Employment Law Update: New Laws in 2014 Article Publication

By: Allyson K. Thompson

The California Legislature was busy this year regarding employment law.  Several new employment related requirements were enacted that went into effect on January 1, 2014, unless otherwise specified.  Some of the more substantive changes deal with workers compensation, wage and hour, and expansions in regards to leaves of absence, among others.  While not entirely exhaustive, the following is a brief survey of some of the new employment laws enacted.  If you are interested in reading the actual legislation, bill numbers are referenced.  You can access the bills at http://www.leginfo.ca.gov/index.html.

Workers Compensation

SB 146 – Among other things, this bill allows an employer, pharmacy benefits manager, insurer, or third-party claims administrator to request a copy of the prescription during a review of any records of prescription drugs dispensed by a pharmacy.  It also provides that any entity submitting a pharmacy bill for payment, on or after January 1, 2013, and denied payment for not including a copy of the prescription from the treating physician, shall have until March 31, 2014 to resubmit those bills for payment.

AB 1309 – Limits access to the California workers' compensation system for professional athletes employed by out-of-state teams.  The bill provides that professional athletes who are employed by out of state teams may access the California workers' compensation system if: a) the athlete played at least two years for a California team, or b) played more than 20% of his or her career for a California team.

Background Checks

The question of when an employer can conduct a background check of prospective and current employees is a hot button issue.  The State of California takes employee privacy seriously.  Thus, this area is heavily regulated.

SB 530 This bill provides that a potential employer may not ask for, seek, or utilize as a factor in determining any condition of employment, information about a conviction that has been judicially dismissed or ordered sealed.

The bill clarifies that an employer is not prohibited from asking an applicant about a criminal conviction or seeking from any source information regarding a criminal conviction of, or entry into a pretrial diversion, or similar program by the applicant, if because of any state or federal law any of the following apply:

  1. The employer is required by law to obtain information regarding a conviction of an applicant;
  2. The applicant will be required to possess or use a firearm in the course of his/her employment;
  3. An individual who has been convicted of a crime is prohibited by law from holding the position sought by the applicant, regardless of whether that conviction has been expunged, judicially ordered sealed, statutorily eradicated, or judicially dismissed following probation; or
  4. The employer is prohibited by law from hiring an applicant who has been convicted of a crime.

AB 218 This bill requires that state and local agencies determine a job applicant's minimum qualifications before obtaining and considering information regarding the applicant's conviction history on an employment application.

More specifically, commencing July 1, 2014, this bill prohibits a state or local agency from asking an applicant for employment to disclose, orally or in writing, information concerning the conviction history of the applicant until the agency has determined that he or she meets the minimum employment qualifications, as stated in any notice issued for the position.

Discrimination & Retaliation

California has gone further than almost any other state in the nation to define protected categories for purposes of protection against discrimination and retaliation.  California laws heavily favor employee rights and strongly penalize discrimination and retaliation in the workplace.  Some of the new laws enacted demonstrate this strong public policy.

AB 556 The amendment to existing laws adds "military and veteran status" to the list of categories protected from employment discrimination under the Fair Employment Housing Act.  Military service was previously a protected category, but now veteran status has been included in the terminology of the category.  The bill defines "military and veteran status" to mean a member or veteran of the United States Armed Forces, United States Armed Forces Reserve, the United States National Guard, and the California National Guard.

SB 292 Clarifies that, with respect to an employment-related sexual harassment claim made under the Fair Employment and Housing Act (FEHA), sexually harassing conduct need not be motivated by sexual desire.  This significantly lessens the burden of proof on an employee to prove sexual harassment.

Previously, for a plaintiff to prove a hostile work environment due to harassment based on sex, the United States Supreme Court in Oncale v. Sundowner Offshore Services, Inc. (1998) 523 U.S. 75, 80-81 established three primary evidentiary routes, as follows: (1) sexual intent or desire on the part of the defendant toward the plaintiff; (2) general hostility by the defendant toward a particular sex, of which the plaintiff is a member; or (3) comparative evidence about how the alleged harasser treated members of both sexes in a mixed-sex workplace.  Although Oncale was a Title VII sexual harassment case, "California courts frequently seek guidance from Title VII decisions when interpreting the FEHA and its prohibitions against sexual harassment, "because FEHA and Title VII "share the common goal of preventing discrimination in the workplace."  Lyle v. Warner Brothers Television Productions (2006) 38 Cal.4th 264, 278.

According to bill analysis, this new law was in direct response to the confusion created by Kelley v. Conco Companies (2011) 196 Cal.App.4th 191, which questioned a plaintiff's evidentiary requirement for a hostile work environment sexual harassment claim.  The Court held in Kelley that a plaintiff in a same-sex harassment case must prove that the harasser harbored a sexual desire for the plaintiff in order to survive summary judgment.  This decision directly contradicted Singleton v. United States Gypsum Co. (2006) 140 Cal.App.4th 1547, and ignored key provisions of the leading U.S. Supreme Court decision on same-gender sexual harassment, in Oncale.

This bill overturns the decision in Kelley, and clarifies that sexual harassment under FEHA does not require proof of sexual desire towards the plaintiff.

SB 496 – There has been confusion in the past as to whether an employee who makes a whistleblower claim must actually make a report to a governmental agency, as opposed to merely informing someone at the company about potentially illegal activity.  This bill expands on whistleblower protections to protect employees who disclose, or may disclose, information regarding alleged violations "to persons of authority over the employee or another employee who has the authority to investigate, discover or correct the violation."

Wage & Hour

Most of the new employment laws for 2014 fall under this category.  Wage and hour issues have been a hot bed of litigation for the past five years, with claims continuing to increase.

AB 10 Increases the minimum wage in California to $9.00 per hour effective July 1, 2014 and to $10.00 per hour effective January 1, 2016.

AB 241 This bill provides for increased protections for domestic workers, such as live-in maids and nannies.  This bill enacts the "Domestic Worker Bill of Rights." "Domestic workers" or "household workers" are generally comprised of housekeepers, nannies and caregivers of children and others who work in private households to care for the health, safety and well-being of those under their care.  The new law provides that a domestic work employee who is a personal attendant shall not be employed more than nine hours in any workday, or more than 45 hours in any workweek unless the employee receives one and one-half times the employee's regular rate of pay for all hours worked in excess of those amounts.

SB 435 This bill covers employees that are entitled to "recovery periods" taken to prevent heat illness.  This will affect farm workers and construction workers, amongst other specified trades. Specifically, this bill:

  1. Provides that, in addition to meal and rest periods, an employer shall not require any employee to work during any "recovery period" mandated by any applicable statute, regulation, standard or order of OSHSB or Cal/OSHA.
  2. Provides that an existing provision of law that requires an employer to pay an employee one additional hour of pay at the employee's regular rate of compensation for each work day that a meal or rest period is not provided also applies to work days that a "recovery period" is not provided.

If you are an employer required to provide "recovery periods," you should be taking steps to ensure that your employees are documenting when they are taking their recovery periods to avoid against lawsuits claiming a violation of this new law.

Immigration Issues

Among the new laws in this area, new protections address retaliation against immigrant workers who complain about unfair wages or working conditions.

AB 60 – This bill was designed to address issues regarding undocumented workers' ability to obtain a driver's license.  This bill will, by January 1, 2015, require the DMV to issue a driver's license for the sole purpose of operating a motor vehicle, and cannot be used for identification or federal purposes.  As a result, the provisions in this bill would allow persons unable to provide satisfactory proof of legal presence to apply for a driver's license, while not jeopardizing the state's efforts to reach Real ID compliance.

The license will bear a notation stating that the card is not acceptable for federal purposes, such as verifying eligibility for employment.  That means that a prospective employee cannot use this card as an acceptable document for purposes of the Form I-9.

AB 263 This bill provides that it shall be unlawful for an employer or any other person or entity to engage in unfair immigration-related practices against any person for the purpose of, or with the intent of, retaliating against any person for exercising any right protected under the Labor Code including complaining about wages or unfair employment practices.  This is a penalty based law, authorizing penalties against employers who engage in unfair immigration-related practices, including a private right of action, which allows for attorneys' fees if the employee prevails.  This bill adds a civil penalty of up to $10,000 per employee per violation of Labor Code section 98.6.

SB 390 This bill provides that it is illegal for an employer to willfully fail to remit withholdings from an employee's wages pursuant to local, state or federal law to the proper agency.  It also provides that if an employer fails to remit $500 or more in wage withholdings, the employer's violation is a misdemeanor and shall be punishable by imprisonment in a county jail for a period of not more than one year, by a fine of not more than $1,000, or both.

SB 462 As previously indicated, the laws in California heavily favor employees.  This new law further supports this policy.  Existing law, Labor Code section 218.5, provides an award of attorneys' fees and costs to the prevailing party in an action brought for nonpayment of wages (other than minimum wage and overtime) fringe benefits, or health and welfare or pension fund contributions.  This bill would add to this provision that a non-employee prevailing party (presumably the employer) could only be awarded attorneys' fees and costs if the court finds that the employee brought the court action in bad faith.

According to the legislative analysis for this bill, the sponsor of this bill, the California Employment Lawyers Association (CELA) argued that the two-way fee-shifting provision in Labor Code section 218.5 had a chilling effect on contractual wage claims.  Although these claims may be relatively small, CELA asserts that the attorneys' fees racked up by employers as the case goes up and down the court system repel plaintiffs (and attorneys) from bringing these types of claims, which are typically filed with other claims such as for overtime, breach of contract, and breach of fiduciary duty.

SB 666 This new law permits the state to suspend or revoke an employer's business license if the employer reports or threatens to report the immigration status of an employee because the employee complained about employment issues.  It is important to note that the bill does not subject employers to suspension or revocation of their business license for requiring a worker to verify eligibility to work.  Similarly, AB 524 was enacted to make it a crime to threaten to report the immigration status of an individual or his or her family members.

Prevailing Wages

It should be noted that there were a handful of laws enacted that affect prevailing wages.  These bills include: AB 1336, SB 7, SB 54, SB 377 and SB 776.  The most notable change to these premium wage laws is espoused in SB 54, which requires payment of prevailing wages in a privately funded refinery construction project.

Leaves & Benefits

Changes in leave laws may require employers to update their Employee Handbook, at a minimum by way of addendum, so that employees are informed of the right to take certain leaves of absence.

AB 11 This bill requires an employer employing 50 or more employees to allow an employee who performs duty as a reserve peace officer or emergency rescue personnel to take temporary leaves of absence, for up to 14 days in a calendar year, to engage in fire, law enforcement, or emergency rescue training.  The law previously only applied to volunteer firefighters and civil air patrol.

SB 288 – This bill expands on previous crime victim leave rights, and provides that an employer may not discharge or in any manner discriminate or retaliate against an employee who is a victim.  This applies to taking time off from work for the following specified crimes: felony child abuse likely to produce great bodily harm or a death; assault resulting in the death of a child under eight years of age; felony domestic violence; felony physical abuse of an elder or dependent adult; felony stalking; solicitation for murder; a serious felony, such as kidnapping, rape, or assault; hit and run causing death or injury; and felony driving under the influence causing injury.

SB 400 This bill enacts various employment protections for employees who are victims of domestic violence, sexual assault, or stalking.

Specifically, this bill extends specified existing protections for victims of domestic violence and sexual assault to also include victims of stalking.  The bill prohibits an employer from discharging, discriminating or retaliating against an employee because of the employee's known status as a victim of domestic violence, sexual assault, or stalking, if the victim provides notice to the employer of the status, or if the employer has actual knowledge of the status.  The bill also requires an employer to provide reasonable accommodations for a victim of domestic violence, sexual assault, or stalking who requests an accommodation while at work, including potentially implementing safety measures.

SB 770 This bill broadens the definition of family within the Paid Family Leave (PFL) program to allow workers to receive partial wage replacement benefits while taking care of seriously ill siblings, grandparents, grandchildren, and parents-in-law.  This legislation does not take effect until July 1, 2014.

Health Insurance

Another big area expected to see a bevy of changes is health insurance in the workplace.  While no state laws were codified regarding health care, changes should be anticipated in light of the enactment of Obamacare, or formally the Affordable Care Act (ACA ), which was signed into law on March 23, 2010, and upheld by the Supreme Court on June 28, 2012.

Stay tuned to the Kring & Chung Newsletter as we will be providing updates regarding employers' requirements pursuant to the ACA.