2019 Employment Law Update

A New Year is Coming! Which means. . . new laws for California employers!  Here is a brief summary of the new rules for your business.  Please do not hesitate to contact me with questions.

Compensation

Minimum Wage. Effective January 1, 2019, California employers with at least 26 employees must pay minimum wage at the rate of $12.00 per hour. For employers with 25 or fewer employees, minimum wage will increase to $11.00 per hour.

Employers are generally subject to federal, state and local minimum wage laws and must follow the stricter standard; that is, the one that is the most beneficial to the employee. Here is a not-exhaustive list of local minimum wages as of January 1, 2019: San Francisco, Sunnyvale, San Jose, Emeryville, Palo Alto, Milpitas, and Berkeley all require a minimum wage of $15.00 per hour as of January 1, 2019 (it may already be that for a particular location). Milpitas will join the $15.00 per hour list in July 2019.

Exempt employees. The minimum salary that must be paid to exempt employees in California corresponds to the state minimum wage. Exempt employees must earn at least twice the state’s minimum wage for full-time employment, e.g. $49,920 annually for employers with 26+ employees.  This minimum salary increases as minimum wage increases. As always, the “duties” tests must be satisfied for any employee classified as exempt. 

Independent Contractors. Every year, courts and government agencies give more and more warnings that employers must confirm that an independent contractor is really an independent contractor, or suffer the consequences. Generally, complying with the California Supreme Court’s 2018 Dynamex “A-B-C test” can help employers reduce liability. Under the test, a worker is an employee unless:

  • she is free from the control and direction of the hirer in performance of the work; and
  • she performs work that is outside the usual course of the hiring entity’s business; and
  • she is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

Fair Employment

Sexual Harassment. The biggest list of changes in California law is in the area of sexual harassment.

By January 2020, employers with five or more employees must provide harassment prevention training to all employees every two years. Supervisors must attend a two-hour training and non-supervisory employees must attend a one hour training.

The Fair Employment and Housing Act was amended to make it an unlawful practice for an employer to require an employee to release a FEHA claim in exchange for a bonus, raise, or continued employment. FEHA now also makes employers liable for any kind of unlawful harassment by non-employees (not just for sexual harassment as under existing law) where the employer knew or should have known of the harassment and failed to take appropriate remedial action. FEHA now also includes statements of legislative intent to make it harder for employers to prevail on harassment claims, such as a declaration that a single act of harassment may suffice to support a finding of a hostile work environment.

Any provision of a contract or settlement agreement that prevents a party to the contract from testifying about criminal conduct or harassment in an administrative, legislative or judicial procedure is void and unenforceable.

Also, settlement agreements entered into after January 1, 2019 cannot prevent disclosure of factual information about claims of sexual assault, sexual harassment, gender discrimination or related retaliation that have been filed in court or before an administrative agency (but does not apply to settlements reached before any filing). The parties may limit disclosure of the amount of a settlement. And the claimant can request that the agreement protect his or her identity (and facts that would lead to the discovery of his or her identity).

A Civil Code section defining privileged communications has been amended to state that a sexual harassment complaint cannot be the basis of a defamation claim. The rule now protects three new categories of communications: Sexual harassment complaints by an employee to an employer based on credible evidence and made without malice; Communications during a harassment investigation between an employer and interested persons (witnesses, etc.) regarding a sexual harassment complaint; Responses by an employer to a reference check as to whether the employer would rehire an employee and, if not, whether that decision is based on the employer’s determination that the former employee was involved in sexual harassment. The rule is not particularly clear as to what the former employer should disclose during a reference check, so it is our recommendation that you work with your employment law counsel to craft a thoughtful response in each situation. Of note, this rule is only about sexual harassment claims; it does not similarly protect from a defamation claim complaints for other forms of harassment (race, religion, national origin, age, etc.).

Pay Equity. Last year, California enacted rules to limit the ongoing effect of salary history on future salary in an effort to reduce the gender pay gap. Last year’s bill required California employers to provide “applicants” with the “pay scale” for a position upon “reasonable request.” These terms were undefined and thus open to interpretation. This past summer, the legislature clarified parts of this rule. The term “applicant” or “applicant for employment” means an external individual seeking a position with the employer. Current employees are excluded. The term “pay scale” means a salary or hourly wage range. It does not include bonus or equity ranges. And the term “reasonable request” is a request made only after an applicant has completed an initial interview with the employer. The new law also clarified that an employer may ask an applicant what they expect or want to be paid, but may not ask what they were paid at a previous job.

National Origin Discrimination. California’s Fair Employment and Housing Council enacted new regulations to help employers better understand the long-protected characteristic of national origin. National origin is defined to include, without limitation, the following actual or perceived characteristics of an individual or her ancestors, including physical, cultural, or linguistic characteristics associated with a national origin group; marriage to or association with persons of a national origin group; tribal affiliation; membership in or association with an organization identified with the interests of a national origin group; participation in schools, churches, temples, mosques, or other religious institutions generally used by persons of a national origin group; and a name that is associated with a national origin group. The section defines “national origin groups” to include “ethnic groups, geographic places of origin, and countries that are not presently in existence.”

Finally, the new rules address “English-only” policies. Before, the rules allowed such policies where “justified by business necessity.” Now, the rules specifically prohibit any policy that “limits” the use of any language in the workplace unless the employer can show the restriction is “narrowly tailored” and justified by business necessity, and making clear that customer or co-worker preferences do not suffice. Also, English-only rules are never lawful during an employee’s non-work time (e.g., meal and break periods, unpaid employer-sponsored events). In fact, such restrictions during nonworking hours could lead to wage and hour violations. Employers cannot discriminate based on an employee or applicant’s “accent” unless it “interferes materially” with job performance. The new rules also specifically state that it is unlawful retaliation to threaten to contact immigration authorities.

Lactation accommodation. Existing law requires employers to make reasonable efforts to provide a location other than a toilet stall to be used for lactation. Under the new law, the location should be something other than a bathroom. (This is a slight change and puts a higher obligation on the employer for the facility). In addition, the location should be a permanent one, but it can be a temporary location under certain conditions.

Military Discrimination. California expanded discrimination protections to members of the Federal Reserve components of the Armed Forces of the United States and members of the State Military Reserve. California law already protects members of the military or naval forces of the state or of the United States or a person ordered to military duty or training or by reason of being a member of the military or naval forces of the state or U.S. In addition, the law specifically provides that no business and other covered establishments may deny a member of the Armed Forces of the United States entrance when the member is dressed in uniform.

Sexual Orientation Discrimination. As a reminder, the U.S. Supreme Court’s decision in Masterpiece Cakeshop, Inc. v. Colorado Civil Rights Commission (the “wedding cake decision”) does not grant businesses the right to discriminate.  In that case, the Court ruled that a baker’s Free Exercise Clause rights under the Constitution were not properly considered by the Colorado Civil Rights Commission when that agency held that the baker was legally required to bake and sell a wedding cake for a same-sex couple. This was actually a very narrow decision focused on the Commission’s impermissible hostility toward the baker’s religious beliefs. The ruling does not give businesses or employers the right to discriminate against customers, guests, or employees due to their sexual orientation or any other protected class status.

Hiring

Background Checks. With a few exceptions, most California employers cannot ask job applicants about their criminal histories until a conditional offer is made. Then, employers can ask job applicants about criminal convictions, including expunged records, for certain roles, particularly if such inquiries are mandated by federal or other state laws. SB 1412 requires employers to ensure that they are not receiving or considering information about convictions beyond the particular conviction that would disqualify the applicant for the role.

In addition, this past year saw several courts give expensive reminders to employers that they should always err on the side of giving written notice and acquiring written consent before doing background checks. And make sure you are the type of employer that can (or should) even do particular background checks. Be thoughtful (and talk with your employment law counsel) about what your goal is in getting background information.

Employee Post-Employment Non-Solicitation Restrictions. In early November, a California Appeals Court invalidated an employer’s contract that restrained former employees from soliciting current employees for a one-year period. These types of restrictions had been a gray area. California’s general rule against noncompetition agreements is that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” In a ruling directed at medical industry recruiters, the Court held that provisions barring solicitation of employees also violate the non-compete rules.  And, more importantly, the Court indicated that any employee non-solicitation provisions are void under the law.

Arbitration Agreements. Recently, Facebook and Google announced that they will no longer require employees to arbitrate sexual harassment cases. Please note, our current aim with such agreements is not to compel arbitration of harassment or discrimination cases, but to limit the crushing financial consequences to the employer of wage and hour collective actions.

Questions? Please do not hesitate to contact me!

jdebacker@mstpartners.com • 408.293.1900

 

What to do if ICE comes to your worksite

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The San Francisco Chronicle reported Tuesday that Immigration and Customs Enforcement officials plan a major sweep in Northern California. The article, which cited an unnamed source familiar with the operation, said the raids could occur in the coming weeks and would aim to arrest more than 1,500 undocumented immigrants.

As a California employer, you must know that just because an ICE officer visits your workplace, that does not mean that the agent has permission to talk to your employees or walk the premises without a proper warrant.  In fact, you must prevent this from happening! 

Also, ICE agents are not allowed to simply get documents without complying with notice obligations.  While perhaps not the most pleasant encounter, you and your employees don’t need to be combative or aggressive in order to prevent ICE from entering your workplace. You just need to be prepared and follow your procedure.  

As mentioned in this blog before, this year the Immigrant Worker Protection Act (AB 450) provides California workers with protection from immigration enforcement while on the job.  The new rules apply to all employers, regardless of size.

Employers must comply with strict rules limiting when ICE can be given access to the worksite or employee records. Employers must also comply with new notice obligations.

California employers cannot voluntarily allow ICE to enter nonpublic work areas or to access company records. Instead, ICE must present legal documentation in the form of a judicial warrant or subpoena before you can allow access. This is a warrant or subpoena issued by a court, not just a document issued by ICE itself.

If the ICE agent presents an ICE Notice of Inspection, ICE does not have the authority to simply enter the premises.  Rather, this Notice provides notice to the employer and a three-day response window to produce the Forms I-9 and other documents such as payroll records, list of current employees, articles of incorporation and business licenses.

Employers must follow specific requirements related to Form I-9 inspections. Within 72 hours of receiving a Notice of Inspection, California employers must post a notice to all current employees informing them of any federal immigration agency’s inspections of Forms I-9 or other employment records.

After the inspection concludes, employers have 72 hours to provide each “affected employee” a copy of the results and a written notice of the employer’s and employee’s obligations arising from the inspection. An “affected employee” is one identified by the inspection results as potentially lacking work authorization or having document deficiencies.

California employers must ensure that supervisors and any employees who may interact with ICE agents know the rules.  These employees must make sure that ICE agents are not simply voluntarily granted access without particular documentation –the judicial warrant or subpoena — in place.  You may want to train your public facing staff on their responsibilities and have a prompt response system in place. At a minimum, these individuals should be trained to ask for a judicial warrant or subpoena. (And not assume that any document is valid – even one with an ICE insignia. It must be a judicial warrant or subpoena).

In addition to the emotional havoc these ICE encounters have on your staff and the potential life-changing consequences if documentation is not deemed satisfactory, the penalties to California employers for violating the new state law can be up to $10,000 per violation. At the same time, federal penalties for Form I-9 violations can range from a $110 to $20,000.

Leaves of Absence – Updated Chart

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Happy New Year!  I updated my LOA Chart Jan 2018 PDF.  If you have a more clever way of saying something, or think this chart could be “better” – let me know!

New Laws, Part 4! (or really, some questions, answered).

You had questions, and now I have answers!

I gave a presentation today and the audience had some great questions that I couldn’t answer at the time. I thought I would share my answers about the Form I-9, the new salary history rule, and the new “Ban the Box” rule here:

How can an employer check the work authorization / complete the Form I-9s of remote employees?

The employer has a variety of options when dealing with remote employees – the company can designate an authorized representative to fill out Forms I-9 on behalf of your company, including personnel officers, foremen, agents or notary public. Except, as pointed out by my friend Nancy Nelson, below, if the remote employees are in California, then the company can only use a notary public who is a properly bonded immigration consultant – even if acting in a non-notary capacity.

The Department of Homeland Security does not require the authorized representative to have specific agreements or other documentation for Form I-9 purposes. Of course, if your authorized representative fills out Form I-9 on your behalf, you are still liable for any violations in connection with the form or the verification process.

The key is that you have someone who can physically examine each document presented and determine if it reasonably appears to be genuine and relates to the employee presenting it. Reviewing or examining documents via webcam (such as Skype, etc.) is not permissible.

If the employee is outside California, you can use a notary. The notaryshould just act as an authorized representative, not as a notary. This means you are using a notary, because you know that the notary understands the importance of looking at the physical documents and filling out the Form I-9 accurately and completely, but the notary public should not provide a notary seal on Form I-9.

The company using the authorized representative needs to pay any fees for those services. Don’t pass them on to the employee!

Special thanks to Nancy Nelson for pointing this out!

How should a company maintain its completed Form I-9s?

I like the old school method where an employer  keeps all the current employees’ Form I-9s in a binder and in a separate binder, the employer keeps those of former employees.   I like all the documents in one place and the ability to simply pull it out of a safe file cabinet when needed. But. . . you have other options!

Homeland Security allows for three methods of maintaining the records: paper, microfilm/ microfiche or electronic copy. DHS’ website explains the requirements for using each of these formats here.

Before selecting a method, keep in mind that Form I-9s contain a lot of personal information about employees, so you’ll want to maintain that information in a private, confidential place that cannot be accessed by anyone without a “need to know.”

No matter how you choose to store your Form I-9, you must be able to present them to government officials for inspection within 3 business days of the date when the request was properly and legally made.

What employers are exempt from the new “Ban the Box” law?

If your company has historically operated under an exception to the existing restrictions on questions about an applicant’s criminal history, you likely remain under an exception. As a threshold matter, only employers with 5 or more employees are covered by the new “Ban the Box” rules.

Also, the law states that it does not apply in any of the following circumstances:

  • a position for which a state or local agency is otherwise required by law to conduct a conviction history background check.
  • a position with a criminal justice agency
  • a position as a Farm Labor Contractor
  • a position where an employer or agent thereof is required by any state, federal, or local law to conduct criminal background checks for employment purposes or to restrict employment based on criminal history.

Can employers ask applicants, “What is your salary expectation if you work here?” in light of the new Salary History rules?

Yes – so long as you don’t ask that in context with what the person’s salary history is. Don’t try to be too clever and ask this in a way that is really asking about salary history!

Can current employees ask for the pay scale for a position, like applicants now can?

Well, a current employee can ask – it cannot be against the rules or policies of the employer to ask! –but the employer isn’t required by law to provide the information.

 

New Laws ’18, part 3!?!

In our ongoing series of new laws for California employers, here’s a brief summary of some more . .

Salary History

A new law for 2018 is the addition of Labor Code §432.3, which bars employers from relying upon an applicant’s salary history as a factor in determining whether to offer to hire the person, or what compensation to offer.  Employers cannot ask, verbally or in writing, personally or through an agent/recruiter, about salary history.

If the applicant volunteers the information without prompting, the employer could consider it.  (But I suggest you make it clear you don’t want such volunteered information as you don’t want a dispute about whether the person felt pressured to volunteer by the company, or an agent).  Also, if the information is publicly available, the employer can consider it.

The law also incorporates the 2017 amendments to the Equal Pay Act to confirm that salary history, by itself, cannot justify any disparity in compensation based on race, gender, or national origin.

Finally, if an applicant makes a reasonable request for the employer’s pay scale, the employer must provide it.

Employers will want to review their employment applications to remove any request for information about salary history (and information about criminal history per the new “ban the box” rules).

Additions to the Harassment Prevention Training Requirements

Government Code §12950.1 is amended to provide that Harassment Prevention trainings, required for companies with more than 50 employees, include training on the prevention of harassment on the basis of gender identity, gender expression and sexual orientation.   (Not to #humblebrag, but my trainings already incorporated this).

And a Reminder of Required Minimum Wage Increases  

On January 1, 2018, the minimum wage for employers with 26 or more employees will increase to $11.00 per hour. The minimum annual salary for an exempt employee at a “larger” employer will increase to $45,760.

For smaller employers (25 or fewer employees), the minimum wage will increase to $10.50, and the minimum salary for an exempt employee will be $43,680.

The Computer Software Professional minimum wage will increase to $43.58 (or $7,565.85 per month; $90,790.07 per year).  Don’t forget, this is a very specific exemption that requires strict compliance with the defined duties.  And. . . it is only an exemption from overtime; these employees must still be provided meal and rest breaks.

This blog is not intended to be an exhaustive list of all new laws, but rather is to highlight some of the new changes. 

New Laws ’18, part 2!

Two very significant new laws were signed by Governor Brown last week.  Here’s a quick summary.

Parental Leave for Employees of “Smaller” Employers

Last week, Governor Brown signed SB 63, the New Parent Leave Act.

The new law requires employers that have between 20 to 49 employees within 75 miles to hold eligible workers’ jobs when they take up to 12 weeks of parental leave.

The new law amends the California Family Rights Act (CFRA) to provide this protected time off. The new law will likely alleviate some of the confusion created by the (poorly) named Paid Family Leave program. That law provides wage replacement when an employee took family leave, but didn’t actually provide the protected time off. This created a lot of misunderstanding about who was entitled to take time off.

Ban the Box

AB 1008 was also signed by Governor Brown last week.

This law will make it an unlawful employment practice under for an employer with 5 or more employees to include on employment applications any question that seeks the disclosure of an applicant’s conviction history or to inquire into or consider the conviction history of an applicant until that applicant has received a conditional offer. The new law also prohibits employers from considering or distributing information about an applicant’s prior arrests, diversions, and convictions. If an employer intends to deny an applicant solely or in part because of conviction history, the employer must make an individualized assessment as to how the conviction has a direct and adverse relationship with the specific duties of the job, among other things. Notice to the applicant is required and the applicant must be given an opportunity to explain or dispute the accuracy of the information. There are, of course, exceptions to this rule – but don’t assume they will apply to your workplace!

Countdown to New Laws ’18! – Protections Against ICE Workplace Raids

On October 5, 2017, Governor Brown signed AB 450 into law. The law prohibits employers from allowing federal immigration agents on private business property without a judicial warrant.

If ICE shows up at your business, do not permit them access to non-public areas without a warrant.

The new law also requires business owners to give their employees public notice — within 72 hours — of federal immigration inspections of employee records. A template created by the Labor Commissioner can be used for the notice.

AB 450 also:

  • Requires an employer to provide affected employees (meaning employees who may lack work authorization or whose documents have deficiencies) a copy of the Notice of Inspection of I-9 Employment Eligibility Verification forms, upon reasonable request.
  • Requires employers to provide to affected current employees, and to an employee’s authorized representative, a copy of the immigration agency notice that provides for the inspection results and written notice of the obligations of the employer and the affected employee arising from the action.
  • Prohibits an employer from re-verifying the employment eligibility of a current employee at a time or in a manner not required by federal law.
  • Prescribes penalties for violations of the provisions of the new law from $2,000 – $10,000.

And in case you didn’t know. .. a new-NEW!- Form I 9 is now in effect (even newer than the one I wrote about in January).  You can pull it up here.