December 3, 2018

Employment Alert: Protect Your business in 2019 — Prepare for Changes in California Employment Law

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As always, the changing of the calendar year triggers the arrival of new laws with important implications for California employers.  Many new laws stem from the #MeToo movement, and most expand protections for employees in 2019 and beyond.  Additionally, several laws clarify the scope of employers’ obligations with respect to existing laws.  Below is a summary of the Top 10 new laws impacting most California employers.  Please contact one of our employment lawyers should you need further guidance on any of these changes.

1. Gender Representation Requirement for Boards of Directors (SB 826)

This new law requires that any publicly held corporation with its principal executive offices in California place at least one female director on its board of directors by December 31, 2019.  By the end of 2021, the law increases the required number to two female directors if the corporation has five directors and three female directors if the corporation has six or more directors.  The law also authorizes the Secretary of State to impose hefty fines for violations.  A first violation will incur a fine of $100,000 dollars, and any subsequent violations will incur a fine of $300,000 each.   Likewise, failure to timely file board member information with the Secretary of State will incur a fine of $100,000.

2. Clarifications Of The Prohibition On Salary History Questions (AB 2282)

Last year, AB 168 amended the California Labor Code to prohibit employers and their agents from inquiring about a job applicant’s prior salary, compensation and benefits.  The law has been amended to clarify several ambiguities.  First, the amended law will reflect the fact that employers are allowed to ask about a job applicant’s salary expectations.  Second, only external applicants are entitled to a “pay scale” (a salary or hourly wage range) upon request, and only after completing an initial interview. Current employees applying for a new position are not entitled to a pay scale upon request.  Third, when an employer provides an applicant with a pay scale, it need only include salary or hourly wage ranges.  Fourth, compensation decisions based on a current employee’s existing salary are permissible so long as they are justified by factors such as a seniority or merit system.

3. Expanded Defamation Protection For Harassment Victims And Employers (AB 2770)

This law is part of a series of new laws stemming from the #MeToo movement.  The law provides that employees who report sexual harassment will not be liable for defamation to the alleged harasser so long as the claim was (1) made without malice and (2) based on credible evidence.  Thus, as long as the two criteria are met, a report of sexual harassment will be privileged.  Further, employers are now entitled to reveal to anyone who inquires that they would not rehire an employee because of a determination that he or she engaged in sexual harassment.

4. Prohibition On Confidentiality In Sexual Harassment Settlement Agreements (SB 820)

This new law prohibits settlement agreements from including a confidentiality provision preventing the disclosure of factual information regarding allegations of sexual harassment, assault, or discrimination.  Any such provision will be void as a matter of law and public policy.  However, the law does not preclude confidentiality provisions forbidding the disclosure of a claimant’s identity if they are included at the claimant’s request.

5. Sexual Harassment Protections Expanded (SB 1300)

This law prohibits employers from requiring an employee, in exchange for a raise or bonus or as a condition of employment or continued employment, to (1) agree not to bring a Fair Employment and Housing Act (FEHA) claim against the employer or; (2) to sign a non-disparagement agreement preventing them from disclosing information about unlawful acts in the workplace, including sexual harassment.  The law also expands employer liability for unlawful harassment by non-employees if the employer, or its agents or supervisors, knows or should have known of the conduct and fails to take immediate and appropriate corrective action.  Further, the law prohibits a prevailing defendant from being awarded attorney’s fees and costs under certain circumstances.

6. Sexual Harassment Training Requirement Expanded (SB 1343)

This new law amends Government Code section 12950, which formerly required employers with 50 or more employees to provide all supervisory employees with at least two hours of workplace harassment training and education once every two years.  As of January 1, 2019, section 12950 will require all employers with five or more employees to provide workplace harassment training and education to all supervisory employees.  Further, starting January 1, 2020, employers must also provide non-supervisory employees with at least one hour of sexual harassment training every two years.

7. Minimum Wage Increases (SB 3)

January 1, 2019 will ring in the next mandatory minimum wage increase required by SB 3, which was signed in to law in 2016.  The state minimum wage will increase to $11 per hour for employers with 25 or fewer employees and to $12 per hour for employers with 26 or more employees.  Please recall that many local and city governments have their own minimum wage requirements.  Employers in those cities must take care to comply with those higher rates.

8. New Workers’ Compensation And Workplace Health And Safety Requirements (AB 2334)

This law requires the California Division of Occupational Safety and Health (Cal/OSHA) to monitor federal electronic record-keeping requirements.  The new law also extends the period an employer may be held liable for violations of workplace injury recording and reporting requirements. The period during which an employer may be held liable will be extended from six months to five years.  The bill re-defines an “occurrence” for purposes of issuing a citation or notice for a violation of recordkeeping requirements.  An “occurrence” now continues until (1) it is corrected, (2) Cal/OSHA discovers the violation, or (3) the duty to comply with the requirement that was violated is no longer applicable.

9. New Lactation Accommodation Requirements (AB 1976)

This law amends the California labor code to require employers to provide employees with a private lactation area “other than a bathroom.”  California Labor Code section 1031 previously required that employers provide employees with a private lactation area “other than a toilet stall.”  The amendment brings California law in line with federal law.  The law would deem an employer to be in compliance if the employer makes available a temporary location that meets specified conditions, including that the location be used only for lactation purposes.  The new law allows for the possibility of an undue hardship exception in certain limited circumstances.

10. Employee’s Right to Inspect or Copy Payroll Records (SB 1252)

California employees are entitled to “inspect or copy” their payroll records.  This law clarifies that the burden is on the employer to make and provide the copies, and that employees are not required to make the copies themselves.

Keesal, Young & Logan Employment Group

This information has been prepared by Keesal, Young & Logan for informational purposes only and is not legal advice. Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship between you and Keesal, Young & Logan. You should not act upon this information without seeking professional counsel.

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