Changes in California Law to Keep Employers on Their Toes — How the New Laws Impact Hiring and Employment Practices in 2018

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During its 2017 session, the California Legislature adopted new measures to broaden employee protections and strengthen enforcement authority.  Following are the new restrictions and requirements with which, as of January 1, 2018, employers will need to comply, from the application and interview process through the course of the employment relationship:

  1. Employers are prohibited from asking for or relying on an applicant’s salary history in deciding whether to offer employment.
  2. Employers are subject to new and expanded restrictions on asking for criminal conviction history until they have made a conditional offer of employment and then are subject to a complicated process if they wish to rescind the employment offer because of a conviction.
  3. Employers are subject to restrictions on the access they may grant to immigration enforcement agents to nonpublic areas of their places of employment, and are required to provide notice to employees of certain employment records inspections by federal immigration agents.
  4. Employers that are required to give sexual harassment training to their supervisors must include specific training regarding transgender employees.
  5. The Fair Pay Act is extended to public employers.
  6. Parental leave rights are expanded for bonding with a new-born or newly adopted or fostered child.
  7. State and local minimum wages are increasing.
  8. The Labor Commissioner is granted broader authority to seek injunctive relief to require an employer it is investigating for Labor Code violations to hire, promote or restore an employee’s employment, where that the Commissioner makes a showing to a court that there is reasonable cause to believe the employer retaliated against the employee.

II.  The Application and Interview Process – Don’t Even Ask

Salary History.  AB168 adds section 423.3 to the California Labor Code to prohibit an employer from relying “on the salary history information of an applicant for employment as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant.”  Accordingly, an employer may not “orally or in writing, personally or through an agent, seek salary history information, including compensation and benefits, about an applicant”.

The new provision does not apply to salary history information (1) that may be obtained through a public records act disclosure under state or federal law or (2) that an applicant, “voluntarily and without prompting discloses . . . a prospective employer”.  The latter information may be considered by the employer in setting the new employee’s salary.

Finally, new section 423.3 requires an employer to provide to an applicant, upon reasonable request, with “the pay scale for a position” that the applicant is seeking.

Criminal Background. AB1008 adds section 12952 to the Government Code to prohibit an employer of five or more employees from inquiring into the criminal conviction history of any applicant before it has made a conditional offer of employment to the applicant.  It also forbids an employer, while conducting a conviction history background check in connection with any application for employment, from considering, distributing, or disseminating information about:

  1. an “[a]rrest not followed by conviction, except in limited circumstances under a Labor Code provision that permits an employer to ask about “an arrest for which the employee or applicant is out on bail or on his or her own recognizance pending trial” or in the case of an employer at a health care facility, who is permitted to ask about certain arrests where access to patients or to medications is involved;
  2. referral to or participation in a pre- or post-trial diversion program; or
  3. a conviction that has been sealed, dismissed, expunged, or otherwise eradicated pursuant to statute.

An employer that intends to deny an applicant a job for the sole or partial reason of his or her conviction history must make an “individualized assessment” of whether the applicant’s conviction history has a “direct and adverse relationship with the specific duties of the job” to justify rejecting the applicant for the position.  That assessment must include: “(i) the nature and gravity of the offense or conduct, (ii) the time that has passed since the offense or conduct and completion of the sentence, and (iii) the nature of the job held or sought.”

Where an employer makes such an assessment, it must, before rejecting the applicant, notify the applicant of its preliminary decision to do so and include in the notification “(A) notice of the disqualifying conviction or convictions that are the basis for the preliminary decision to rescind the offer; (B) a copy of the conviction history report, if any, and (C) An explanation of the applicant’s right to respond to the notice of the employer’s preliminary decision before that decision becomes final and the deadline by which to respond.”  The explanation must inform the applicant that the response may include evidence challenging the accuracy of the conviction history on which the employer based its rescission of the offer, and/or evidence of rehabilitation or mitigating circumstances.

The employer then must give the applicant at least five business days to respond to the notification and, if the applicant timely “notifies the employer in writing that the applicant disputes the accuracy of the conviction history” on which the employer based its rescission of the offer and that the applicant is taking specific steps to obtain evidence supporting that assertion, then employer must give the applicant five additional business days to respond to the notice.

If the employer, after receiving the information from the applicant, makes a final decision to reject the applicant solely or in part because of the applicant’s conviction history, it must notify the applicant in writing of “(A) the final denial or disqualification, . . . (B) any existing procedure the employer has for the applicant to challenge the decision or request reconsideration, and (C) the right to file a complaint with” the Department of Fair Employment and Housing.

The new law does not apply to some governmental agencies and private employers that are required by law to conduct criminal background checks.

II.  Sanctuary State Protections for Employees

AB450 adds section 7285.1 and 7285.2 to the Government Code, to prohibit an employer from granting “voluntary consent to an immigration enforcement agent to enter any nonpublic areas of a place of labor,” except where “the immigration enforcement agent provides a judicial warrant.”  And an employer may not “provide voluntary consent to an immigration enforcement agent to access, review, or obtain the employer’s employee records without a subpoena or judicial warrant.”  This prohibition does not apply to “I-9 Employment Eligibility Verification forms and other documents for which a Notice of Inspection” has been provided.  Failure to comply with these provisions subjects an employer to “a civil penalty of $2,000 to $5,000 for a first violation and $5,000 to $10,000 for each subsequent violation.”

AB450 also adds section 90.2 to the California Labor Code to require an employer to “provide a notice to each current employee, by posting in the language the employer normally uses to communicate employment-related information to the employee, of any inspections of I-9 Employment Eligibility Verification forms or other employment records conducted by an immigration agency within 72 hours of receiving notice of the inspection.”  And the new law requires the employer to provide each affected employee and his/her collective bargaining representative, “a copy of the written immigration agency notice that provides the results of the inspection of I-9 Employment Eligibility Verification forms or other employment records within 72 hours of its receipt of the notice.”  Failure to comply subjects the employer to the same penalties as noncompliance with sections 7285.1 and .2 of the Government Code.

Finally, AB450 prohibits an employer, except as required by federal law, from reverifying “the employment eligibility of a current employee at a time or in a manner not required by” the federal law governing documentation for employment of aliens.  Failure to comply subjects an employer to a civil penalty of up to $10,000.

III.  Expansion of Employee Protections

Transgender-specific Sexual Harassment Training.  SB396 requires employers to post in the workplace, in addition to a poster describing non-discrimination and sexual harassment protections, a poster regarding transgender rights.  In addition, employers with at least 50 employees must include in the sexual harassment training they are required to provide to supervisors every two years, training regarding harassment based upon gender identity, gender expression and sexual orientation.[1]

Fair Pay Act for Public Employees.  AB46 makes the California Fair Pay Act applicable to public employers, except for the provision making willful violation a misdemeanor.

Expanded Veterans Employment Protections.  AB1710 expands protections for members of the armed forces, making clear that employers may not discrimination against them with regard to the “terms, conditions or privileges” of employment.

Expanded Parental Leave.  SB63 expands the leave an employee who is a parent may take to bond with a new-born child.  The leave must be provided, upon an employee’s request, by an employer of at least 20 employees within 75 miles of a worksite.  To be eligible for the leave, an employee must have more than 12 months of service with the employer, with at least 1,250 hours of service with the employer during the previous 12-month period.  Such an employee is eligible to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement.  The employer must maintain in force the employee’s health insurance during the leave.

Wage and Hour.  On January 1, 2018, the state minimum wage increases to $11.00 per hour for employers with more than 25 employees, and to $10.50 per hour for employers with 25 or fewer employees.  City and county minimum wage ordinances should be consulted for even higher increases.

Expanded Labor Commissioner Authority.  AB306 broadens the authority of the California Labor Commissioner to investigate suspected discrimination by an employer against an employee in violation of laws under the jurisdiction of the Commissioner, even without a complaint having been filed by the employee, where suspected retaliation has occurred during the course of adjudicating a wage claim that is the subject of a field inspection by its field enforcement unit.  During the investigation, the Commissioner may seek injunctive relief in court requiring the employer to hire, promote or restore an employee, upon a showing of “reasonable cause” to believe that an employer has violated anti-retaliation laws.  This is a much lower standard of proof than the “likelihood of success on the merits” standard usually required to obtain injunctive relief.

An employer who willfully refuses to comply with “an order of such a court to hire, promote, or otherwise restore an employee or former employee who has been determined to be eligible for such relief, or who refuses to comply with an order to post a notice to employees or otherwise cease and desist from the violation shall, in addition to any other penalties available, be subject to a penalty” of $100 per day for each day the employer continues to be in noncompliance with the court order, up to a maximum of $20,000.

AB306 also authorizes the Labor Commissioner to issue and serve a citation on an employer to remedy violations of wage and hour laws, including payment of lost wages and penalties and reinstatement of an employee whom the Commission determines was unlawfully terminated.  The employer may seek review of the citation in court, but only upon posting of a bond for the amount of minimum wages, liquidated damages, and overtime compensation that the Commissioner determined are due.

[1]   AB1556 revises the California Fair Employment and Housing Act to replace gender-specific pronouns in its anti-discrimination, anti-harassment, family and medical leave and pregnancy disability provisions with terms such as “the director,” “the person” and “the employee.”  These changes are along the lines of the regulations issued earlier in 2017 that require employers to respect an employee’s request to self-identify by a particular gender, name, or pronoun (including gender-neutral).

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