Every year, California enacts hundreds of new laws that take effect January 1st. Many of them involve employees/employers laws, and most notably, changes to labor and wage/hour laws. In 2017, a number of new laws signed by Governor Brown will affect California employers and employers with employees in California. A summary of the top new employment laws that will be taking effect on January 1, 2017 are below. Please note that this is not an exhaustive list and we are not going into significant detail as to each item. If you have questions about how any of the below items affect your business, please contact us.
1) New Minimum Wage Rules and Exempt/Non-Exempt Status of Employees Paid Less than $43,680
All employers with 26 or more employees must now pay employees $10.50 per hour, effective January 1, 2017. The law establishes annual increases in the minimum wage for the next seven years (up to $15.00 per hour as of January 1, 2022). The new minimum wage also affects an employee’s classification – employees in California must also earn at least 2 times the minimum wage for full-time employment (defined as 40 hours per week) to maintain their status as exempt. So, employees must earn at least $43,680 to maintain status as exempt. Otherwise, they are deemed non-exempt and must accrue overtime, and be given meal/rest/etc. breaks. So, if your business has employees that are not paid at least $43,680.00 and you have more than 26 employees, then their wages must be increased in order to maintain their status as exempt employees.
2) Bathroom Bill / Gender-Assigned Bathrooms
Effective March 1, 2017, businesses are prohibited from labeling any single-stall bathroom as either “male” or “female.” This means that if you business has any single-stall bathrooms, it must remove gender-identifiers and make the bathroom usable for users of any gender. Your business may have to update its signage.
Effective January 1, 2018, adults over the age of 21 will be permitted to use marijuana recreationally. As a result, all Employee handbooks should be updated to include new policies for marijuana use on the job. Proposition 64 continues to prohibit smoking while driving a vehicle, in all public places, and anywhere that smoking tobacco is prohibited. Possession of marijuana on the grounds of a school, day care, or youth center while children are present is illegal.
4) Smoke-Free Workplace Expansion
Labor Code Section 6404.5 now expands its smoke-free workplace protections by eliminating most of the previous exemptions that allowed for smoking in certain work environments. For example, hotel lobbies, bars, taverns, gaming clubs and warehouse facilities were not considered “places of employment,” and thus smoking was permitted. These exemptions, among others, have been removed, and now only seven narrow exemptions remain. Further, the new law now outlaws designated smoke break rooms for employees; and also eliminated the exception for small businesses with a total of five or fewer employees. The workplace smoking ban now also includes owner-operated businesses in which the owner is the only worker. Finally, the smoking ban includes the use of e-cigarettes and vaping devices that contain nicotine.
5) Juvenile Criminal Background Information
Employers may no longer ask or take juvenile criminal proceedings into consideration when making hiring decisions. California Labor Code Section 432.7 prohibits most employers from asking an applicant to disclose any arrest or detention that did not result in a conviction, or from using such information as a factor in connection with employment. Now, Assembly Bill No. 1843 expands this to prohibit employers from asking any information concerning or relating 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.
6) Notification as to Rights
Employers with over 25 employees must now inform new hires of his or her rights under laws protecting victims of Domestic Violence, Sexual Assault, and Stalking, by providing specific information in writing to new employees upon hire and to other employees upon request. Businesses must now notify all new employees about their rights to take off time for domestic violence, sexual assault, and/or stalking. The Labor Commissioner must develop a noticed employers can use by July 1, 2017. Businesses do not need to give notice until the form is developed by the Labor Commission.
7) Improvements to ADA-Abuse Lawsuits
Senate Bill No. 269 improved business’s rights and remedies for ADA/accessibility abuse lawsuits. The new law creates a rebuttable presumption that certain technical violations do not cause an individual to experience “difficulty, discomfort or embarrassment,” which would otherwise entitle him or her to statutory damages in a construction-related accessibility claim. This rebuttable presumption is available only to small businesses, namely, businesses that employ 25 or fewer employees on average over the past three years and have average annual gross receipts of less than $3.5 million. The new presumption arises when the businesses, within 15 days of receiving a summons and complaint, corrects all the technical violations that are the basis of the claim, if the claim is based on technical violations. SB 269 also exempts businesses that employ 50 or fewer employees from liability for statutory damages if the structure or area of the alleged violation was inspected by a Certified Access Specialist or “CASp” before a claim was filed and all required corrections were completed within 120 days of the inspection.
8) Immigration-Related Practices
Senate Bill 1001 makes it unlawful for an employer to engage in tough immigration-related practices. It is now illegal for an employer to (1) request more or different documents than required under Section 1324a(b) of Title 8 of the United States Code to verify that an individual is not an unauthorized immigrant; (2) refuse to honor documents tendered that on their face reasonably appear to be genuine; (3) refuse to honor documents or work authorizations based on specific status or term that accompanies the authorization to work; or (4) attempt to reinvestigate or re-verify an incumbent employee’s authorization to work using an unfair immigration-related practice. An employee who suffers an unfair immigration-related practice can file a complaint with the Division of Labor Standards Enforcement. The bill also provides that a violation of these provisions can result in a penalty of up to $10,000.
9) Voiding of Employment Agreements Clauses re: Venue/Forum
Effective January 1, 2017, all employment agreements or clauses that require a dispute with an employee to be adjudicated somewhere other than California or requiring the law applied to be the state law of another state other than California, can be voided by the employee. The new law allows attorneys’ fees to be awarded to the employee in challenging the provision. This means that if your business uses arbitration agreements or employment agreements, or employee handbooks requiring that any disputes with employees to be adjudicated, litigated, or arbitrated in any state other than California, the provision will be deemed void. To avoid any attorneys’ fees being sought by the employee in challenging the provision, all such documents should be updated to remove any forum or venue selection clauses. This applies specifically to arbitration agreements, and any agreement entered into on or after January 1, 2017 must not contain any such provisions.
10) Fair Pay Act Expanded to Race and Ethnicity
The California Fair Pay Act is being expanded to prohibit discrepancies in pay between employees based on race and ethnicity. Previously, the California Fair Pay Act prohibited employers from paying employees differently based on gender (i.e., paying men more than women, for equal work).
11) Sick Leave Ordinances
In addition to the California state-wide sick leave law, the following California cities now have sick leave ordinances applicable to some or all of the employees working within their boundaries: Berkeley, Emeryville, Oakland, Long Beach, the City of Los Angeles, the County of Los Angeles, San Diego, San Francisco, and Santa Monica. Often the ordinances are passed in conjunction with a higher local minimum wage. No two ordinances are the same and San Francisco’s was recently revised. Employers with employees in some or all of those cities or counties must comply with both state law and the applicable city/county ordinance.
Getting Legal Help
AXIS Legal Counsel provides legal advice to numerous small businesses with a variety of legal matters, including labor/employment and other matters concerning employees, wage/hour compliance, and legal compliance with California’s numerous employment and labor laws. If you need assistance with any legal matter, contact email@example.com or call (213) 403-0130 for a confidential consultation.
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