Business Law Articles
By: Tonya D. Hubinger, Esq. & Roger J. Brothers, Esq.
Buchman Provine Brothers Smith LLP
Walnut Creek, California
2014 was a big year for legislation in the employment arena. Some of the more significant changes include the introduction of mandatory paid sick leave, potential liability for employers who use labor contractors (staffing agencies) and the requirement that supervisors receive anti-bullying training in addition to the sexual harassment training already required. In this Alert, we provide a brief introduction to the new laws impacting California employers.
Staffing Agency Wage Hour Violations
Assembly (“AB”) 1897 states that businesses that contract with labor contractors (including temporary and other staffing agencies) are directly liable to workers if/when those labor contractors fail to correctly and completely pay wages or fail to provide worker’s compensation insurance coverage.
Rest and Recovery Periods
Senate Bill (“SB”) 1360 requires the provision of paid “recovery periods” to employees in outdoor occupations in certain situations, in order to prevent heat-related illness. The bill clarifies that “recovery periods” are paid breaks and count as hours worked.
Waiting Time Penalties
Prior to the addition of AB 1723, the Labor Commissioner could cite an employer who pays less than minimum wage and include in that citation a civil penalty, restitution and liquidated damages. With the introduction of AB 1723, the Labor Commissioner may now also include “waiting time” penalties in the citation.
AB 2743 also addresses waiting time penalties by allowing a waiting time penalty if unionized theatrical and concert venue employers violate an agreed-upon timeframe for payment of final wages contained in a collective bargaining agreement.
Recovery of Wages
The statute of limitations for filing a lawsuit seeking to recover liquidated damages for minimum wage violations may now be filed any time before the expiration of the three (3)-year statute of limitations of the underlying wage claim. Not one (1) year, as recent cases suggested.
Discrimination against Employees with Undocumented Drivers’ License
Under existing law, the Department of Motor Vehicles (“DMV”) is required to issue drivers’ licenses to otherwise qualified California residents even if they were unable to submit proof that their presence in the United States was authorized under federal law. AB 1660 amends the California Fair Employment and Housing Act (“FEHA”) to make it illegal for an employer to discriminate against individuals because they hold or present such a driver’s license. This new law will create issues for California employers that are presented with Undocumented Drivers’ Licenses in response to the requirement to complete an I-9. It is unclear how federal and state law will come together in this area.
Expansion of “Unfair Immigration-Related Practices”
AB 2751 expands the definition of an “unfair immigration-related practice” to include threatening to file or filing a false report or complaint with any state or federal agency. Currently, the law provides protection solely for reports filed with the police. The bill also clarifies that an employer may not discriminate or retaliate against an employee who updates his/her personal information “based on a lawful change of name, social security number, or federal employment authorization document.”
Protection of Unpaid Interns and Volunteers
AB 1443 adds unpaid interns, volunteers and apprenticeship trainees to the list of individuals protected from harassment under FEHA. It further prohibits employers from (1) discriminating against individuals in an unpaid internship or another limited duration program and (2) extends religious belief protections and religious accommodation requirements to anyone in an apprenticeship training program, an unpaid internship or any other program to provide unpaid experience for a person in the workplace or industry.
Anti-Bullying Training – Prevention of Abusive Conduct
AB 2053 requires employers subject to the mandatory sexual harassment prevention training requirement for supervisors to include in the training prevention a component on the prevention of “abusive conduct.” Abusive conduct is defined as conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive and unrelated to an employer’s legitimate business interests. As drafted currently, the new law does not provide an employee the right to sue, but merely requires training on the prevention of abusive conduct.
Mandatory Paid Sick Leave
AB 1522, the Healthy Workplaces, Healthy Families Act of 2014, requires all employers with at least one (1) employee to provide paid sick leave to any employee who worked in California for thirty (30) days. Paid sick leave will accrue at the rate of one (1) hour for every thirty (30) hours worked. An employer may limit an employee’s use of paid sick leave to twenty-four (24) hours or three (3) days in each year and may put a maximum cap on total accrual of forty-eight (48) hours or six (6) days. Additionally, paid sick leave must be allowed to roll over and must be tracked on itemized wage statements. The effective date for employers to begin providing paid sick leave is July 1, 2015.
Emergency Personnel Leave Expanded
AB 2536 expands the list of employees eligible for protected time-off for emergency duty to include an officer, employee or member of a disaster medical response entity sponsored or requested by the State. It also requires employees who are health care providers to notify their employer when they become designated as emergency rescue personnel and when they are notified that they will be deployed as a result of that designation.
Miscellaneous Employment Laws
Responsibility for Data Breaches
AB1710 requires a business that owns, licenses or maintains personal information about a California resident to implement and maintain reasonable security procedures and practices appropriate to the nature of the information to protect the information from unauthorized access, destruction, use, modification or disclosure. If a business providing notification of a breach was the source of the breach, it must offer to provide appropriate identity theft prevention and mitigation services, if needed, to the affected person(s) at no cost for not less than twelve (12) months if the breach exposed or may have exposed specified personal information.
Cell Phone Use
In a recent California Court of Appeals case, it was decided that under Labor Code section 2802 employers are required to reimburse an employee who uses his/her cell phone for work regardless of whether or not the use of the cell phone increases the cost of the employee’s personal cell phone plan. Whether the employee has a cell phone plan with unlimited minutes or limited minutes, the reimbursement owed is a “reasonable percentage” of his/her cell phone bills.
Independent Contractor? Unlikely.
There were a number of cases decided in 2014 where the written agreements entered into between an employer and “independent contractor” were ignored and the Court looked instead to the economic realities of the relationship between the parties. In conjunction with these cases, the Department of Labor Standards Enforcement has said that “we will examine independent contractors with an eye towards the employment relationship and protections afforded to employees in this state….” In addition, the Labor Secretary issued a press release regarding funding for enhancing employer audit programs and conducting employer education initiatives. The key question is, who has the “right to control”, whether or not control is actually exerted.
California Family Rights Act (“CFRA”) Regulatory Changes
CFRA has not been updated since its inception in 1995. The Fair Employment and Housing Council adopted amendments to CFRA in mid-January 2015, which should go into effect as early as February 2015. These amendments are numerous, but include, among other provisions new definitions for military and veteran status, gender identity and gender expression. They also add provisions expressly addressing a disability accommodation that includes the need for support animals.
The foregoing is an abbreviated overview of certain laws that have been implemented or revised for 2015. We expect further attempts in 2015 to increase the number of paid sick leave days and to expand coverage to home healthcare workers. In addition, there are bills being proposed currently that would make it easier to sue franchisors or to allow pre-determined liens to be placed on employers. As always, the employment landscape is constantly changing.
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