hours Worked
Troester v. Starbucks Corporation: Many employers engage in the practice of automatically rounding employee time up or down to the nearest quarter-hour. The California Supreme Court has changed the analysis applied to challenges to such practices. Now, employers who round employee time must prove that their policies are neutral on their face and that they do not result in any loss of pay to employees. While the Court did not reject the doctrine outright, the practice remains risky and should be avoided.
What Should Employers Be Doing Now?
These new laws affect a wide range of employment-related policies and procedures. While employers should be reviewing all policies and documents on an annual basis, employers with a California workforce should consider an internal audit with legal counsel now and the following in light of the new laws:
- Review and revise employee handbooks to ensure that they are up to date.
- Train hiring personnel and supervisors about pay scale requests and how to question applicants properly about salary expectations. Further scrutinize employment applications and processes to ensure compliance with California’s “ban the box” and salary history laws.
- Review all new-hire packets, severance agreements, and other personnel forms to ensure that they do not contain prohibited release and nondisparagement agreements.
- Review, and revise if applicable, any settlement, separation or other agreements that may require employees to waive their rights to testify concerning alleged criminal conduct or sexual harassment.
- Take steps to ensure that nonsupervisory employees will receive adequate sexual harassment training by January 1, 2020, and consider adding education on bystander intervention to supervisory and non-supervisory anti-sexual harassment training.
- Ensure compliance with applicable state and local minimum wage laws. State minimum wage is going up to $12 per hour for employers with 26 or more employees ($11 per hour for employers with fewer than 26 employees). Local minimum wages may be higher. It is critical employers are complying with their local ordinances – cities like San Francisco, Los Angeles, and San Diego impose unique local minimum wage requirements that are well above state and federal minimums.
- Consider arbitration agreements. The U.S. Supreme Court ruled this year in Epic Systems Corp. v. Lewis that employers may include class action waivers in arbitration agreements. Such agreements should be drafted carefully to comply with California and federal law.
- If using the services of a PEO (Professional Employer Organization), do not assume they will take care of compliance with these new laws. It always remains the employer’s responsibility to make sure its documents and processes are in order.
The employment law attorneys at Dunn DeSantis Walt and Kendrick can provide confidential counseling and advise on these topics.