New Laws Effective in 2014

         When it comes to employment legislation, 2013 was yet another big year of changes. The California Legislature continued its long-established trend of increasing employee protections and entitlements, while strengthening the enforcement powers of State regulators. The following is a summary of new employment laws taking effect on or after January 1, 2014.

Minimum Wage Increase

         On July 1, 2014, California's minimum wage will increase from $8 to $9 per hour, and then increase again to $10 per hour on January 1, 2016.

           It is important to note that the effect of these increases will not be limited to hourly employees. The new law also will increase the minimum salary required for an employee to be properly classified as overtime-exempt (the salary must be at least two times the state's minimum wage). After July 1st, the minimum monthly salary to preserve exempt status will rise to $3,120 per month (equivalent to $720 per week, or $37,440 annually). It will go up again in January 2016. California employers should verify that the salaries of any lower paid "exempt" employees meet the new minimum.

           At least two other overtime exemptions also are affected by the new minimum wage. The exemption for certain "inside" commissioned sales employees requires total compensation of at least 1.5 times the minimum wage (i.e., $13.50/hr.) for all hours worked. And, the overtime exemption for union-represented employees covered by a union contract requires that they be paid hourly rates which are no less than 130% of the minimum wage. As of July, that figure will be $11.70/hr. Employers taking advantage of these exemptions should verify that the salaries in question meet these new standards.

New Anti-Discrimination Protections for Military Reservists and Veterans

The Legislature added "military and veteran status" -- defined as past or present membership in the U.S. Armed Forces, U.S. Armed Forces Reserve, U.S. National Guard or California National Guard -- to the long list of protected classes under California's Fair Employment and Housing Act ("FEHA").  

Although California (and federal) law already prohibited discrimination against members of the armed services, and provided for reinstatement after military leaves, the new law will allow these employees (or job applicants) to file complaints with the California Department of Fair Employment and Housing. With the ongoing influx of veterans returning from Iraq and Afghanistan into a difficult employment market, military status discrimination claims could be the next big thing when it comes to employment discrimination.  

New Protections For Undocumented Immigrant Employees

       As the immigration debate rages in the United States Congress, California lawmakers have weighed in on the side of protecting undocumented workers from discrimination or other workplace abuses. A new law makes it unlawful for employers to report (or threaten to report) an employee's immigration status to immigration authorities in response to a claim for unpaid wages. Those that do may risk having the business's operating licenses revoked or suspended.

The new laws create a "rebuttable presumption" of unlawful retaliation (or engaging in a so-called "unfair immigration-related practice") whenever an employer reports (or threatens to report) an employee's undocumented status within 90 days of an the worker's having exercised his or her rights protected under the Labor Code or a local ordinance.   

          Though it is illegal to employ an undocumented worker, those who are working illegally can nevertheless take advantage of these new protections. Among other things, these employees may sue for the full array of damages available under the state's job bias law.   

Although the law expressly requires employers to verify an applicant's eligibility to legally work in the U.S., the new law may nonetheless create a substantial new basis for employee lawsuits. Notably, these protections apply not only to undocumented employees, but also to employees alleging that they were perceived by their employer to be undocumented.  

Expanded Protection and Increased Penalties for Retaliation against Employees Complaining about Unpaid Wages

   New Rights for Employee Crime Victims

           Many employers fail to understand that employee crime victims have workplace rights even if the crime in question occurs away from the workplace or has nothing to do with work. For example, existing law requires employers to provide unpaid leave to employees who are victims of a crime to appear as witnesses in court, and for victims of domestic violence or sexual assault to obtain a restraining order.

          A new law applicable to all employers adds "stalking victims" to the list of crime victims protected under these laws. The new law requires employers to reasonably accommodate time off requests and provide other accommodations which might be necessary to provide for the employee's safety in the workplace.

Employers with 25₊ employees must also offer time off to these employees to attend to court or medical appointments to obtain medical attention or counseling for injuries resulting from those crimes, to obtain the services of a domestic violence shelter, "participate in safety planning" or "take other actions to increase safety from future domestic violence, sexual assault, or stalking." For example, the reasonable accommodations which must be provided to protect the safety of employee crime victims covered under the law may include transfers to other locations, schedule changes, installation of locks on doors, changed work telephone numbers, changes of work requirements and/or implementation of new safety procedures. In response to such requests, employers may require certification of the employee's status as a covered crime victim and may require re-certification of the need for continued accommodation as often as every six months.

          Another new law creates a new legal claim for discrimination in the workplace and retaliation for covered crime victims and their loved ones. This new protection protects covered employee crime victims from discrimination and retaliation. It also affords the employee protection in the event that family members (children, parents, spouse or siblings) are victims of covered crimes. Under the new law, employers may not discriminate against these employees for taking advantage of the protections offered under these laws. Nor may an employer retaliate against those individuals. This would include such matters as missing work to appear in a legal proceeding where his or her rights as a victim are at issue (such as sentencing or delinquency hearings or hearings on early release of a perpetrator.) Notably, employee crime victims must also be allowed to use vacation or any other accrued paid leave time to cover these absences.

            To qualify for protected leave under either of the new laws, wherever feasible, an employee must provide reasonable advance notice of the need for leave and a written certification identifying the employee (or an immediate family member) as the victim of one of the specified serious crimes. This must be provided within a reasonable period of time after the absence. The certification may be in the form of a police report or court order, or a note from a healthcare provider, victims' advocate or counselor.   

Employers must maintain the confidentiality of both the request for leave for these purposes and the certification documents. Employees who suffer discrimination because of their crime victim status, or suffer retaliation for exercising their rights under the new laws, may file a complaint with the State Labor Commissioner within a year of the violation and may be awarded reinstatement and back pay.

       Employers should update their written leave policies and employee handbooks to reflect the new leave obligations and incorporate the new accommodation requirements. The new obligations should also be integrated into supervisor and management training programs to ensure the proper response to accommodation requests and the confidential treatment of related documentation.

Use of Expunged or Sealed Convictions 

in Employment Decisions

            Existing law already prohibits employers from requiring job applicants or employees to disclose arrests which did not result in convictions, or referrals to pre-trial diversion programs, as well as prohibiting consideration of such information as a factor in employment decisions. A new law expands those prohibitions to questions about, or consideration of, convictions that have been judicially expunged or ordered sealed. There are exceptions to the prohibition if the employer is required by law to obtain such information.

New Protected Training Leave for Reserve Peace Officers and Emergency Rescue Personnel

        Existing law encourages employee participation as a volunteer firefighter. The law states that employers with 50+ employees must allow employees who are volunteer firefighters to take up to 14 days of unpaid leave to attend fire and law enforcement training. That law has now been amended to extend the same leave entitlement to employees who are reserve peace officers or emergency rescue personnel.  

Overtime Pay for Domestic Employees

      AB 241, known as the Domestic Worker Bill of Rights ("DWBOR"), provides that in-home "personal attendants," (defined as employees who spend at least 80% of their work time supervising, feeding or dressing children or elderly or disabled persons), must be paid one and one half times their regular hourly rate of pay for any hours worked in excess of nine hours in a day or 45 hours in a workweek.

     Because such employees have long been subject to an exemption from the overtime requirements found in the California Wage Order No. 15 (governing household employees), the DWBOR is expected to lead to a substantial increase in the cost of home care, as well as an increase in home based overtime claims against third-party home care agencies and individuals and families who directly employ home care employees.

      There are several exemptions from the new requirements, including exemptions for close family members of the person cared for, casual babysitters, minors and employees employed under certain State health and welfare programs or who work for certain licensed facilities. Because of concerns that it will render home health care unaffordable, the law was enacted with a "sunset provision," and will automatically expire in three years unless renewed by the Legislature.

        A change in federal law on the subject is slated to take effect on January 1, 2015. Under that law, employers are expected to extend the FLSA's minimum wage and overtime protections to most workers who provide essential home care assistance to elderly people and people with illnesses, injuries, or disabilities. Similar to the change in California law, the new federal regulation narrows an overtime exemption (the so-called "companionship services" exemption) which has long been applied to home care workers.

        In light of these changes, employers of home care workers should insure that all required tax filings are completed and that the employee is covered under a workers compensation policy (often this is available as a rider to a homeowner's insurance policy). Home employers also should review staffing and scheduling options for limiting overtime work. If in-home care workers are paid on a salary or per-visit basis, employers should consider changing them to hourly pay to simplify payroll.

New Heat Illness Recovery Breaks

         Under existing law, employers must pay a penalty equal to one-hour's pay for missed meal and rest breaks. That law was amended to impose the same penalty for failure to provide breaks for certain employees exposed to high temperature conditions at work as required by applicable Cal/OSHA regulations. The amendment defines a "recovery period" as a "cooldown period afforded an employee who works outdoors to prevent heat illness." Employees who work outside must be allowed to take a cooldown rest for at least five minutes when they feel the need to do so in order to avoid overheating.

         This change no doubt will result in a new wave of class action lawsuits against employers who employ employees to work out of doors. Employers who engage employees to work outdoors are encouraged to take the following preventive steps: 1) review their Heat Illness Prevention plan and Employee Handbooks to make sure they are in compliance with Cal/OSHA regulations; 2) ensure that written policies reflect that employees are permitted and encouraged to request their mandated heat recovery breaks; 3) train management and supervisors about the importance of compliance and to ensure that these breaks are provided and documented when requested.

Higher Penalties for Labor Commissioner Citations

          Existing law provides that employees who file suit to recover unpaid wages may recover a penalty (called "liquidated damages") which is equal to 100% of the wages found due and owing, essentially doubling the amount recovered by the employee. Under a new law, the Labor Commissioner may recover these penalties as well if a citation is issued following an investigation by the Labor Commissioner.

Same Sex "Sexual Harassment" Definition Broadened

          The definition of "sexual harassment" found in the state's job bias law has been amended to clarify that harassing conduct does not have to be motivated by sexual desire to run afoul of the law. The amendment was passed to overturn a 2011 Court of Appeal decision - Kelley v. Conco Companies - a same-sex harassment case in which the court held that the plaintiff had to prove the harasser harbored sexual desire for the plaintiff to make a valid claim for same sexual harassment.

Eligibility for the State's Wage 

Replacement Benefits Broadened

        A new law expands the list of covered "family" members when determining eligibility for the State's family temporary disability wage replacement benefits. These benefits compensate employees who are taking an otherwise unpaid leave to care for a seriously ill family member. Existing law permitted these benefits to be paid when an employee takes time off to care for a seriously ill child, spouse, domestic partner or parent, or to bond with a child within one year of birth, adoption or foster care placement. Effective July 1, 2014, that list will be expanded so that benefits will also be payable to employees on leave to care for seriously ill grandparents, grandchildren, siblings or parents-in-law. It is important to note that the law does not expand employees' rights to a protected leave of absence, but only eligibility for State authorized wage replacement benefits under the State program.

Employer Recovery of Attorneys' Fees after 

Defeating Wage Claims

      Existing law allows an employee to recover his or her attorney's fees when the employee sues an employer for failure to pay the minimum wage or failure to pay overtime premiums and win. That same law will not permit an employer to recover its fees if the employee files suit and loses.

Other claims for unpaid wages or benefits are governed by a different provision of law which allows whichever side is the "prevailing party" to recover its attorney's fees. That section has now been amended to state that if the employer wins, it can recover its attorney's fees only if the employer can prove that the employee filed the lawsuit in bad faith.

Expanded Whistleblower Protections

          California's whistleblower statute prohibits employers from retaliating against employees who actually report an employer's suspected illegal activity to a governmental authority or refuse to participate in activities which the employee reasonably believes to be a violation of a federal or state statute or regulation. A new law substantially expands the state's whistleblower protections in three significant ways.

First, the new law extends whistleblower protection where the activities in question are believed to be in violation of local rules or regulations.

Second, the law now applies to internal complaints to a person with compliance duties and authority over the employee (i.e., a supervisor) or to another employee who has authority to investigate, discover or correct the violation or alleged non-compliance.

Third, the new law extends the anti-retaliation protections to an employee who hasn't actually made a complaint, but who the employer believes has done so or suspects might do so in the future.

Overhaul of Prevailing Wage Laws

            A series of amendments to California's so-called "prevailing wage" laws provide for stronger remedies against violators and more effective enforcement procedures.

            Prevailing wage laws require that employers engaged in "public works" projects must pay current prevailing union wages. "Public works" include not only work performed directly for a public entity, but also certain private construction or development projects that receive public funds. The Director of the Department of Industrial Relations ("DIR") has authority to determine whether a given project qualifies as a public work.

            The new laws provide new time limits for determining coverage under the prevailing wage law. Under the amendments, DIR must make an initial determination as to whether a project qualifies as a "public work" (and thus subject to the prevailing wage requirements) within 60 days of receiving a request for such a determination, and then allow for another 60 days to process any appeals of that determination. With these changes, a definitive determination will take no more than 120 days.

            Up until now, the main mechanism for enforcing these laws was by initiating a claim with the Labor Commissioner. In the past, the Labor Commissioner was required to assess any such penalties, if at all, within 180 days of completion of the project. The new law extends the deadline for such penalty assessments to 18 months following completion of the project.

           The new laws also provide an alternative route for recovery of underpaid wages through a civil lawsuit filed by a Joint Labor-Management Committee, which can recover unpaid wages, liquidated damages in the amount of the unpaid wages, interest and attorneys' fees. This action may be commenced within two years of a prevailing wage violation.