The California Legislature completed its substantive legislative work for the year in the very early morning hours of Thursday, September 1, 2016, with the usual frenetic, last-minute flurry of bill-passing, including some bills that had been amended at the end of August.

Governor Brown will have until Friday, September 30, 2016, to sign or veto the almost 800 bills passed by the Legislature in the last weeks of the session, although he should act on most bills before that deadline.

Following are the major legislative developments affecting employment law for California private sector employers since our last report.¹

New Laws

The following bills have already been enacted. Unless otherwise noted, all new laws become effective January 1, 2017.

Agricultural Labor

SB 836 (218-page budget bill for 2016) requires that a person seeking to be licensed as a farm labor contractor attest, as part of the initial licensing or license renewal process, that the person’s supervisorial employees, including any supervisor, crewleader, mayordomo, foreperson, or other employee whose duties include the supervision, direction, or control of agricultural employees, have been trained at least once for at least two hours each calendar year in the prevention of sexual harassment in the workplace. The measure also requires that all new non-supervisorial employees, including agricultural employees, receive training during hire, and that all non-supervisorial employees, including agricultural employees, receive training at least once every two years in identifying, preventing, and reporting sexual harassment in the workplace.  The amended statute also specifies the nature of the required training.  The new requirements were effective June 27, 2016, as part of the 218-page budget bill. Adds new Labor Code section 1684(a)(8)(A)-(F); no substantive legislative history).

Collective Bargaining Agreements

SB 954 requires per diem wages to include industry advancement and collective bargaining agreements' administrative fees if the payments are made under a collective bargaining agreement to which the employer is obligated. The law excludes from per diem wages, if the payments are not made under a collective bargaining agreement to which the employer is obligated, employer payments related to certain apprenticeship or training programs, worker protection and assistance programs or committees established under the federal Labor Management Cooperation Act of 1978, and industry advancement and collective bargaining agreements' administrative fees. Finally, the measure prohibits credit for payments for industry advancement and collective bargaining agreement administrative fees if those payments are not made under a collective bargaining agreement to which the employer is obligated. (Amends Labor Code section 1773.1; legislative information here).

Workers’ Compensation

AB 2883 clarifies the rules that govern when owners or officers of businesses may exclude themselves from workers' compensation coverage, deletes a duplicative Labor Code Section, and adds provisions that specify how officers and owners of employers can declare that they are not "employees" of the company for purposes of workers' compensation insurance.  (Amends Labor Code sections 3351 and 3352, and repeals section 6354.7; legislative information here).

Talent Services

AB 2068 prohibits specific activities or omissions of a talent service, its owners, directors, officers, agents, and employees through any means of communication. The new statute extends the prohibition of failing to remove an artist’s information or photographs to those displayed on an online service, online application, or mobile application of the talent service, or one that the talent service has the authority to design or alter, and would require the talent service to also act on requests to remove information or photographs made by text message or other electronic communication. The new statute expands the notice requirement to contracts in which the talent service offers to display information about, or a photograph of, an artist on the service’s online service, online application, or mobile application. (Amends Labor Code sections 1703 and 1703.4; legislative information here).

Key Pending Bills

The following outlines the current status of key pending bills. Each measure's latest committee or house location is noted in italics.

Leaves of Absence

SB 654 was gutted and amended² on August 11, converting it from a two-year bill on toxic waste to a reiteration of 2015-2016’s SB 1166, which died July 1 for failing to meet a necessary deadline.  This bill would create the “New Parent Leave Act,” which would prohibit an employer from refusing to allow an employee with over 12 months of service with the employer, and who has at least 1,250 hours of service with the employer during the previous 12-month period, to take up to six weeks of [unpaid] parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement. The bill would also prohibit an employer from refusing to maintain and pay for coverage under a group health plan for an employee who takes this leave.  The bill would become operative on January 1, 2018.  For this provision’s application to the private sector, an employer is defined as “a person who directly employs, within 75 miles of the worksite where an employee is employed, 20 or more persons to perform services for a wage or salary.”  The California Chamber of Commerce designated the bill a “job killer.”

Equal Pay

SB 1063 would, by amending California’s equal pay statute, prohibit an employer from paying any of its employees at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work.  (The bill is double-jointed³ with AB 1676).

AB 1676, which previously prohibited an employer from demanding an applicant’s salary history, was gutted and amended in the Senate.  The bill now specifies that, for California’s equal pay statute (Labor Code § 1197.5), prior salary cannot, by itself, justify any disparity in compensation under the bona fide factor exception to the prohibition on discrimination based on gender.  (The bill is double-jointed with SB 1063).

Janitorial Industry

AB 1978 would expand certain employer requirements to those in the janitorial industry. The bill would apply to about 220,000 California employees in this sector. The bill would require every janitorial employer subject to its provisions to keep accurate records of specific information regarding employees for three years. The bill would require the Division of Labor Standards Enforcement to enforce its provisions and would authorize the Labor Commissioner to adopt any regulations necessary to carry out the provisions of the bill. The bill would require every janitorial employer, effective July 1, 2018, to register annually with the Labor Commissioner under prescribed procedures. The bill would prohibit a janitorial employer from conducting any business without registration as required by the bill, and would authorize the Commissioner to revoke a registration under certain circumstances. The bill would set application and renewal fees for registration and require an employer to include specific information in the registration application. The bill would also prohibit the division from granting registration under specific circumstances. The bill would require the Commissioner to maintain on the department’s website a public database of registered property service employers. By January 1, 2019, the division would be required to establish a biennial, in-person sexual violence and harassment prevention training requirement for employees and employers with the assistance of a prescribed advisory committee to be convened by the director. The bill would also require employers, by July 1, 2018, and until the division establishes that training requirement, to provide employees with the Department of Fair Employment and Housing's pamphlet on sexual harassment.  The bill would establish civil fines for specific violations of its provisions and vest in the Commission the exclusive authority to enforce the civil fine provisions.  The bill’s publicly-stated co-sources are SEIU California, and Equal Rights Advocates.

Agricultural Industry Overtime for Farmworkers

AB 1066, the “Phase-In Overtime for Agricultural Workers Act of 2016” would remove the exemption for agricultural employees regarding overtime hours, meal breaks, and other working conditions, including specified wage requirements, and would create a schedule that would phase in overtime requirements for agricultural workers from 2019 to 2022.⁴  The bill would provide that employers who employ 25 or fewer employees would have an additional three years to comply with the phasing in of these overtime requirements. Beginning January 1, 2022, the bill would require any work performed by a person employed in an agricultural occupation for over 12 hours in one day be compensated at the rate of no less than twice the employee’s regular rate of pay. The bill would authorize the Governor to delay the implementation of these overtime pay provisions if the Governor also suspends the implementation of a scheduled state minimum wage increase. The bill would require the Department of Industrial Relations to update Wage Order 14 for consistency with these provisions.

Same-Sex Bathrooms

AB 1732 would, commencing March 1, 2017, require all single-user toilet facilities in any business establishment, place of public accommodation, or government agency to be identified as all-gender toilet facilities. The bill would authorize inspectors, building officials, or other local officials responsible for code enforcement to inspect for compliance with these provisions during any inspection.

Private Sector Retirement Programs

SB 1234 provides legislative approval for the California Secure Choice Retirement Savings Program (SCRSP; additional information available here) and sets forth recommendations and requirements for the design and implementation of that program. In its current form, Secure Choice would apply to private sector employers with five or more employees that do not offer an employer-sponsored retirement plan. Employers that fit this definition would be required to either offer an employer-sponsored retirement plan, or to automatically enroll their employees into Secure Choice by creating a payroll contribution to the employee’s personal Secure Choice Retirement account.  Employers would have minimal administrative responsibilities. They would only be required to: (1) enable employees to make an automatic contribution from their paycheck into their Secure Choice Account; (2) transmit the payroll contribution to a third-party administrator to be determined by the Board; and (3) potentially provide state-developed informational materials about the program to their employees.

Other Pending Bills

While the previously mentioned bills are likely of the most interest to employers, there are other pending bills that would also affect some private sector employers.

Apprenticeship

AB 1926 would require, when a contractor requests the dispatch of an apprentice to perform work on a public works project, and requires compliance with certain pre-employment activities as a condition of employment, that the apprentice be paid the prevailing rate for the time spent on any mandated pre-employment activity, including travel time to and from the activity, if any, except as specified in the bill.

AB 2288 would require that the California Workforce Development Board and each local board ensure, to the maximum extent feasible, that federal Workforce Innovation and Opportunity Act of 2014 funds awarded for pre-apprenticeship training in the building and construction trades fund program and services that: (1) follow the Multi-Craft Core Curriculum implemented by the State Department of Education; and (2) develop a plan for outreach and retention for women participants to help increase the representation of women in the building and construction trades. The bill’s listed source is the State Building and Construction Trades Council, AFL-CIO.

Agriculture Industry

SB 702 would extend until January 1, 2022, a Lake County-specific exemption of child labor law that allows minors to work during the peak agricultural season when school is not in session.

Arbitration

SB 1007 would allow a party to an arbitration proceeding the right to have a court reporter present during the arbitration proceeding.

SB 1078 prohibits an arbitrator in consumer arbitrations from entertaining or accepting, from the time of appointment until the conclusion of the arbitration, any offers of employment as a dispute resolution neutral in another case involving a party or lawyer for a party in the pending arbitration without the prior written consent of the parties. This bill also adds specified prohibitions and disclosure requirements relating to certain solicitations made by, or at the direction of, a private arbitration company to a party or a lawyer for a party in a pending arbitration.

Background Checks

AB 1843 would prohibit an employer from asking an applicant for employment to disclose, or from utilizing as a factor in determining any condition of employment, information concerning or related to an arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while the person was subject to the process and jurisdiction of juvenile court law. The bill, for the prohibitions and exceptions described above, would provide that “conviction” excludes an adjudication by a juvenile court or any other court order or action taken regarding a person who is under the jurisdiction of the juvenile court law, and would make related and conforming changes. The bill would prohibit an employer at a health facility from inquiring into specific events that occurred while the applicant was subject to juvenile court law, with a certain exception, and from inquiring into information concerning or related to an applicant’s juvenile offense history sealed by the juvenile court. The bill would require an employer at a health facility seeking disclosure of a juvenile offense history under that exception to provide the applicant with a list describing offenses for which disclosure is sought.

Commuter Benefits

SB 1128 would remove the January 1, 2017, sunset provision from a program requiring certain employers in the San Francisco Bay Area to offer alternative-commute benefits to their employees.

Domestic Worker Bill of Rights

SB 1015 would delete the January 1, 2017, repeal date of the Domestic Worker Bill of Rights.

Employment Discrimination

AB 488 would authorize individuals employed under a special license in a nonprofit sheltered workshop or rehabilitation facility to sue under the Fair Employment and Housing Act (FEHA) for prohibited harassment or discrimination.

AB 1687 would prohibit a commercial online entertainment employment service provider that contracts to provide employment services to an individual, upon request of the subscriber, from either publishing or making public, the subscriber’s date of birth or age information in an online profile of the subscriber, or sharing the subscriber’s date of birth or age information with any Internet Web sites for publication. This bill, sponsored by the Screen Actors Guild, additionally requires a service provider to remove within five days the subscriber’s date of birth and age information in an online profile from public view on any companion Internet Web sites under its control upon request by the subscriber.

Government Contractors

AB 1890, the Equal Pay for Equal Work Act of 2016, would require an employer with a state contract that amounts to $50,000 or more that either (a) is required by federal regulations to submit a federal nondiscrimination report, or (b) has 100 or more employees in the state, to submit an annual report to the Department of Fair Employment and Housing (DFEH) that includes summary data on the compensation paid to employees, sorted by gender and race, and a description of the employer’s policies designed to ensure pay equity and prevent unlawful discrimination.

Health and Safety

SB 1167 would require the Division of Occupational Safety and Health, by January 1, 2019, to propose to the Occupational Safety and Health Standards Board for the board’s review and adoption, a heat illness and injury prevention standard applicable to workers working in indoor places of employment. The bill would specify this requirement does not prohibit the division from proposing, or the standards board from adopting, a standard that limits the application of high-heat provisions to certain industry sectors.

Unfair Immigration-Related Practice

SB 1001 would make it unlawful for an employer to request more or different documents than are required under federal law, to refuse to honor documents tendered that on their face reasonably appear to be genuine, to refuse to honor documents or work authorization based upon the specific status or term of status that accompanies the authorization to work, or to reinvestigate or re-verify an incumbent employee’s authorization to work. The bill would authorize an applicant for employment or an employee subject to an unlawful act prohibited by these provisions, or a representative of that applicant for employment or employee, to file a complaint with the Division of Labor Standards Enforcement. The bill would specify that any person who violates these provisions will be subject to a penalty imposed by the Labor Commissioner not exceeding $10,000, and be liable for equitable relief.

DFEH Investigations

SB 1442, which is sponsored by the DFEH, would, among other actions, require the DFEH (instead of the Secretary of the Health and Human Services Agency) to investigate and enforce the laws prohibiting discrimination in the conduct, operation, or administration of state or state-funded programs or activities on the basis of race, national origin, ethnic group identification, religion, age, sex, sexual orientation, color, genetic information, or disability, and to issue rules and regulations.  The bill would consolidate in the DFEH the authority to promulgate rules and regulations for various anti-discrimination statutes in the codes. (This bill is double-jointed with AB 2707).

Labor Commissioner Rulings

AB 2899 would require a person seeking a writ of mandate contesting the Labor Commissioner’s ruling on an employer’s non-payment of a minimum wage to post a bond with the Labor Commissioner, in an amount equal to the unpaid wages assessed under the citation, excluding penalties. The bill would require that the bond be issued for the unpaid employees and ensure that the person seeking the writ makes prescribed payments under the proceedings.  The proceeds of the bond, sufficient to cover the amount owed, would be forfeited to the employee if the employer fails to pay the amounts owed within 10 days of the proceedings' conclusion. 

Notifications and Postings

AB 2337 would require employers to inform each employee of his or her employment leave rights as a possible victim of domestic violence, sexual assault, or stalking, by providing that information in writing to new employees upon hire, and to other employees upon request. The bill would also require the Labor Commissioner, by July 1, 2017, to develop a form that an employer may elect to use to comply with these provisions and to post it on the Commissioner’s website.  Employers would not be required to comply with the notice of rights requirement until the Commissioner posts the form.

AB 2437 would require, on and after July 1, 2017, an establishment licensed by the Board of Barbering and Cosmetology (BBC) to post a model notice pertaining to workplace rights and wage and hour laws, developed by the Labor Commissioner, and would require the BBC to inspect for compliance of the posting requirement.

AB 2532 would repeal the existing requirement that every community action agency, or any private organization contracting with a state or local government agency that provides specified employment services, post in a prominent location in the workplace a notice stating that only citizens or those persons legally authorized to work in the United States may use the agency’s or organization’s employment services funded by the federal or state government.

AB 1847 would compel some employers required to notify employees who may be eligible for the federal earned income tax credit to also notify these employees they may be eligible for the California Earned Income Tax Credit under the same conditions.

Prevailing Wages

AB 326 would require the Department of Industrial Relations to release certain funds deposited in escrow, plus interest earned, to those persons and entities within 30 days following either the conclusion of all administrative and judicial review, or upon the department receiving written notice from the Labor Commissioner or his or her designee of a settlement or other final disposition of an assessment issued, or from the authorized representative of the awarding body of a settlement or other final disposition of a notice issued.

Public Works

AB 1505 would require that prosecution for a misdemeanor for evading provisions requiring public work projects be done by contract after competitive bidding, be commenced within three years of the commission of the offense, instead of one year.

Service Contractors

AB 1669 would extend to contractors and subcontractors that submit bids for contracts for the collection and transportation of solid waste, the existing 10 percent bidding preference for public transit service contractors and subcontractors that agree to retain employees of the previous contractor for a period of at least 90 days. The bill is sponsored by the California Teamsters Public Affairs Council. 

Unemployment Insurance Appeals

AB 2886 would extend the California Unemployment Insurance Appeals Board appeals window for State Disability Insurance and Paid Family Leave benefits from 20 to 30 days.

Workers’ Compensation

AB 1643 would prohibit apportionment in cases of physical injury based on pregnancy, menopause, osteoporosis, and carpal tunnel syndrome, and would require that breast cancer not receive less than the comparable impairment rating for prostate cancer.

AB 1922 would establish exceptions from workers' compensation insurance policy filing requirements for large employers that purchase high deductible policies.

What's Next?

The fate of these bills is now in the Governor's hands. We will publish a final California legislative update for 2016 following the September 30, 2016, deadline for action on these measures.