2013 bb&k labor & employment update: new legislation - private employers

BB&K 2013 ANNUAL LABOR & EMPLOYMENT LAW UPDATE 1

NEW LEGISLATION

Assembly Bill 1844 – Employer’s Use of Social Media

AB 1844 adds Chapter 2.5 commencing at Section 980 to the Labor Code. The new legislation prohibits an employer from requiring or requesting an employee or applicant for employment to disclose a username or password for the purpose of accessing personal social media, to access personal social media in the presence of the employer, or to divulge any personal social media. The exception to this prohibition is that an employer may request personal social media if the employer reasonable believes that the social media is relevant to an investigation of employee misconduct or a violation of laws and regulations. The social media information may only be used for the investigation or related proceedings. This new legislation also prohibits an employer from discharging, disciplining, threatening to discharge or discipline, or otherwise retaliating against an employee or applicant for not complying with a request or demand by the employer that violates these provisions. Under AB 1844, “social media” is expansively defined by the new law to include electronic content containing videos, still photographs, blogs, podcasts, text messages, email, or internet website profiles. The new legislation becomes effective January 1, 2013. AB 25, which has just been introduced, would make this law specifically applicable to public employers. Assembly Bill 2386 - FEHA Expanded to Prohibit Discrimination of Breastfeeding

Under the California Fair Employment and Housing Act, it is unlawful to engage in specified discriminatory practices in employment or housing accommodations based on stated protected categories, including sex. AB 2386 amends Government Code section 12926(q) to provide that, for purposes of the act, the term "sex", which already included gender, pregnancy, childbirth, and medical conditions related to pregnancy or childbirth, now includes breastfeeding or medical conditions related to breastfeeding. The new amendment states that it is declaratory of current law and should not be construed as creating new law. The new legislation becomes effective January 1, 2013.

Assembly Bill 1964 – FEHA Expanded to Prohibit Discrimination and Require Accommodation for Religious Dress and Grooming Practice

Under California’s Fair Employment and Housing Act (FEHA), Government Code § 12940 et seq., employers must reasonably accommodate religious beliefs and observances of their employees unless the accommodation would create an undue hardship for the employer. AB 1964 amends Government Code section 12926(p) to include religious dress and grooming practices as covered “beliefs and observances” against religious discrimination. In addition, the new law states that FEHA's “significant difficulty or expense” definition of undue hardship, not the narrower federal Title VII standard, applies to the FEHA religious discrimination section. AB 1964 also specifies that segregation, such as assigning an employee to a stock room out of public view, will no longer be an acceptable religious accommodation. The new legislation becomes effective January 1, 2013.


Assembly Bill 2674 – Right To Inspect Personnel Records

Under existing law, an employee has the right to inspect the personnel records that his or her employer maintains relating to the employee's performance or to any grievance concerning the employee. AB 2674 amends Labor code section 1198.5 to require an employer to maintain personnel records for not less than three years from termination and to provide a current or former employee, or his or her representative, an opportunity to inspect and receive a copy of those records within a specified period of time, except during the pendency of a lawsuit filed by the employee or former employer relating to a personnel matter. In addition, in the event an employer violates these provisions, the bill would permit a current or former employee or the Labor Commissioner to recover a penalty of $750 from the employer, and would further permit a current or former employee to obtain injunctive relief and attorney's fees. Under existing law, an employer who fails to permit an employee to inspect the employee's personnel records is guilty of a misdemeanor punishable by a fine or imprisonment, as specified. AB 2674 also provides that, instead, a violation of the above provisions requiring that personnel records be made available for inspection constitutes an infraction. The new legislation becomes effective January 1, 2013.

Assembly Bill 2103 – Overtime Pay, Nonexempt Salaries

Current law, with certain exceptions, establishes 8 hours as a day's work and a 40-hour workweek, and requires payment of prescribed overtime compensation for additional hours worked. Current law provides that for the purpose of computing the overtime rate of compensation required to be paid to a nonexempt full-time salaried employee, the employee's regular hourly rate shall be1/40th of the employee's weekly salary. AB 2103 amends Labor code section 515 to provide that payment of a fixed salary to a nonexempt employee shall be deemed to provide compensation only for the employee's regular, non overtime hours, notwithstanding any private agreement to the contrary, specifically overturning the decision in Arechiga v. Doleres Press (2011) 192 Cal.App.4th 567. The new legislation becomes effective January 1, 2013.

Assembly Bill 1744 – Itemized Wage Statements

Current law requires every employer, semimonthly or at the time of each payment of wages, to furnish each employee with an accurate itemized statement in writing showing specified information. Existing law provides that a knowing and intentional violation of this provision is a misdemeanor. AB 1744 amends Labor code section 226, effective July 31, 2012, to require that in addiction to the nine items of information already required, itemized statement include, if the employer is a temporary services employer, the rate of pay and the total hours worked for each assignment, with a specified exception. Existing law requires an employer to provide each employee, at the time of hiring, with a notice that includes specified information, such as the rate and the basis, whether hourly, salary, commission, or otherwise, of the employee’s wages, and to notify each employee in writing of


any changes to the information set forth in the notice within 7 calendar days of the changes unless such changes are reflected on a timely wage statement or another writing, as specified. Effective January 1, 2012, AB 1744 bill additionally requires that, if the employer is a temporary services employer, as specified, the notice include the name, the physical address of the main office, the mailing address if different from the physical address of the main office, and the telephone number of the legal entity for whom the employee will perform work, and any other information the Labor Commissioner deems material and necessary. Senate Bill 1255 – Penalty For Wage Statement Violations

For several years, California has required that employers provide employees with wage statements that provide nine specific categories of information. Previously, however, an employee had to show some injury in order for the employer to have monetary liability for violation of the requirement. Now, under the new law, an employee will be deemed to suffer injury if an employer fails to provide a wage statement, or if the employer provides inaccurate or incomplete information in any of the nine categories, and the employee cannot “promptly and easily determine” from the wage statement one or more of the following:

• For the pay period, the amount of gross or net wages paid to the employee, total hours worked, piece-rate units earned, deductions taken, inclusive dates, and all applicable hourly rates in effect and the corresponding number of hours worked at each rate;

• The specific deductions that were taken from gross wages to generate the net wages paid during the pay period;

• The name and address of the employer; and • The name of the employee and the employee identification number or the last four digits

of his or her social security number. Penalties for violation remain the greater of actual damages or $50 for the initial pay period, and $100 for each pay period thereafter, up to $4,000. The new legislation becomes effective January 1, 2013. Assembly Bill 2180 – Local Health Care Districts: Employment Contracts

AB 2180 adds section 32121.6 to the Health and Safety Code. Section 32121.6 provides that if a health care district enters into a written employment agreement with it administrator or CEO, the employment agreement must specify all material terms and conditions agreed to between the district and the administrator/CEO regarding compensation, deferred compensation, retirement benefits, severance or continuing compensation after termination of the agreement, vacation pay and other paid time off for illness or personal reasons, and other employment benefits that differ from those available to other full-time employees. The new legislation becomes effective January 1, 2013.

Assembly Bill 439 – Health Care Information

Current law, the Confidentiality of Medical Information Act (CMIA), prohibits a health care provider, a contractor, or a health care service plan from disclosing medical information, as defined, regarding a patient of the provider or an enrollee or subscriber of the health care service


plan without first obtaining an authorization, except as specified. In addition to other remedies available, current law authorizes an individual to bring an action against any person or entity who has negligently released his or her confidential records in violation of those provisions for nominal damages of $1,000. AB 439 amends Civil Code section 56.36 to specify that, in an action brought on or after January 1, 2013, a court may not award nominal damages if the defendant establishes specified factors as an affirmative defense, including, but not limited to, that it is a covered entity or business associate, as defined, that it has complied with any obligations to notify persons entitled to receive notice regarding the release of the information, and that it has taken appropriate preventative actions to protect the confidential information or records against release consistent with federal law, as specified. The bill would provide that if an affirmative defense is established as described above, the defendant shall not be liable for more than one judgment on the merits for releases of confidential information or records arising out of the same event, transaction, or occurrence. The new legislation becomes effective January 1, 2013.

Assembly Bill 2675 - Employment Contract Requirements

Current law requires that whenever an employer enters into a contract of employment with an employee for services to be rendered within this state and the contemplated method of payment of the employee involves commissions, the contract must be in writing and set forth the method by which the commissions are to be computed and paid. AB 2675 amends Labor Code section 2751 to exempt from this requirement temporary, variable incentive payments that increase, but do not decrease, payment under the written contract. The new legislation becomes effective January 1, 2013. Assembly Bill 1396 - All Commissioned Employees Must Have Written Agreements Existing statutory law, which has been held invalid by existing case law, requires an employer who has no permanent and fixed place of business in the state and who enters into a contract of employment involving commissions as a method of payment with an employee for services to be rendered within the state to put the contract in writing and to set forth the method by which the commissions are required to be computed and paid. An employer who does not comply with those requirements is liable to the employee in a civil action for triple damages. AB 1396 makes this contract requirement applicable to all employers entering into a contract of employment involving commissions as a method of payment with an employee for services to be rendered in the state. In addition, the bill would repeal the provision making an employer who violates this requirement liable in a civil action for triple damages. The new legislation becomes effective January 1, 2013. Assembly Bill 1775 – Wage Garnishment: Exempt Earnings

AB 1775 amends Civil Code section 706.11 to define "disposable earnings" as the portion of an individual's earnings that remains after deducting all amounts required to be withheld by law. AB 1775 also amends Code of Civil Procedure to prohibit the amount of an individual judgment debtor's weekly disposable earnings subject to levy under an earnings withholding order from exceeding the lesser of 25% of the individual's weekly disposable earnings or the amount by which the individual's disposable earnings for the week exceed 40 times the state minimum


hourly wage in effect at the time the earnings are payable, unless an exception applies. For any pay period other than weekly, the bill would also require the use of certain multipliers to determine a maximum amount subject to levy under an earnings withholding order that is proportional in effect to a calculation based on the amount by which the individual's earnings for a workweek exceed 40 times the state minimum wage, except as specified. The new legislation becomes effective July 1, 2013.

Assembly Bill 1845 – Assessments For Overpaid Unemployment Compensation Benefits

AB 1845 amends a number of sections in the Unemployment Insurance Code to provide that an employer's reserve account is not relieved of charges relating to a benefit overpayment established on or after October 22, 2013, if the Employment Development Department determines that the payment was made because the employer, or an agent of the employer, was at fault for failing to respond timely or adequately to requests of the department for information relating to the individual claim for unemployment compensation benefits, as provided. This bill contains other related provisions and other current laws. The new legislation becomes effective January 1, 2013.

Senate Bill 1193 – Notice Requirement Regarding Human Trafficking No later than April 1, 2013, certain business are required to post an 8.5” x 11” notice (in 16-point font) in a conspicuous place near the entrance of the establishment, or in another conspicuous location in clear view of the public and employees where similar notices are customarily posted, that contains information about organizations that provide services to eliminate slavery and human trafficking. The identified business required to comply with the new law, include: (1) On-sale general public premises licensees under the Alcoholic Beverage Control Act (Division 9 (commencing with Section 23000) of the Business and Professions Code); (2) Adult or sexually oriented businesses, as defined in subdivision (a) of Section 318.5 of the Penal Code; (3) Primary airports, as defined in Section 47102(16) of Title 49 of the United States Code; (4) Intercity passenger rail or light rail stations; (5) Bus stations; (6) Truck stops (“truck stop” means a privately owned and operated facility that provides food, fuel, shower or other sanitary facilities, and lawful overnight truck parking); (7) Emergency rooms within general acute care hospitals; (8) Urgent care centers; (9) Farm labor contractors, as defined in subdivision (b) of Section 1682 of the Labor Code; (10) Privately operated job recruitment centers; (11) Roadside rest areas; and (12) Businesses or establishments that offer massage or bodywork services for compensation and are not described in paragraph (1) of subdivision (b) of Section 4612 of the Business and Professions Code. The Department of Justice is tasked with developing a model notice that complies with the above requirements and make the model notice available for download on the department’s Internet Web site. Senate Bill 1038 – FEHA Transformed by Elimination of FEHC and Transfer of Duties to DFEH SB 1038 reconfigures enforcement of the California Fair Employment and Housing Act (FEHA) by eliminating the Fair Employment and Housing Commission effective January 1, 2013. This law creates a new Fair Employment and Housing Council within the California Department of Fair Employment and Housing (DFEH) consisting of seven members appointed by the Governor


and confirmed by the Senate to promulgate regulations under FEHA. SB 1038 also allows DFEH to file cases directly in court, and parties to all cases will be required to undergo free-of-charge mandatory dispute resolution prior to filing a civil action. DFEH will also be awarded reasonable attorney’s fees and costs, including expert fees, if successful in its litigation. Assembly Bill 2343 – New Notice Required When Taking Adverse Actions Against Applicants or Employees Based on DOJ Criminal History Reports AB 2343 requires agencies, organizations, and individuals, such as certain healthcare institutions, that received criminal history information from the California Department of Justice to give notice to an applicant or employee who is the subject of an adverse employment, licensing, or certification decision. This new reporting requirement models those already found in the Fair Credit Reporting Act and the California Investigative Consumer Reporting Agencies Act. Assembly Bill 2677 – Per Diem Wages For Workers On Public Works Projects Currently, employer payments provided as part of per diem wages paid to employees working on public works projects do not reduce the employer’s obligation to pay the prevailing hourly straight time and overtime wages. Pursuant to AB 2677, an employer payment that results in a lower hourly straight time or overtime wage will count toward satisfaction of the prevailing wage requirement so long as:

• the payment is made under a collective bargaining agreement; • the basic hourly rate and employer payment are at least equal to the general prevailing

rate; and • the payment is irrevocable unless made in error.

In addition, employer payments meeting these criteria that result in a lower taxable wage will not violate the prevailing wage determination. Assembly Bill 1794 and State Bill 691 – State Agency Access to Employee Information These bills direct the California Employment Development Department (EDD) to share information it obtains from employers about new employees, and information it obtains in other ways, with various other state agencies, including the Joint Enforcement Strike Force on the Underground Economy, the Contractors’ State License Board, and the State Compensation Insurance Fund. These agencies are expected to use this information for purposes of auditing, investigating, and prosecuting tax and cash-pay reporting violations, and for purposes of workers’ compensation payroll reporting. In addition, the Contractors’ State License Board will qualify as an “authorized governmental agency” permitted to receive employee information related to any workers’ compensation insurance fraud investigation. Senate Bill 863 – Workers’ Compensation Reform


Senate Bill 863, makes wide-ranging changes to California’s workers’ compensation system, including increased benefits to injured workers and cost-saving efficiencies. The bill takes effect on January 1, 2013, although not all of its provisions will be effective immediately. However, some of its provisions will be effective immediately, requiring changes to notices that explain employee rights and employer obligations. California employers must post a notice explaining employee rights and employer obligations under the state workers’ compensation system and must provide all employees with a workers’ compensation pamphlet at the time of hire.

2013 bb&k labor & employment update: new legislation - private employers

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