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 for further information on these new laws or for assistance in ensuring that your company’s policies and practices comply with these laws.