The following California laws affecting benefits and employment were enacted by the Legislature and signed by Governor Jerry Brown. The new laws are generally effective January 1, 2012, except as otherwise noted.
AB 22. Credit reports. Prohibits employers from obtaining consumer credit reports to evaluate applicants or employees. Exceptions: Employers may use credit reports if the employee will have regular access to money (at least $10,000 per workday), assets or confidential information; if the employee will be in a managerial position (as defined in Wage Order 4 of the Industrial Welfare Commission); or if the employer is the state Department of Justice or a law enforcement agency. California employers should use caution if using agencies outside of California for background checks, as they might not yet be aware of this new limitation in California law.
AB 469. Wage Theft Protection Act. Every employer (even if headquartered outside of California) must give written notice to all employees hired in California on or after January 1, 2012, and such notice must include the following 8 items:
1. Rate of pay and basis on which it is paid (e.g., per hour or day)
2. Identify all allowances claimed as part of the minimum wage
3. Regular pay date
4. Legal name of the employer, including any DBA
5. Physical address of employer’s main location (and mailing address, if different)
6. Employer’s phone number
7. Workers’ compensation carrier name and address and phone number
8. Any other information the Labor Commissioner requires.
Additionally, if any information changes in the future, the employer must notify employees within seven days. The California Labor Commissioner (DLSE) will provide a template, but has not yet (as of November 21, 2011). The DLSE website says it intends to post the template on this webpage by mid-December 2011.
Exceptions: The following three categories of employers are not required to comply:
1. State and local government entities
2. Employers exempt from the overtime rules
3. Employers with employees subject to a collective bargaining agreement that meets certain requirements.
AB 469 also imposes new misdemeanor penalties on employers who fail to comply with the above requirements and others under the Labor Code.
AB 592. Companion bill to SB 299, clarifies existing California law on Pregnancy Disability Leave (PDL) by amending Government Code 12945 to clarify that it is an unlawful employment practice for an employer to interfere with, attempt to interfere with, restrain or deny an employee’s rights under FMLA or PDL law.
AB 887. Gender identity. Amends the definition of “sex” as one of the prohibited bases of discrimination under the California FEHA and Unruh Civil Rights Act to provide that sex includes gender identity and gender expression. This affects numerous types of nondiscrimination (e.g., housing, education), and for employment it means that employers must allow employees to appear or dress in a manner consistent with their “gender expression” – defined as a person’s gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth.
AB 1236. Employment Acceleration Act. Prohibits the State, Counties or special districts from requiring employers to use E-verify, except as required by federal law or as a condition of receiving federal funds. They cannot require use of E-verify as a condition of applying for or maintaining a business license, or contracting with state or local government or a special district. It is still legal to use E-verify—the law does not prohibit employers from using it, but employers cannot be required to use it.
AB 1396. Commissions. Requires employers who pay employees by commission to put this in a written contract that states the method by which commissions should be computed and paid. The contract must be signed by the employer and each affected employee. If an employee continues to work under an expired contract, the contract terms are presumed to remain in full force and affect. “Commissions” does not include short-term productivity bonuses (such as are paid to retail sales clerks), or bonus and profit-sharing plans. Additionally, repeals Labor Code section 2752, which provided for triple damages for an employer who violated the written contract requirement. AB 1396 is not effective until January 1, 2013.
SB 299. Benefits during pregnancy disability leave. Requires employers to maintain and pay their regular share of group health benefits for up to four months in a 12-month period, for employees who are disabled due to pregnancy, childbirth or a related medical condition. Prior law required employers to continue to pay this only while an employee was out on FMLA leave, but not also during Pregnancy Disability Leave (PDL), which is four weeks longer than the FMLA leave period. Additionally, PDL applies to both part-time and full-time employees, regardless of how long they have worked for the employer, and it applies to employers with at least five employees in California. The requirement under SB 299 is that the employer continue to pay its share of whatever level of coverage the employee had immediately prior to the leave (e.g., self-only or family coverage). Also allows employers to recover premiums from employees who do not return to work once the pregnancy disability leave period ends, unless the failure to return is due to the continuation, recurrence or onset of a health condition that entitles the employee to leave, or to other circumstances beyond the employee’s control.
SB 459. Independent contractors. Adds section 226.8 to the California Labor Code to prohibit willful misclassification of workers as independent contractors rather than employees, and allows the California Labor and Workforce Development Agency (LWDA) to take enforcement actions including assessment of civil damages. Fines of $5,000-$15,000 may be imposed for each violation, increased to $10,000 – $25,000 if LWDA or a court determines that the employer engaged in a pattern or practice of these violations. It’s not clear if “each violation” means each individual who is misclassified or means each group of individuals who are misclassified. “Willful misclassification” means voluntarily and knowingly avoiding employee status by misclassifying an employee as an independent contractor. An employer who is found to have violated the law must prominently post on its Internet website (or at its physical location if it does not have a website) for at least 1 year, a notice stating that the LWDA or a Court has found that it “has committed a serious violation of the law by engaging in the willful misclassification of employees.”
Also adds new Labor Code 2753, which provides that an individual is jointly and severally liable with the employer if the individual, “for money or other valuable consideration, knowingly advises an employer to treat an individual as an independent contractor to avoid employee status.” This provision does not apply to a person who advises his/her own employer or to attorneys who give legal advice in the course of practicing law.
SB 559. Discrimination based on genetic information. Adds “genetic information” to the list of prohibited bases of discrimination under the California Fair Employment and Housing Act (FEHA) and the Unruh Civil Rights Act. This primarily duplicates federal requirements under the Genetic Information Non-Discrimination Act (GINA), but the California law applies to employers with at least five employees, while the federal law only applies to employers with at least 15 employees.
SB 757. Same-sex spouses. Requires group health insurance policies and group HMO contracts covering California residents to provide the same coverage for registered domestic partners of employees as for spouses of employees, and prohibits them from discriminating in coverage between spouses or domestic partners of a different sex and spouses or domestic partners of the same sex. Current California law specifies that such policies are subject to California insurance law regardless of the situs of the contract or master group policyholder, but includes an exception for policies issued outside of California to employers whose principal place of business and majority of employees are located outside of California. SB 757 provides that its provisions apply even if a policy is issued outside of California to an employer whose principal place of business and majority of employees are located outside of California.