2012 Legislative Update

The following is a synopsis of notable changes in California and federal employment laws that take effect in 2012.

California Law
AB 469 – Wage Theft Prevention Act
At the time of hiring, every employer must provide each employee with a notice containing the rate and basis of the employee’s wages. Employers must also notify each employee in writing within seven calendar days of any changes to the information contained in the notice unless the changes are reflected in the employee’s next wage statement. The Division of Labor Standards Enforcement has promulgated a form to be used for this purpose, which can be downloaded from the DLSE’s website:   All of the information contained within the form must be provided even if the form itself is not used.

In addition to paying civil penalties, employers who fail to pay employees the minimum wage will now be required to pay restitution to employees for unpaid minimum wages. Furthermore, employees may recover attorney’s fees and costs to enforce a judgment for unpaid wages. Employers who willfully fail to timely pay a judgment for wages will now be guilty of a misdemeanor and subject to fines, imprisonment or both for each offense.

This law also extends the time the Labor Commissioner has to commence action to collect a statutory penalty or fee from one year to three years.

SB 459 – Penalties for Willful Misclassification of Independent Contractors
Employers that willfully misclassify an employee as an independent contractor will be assessed a penalty of between $5,000 and $25,000 per violation. The law also prohibits employers who have willfully misclassified an employee as an independent contractor from charging the employee any fees or making any deductions from his compensation if such a fee or deduction would have been prohibited if the employee were not an independent contractor.

AB 22 – Use of Credit Report Information in Employment
This law prohibits employers, with the exception of certain financial institutions, from obtaining a credit report for employment purposes unless the applicant is seeking one of the following positions:
• positions in the state Department of Justice;
• managerial positions, as defined under the “executive” exemption to California overtime laws;
• peace officer or other law enforcement positions;
• positions for which the information contained in the report is required by law to be disclosed or obtained by the employer;
• positions involving regular access to specified personal information for any purpose other than routine solicitation and processing of credit card applications in a retail establishment;
• positions in which the person is or would be a named signatory on the employer’s bank or credit card account, or authorized to transfer money or enter into financial contracts on the employer’s behalf;
• positions involving access to confidential or proprietary information; or
• positions involving regular access to cash amounts of $10,000 or more.

If a credit report is obtained for one of these positions, the employer must provide written notice to the applicant or employee specifying the basis for requesting the report and providing the employee the opportunity to request a copy of the report.

AB 887 – Gender Non-Discrimination
Refines the definition of “gender” under the Fair Employment and Housing Act (“FEHA”) to include a person’s gender identity or gender expression. “Gender expression” is defined as “a person’s gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth.”

SB 299 – Extended Health Coverage During Pregnancy Leave
Employers must continue to maintain and pay for coverage under a group health insurance plan for employees on pregnancy disability leave for up to four months.

AB 592 – Pregnancy Leave/CFRA Leave
This law makes it an unlawful employment practice for employers to interfere with, restrain, or deny the exercise of, or the attempt to exercise, any right provided under the California Family Rights Act or the Pregnancy Disability Leave Law.

AB 1236 – Electronic Employment Verification
Prohibits the state, or a city, county, or special district, from requiring private employers to use an electronic employment verification system except when required by federal law or as a condition of receiving federal funds.

SB 559 – Discrimination: Genetic Information
This law expands FEHA to prohibit discrimination based on an applicant’s “genetic information.” Genetic information is defined as:
• an individual’s genetic tests;
• the genetic tests of the individual’s family members; or
• the manifestation of a disease or disorder in the individual’s family members.

SB 757 – Health Insurance Coverage for Domestic Partners
Existing law requires that domestic partners be provided with the same insurance coverage as spouses under all circumstances. However, policies issued outside the state of California to employers with a principal place of business and a majority of employees outside of California are exempt from this requirement. SB 757 eliminates that exemption by providing that no health insurance policy or certificate of health insurance marketed, issued or delivered to California residents may discriminate between spouses or domestic partners of the same sex and spouses or domestic partners of a different sex.

Increase in Minimum Salary Requirements for Exempt Computer Professionals and Physicians
California is raising the minimum salary required to qualify for the “computer professional” overtime exemption. Computer professionals must be paid a minimum of $38.89 per hour or $81,026.25 annually and not less than $6,752.19 per month. Similarly, the minimum rate for exempt physicians will increase to $70.86 per hour.

Federal Law

New Mandatory Federal Law Employment Poster
All employers subject to the National Labor Relations Act (NLRA) are required to post notices informing employees of their rights under the NLRA. The 11-by-17 inch notice will be provided at no charge by NLRB regional offices or may be downloaded from the NLRB website and printed either in color or in black and white. Employers must also post the notice on an internet site if personnel rules and policies are customarily posted there.