2018 Labor & Employment Law Update for California Employers

The New Year will welcome in a number of new California laws affecting employers. Below is a brief summary of many of these laws, which generally take effect on January 1, 2018. Employers should review their policies and practices – preferably with counsel – to ensure compliance and to limit potential exposure depending on their varying needs and concerns.

EMPLOYERS PROHIBITED FROM PRE-EMPLOYMENT INQUIRIES REGARDING SALARY HISTORY

As discussed in a prior Legal Alert (October 24, 2017), beginning January 1, 2018, when Assembly Bill 168 goes into effect, all California employers, including state and local government employers, are prohibited from:

• Asking orally or in writing, personally or through an agent, for an applicant’s salary history information; and
• Relying on an applicant’s salary history information as a factor in determining whether to offer him/her employment or what salary to offer him/her.

While an applicant may voluntarily and without prompting, disclose his/her salary history to a prospective employer, recruiting and hiring personnel must be careful not to solicit that information or to rely upon it.

In addition, the new statute requires that, upon reasonable request from an applicant, the employer must provide the pay scale for the position to an applicant.

Similar prohibitions are contained in San Francisco's "Parity in Pay" Ordinance, which goes into effect on July 1, 2018, and which is also discussed in detail in our prior Legal Alert dated October 24, 2017.

LIMITATIONS ON USE OF CONVICTION RECORDS

Effective January 1, 2018, all California employers with five or more employees, including state or local government employers, will be prohibited from:

• Asking orally or in writing for an applicant's criminal conviction history prior to a conditional offer of employment to the applicant; and
• Considering, distributing, or disseminating information about any of the following while conducting a background check following a conditional offer of employment:
  
  • An arrest not followed by a conviction, except that employers at health facilities may ask applicants for positions with regular access to patients to disclose an arrest under the Sex Offender Registration Act, and may ask applicants seeking positions with access to drugs and medication to disclose an arrest under certain sections of the California Health and Safety Code.
• • Referral to or participation in a pre-trial or post-trial diversion program.
  • Convictions that have been sealed, dismissed, expunged, or statutorily eradicated pursuant to law (Assembly Bill 1008).

May Employers Consider Conviction History After a Conditional Offer Is Made?

Yes. However, if the applicant's conviction history is a factor in denying employment to the applicant, the law requires the employer to assess whether the individual applicant's conviction history has a "direct and adverse relationship with the specific duties of the job that justify denying the applicant the position." This individualized assessment must consider the nature and gravity of the criminal offense, the time that has passed since the offense and the completion of the sentence, and the nature of the job sought.

Can Employers Rescind a Conditional Offer of Employment Due to Conviction History?

Yes, if certain steps are followed. If an employer makes a preliminary decision that the applicant's conviction history disqualifies the applicant from employment, the employer must notify the applicant of this preliminary decision in writing and the notification shall contain all of the following:

• Notice of the disqualifying conviction(s) forming the basis for the preliminary decision to rescind the offer;
• A copy of the conviction history report, if any; and
• An explanation of the applicant's right to respond to the notice of the employer's preliminary decision before that decision becomes final, and a deadline which must allow the applicant at least five business days by which to respond, with five additional business days if the applicant notifies the employer that the applicant disputes the accuracy of the conviction history report.

The employer is required to consider the applicant's response to the notice before making a final decision. Employers in Los Angeles are also required, under the Los Angeles Fair Chance Initiative for Hiring, to document their individualized assessment and provide the applicant with a copy of it before making a final decision to deny an application. If the employer's final decision is to deny an application solely or in part because of the applicant's conviction history, the employer must notify the applicant in writing of all of the following:

• The final denial or disqualification;
• Any existing procedure the employer has for the applicant to challenge the decision or request reconsideration; and
• The applicant's right to file a complaint with the Department of Fair Employment and Housing.

What Is an Employer's Liability for a Violation?

An aggrieved individual may sue for the full range of damages available under the California Fair Employment and Housing Act, including compensatory damages, punitive damages, attorneys' fees, and costs.

MANDATORY MANAGEMENT TRAINING AND POSTING ON GENDER IDENTITY, GENDER EXPRESSION AND SEXUAL ORIENTATION HARASSMENT

Currently, the Fair Employment and Housing Act (FEHA) requires employers with 50 or more employees to provide at least two hours of training on sexual harassment to supervisors every two years. Senate Bill 396, the Transgender Work Opportunity Act, amends the FEHA, effective January 1, 2018, to require employers to include, as a component of this mandatory biennial training, training on gender identity, gender expression, and sexual orientation harassment.

Further, employers must prominently display a new poster regarding transgender rights in the workplace.

Additionally, in April, May and June of 2017, the Department of Fair Employment and Housing (DFEH) issued revised materials for employers, including four updated DFEH posters. California employers should be aware of the following poster requirements:

1. All California employers must either display the poster, or distribute the brochure, titled The Facts about Sexual Harassment, revised April 2017. Both the poster and brochure were updated to reflect the minimum information that employers are required to provide under California Government Code section 12950(b). Because the content was revised, all employers must utilize the new materials.
2. All California employers must have a compliant version of the Workplace Discrimination poster titled "California Law Prohibits Workplace Discrimination and Harassment." Only the design was changed, so any version from December 2014 to the present is compliant. (Updated May 2017.)
3. If the employer has five or more employees, it must also display the Rights and Obligations as a Pregnant Employee notice. Any version from April 2016 to the present is compliant. Note that employers are also required to give an employee a copy of this notice as soon as practicable after being notified of her pregnancy. (Updated June 2017.)
4. If the employer has 50 or more employees, it must also display the CFRA/Pregnancy Disability Leave notice. Any version from July 2015 is compliant. (Updated May 2017.)

Posting Guidelines

Any required DFEH posters must be located in a conspicuous place where employees and applicants can easily see them. The text must be large and legible enough to be easily read. Electronic posting is permitted as long as the notice is posted in a conspicuous place or places where employees would tend to view it in the workplace. California employers must display the posters at all locations where they have employees, including warehouses, stores, and all branches.

Finally, a covered employer whose workforce at any facility or establishment is comprised of 10 percent or more persons whose spoken language is not English must translate the notice into every language that is spoken by at least 10 percent of the workforce.

Employment Notice and Posting Review

This is an opportune time for California employers to review all of their employment-related posters and notices to ensure compliance with these changing obligations.

GENDER-NEUTRAL TERMS ADOPTED IN FAIR EMPLOYMENT AND HOUSING ACT (FEHA)

The FEHA contains various provisions prohibiting employment discrimination and protecting the rights of employees to take family medical leave. Assembly Bill 1556 removes gendered terms such as "female," "she" and "her" from the FEHA, and replaces them with gender-neutral terms such as "person" or "employee." These changes clarify that the FEHA's protections apply to all persons in California, including transgender, non-binary and gender non-conforming employees.

EXPANDED HUMAN TRAFFICKING NOTICE POSTING REQUIREMENTS

Existing California law requires certain types of businesses (e.g., emergency rooms, urgent care centers, job recruitment centers, alcohol retailers) to post a notice containing information related to slavery and human trafficking. Non-compliance can result in significant monetary fines. Effective January 1, 2018, Assembly Bill 260 extends this notice-posting requirement to hotels, motels, and bed and breakfast inns. Additionally, Senate Bill 225 updates the notice to provide a telephone number that individuals may text to access support and services. A model human trafficking notice is available for download from the California Attorney General's website and is required to be printed in English, Spanish, and in one other language that is the most widely spoken language in the county where the business is located. A revised and updated model notice will be available on or before January 1, 2019, and businesses required to post the model notice are required to post the updated model notice starting on January 1, 2019.

PROHIBITED DISCRIMINATION AGAINST SERVICE MEMBERS

Existing California law prohibits employers from discriminating against a member or veteran of the military or naval forces for the State or the United States because of his or her membership or service. The existing law provides for criminal penalties and civil remedies for violations of these prohibitions. Assembly Bill 1710 slightly modifies the existing law to prohibit discrimination against a member or veteran with respect to his or her "terms, conditions or privileges" of employment. The law becomes effective January 1, 2018.

ADDED PROTECTION FOR HEALTH CARE WORKERS

Section 1278.5 of California's Health and Safety Code prohibits a health facility from discriminating or retaliating against a patient, employee, member of the medical staff, or any other health care worker of the health facility because that person has presented a grievance, complaint, or report to the facility, as specified, or has initiated, participated, or cooperated in an investigation or administrative proceeding related to the quality of care, services, or conditions at the facility, as specified. It also makes a person who willfully violates those provisions guilty of a misdemeanor punishable by a fine of not more than $20,000 and makes a violation of those provisions subject to a civil penalty.

Assembly Bill 1102 amends Section 1278.5 to increase the maximum fine for a misdemeanor violation from $20,000 to $75,000. The stated intent of the amendment is aimed at alleged retaliation against workers who complain about unsafe working and patient conditions.

NEW RULES FOR RETALIATION COMPLAINTS

The California Labor Code makes it unlawful for an employer to discharge or otherwise discriminate against an employee in violation of any law under the jurisdiction of the Labor Commissioner. Under existing law, the Labor Commissioner is permitted to investigate alleged retaliation claims only after receiving an employee complaint. Senate Bill 306, effective January 1, 2018, however, permits the Labor Commissioner, "with or without receiving a complaint," to begin an investigation into alleged retaliation. It allows the Labor Commissioner to proceed without a complaint in cases where suspected retaliation has occurred during adjudication of a wage claim, during a field inspection, or in instances of suspected immigration-related threats.

Further, the Labor Commissioner will now be permitted to petition a court for injunctive relief "during the course of an investigation," meaning that the Labor Commissioner can request injunctive relief before an investigation has been completed and before any finding of violation has been made. The Labor Commissioner will be entitled to injunctive relief merely by showing "reasonable cause" exists to believe the employee has been unlawfully discharged, retaliated against or subjected to an adverse action.

EXPANSION OF PARENTAL BABY BONDING LEAVE PROTECTIONS

Existing law requires larger employers to provide protected parental bonding leaves to eligible employees. Senate Bill 63, the New Parent Leave Act ("NPLA"), expands such protection to smaller employers. The NPLA requires that employers with 20 or more employees: (1) provide up to 12 weeks of unpaid, job-protected parental leave (leave to bond with a new child within one year of the child's birth, adoption or foster-care placement) to employees who request such leave if the employee has more than 12 months of service, at least 1,250 hours of service during the previous 12-month period, and works at a worksite in which the employer employs at least 20 employees within 75 miles; (2) maintain group health plan coverage for such an employee during the parental leave (the employer may recover costs if the employee fails to return from leave and the failure is for a reason other than continuation, recurrence, or onset of a serious health condition or other circumstances beyond the control of the employee); (3) on or before commencement of the leave, provide the employee with a guarantee of employment in the same or a comparable position upon the termination of the leave; and (4) allow the employee to use accrued vacation, paid sick time or other accrued paid time off, or other paid or unpaid time off negotiated with the employer, during the leave. The NPLA also prohibits discrimination, retaliation and interference related to rights under the Act.

If both parents are employed by the same employer, the cumulative NPLA required for both parents is 12 weeks. The NPLA further provides that to the extent existing regulations are within the scope of and not inconsistent with the NPLA, those regulations likely will govern the NPLA. The right to leave under the NPLA is in addition to any rights an employee has to a Pregnancy Disability Leave, which rights apply to employers with five or more employees.

GENERAL CONTRACTORS MAY BE HELD LIABLE FOR THE WAGE AND HOUR VIOLATIONS OF THEIR SUBCONTRACTORS

Governor Brown recently signed Assembly Bill 1701, a measure sponsored by the California Conference of Carpenters, which holds general contractors directly liable to pay wages, fringe benefits, or other benefit payments or contributions owed by their subcontractors. The law will apply to contracts entered into after January 1, 2018, for the erection, construction, alteration, or repair of a building, structure, or other work between direct contractors and subcontractors. Notably, the law does not require employees to exhaust their remedies against the employing subcontractor before proceeding against the general contractor. Under the new law, which was opposed by the California Building Industry Association and other employer associations, general contractors are not liable for penalties or liquidated damages. Also, the law permits general contractors to verify wages actually owed. Upon request, subcontractors must provide payroll records containing information sufficient to inform the direct contractor of the wages owed. If a subcontractor fails to provide the requested information, a general contractor may withhold the disputed wages. Only certain parties are authorized to pursue enforcement of this law: (1) the Labor Commissioner; (2) a third party owed fringe or benefit payments; or (3) a joint labor-management cooperation committee.