CALIFORNIA LEGLISLATIVE UPDATE - 2004I. EMPLOYMENT DISCRIMINATION AND SEXUAL HARASSMENT
AB 76 - Harassment by Third Parties
This new law makes it unlawful under the Fair Employment & Housing Act (“FEHA”) for an employer to fail to take immediate and appropriate corrective action to prevent harassment of an employee by any person, once the employer knows or should have known of this conduct. The bill was introduced in an effort to reverse the recent court decision Salazar v. Diversified Paratransit, Inc. (2002) 103 Cal.App.4th 131, rev. granted, which held that an employer’s duty to prevent harassment did not extend to harassment by an employer’s customers or clients.
? Employee handbooks should be amended to address the “notice” and “complaint” procedures and requirements related to this new law. Additionally, employee handbooks should be amended, if necessary, to take advantage of the “avoidable consequences” doctrine set forth by the California Supreme Court in State Department of Health Services v. Superior Court (2003) 2003 WL 22764580.AB 196 - Gender Identity Discrimination
This new law expands the prohibition under FEHA against sexual discrimination and harassment by including “gender,” as defined, in the definition of sex. The new law permits employers to require employees to comply with reasonable workplace appearance, grooming, and dress standards consistent with state and federal law, provided that, employees are allowed to appear or dress consistently with their gender identities i.e., “cross-dressing.” Similar bills have failed to pass the Legislature in 2000 (AB 1649) and 2002 (AB 2142).
AB 1536 - New Filing Procedures for the Dept. of Fair Employment and Housing
Under the existing FEHA, when a complaint alleging an unlawful practice is filed with the Department of Fair Employment and Housing, the department is required to serve the complaint upon the person, employer, labor organization, or employment agency alleged to have committed the unlawful practice, and service is to be completed within 45 days. This law provides that where a person claiming to be aggrieved by an unlawful practice is represented by private counsel, private counsel, and not the department, will instead serve the complaint, and in either case, service is to be completed within 60 days.
II. WAGE AND HOUR & PENALTIESAB 223 - Recovery of Attorney’s Fees
This new law provides that an employee will be deemed “successful” on an appeal of a Labor Commissioner ruling of an unpaid wage claim so long as the employee recovers judgment in his or her favor. AB 223 is intended to reverse the holding of Smith v. Rae-Venter Law Group (2002) 29 Cal.4th 345 and restore the prior holdings in Cardenas v. Mission Industries (1991) 226 Cal.App.3d 952 and Triad Data Services, Inc. v. Jackson (9184) 153 Cal.App.3d Supp. 1 on this issue.
AB 276 - Penalties for Labor Code ViolationsThis new law increases fines on employers for as many as 158 different violations under the Labor Code.
SB 179 – Contracts with Labor Contractors
This new law provides that any person or entity who enters into a labor contract for construction, farm labor, garment, janitorial, or security guard services when the person or entity knows or should know that the contract does not provide funds sufficient to allow the labor contractor to comply with all applicable laws or regulations governing the labor or services to be provided under the contract, is subject to liability and specified civil penalties. A similar bill was vetoed by the Governor in 2002 (SB 1466).
SB 796 – “Sue Your Boss” - Private Enforcement of Labor Laws by Employees
This new law creates the “Labor Code Private Attorney General Act of 2004,” authorizing employees to bring private rights of action to enforce wage and hour laws and obtain civil fines and penalties and recovery of attorney’s fees. Under this new law, a single employee is permitted to pursue an action in Superior Court on behalf of himself or herself as well as other current and former employees. The single employee can allege causes of action for Labor Code violations even if the single employee himself or herself never suffered from that particular violation. For example, a single employee can bring an overtime claim on behalf of himself and 100 other employees and then also plead causes of action for failure to provide meal and rests breaks, failure to timely pay final wages and/or failure to timely pay commissions on behalf of 200 other current and former employees. This so-called "bounty hunter law" provides financial incentives to file suit and creates new penalties. This law gives employees the right to sue employers for Labor Code violations not pursued by state agencies.
? The impact of this new legislation is very significant! All employers must ensure absolute compliance with all requirements of California law, including the Wage Orders, the Labor Code and all wage & hour laws to protect themselves from the reach of this new statute. The penalties are extraordinary! For example, under the new penalties provided by this statute, an employer may be required to pay a civil penalty of one hundred dollars ($100) for each aggrieved employee per pay period for the initial violation and two hundred dollars ($200) for each aggrieved employee per pay period for each subsequent violation. Now assume Employer A employs 50 employees and commits the same violation from Jan. 1, 2004 - June 30, 2004, or 12 pay periods. The penalty calculation is as follows:
• Initial Violation (Jan. 1 – Jan. 15) $100 x 50 employees = $5,000
• Subsequent Violation (Jan. 16 - Jan.30) $200 x 50 employees = $10,000
• Subsequent Violation (Feb. 1 – Feb. 15) $200 x 50 employees = $10,000
• Subsequent Violation (Feb. 16 – Feb. 29) $200 x 50 employees = $10,000
• Subsequent Violation (Mar. 1 – Mar. 15) $200 x 50 employees = $10,000
• Subsequent Violation (Mar. 15 – Mar. 31) $200 x 50 employees = $10,000
• Subsequent Violation (April 1 – April 15) $200 x 50 employees = $10,000
• Subsequent Violation (April 16 – April 30) $200 x 50 employees = $10,000
• Subsequent Violation (May 1 – May 15) $200 x 50 employees = $10,000
• Subsequent Violation (May 16 – May 31) $200 x 50 employees = $10,000
• Subsequent Violation (June 1 – June 15) $200 x 50 employees = $10,000
• Subsequent Violation (June 15 – June 30) $200 x 50 employees = $10,000
Grand Total: $115,000SB 777 - “Whistleblower” Law and Attorney General Hotline
New state law protects employees from employer retaliation for reporting violation of laws protecting shareholders, investors, employees and the general public. This new "whistle blower law" requires new poster and a "hotline" to the state Attorney General's office for reporting violations. Additionally, the law boosts penalties and raises the employer's burden of proving that a legitimate personnel action is not retaliation for the employee reporting a violation of law at a current or previous job.
Existing law prohibits employers from making, adopting, or enforcing a policy that prevents an employee from disclosing violations of a state or federal statute, or a violation or noncompliance with a state or federal regulation to a government or law enforcement agency, or from retaliating against an employee who makes a disclosure. This new law extends these protections to employees who report a violation of a state or federal rule, who refuse to participate in an activity that would result in a violation of state or federal statute, or a violation or noncompliance with a state or federal rule or regulation, or who exercised these rights in former employment. This new law prohibits an employer from retaliating against an employee for exercising any of these rights, adds an additional civil penalty for violations, and establishes the evidentiary burdens of the parties participating in a civil action or administrative hearing involving an alleged violation of the law’s provisions.
The whistleblower hotline information is included in the new poster kit that employers can order from the California Chamber of Commerce’s website at: www.calchamberstore.com.
III. LEAVE LAWS
SB 1661 - Family Temporary Disability Insurance
This new law provides an employee up to six (6) weeks of income from a new state fund (which is paid with state disability insurance) if an employee takes times off work to care for a seriously ill child, spouse, parent or domestic partner or to bond with a newly born or adopted child. However, this bill does not provide new protected leave rights to employees who are not eligible for federal Family & Medical Leave (“FMLA”) or leave under the California Family Rights Act (“CFRA”). (An employee may not be eligible for FMLA/CRFA leave because he/she has not worked 1250 hours in the past 12 months or because his/her employer does not employ 50 or more people in a 75 mile radius.)
A small employer, who is not covered by the FMLA/CFRA, is not required to provide protected leave or any leave for an employee even if the employee needs to care for a seriously ill child, spouse, parent or domestic partner or wants to bond with a newly born or adopted child. If an employee is not eligible for FMLA/CRFA leave for any reason (i.e., employer is not covered by FMLA/CFRA or employee has not satisfied the 1250 hour requirement), the employer is not required by this new law to provide the employee with unpaid leave.
If an employee is eligible for FMLA/CRFA leave, the employer must provide protected unpaid leave to the employee and the employee can then apply for the monetary benefits provided for in this legislation after July 1, 2004.
This new program is paid for by taxes levied on employees. The employee’s contribution rate is tied to the rates for state disability insurance. Additionally, the employer can require employee to first use up to two weeks of accrued vacation before receiving benefits under this new program. The legislation takes effect on January 1, 2004, with benefits payable on or after July 1, 2004. The Paid Family Leave Pamphlets are a new mandatory notice that must be provided to all new employees and employees taking a leave of absence from work. The notice can be printed from the following website: http://www.edd.ca.gov/direp/de2511.pdf
? Employee Handbooks and/or Personnel Manuals should be revised to include information regarding Family Temporary Disability Leave.
SB 478 - Leave For Victims of Crime and Work Absences for Judicial Proceedings.
Existing law prohibits an employer from discharging or discriminating against an employee for taking time off to serve on a jury. This new law requires an employer to allow an employee who is a victim of a crime, as defined, or certain persons who are related to a crime victim (spouse, child, stepchild, brother, stepbrother, sister, stepsister, mother, stepmother, father, stepfather and registered domestic partner) to be absent from work in order to attend judicial proceedings related to the crime. The new law prohibits an employer from discharging or in any manner discriminating against an employee, in compensation or other terms, conditions, or privileges of employment, including, but not limited to the loss of seniority or precedence, because the employee is absent from work pursuant to this law and will authorize the employee to file a complaint with the Division of Labor Standards Enforcement.
? Employee Handbooks and/or Personnel Manuals should be revised to include information regarding this new type of protected leave.
IV. WORKERS’ COMPENSATION
There were several bills dedicated to workers' compensation reform. In summary, these new state laws:
• Require employers or their insurers to create utilization review programs in connection with workers' compensation benefits administration;
• Define workers' compensation fraud and increase criminal penalties for violations;
• Amend penalties for late benefits payments;
• Expand opportunities for alternative dispute resolution programs;
• Replace vocational rehabilitation program for all injuries occurring after January 1, 2004 with vouchers in varying amounts to be used for training by injured workers unable to return to their former employment; and
• Make other changes not directly affecting employers' administration of workers' compensation benefits. (AB227, SB228, AB1262, AB149, AB1557, SB176)V. WORKPLACE SAFETY
AB 1719 - Safety in Employment
Under existing law, the Division of Occupational Safety and Health investigates complaints that a workplace is not safe, and it may issue orders necessary to ensure employee safety. It notifies a complainant of any action taken. This new law requires the Division of Occupational Safety and Health to notify the complainant within 14 calendar days of taking action (that a workplace is not safe). It also requires the division to annually compile and release on its website information as to complaints received and actions taken.
VI. PRIVACY
SB 763 – Social Security Numbers
Existing law prohibits a person or entity, except as specified, from publicly posting or displaying an individual's social security number, printing that social security number on a card required for the individual to access products or services or on materials mailed to the individual, or otherwise requiring an individual to transmit or use that social security number. This new law prohibits a social security number, that is otherwise permitted to be mailed, from being printed, in whole or in part, on a postcard or other mailer or visible on the envelope or without the envelope having been opened.VII. EMPLOYEE BENEFITS
SB 2 - Health Care Coverage
This new state law requires medium and large employers to provide employee health benefits or pay a fee to the state for a state-run benefit program. The law is effective for employers with 200 or more employees in California on January 1, 2006. The law is effective for employers with 20 to 199 employees in California effective January 1, 2007, except that employers with 20 - 49 employees will not be required to comply unless a tax credit is enacted that equals 20 percent of net cost of the fee.
VIII. DOMESTIC PARTNERSHIPS
AB 17 - State Contractors
This law requires employers with state contracts valued at $100,000 or more provide the same benefits to spouses and domestic partners of employees.
AB 205 - Spousal Rights Extended to Domestic Partners
This law extends legal rights to domestic partners equal to those of spouses. This law does not take effect until Jan. 1, 2005.
IX. NEW NOTICES & POSTINGS
New Pamphlets/Notices
• EDD - There is a new pamphlet from EDD covering paid family leave, to be given to new employees starting January 1, 2004, and to all employees requesting leave for a covered reason starting July 1, 2004.
• UI/SDI - The Unemployment Insurance (UI) and State Disability Insurance (SDI) pamphlets (two separate notices) have new information, also with reference to the new paid family leave law.
• Workers’ Compensation - There is an updated Workers' Compensation pamphlet that includes new required language mandated from reform legislation effective January 1, 2004.
New Postings
• "Protection for Employee Whistleblowers" notice from the Office of the Attorney General with the whistleblower hotline phone number.
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