Year In Review – 2014 Key Employment Legislative Laws

Posted on January 15, 2015

By: Allyson K. Thompson

Employment related legislation was big in 2014. The Legislature once again passed a number of pro-employee bills that are worth reading about. While this list is not exhaustive, it provides an overview of the key legislation employers should be aware of. In case you are tempted to skip this article, remember that the State of California expects employers to know and understand all laws that are passed that may affect your employees. So keep reading!

Bills Related to Discrimination

AB 1660 - Drivers' Licenses & Non-Discrimination - The DMV is now required, per AB 60, to issue a driver's license to individuals that are unable to submit satisfactory proof of the individual's right to be present in the United States, assuming of course that the individual meets other qualifications for licensure and provides proof of his or her identity and California residency. Licenses issued under AB 60 will say on the license, "Federal Limits Apply."

AB 1660, makes it a violation of the Fair Employment & Housing Act ("FEHA") for an employer to discriminate against an individual because he or she presents a driver's license that indicates "Federal Limits Apply." Discrimination on the basis of national origin now includes, but is not limited to, discrimination on the basis of processing a driver's license granted under these provisions. Employers must continue to comply with the federal Immigration & Nationality Act by only accepting documents that meet with the requirements set forth on Form I-9.

AB 1443 - No Discrimination of Unpaid Interns - Per the FEHA, individuals seeking and obtaining employment should be free from discrimination or harassment based on age, race, religious creed, color, ancestry, national origin, disabilities, medical and genetic conditions, marital status, sex, gender, including gender identity and expression, sexual orientations and military status.

This law expands the applicability of the FEHA to unpaid internships. Unpaid interns will now be subject to the protections against discrimination or harassment, including during the hiring process, termination and course of employment.

AB 2053 - Education & Training Regarding Abuse Conduct - Hopefully employers with more than 50 employees are well aware of the law requiring them to conduct sexual harassment training for its supervisors. Effective January 1, 2015, employers will have to include anti-bullying training within the 2-hour training curriculum. The new law defines "abusive conduct" as:

. . . conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer's legitimate business interests. [It] may include repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, and epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person's work performance.

Kring & Chung can provide this mandatory training to your supervisors. Please contact Allyson K. Thompson for more information about the specialized training session.

AB 2288 - Child Labor Protections Against Discrimination - AB 2288 strengthens current law to protect children from child labor abuses by providing additional remedies. Specifically, the statute of limitations for a child labor violation will be tolled until the child reaches the age of 18. AB 2288 specifies that this provision is declarative of existing law, meaning it applies retroactively. Also, AB 2288 allows treble damages, the recovery of three times the amount of actual financial losses suffered. Finally, this new bill will strengthen civil penalties in class "A" violations, the most serious violations and will increase the civil penalty from $5,000 - $10,000 to $25,000 - $50,000 for each labor practice violation involving minors less than 12 years of age.

AB 2617 - Waiver of Civil Rights - Under existing law, individuals are protected from any violence or threat of violence committed against them due to their political affiliation, position in a labor dispute, or any other protected category.

AB 2617 prohibits a person from requiring a waiver of these protection as a condition to enter into a contract for goods and services, including the right to file and pursue a civil action or complaint with any public prosecutor, the Department of Fair Employment & Housing (DFEH) or any other governmental agency. Any waiver of these protections must be made knowingly and voluntarily in writing, and expressly not made as a condition of entering into the contract or as a condition of providing or receiving goods or services.

This bill only applies to contracts entered into, altered, modified, renewed, or extended after January 1, 2015. This legislation does not apply to general discrimination claims under FEHA, but only to waivers under specified civil rights statutes, such as the Ralph Civil Rights Act or the Bane Civil Rights Act.

Leaves of Absence

Perhaps the hottest and most publicized employment related bill is AB 1522, commonly referred to as the Healthy Workplaces, Healthy Families Act of 2014. This act now requires employers to provide three paid sick leave days a year. California and Connecticut are the only two states in the nation that now make it a law to provide paid sick days. Kring & Chung advises that employers look at their current sick leave or PTO policies to make sure that they are in compliance with the new law.

AB 1522 - Paid Sick Days - Effective July 1, 2015, employers are now required to provide three (3) paid sick days (up to 24 hours) to all employees working in California. While the Act establishes minimum requirements, employers have the option to provide more time off than the minimum required three days. This Act applies to all employers, regardless of size. It also applies to all employees, regardless of whether they work part-time or full-time, exempt or non-exempt. Specifically it applies to employees that have worked in California for 30 or more days within a year from the commencement of employment. That means that temporary or seasonal employees may be covered if they spend enough time working in California. Under the Act, an employee can use paid sick leave for the diagnosis, care, or treatment of an existing health condition, or preventive care, for themselves or a defined family member. Remember, that if an employee asks to use sick leave, employers cannot ask the specific reason why. To do so may lead to exposure for discrimination.

Employers can choose three options in calculating and satisfying the requirement to provide employees with paid sick leave: 1) Statutory Mandated Accrual Method; 2) Lump-Sum Approach; or 3) the Employer Policy Meeting the Minimum Requirements. The latter two methods are the easiest to incorporate. The following is a very brief summary of the three methods. Please seek legal counsel for more detailed information about the three methods.

1) Statutory Mandated Accrual Method: Under this method, an employee earns one hour of sick pay for every thirty (30) hours worked. Eligible employees will begin to accrue on July 1, 2015. Both regular and overtime hours are counted toward accrual. Policies that don't permit accrual of paid sick leave during the introductory period are not allowed. Any accrued but unused time must carry over to the following year of employment. However, an employer can cap the employee's total accrued amount at 48 hours or six days. Important to note, an employer does not need to pay out accrued but unused sick leave when an employee leaves employment, unless the employer wraps the paid sick leave days into a paid-time off (PTO) program.

2) Lump Sum Method: With this method, the employer grants the full amount of leave, three days or 24 hours at the beginning of each year. This method takes out the painstaking time and attention that the accrual method requires. If using a lump-sum method, carry over is not allowed. There is no requirement to pay out any unused leave at the end of the employment.

3) Employer Paid Leave and PTO Plans Meeting Minimum Requirements: This method applies to employers that already have a paid sick leave, PTO or other leave policy, that covers the requirement of at least three paid leave days. If an employer already provides for at least three paid leave days, employers do not have to provide for any additional time in order to comply with the new law.

Wage & Hour Laws

AB 1723 - Waiting Time Penalties Available to Citation by Labor Commissioner - Currently, the Labor Commissioner lacks the statutory authority to recover "waiting time" penalties as part of a citation for a minimum wage violation. Waiting time penalties occur when an employer willfully fails to pay any wages of an employee who is discharged or who quits. The wages of the employee continue as a penalty for up to 30 days.

AB 1723 provides that, in a citation by the Labor Commissioner for failure to pay minimum wage, an employer who fails to pay the minimum wage shall be subject to any applicable "waiting time" penalties under existing law in addition to existing civil penalties, restitution of wages, and liquidated damages.

AB 2074 - Three-Year Statute of Limitations on Liquidated Damages Claim - Existing law authorizes employees to bring a civil lawsuit seeking liquidated damages for failing to pay minimum wage. Liquidated damages are "an amount equal to the wages unlawfully unpaid and interest." However, an issue arose in deciding how back the employees' claims stretch. A claim for unpaid wages has a three-year statute of limitations while a claim for penalties is subject to a one-year statute of limitations.

AB 2074 provides that a claim for liquidated damages arising out of an employer's failure to pay minimum wages is subject to a three-year statute of limitations.

SB 266- Prevailing Wage Determination - Existing law seeks to streamline the determination process for public works projects to ensure that workers receive the legally mandated prevailing wage.

SB 266 clarifies the procedure by outlining the steps for furnishing the proper documentation to the Labor Commissioner (LC). Current law states that a notice of completion must be provided to the LC in a manner determined by the LC. SB 266 clarifies the notice of completion process, including a ten-day deadline for furnishing the documents requested by the LC.

SB 1360 - Rest or Recovery Periods Are Compensable Time - Existing law prohibits an employer from requiring employees to work during a meal, rest or recovery period. Failure to provide an employee with a meal, rest or recovery period entitles the employee to one additional hour of pay at his/her regular rate of compensation for each workday that the meal, rest or recovery period is not provided. There was some ambiguity as to whether or not these periods are counted as hours worked, and thus required to be compensated.

SB 1360 clarifies that a legally mandated rest or recovery period is counted as hours worked and thus employees shall be required to be compensated. This bill requires employers to pay for rest or recovery periods. It defines a recovery period as a cool down period afforded to an employee by law to prevent heat illness. SB 1360 states that it is "declaratory of existing law" which means it is effective immediately and applies retroactively. For those employers that pay their employees on a piece-rate basis only, employers must be careful to ensure that they are paying employees for rest breaks. Some employers only pay employees for productive time and not for non-productive time. If an employee takes a rest break during unpaid non-productive time, that practice would be against the law. It is advisable to speak with an attorney about piece rate and rest breaks if you have any questions about the new laws.

Allyson K. Thompson is a Partner of Kring & Chung, LLP's Irvine, CA Office. She can reached at (949) 261-7700 or athompson@kringandchung.com

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