2017 Employment Laws

Happy New Year!

Here’s a short summary of new employment laws set to take effect in January and beyond. If you have any questions about these changes, please do not hesitate to contact me.

Changes to federal overtime rules are on hold.  New federal overtime guidelines were to take effect on December 1, 2016.  In general, these new rules would require that exempt employees be paid an annual salary of at least $47,476. A federal judge in Texas recently issued a preliminary injunction that indefinitely delays the implementation of a new rule.

Minimum Wage Increase.  For employers with at least 26 employees, minimum wage will increase on the following schedule:

  • $10.50 per hour starting January 1, 2017
  • $11 per hour starting January 1, 2018
  • $12 per hour starting January 1, 2019
  • $13 per hour starting January 1, 2020
  • $14 per hour starting January 2021
  • $15 per hour starting January 1, 2022

For employers with 25 or fewer employees, the minimum wage increase will lag behind larger employers by one year:

  • $10.50 per hour starting January 1, 2018
  • $11 per hour starting January 1, 2019
  • $12 per hour starting January 1, 2020
  • $13 per hour starting January 1, 2021
  • $14 per hour starting January 1, 2022
  • $15 per hour starting January 1, 2023

Many local municipalities have their own minimum wages. As of January 1, 2017, local minimum wages include:

  • $13/hour for San Francisco
  • $13/hour for Sunnyvale
  • $12.25/hour for Oakland
  • $11/hour for Santa Clara
  • $10.50 for San Jose

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, and must increase as the minimum wage increases. Thus, per the above schedule, for larger employers the minimum salary is $43,680 and for smaller employers, the minimum salary is $41,600.

Fair Pay Expansion.  Last year, the Labor Code was revised in an effort to eliminate the gender wage gap by trying to increase wage transparency and making it more difficult for employers to defend against gender-based equal pay claims.  For 2017, these laws are expanded to bar employers from paying employees wage rates less than the rates paid to other employees of another race or ethnicity for substantially similar work.

New pay rules for certain industries.  In-home support services providers are now eligible for paid sick leave after working in California for 30 or more days within a year of hire.  The weekly pay rules governing temporary services employers will cover most security guards.  Starting in 2019, farm laborers will be eligible for daily overtime (not just weekly).  Also, starting in July 2017, private school teachers must earn no less than 70% of the lowest scheduled salary offered by the school, district, or county in which the school is located, or 100% of the lowest salary offered by any school district to a credentialed teacher – whichever is greater.

Clarification on wage statements.  Wage statements (or paystubs) for exempt employees do not need to include the total hours worked in the workweek.  Those of nonexempt employees must include this information.

Restroom facilities.  Effective March 1, 2017, all single-user restroom facilities in any business establishment, place of public accommodation, or government agency must be identified as “all gender” facilities rather than being designated as male- or female- only.

Assistance for employee victims of domestic violence.   By July 2017, the Labor Commissioner is scheduled to publish a notice to employees explaining the protections available for domestic violence victims, victims of sexual assault, or stalking.

Definition of “employee” under the Fair Employment and Housing Act.   Individuals employed under a special license in a nonprofit sheltered workshop, day program, or rehabilitation facility are covered under FEHA as employees and may bring actions for unfair employment practices.

Employment Verification.  California employers cannot ask for different or additional documents than those required by the federal I9 Form.  Employers cannot refuse to honor documents that appear genuine or refuse to honor documents of a specific status or with a term.  Finally, employers cannot go back and require that employees re-verify their status using any of the above methods.

Restrictions on the scope of background checks.  Starting in 2017, California employers cannot ask about or consider juvenile convictions and cannot use juvenile criminal matters as a factor in determining any condition of employment.

Required expansions of the scope of background checks.  “Transportation network companies” (like Uber and Lyft) must do a local and national criminal background check for each participating driver.

California as the judicial forum for disputes.  Employment contracts entered into, modified, or extended on or after January 1, 2017, cannot contain a provision forcing a “California employee” to adjudicate a claim that arose within the state of California in a different state.  The law covers claims resulting in litigation or arbitration. The law prohibits employers from requiring an employee to agree to any provision which would deprive the employee of the protections of California law with respect to a claim or dispute arising in California.  Any such provision is voidable by the employee, even if the employee agreed to it at the time.  There is an exception if the employee was represented by a lawyer during the contract negotiation process and the parties agreed to the change.

Smoking is prohibited from almost every California workplace.  The new law eliminates the “owner-operated” exception and those that permitted smoking in hotels, bars, warehouse facilities and employee break rooms.

Proposition 64 and Recreational Marijuana Use.  The passage of Proposition 64 does not impact the right of a California employer to prohibit marijuana use nor will it require an employer to accommodate such use.  The Act expressly states that it will not be construed or interpreted to restrict the right of an employer to maintain a drug-and alcohol-free workplace.  It cannot be interpreted to require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale, or growth of marijuana in the workplace.  And it does not affect the ability of employers to have policies prohibiting the use of marijuana by employees and prospective employees.

“Opportunity to Work” – San Jose’s Measure E.  Starting in the first quarter of 2017, employers in the City of San Jose must offer more hours to existing part-time workers before hiring new workers.  Businesses with less than 36 employees are exempt, and other businesses can apply for a “hardship” exemption.

 

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