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Recap of New Employment Legislation Going into Effect January 1, 2018

By Melissa M. Whitehead, Freeman Mathis & Gary, LLP

 

For those unable to join us at SAHRA’s Annual Law update on December 6, below is recap of some key legislation going into effect in 2018, which will impact California employers.

 

Minimum Wage Increase

 

Effective January 1, 2018, California companies with 26 or more employees will need to pay a minimum wage of $11.00 per hour. Companies with 1-25 employees will need to pay a minimum wage of $10.50 per hour. This is a previously scheduled increase and the minimum wage in California is currently scheduled to increase every January until it reaches $15.00 per hour on January 1, 2023.

 

When determining wages, employers should always check local ordinances where the employee will be working. If the local minimum wage is greater than the statewide minimum wage, it controls. For example, even after the January 2018 statewide increase, the following cities will have even higher minimum wage ordinances: Berkeley, El Cerrito, Emeryville, Los Angeles (26+ employees), Pasadena, Oakland, Richmond, San Diego, San Francisco, Santa Monica (26+ employees), and Sunnyvale. This is not meant to be a comprehensive list and employers should always check local ordinances.

 

Ban the Box (AB 1008)

 

As of January 1, 2018, companies with five or more employees are prohibited from asking about an applicant’s criminal history, until after a conditional offer has been made. In other words, you can no longer ask for criminal history information on job applications or during interviews, and employers cannot conduct background searches (formal or otherwise) until after a conditional offer of employment has been made.

 

Once a conditional offer of employment has been made, if the employer discovers that the applicant has prior convictions, employers are required to do an “individual assessment” to determine whether those convictions disqualify the applicant from employment. That “individual assessment” must include consideration of the nature and gravity of the offense or conduct and the lapse of time since the conviction. Employers should also consider whether there is a “direct and adverse” relationship between the nature of the offense and the job duties. For example, when hiring an employee to run payroll, a prior conviction for driving under the influence (DUI) should be looked at differently than a prior conviction for embezzlement.

 

If an employer has conducted an “individual assessment” and determined the applicant is not eligible for employment, the employer must provide written notice of the decision to rescind the offer to the applicant. That written notice must include notice of the disqualifying conviction(s), a copy of the conviction history report (if any), and an explanation of the applicant’s right to respond to the notice and the deadline in which to respond. Applicants must be given at least five (5) business days to submit evidence challenging the accuracy of the conviction history report, evidence of rehabilitation and/or mitigating circumstances. If within those five (5) days, the applicant informs the employer that they are taking “specific steps” to obtain evidence that the conviction history is inaccurate, then employers must give the applicant an additional five (5) business days to respond. Employers must consider all timely submitted information.

If the employer ultimately decides to deny employment, they must provide the applicant written notice of the final decision. That written notice must include information about any appeal process and information about the applicant’s right to file a claim with the DFEH.

 

Note that this new law will not apply to public and private employers that are otherwise required by law to conduct criminal background checks.

 

Salary History Ban (AB 168)

 

Labor Code section 432.3 will go into effect on January 1, 2018, and will prohibit ALL employers from (a) asking about salary history information of applicants and/or (b) relying on prior salary history information “as a factor in determining whether to offer employment … or what salary to offer an applicant.” This means that not only are employers banned from asking this information on applications or in interviews, but they also cannot seek this information in any other way, such as phone calls to references and former employers. “Salary history information” includes both compensation and benefits.

 

This new provision will not apply to salary history information that must be disclosed to the public under federal or state law. Also, if an applicant voluntarily and without prompting provides salary history information, employers can consider it when determining the salary to offer an applicant.

 

Finally, this new provision also requires that employers provide a pay scale for a position “upon a reasonable request” by an applicant.

 

Parental Leave (SB 63)

 

The new Parental Leave law essentially extends the family leave provisions of FMLA and CFRA to employers with 20 or more employees (all located within a 75-mile radius). These employers must now provide up to 12 weeks of unpaid, protected leave to new parents for bonding time with newborn, adopted, or foster children. Employees can use vacation, sick time, or PTO during this leave.

 

To be eligible for leave, employees must have been employed for at least 12 months and have worked 1,250 or more hours during the past 12 months. Also, if both parents work for the same employer, the 12 weeks will be split between them.

 

Sanctuary State Law (AB 450)

           

Included in the highly publicized “sanctuary state laws” in California is the provision prohibiting employers from allowing federal immigration enforcement agents into non-public work areas or access to employee records without a warrant. One exception to this prohibition applies to I-9 audits/inspections, but employers must then post notice of the inspection/audit to its employees at least 72 hours in advance.

 

Conclusion

 

Again, this is FAR from all legislation passed that will impact employers in 2018 (indeed, it’s not even close to all that was covered in last week’s presentation!), but it is a highlight of key legislation that will require immediate action on the part of many employers in order to avoid finding themselves out of compliance with California law on January 1, 2018. Employers are encouraged to seek the advice and counsel of experienced and knowledgeable labor and employment counsel in identifying and updating effected policies and procedures.

 

Please contact Melissa M. Whitehead (mwhitehead@fmglaw.com, 916.472.3306) with any questions.

 

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