News, Articles & Updates

California Employment Law Changes in 2012

New Laws Taking Effect Next Year Will Impact California Employers

Discrimination, health care coverage, and compensation practices are just a few of the areas impacted by new employment legislation going into effect on January 1, 2012.  With these changes also comes the need for California employers to ensure that their practices comply with the new requirements.

The following are some of the laws impacting California businesses as they ring in the New Year:

AB 877–This law extends the definition of “gender” under the Fair Employment and Housing Act to include gender and “gender expression.”  This clarification makes it clear that discrimination on either basis is prohibited.  This law also amends Government Code Section 12949 and requires an employer to allow an employee to dress consistently with both the employee’s gender identity and expression.

SB 299This law requires that employers with five or more employees maintain group health insurance coverage for eligible employees who take Pregnancy Disability Leave for up to four months in a 12-month period.  The benefits must be at the same level as they would have been if the employee continued to work during her leave period.  This requirement is imposed regardless of the employer’s temporary disability leave policy or Family and Medical Leave Act coverage.

AB 469–This law imposes a new requirement that employers provide non-exempt employees with a single notice at time of hire that informs them of pay details, any allowances claimed as part of minimum wage, the regular payday schedule, certain information about the employer,  and information about the employer’s workers’ compensation insurer.  Upon any of this information changing, the employer must notify employees within seven calendar days.  This law further increases penalties for wage violations and increases the statute of limitations.

SB 459–This law prohibits an employer from willfully misclassifying an individual as an independent contractor.  Willful misclassification is “avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor.”  A first time violator would face a penalty ranging from $5,000 to $10,000 per violation and repeat violators could pay up to $25,000 per violation.

AB 22–This law prohibits obtaining and using credit reports for employment purposes except in a limited number of circumstances.  Specifically, employers or prospective employers may not obtain or use credit reports for hiring or other employment reasons.  The exemptions to the law include managerial positions and law enforcement jobs as well as certain jobs that require financial duties or access to proprietary information.

AB 1396–This law requires that employers have a signed written commission agreement for employees performing services in California and who are paid on a commission basis.  This written agreement must include how commissions are computed and paid.  Employers are given a year to bring their agreements in line with this law and enforcement will begin on January 1, 2013.

SB 272–This law clarifies Labor Code section 1508-1512, which applies to organ and bone marrow donor leave.  Under the new law, an employee is allowed up to 30 business days of leave in a one-year period for organ donation and up to five business days in a one-year period for bone marrow donation.  The one-year period begins from the date the employee’s leave begins. Also, employers may require the employee to use a certain number for paid time off days.

AB 240–This bill permits an employee to recover liquidated damages from a complaint brought before the Labor Commissioner that alleges underpayment of minimum wages.  The previous law only permitted employees to recover liquidated damages in a court action.  An employee is allowed to recover an amount equal to twice the wages unlawfully paid, including interest.

SB 559–This bill prohibits employers from discriminating on the basis of an individual’s genetic characteristics.  Genetic information includes details about a person’s genetic tests, genetic tests of family members, or the manifestation of a disease or disorder in a family member of the individual.

AB 1236–This law prohibits state agencies and local governments from passing requirements that employers use E-Verify to check employees’ employment eligibility.  Instead, an employer may independently choose a verification program.

SB 117–This law prohibits a state agency from entering into a contract for $100,000 or more with a contractor who discriminates against employees with same-sex spouses or domestic partners.

AB 551This law applies to certain state or federal contracts, which generally require a set wage above minimum wage.  The law increases maximum wage penalties from $50 to $200 per calendar day that an employee is paid less than the determined wage.  It also increases the minimum penalty from $10 to $40 per day for violations of wage obligations.

AB 1136This law imposes requirements on general acute care hospitals to maintain a safe patient handling policy, including trained lift teams or specified training for staff on safe lifting techniques.

Workers’ Compensation Laws–Five laws that affect workers’ compensation could lower employer’s costs and make notices and procedures easier. AB 335, AB 378, AB 397, AB 1168, and AB 1426 all makes changes to the workers’ compensation system that should positively impact employers.  AB 335 is the only law of those listed that imposes action by the employer.  The law requires that employers include on workers’ compensation notices the website address and contact information of the insurer.

How Does This Affect Your Business?

Some of the new laws place additional requirements on employers and therefore it is essential that employers make sure that their practices and policies comply with the new mandates.  Failure to do this could bring heavy fines and penalties.

It is recommended that California employers review and update their employment policies, employee handbooks, employment postings, hiring and compensation practices, leave policies, and heath care coverage.

Please contact The Mitzel Group, LLP at info@mitzelgroup.com for further information on these new laws or for assistance in ensuring that your company’s policies and practices comply with these laws.

EEOC Provides Guidance For the Use Of RFOA Defense Under the ADEA

The Guidance Provided May Adversely Impact Employers’ Abilities To Change Company Policies And Effectively Downsize

In November, the Equal Employment Opportunity Commission (“EEOC”) approved draft final regulations that provide guidance for the use of  the “reasonable factor other than age” (“RFOA”) defense under the Age Discrimination in Employment Act (“ADEA”). If these new regulations become law they may both advance the purpose of the ADEA (and consequently protect older employees) and/or hurt employers during already difficult periods of downsizing and policy changes.

The EEOC drafted these regulations in response to two court cases. The Courts held in Smith and Meacham that if an employment practice which has a disparate impact on older workers is implemented, it is discriminatory unless the practice is justified by a reasonable factor other than age and that the employer bears the burden of proving such a defense. (Smith v. City of Jackson , 544 U.S. 228 (2005); Meacham v. Knolls Atomic Power Lab., 128 S. Ct. 2395 (2008).)

In defining “reasonableness” the EEOC presents the following non-exhaustive list of factors as relevant to this determination:

  • whether the employment practice and the manner of its implementation are common business practices;
  • the extent to which the factor is related to the employer’s states business goal;
  • the extent to which the employer took steps to define the factor accurately and to apply the factor fairly and accurately (e.g., training, guidance, instruction of managers);
  • the extent to which the employer took steps to assess the adverse impact of its employment practice on older workers;
  • the severity of the harm to individuals within the protected age group, in terms of both the degree of injury and the numbers of persons adversely affected and the extent to which the employer took preventive or corrective steps to minimize the severity of the harm, in light of the burden of undertaking such steps; and
  • whether other options were available and the reasons the employer selected the option it did.

While employers need not address every factor listed above, the EEOC fails to tell employers which  of these factors will be the most crucial in determining reasonableness in different circumstances. As such, it may be harder now for employers to make previously rational lay-offs or other policy changes without opening themselves up to the threat of litigation.

In addition to providing guidance  on whether or not a factor is “reasonable,” the EEOC also helps define the “other than age” requirement with this non-exclusive list of factors to consider:

  • the extent to which the employer gave supervisors unchecked discretion to assess employees subjectively;
  • the extent to which supervisors were asked to evaluate employees based on factors known to be subject to age-based stereotypes; and
  • the extent to which supervisors were given guidance or training about how to apply the factors and avoid discrimination.

Again, not all factors mentioned must be addressed by the employer and others may be added to address the issue of “other than age”.

How Does This Affect Your Business?

Going forward, when implementing any non-age related employment practice it will be more important than ever to consider just what type of impact the practice may have on your employees. Will it disproportionately affect older workers? Has your company taken any preventative or corrective measures? Are there other equally effective alternatives available to achieve your goal that don’t disproportionately harm older workers?

Often times you may not realize proposed employment practices will have an adverse affect. If you’d like help implementing new policies fairly please contact us at info@mitzelgroup.com.

San Francisco Minimum Wage Set To Rise

As Of January 1, 2012 Minimum Wage In San Francisco Will Be $10.24/hr

While San Francisco’s minimum wage is already well above both state and federal requirements set at $8.00/hr and $7.25/hr, respectively, it is set to increase again on January 1, 2012.

In 2003 San Francisco voters passed Proposition L. The passing of this proposition means that each year the minimum wage within the city limits must be raised at the same rate inflation occurs. The exact amount is based upon the previous year’s Consumer Price Index for wage earners in the San Francisco/Oakland/San Jose area. This year’s change represents a 3.2 percent increase over the former $9.92/hr, and brings San Francisco’s minimum wage over $10/hr for the first time.

How Does This Affect Your Business?

If your business is located within San Francisco and currently paying any employees less than the new minimum wage of $10.24/hr you will need to increase those employees’ hourly wages. This change must take effect on  or before January 1, 2012. Failure to do so in violation of the law and may leave your business open to wage related lawsuits.

For more information on how you can ensure compliance with this new minimum wage requirement, please contact us at info@mitzelgroup.com.