Governor Edmund G. Brown recently signed several new employment bills into law for California Employers.
PAGA amended
California’s Private Attorney General Act (PAGA) authorizes an employee to file a civil action to recover specified civil penalties that otherwise would be assessed and collected by the Labor and Workforce Development Agency on behalf of the employee and other current or former employees for violations of the California Labor Code. PAGA claims based on an employer’s failure to provide an itemized wage statement that complies with Labor Code Section 226 are common. Section 226 requires an itemized wage statement to include, among other things, the inclusive dates of the pay period and the name and address of the legal entity that is the employer.
Assembly Bill (AB) 1506 amends PAGA to require that before an employee can file a civil action under the Act for noncompliant wage statements, he must give notice to the employer and an opportunity for the employer to fix the statements. An employer violation will be considered cured only upon a showing that the employer has provided a fully compliant itemized wage statement to each aggrieved employee for each pay period for the three-year period before the date of the employee’s written notice of the violation. AB 1506 limits the employer’s right to cure these violations to once in a 12-month period. The legislature declared AB 1506 an urgency statute, so it became effective immediately.
‘School activities’ leave expanded
Currently, Labor Code Section 230.8 requires employers with 25 or more employees to provide unpaid leave to employees who are a parent, guardian, or grandparent with custody of one or more children who are in kindergarten or grades 1 through 12 or are attending a licensed daycare facility. Employers must provide such employees with up to 40 hours of unpaid leave each year, not to exceed eight hours in any calendar month, to participate in school or daycare activities.
Effective January 1, 2016, SB 579 expands the reasons for which employees can take leave to include the following: (1) to find or enroll or re-enroll their child in a school or with a licensed childcare provider and (2) to address a childcare provider or school emergency. “Childcare provider or school emergency” is broadly defined to mean that an employee’s child can’t remain in school or with a childcare provider because of one of the following:
The school or childcare provider has requested that the child be picked up or has an attendance policy, excluding planned holidays, that prohibits the child from attending or requires the child to be picked up;
Behavioral or discipline problems;
The closure or unexpected unavailability of the school or childcare provider, excluding planned holidays; or
A natural disaster such as a fire, earthquake, or flood.
SB 579 also expands the time-off protections to cover employees who are stepparents, are foster parents, or stand in loco parentis (Latin for “in the place of a parent”) and eliminates the requirement that grandparents have custody to be covered. Further, the bill replaces the term licensed “child daycare facility” with the broader term licensed “childcare provider.”
‘Kin care’ law expanded
SB 579 also amends Labor Code Section 233, commonly referred to as the “kin care” law. The currently existing kin care law states that an employer that provides paid sick leave for employees must permit employees to use their accrued and available sick leave entitlement—in an amount not less than the sick leave that would be accrued during six months at their then-current rate of entitlement—to attend to an illness of their child, parent, spouse, or domestic partner.
Effective January 1, 2016, SB 579 requires employers to allow such leave to be used for the same reasons allowed under California’s new sick leave law:
The diagnosis, care, or treatment of an existing health condition of or preventive care for an employee or the employee’s family member; and
Certain absences resulting from domestic violence, sexual assault, or stalking.
The term “family member” is defined in accordance with California’s new paid sick leave law and includes not only a child, parent, spouse, or registered domestic partner but also a parent-in-law, grandparent, grandchild, or sibling. The rights and obligations under Section 233 should no longer be referred to as “kin care” leave since the amended Section 233 includes not only kin care leave but also leave for an employee’s own illness and leave for an employee who is a victim of domestic violence, sexual assault, or stalking.
Labor Code Section 233 and California’s new paid sick leave law are separate, nonexclusive rights. Covered employers must comply with both Section 233 and the new paid sick leave law.
Whistleblower protections expanded
Current law prohibits an employer from discharging an employee or in any manner discriminating, retaliating, or taking any adverse action against an employee or applicant because she has engaged in protected conduct. Protected conduct includes:
Making a written or oral complaint that she is owed unpaid wages or filing a claim relating to her rights under the jurisdiction of the labor commissioner (Labor Code Section 98.6);
Reporting suspected violations of a state or federal statute, rule, or regulation to a government or law enforcement agency, to a person with authority over the employee, or to another employee who has the authority to investigate, discover, or correct the violation or noncompliance (Labor Code Section 1102.5); or
Reporting unsafe working conditions (Labor Code Section 6310).
AB 1509 extends these protections to an employee who is a family member of a person who engaged in or was perceived to engage in protected conduct under Labor Code Sections 98.6, 1102.5, and 6310. The bill also expands joint-employer liability by changing the definition of employer under these antiretaliation laws to include “client employers” as defined under Labor Code Section 2810.3. Under that provision, a “client employer” is a “business entity, regardless of its form, that obtains or is provided workers to perform labor within its usual course of business from a labor contractor.”
Meal periods in healthcare industry
Gerard v. Orange Coast Memorial Medical Center (2015) 234 Cal.App.4th 285, a California appellate court held that Industrial Welfare Commission (IWC) Wage Order 5-2001, § 11(D), which governs meal periods for healthcare employees, was invalid to the extent it allows employees to waive their second meal periods on shifts longer than 12 hours.
In response, the legislature passed SB 327, which clarifies that contrary to the holding in Gerard, Section 11(D) of IWC Wage Orders 4 and 5 continues to be valid and enforceable. This bill was designated as urgency legislation and took effect immediately.
Rest and recovery periods for piece-rate workers
AB 1513 adds Labor Code Section 226.2, which requires employers to pay piece-rate workers for rest and recovery periods and other nonproductive time at specified minimum hourly rates. This compensation must be separate from the piece-rate compensation.
Piece-rate employees must be compensated for rest and recovery periods at a regular hourly rate that is no less than the higher of (1) the applicable minimum wage or (2) an average hourly rate determined by dividing the total compensation for the workweek, excluding compensation for rest and recovery periods and any premium compensation for overtime, by the total hours worked during the workweek, excluding rest and recovery periods. Such employees must be compensated for other nonproductive time at an hourly rate that is no less than the applicable minimum wage.
AB 1513 mandates that in addition to the other items specified in Labor Code Section 226, a piece-rate employee’s itemized wage statement must include (1) the total hours of compensable rest and recovery periods, the rate of compensation, and the gross wages paid for those periods during the pay period and (2) the total hours of other nonproductive time, the rate of compensation, and the gross wages paid for that time during the pay period.
AB 1513 includes a safe-harbor provision from civil actions for unpaid rest and recovery periods and other nonproductive time before December 31, 2015, if, by December 15, 2016, the employer fully compensates piece-rate employees for previously uncompensated or undercompensated rest and recovery periods and other nonproductive time from July 1, 2012, to December 31, 2015, and meets other requirements.
Enforcing wage provisions
AB 970 amends Labor Code Sections 558 (overtime) and 1197.1 (minimum wage) to authorize the labor commissioner to investigate and, upon a request from a local entity, enforce local laws regarding overtime hours or minimum wage provisions and to issue citations and penalties for violations, unless the local entity has already issued a citation for the same violation.
Labor Code Section 2802 requires an employer to indemnify employees for all expenses they incur in direct consequence of the discharge of their duties or as a result of obeying the employer’s directions. AB 970 amends Section 2802 to authorize the labor commissioner to enforce these provisions by issuing citations and penalties to employers that violate this requirement.
Restrictions on use of E-Verify
AB 622 adds Labor Code Section 2814, which provides that, except as required by federal law or as a condition of receiving federal funds, employers are prohibited from using the federal E-Verify system to check the employment authorization status of an existing employee or an applicant who hasn’t been offered employment at a time or in a manner not required under federal law or any federal agency memorandum of understanding governing the use of E-Verify.
This new law doesn’t prohibit an employer from using the federal E-Verify system to check the employment authorization status of a person who has been offered employment, as long as such use is in accordance with federal law.
Wage garnishment restrictions
SB 501 reduces the prohibited amount of weekly disposable earnings that may be garnished. Under current law, a withholding order can’t exceed the lesser of (1) 25 percent of an individual’s weekly disposable earnings or (2) the amount by which the disposable earnings for the week exceed 40 times the state minimum hourly wage.
Effective July 1, 2016, SB 501 reduces the maximum amount of disposable earnings subject to wage garnishment to the lesser of (1) 25 percent of the individual’s disposable earnings for that week or (2) 50 percent of the amount by which the individual’s disposable earnings for that week exceed 40 times the state minimum hourly wage in effect at the time the earnings are payable.
Public contracts—gender identity discrimination
Current law prohibits the state from entering into contracts for the acquisition of goods or services of $100,000 or more with a contractor that discriminates between spouses and domestic partners or same-sex and different-sex couples in the provision of benefits. SB 703 expands the law to also prohibit the state from entering into such contracts with a contractor that discriminates between employees on the basis of gender identity.
Bottom line
This article highlights some of the California employment laws recently signed into law by the governor. You should review and update your employee handbook policies and procedures to ensure compliance with the new laws, including the expanded school activities leave and the Labor Code Section 233 leave. Also, you must review your practices to ensure you use E-Verify only in a time and manner permitted by federal law.
In addition, ensure that employees’ itemized wage statements are compliant with Labor Code Section 226. And for employees paid on a piece-rate basis, ensure that rest and recovery periods and other nonproductive time are paid in accordance with the new law set forth in Labor Code Section 226.2.
Adapted from an article by Cathleen S. Yonahara, Freeland Cooper & Foreman LLP
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