New California Laws Alter Workplace Rules in 2017

A new year ushers in a host of new laws the state legislature passed and now take effect on Jan. 1.

At the top of the list is the new minimum-wage regulation that goes from $10 to $10.50 an hour. Eventually, the minimum wage will jump to $15 an hour by 2022, which is a stark contrast to the six years when the minimum wage was stuck at $8 an hour until it was raised to $9 an hour in 2014.

Those who pay their workers a piece-rate wage have to take into consideration that their employees must be paid at least the minimum wage even if their per-piece production doesn’t exceed $10.50 an hour.

By contrast, the federal minimum wage is $7.25 an hour and has not gotten a boost since July 2009.

Other new California laws include equal pay, labeling single-user bathrooms and resolving employment disputes.

Minimum Wage (SB3)

On Jan. 1, the state minimum wage goes up from $10 to $10.50 an hour for employers with more than 26 employees, gradually rising to $15 an hour by the beginning of 2022.

For California employers with 25 or fewer employees, the minimum-wage increases will be delayed by one year.

But there are exceptions to this statewide minimum wage. In Los Angeles, Santa Monica and Pasadena, starting on July 1, 2017, the minimum wage will increase to $12 an hour for employers with more than 26 employees but remain at $10.50 per hour for employers with 25 or fewer employees. In San Diego, the minimum wage will rise to $11.50 an hour on Jan. 1 while in San Francisco, starting July 1, the minimum wage will hit $14 an hour.

The minimum wage increases not only affect hourly workers but also those employees who have exempt status. In order to be exempt from being paid overtime under the executive, administrative and professional exemptions, an employee must be paid at least twice the state minimum wage per month. That means that in 2017, the minimum annual salary for an employee to be considered an exempt employee in California will rise to $43,680.

Bond Requirement for Appealing Wage Violations (AB2899)

When appealing a decision by the Labor Commissioner over whether an employer violated California wage and hour laws, the employer must post a bond, in favor of the unpaid employee, equal to the amount in question for minimum wages, overtime or liquidated damages. If the employer fails to pay the amounts owed within 10 days from the conclusion of the proceedings, the money will be forfeited to the employee.

Fair-Pay Act Amendments (SB1063 and AB1676)

Currently, employers are prohibited from paying a worker of one sex less than a fellow worker of the opposite sex for a job that is substantially similar.

SB1063 expands the Fair-Pay Act by prohibiting pay differences based on race or ethnicity as well as for “substantially similar work.”

The exception to this is when an employer can show that the wage difference between two employees is based upon a seniority system, a merit system, a system that measures earnings by quantity or quality of production, or upon a bona fide factor other than race or ethnicity, such as education, training or experience.

AB1676 prohibits employers from considering prior salary as the sole justification for any disparity in compensation. Employers are not prohibited from inquiring into prior salary history, but employers are prohibited from using that information to justify a wage differential between men and women or between persons of different race or ethnicity who perform substantially similar work.

Itemized Wage Statements (AB2535)

This bill alters reporting requirements and clarifies that itemized wage statements do not need to report total hours worked for employees who are exempt from the payment of minimum wage and overtime.

Employers must continue to include the total hours worked by nonexempt employees in the itemized wage statements for each pay period.

Single-User Bathrooms (AB1732)

Beginning March 1, 2017, all single-user toilets in a place of business, public space or government agency must be identified as all-gender toilet facilities. This bill authorizes inspectors, building officials or other local officials responsible for code enforcement to inspect for compliance with these provisions.

Unfair Immigration-Related Practices (SB1001)

This new law explicitly prohibits an employer from: (1) requesting more or different documents than are required under federal law for work authorization verification purposes, (2) refusing to honor documents tendered that on their face reasonably appear to be genuine, (3) refusing to honor documents or work authorizations based upon the specific status or term of status that accompanies the authorization to work, or (4) attempting to reinvestigate or reverify an incumbent employee’s authorization to work using an unfair immigration-related practice.
This new regulation also permits an applicant or employee suffering from an unlawful immigration-related practice to file a complaint with the Labor Commissioner, and the Labor Commissioner may impose a penalty of up to $10,000 per violation.

Employment Disputes (SB1241)

For work contracts made after Jan. 1, 2017, employers cannot require a worker who lives and works in California to go to court outside of California to settle employment disputes or deprive an employee of protection of California law if a controversy takes place in California. This new law does not affect employment agreements or contracts already in effect.

Employees cannot be forced to resolve their dispute in a court outside of California unless the worker is represented by a lawyer who is negotiating the terms of the contract.

Employee Rights Concerning Domestic Violence, Sexual Assault and Stalking (AB2337)

Under this law, California employers with 25 or more employees cannot discriminate or retaliate against employees taking time off for specified purposes because they are the victims of domestic violence, sexual assault or stalking.

This law requires employers to inform their employees of these existing rights. The notice must be provided to employees upon hire and upon employee request. The Labor Commissioner has until July 1, 2017, to develop the form notice for employers to provide to their employees. Employers are not required to provide this notice to their employees until the Labor Commissioner posts the form publicly.

Juvenile Criminal History (AB1843)

Currently, an employer is prohibited from considering certain information for employment purposes, such as information relating to an arrest or detention that did not result in conviction or a conviction that has been judicially dismissed or ordered sealed.

AB1843 amends the state labor code by further prohibiting employers from making inquiries about juvenile convictions or taking into consideration any information related to an arrest, detention, processing, diversion, supervision, adjudication or court disposition that occurred while the person was subject to the jurisdiction of juvenile- court law when making an employment decision.

Also, the definition of “conviction” does not include the adjudication by a juvenile court or any other court order or action taken with respect to a person who is under the process or jurisdiction of a juvenile court.

The regulation does specify an exception that health-care facility employers may inquire about an applicant’s juvenile crimes if a juvenile court made a final ruling or adjudication that the applicant committed a felony or misdemeanor relating to sex crimes or certain controlled-substance crimes within five years prior to applying for employment.

Workers’ Compensation (AB2883)

This regulation amends the state labor code to require most officers, directors and partners of corporations, limited liability companies and partnerships to be covered under the employers’ workers’ compensation policy. They no longer may declare that they are not “employees” for purposes of workers’ compensation coverage.