Consistent with the trend that emerged over the past two years, a significant number of employment and labor bills made it through the California Legislature and were signed into law by Governor Jerry Brown this past year. Most notably, the state minimum wage will increase for the first time since 2008. Below is a summary of some of the bills, with all scheduled to go into effect January 1, 2014, unless otherwise noted.
WAGE & HOUR
Minimum Wage Increase (AB 10)
With the passage of AB 10, the California minimum wage will increase from $8.00 to $9.00 per hour on January 1, 2014, and to $10.00 per hour on January 1, 2016, which will make California the state with the highest minimum wage in the country.
The new law will impact not only minimum wage earners, but also exempt employees who must be paid on a salary-basis. California law requires that in order for most employees to be treated as exempt from overtime, they must be paid at least twice the minimum wage.
Successor Farm Labor Contractor Liability (SB 168)
SB 168 imposes successor liability on any farm labor contractor where the predecessor owed wages or penalties to a former employee of that predecessor, so long as the successor meets one or more of the specified criteria. The criteria include: 1) if the successor uses “substantially the same facilities or workforce to offer substantially the same services as the predecessor;” 2) shares the same ownership of the business and control of employees; 3) employs any manager who controlled the wages, hours or working conditions of the wronged employees under the predecessor; or 4) is an immediate family member of the predecessor’s owner, partner, officer, licensee, director, or someone with a financial interest. If certain conditions are met, farm labor contractors would be liable for wages and penalties owed and may face misdemeanor charges in certain circumstances.
Domestic Worker Bill of Rights (AB 241)
AB 241 creates a “Domestic Worker Bill of Rights” to regulate certain domestic workers’, including personal attendants and housecleaners, work hours and provide an overtime compensation rate for those employees who work in excess of nine hours in a workday or 45 hours in a workweek. The Domestic Worker Bill of Rights, commencing with new Labor Code section 1450, is scheduled to sunset in January 1, 2017.
Heat Illness Recovery Periods (SB 435)
SB 435 amends the Labor Code by adding a provision to require employers to pay of piece rate employees in outdoor occupations for time spent during a cool down recovery period to prevent heat illness. The employer must provide one additional hour of pay at the employee’s regular rate of compensation for each workday that the recovery period is not provided, just as with missed meal and rest periods.
Damages for Minimum Wage Violations (AB 442)
In addition to civil penalties and restitution of unpaid wages, employers that fail to pay the minimum wage may also be required to pay liquidated damages in an amount equal to the wages unlawfully unpaid plus interest. However, employers may assert as a defense that they were acting in good faith and had reasonable grounds for believing they were in compliance with the law.
Employer’s Right to Attorneys’ Fees in Employment Cases (SB 462)
Existing law provides for an award of attorneys’ fees to the prevailing party (either the employer or the employee) in a suit for nonpayment of wages and certain benefits. SB 462 amends that law to provide that when the prevailing party is the employer, the court may award attorneys’ fees only upon finding that the employee brought the claim in bad faith.
Lien on Employee Awards (AB 1386)
AB 1386 would provide that upon an order of the Labor Commissioner becoming final (i.e., after the 10-day period to appeal elapses), a lien is automatically created and the Labor Commissioner may record a lien on the employer’s real property. The lien would continue until satisfied or released, up to 10 years.
Driver’s Licenses for Undocumented Immigrants (AB 60)
The DMV will be required to issue a driver’s license to an undocumented person who can prove identity and California residency and who can otherwise qualify for a license (e.g., written and behind-the-wheel exams). The licenses carry a distinctive “DP” (driving privilege) designation and expressly state that they may not be used to verify “eligibility for employment.” The new law also makes it a violation of the state Unruh Civil Rights Act to discriminate against someone for possessing such a license. It remains an open question as to how employers will reconcile their obligations under the federal Immigration Reform and Control Act (IRCA) to verify employment eligibility of applicants or employees who present a license that indicates they are probably undocumented with the anti-discrimination provisions of the new law. An amendment to the statute is necessary to prevent employers from getting “between a rock and a hard place.”
Prohibition of “Unfair Immigration-Related Practices;” Increased Anti-Retaliation Protection (AB 263 and SB 666); Extortion Law Broadened (AB 524)
AB 263 and SB 666 combine to create new prohibitions against “unfair immigration-related practices” and new anti-retaliation protections for employees. The provisions include prohibiting employers from retaliating or taking adverse action against an employee or applicant for making a bona fide complaint or claim (whether written or oral) for unpaid wages. They entitle such employees to reinstatement and reimbursement for lost wages, authorize civil penalties of up to $10,000, and waive the requirement that employees exhaust administrative remedies for such actions. The new laws also prohibit any person acting on behalf of an employer from preventing an employee from disclosing information to the government, and expand prohibited actions to include preventing an employee from testifying before a public body. Violations are a misdemeanor and civil penalties up to $10,000 are authorized. Finally, employers are prohibited from taking adverse action against employees for updating their personal information, unless the changes are directly related to the job.
Finally, AB 524 makes threats to report the immigration status of an individual or his/her family an act of criminal extortion.
DISCRIMINATION & RETALIATION
Clarifying Definition of Sexual Harassment (SB 292)
The definition of hostile environment based upon sex has been revised to clarify that sexually harassing conduct need not be motivated by sexual desire. This amendment to the Fair Employment and Housing Act (FEHA) was aimed at overturning the California appellate court decision Kelley v. Conoco Companies, where the plaintiff’s sexual harassment claim failed absent a showing that the defendant’s actions were an “expression of actual sexual desire or intent” or resulting from plaintiff’s “actual or perceived sexual orientation.” The amendment ensures that an employee who is subjected to vulgar sexual comments or actions need not prove that the conduct was motivated by the harasser’s “sexual desire.”
Expansion of Whistleblower Retaliation Protections (SB 496)
Existing law prohibits an employer from making, adopting, or enforcing any rule, regulation, or policy preventing an employee from disclosing information to a government or law enforcement agency, if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation of or noncompliance with a state or federal rule or regulation. These provisions have been expanded to prohibit an employer from making, adopting, or enforcing any rule, regulation or policy preventing an employee from disclosing information to a government or law enforcement agency, if the employee has reasonable cause to believe that the information discloses a violation of or noncompliance with a local rule or regulation. An employer also may not retaliate against an employee for such a disclosure.
Military & Veteran Protections (AB 556)
Existing law prohibits discrimination against employees on account of race, religion, gender and other protected categories. AB 566 amends FEHA (Fair Employment and Housing Act) to add “military and veteran status” as newly protected categories. Existing federal and state laws protect employees in military service and veterans from discrimination; now, FEHA protection and remedies will be available to such employees.
LEAVES OF ABSENCE
Time Off for Stalking & Crime Victims (SB 288, SB 400)
Under existing law, an employer may not take adverse employment action against a victim of domestic violence or sexual assault who takes time off from work to attend to issues arising as a result of the domestic violence or sexual assault, as long as the employee complies with certain conditions. These protections have been expanded to include victims of stalking. The law also prohibits discrimination and retaliation against, and requires reasonable accommodation of victims of domestic violence, sexual assault or stalking. Pursuant to another new law, victims of certain crimes may take time off from work to appear in a court proceeding in which a right of the victim is at issue.
Paid Family Leave Extended (SB 770)
California’s Paid Family Leave law has been expanded to include partial replacement of wages for time off for employees to take care of seriously ill grandparents, grandchildren, siblings and parents-in-law.
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