Wage & Hour Updates
Assembly Bill (“AB”) 10 raises California’s current minimum wage of $8 per hour by two, one-dollar increments: to $9 per hour effective July 1, 2014, and to $10 per hour effective January 1, 2016. This law, the first mandatory wage increase in nearly five years, comes as a welcome change for California workers. Increase in the California minimum wage is forecasted to benefit at least 3 million workers in the state.
Domestic Work Employees
AB 241 enacts the Domestic Worker Bill of Rights, which provides for specific overtime pay for certain in-home employees; a “domestic work employee who is a personal attendant.” Those with in-home help will need to carefully determine whether the new law applies to them because AB 241 contains many specific definitions and exclusions. One of the most noteworthy is that your babysitter is still not considered a Domestic Worker under most circumstances. The U.S. Department of Labor (DOL) also issued new rules on personal attendants that take effect on January 1, 2015 that will apply to all 50 states.
Meal and Rest Periods – Expansion to Heat Illness Recovery Periods
Senate Bill (“SB”) 435 expands meal and rest break prohibitions to “recovery” periods taken to prevent heat illness. Under SB 435, an employer cannot require an employee to work during a recovery period mandated by state law under Cal/OSHA’s heat illness standard.
An employer that does not provide an employee with a recovery period must pay the same premium penalty that exists for non-complaint meal or rest breaks — one additional hour of pay for each workday that the meal, rest or recovery period is not provided. Employers with outdoor places of employment are subject to Cal/OSHA’s heat illness standard, which allows for cool-down periods in the shade of no less than five minutes at a time on an “as-needed” basis for employees to protect themselves from overheating. Stay tuned, as Wage & Hour class actions may now have a weather component to them.
Damages for Minimum Wage Violations
AB 442 expands the penalty available for citations issued by the Labor Commissioner for failing to pay minimum wage to include a requirement that the employer pay liquidated damages to the employee, in addition to existing penalties. As it pertains to field investigations, existing state law does not grant the Labor Commission the authority to collect liquidated damages, on behalf of workers. This is the case even after a citation for failure to pay minimum wage is issued to the employer. Under current law, the Labor Commissioner may only: (1) Assess a civil penalty against the employer, which is deposited into the General Fund. (2) Recover wages owed to the worker. This bill expands the DLSE’s authority, after a citation, from a field investigation is issued to an employer for failure to pay minimum wages to his/her workers, to also recover and pay to the workers, the unpaid minimum wage liquidated damages.
Protections for Exercising Rights Under Labor Code
AB 263 amends Labor Code Section 98.6, which protects employees who assert their rights under the Labor Code; for example, by complaining of wage theft. AB 263 prohibits retaliation or adverse action against employees for exercising their rights under the Labor Code (current law only explicitly prohibits discharge and discrimination). AB 263 also expands protected conduct under Labor Code Section 98.6 to specifically include a written or oral complaint by an employee that he/she is owed unpaid wages.
Most importantly for small businesses and employees alike, AB 263 adds a civil penalty of up to $10,000 per employee per violation.
Labor Commissioner Lien on Property for Employee Complaints
AB 1386 requires that the amount due under a Labor Commissioner order, decision or award that has become final shall create a lien that the Labor Commissioner may record on the employer’s real property.
Attorneys’ Fees – Prevailing Party Wage Claims
SB 462 states that employers who win wage-claim lawsuits may recover attorneys’ fees and costs from the employee only if a trial court finds that the employee filed the lawsuit in bad faith.
Employee Wage Withholdings – Criminal Penalty
SB 390 creates a criminal penalty for an employer that fails to remit withholdings from an employee’s wages that were made pursuant to state, local or federal law. This creates another layer of risk for companies who utilize independent contractors.
Garment Manufacturer Requirements
AB 1384 creates a civil penalty for a garment manufacturer’s failure to display his/her name, address and registration number at the front entrance of the premises.
Car Wash Industry
AB 1387 increases the bond requirement for employers in the car wash industry from $15,000 to $150,000, but exempts an employer from the bond requirement if the employer has a collective bargaining agreement in place that meets specified criteria.
Farm Labor Contractors – Successor Liability
SB 168 makes a successor farm labor contractor liable for wages or penalties owed by a predecessor farm labor contractor under certain specified circumstances, if: (1) uses substantially the same facilities or workforce to offer substantially the same services as the predecessor, with certain defenses; (2) shares in the ownership, management, control of the workforce, or interrelations of business operations with the predecessor; (3) employs in a managerial capacity any person who directly or indirectly controlled the wages, hours, or working conditions of the employees owed wages or penalties by the predecessor; or (4) is an immediate family member of any owner, partner, officer, licensee, or director of the predecessor or of any person who had a financial interest in the predecessor. According to the Cal Chamber, this bill creates potential liability for successors despite the lack of fair notice or continuity between the business of the successor and predecessor under Labor Code § 1698.9. This bill seems to make quick work of piercing the corporate veil as it applies to farm labor contractors.
A number of bills signed this year relate to prevailing wages. Employers that provide services or construction work for the government or public entities must pay the prevailing wage, which usually is significantly higher than the minimum wage. The bills include AB 1336, SB 7, SB 54, SB 377 and SB 776. One notable bill (SB 54) expands payment of prevailing wages to privately financed refinery construction projects which would not normally come under the purview of these laws.
Discrimination, Harassment and Retaliation Protections
Protection for Military and Veterans
AB 556 adds “military and veteran status” to the list of categories protected from employment discrimination under the Fair Employment and Housing Act (“FEHA”) found at Government Code 12940, et seq.
Sexual Harassment Definition Clarified
SB 292 amends the definition of harassment to clarify that sexually harassing conduct does not need to be motivated by sexual desire. The new law clarifies that hostile treatment can amount to unlawful sexual harassment regardless of whether the treatment was motivated by any sexual desire to address a recent Court of Appeal decision.
SB 496 expands whistleblower protections to include reports alleging a violation of a local rule or regulation. It also protects employees who disclose, or may disclose, information regarding alleged violations “to a person with authority over the employee or another employee who has authority to investigate, discover or correct the violation.” SB 496 also prohibits retaliation against an employee because the employer “believes the employee disclosed or may disclose information.”
Undocumented Immigrant Protections
Retaliation and Unfair Immigration Practices
AB 263 prohibits an employer from engaging in “unfair immigration-related practices” when an employee asserts protected rights under the Labor Code. For instance, an employer may not threaten to contact, or contact, immigration authorities because an employee complained that he/she was paid less than the minimum wage. It appears this prohibition would also extend the employer’s attorneys and human resource advisors. AB 263 authorizes various penalties against employers that engage in unfair immigration-related practices, including a private right of action.
License Revocation for Threatening to Report Immigration Status
SB 666 permits the state to suspend or revoke an employer’s business license where that employer reports, or threatens to report, the immigration status of any employee because the employee makes a complaint about employment issues. It also allows for disbarment of attorneys for similar conduct against witnesses or parties in a lawsuit, which would seem to be an issue since some counsel have a duty to report the immigration issues, but will have to do so in a manner that does not violate this law.
The law covers reports, or threats to report, employees, former employees, prospective employees or family members, as defined, to immigration authorities. Since both a report and a threat to report seem to be a restraint on free speech, it appears this statue is headed for litigation. Employers are not subject to the suspension or revocation of a business license for requiring a worker to verify eligibility for employment under the Form I-9.
Criminal Extortion for Threatening to Report Immigration Status
AB 524 clarifies that a person may be guilty of criminal extortion if the person threatens to report the immigration status or suspected immigration status of an individual, or his/her relative or a member of his/her family.
Driver’s License for Undocumented Immigrants
AB 60 requires the California Department of Motor Vehicles (DMV) to issue a driver license to an undocumented person who can prove identity and California residency and who can meet all other licensing requirements, such as the written and behind-the-wheel exams. The card will bear a notation stating that the card is not acceptable for federal purposes, such as verifying eligibility for employment. In other words, this card is not acceptable for Form I-9 verification.
AB 60 does not take effect until January 1, 2015, or on the date the Department of Motor Vehicles (DMV) director executes a specified declaration, whichever is sooner. The DMV must adopt regulations to implement the new law, including documents acceptable for the purposes of proving identity and California residency, as well as procedures for verifying authenticity of documents. I am not sure why simply accepting another country’s driver’s license would not be acceptable under these circumstances.
Leave of Absence and Benefits for Employees
Time Off for Crime Victims
SB 288 adds new protections for crime victims to take time off from work to appear in any court proceeding in which a right of the victim is at issue. The law applies only to specific crimes, such as solicitation for murder and vehicular manslaughter while intoxicated.
Employees must comply with requirements for requesting the leave. Violations of the law will be enforced by the DLSE.
Time Off for Victims of Stalking and Accommodation for Domestic Violence, Sexual Assault and Stalking Victims
SB 400 extends existing protections for victims of domestic violence or sexual assault to victims of stalking. Existing protections that will now be extended to stalking victims include time off to appear at legal proceedings (all employers) and to seek medical/psychological treatment, including safety planning (employers with 25 or more employees).
SB 400 also makes it unlawful to discriminate or retaliate against an employee because of his/her status as a victim of domestic violence, sexual assault or stalking.
SB 400 further adds a new reasonable accommodation requirement for victims of domestic violence, sexual assault or stalking. Reasonable accommodations under the statute may include implementation of safety measures and there will be a necessary conflict between the employers duty to maintain a violence free workplace and the employer’s duty to take safety measures, especially in schools where most guns are prohibited. The underlying lawsuit driving the law involved a teacher physically threatened by a violent ex-husband who showed up in the parking lot at a school in San Diego. It is unclear what measures will be required to protect a victim as well as co-workers (and children) in this type of case under the statute.
Time Off for Emergency Duty EMT and Police
AB 11 requires an employer with 50 or more employees to provide a temporary leave of absence of up to 14 days per calendar year for reserve peace officers and emergency rescue personnel to receive training. Current law provided the training leave of absence only to volunteer firefighters. AB 11 also expands the law to cover time off for “emergency rescue training” in addition to the existing protections for fire or law enforcement training which makes sense as reserve police and EMTs also need to keep their skills current.
Paid Family Leave Benefits
SB 770 expands Paid Family Leave (“PFL”) wage-replacement benefits for employees to include benefits for time taken off to care for a seriously ill grandparent, grandchild, sibling or parent-in-law. PFL does not create the right to a leave of absence, but provides California workers with some financial compensation and/or wage replacement during a qualifying absence. This legislation takes effect July 1, 2014.
San Francisco Family-Friendly Workplace Ordinance
In a law thankfully that only applies to one city, the San Francisco passed a Family-Friendly Workplace Ordinance that will require covered employers with employees working in San Francisco to consider requests for “flexible or predictable working arrangements to assist with care giving responsibilities.” The ordinance also protects employees from adverse action based on “caregiver status.” The ordinance requires a poster informing employees of their rights. The San Francisco Office of Labor Standards Enforcement (OLSE) will enforce the ordinance and develop the required notice.
AB 218 prohibits a state or local agency from asking an applicant to disclose information regarding a criminal conviction until after the agency determines the applicant meets minimum employment qualifications. This seems to be a real issue for those working with children or the elderly. Are we legislating that those convicted of certain crimes should waste the time applying? There are specified exceptions, such as where a criminal history background check is otherwise required by law for the position. This legislation will not go into effect until July 1, 2014.
Several bills relating to workers’ compensation were signed into law in 2013 and will take effect in 2014. These include:
AB 1309 limits the ability of professional athletes who work for out-of-state sports teams to bring workers’ compensation claims in California. A player employed by an out-of-state sports team who wants to bring claims for cumulative trauma (such as for arthritis or brain injuries due to multiple concussions) will have to prove that he/she worked a good part of his/her career for teams based in California or spent more than 20 percent of his/her professional time working in California. Bascially, California was becoming the pro athlete “retirement” state and the insurance companies were understandably “sick of it.”
AB 607 relates to death benefits for dependent children, and will Enables a deceased employee’s totally dependent children to receive workers’ comp death benefits irrespective of whether the employee’s surviving spouse is totally dependent.
AB 1376 relates to language assistance and interpreters, and Delays DWC’s workers’ comp qualified medical interpreter certification regulations, required by SB 863, from taking effect until March 1, 2014.
SB 146 deals with medical treatment and billing and copies of prescriptions, and eliminates the requirement that copies of prescriptions be sent with requests for payment unless the provider entered into a written agreement to do so. Also enables any entity that was denied payment of a pharmacy bill submitted from Jan. 1 to March 31, 2014 to resubmit the bill if payment was denied for failure to include a copy of the prescription. It allows payers to request copies of prescriptions for a review of records of prescriptions dispensed by a pharmacy.
SB 809 involves reporting of controlled substances, and assesses an annual $6 fee on provider and dispenser licenses to fund the Controlled Substance Utilization Review and Evaluation System (“CURES”) monitoring program. The changes also require the state Medical Board to develop and distribute to physicians and hospitals materials on assessing a patient’s risk of abusing or diverting controlled substances and information about CURES, and require the state to streamline the application and approval process for medical providers and pharmacists to access CURES. CURES enables registered users, such as healthcare prescribers, pharmacists and law enforcement, to access patient substance history information. Consumer Watchdog argues the problem with CURES is doctors are not using this system, and that is contributing to a growing prescription drug problem. Interesting debate in a state that legalized medical marijuana.