2017 legislative issues for california employers/media/files/insights/events/2017/01/ann… ·...

www.dlapiper.com 0 January 2017

January 2017

2017 LEGISLATIVE ISSUES

FOR CALIFORNIA EMPLOYERS

*This presentation is offered for informational purposes only, and the content should not be construed as legal

advice on any matter.


SB 3 will increase the minimum wage over the next several

years to $15/hour

– Beginning on January 1, 2017, minimum wage increases

to $10.50/hour

California minimum wage increases


– AB 1676 amends last year’s Fair Pay Act, Section 1197.5 of the

Labor Code, to prohibit employers from considering prior salary as

the sole justification for any disparity in compensation. Effective

January 1, 2017

– SB 1063 expands the Fair Pay Act to race and ethnicity, and

responds to critics that the pay equity issue is not limited to gender.

Specifically, it prohibits employers from paying employees a wage

less than the wage paid to employees of a different race or ethnicity

for substantially similar work. Effective January 1, 2017

Equal pay


AB 1066 enacts the “Phase-In Overtime for Agricultural Workers Act of 2016,”

which lowers the current 10-hour-day threshold for overtime by half an hour

each year until it reaches the standard eight-hour day/40-hour week by 2022.

Effective January 1, 2019, employers are required to pay overtime for any

hours worked over 9.5 hours per day or 55 hours per workweek

– AB 2899 requires that any employer, before appealing a decision by the

Labor Commissioner (LC) relating to a violation of wage laws, must file a

bond – in favor of the unpaid employee – with the LC that covers the total

amount of unpaid wages assessed under citation, excluding penalties.

Effective January 1, 2017

– AB 2535 employers need not list the number of hours worked on wage

statements for any employee who is exempt from minimum wage and

overtime requirements under the applicable IWC Wage Order or under

statutes specified in Labor Code Section 226(j). Effective January 1, 2017

Wage and hour


– AB 1843 prohibits employers from asking an applicant for employment to

disclose any information regarding juvenile convictions and seeking or

utilizing any information related to juvenile arrests, detentions, or court

dispositions as a factor in employment determination. Some exceptions for

employers at a health facility. Effective January 1, 2017

– SB1001 makes it an unlawful employment practice to request more or

different documents than required under federal law to verify that an

individual is not an unauthorized immigrant, or to refuse to honor documents

tendered that on their face reasonably appear to be genuine, refuse to

honor documents or work authorization based on specific status or term that

accompanies the authorization to work, or to attempt to reinvestigate or re-

verify an incumbent employee’s authorization to work using an unfair

immigration-related practice. Effective January 1, 2017

Background checks and immigration


– Revised I-9: On Nov. 14, USCIS released a revised version of Form I-9. By

January 22, 2017, employers must use the revised form. Employers should

continue to follow existing storage and retention rules for all of their

previously completed Forms I-9. Among the changes in the new version,

Section 1 asks for “other last names used” rather than “other names used,”

and streamlines certification for certain foreign nationals. Other changes

include:

– The addition of prompts to ensure information is entered correctly

– The ability to enter multiple preparers and translators

– A dedicated area for including additional information rather than having to

add it in the margins

– A supplemental page for the preparer/translator

Federal background checks and immigration


– AB 2337 requires employers with 25 or more employees to give notice to

employees regarding domestic violence protections and right to time off

related thereto

– Employer must inform each new employee – and other employees upon

request – of the rights protecting employees affected by domestic

violence in writing

– Labor Commissioner is charged with developing the form providing notice

by July 1, 2017. Employers are not required to provide notice until

the Labor Commissioner posts the form

(Existing law already requires employers to allow time off to any employee

who is the victim of domestic violence or sexual assault and who needs time

off for a TRO, medical attention, shelter or rape crisis services, counseling,

or safety planning or relocation; new law simply establishes notice

requirement)

Discrimination and harassment


Employment contracts – choice of law and forum

– SB 1241 prohibits an employer from requiring an employee who resides and works in

California, as a condition of employment, to agree to a provision that would either

require the employee to litigate or arbitrate employment disputes (1) outside of

California or (2) under the laws of another state. Effective January 1, 2017

– EXCEPTION: OK for non-CA venue/choice of law if the employee was

represented by a lawyer in negotiating an employment contract

Single-user restrooms

– AB 1732 requires all single-user toilet facilities in any business establishment, place

of accommodation, or government agency to be identified as all-gender toilet

facilities. The bill also provides that local officials responsible for code enforcement

are to inspect for compliance. Effective March 1, 2017

Payroll

– AB1847 requires that employers who notify employees of their eligibility for the

federal EIC Tax Credit must also notify these employees that they may be eligible for

the California EIC

Other new California legislation


New certification requirements for public contractors

– AB 2844 requires those who bid, propose, or renew a contract of $100,000 or more

with a state agency to certify their compliance with the Unruh Civil Rights Act and the

Fair Employment and Housing Act

Increase in paid family leave benefits

– AB 908 increases the amount of paid family leave benefits an employee can receive

from 55 percent of earnings to either 60 or 70 percent of earnings, depending on

income. These increases begin on January 1, 2018

Private retirement savings plans

– AB1234 requires that employers with five or more employees that do not offer

specified retirement plans put a payroll arrangement in place so employees can

contribute a portion of their wages to a retirement savings program in the California

Secure Choice Retirement Savings Program

Other new California legislation (cont’d)


Scheduling

– Measure E: Requires that before additional personnel are hired, existing

employees must be offered additional hours of work if they have the skills

and experience to perform the work

– Applies to employers with more than 36 employees in total throughout

the company, but does not require employees to be given overtime

– Employers are encouraged to train their employees to make them

qualified for additional hours

– Newly proposed AB-357: The California Fair Scheduling Act would require

certain businesses with 10 or more employees to offer additional hours of

work to an existing nonexempt employee who, in the employer’s reasonable

judgment, has the skills and experience to perform the work, before hiring

an additional employee

New local ordinance: San Jose


– California voters passed Proposition 64, legalizing recreational use of

marijuana

– Californians who are 21 and older can possess, transport, buy, and use

up to an ounce of marijuana

– Effective immediately

– Does not set a legal limit for marijuana (like 0.08% for blood alcohol level)

– While use is lawful, people still cannot be high at work

High times!


Scheduling

– San Francisco formula retail employee rights ordinances: Requires

certain restaurants and retailers to provide employees with work schedules

two weeks in advance, with a penalty of up to four hours of pay for

subsequent changes. Employers also must provide specified amounts for

employees who are on call and offer additional work to certain part-timers

before hiring more staff. Effective March 1, 2016

– Newly proposed AB-357: The California Fair Scheduling Act would require

certain businesses with more than 500 California employees (including

electronic and tech retailers, grocery stores, restaurants, and franchises) to:

– Provide employees with at least 2 weeks’ notice of their work schedules

– Pay penalties for shifts that are changed or canceled within that two

weeks and

– Pay specified amounts to employees who are on call

New local ordinance: San Francisco


Wage and hour

– Los angels city minimum wage and sick leave ordinance: The new law,

which went into effect on July 1, 2016, requires that employers with 26 or

more employees provide employees with 48 hours of paid sick leave per

year, which is twice the amount required by California state law. The

ordinance also increases the minimum wage according to the following rate:

New local ordinances: Los Angeles

Effective

date

Employers with 26

or more employees

Employers with 25 or fewer employees or

nonprofit corporations with 26 or more

employees with approval to pay a deferred

rate

7/1/2016 $10.50 Deferred

7/1/2017 $12.00 $10.50

7/1/2018 $13.25 $12.00

7/1/2019 $14.25 $13.25

7/1/2020 $15.00 $14.25

7/1/2021 $15.00 $15.00


Wage and hour

– San Diego minimum wage and earned sick leave: San Diego’s new

minimum wage ordinance implemented the following rules:

– Employees working in the City of San Diego must now be paid a

minimum wage of at least $10.50 per hour

– The minimum wage increases to $11.50 per hour on January 1, 2017

– Beginning January 1, 2019, the minimum wage will be tied to the

Consumer Price Index and adjusted as necessary based on the cost of

living

– Employers must provide employees with 1 hour of earned sick leave for

every 30 hours worked

New local ordinance: San Diego


CEO pay

– Tax surcharge on CEO pay: Effective January 1, 2017, companies with

CEOs whose compensation is more than 100 times the median pay of all of

their workers must pay an extra 10% surcharge on top of Portland’s existing

2.2% business income tax. Companies with CEOs who make 250 times the

median pay will pay an additional 25%

– This applies to every organization doing business in Portland – not just

those who are based within the city

– The Portland City Council estimates this will generate an estimated $2.5

million to $3.5 million per year

New legislation: Portland, Oregon


On November 22, 2016, a Texas federal district judge issued a preliminary

injunction on the DOL’s final rule

Technically, this injunction excuses employers everywhere – for now – from

complying with the new rule that was set to become effective on December 1

If you have already told employees of their new status, it may not make

sense to reverse field on short notice

– Employees who expected salary increases or OT pay may react

negatively, contact the DOL or an attorney

– Morale issues

– Confusion with employees, administration, payroll

Uncertainty over whether the preliminary injunction will survive an appeal by

the DOL to the US Court of Appeals for the Fifth Circuit

Note that briefing on the appeal is expedited, to be concluded in end of

January (i.e., after the new Trump Administration takes over)

DOL overtime rules on hold

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