New Employment Laws in 2015

Posted on: October 22, 2014

It was a busy year for new employment-related laws and an activist Legislature. Below are brief summaries of the new employment-related laws most likely to affect employers generally. In some cases the new laws are considerably more complex than can be fully discussed in these brief summaries. Future newsletters will likely focus on the new laws of greatest interest to our clients. Unless indicated otherwise, these laws will go into effect January 1, 2015. For a full copy of the new laws, simply follow the links. Holden Law Group is here to support you if you have questions or concerns.

Construction: Prevailing Wage – AB 26

  • Broadens the definition of “construction” for purposes of determining what constitutes “public works.” Under the new definition, “construction” would also include work performed during the post-construction phases of construction, including but not limited to, all cleanup work at the jobsite. The previous definition included work performed during the design and pre-construction phases but made no mention of the post-construction phases.


Reports by Private Arbitration Companies  – AB 802

  • Requires private arbitration companies to report details about the arbitrations they conduct, including employment arbitrations. The reporting must be made available to the general public and must include the name of the employer among other details. This new mandate will reduce the privacy element of arbitration that was previously considered a benefit of arbitration.


Discrimination/Harassment: Unpaid Interns – AB 1443

  • Expands the scope of the California Fair Employment and Housing Act by extending its protection against harassment to unpaid interns and volunteers. It also makes it unlawful for an employer to discriminate against an unpaid intern on the basis of a protected category such as race, religion, disability, etc.


Employment: Paid Sick Days – AB 1522

  • Enacts the Healthy Workplaces, Healthy Families Act of 2014 and for the first time in California requires employers to provide paid sick leave.
  • Applies to all employers, regardless of size and mandates that paid sick leave benefit must begin being provided on or before July 1, 2015. Does not apply to employees covered by union contracts that meet certain requirements.
  • An employee who works in California for 30 or more days within a year from the commencement of employment is entitled to paid sick leave to be accrued at a rate of no less than one hour for every 30 hours worked. The employee may begin using the accrued sick days beginning on the 90th day of employment.
  • An employer has no obligation to allow an employee’s total accrual of paid sick leave to exceed 48 hours or 6 days.
  • Although the sick leave, like vacation pay, may not be forfeited, an employer may cap the accrual to a maximum of 48 hours or six days. Additionally, the employer may restrict the employee’s use of the accrued leave to 24 hours or 3 days in each year of employment.
  • Prohibits an employer from discriminating or retaliating against an employee who requests paid sick days.
  • Requires employers to satisfy specified posting and notice and recordkeeping requirements.


Occupational Safety and Health: Violations – AB 1634

  • Prohibits the Division of Occupational Safety and Health in the Department of Industrial Relations from granting, for serious violations, a proposed modification to civil penalties for abatement or credit for abatement unless the employer has abated the violation as specified or has submitted a statement to the Division with supporting evidence where necessary.
  • Authorizes the granting of a modification only if the violation has been abated or the signed statement and supporting evidence is received within 10 working days after the end of the period fixed for abatement.
  • Generally prohibits the stay or suspension of a requirement to abate the hazards affirmed by the decision or order during the pendency before the appeals board of a petition for reconsideration of a citation for a violation classified as a serious violation, repeat serious violation or willful serious violation.
  • Authorizes the appeals board to stay or suspend an abatement, upon petition by the employer, only if the employer demonstrates that a stay or suspension will not adversely affect the health and safety of employees.


Driver’s Licenses: Nondiscrimination – AB 1660

  • Existing law (Vehicle Code § 12901.9) requires the Department of Motor Vehicles to issue a driver’s license to a person who cannot prove he or she is legally in the United States if the person meets all other qualifications for the driver’s license and provides satisfactory proof of his or her identity and California residency.
  • This bill expands the protections of the Fair Employment and Housing Act by defining “national origin” discrimination to include discrimination on the basis of possessing a driver’s license issued pursuant to section 12901.9.
  • Makes it a violation of the Unruh Civil Rights Act for a business establishment to discriminate against an individual because he or she holds or presents a license issued under section 12901.9. Clarifies that any action taken by an employer to comply with any requirement or prohibition under the federal Immigration and Nationality Act is not a violation of the law.
  • Clarifies that driver’s license information obtained by an employer shall be treated as private/confidential and exempt from disclosure under the California Public Records Act. Prohibits disclosure to any unauthorized person or use for any purpose other than to establish identity and authorization to drive.


Wage Claim Penalties – AB 1723

  • Provides that an employer cited by the Labor Commissioner for failure to pay minimum wages shall be subject to any applicable “waiting time” penalties pursuant to Labor Code 203 in addition to existing civil penalties, restitution of wages and liquidated damages.


Labor Contracting: Client Liability – AB 1897

  • Provides that a client employer shall share with a labor contractor all civil responsibility and civil liability for (1) the payment of wages to workers provided by a labor contractor; (2) the failure to report and pay all required employer contributions, worker contributions, and personal income tax withholdings; and (3) failure to secure valid workers’ compensation coverage.
  • Prohibits a client employer from shifting to a labor contractor any legal duties or responsibilities related to workplace health and safety.
  • Clarifies that the subject provisions are in addition to, and supplemental of, any other theories of liability or requirement established by statute or common law.
  • Specifies that the bill does not prohibit a client employer from establishing, exercising, or enforcing by contract any otherwise lawful remedies against a labor contractor for liability created by acts of a labor contractor, and vice versa.
  • Requires a client employer to provide to a state enforcement agency, upon request, any information in its possession, custody or control, required to verify compliance with applicable state laws.
  • Authorizes the Labor Commissioner, the Division of Occupational Safety and Health, and the Employment Development Board to adopt regulations and rules of practice and procedure necessary to administer and enforce provisions of the bill.
  • Declares that any waiver of the provisions of the bill is contrary to public policy, void and unenforceable.
  • Provides that the bill shall not be interpreted to impose liability on a client employer for the use of a bona fide independent contractor or to change the definition of an independent contractor.


Public Works: Recovery of Contractor’s Costs – AB 1939

  • Authorizes a contractor to bring a court action to recover from the hiring party that the contractor directly contracts with, any increased costs, including labor costs, penalties, and legal fees incurred as a result of any subsequent decision by the Department of Industrial Relations, the Labor and Workforce Development Agency or a court that classifies the project, or any part thereof, as a public work.
  • Authorization does not apply if (1) the developer of a construction project or its agent expressly advised the contractor that the work to be covered by the contract would be a “public work” or (2) the party with whom the contractor has a direct contract expressly advised the contractor that the work would be a “public work.”
  • Specifies that in order to be entitled to recovery of increased costs, the contractor shall notify the party with whom it has a direct contract and the developer within 30 days after receipt of notice of decision.
  • Provides that these provisions do not apply if the conduct of the contractor caused the project to be a “public work,” or the contractor has actual knowledge that the work is a “public work.”


Employment Discrimination or Harassment: Education and Training: Abusive Conduct – AB 2053

  • Expands the existing training and education requirements placed on larger employers regarding sexual harassment. The bill mandates that employers include the prevention of “abusive conduct” as a component of their training programs.
  • “Abusive conduct” is defined as conduct of an employer or employee in the workplace, with malice, that reasonable person would find hostile, offensive and unrelated to an employer’s legitimate business interests. It may include repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, and epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating or humiliating, or the gratuitous sabotage or undermining of a person’s work performance.
  • Specifies that a single act shall not constitute “abusive conduct,” unless especially severe or egregious.


Recovery of Wages: Liquidated Damages – AB 2074

  • Existing law permits an employee to recover liquidated damages equal to the unpaid wages plus interest in a court action alleging payment of less than the state minimum wage.
  • This bill clarifies that the statute of limitations for a suit for liquidated damages is the same as the statute of limitations for bringing the underlying action alleging payment of less than the state minimum wage.


Public Works: Prevailing Wages – AB 2272

  • Revises the definition of “public works” to also include infrastructure project grants from the California Advanced Services Fund.


Child Labor Protection Act of 2014 – AB 2288

  • Tolls (extends) the statute of limitations for unlawful labor practices until a child worker attains the age of majority.
  • Authorizes an award of treble damages, in addition to other available remedies, to any individual who is discharged, threatened with discharge, demoted, suspended, retaliated against, subject to adverse action or in any way discriminated against because he or she filed a claim or civil action alleging a violation of the Labor Code that arose while he or she was a minor.
  • Increases the amount of a Class “A” civil penalty to an amount not less than $25,000 and not exceeding $50,000 for each violation against a child worker 12 years of age or younger.


Employees: Emergency Rescue Personnel – AB 2536

  • Existing law prohibits employers with 50 or more employees from discharging or otherwise discriminating against an employee for taking time off to perform emergency duty as a volunteer firefighter, reserve peace officer or emergency rescue personnel.
  • This bill expands the definition of “emergency rescue personnel” to include an officer, employee or member of a disaster medical response team sponsored or requested by the state.
  • Requires an employee who is a health care provider to notify his or her employer at the time the employee becomes designated as emergency rescue personnel and when the employee is notified that he or she will be deployed as a result of that designation.


Public Works: Apprenticeship Violations – AB 2744

  • Provides that in the event a contractor or subcontractor is determined by the Labor Commissioner to have knowingly committed a serious violation of any provision of law relating to apprentices, the Labor Commissioner may also deny to the contractor or subcontractor the right to bid on or be awarded or perform work on any public works contract for a period of up to one year for the first violation, and for a period of up to three years for a subsequent violation.


Unfair Immigration-Related Practices Penalty – AB 2751

  • Existing law prohibits employers from engaging in unfair immigration-related practices, including among other things, threatening to file or filing a false police report, in retaliation for an employee exercising a right protected under state or local labor and employment laws. An employer or person who violates the law is subject to a civil penalty of up to $10,000 per violation.
  • This bill requires that the civil penalty be awarded to the employee or employees who suffered the violation (as opposed to the state receiving the money).


Foreign Labor Contractors: Registration – SB 477

  • Existing law regulates the services of foreign labor contractors. This bill expands the regulation of such services as described below.
  • Requires, effective July 1, 2016, any person acting as a foreign labor contractor to register with the Labor Commissioner and follow additional contractual and bonding requirements.
  • Clarifies that foreign labor contracting activity does not include the services of an employer if those services are provided directly to foreign workers solely to find workers for the employer’s own use.
  • Prohibits, effective July 1, 2016, a person from knowingly entering into a contract for the services of a foreign labor contractor that is not registered.
  • Prohibits a foreign labor contractor or person using their services from assessing any fee, including but not limited to, visa fees, processing fees, transportation fees, legal expenses, placement fees, and other costs to a foreign worker for employment services.
  • Provides that a foreign worker may not be required to pay any costs or expenses that are not customarily assessed against all workers similarly employed.
  • Provides that a person may not intimidate, threaten, restrain, coerce, discharge, or in any manner discriminate against a foreign worker or member of his or her family in retaliation for a foreign worker’s exercise of any rights under the law.
  • Provides that a person who violates the regulations shall be subject to a civil penalty of not less than $1,000 and not more than $25,000 per violation. Provides that the Labor Commissioner or aggrieved person may bring the enforcement action.
  • Provides that a person shall not be jointly and severally liable under Labor Code section 999.8 for any act or omission by a foreign labor contractor engaged by the person provided the foreign labor contractor was registered no later than the first day of such engagement.


Farm Labor Contractor Licenses: Sexual Harassment – SB 1087

  • Amends Labor Code section 1695 to provide that no license to operate as a farm labor contractor shall be granted to a person who, within the past 3 years, has been found by a court or an administrative agency, to have committed sexual harassment of an employee or to have employed a supervising employee who he or she knew or should have known had been found to have committed sexual harassment within the past 3 years.
  • A farm labor contractor shall be deemed to satisfy this requirement if they execute a statement on a form provided by the Labor Commissioner that includes the following statement: “I have not been found to have committed sexual harassment by any court or any administrative agency within the preceding three years.” This requirement does not go into effect until the Labor Commissioner has posted such a form on its web site.
  • Amends Labor Code section 1690 to empower the Labor Commissioner to revoke, suspend, or refuse to renew any license if it is shown that the licensee has been found by a court or administrative agency to have committed sexual harassment of an employee or to have employed a supervising employee who he or she knew or should have known had been found to have committed sexual harassment within the past 3 years.


Limited Liability Companies: Income Taxes & Withholding – SB 1131

  • Excludes members of a limited liability company from the definition of an “employee” when the limited liability company is treated as a partnership for federal income tax purposes.
  • Provides that in such situations an employer is not required to withhold from the member for personal income tax.


Rest or Recovery Periods – SB 1360

  • Clarifies that a legally mandated rest or recovery period is counted as hours worked and therefore shall not result in any deductions from an employee’s wages.


Fair Pay and Safe Workplaces – Executive Order 13673 (federal law)

  • Not a new California law, but a relatively new law that may impact our clients who contract with the federal government.
  • Requires federal contractors (on contracts of $500k+) to disclose merits determinations, arbitration awards, and civil judgments in the preceding 3 years for violations of specified federal labor laws and yet to be determined state law equivalents. The federal laws include: Fair Labor Standards Act, OSHA, NLRA, Section 503 of Rehab Act of 1973, FMLA, Title VII, ADA and ADEA. The yet to be determined California laws (to be identified by guidance issued by the DOL) are likely to be FEHA, CFRA, Labor Code provisions and CAL-OSHA regulations. It would also require contractors to have their subcontractors disclose similar matters.
  • Disclosures would be pre-award and every six months during performance of the contract. Contractor (and subcontractor) would be provided with an opportunity to disclose steps taken to correct the violations or improve compliance. The disclosures could be the basis for denying a contract, as the Labor Compliance Advisor (a newly created position) is to evaluate whether the prospective contractor “is a responsible source that has a satisfactory record of integrity and business ethics.”
  • Prohibits employers with federal contracts exceeding $1 million from requiring employees to enter into pre-dispute arbitration agreements on claims arising under Title VII or any tort related to sexual assault or harassment. Prohibition does not apply to employees covered by a collective bargaining agreement, or where an employee or independent contractor consented to arbitration prior to the contractor/subcontractor bidding on the federal contract (so long as the arbitration agreement does not permit the employer to change the terms of the arbitration agreement).


Some of these new laws are likely to have a significant impact on employers. We will be analyzing the impact in the coming months and providing you with in-depth analysis in selected cases. In the meantime, if you have immediate questions or concerns about the new legislation, call us and we will be your resource and partner in navigating through the changes.


Holden Law Group