Employee Benefits Compliance, Laws, Regulations & FAQs, State-Specific Information

NEW California Laws for 2014

NEW California Laws Effective in 2014

The 2012-2013 Legislative session ended September 30, and a number of bills were passed by the California Legislature and sent to Gov. Brown for his signature.  October 13 was the final day for the Governor to sign or veto bills from this legislative session. Below are listings and short summaries of selected bills that were signed and chaptered, in the areas of Employment, Insurance & Health Benefits, Covered California and the Affordable Care Act, Privacy, Immigration and Other.  Most bills are effective January 1, 2014;  other effective dates are noted, where applicable.  (This article was updated Oct. 22 and 23 with additional information on some of the bills.)  Also, we have already posted separate articles on SB 161 and AB 1083.  Copies of all bills are available at www.leginfo.ca.gov .


AB 10 – (Alejo) – Increases California’s current minimum wage (of $8 per hour) in two $1 increments: to $9 per hour on July 1, 2014, and from $9 per hour to $10 per hour on January 1, 2016.  This is the first minimum wage increase in California in five years.  Increasing the minimum wage will also increase the minimum salary amount employees must earn to qualify as “exempt” employees under California state law executive, administrative, or professional exemptions.  One of the requirements for employees to be exempt from overtime and other requirements for hourly-wage employees is that their monthly salary must be at least twice the state minimum wage for full-time employment. Under current law, the earnings threshold for exempt employees is $2,773.34 per month.  Under AB 10, the minimum monthly salary for exempt employees will increase to $3,120 on July 1, 2014, and $3,466.67 on January 1, 2016.

Note that some California cities and counties have already increased their minimum wages above the current $8/hour.  In San Francisco the minimum wage is $10.55/hour, and in San Jose it is $10/hour.

Signed by Gov.  on Brown September 25.

AB 11 – (Logue) – Employees: reserve peace officers and emergency rescue personnel.  State law already requires employers with 50 or more employees to allow volunteer firefighters in their employ temporary leaves of absence to participate in fire or law enforcement training.  AB 11 expands current law to include reserve peace officers and emergency rescue personnel.  Effective January 1, 2014.

AB 218 – (Dickinson) – Employment applications: criminal history.  Existing law prohibits both public and private employers from asking an applicant for employment to disclose  (either in writing or verbally) any information concerning an arrest or detention that did not result in a conviction. AB 218 will prohibit a state or local agency, as of July 1, 2014, from asking an applicant to disclose information regarding a criminal conviction, except as specified, until the agency has determined the applicant meets the minimum employment qualifications for the position.  Signed by Gov. Brown October 10.  Effective July 1, 2014.

AB 556 – (Salas) – Adds “military and veteran status” to the list of categories protected from employment discrimination under the Fair Employment and Housing Act (FEHA), and also provides an exemption for an inquiry by an employer regarding military or veteran status for the purpose of awarding a veteran’s preference as permitted by law.  The list of protected categories under existing FEHA are: race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, and sexual orientation.

SB 288 – (Lieu) – Employment protections: time off.  Existing law prohibits an employer from discharging or in any manner discriminating against an employee for taking time off to serve on a jury, an employee who is a victim of a crime for taking time off to appear in court as a witness in any judicial proceeding, or an employee who is a victim of domestic violence or a victim of sexual assault for taking time off from work to obtain or attempt to obtain prescribed relief.  SB 288 would additionally prohibit an employer from discharging, discriminating or retaliating against an employee who is a victim of specified offenses, for taking time off from work, upon the victim’s request, to appear in court to be heard at any proceeding, including postarrest release decision, plea, sentencing, postconviction release decision, or any proceeding in which a right of the victim is at issue.

Existing law also entitles an employee who is discriminated or retaliated against for any of the above actions to reinstatement and reimbursement for lost wages and work benefits, and to file a complaint with specified government departments.   SB 288 also would  extend these protections to an employee who is protected under SB 288.

SB 292 – (Corbett) – Employment: sexual harassment.  Existing law (California Fair Employment and Housing Act) prohibits employment discrimination or harassment on account numerous characteristics, including but not limited to race, religious creed, color, national origin, and sex. SB 292 specifies that, for purposes of the definition of “harassment because of sex” under these provisions, that sexually harassing conduct need not be motivated by sexual desire. Signed by Gov. Brown on August 12.

SB 390 – (Wright (D-Los Angeles) – Employee wage withholdings: failure to remit.  Existing law makes it a crime for an employer to fail to make agreed-upon payments to health and welfare funds, pension funds, or various benefit plans. Such crime is punishable as a felony if the amount unpaid exceeds $500, and as a misdemeanor if the amount is less than $500. SB 390 extends the definition of a crime to include an employer’s failure to remit withholdings from an employee’s wages that were made pursuant to state, local, or federal law. Signed by Gov. Brown October 10.

SB 400 – (Jackson) – Employment protections: victims of domestic violence, sexual assault or stalking.  Existing law prohibits an employer from taking adverse employment action against a victim of domestic violence or sexual assault who takes time off from work to attend to issues arising as a result of the domestic violence or sexual assault, as long as the employee complies with certain conditions.  It also provides protections to employees who are discharged, or discriminated or retaliated against.  SB 400 extends the protections to victims of stalking.  Signed by Gov. Brown October 11.

SB 462 – (Monning) – Employment: compensation. In any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions, existing law generally requires a court to award reasonable attorney’s fees and costs to the prevailing party if any party to the action so requests.  SB 462 changes this by providing that where the employer is the prevailing party, the court can award attorney’s fees and costs only if it finds that the employee brought the court action in bad faith.  Signed by Gov. Brown August 26.   Effective January 1, 2014.

SB 666  – Suspends or revokes an employer’s business license for retaliation against employees and others on the basis of citizenship and immigration status, and establishes a civil penalty of up to $10,000 per violation.   Signed by Gov Brown on October 5.

SB 770 – (Jackson) – Unemployment compensation: disability benefits: Paid Family Leave program.

Under existing law, the family temporary disability insurance program (aka Paid Family Leave or PFL) provides up to six weeks of wage replacement benefits to employees who take time off work to care for a seriously ill child, spouse or domestic partner, or parent, or to bond with a minor child within one year of the birth or placement of the child in connection with foster care or adoption. These benefits have been in effect since July 2004, payable for family temporary disability leaves that began on and after July 1, 2004.

SB 770 expands the scope of the family temporary disability program to include time off to care for a seriously ill sibling, grandparent, grandchild, or parent-in-law, as defined. It also makes conforming and clarifying changes in provisions relating to family temporary disability compensation. SB 770 is effective July 1, 2014.


AB 219 – (Perea) – Requires health care service plan contracts and health insurance policies issued on or after January 1, 2015, that cover prescribed, orally administered anti-cancer medications to limit an enrollee/insured’s total cost share to no more than $200 per filled 30-day prescription.  For plans that do not meet the IRC 223(c)(2) definition of “high deductible health plan” (HDHP), this $200 maximum applies even if the enrollee/insured has not met the applicable deductible.  For HDHPs, however, the $200 maximum applies only once the enrollee’s/insured’s deductible has been met for the year. As of January 1, 2016, and each January thereafter, a health plan can increase the $200 by the percentage increase in the CPI for that year.  Signed by Gov.Brown October 9.   AB 219 is effective from January 1 ,2015 – January 1, 2019, unless that date is deleted or extended by a subsequent bill.

AB 460 – (Ammiano) – Health care coverage: infertility.  Existing law requires health care service plans and health insurance contracts to offer coverage for the treatment of infertility, except in vitro fertilization, to the group policyholder (employer sponsor of a group health plan), but does not require the policyholder to purchase such coverage.  AB 460 requires that such if such coverage is purchased, it must be provided without discrimination on the basis of age, ancestry, color, disability, domestic partner status, gender, gender expression, gender identity, genetic information, marital status, national origin, race, religion, sex or sexual orientation. This applies to insurance policies that are issued, amended or renewed to California residents, regardless of the situs of the contract.  Signed by Gov. Brown October 8.

AB 1000 – (Wieckowski) – Physical therapists: direct access to services: professional corporations.  Allows patients to access physical therapy treatment directly and, in those circumstances, requires a physical therapist to: 1) refer the patient to another specified medical provider if the patient’s condition requires treatment or services beyond the therapist’s scope of practice or if the patient is not progressing, 2)  disclose to the patient any financial interest he or she has in treating the patient, and,3)  with the patient’s written authorization, to notify the patient’s physician and surgeon, if any, that the physical therapist is treating the patient. AB 1000 limits a physical therapist from treating a patient who initiated services directly for the lesser of more than 45 calendar days or 12 visits, except as specified, and requires a physical therapist to obtain the patient’s signature on a specified notice before performing services on that patient.  Signed by Gov. Brown October 7.

SB 161 – (Hernandez) Prohibits stop-loss insurers in California from issuing policies with specific deductibles below $35,000 (increasing to $40,000 in 2016), for groups with under 100 employees.  Applies to policies issued on or after January 1, 2014.  Also prohibits aggregate attachment points less than the lesser of:  1) $5,000 times the total number of group members;  2) 120% of expected claims; or 3)  $35,000 (increasing to $40,000 in 2016).  SB 161 also prohibits “lasering,” and it requires stop-loss insurers in California to report to the California Dept. of Insurance — each April 1 — the number of small-employer stop-loss policies previously issued that were in effect as of December 31 of the prior year.  Signed by Gov. Brown on Oct. 1, 2013.

SB 251 – (Calderon) – Insurance: notice: electronic transmission.   SB 251 allows insurance companies to transmit notices electronically instead of by postal mail, with a customer’s consent. 

SB 353 – (Lieu) – Requires health plans and health insurers to translate coverage documents in the same language they use to market or advertise their products, if existing law does not already require that language to be translated.

SB 494 – (Monning) – Health care providers.  Until January 1, 2019, requires a health care service plan to ensure that there is at least one full-time equivalent primary care physician for every 2,000 enrollees.  Also authorizes, until January 1, 2019, the assignment of up to an additional 1,000 enrollees, as specified, to a primary care physician for each full-time equivalent non-physician medical practitioner, as defined, who is supervised by that physician.  Signed by Gov. Brown October 9.  

SB 639   (Hernandez) – Health care coverage.   SB 639 conforms California law to the Affordable Care Act (ACA) requirements that limit annual deductibles and out-of-pocket limits for non-grandfathered insured health plans in the individual, small and large group market.  Any such policy that becomes effective or renews on or after January 1, 2014, must limit annual deductibles to $2,000 for individual coverage and $4,000 for families, and must limit annual out-of-pocket costs (for Essential Health Benefits) to $6,500 for individual coverage, and $12,700 for family coverage.  Two exceptions apply: 1) Small group products at the bronze level of coverage may have higher deductibles in order to meet Minimum Value (60% actuarial value); and 2) Pediatric dental care that meets the definition in the ACA may have an out-of-pocket maximum of $1,000 for one child and $2,000 for more than one child.

Carriers who are in the Exchange/Marketplace can offer a catastrophic individual plan only for individuals under age 30 (aka a “young invincibles” policy), but carriers not in the Exchange cannot offer such a plan.

Catastrophic plans or policies are ones that provide no benefits for any plan year until the enrollee has incurred cost-sharing expenses in an amount equal to the annual limit on out-of-pocket costs, except that the plan must provide coverage for at least three primary care visits before the deductible is met. Catastrophic plans can only be offered if either of the following apply:

  • The individual purchasing the plan has not yet attained age 30 at the beginning of the year; or,
  • The individual has a certificate of exemption from the federal individual mandate because the individual is not offered affordable coverage or because the individual faces hardship.

Signed by Gov. Brown on September 20, 2013.  Effective January 1, 2014.


AB 658 – (Calderon) – Personal information: disclosure.  Existing law (the Confidentiality of Medical Information Act) prohibits a provider of health care, a health care service plan, contractor, or corporation and its subsidiaries and affiliates from intentionally sharing, selling, using for marketing, or otherwise using any medical information for any purpose not necessary to provide health care services to a patient, except as expressly authorized by the patient, enrollee, or subscriber,  or as otherwise required or authorized by law. Violations of those provisions are subject to a civil action for compensatory and punitive damages, and, if a violation results in economic loss or personal injury to a patient, it is punishable as a misdemeanor.
AB 658 applies these prohibitions and penalties to any business that offers software or hardware to consumers, including a mobile application or other related device that is designed to maintain medical information to allow an individual to manage his or her information, or for the diagnosis, treatment, or management of a medical condition of the individual.  Signed by Gov. Brown September 9.

SB 282 – (Yee) – Confidential medical information: required authorization to disclose.  Existing law (the Confidentiality of Medical Information Act) requires, among other things, that a demand for settlement or offer to compromise issued on a patient’s behalf prior to the service of a complaint in any action arising out of the professional negligence of a physician and surgeon be accompanied by an authorization to disclose medical information to the persons or organizations insuring, responsible for, or defending the professional liability of the physician and surgeon in order to allow an evaluation of the merits of the demand for settlement or offer of compromise.  SB 282 extends these requirements (that an authorization to disclose medical information must accompany a demand for settlement or offer to compromise issued on a patient’s behalf) to licensed marriage and family therapists.  Signed by Gov. Brown July 3.   Effective January 1, 2014. 

SB 568 – (Steinberg) – Privacy: Internet: minors.  California Internet Eraser Law.  As of January 1, 2015, prohibits an operator of an Internet Web site, online service, online application, or mobile application from marketing or advertising specifeid types of products or services to a minor.  Also prohibits an operator from knowingly using, disclosing, or compiling the personal information of a minor (or allowing a 3rd party to do so) for the purpose of marketing or advertising specified types of products or services.  SB 568 also requires the operator of an Internet Web site, online service, online application, or mobile application to permit a minor, who is a registered user of the operator’s Internet Web site, online service, online application, or mobile application, to remove, or to request and obtain removal of, content or information posted on the operator’s Internet Web site, service or application by the minor.  Several exceptions apply.  Signed by Gov. Brown sept. 23. Effective January 1, 2015.


AB 422 – (Nazarian) – Requires information on Covered California’s health care coverage and the continued availability of Medi-Cal options to be included on the National School Lunch Program notifications that school districts provide to students.  Effective January 1, 2014.

AB 1180 – (Pan) – Updates existing state law implementing the federal Health Insurance Portability and Accountability Act (HIPAA) and other individual coverage rights related to losing group coverage to conform with the federal Affordable Care Act.  Requires health plans and health insurers to notify specified individuals that guaranteed issue coverage through Covered California is available.

AB 1428 – (Conway) – California Health Benefit Exchange: employees and contractors.

ABX1- 1 – (Perez) – Medi-Cal: eligibility.  Effective January 1, 2014. 

ABX1- 2 – (Pan) – Health care coverage.  Aligns California law with the federal reforms for insurers in the individual market that are regulated by the Department of Insurance.

SB 1×2 – (Hernandez) – Ensures that the federal reforms apply to health care service plans regulated by the Department of Managed Health Care (DMHC).  Fully effective January 1, 2014. 

SB 28 – (Hernandez) – Further implements the state’s expansion of Medi-Cal, authorized and required by the Affordable Care Act, by giving the California Department of Health Care Services more flexibility in issuing all-county letters until regulations are adopted, and updating the budgeting methodology for Medi-Cal county administrative costs.

SB 332 – (Emmerson) – Requires transparency for California’s contracts and rates of payment to vendors, contractors, board and staff.  Such contracts must be available for public inspection under the California Public Records Act, except for health plan contracts and their rates, which are made public in three and four years respectively.

SB 509 – (DeSaulnier/Emmerson) – California health benefit exchange: background checks.  Became effective immediately upon enactment.

SB 800 – (Lara) – Requires the California Department of Health Care Services (DHCS) to give Covered California information about parents/caretakers of children enrolled in the Healthy Families program or the targeted low-income Medi-Cal program in order to market to potentially eligible individuals, and also transfers specified employees of the Managed Risk Medical Insurance Board (MRMIB) to Covered California and the DHCS.

SBX1 1 – (Hernandez/Steinberg) – Medi-Cal: eligibility.  Implements provisions of the federal Affordable Care Act.  Effective January 1, 2014. 

SBX1 3 – (Hernandez) – Health care coverage: bridge plan.  Effective January 1, 2014.


AB 35 – (Hernandez) – Provides that immigration consultants, attorneys, notaries public and organizations accredited by the U.S. Board of Immigration Appeals are the only individuals authorized to charge a fee for providing services associated with filing an application under the deferred action program of the U.S. Department of Homeland Security.

AB 60 – (Alejo) – Requires the California Department of Motor Vehicles to issue a driver license to illegal aliens who can prove identity and California residency and meet all other licensing requirements, such as passing the written exams and driving tests.  The DMV will design a special driver license that complies with the U.S. government’s REAL ID Act.  AB 60 also makes it a violation of law to discriminate against anyone on the basis of having this new license, and the law explicitly prohibits using the new license for criminal investigation, arrest or detention based on immigration status.  New law fully effective on January 1, 2015.

AB 524 – (Mullin) – Provides that a threat to report the immigration status or suspected immigration status of individuals or their family members may induce fear sufficient to constitute extortion. Also specifies that this is a clarification of existing law (which I believe makes it effective immediately).

AB 1024 – (Gonzalez) – New law which allows illegal aliens to practice law in California.

AB 1159 – (Gonzalez) – Imposes various restrictions and obligations on persons who offer services related to comprehensive immigration reform.


AB 362 – (Ting) – Until January 1, 2019, excludes from gross income any amounts received by an employee from an employer to compensate for additional federal income taxes incurred by the employee on employer-provided health-care benefits because (for federal income tax purposes) the same-sex spouse or domestic partner of the employee is not considered the spouse of the employee. (The exclusion from gross income will only apply for domestic partners now, since the Supreme Court ruling on same-sex spouses in the Windsor case.)

 AB 1266 – (Ammiano) – Pupil rights: sex-segregated school programs and activities.“California Bathroom Bill” – Controversial law allowing transgender students in public schools to choose which restrooms they use and whether they participate in boy or girl sports.  Forces all California public schools to permit biological boys in girls’ restrooms and showers, along with biological girls in boys’ restrooms and showers.  New law effective January 1, 2014. 

AB 1308 – (Bonilla) – Authorizes a midwife to directly obtain supplies and devices, obtain and administer drugs and diagnostic tests, order testing and receive reports that are necessary to his/her practice of midwifery and consistent with his/her scope of practice.  Expands the disclosures required to be made by a midwife to a prospective client to include the specific procedures that warrant consultation with a physician and surgeon, and the new law makes other correcting and conforming changes.

SB 281 – (Calderon) – Life insurance: accelerated death benefits.