November 16, 2017

Time To Revise Your Policies And Practices To Comply With New California Employment Laws For 2018


By the end of October, an inevitable raft of new legal obligations has been signed into law, and California employers must begin the task of revising employment policies and practices to come into compliance by New Year’s Day.  This year is no exception, with new laws regulating the hiring and recruiting process, expanding parental leave rights, requiring changes to mandated harassment training, and limiting employers’ ability to cooperate with federal immigration agencies.

Detailed below are the most important new laws going into effect on January 1, 2018, as well as some basic action items to address before the end of the year.

Limits on Salary History Information in Hiring Process

AB 168 is a new measure designed to close the gender pay gap. It prohibits employers from inquiring into or considering an applicant’s salary history information in deciding whether to offer that applicant employment and what salary to offer a successful applicant. An employer may now consider an applicant’s salary history only if the applicant provides the information without prompting by the employer and then only for the purpose of deciding which salary to offer the applicant (i.e., the employer cannot consider voluntarily-provided salary history information in deciding whether to make an offer in the first place).  Additionally, AB 168 requires employers to disclose the “pay scale” associated with a position to any applicant “upon reasonable request.”  Governor Brown vetoed a related bill, AB 1209 (known as the “Gender Pay Gap Transparency Act”), which would have required large employers to collect and disclose various data comparing the wages it pays to male and female employees.   Action items:  Revise employment application forms to delete questions asking for salary or wage history.  Train all recruiters and hiring managers not to ask for such information in interviews.  Consider asking applicants in writing for salary expectations or requirements instead.

Limits on Criminal History Information in Hiring Process

AB 1008 expands California’s 2013 “Ban the Box” legislation to the private sphere, limiting when employers may ask about criminal history, limiting how they can use criminal history, and imposing due process requirements when disqualifying an applicant due to criminal history.
AB 1008 prohibits employers who employ more than five employees from inquiring into a job applicant’s criminal conviction history until after making a conditional offer of employment.  Once a conditional offer is made, the employer may ask for such information, including through conducting a criminal background check.  To use criminal history, employers must make an “individualized assessment” of whether the applicant’s conviction history has a direct and adverse relationship with the job duties of the position at issue.  If the employer decides to rescind the conditional offer, it must give the applicant notice and then five business days to respond before finalizing the decision.  AB 1008 does not apply where the employer is required by law to conduct a background check for the position.  As such, employers who hire for positions subject to legally-required background checks will need to adopt a parallel hiring process for such jobs.   Action items:  Revise application forms to delete any questions about criminal history, arrests and convictions.  Revise any policies or practices that impose a blanket exclusion of employees with criminal convictions.  Develop procedures for evaluating criminal history and for notifying applicants of disqualification and allowing them to respond.

Expansion of New Parent Leave Eligibility

SB 63 expands the coverage of the California Family Rights Act (“CFRA”)’s new parent leave provisions to employees who work for employers of 20 or more employees within a 75-mile radius.  Except for the lowered employee threshold, SB 63’s provisions mirror CFRA’s provisions for other leaves: employees qualify by working at least 1,250 hours in the 12 months preceding a leave request and are entitled to 12 weeks of leave annually.  SB 63 also provides for a pilot mediation program to be developed by the Department of Fair Employment and Housing for resolving disputes arising in connection with leaves taken pursuant to SB 63.  The mediation provisions were added to the bill in response to a request made by Governor Brown when he vetoed a similar bill in 2016 and are set to expire in 2020.   Action Items:  Revise employee handbook provisions addressing parental leave, and for smaller employers adopt a Parental Leave policy reflecting the new legislative requirements.

Expanded Sexual Harassment Training Requirements

Building on recent revisions to the Fair Employment and Housing Act (FEHA), which added gender identity and expression as legally protected characteristics, newly-passed SB 396 expands the sexual harassment training that employers must provide.  It requires employers subject to FEHA’s sexual harassment training requirements to address, as part of that training, harassment based on gender identity, gender expression, and sexual orientation.  SB 396 does not require that employers spend any additional time training supervisory employees, only that they add the additional topics to their training programs.  In addition to its training provisions, SB 396 requires employers to post a Department of Fair Employment and Housing poster regarding transgender rights in a prominent location.  SB 396 does not introduce any new remedial or punitive measures.  Action items:  Revise sexual harassment training curriculum to cover these issues (or ensure that outside training provider does so).

The Governor also signed SB 295, which amends the sexual harassment training provisions that apply to farm labor contractors.  Starting in 2018, farm labor contractors will be obligated to provide the required sexual harassment training in the language understood by the employee and to include in their license applications a list of the materials used in their sexual harassment training programs as well as identifying the number of employees trained in the preceding year.

Immigrant Worker Protection Act

As part of its package of legislation to make California a “sanctuary state,” the Legislature passed AB 450, known as the “Immigrant Worker Protection Act.”  Under AB 450, an employer may not consent to an immigration enforcement agent’s entrance into nonpublic areas of a workplace and may not comply with an immigration enforcement agency’s request to access employee files absent a subpoena or judicial warrant.  AB 450 does not prohibit an employer from complying with a Notice of Inspection issued by an immigration enforcement agency, but does require the employer to notify its employees that it has received a Notice of Inspection within 72 hours of receipt of the Notice.  Failure to comply with these provisions may result in a civil penalty of between $2,000 and $5,000 for the first violation and between $5,000 and $10,000 for subsequent violations.  Additionally, AB 450 prohibits employers from re-verifying an employee’s work authorization except as required by federal law.  A violation of this provision exposes the employer to a fine of up to $10,000.  The Labor Commissioner has the exclusive authority to enforce AB 450’s provisions.  Action items:  Develop processes for responding to inquiries from federal immigration authorities and notifying employees of inspection notices, and train responsible employees accordingly.

Expanded Labor Commission Authority To Address Retaliation Claims

Effective January 1, 2018, the Division of Labor Standards Enforcement (“DLSE”), otherwise known as the Labor Commissioner, will have new authority with respect to investigations of alleged retaliation.  SB 306 provides the DLSE with the authority to initiate investigations into employer retaliation against employees who cooperate with an existing DLSE investigation whenever the DLSE “suspects” retaliation, even where the agency has not received a complaint that the employer has engaged in retaliation, and empowers both the agency and private actors to seek injunctive relief in connection with retaliation claims.

Expanded Liability for Construction Contractors

AB 1701 expands contractor liability for wage claims brought against subcontractors, which has been the rule in public contracting, into the realm of private projects. To compensate for this expanded liability, AB 1701 empowers direct contractors to obtain payroll records and contract award information from subcontractors.

For further information, or for assistance with revising your policies and practices to comply with these new laws, please contact Felicia Reid or Ian Forgie in our San Francisco Office, and Glen Kraemer or Kirstin Muller in our Santa Monica Office.