This past year California Governor Brown signed more than 1,000 bills into law—a staggering number by any measure. Many of these new laws go into effect in 2019 and will impact nearly every entity doing business in California. These laws cover a broad range of issues, including employee compensation (minimum wage and overtime), sexual harassment training, civil settlements and releases, passive liability, the composition of corporate boards, drinking straws, health insurance, and even what parents can feed their children.
To no one’s surprise, some of these laws have been and will be challenged in the courts. Many are intended to and will change the way business is done and how people in and outside California conduct their lives and businesses. In no particular order, below is a summary of the most significant changes anyone doing business in California should be aware of:
Any publicly held corporation with executive offices located in California (according to 10-K forms) must have at least one female on its board of directors by the end of 2019. By the end of 2021, the minimum number increases to two females if the corporation has five directors and three females if the corporation has six or more directors. The bill defines “female” as “an individual who self-identifies her gender as a woman, without regard to the individual’s designated sex at birth.” A corporation may increase the number of directors on its board to comply with this section.
Employee Training Requirements.
Employers with at least 50 employees are already required to provide two hours of sexual harassment training to supervisors and managers every two years. This requirement is being expanded to include all employers with at least five employees and will apply to supervisory and non-supervisory employees. Employers have until the end of 2019 to provide supervisors with two hours of sexual harassment training and non-supervisory employees with one hour of sexual harassment training. These requirements will have to be met every two years thereafter. Furthermore, temporary or seasonal employees must receive the required sexual harassment training within 30 days of being hired or within their first 100 hours worked.
Ban on Confidential Settlements.
Settlement agreements involving sexual harassment or discrimination that prevent the disclosure of certain factual information relating to civil or administrative claims are unenforceable. While settlement agreements can still protect the identity of the claimant (at his or her request) and the amount of the settlement agreement, the identity of the purported wrongdoer cannot be shielded.
Ban on Liability Releases.
Employers cannot require employees to enter into a release of a claim or right under FEHA (e.g., sexual harassment claims) as a condition of their continued employment or in exchange for a raise or bonus.
Liability for Nonemployee’s Activity.
Employers can already be held liable for the acts of nonemployees who sexually assault employees if the employers knew or should have known of the harassment and failed to take immediate corrective action. Now, employers can also be held accountable in the same way for other types of harassment by nonemployees that are barred by FEHA (e.g., race, religion, color, national origin, etc.).
Ban on Waivers of Right to Testify.
A provision in a contract or settlement agreement is unenforceable if it requires an employee to waive his or her right to testify in a proceeding concerning criminal conduct or sexual harassment on the part of the employer or its employees/agents, where the employee has been required or requested to attend the proceeding by court order, subpoena or written request from an administrative agency or the legislature.
Increasing Employer’s Summary Judgment Burden in Workplace Cases.
The state took express positions this year regarding several court decisions that will make it more difficult for employers to win summary judgment in workplace harassment cases:
- Affirming the court’s observation in Nazir v. United Airlines, Inc., 178 Cal. App. 4th 243 (2009), that work environment or harassment cases are “rarely appropriate for disposition on summary judgment.”
- Rejecting Brooks v. City of San Mateo, 229 F.3d 917 (9th Cir. 2000), and expressly providing that “a single incident of harassing conduct is sufficient to create a triable issue regarding the existence of a hostile work environment if the harassing conduct has unreasonably interfered with the [employee]’s work performance or created an intimidating, hostile, or offensive working environment.”
- Affirming the court’s decision in Reid v. Google, Inc., 50 Cal. 4th 512 (2010), rejecting the “stray remarks doctrine” and expressly providing that “the existence of a hostile work environment depends upon the totality of the circumstances and a discriminatory remark, even if not made directly in the context of an employment decision or uttered by a non-decision maker, may be relevant, circumstantial evidence of discrimination.”
- Affirming the decision in Harris v. Forklift Systems, 510 U.S. 17 (1993), that an employee “need not prove that his or her tangible productivity has declined as a result of the harassment. It suffices to prove that a reasonable person subjected to the discriminatory conduct would find, as the plaintiff did, that the harassment so altered working conditions as to make it more difficult to do the job.”
- Disapproving of Kelley v. Conco Companies, 196 Cal. App. 4th 191 (2011), to the extent that it conflicts with the legislature’s position that “the legal standard for sexual harassment should not vary by type of workplace. It is irrelevant that a particular occupation may have been characterized by a greater frequency of sexually related commentary or conduct in the past. In determining whether or not a hostile environment existed, courts should only consider the nature of the workplace when engaging in or witnessing prurient conduct and commentary is integral to the performance of the job duties.”
On January 1, 2019, the statewide minimum wage will increase to $12 for businesses with 26 or more employees and $11 for those with fewer employees. For businesses in the city of Los Angeles with 26 or more employees, the minimum wage is increasing to $14.25 on July 1, 2019. It is important for California employers to also comply with city and county local rules for minimum wage and other labor laws.
Employers are now prohibited from joining together to form association health plans that would be exempt from many of the ACA’s remaining coverage requirements.
Breastfeeding and Pumping in the Workplace.
Employers are already required to make reasonable accommodations for mothers to pump breast milk at work. With few exceptions, employers are now required to make available a private room or location (that is not a bathroom) for lactation purposes.
It was already the law that, upon request, employers must permit current and former employees to review their payroll records. The amended law provides that they also have a right to receive a copy of the records.
Cal/OSHA Reporting Requirements.
Cal/OSHA was previously unable to issue a citation more than six months after the “occurrence” of a record keeping violation. The term is expanded so that an “occurrence” will now continue indefinitely until (1) it is corrected, (2) Cal/OSHA discovers the violation, or (3) the duty to comply with the violated requirement ceases to exist.
Protected Employer Communications.
Employers are already protected from a lawsuit for defamation when they inform a prospective employer whether they would rehire an employee. This protection is now extended to include additional types of employer communications regarding sexual harassment: (1) employees who report sexual harassment, based on credible evidence and without malice, (2) communications between an employer and interested persons (e.g., victims or witnesses) regarding alleged sexual harassment that are made without malice, and (3) employers may state in a job reference whether an employee would not be eligible for rehire due to sexual harassment issues.
Personal Liability for Sexual Harassment.
Personal liability for sexual harassment in the course of a business, service or professional relationship is expanded from doctors, lawyers and bankers to now also expressly include elected officials, lobbyists, investors, directors and producers.
Conviction History Update.
Last year, a new law went into effect prohibiting employers from requesting information or basing a hiring decision on a person’s criminal record (with limited exceptions). The law is being revised to clarify that employers obligated by law to consider criminal convictions may inquire into an applicant’s criminal history under certain circumstances. Employers not required by law to consider an applicant’s criminal convictions must still refrain from requesting criminal history information until a conditional offer of employment has been made.
State Net Neutrality.
A bill regarding “net neutrality” was set to take effect January 1, 2019 but its implementation was blocked pending the outcome of a federal lawsuit.
Salary History Update.
A law went into effect last year barring employers from requesting an applicant’s pay history and requiring employers to provide the pay scale for a position to applicants upon request. The law is being revised to clarify that an employer may ask about an applicant’s pay expectations and that external applicants are entitled see the position’s pay scale only after passing an initial interview. Internal applicants applying for a position are not entitled to see the position’s pay scale and an employer may consider the internal applicant’s current salary where justified by non-discriminatory factors (e.g., seniority or merit).
Port Drayage Motor Carrier Blacklist.
Businesses with 26 or more employees who hire trucking companies will now be liable for wage and hour claims when they hire a port drayage motor carrier (“PDMC”) on the Division of Labor Standards Enforcement’s (DLSE’s) “Blacklist.” The “Blacklist” will be published on the DLSE’s website and will include bad actor PDMC’s (e.g., those with unsatisfied final judgment for taxes, wage and hour violations, independent contractor misclassification, etc.).
Required Sex Traffic Training.
Hotel and motel employers must provide at least 20 minutes of human trafficking awareness training to employees who are likely to interact with victims of human trafficking (e.g., front desk workers, housekeepers, bellhops, drivers, etc.). The training must be completed by the end of 2019 and every two years thereafter.
Plastic Straw Ban at Sit-Down Restaurants.
Full-service restaurants are prohibited from providing plastic straws unless the customer specifically requests one. The law defines a “full-service restaurant” as an establishment where food may be consumed on the premises and employees (1) escort customers to their table; (2) take food and beverage orders once seated; (3) deliver the food and beverage orders directly to the table; (4) deliver additional requested items to the table; and (5) deliver the check at the table. Accordingly, this new law does not affect fast food or takeout restaurants, and it does not affect non-plastic straws (e.g., straws made from paper, pasta, sugarcane, wood, bamboo, etc.).
Ban on Sodas with Kid’s Meals.
Restaurants may not include by default a soda with any “kid’s meal.” Restaurants may make the default kid’s meal beverage water, sparkling water, flavored water, unflavored milk or a nondairy milk alternative. A soda may be provided upon request.
Note: The foregoing are summaries of just some of the significant changes to California laws. Be sure to check the full text of the law and local ordinances for other changes that may apply. Human resource departments should ensure that compliant procedures, job application forms and workplace postings are in place for the new year.