The California legislature was certainly busy last year, resulting in a number of new and significant employment laws effective January 1, 2018. Employers should take note of the following key developments and review their policies and practices—preferably with counsel—to ensure they are in compliance and limit their potential exposure.
Minimum Wage and Minimum Salary Basis Increase
California’s minimum wage increased on January 1, 2018 to $10.50 per hour for employers with 25 or fewer employees, and to $11.00 per hour for employers with 26 or more employees. As a result of this increase, the minimum salary an employee must earn to qualify for exempt status under California law will increase to $43,680 per year ($840 per week) for employers with 25 or fewer employees, and to $45,760 per year ($880 per week) for employers with 26 or more employees. These rates are set to increase again on January 1, 2019.
Employers should also be aware that many local municipalities and counties require a higher minimum wage than state law. Complying with the applicable minimum wage ordinance is important as these violations come at a steep price.
Ban the Box: Job Applicants’ Conviction History (AB 1008)
Effective January 1, 2018, all California employers with five or more employees are prohibited from asking applicants, in writing or orally, about their criminal conviction history. Any questions related to a criminal history should be removed from employment applications and hiring managers should be trained not to ask about criminal convictions during an interview. Only after a conditional offer of employment is made can the employer request that the employee submit to a criminal background check.
If the check reveals a conviction, there is an individualized assessment process that the employer must comply with and if the employer decides to rescind the offer of employment, a written decision must be issued to the applicant detailing the basis for the decision.
An employer’s liability for violating this restriction can be significant. An aggrieved individual may sue for the full range of damages available under the California Fair Employment and Housing Act, including compensatory damages, punitive damages, attorneys’ fees, and costs.
Ban on Seeking Job Applicant’s Compensation History (AB 168)
Effective January 1, 2018, the California Fair Pay Act prohibits all employers, regardless of size, from inquiring about an applicant’s salary history. In addition, it prohibits employers from relying on an applicant’s salary history as a factor in determining whether to make a job offer or what compensation to offer an applicant.
The new law also requires an employer to provide a pay scale for the position the applicant is seeking upon request.
In light of this new restriction, employers should remove questions about prior salary from their applications and any interview guidelines. They must also ensure recruiting and hiring personnel are careful not to solicit that information during interviews or to rely upon it. While the penalties for a violation of this provision remain unclear, no company wants to be the first to find out.
In light of this new restriction, employers should remove questions about prior salary from their applications and any interview guidelines.
Immigrant Worker Protection Act (AB 450)
Starting January 1, 2018, employers have a host of new requirements under the Immigrant Worker Protection Act relating to California’s decision to become a “sanctuary state.” Some of these requirements include:
- Barring immigration agents from nonpublic areas of a facility unless a warrant has been issued granting access.
- Prohibiting employers from voluntarily providing employee records to immigration enforcement agents.
- A new notice requirement to employees who are affected by inspection requests.
The violation of these new requirements can range from $2,000 to $10,000 per violation depending on the facts and circumstances around the violation.
Additionally, the law prohibits employers from re-verifying a current employee’s eligibility at a time or manner not required by law, including voluntary internal immigration compliance audits. An employer who conducts unlawful re-verification is subject to a civil penalty of up to $10,000.
Mandatory Management Training On Gender Identity, Gender Expression & Sexual Orientation Harassment
The Fair Employment and Housing Act (FEHA) requires employers with 50 or more employees to provide at least two hours of training on sexual harassment to supervisors every two years. Effective January 1, 2018, the Transgender Work Opportunity Act (which amends FEHA) requires employers to incorporate—as a component of this mandatory training—training on gender identity, gender expression, and sexual orientation harassment.
It also requires employers with five or more employees to prominently post a new poster issued by the DFEH (available here) that incorporates information from the FEHC regulations on gender identity and expression that were adopted in July 2017.
Parental-Leave Provisions Expanded to Smaller Employers (SB 63)
Under the existing California Family Rights Act (“CFRA”), eligible employees who work for larger employers (50 or moreemployees) may take up to 12 weeks of leave in any 12-month period for the birth, adoption, or foster care placement of a child. Beginning January 1, 2018, the New Parent Leave Act expands these parental-leave provisions to employees working for smaller employers with 20 or more employees.
Additionally, employers may not retaliate and/or discriminate against any individual for taking parental leave, and must maintain and pay for the employee’s continued coverage under a group health plan.
This update is intended to provide an overview of the most significant new developments impacting the California workplace. For more information about these new laws and regulations, please contact the employment law experts at RPNA to ensure your policies and practices are in compliance and up to date.