New Laws for 2015

01.13.2015
Employment Law Reporter, Ervin Cohen & Jessup LLP

With hundreds of laws being proposed in the California Legislature each year, it is hardly a surprise that more than a few are signed into law. For employers, staying abreast of these new laws is a necessity. What follows is an outline of the key employment law changes that go into effect in California in 2015. Unless otherwise stated, these laws became effective on January 1, 2015.

Mandatory Paid Sick Leave

A hot topic for legislators through the United States, last fall California became the second state to require paid sick leave. Effective July 1, 2015, California’s Healthy Workplaces, Healthy Families Act of 2014 provides that all employees working in California for 30 or more days within a year from the commencement of employment are entitled to paid sick leave, which means that temporary and part-time employees may be eligible. Sick leave must either (i) accrue at the rate of no less than one hour for every 30 hours worked, or (ii) total at least three days or 24 hours and be provided in full at the beginning of the year. Although sick leave that accrues may total more than three days per year, employers may limit use to three days or 24 hours per year of employment. Sick leave that accrues must carry over from year to year, but employers may cap accrual to six days or 48 hours. Employees must be entitled to use accrued paid sick days beginning on the 90th day of employment. Employees may use accrued paid sick days for their own health needs, including preventative care, or for the health needs of a broad group of family members, and sick leave may also be used for victims of domestic violence, sexual assault and stalking to attend to related legal matters.

Exempt employees are covered and will accrue and be paid for sick leave based on a 40 hour per week workweek, unless the employee’s work week is less than 40 hours, in which case the employee shall accrue paid sick days based upon that normal workweek. For an hourly employee, the rate of pay for sick leave would be the hourly wage. However, if in the preceding 90 days an employee had different hourly rates, was paid by commission, or was a nonexempt salaried employee, the rate of pay is calculated by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.

Employers must notify employees of their right to sick leave by posting a notice, and provide written notice on each payday of the amount of paid sick leave available. Employers must keep for at least three years records documenting hours worked, paid sick days accrued and paid sick days used by each employee. Various penalties apply if an employer fails to comply with the requirements of the new law and retaliation against an employee seeking to invoke his or her rights under the law is strictly prohibited.

SB 1034 Amends the Health and Safety and Insurance Codes

Senate Bill 1034 amended several sections of the Health and Safety Code and Insurance Code relating to waiting period limitations for healthcare coverage. The law serves to clarify that employer-imposed waiting periods are governed by the 90-day period authorized under the federal Patient Protection and Affordable Care Act. Prior to this revision, California only permitted a shorter, 60-day waiting period.

New Law Seeks to Encourage Higher Wages Through the Public Shaming of Employers

One of the more interesting laws to emerge from the 2014 legislative session was Assembly Bill 1792. AB 1792 amends and adds sections to the Government Code, Unemployment Insurance Code and Welfare and Institutions Code. Specifically, the law requires the State of California to compile information on the use of public assistance programs, including the average cost of state and federally funded benefits provided to each individual receiving benefits. “Public assistance program” is defined specifically as the Medi-Cal program. Thereafter, beginning in January of 2016, the law requires the state to post on the Internet a list of the top 500 employers that employ public assistance beneficiaries in California. “Employer” is defined as employing 100 or more beneficiaries. “Beneficiary” is defined as anyone enrolled for six months or more in any public assistance program and who is employed for one quarter, excluding any seniors or disabled persons. In addition to this list, the law prohibits any employer from discriminating or retaliating against beneficiaries and further prohibits the employer from disclosing an employee’s participation in a public assistance program. AB 1792 has a sunset provision which requires the law to expire on January 1, 2020.

AB 1792 is an effort by the state assembly to address a growing problem in California. Specifically, California has the highest number of poor working families in the country. The assembly perceives that employers who employ participants in public assistance programs are in fact shifting part of the cost of doing business to taxpayers in the State of California. It will be interesting to see how taxpayers react to the public shaming of these employers.

Employers Required to Train Supervisors on the Prevention of Abusive Conduct

Assembly Bill 2053 expands the existing requirement for sexual harassment training under Government Code section 12950.1 to include training on the prevention of abusive conduct. The law applies to every employer that employs 50 or more persons or receives the services of 50 or more persons pursuant to a contract. “Abusive conduct” is defined as conduct that a reasonable person would find hostile and offensive and is otherwise unrelated to legitimate business interest. Abusive conduct may include derogatory remarks, insults, epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating or humiliating, or the gratuitous sabotage or undermining of a person’s work performance. The new law states that a single act does not constitute abusive conduct, unless it is especially severe and egregious.

Legislature Addresses Workplace Safety Issues

Several new laws attempt to fine-tune workplace safety rules. Assembly Bill 326 amends Labor Codes section 6409.1. The law states that any injury or illness which results in lost time beyond the date of injury or illness or which requires more medical treatment than first aid must be reported to the Department of Industrial Relations within five days. The law further requires every employer to report a serious injury, illness or death to the Division of Occupational Safety and Health immediately by telephone or email or risk a civil penalty of up to $5,000.00.

Other revisions include Assembly Bill 1634, which prohibits the occupational safety and health appeals board from modifying civil penalties for abatement or credit unless the employer has fixed the violation. Further, this law generally prohibits a stay or suspension of an abatement requirement while an appeal or petition for reconsideration is pending in cases of serious violations. Exceptions exist where the employer can demonstrate that a stay or suspension will not adversely affect the health and safety of employees.

Senate Bill 1299 requires that Cal/OSHA adopt standards for hospitals to include workplace violence prevention plans as part of injury and illness prevention plans. These standards must be adopted by January 1, 2016.

Interns and Volunteers Protected from Workplace Harassment, Discrimination and Retaliation

Assembly Bill 1443 amends the Fair Employment and Housing Act to prohibit discrimination in the selection, termination, training or treatment of unpaid interns. In addition, AB 1443 prohibits the unlawful harassment of interns or volunteers and extends religious belief or observance protections to unpaid interns, apprentices and to participants in any unpaid work experience program.

California Legislature Fine-Tunes Immigration Related Protections

In 2013 the California Legislature enacted a number of laws that sought to protect undocumented workers in California. Assembly Bill 2751 amends Labor Code sections 98.6, 1019 and 1024.6 and fine-tunes these sections by expanding the definition of “unfair immigration practice” to include threatening to file or filing a false report or complaint with any state or federal agency; the prior version extended this protection only to reports filed with the police. AB 2751 also clarifies that an employer cannot discharge or retaliate against an employee who updates personal information based on a “lawful change of name, social security number or federal employment authorization.” The law authorizes civil actions and includes the possibility of a $10,000.00 penalty for each employee impacted as well as a court order suspending business licenses.

Drivers Licenses for Undocumented Persons

Assembly Bill 1660 further revised law that was enacted in 2013. Specifically, in 2013 Assembly Bill 60 allowed the Department of Motor Vehicles to issue drivers licenses to undocumented California residents. The licenses will be marked as “DP” (for “driving privilege”) and are required to be available as of January 1, 2015. AB 1660 builds on AB 60 by making it a violation of the Fair Employment and Housing Act for an employer to discriminate against an individual because he or she holds a DP license. The new law also clarifies that it is not intended to interfere with an employer’s obligation to comply with federal I-9 verification requirements under the Immigration and Nationality Act. Regardless, employers cannot require a person to present a driver’s license unless possession of a driver’s license is required by law or required by the employer and the employer’s requirement is permitted by law. AB 1660 further states that employers and the DMV are required to maintain any driver’s license information as confidential and not subject to release to the public.

Expansion of Wage Recovery Penalties

Continuing in a trend that started in 2013, the California Legislature focused considerable time and effort on expanding liability and increasing penalties under several existing laws in 2014. Assembly Bill 1723 amends Labor Code section 1197.1 by expanding the penalty for the failure to pay employees less than minimum wage to include penalties under Labor Code section 203 in addition to liquidated damages in the amount of the unpaid wages, recovery of the unpaid wages and pay period violations for each employee of $100.00 for the first pay period and $250.00 per pay period thereafter. AB 1723 further permits the Labor Commissioner to issue a citation for all of the available penalties, wages and liquidated damages. If the citation is uncontested, it may be entered as a judgment in the superior court in which the person assessed has or had a place of business. Any employer or other person acting either individually or as an officer, agent or employee of another person who pays or causes to be paid to any employee a wage less than the minimum can be held liable under this law.

Assembly Bill 2074 amends Labor Code section 1194.2 to allow a longer time period within which an employee can seek to recover liquidated damages for the failure to pay minimum wage. Prior case law held that such liquidated damages claims were subject to a one year statute of limitations. AB 2074 provides that a lawsuit seeking to recover liquidated damages for minimum wage violations can be filed at any time before the expiration of the statute of limitations that applies to the underlying wage claim, which is three years.

Assembly Bill 2288, the Child Labor Protection Act of 2014, provides additional penalties in connection with the employment of minors. The law provides a penalty in an amount of not less than $25,000.00 and not more than $50,000.00 for each violation regarding the employment of a minor 12 years of age or younger, defined as a “Class A” violation. In addition, AB 2288 states that the statute of limitations for any claim arising under the act shall be tolled until an individual has reached the age of 18. The new law prohibits any discrimination against an individual because he or she filed a claim that arose while the individual was a minor and provides for the possibility of treble damages in connection with such discrimination.

Recovery Periods Must Be Paid

Senate Bill 1360 amends Labor Code section 226.7 to clarify that rest and recovery periods should be paid and counted as hours worked. This law was passed to clear up any confusion that employers may have had regarding the addition of recovery periods to statute last year. A “recovery period” is a cool down period of at least five minutes which must be provided to employees who work outdoors on an as-needed basis.

Assembly Bill 1897 Targets Employers Who Contract for Labor

Assembly Bill 1897 is essentially an effort to hold employers who contract for labor accountable for wage and hour violations, something the legislature has sought to do in various failed legislative attempts over the last several years. Specifically, AB 1897 adds section 2810.3 to the Labor Code and requires client employers to share all civil legal responsibility and liability with labor contractors. “Client employer” is defined to exclude businesses with a workforce of less than 25 workers and employers who employ five or fewer workers through a labor contractor at any given time. The law excludes employees who are exempt from overtime wages in the calculations. The responsibility extended to the client employer includes not only wage and hour laws, but all workers’ compensation and Cal/OSHA requirements. Any contractual waiver regarding the application of the law between the client employer and the labor contractor is strictly prohibited, but the law does not prohibit the parties from enforcing otherwise lawful remedies against one another relating to their respective contractual obligations. The labor contractor and the employer are further prohibited from taking any adverse action against any worker for providing a notification of a violation or who files a claim or civil action. Interestingly, the law requires that a notice must be provided to the client employer for any violations at least 30 days prior to the filing of a civil action. The notice can be provided by either the worker or his or her representative.

Expansion of Time Off for Emergency Duty Requirements

Assembly Bill 2536 amends Labor Code section 230.3 to expand the definition of “emergency rescue personnel” to include disaster medical response entities sponsored or requested by the State of California. Officers, employees and members of such disaster medical response teams are to be treated the same as volunteer fire fighters and police reserve when taking time off to perform emergency duties. AB 2536 also requires an employee who is employed by a healthcare provider to notify his or her employer of his or her status as emergency rescue personnel and of any deployment at the time he or she learns that he or she will be deployed for emergency duty.

New Mileage Rates for 2015

Oil prices may be going down, but reimbursement rates are going up. On January 1, 2015, the IRS standard mileage deduction rate increased from 56¢ to 57.5¢ per mile for business miles driven. However, the rate for medical or moving purpose mileage decreased from 23.5¢ to 23¢. The rate for miles driven in service of a charitable organization remained set at 14¢ per mile. The business rate is based on an annual study of the fixed and variable costs of operating an automobile. The medical and moving rate is based on the variable costs. The charitable rate is based on statute.

Because California requires that all employers reimburse their employees for all costs incurred in performing their job duties pursuant to Labor Code section 2802, these rates are used by most employers to reimburse employees for expenses incurred in using their personal vehicles for business purposes. However, it is important to remember that neither employees nor taxpayers are required to use these rates as they have the option of calculating the actual expense of operating the vehicle.

This publication is published by the law firm of Ervin Cohen & Jessup LLP. The publication is intended to present an overview of current legal trends; no article should be construed as representing advice on specific, individual legal matters, but rather as general commentary on the subject discussed. Your questions and comments are always welcome. Articles may be reprinted with permission. Copyright ©2015. All rights reserved. ECJ is a registered service mark of Ervin Cohen & Jessup LLP. For information concerning this or other publications of the firm, or to advise us of an address change, please visit the firm’s website at www.ecjlaw.com.

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