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Legislative Update – New California Labor and Employment Laws for 2015

In 2014, Governor Brown signed a variety of employment-related measures. These bills became law on January 1, 2015, unless otherwise specified. These new measures will affect the day-to-day business of employers in 2015. The highlights for these new employment-related measures follow:

General Employment
AB 1522 (Gonzalez) – Paid Sick Days

California law provides various forms of leave (paid and unpaid) to employees. Prior to January 1, 2015, paid sick leave was not mandated. AB 1522 enacted the “Healthy Workplaces, Healthy Families Act of 2014,” which now mandates paid sick leave, and applies to most California employers. The new paid sick leave law covers exempt and non-exempt employees (including part-time, per diem, and temporary employees). Specifically, the new law:

  • Mandates that employers provide at least 24 hours of paid sick leave per year. This benefit will apply to California employees who work 30 or more days within one year from the commencement of their employment.
  • Requires that employees accrue no less than one hour of sick leave for every 30 hours worked beginning on July 1, 2015, which employees are entitled to use beginning on the 90th day of their employment.
  • Authorizes employers to limit the amount of sick leave used to 24 hours or 3 days in each year of employment, though employees may accrue up to 48 hours or 6 days. Accrued paid sick days generally carry over to the following year.
  • Prohibits employers from discriminating or retaliating against employees who utilize paid sick leave.

Harassment and Discrimination
AB 1443 (Skinner) – Harassment: Unpaid Interns

Long-standing California law strictly prohibits harassment and discrimination of employees, applicants, employment training applicants, and apprentices. These protections are applicable on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status.

These protections have been extended to include individuals participating in an unpaid internship, volunteer opportunity, or other program that provides unpaid experience in a workplace or industry.

AB 2053 (Gonzalez) – Employment Discrimination: Education and Training: Abusive Conduct

Current law requires employers with 50 or more employees to provide training and education regarding sexual harassment to all supervisory employees. This training is to be a minimum of two hours and must be conducted within the first 6 months of an employee assuming a supervisorial position, and thereafter every two years.

This new law adds training on the prevention of abusive conduct to existing sexual harassment training requirements for supervisory employees. Abusive conduct is defined as malicious conduct that would reasonably be considered hostile, offensive, and unrelated to an employer’s legitimate business interests.

AB 326 (Morrell) – Occupational Safety and Health: Reporting Requirements

Current law requires an employer to file a complete report of every occupational injury or illness of each employee to the Division of Occupational Safety and Health within the Department of Industrial Relations. Immediate reporting via telephone or telegraph is required for cases involving serious injury, illness or death of an employee.
Employers must now make immediate reports by telephone or email to the Division of Occupational Safety and Health for every case involving an employee’s serious injury or illness or death.

AB 1897 (Hernandez) Labor Contracting: Client Liability

State law regulates the terms and conditions of employment and provides specific obligations for employers in California. Employers, for example, are prohibited from entering into a contract for labor or services if the employer knows or should know that there are insufficient funds available for the contractor to comply with existing labor and employment laws.

In a significant expansion of employer-based liabilities, employers who contract with labor contractors for employees will now share civil legal responsibility and liability for the payment of wages and the failure to obtain valid workers’ compensation coverage for all workers who are supplied under the contract. Client employers are also prohibited from shifting legal duties and liabilities for workplace safety to the labor contractor. Employers and contractors are required to provide enforcement agencies and departments, upon request, with information and documentation of compliance with these provisions. Exemptions include nonprofit, labor, and motion picture payroll service organizations, as well as third parties engaged in employee leasing arrangements.

AB 2365 (PĂ©rez) – Unlawful Contracts

Non-disparagement clauses are used in contracts to prevent individuals from making statements or taking any other action that can have a negative impact on the other party.
Responding to recent media reports identifying companies that were using non-disparagement clauses to silence unhappy customers, state law now prohibits a consumer goods or service contract from waiving a consumer’s right to make any statement relating to their retail experience, and also prohibits a consumer from being penalized for making statements about their retail experience.

Health Care Coverage
SB 1446 (DeSaulnier) Health Care Coverage: Small Employer Market

SB 1446 was an urgency statute that went into effect in July of 2014 when it was signed. It permits renewal of small employer (employers with fewer than 50 employees) health plans that fail to meet the requirements of the Affordable Care Act through the end of 2015 for group health insurance that was in effect on December 31, 2013, and was still in effect in July of 2014 when the law took effect.

SB 1034 (Monning) Health Care Coverage: Waiting Periods

Under federal law, group health plans and insurance issuers are prohibited from applying a waiting period that exceeds 90 days. Current law in California allows group health plans and policies to apply waiting periods up to 60 days as a condition of employment, provided that the condition is applicable to all eligible employees and dependents.
Health plans and health insurance policies in the group market are now prohibited from imposing waiting or affiliation periods in addition to the waiting period imposed by an employer. Group health plans or insurers are still permitted to administer a waiting period imposed by a plan sponsor or employer, though.

Employee Benefits
SB 1314 (Monning) – Unemployment Benefits

Under state law, the state Employment Development Department (EDD) considers the facts submitted by an employer to determine a claimant’s eligibility for unemployment compensation benefits. An administrative law judge could reconsider an unemployment eligibility determination if an appeal is filed by either the claimant or the employer within 20 days after mailing the notice of a determination.

The deadline for filing an appeal has now been extended. Beginning on or after July 1, 2015, claimants and employers have 30 days to appeal an unemployment eligibility determination.

AB 1792 (Gomez) – Public Benefits: Reports on Employers

AB 1792, referred to by some as the public shaming law, requires the state Department of Finance to identify and compile an annual list of private employers with 100 or more employees who are enrolled in public assistance programs. The Department will send a list of the 500 employers in the State with the most employees who are enrolled in public assistance programs to the Legislature and will post the list (a “list of shame”) on its website beginning in January of 2016, and continuing until January 1, 2020.