What’s new in California labor and employment laws in 2015?
There were major forces at work this past year that have made the labor and employment landscape in 2015 more dynamic and unpredictable than in recent years. A volatile political climate, still-sluggish economy, historic swing in the mid-term elections and aggressive federal initiatives has left many California employers wondering what 2015 holds in store.
New 2015 California Employment Laws
California’s 2014-2015 legislative session ended on August 31, 2014, with Governor Jerry Brown signing a number of important bills into law. Below is a brief summary of the most important legislation, relevant to the majority of California employers in 2015.
AB 1522 – Paid Sick Leave
- Employees who work for at least 30 days are entitled to paid sick leave, accruing at a rate of at least one hour for every 30 hours worked. An employer can cap an employee’s use of paid sick days to 3 days (24 work hours) per year. An employee is permitted to use their accrued sick days beginning on the 90th day of employment.
AB 2053 – “Prevention of Abusive Conduct” training.
- Employers that currently provide mandatory sexual harassment training must add ‘prevention of abusive conduct’ to the training curriculum for managers and supervisors. Abusive conduct is defined as conduct with malice that a reasonable person would find hostile, offensive and unrelated to the employer’s legitimate business interests.
AB 1897 – Labor Contractor Requirements
- Business entities with 25 or more workers that contract with staffing agencies or outside labor providers are now accountable for wage-and-hour violations. If the labor contractor fails to pay its employees properly or to provide workers’ compensation coverage, the law imposes legal responsibility on the client employer.
AB 1443 – Anti-harassment and discrimination protections against unpaid interns.
- Prohibits discriminating against unpaid interns and volunteers on the basis of any legally protected classification (such as race, religion, sexual orientation, disability, etc.) and to prohibit sexual harassment of them.
AB 1660 – FEHA Prohibits Discrimination based on Driver’s License for Undocumented Workers
- Last year, California passed AB 60 which authorized the Department of Motor Vehicles to issue a special driver’s license to an undocumented person. This law makes it illegal to discriminate against an individual because they hold such a license, indicating the worker is undocumented. It further prohibits an employer to require an applicant or employee to present a driver’s license unless having one is a requirement of the job.
AB 1847 – Updating Mental Health Disorders Language
- The law changes terms used to describe mental health conditions (such as “insane,” “mentally defective,” and “abnormal”) to “persons with a mental health disorder” or “persons who lack legal capacity to make decisions.”
California Workers’ Compensation Rates Highest in the Nation
California has once again reaffirmed its position as one of the least business-friendly states in the nation after being ranked as the most expensive state for workers’ compensation costs.
The 2014 Oregon Workers’ Compensation Premium Rate Ranking Summary reports that, on average, California businesses spend $3.48 for every $100 of payroll to pay for workers’ comp. That is almost double the national average rate of $1.85.
Initially, the study was established in the 1980s to measure the competitiveness of Oregon’s workers’ compensation costs and benefits against neighboring states. It has since become a measuring stick for workers’ comp programs across the United States.
Rising Rates, Despite Reforms
Over the past 5 years, California’s rates have risen over 40%. In 2012, the California legislature passed Senate Bill 863 which was touted as ushering in a new era of reduced claims litigation and improved efficiency. The projected savings from these new reforms were earmarked to increasing the benefits of injured workers. Unfortunately, despite the reforms, rates continued to rise as California moved up from 3rd most expensive state in 2012, to the most expensive 2 years later.
According to Jerry Azevedo, a spokesman for the California-based Workers’ Compensation Action Network, this increase can be blamed on a variety of factors, including:
- an increasing rate of work-related injury claims;
- increased workers’ compensation litigation;
- increasing workers comp medical costs;
- and higher unemployment rates, which is often linked to an increase in claim frequency.
Azevedo claims much of the collected premiums pay for attorneys who dispute medical treatments, while other money gets wasted in administrative overhead and brokers’ commissions.
In defense of SB 863, many of the reforms it introduced have yet to be fully implemented. Looking at the past, the future may hold promise for lower insurance rates. California’s lowest ranking in the past 15 years occurred in 2008 when it ranked 13th in workers’ comp costs. Those rates came on the heels of different legislative reforms which ultimately helped reduce insurance premiums by 66%.
2014 California Labor Laws
In case you are still trying to catch up with 2014 California employment laws, below is a list of legislation that went into effect last year.
Wage and Hour
AB 10 – Minimum Wage
AB 10 increases the minimum wage in California by two $1 increases. Effective on July 1, 2014, the new minimum wage will be increased to $9 per hour, and on January 1st, 2016 it will be raised an additional dollar to $10 per hour. The law requires employers to give notice to their employees 7 days prior to the effective date via a pay notice or other written notice.
AB 241 – Domestic Work Employees
This law provides specific overtime compensation for certain “in-house” employees. By definition, this employee must be a “domestic work employee who is a personal attendant.” It does not include casual babysitters. Many definitions and exclusions are included in the law, so those with “in-house” assistance are advised to carefully review the application of the legislation.
Federally, the U.S. Department of Labor declared new rules on personal attendants which will take effect January 1st, 2015 while the California law goes into effect on January 1st, 2014.
SB 435 – Meal and Rest Periods – Expansion to Heat Illness Recovery Periods
This law acts as an expansion to the current meal and rest-break law that gives employees a “recovery” period in order to protect them from heat illness. An employer cannot require an employee to work during this recovery period; this is mandated by state law under Cal/OSHA’s heat illness standard.
Employees working in outdoor environments are subject to Cal/OSHA’s heat illness standard which grants workers cool-down periods. These periods are for a minimum of 5 minutes per time, on an “as-needed.”
AB 442 – Damages for Minimum Wage Violations
AB 422 expands employer penalties issued by the Labor Commissioner for failing to pay minimum wage. For all violations, employers will be required to pay liquidated damages to the employees in addition to the existing penalties. “Liquidated damages” is financial compensation awarded to an employee for a loss or injury resulting from the employer’s failure to pay the minimum wage.
Leaves and Benefits
SB 288, SB 400 and AB 11 relate to permissible time-off of work under specific circumstances.
SB 228 allows employees to appear in court proceedings for specific crimes, such as solicitation for murder and vehicular manslaughter while intoxicated. Violations of the law will be enforced by the Labor Commissioner and employees must comply with requirements for requesting the leave.
SB 400 expands existing protections for victims of domestic violence, sexual assault and victims of stalking. These protections include taking time off to appear at legal proceedings and to seek medical/psychological treatment including safety planning (only for employers with 25 or more employees). SB 400 also adds a new reasonable accommodation under this statute that may include implementation of safety measures for these types of victims.
AB 11 requires an employer with 50 or more employees to provide a temporary leave of absence of up to 14 days per year for reserve peace officers and emergency rescue personnel to receive training. The current law allows training leave of absences for volunteer firefighters only.
Discrimination and Retaliation Protections
AB 556 – Protection for Military and Veterans
“Military and Veteran Status” is now added to the list of categories protected from employment discrimination under the Fair Employment and Housing Act.
SB 292 – Sexual Harassment Definition Clarified
This law clarifies further that sexual harassment does not need to be provoked by sexual desire. Hostile treatment can result in unlawful sexual harassment whether the behavior was motivated by sexual desire or not.
AB 263 – Protections for Exercising Rights Under Labor Code
AB 263 protects employees who assert their rights from being retaliated against by the employer. Currently this law only prohibits discharge and discrimination.
AB 263 also adds a procedure to specifically include a written or oral complaint by an employee that he or she is owed unpaid wages. If an employer fails to abide by this law, civil penalties of up to $10,000 per employee per violation may apply.
AB 263 expanded further in Immigrant Protections section below.
AB 263 – Retaliation and Unfair Immigration Practices
This law prohibits an employer from engaging in “unfair immigration-related practices” when an employee declares their protected rights. Specifically, an employer may not threaten to contact, or contact, immigration authorities because an employee complained that he or she was paid less than the minimum wage.
SB 666 – License Revocation for Threatening to Report Immigration Status; and
AB 524 – Criminal Extortion for Threatening to Report Immigration Status
These laws prohibit employer s from reporting, or threatening to report, an employee’s immigration status to the immigration authorities.
AB 524 sets the standard that if a person threatens to report the immigration status or suspected immigration status of an individual, his or her relative or a member of his or her family then that person may be guilty of criminal extortion.
AB 666 allows the state to suspend or revoke an employer’s business license if the employer reports, or threatens to report, the immigration status of a current or former employee, or an employee’s family member, because that employee makes a complaint about employment issues.
Employers are not subject to the suspension or revocation of a business license for requiring a worker to verify eligibility for employment under Form I-9.
AB 60 – Driver’s License for Undocumented Immigrants
AB 60 requires the California Department of Motor Vehicles (DMV) to issue a driver’s license to an undocumented person who can prove identity, California residency and who can meet all other licensing requirements, such as the written and behind-the-wheel exams.
This card will not be acceptable for federal purposes and will be noted on the driver’s license. This may not be used to verify eligibility for employment or be an acceptable I-9 Form. This will not take effect until January 1st, 2015 or as soon as the Department of Motor Vehicle’s director executes a specific declaration, which can be before the estimated date.