January 17, 2018

New California Employment Laws for 2018

On January 1, 2018, a number of new employment laws will take effect in California. These laws will have a significant impact on California employers and companies with operations in the state. Prompt action will need to be taken to ensure compliance, including revising employment policies and practices such as hiring and compensation practices, employee handbooks, and notices. Below is a summary of many of the laws that affect agricultural employers. All are effective January 1, 2018, unless otherwise noted.



New Minimum Wage and Salary for White Collar Exemptions

When Governor Brown signed SB 3 into effect in 2016, he set California on course for a $15 minimum wage by 2022. The next phase-in sets the minimum wage at $11.00 an hour, up from $10.50 per hour, as of January 1, 2018 for businesses with 26 or more employees. Smaller businesses jump to $10.50 per hour.

The increased minimum wage also increases the minimum salary that must be paid to meet the so called “white collar” exemptions (i.e., executive, administrative, and professional). For employers with 26 or more employees, the minimum salary under California law is $45,760 per year as of January 1, 2018. For employers with 25 or fewer employees, the minimum salary under California law is $43,680 per year as of January 1, 2018. In addition, nine cities and counties have set their own minimum wages higher than the state’s minimum, including San Diego, Los Angeles, San Francisco, and San Jose, among others. Some municipalities including Los Angeles and Berkeley have even enacted paid sick leave ordinances that exceed state law requirements. Make sure to check whether or not the cities or counties where your employees work have such ordinances.


Ag Overtime

In 2016, Governor Brown signed AB 1066 into law, which will gradually lower the daily and weekly hours of work thresholds for paying overtime to agricultural employees starting in 2019 for ag employers with 26 or more employees and by 2022 for smaller operations. AB 1066 directs the Department of Industrial Relations (DIR) to update Industrial Wage Commission Wage Order 14 (which governs agriculture) to make it consistent with the new law. However, to date, DIR has not updated the wage order. As a result, it is unclear whether the Wage Order 14 exemptions from overtime (e.g., for irrigators and truck drivers, among others) remain in place for now or whether they sunset in 2019 when the overtime phase-in begins. However, most practitioners agree that ag’s exemption from the requirement to provide employees with one day’s rest in seven was eliminated by AB 1066 on Jan. 1, 2017. Western Growers, in conjunction with other industry organizations, is seeking clarification by state regulators and cleanup legislation, if necessary.

In Mendoza v. Nordstrom, the California Supreme Court ruled that the required “day of rest” is measured by the workweek as defined by the employer, and not on a 7-day rolling calendar basis. The court agreed the law allows a limited exception for part-employees who work no more than six hours a day and not more than 30 hours in a workweek. The court further clarified that employees may voluntarily decide to work more than six days in seven, after the employees have been informed of their right to take a day of rest and may take it free from coercion.


Immigration Worker Protection Act

New Government Code sections 7285.1 and 7285.2 prohibit an employer or any person acting on an employer’s behalf from providing voluntary consent to an immigration enforcement agent to enter a nonpublic area of business without a warrant. The new law also prohibits an employer from providing consent to an immigration enforcement agent to access, review or obtain the employer’s employee records without a subpoena or judicial warrant. Importantly, the prohibition does not apply to I-9 Employment Eligibility Verification forms and other documents for which a Notice of Inspection has been provided to the employer.

Labor Code section 1019.2 prohibits an employer from reverifying the employment eligibility of a current employee at a time or in a manner not required by federal law.

Labor Code section 90.2 requires employers to post a notice informing employees of any inspections of I-9 Forms or other employment records conducted by an immigration agency. The posting must occur within 72 hours of receiving the inspection notice, including in a language normally used to communicate work related information.

The posting must contain the following information:

1.  The name of the immigration agency conducting the inspection;

2.  The date the employer received the notice of inspection;

3.  The nature of the inspection, to the extent known; and

4.  A copy of the notice of inspection.


The Labor Commissioner is directed to develop a template notice by July 1, 2018. Upon reasonable request, the employer must provide affected employees with a copy of the notice of inspection.

Moreover, the law requires that, except as otherwise required by federal law, employers must provide each “affected employee” (and their exclusive collective bargaining representative, if any) a copy of the agency’s results of the inspection within 72 hours.

The notice must relate to the affected employee only, and contain the following information:

1.  A description of the deficiencies identified in the written immigration inspection results notice related to the affected employee;

2.  The time period for correcting any potential deficiencies identified by the agency;

3.  The time and date of any meeting with the employer to correct any deficiencies; and

4.  Notice that the employee has a right to representation during any meeting scheduled with the employer.


The notice must be delivered by hand at the workplace, if possible, or by mail and email if hand delivery is not possible, and must include notice to the affected employee’s representatives, including collective bargaining representatives.

Penalties for failure to comply with the above requirements range from $2,000 to $10,000 per event.


California “Bans the Box”

A.B. 1008 amends the Fair Employment Housing Act (Government Code § 12952) to mandate a multi-step process for requesting and considering an applicant’s criminal conviction history until after a conditional offer of employment has been extended. The new law applies to employers with five or more employees, and contains exceptions for farm labor contractors and positions for which an employer is required by law to conduct background checks or restrict employment based on criminal history. Employers must conduct an individualized assessment before rejecting an applicant based on a criminal conviction, including consideration of whether the criminal history has a “direct and adverse relationship with the specific duties of the job that justif[ies] denying the applicant the position,” taking into account the “nature and gravity” of the offense or conduct, the amount of time that has passed since the offense and completion of the sentence, and the nature of the job.

Once the employer has made the decision to disqualify the candidate, the employer must then provide written notice of the preliminary decision to the candidate. The candidate then gets five business days to respond to the notice, and if he or she disputes the accuracy of the conviction history findings, then the candidate gets an additional five business days to respond to the notice. The employer must consider any information from the applicant before making a final decision, which must include: the final denial or disqualification; any procedure the employer has for challenging the decision; and the right to file a complaint with the Department of Fair Employment and Housing (DFEH). The employer may, but is not required to, justify or explain the reasoning for the final decision. Applicants can sue for alleged violations of the provision, requesting compensatory damages, attorneys’ fees and costs.


Prior Salary Information

California employers are now prohibited from seeking or relying on an applicant’s salary history as a factor in determining whether to offer employment or what salary to offer. (Labor Code § 432.3.) The law defines “salary history information” to include both compensation and benefits. While the new law does not prohibit an applicant from voluntarily and without prompting providing salary history information, or an employer from considering or relying on a voluntary disclosure in determining the salary for that applicant, it would be difficult for an employer to prove that the disclosure was truly “voluntary and without prompting.” The new law also requires employers to provide the pay scale for the position upon an applicant’s request. Section 432.3, consistent with Labor Code section 1197.5 (the Equal Pay Act”) affirms that consideration of prior salary, by itself, may not be used to justify any disparity in compensation.


Parental Leave for Small Employers

The California Family Rights Act (CFRA) provide employees with up to 12 weeks of unpaid leave to bond with a new child within one year of the child’s birth, adoption or foster care placement. The law was limited to employers with 50 or more workers. Under the New Parent Leave Act, the threshold has been lowered to 20 or more employees within a 75-mile radius. Employees are eligible to take leave once they have 12 months of service with the employer, worked at least 1,250 hours in the prior twelve months, and work at a worksite with 20 or more employees within a 75 mile radius. Eligible employees may use paid sick leave for parental leave. If both parents work for the company, leave can be limited to a combined total of 12 weeks and the employer can require the leave be taken concurrently.


Cal-WARN Act Applies even for Temporary Layoffs

The federal Worker Adjustment and Retraining Notification Act (WARN ACT) requires covered employers to provide employees and certain agencies 60 days’ advance notice before closing a plant or conducting a “mass layoff” when 50 or more employees at a covered establishment experience a “layoff” during any 30-day period. Covered employers that do not comply with or qualify for an exception may be liable to pay employees back pay and benefits. As is so often the case, California has enacted its own version of the law (Cal-WARN) that has more stringent requirements.

In The International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers and Helpers, Local 998, et al. v. Nassco Holdings Inc., et al., the plaintiffs alleged that their employer violated Cal-WARN by failing to provide notice before ordering about 90 employees not to return to work for four to five weeks. The California Court of Appeal considered whether the furlough constituted a “layoff” triggering the 60-day notice requirement.

In finding that the Cal-WARN Act is broader than the federal WARN Act, the court held that California’s WARN Act requires employers to give employees advance notice of mass layoffs even when the layoffs are not permanent and were less than six months in duration (i.e.., the trigger under the federal statute.)

Fortunately, employers are not required to provide a Cal-WARN or federal WARN Act notice to seasonal employees or employees hired for a limited project, so agricultural seasonal layoffs do not trigger a notice obligation. However, an agricultural operation that intends to permanently or indefinitely shut down part or all of its operations (e.g., shutting down a processing plant or stop growing a particular crop leading resulting in a “mass layoff”) may subject the employer to the statute’s strict requirements.


New Harassment Training Requirements

California employers with 50 or more employees currently must provide two hours of sexual harassment training for supervisors every two years. SB 396 expands the subjects that the mandatory supervisor training must include. Beginning January 1, 2018, the two-hour harassment training must include components on harassment based on gender identity, gender expression, and sexual orientation. The training must include specific examples of such harassment. This portion of the training must be presented by trainers with knowledge and expertise in these areas.

SB 396 also requires employers to display a new poster regarding transgender rights prepared by DFEH.


Given the scope of these new laws, employers should carefully review and revise their written policies, procedures, and new-hire packets to ensure compliance.